Opinion
Civil Action No. 3:00-CV-0859-L
October 28, 2003
ORDER
The court administratively closed this case on December 27, 2001 because of the pendency of bankruptcy. Bayport filed a motion to reopen the case, which the court later granted on November 8, 2002. Before the court are Plaintiff's Application Pursuant to 9 U.S.C. § 9 to Confirm the Award of the American Arbitration Association as the Judgment of the Court, filed April 25, 2000; Defendant's Application to Vacate or Modify Arbitration Award, filed May 24, 2000; Defendant's Motion to Strike, filed July 14, 2000; and Plaintiff's Motion that Bayport be Allowed to Amend its Response to MFSNT's Application to Modify or Vacate the Arbitration Award and to Provide the Court Appendix C, filed September 13, 2000. Upon consideration of the application, motions, responses, replies, record on file, and the applicable authority, the court grants Plaintiff's Application Pursuant to 9 U.S.C. § 9 to Confirm the Award of the American Arbitration Association as the Judgment of the Court; denies Defendant's Application to Vacate or Modify Arbitration Award; denies as moot Defendant's Motion to Strike; and denies Plaintiff's Motion that Bayport be Allowed to Amend its Response to MFSNT's Application to Modify or Vacate the Arbitration Award and to Provide the Court Appendix C.
I. Factual and Procedural Background
This case involves a construction contract. On May 1, 1997, Adesta Communications, Inc. f/k/a MFS Network Technologies, Inc. ("MFS" or "Defendant") subcontracted with Bayport Pipeline, Inc. ("Bayport" or "Plaintiff) to construct a fiber optic infrastructure in Pennsylvania ("the Contract"). The Contract included an arbitration clause:
SECTION 22. DISPUTE RESOLUTION PROCESS
(I) If the Contract Documents do not provide a dispute resolution procedure, or if, in the sole judgment of Contractor, the controversy, dispute, or claim is principally between Contractor and Subcontractor and is not governed by the foregoing provisions in this Section 22, then such controversy, dispute or claim between Contractor and Subcontractor shall be decided by arbitration in accordance with the construction industry rules of the American Arbitration Association then prevailing unless the parties mutually agree otherwise. This agreement to arbitrate shall be specifically enforceable under the prevailing arbitration law. The award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.
Appendix in Support of Bayport's Application Pursuant to 9 U.S.C. § 9 To Confirm the Award of the American Arbitration Association as the Judgment of the Court ("Pl. App.") at 11. After Bayport began working on the infrastructure, disputes arose between Bayport and MFS regarding their obligations and performance under the Contract.
On September 18, 1997, Bayport sued MFS in Texas state court for a declaratory judgment to determine its rights under the contract. Bayport subsequently amended its petition to include claims for breach of contract, quantum meruit and fraud. On December 22, 1997, MFS filed a motion to compel arbitration and stay the proceedings, which the state court judge denied on April 3, 1998. MFS then filed a notice of removal in federal district court, but the case was remanded to state district court on June 3, 1998. Eight days later, MFS filed a notice of appeal, seeking interlocutory review of the denial of its motion to compel arbitration under the Texas Arbitration Act. MFS also filed a petition for writ of mandamus to order the trial court to compel arbitration under the Federal Arbitration Act ("FAA"). The Fifth District Court of Appeals of Texas subsequently consolidated the interlocutory appeal and the petition for writ of mandamus; dismissed as moot the interlocutory appeal; and directed the state district court to withdraw its order denying arbitration and to enter an order granting MFS's motion to compel arbitration.
Bayport thereafter filed an arbitration demand with the American Arbitration Association ("AAA") alleging fraud, breach of contract, quantum meruit and delay and hindrance in which it sought recovery of $5.5 million; MFS filed a counterclaim alleging breach of contract due to defective work. The parties arbitrated their disputes in November and December 1999, before an AAA construction industry arbitration tribunal (the "Arbitrators"). In their Award of Arbitrators ("arbitration award" or "award") issued in February 2000, the Arbitrators awarded Bayport a total sum of $4,331,864, comprising of $1,546,537 for unreimbursed costs (other than equipment); $1,834,668 for unreimbursed equipment costs; $445,851 in interest; and $504,808 in fees. On the counterclaim, the Arbitrators awarded MFS a total sum of $256,734, comprising of $137,916 for backcharges for Bayport's defective work; and $118,818 in attorney's fees. The net award to Bayport is $4,075,130. In March 2000, MFS filed a motion to modify the arbitration award, which was denied by the Arbitrators.
