As we explained in our case summary, the question in this case was whether a panel of arbitrators exceeded its authority when, after issuing a partial award finding no loss under an insurance policy, the panel later revisited that decision and issued a final award finding a loss under the policy. A unanimous Court (Stein, J.) held that the arbitrators were not barred from revisiting their earlier decision and reversed the Appellate Division decision to the contrary.
The Court’s began by acknowledging the common law functus officio rule, which precludes an arbitrator from taking additional action after issuing a final award. The Court also acknowledged federal judicial decisions recognizing that an arbitrator could issue a partial award on less than all of the issues in the arbitration, which would be considered a final award if the parties expressly agreed to that arrangement. The Court, however, refused to address whether the functus officio rule was still good law. And it refused to address whether state law incorporated the federal rule permitting less-than-final final arbitration awards. Neither issue was presented, the Court held, because the parties in this case did not expressly agree that the panel’s partial award would be considered final. The decision was merely an interim award, and there was nothing in the parties’ agreement that precluded the panel from revisiting an interim decision.
Return to the case page for AISLIC v. Allied Capital Corporation.