The Eleventh Circuit joins the majority of circuits in finding grounds to vacate a non-domestic arbitration award under the FAA

In Corporacion AIC, SA v. Hidroelectrica Santa Rita S.A., the US Eleventh Circuit Court of Appeals, sitting en banc, issued a decision overruling its own prior decision and recognised that the grounds for vacating an arbitration award under Chapter 1 of the Federal Arbitration Act (FAA) should also be applied to vacate a non-domestic arbitration award (awards rendered in the US involving a non-US based party). As a result of this decision, the Eleventh Circuit resolved a circuit split, joining the Second, Third, Fifth, Sixth, Seventh, Ninth, Tenth, and DC circuits – all of which have held that Section 10 of Chapter 1 of the FAA governs vacatur.

Section 10 of Chapter 1 of the FAA outlines four reasons for vacating an arbitral award: 

• The award was procured by corruption, fraud, or undue means;
  
  
• There was evident partiality or corruption in the arbitrators; 
  
  
• The arbitrators were guilty of misconduct in the manner in which the hearing was conducted or evidence presented; or
  
  
• The arbitrators exceeded their powers or imperfectly executed them so that a mutual, final, and definite award upon the subject matter submitted was not made. 

The drastic change in the Circuit’s position will leave many reconsidering choices of an arbitral seat going forward.