Manifest-Disregard Doctrine Law and Legal Definition
Manifest-Disregard Doctrine refers to a legal principle that an arbitration award will be vacated if the arbitrator manifestly disregards the law. To constitute a manifest disregard for the law, a mere error in interpretation or application of the law is insufficient. Rather, the decision must fly in the face of clearly established legal precedent. An arbitrator acts with manifest disregard if (1) the applicable legal principle is clearly defined and not subject to reasonable debate; and (2) the arbitrators refused to heed that legal principle. It is a nonstatutory ground for vacatur.
However there are conflicting decisions regarding the doctrine.
The United States Supreme Court has implicitly recognized judicial review based on "manifest disregard" of the law when it stated that the interpretations of the law by the arbitrators in contrast to manifest disregard are not subject, in the federal courts, to judicial review for error in interpretation.[ Coffee Beanery, Ltd. v. WW, L.L.C., 300 Fed. Appx. 415 (6th Cir. Mich. 2008)]
In Hall Street Associates, L.L.C. v. Mattel, Inc., 128 S. Ct. 1396, 1403, 170 L. Ed. 2d 254 (2008) the Supreme Court restricted the grounds for vacatur of an arbitration award to those set forth in § 10 of the Federal Arbitration Act (FAA), 9 U.S.C.S. § 1 et seq., and consequently, manifest disregard of the law is no longer an independent ground for vacating arbitration awards under the FAA.