WA Supreme Court: Court May Vacate Facially Valid Arbitration Award
Broom's broker made some bad decisions. He took a retirement account, liquidating blue-chip stocks and going high-tech. Not a smart move for an old man. The broker move to Morgan Stanley in 2000, taking the account with. The value continued to decrease, and Broom passed away in 2002.
The children brought suit, alleging negligence and a slew of other claims. The arbitration agreement came into effect and Morgan Stanley asserted statute of limitations. The arbitration panel held that the claims were barred by the statute limitations (except for the CPA claim. The panel then dismissed the CPA claim.
The problem here is the statute of limitations applied to arbitrations is that of the arbitration agreement, not the state. The parties, may of course contract specifically for a state statute limitations, but this does not mean that they apply automatically. Thus, the six-year limitation within the arbitration agreement governed.
The next question then becomes whether the court can trump an arbitration award where there is a clear error of law: "We hold that facial legal error falls within former RCW 7.04.160(4) as one instance in which arbitrators exceed their powers and that it is a valid ground to vacate an arbitration award."
Yes, I have had my Xanax and can now again blog securities opinions. Or maybe it's the fact that this is an opinion about arbitration awards that only tangentially touches on securities. Either way, you have your opinion, and a bit of analysis to boot.