On April 25, 2000, Bayport filed this application to confirm the arbitration award pursuant to the FAA, 9 U.S.C. § 1, et seq. MFS answered the application, and on May 24, 2000, it filed a motion to vacate or modify the arbitration award.
II. Law Applicable to Review of Arbitration Decisions
Pursuant to the FAA, the court is authorized to confirm an arbitration award, and it must do so unless the award is vacated, modified, or corrected. See 9 U.S.C. § 9. Section 9 of the FAA states:
If the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration, and shall specify the court, then at any time within one year after the award is made any party to the arbitration may apply to the court so specified for an order confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title. If no court is specified in the agreement of the parties, then such application may be made to the United States court in and for the district within which such award was made. Notice of the application shall be served upon the adverse party, and thereupon the court shall have jurisdiction of such party as though he had appeared generally in the proceeding. If the adverse party is a resident of the district within which the award was made, such service shall be made upon the adverse party or his attorney as prescribed by law for service of notice of motion in an action in the same court. If the adverse party shall be a nonresident, then the notice of the application shall be served by the marshal of any district within which the adverse party may be found in like manner as other process of the court.9 U.S.C. § 9.
Thus, the court must confirm an arbitration award unless grounds to vacate or modify are shown. 9 U.S.C. § 9. MFS has requested a vacatur of the arbitration award. Under the FAA, a district court's review of an arbitration award is usually "extremely narrow." Antwine v. Prudential Bache Sec., Inc., 899 F.2d 410, 413 (5th Cir. 1990). A court may not vacate an arbitration award based on mere errors in interpretation or application of law, or mistakes in factfinding. See United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 38 (1987) (stating "[a]s long as [an] arbitrator is even arguably construing or applying the contract and acting within the scope of his authority, that a court is convinced he committed serious error does not suffice to overturn his decision). A district court must "defer to the arbitrator's resolution of the dispute whenever possible," Atlantic Aviation, Inc. v. EBM Group, Inc., 11 F.3d 1276, 1282 (5th Cir. 1994), and must "affirm the arbitrator's decision if it is rationally inferable from the letter or purpose of the underlying agreement." Executone Inform. Sys., Inc. v. Davis, 26 F.3d 1314, 1320 (5th Cir. 1994). Under this limited review, the court identifies only those errors that render the arbitration award "fundamentally unfair." See Forsythe Int'l, S.A. v. Gibbs Oil Co. of Texas, 915 F.2d 1017, 1020 (5th Cir. 1990).
Despite this narrow standard of review, several grounds exist that render an arbitration award so fundamentally unfair that a court may vacate the award. See 9 U.S.C. § 10(a). Pursuant to § 10, a court may vacate an award if (1) the award was procured by corruption, fraud, or undue means; (2) there is evidence of partiality or corruption of the arbitrator; (3) there is misconduct on the part of the arbitrator; or (4) where the arbitrator exceeds his authority. 9 U.S.C. § 10(a); Harris v. Parker College of Chiropractic, 286 F.3d 790, 792 (5th Cir. 2002). In addition, the Fifth Circuit recognizes a number of nonstatutory grounds for vacatur. Specifically, a court may vacate an arbitration award when it (1) is contrary to public policy; (2) is arbitrary and capricious; (3) does not "draw its essence" from the underlying contract; or (4) is in manifest disregard of the law. See Harris, 286 F.3d at 792 n. 1; Weinberg v. Silber, 140 F. Supp.2d 712, 717 (N.D. Tex. 2001).
MFS has also requested a modification of the Award. Section 11 of the FAA allows modification of an award to correct mathematical and other procedural matters. 9 U.S.C. § 11. III. Analysis
A. Defendant's Application to Vacate or Modify Arbitration Award
MFS contends that the award should be vacated because the Arbitrators exceeded their powers by (1) rendering an award that is not in accord with the AAA construction industry rules; (2) awarding damages on behalf of third parties which were not parties to the Contract; and (3) disregarding the express terms of the Contract. MFS further contends that the award should be vacated or modified because it contains a duplicate award of equipment costs and a triple award of profit.
