7th Circuit Emphasizes Narrow Scope of Judicial Review of Arbitral Orders | ZFZ Postcard Cases

The Seventh Circuit was tasked with reviewing an FAA arbitral award that ruled in favor of Certain Underwriters at Lloyd’s of London against Continental in an insurance dispute.

Continental moved for the vacatur of an interim award and a post-final award order entered by the FAA in the District Court for the Northern District of Illinois. The district court affirmed the arbitral orders noting that the arbitrators had broad authority to formulate appropriate remedies under the “honorable engagement” provision of the arbitration agreement between the parties.

In affirming the district court’s ruling, the Seventh Circuit recognized that if its job were to assess the merits of the claim the same way the court approaches ordinary appeals, then its conclusion may have been different here. However, noting the narrow scope of judicial review of arbitral awards, the Seventh Circuit stated, “Hard as it may be to set aside our normal rules for review, we must do so for arbitration, lest we undermine the institution.”

Read more on this decision here.