Occasionally, New York state and federal courts are asked to enforce awards that, upon close inspection, turn out to be ambiguous. The common-law doctrine of “functus officio” limits the power of arbitrators (and courts) to alter an award once the arbitrators have decided the issue. Recently, in Gen. Re Life Corp, the Second Circuit reinforced its well-settled exception to the common law doctrine that, when asked to confirm an ambiguous award, courts retain authority to vacate and may seek clarification from the arbitrator. See Gen. Re Life Corp. v. Lincoln Nat’l Life Ins. Co., 909 F.3d 544, 549 (2d Cir. 2018). Because there is some difference with regard to how New York federal and state courts treat ambiguous awards, this article will compare the approach in the different court systems. To that end, this article will begin by discussing how New York federal and state courts treat ambiguous domestic awards in the pre-judgment and post-judgment context. Lastly, the article will discuss an issue that has seen very little consideration from New York’s courts, which is how they should approach ambiguous foreign awards.
How Do Courts Treat Ambiguous Domestic Awards?
Pre-Judgment Awards in the Second Circuit. When faced with a motion to vacate an ambiguous arbitration award, New York’s federal courts applying the FAA have generally opted to confirm or vacate the award in full. The Federal Arbitration Act (FAA) governs the Second Circuit’s ability to vacate an ambiguous arbitration award, whereas the CPLR similarly controls state courts. In General Re Life, Judge Bolden, writing for the Second Circuit, recently cemented this binary approach. There, the court affirmed the district court’s ruling and order denying General Re’s petition to confirm an arbitration award and granted the cross-petition of Lincoln National Life Insurance Co. to affirm the award issued after the arbitral panel clarified the original award. 909 F.3d at 546. General Re argued that the doctrine of functus officio barred the panel from clarifying how the parties were to calculate the amount of the award. Id. The court noted that its treatment of the ambiguous exception to functus officio furthers the well-settled rule in the Second Circuit that when asked to confirm an ambiguous award, the district court should instead remand to the arbitrators for clarification. 909 F.3d at 546 (collecting cases).