1. The Form of the Arbitration Award
MFS contends the arbitration award does not contain a "concise, written breakdown of the award" as required by Rule R-42 of the AAA construction industry rules and therefore violates the Contract. Therefore, MFS contends, the Arbitrators exceeded their powers, necessitating vacatur of the award. Bayport contends that the award does provide a "concise, written breakdown of the award," and thus this argument cannot form the basis upon which to vacate the award. The court agrees.
The Contract provides that disputes between the parties would be decided by "arbitration in accordance with the construction industry rules" of the AAA. Rule R-42 of the AAA construction industry rules, titled Form of Award, provides:
The award shall be in writing and shall be signed by a majority of the arbitrators. It shall be executed in the manner required by law. The arbitrator shall provide a concise, written breakdown of the award. If requested in writing by all parties prior to the appointment of the arbitrator, or if the arbitrator believes it is appropriate to do so, the arbitrator shall provide a written explanation of the award.
Defendant's Application to Vacate or Modify Arbitration Award and Reply to Plaintiff's Application to Confirm Arbitration Award ("Def. App.") at 489 (emphasis added).
The Award provides: WE, THE UNDERSIGNED ARBITRATORS, having been designated in accordance with the Arbitration Agreement entered into by the above-named Parties and the Subcontract Agreement dated May 1, 1997, and having been duly sworn and having heard the proofs and allegations of the Parties find as follows:
FOR THE CLAIMANT: BAYPORT PIPELINE, INC.
Unreimbursed costs (other than equipment) $1,546,537.00 Unreimbursed equipment costs 1,834,668.00 Interest 445,851.00 Attorney fees 504,808.00 TOTAL $4,331,864.00
FOR THE RESPONDENT AND COUNTERCLAIMANT: MFS NETWORK TECHNOLOGIES, INC.
Backcharges for Bayport defective work $137,916.00 Attorney fees 118,818.00 TOTAL $256,734.00
NET AWARD TO BAYPORT PIPELINE, INC. $4,075,130.00
Accordingly, we AWARD as follows:
MFS Network Technologies, Inc. shall pay to Bayport Pipeline, Inc. the net sum of $4,075,130.00 within thirty (30) days after the date of this award.
The administrative fees and expenses of the American Arbitration Association shall be borne equally by the parties.
The compensation and expenses of the arbitrators shall be borne equally by the parties.
This award is in full settlement of all claims and counterclaims submitted to this arbitration panel. All other claims or counterclaims not awarded herein are denied.
This Award may be executed in any number of counterparts, each of which shall be deemed an original, and all of which shall constitute together one and the same instrument.
[Dated and signed by the Arbitrators].
The original award was signed by two of the three Arbitrators. At some later point, MFS received a copy of the award signed by all three Arbitrators.
Pl. App. at 12-13 (signed by two Arbitrators); Def. App. at 178-79 (signed by all three Arbitrators).
MFS contends that the meaning of "concise, written breakdown of the award" is explained in the AAA Construction Industry Arbitrator Training Manual ("training manual"):
Construction arbitrators are required to include concise breakdowns itemizing what was granted and/or denied on the parties' claims and counterclaims in their awards. The operative word here is "concise." When preparing breakdowns of your awards keep in mind three simple elements:
Itemize the components of each parties' claim/counterclaim;
Specify what was granted and/or denied as to each component;
Where appropriate, summarize with a "net" award statement as in the above example.
An example of a concise breakdown of a construction award appears on the opposite page.
Def. App. at 495 (emphasis added). MFS contends that Rule R-42 coupled with the instructions in the training manual required the Arbitrators to (1) rule on each of Bayport's claims (fraud, breach of contract, quantum meruit and delay and hindrance); (2) rule on its motion for partial summary judgment; (3) "specify those portions of Bayport and [MFS]'s claimed damages [that] were granted or denied"; and (4) "state how the damage amounts were determined." Bayport counters that the parties bound the Arbitrators to abide by the AAA construction industry rules not the training manual; and MFS was not entitled to an explanation of the award because such an explanation was never requested in writing by all parties prior to the appointment of the arbitrator as required by Rule R-42.
