Jurisdiction(s):
United Kingdom

New York FAA confirmations: Stafford’s confidentiality safe harbour and LXA Aviation—full satisfaction needed; contests or outstanding non-monetary relief risk unsealing awards

Published on: 21 October 2024

Published by a Law360 reporter

Legal News

Article summary

Lawyers have lately leveraged the Federal Arbitration Act’s (FAA’s) confirmation route to work around arbitration confidentiality promises. The tactic runs as follows: the winning side moves to confirm a confidential award, paid or unpaid; submits the award under seal as an exhibit to the confirmation motion; then urges the court to unseal it on the basis that filings on a court docket are presumed open to the public. As many courts disapprove of sealing and precedent imposes a demanding standard for sealing applications, this strategy has gathered momentum. In the Southern District of New York, for instance, even parties who promptly satisfied their awards in full saw those awards unsealed when claimants pursued confirmation after payment. The US Court of Appeals for the Second Circuit curtailed this manoeuvre last year in Stafford v International Business Machines Corp, yet, as the 25 September LXA Aviation ruling shows, difficulties persist. In Stafford, the Second Circuit concluded that arbitration awards submitted with confirmation petitions must stay sealed when they have been satisfied and are governed by a confidentiality clause. Those post-payment applications triggered unsealing despite immediate satisfaction of the awards. The practice has proved attractive to many claimants...

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