Cantor Fitzgerald Sec. v. Refco Sec. Llc

• Decision Date: 26 April 2011
• Parties: CANTOR FITZGERALD SECURITIES, Petitioner–Respondent,v.REFCO SECURITIES, LLC, Respondent–Appellant.Refco Securities, LLC, Petitioner–Appellant,v.Cantor Fitzgerald Securities, Respondent–Respondent.
• Court: New York Supreme Court — Appellate Division

83 A.D.3d 592

922 N.Y.S.2d 312

2011 N.Y. Slip Op. 03297

CANTOR FITZGERALD SECURITIES, Petitioner–Respondent,

v.REFCO SECURITIES, LLC, Respondent–Appellant.Refco Securities, LLC, Petitioner–Appellant,

v.Cantor Fitzgerald Securities, Respondent–Respondent.

Supreme Court, Appellate Division, First Department, New York.

April 26, 2011.

SNR Denton U.S. LLP, New York (Arthur H. Ruegger of counsel), for appellant/appellant.Saul Ewing LLP, New York (Ruth A. Rauls of counsel), for respondent/respondent.TOM, J.P., ANDRIAS, FRIEDMAN, ABDUS–SALAAM, ROMÁN, JJ.

Judgments, Supreme Court, New York County (Barbara Jaffe, J.), entered August 3, 2010 and August 9, 2010, which denied the petition to vacate an arbitration award, granted the petition to confirm the same award, and awarded petitioner-respondent Cantor Fitzgerald Securities the principal amount of $11,193,466 plus interest, unanimously affirmed, without costs.

Judicial review of the award in this matter is governed by the Federal Arbitration Act (FAA) (9 USC § 1 et seq.), which mandates the enforcement of written arbitration agreements relating to transactions affecting interstate commerce ( see 9 USC § 2; see also Matter of Salvano v. Merrill Lynch, Pierce, Fenner & Smith, 85 N.Y.2d 173, 180, 623 N.Y.S.2d 790, 647 N.E.2d 1298 [1995] ). It is undisputed that none of the grounds for vacating an arbitration award set forth in the FAA applies here ( see 9 USC § 10[a] ). Contrary to Cantor's contention, the judicially-created “manifest disregard of the law” ground for vacating an arbitration award under the FAA is still viable, notwithstanding the Supreme Court's decision in Hall Street Assoc., L.L.C. v. Mattel, Inc., 552 U.S. 576, 585, 128 S.Ct. 1396, 170 L.Ed.2d 254 [2008] ) ( see Stolt–Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. ––––, 130 S.Ct. 1758, 1768 n. 3, 176 L.Ed.2d 605 [2010]; see generally Gemstar–TV Guide Intl., Inc. v. Yuen, 61 A.D.3d 478, 479, 876 N.Y.S.2d 404 [2009], lv. denied 13 N.Y.3d 701, 885 N.Y.S.2d 715, 914 N.E.2d 364 [2009] ).

Here, the arbitration award was properly confirmed since there was no showing that the arbitration panel manifestly disregarded the law or exceeded its authority. Specifically, there is no basis to conclude that the panel ignored or refused to apply controlling and explicit law on the issue of lost volume sellers. Even if the panel erred in making its legal conclusion on that issue or failed to understand the law, such error does not equate to a manifest disregard for the law ( see Wien & Malkin LLP v. Helmsley–Spear, Inc., 6 N.Y.3d 471, 480–486, 813 N.Y.S.2d 691, 846 N.E.2d 1201 [2006], cert. dismissed 548 U.S. 940, ...