The court determines that the Arbitrators complied with their obligations as specified in the Contract, that is, they followed the AAA construction industry rules. The award complies with both R-42 and the training manual. Moreover, that the award does not specifically mention Bayport's claims, MFS's motion for partial summary judgment, or the parties' damages is of no moment; the award language is simple, unambiguous, and disposes of all the parties' claims. See Antwine, 899 F.2d at 412 (stating "[i]t has long been settled that arbitrators are not required to disclose or explain the reasons underlying the award."); Remmey v. Painewebber, Inc., 32 F.3d 143, 150(4th Cir. 1994), cert. denied, 513 U.S. 1112 (1995). The arbitration award states that it settles all claims and counterclaims submitted to arbitration, and that "[a]ll other claims or counterclaims not awarded herein are denied." A party cannot succeed on a § 10(a)(4) challenge when the arbitration award contains this type of language. See Antwine, 899 F.2d at 411 (denying § 10(a)(4) relief because arbitrator's decision stated "[a]ll claims submitted by [plaintiffs] are denied. . . .This Award is in full settlement of all claims submitted to this Arbitration."); Remmey, 32 F.3d at 150 (rejecting § 10(a)(4) challenge because arbitration award containing such language "could hardly be more final and definite"). Similarly, the Arbitrators were not required to explain how they arrived at the damages awarded. See Antwine, 899 F.2d at 412. Further, as there is no evidence that the parties requested in writing an explanation of the award, the Arbitrators were not required to do so. See Def. App. at 489 (R-42 specifically requires the parties to request in writing an explanation of the award prior to the appointment of the arbitrator).
The court notes that the arbitration award is similar to the example given in the training manual. See Def. App. at 496.
For these reasons, the court determines that the Arbitrators did not exceed their authority because the form of their award complies with the AAA construction industry rules and thus complies with the terms of the Contract. Accordingly, the court denies Defendant's motion to vacate with respect to this issue.
2. Damages on Behalf of Third Parties
MFS also contends that the Arbitrators exceeded their authority by awarding Bayport $1,834,668 in unreimbursed equipment costs because these costs were based on lost rentals to three companies (Big Sky, Dallas Pipeline and Bayport Equipment) which were not parties to the Contract and thus outside the scope of the arbitration agreement. Stated another way, MFS contends that Bayport should not have been compensated for losses suffered by these third parties. Bayport counters that the unreimbursed equipment costs represents "time-and-material" rates for equipment on the job; and that these rates are based on rental payments made to its related entities (Big Sky, Dallas Pipeline and Bayport Equipment) for various pieces of equipment is irrelevant. Bayport further contends that regardless of the method in which these equipment costs are determined, these costs were bargained for in modification to the Contract.
MFS relies on Eljer Mfg. Inc. v. Kowin Dev. Corp., 14 F.3d 1250 (7th Cir.), cert. denied, 512 U.S. 1205 (1994), to support its position that the Arbitrators exceeded their authority by awarding damages to third parties who were not parties to the arbitration. Eljer involved an arbitration agreement between Simonds Division, whose parent company was Eljer Manufacturing, and Kowin Development, Inc. Simonds and Kowin entered into a joint venture to manufacture files in China. In an attempt to aid the joint venture, Simonds sold equipment to the Bank of China which then leased the equipment back to the joint venture. When the joint venture failed, Kowin sued Eljer and Simonds for, inter alia, fraudulently misrepresenting and concealing facts regarding the equipment it sold to the Bank of China. The Bank of China also sued Eljer in China for fraud in connection with the sale. The district court granted Eljer's motion to compel arbitration. Kowin claimed that Eljer should not be permitted to keep the proceeds of the sale of equipment to the Bank of China. The arbitrator apparently agreed because Kowin was awarded damages, including the amount that the Bank of China paid for the purchase of the equipment. The Eljer court held that the arbitrator exceeded his authority because the arbitration agreement did not authorize him to resolve disputes between Eljer and the Bank of China, a third party which was not a signatory to the arbitration agreement. Eljer Mfg. Inc., 14 F.3d at 1256-57.
