Panel Did Not Commit Manifest Disregard Of The Law When It Rejected Res Judicata Defense

Carlton Fields
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A construction company appealed an order confirming an international arbitration award, which had denied the company’s demand for unpaid monies against an Antiguan medical school. The award also granted the medical school’s counterclaim, which had sought a refund of certain tax payments it had made to the company during the project that were earmarked for the company to pay the Antiguan and Barbudan tax authorities, but which the company never paid. In upholding the arbitration award, the Second Circuit rejected the company’s argument that the panel had committed a manifest disregard of the law by declining to apply res judicata and related claim or issue preclusion defenses due to a prior litigation between the parties. The court “correctly concluded that the arbitral panel ‘manifestly did not ‘ignore’ or ‘pay no attention to’ these doctrines; instead, it explicitly considered and rejected applying both doctrines, and in each case had more than ‘barely colorable justification.’” American University of Antigua-College of Medicine v. Leeward Construction Co., Ltd., Case No. 15-1595-cv (2d Cir. June 24, 2016).

 

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