In a dispute between a construction company hired by New York State to replace a portion of the Whitestone Bridge and a steel company regarding the timeliness of certain deliveries related to the project, the Second Circuit Court of Appeals affirmed the confirmation of the roughly $6.5 million net arbitration award in favor of the construction company. The steel company contended that the arbitrator committed a "manifest disregard of the law" by disregarding an order issued by a New Hampshire court in a related action. The order contained statements suggesting that the steel company was not liable in the instant dispute. The Second Circuit, however, rejected the steel company's argument, agreeing with the lower court that there was "ample support for the arbitrator's ruling" that the cited language from the New Hampshire court's order was only dicta.
The steel company also argued that the arbitrator manifestly disregarded the terms of a "Letter Agreement" between the parties, but the court found that there was insufficient evidence to conclude that arbitrator had no "colorable justification" for finding that the alleged agreement was never finalized and was not binding. The court also rejected an argument from the steel company that the arbitrator erroneously imposed liability on the company for a time period that was not covered by the parties' agreements. The court held that the steel company failed to show beyond speculation why the arbitrator decided to award certain percentages of the claims at issue. The court also held that to the extent the steel company was arguing that the arbitrator manifestly disregarded the evidence, the Second Circuit "does not recognize" that reason as "a proper ground for vacating an arbitrator's award." Tully Construction Co., Inc. et al. v. Canam Steel Corp., Case No. 16-1324-cv (2d Cir. Mar. 23, 2017).
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