MFS's reliance on EIjer is misplaced. First, EIjer is not controlling authority on this court. Second, it is inapposite. The Arbitrators did not resolve a dispute between Bayport and its related entities (Big Sky, Dallas Pipeline, and Bayport Equipment), because there has been no evidence presented that such a dispute existed. Further, unlike EIjer, the award of unreimbursed equipment costs does not duplicate an amount requested by Bayport; therefore, this court would have to accept MFS's speculation as to the method by which the award was determined. Finally, even if the award was determined in the method proposed by MFS, that the equipment costs incurred by Bayport are based on its rental payments to third party related entities does not does not transform an award of equipment costs to Bayport into an award to those related companies, In short, the parties bargained for payment of these costs. While MFS counters that the Contract was never modified and thus these costs were not bargained for, these issues were before the Arbitrators. See Def. App. at 25-42 (MFS's Motion for Partial Summary Judgment); 148-177 (MFS's Post-Hearing Brief); and 180-188 (MFS's Motion to Modify Award). The arbitration award necessarily would require the Arbitrators to consider and decide these issues raised by MFS's motion for partial summary judgment and subsequently its motion to modify the award, which was denied.
As MFS has presented no evidence or authority to demonstrate a basis upon which to vacate the arbitration award, the court determines that the Arbitrators did not exceed their authority. Accordingly, the court denies Defendant's motion to vacate with respect to this issue.
3. Disregards the Express Terms of the Contract
MFS further contends that the Arbitrators exceeded their authority by awarding unreimbursed equipment costs because the Contract precluded recovery for lost profits resulting from delay. MFS also contends that this portion of the award does not draw its essence from the Contract. MFS refers to section 9 of the Contract, titled Delays, which states in relevant part:
In that event, and in only that event, [Bayport] shall be entitled to recover only such direct costs as it may have incurred as a result of the delay or interference and [Bayport] shall not be entitled to recover any amount as compensation for overhead or lost profits as a result of such delay.
Pl. App. at 10.
Bayport counters that the evidence elicited during the arbitration hearing established that the terms of the Contract had been modified and that Pennsylvania law, the law under which the case was arbitrated, allowed the Arbitrators to determine that section 9 had no applicability to the Contract as modified. Bayport further contends that under Pennsylvania law, exculpatory clauses, such as section 9, "cannot be raised as a defense when there has been affirmative or positive interferences by the owner [MFS] with the contractor's [Bayport's] work or where there has been a failure on the part of the owner to act in some essential matter necessary to the prosecution of that work such as obtaining permits." In its reply, MFS contends that under Pennsylvania law, section 9 is not an exculpatory clause but rather a limitation on liability which could have been enforced in this case and that the evidence did not support the amount of damages awarded by the Arbitrators.
A district court may vacate an arbitration award if it does not draw its "essence" from the underlying contract. See United Steelworkers of America v. Enterprise Wheel and Car Corp., 363 U.S. 593, 597 (1960) (stating award "is legitimate only so long as it draws its essence from the [arbitration agreement]"); Williams v. Cigna Fin. Advisors Inc., 197 F.3d 752, 758 (5th Cir. 1999), cert. denied, 529 U.S. 1099 (2000); Executone, 26 F.3d at 1324; Brotherhood of R.R.Trainmen v. Central of Ga. Ry., 415 F.2d 403, 412 (5th Cir. 1969), cert. denied, 396 U.S. 1008(1970). Underthis test, the court must determine whether the arbitrator's award "was so unfounded in reason and fact, so unconnected with the wording and purpose of the [arbitration agreement] as to `manifest an infidelity to the obligation of an arbitrator.'" Executone, 26 F.3d at 1325 (citations omitted). In making the "essence" inquiry, a district court is not limited to the arbitrator's explanation for the award. Id. Instead, "[t]he single question is whether the award, however arrived at, is rationally inferable from the contract." Id. (quoting Anderman/Smith Operating Co. v. Tennessee Gas Pipeline Co., 918 F.2d 1215, 1219 n. 3 (5th Cir. 1990), cert. denied, 501 U.S. 1206 (1991)). All doubts whether an award draws its essence from the contract must be resolved in favor of the arbitrator. See Valentine Sugars, Inc. v. Donau Corp., 981 F.2d 210, 213 (5th Cir.), cert. denied, 509 U.S. 923 (1993).
