February 06, 2019 Practice Points

Second Circuit Recognizes Exception to Functus Officio Doctrine

The court affirmed, largely based on precedent from other circuits.

By Michael S. Oberman

The Second Circuit has recognized an exception to the functus officio doctrine that allows arbitrators to clarify an ambiguous award. General Re Life Insurance Co. v. Lincoln National Life Insurance Co., No. 17–2496 (2nd Cir. November 28, 2018)

After the final award was issued, the parties disagreed over how to implement it, and one side sought clarification while the other objected. The panel (with one dissent) issued a “clarification.” The party seeking that clarification moved to confirm the award as clarified; the other side moved to confirm the original award. The district court confirmed the clarified award (in a decision that thoroughly explored the functus officio doctrine, 273 F. Supp. 3d 307 (D. Conn. 2017)). The Second Circuit affirmed, largely based on precedent from other circuits:

We join the Third, Fifth, Sixth, Seventh, and Ninth Circuits in recognizing an exception to functus officio where an arbitral award “fails to address a contingency that later arises or when the award is susceptible to more than one interpretation.” Sterling China Co. v. Glass, Molders, Pottery, Plastics & Allied Workers Local No. 24, 357 F.3d 546, 554 (6th Cir. 2004) (internal quotation marks omitted); Brown v. Witco Corp., 340 F.3d 209, 219 (5th Cir. 2003) (“An arbitrator can . . . clarify or construe an arbitration award that seems complete but proves to be ambiguous in its scope and implementation.”); Glass, Molders, Pottery, Plastics & Allied Workers Int’l Union v. Excelsior Foundry Co., 56 F.3d 844, 847 (7th Cir. 1995) (same); Colonial Penn. Ins. Co. v. Omaha Indem. Co., 943 F.2d 327, 334 (3d Cir. 1991) (“[W]hen the remedy awarded by the arbitrators is ambiguous, a remand for clarification of the intended meaning of an arbitration award is appropriate.”); McClatchy Newspapers v. Central Valley Typographical Union No. 46, 686 F.2d 731, 734 n.1 (9th Cir. 1982) (same).

Adopting this exception to functus officio furthers the well‐settled rule in this Circuit that when asked to confirm an ambiguous award, the district court should instead remand to the arbitrators for clarification.

Michael S. Oberman is counsel with Kramer Levin Naftalis & Frankel LLP in New York, New York.

Copyright © 2019, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).