Manifest Disregard of the Law is Not Ground for Vacatur, 7th Circuit Rules

CHICAGO - A federal court erred in vacating a portion of an arbitration award for manifest disregard of the law, the 7th Circuit U.S. Court of Appeals has ruled, noting that the Federal Arbitration Act does not authorize vacatur on such grounds. Affymax Inc. v. Ortho-McNeil-Janssen Pharmaceuticals Inc., No. 11-2070 (7th Cir.).

The appellate court further ruled that the arbitrators did not manifestly disregard the law by failing to discuss in the award certain of the issues before them.

In 1992, Affymax Inc. and Ortho-McNeil-Janssen Pharmaceuticals Inc. began a joint venture to develop peptide compounds. The agreement provided that any …