In this case, MFS's objections boil down to a dissatisfaction with the Arbitrators' application of Pennsylvania law and the sufficiency of the evidence. The court may not vacate an award based on mere errors in the application of the law or on mistakes in factfinding. See Misco, 484 U.S. at 38 (1987) (stating gross errors do not authorize a court to annul an arbitration award); Eljer, 14 F.3d at 1256 ("A question of sufficiency of the evidence before the arbitrator simply does not trigger the review powers of [the] court.").
For these reasons, the court determines that the Arbitrators did not exceed their authority or violate the "essence" test. Accordingly, the court denies Defendant's motion to vacate with respect to this issue.
4. Double Recovery of Equipment Costs and Triple Recovery of Profit
MFS lastly contends that the award should be vacated or modified because "it contains a double recovery of certain equipment costs and a triple recovery of profit" and thus is in manifest disregard of the law. Specifically, MFS contends that the unreimbursed costs (other than equipment) portion of the award consists of Bayport's direct costs, including incurred equipment costs, and a 20% profit; and that the unreimbursed equipment costs also consists of equipment costs and a 20% profit. Bayport summarily contends that MFS's argument is without merit.
MFS contends that the amount for direct cost included a 20% profit. Stated another way, unreimbursed costs (other than equipment) included two 20% profit components.
A district court may vacate an arbitration award if it is in manifest disregard of the law. See First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 942 (1995) (stating "parties [are] bound by [an] arbitrator's decision not in `manifest disregard' of the law"); Williams, 197 F.3d at 758. The Circuit Courts have emphasized that the "manifest disregard" doctrine is "severely limited," and "clearly means more than error or misunderstanding with respect to the law." DiRussa v. Dean Witter Reynolds, 121 F.3d 818, 821 (2d Cir. 1997) (citations omitted). Instead,
[t]he error must have been obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator. Moreover, the term "disregard" implies that the arbitrator appreciates the existence of a clearly governing legal principle but decides to ignore or pay no attention to it.Id. at 281; accord Williams, 197 F.3d at 762 n. 2. Thus, a district court may vacate an arbitration award on these grounds if, based on the information available, (1) it was manifest that the arbitrators acted contrary to applicable law, and (2) confirmation of the award would result in significant injustice, taking into account all the circumstances of the case. See Williams, 197 F.3d at 762 (adopting this "helpful" two-part test for applying manifest disregard standard); Harris, 286 F.3d at 292 n.l.
MFS contends that the court is able to determine the basis for the damages based on the evidence introduced during the arbitration hearing. MFS relies on Eljer. In Eljer, the district court easily determined the injury attributable to each damage award because the award duplicated the amounts requested by the plaintiff in its post-hearing brief. 14 F.3d at 1253. In this case, however, the award already indicates the "injury" upon which the damage award is based: unreimbursed costs (other than equipment), unreimbursed equipment costs, interest, and attorney's fees. Further, unlike Eljer, the award of unreimbursed equipment costs does not duplicate an amount requested by Bayport; therefore, this court would have speculate as to the manner in which the Arbitrators calculated their damages. The court declines to do so. Finally, the court notes that this issue was before the Arbitrate rs (see Def. App. at 180-193 (MFS's Motion to Modify Award)), and they found that MFS's position had no merit (see Def. App. at 194 (Order denying MFS's motion to modify the arbitration award)).
"A mere ambiguity in the opinion accompanying an award, which permits the inference that the arbitrator may have exceeded his authority, is not a reason for refusing to enforce the award." Enterprise Wheel, 363 U.S. at 598. All doubts must be resolved in favor of the arbitrator's decision in determining whether the arbitrator exceeded his powers. Valentine Sugars, Inc., 981 F.2d at 213, citing Moses H. Cone Memorial Hospital v. Mercury Construction, 460 U.S. 1, 24-25 (1983).
MFS fails to establish that it was manifest that the Arbitrators acted contrary to applicable law and that the court's confirmation of the arbitration award would result in significant injustice. Therefore, MFS's argument that the award was in manifest disregard of the law and thus exceeded the Arbitrators' authority is without merit. Accordingly, the court denies Defendant's motion to vacate or modify with respect to this issue.
B. Plaintiff's Application to Confirm the Arbitration Award
Having denied Defendant's motion to vacate or modify the arbitration award, the court turns to Plaintiff's application to confirm the award. Bayport seeks an order confirming the arbitration award against MFS in the amount of $4,075,130, plus post-award interest and post-judgment interest.
1. Analysis
The parties agreed that "the award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof." Pl. App. at 11. There is no dispute that Bayport has satisfied the requirements for pursuing a confirmation of the arbitration award in this district; that the prerequisites to jurisdiction under § 9 have been satisfied; that Plaintiff's application was timely; or that venue is proper in this district. In addition, the court determines that it has diversity jurisdiction over this matter pursuant to 28 U.S.C. § 1332, as the amount in controversy exceeds $75,000, and the dispute is between citizens of different states. MFS has not challenged the court's jurisdiction or ability to act under the FAA.
As stated before, a court must confirm an arbitration award unless grounds to vacate or modify are established. See 9 U.S.C. § 9. Since the court has determined that MFS's application to vacate or modify the arbitration award should be denied, the court must confirm the arbitration award. Accordingly, Plaintiff's Application Pursuant to 9 U.S.C. § 9 to Confirm the Award of the American Arbitration Association as the Judgment of the Court is granted.
2. Post-award Interest and Post-judgment Interest
Bayport requests "post-Award interest and post-judgment interest, after confirmation of said Arbitration Award." Having confirmed the arbitration award, the court awards post-award interest at the lawful applicable rate from the date of the arbitration award to the date of the judgment. The court also awards post-judgment interest at the current federal statutory rate of 1.3% per annum on the arbitration award and the post-award interest from the date of the judgment until paid. See Mantle v. Upper Deck Co., 956 F. Supp. 719, 739 (N.D.Tex. 1997) (citing 9 U.S.C. § 13) ("The district court's judgment confirming an arbitration award is to have the same effect, in every respect, as is any other judgment entered by the court, and post-judgment interest is thus governed by statutory rates."); see also 28 U.S.C. § 1961(a).
D. Defendant's Motion to Strike and Plaintiff's Motion to Amend Motion Response
MFS filed its motion to vacate or modify the arbitration award ("MFS's motion") on May 16, 2000. Bayport timely responded to MFS's motion on June 14, 2000, and filed an amended response on June 23, 2000 to correct its appendix which was missing deposition excerpts and to conform its brief to these additions. On July 14, 2000, MFS filed a motion to strike Bayport's amended response because it was untimely and not permitted under the Local Rules and to strike the amended appendix because it contains matters which were not a part of the arbitration hearing. In response to MFS's motion to strike and in an abundance of caution, Bayport filed a motion to amend its response on September 13, 2000.
In its reply to Bayport's response to its motion to vacate, MFS informs the court that its reply addresses the issued raised in Bayport's response and amended response.
In reaching its determination with respect to Bayport's application to confirm the arbitration award and MFS's motion to vacate or modify the arbitration award, the court did not rely on Bayport's amended response or amended appendix. Accordingly, the court denies Bayport's motion to amend its response to MFS's motion to vacate or modify the arbitration award and denies as moot MFS's motion to strike.
IV. Conclusion
For the reasons herein stated, the court grants Plaintiff's Application Pursuant to 9 U.S.C. § 9 to Confirm the Award of the American Arbitration Association as the Judgment of the Court; denies Defendant's Application to Vacate or Modify Arbitration Award; denies as moot Defendant's Motion to Strike; and denies Plaintiff's Motion that Bayport be Allowed to Amend its Response to MFSNT's Application to Modify or Vacate the Arbitration Award and to Provide the Court Appendix C. The award of the Arbitrators is hereby confirmed. The court will issue judgment by separate document pursuant to Fed.R.Civ.P. 58.