Texas Construction Law Blog

When an arbitration tribunal issues an award, the first thing parties should do is calculate and calendar their deadlines to seek relief in court. This post discusses one such deadline—the one to file a motion to vacate or modify the award. Both the Federal Arbitration Act (FAA) and Texas Arbitration Act (TAA) provide that a party must make such a motion no later than 3 months (FAA) or 90 days (TAA) after the date a copy of the award is delivered to the movant.¹ But sometimes post-arbitration motion practice, or partial awards, can leave open the question of just when that 90-day period begins to run. Both federal and state courts have begun to provide guidance on this issue.

The Federal Arbitration Act

In First Kuwaiti General Trading & Contracting WLL v. Kellogg Brown & Root International Inc., No. 1:23-MC-1, 2023 WL 3437813 (E.D. Va. May 12, 2023), a federal district court in Virginia recently ruled that an arbitral tribunal’s order on an application to clarify/correct an arbitration award did not extend the three-month deadline under the FAA to file a motion to vacate an arbitration award. The tribunal issued its final award in July 2022. Both parties submitted applications to clarify/correct the final award under the Rules for the International Center for Dispute Resolution (ICDR). In October 2022, the tribunal granted Kellogg, Brown and Root International, Inc.’s (KBR) application, clarifying that its final award resulted in a net monetary recovery on one of KBR’s counterclaims.

First Kuwaiti General Trading & Contracting WLL (FKTC) waited until January 2023 to file its motion to vacate with the district court. KBR argued the motion was untimely under the FAA because more than three months had passed from the July 2022 final award. FKTC argued that the tribunal’s October 2022 order set a new deadline for a motion to vacate. The district court agreed with KBR, noting that the only FAA cases that favored FKTC’s interpretation were those finding that the underlying arbitration award was not yet final. First Kuwaiti, 2023 WL 3437813 at *8–10. The court, instead, followed a litany of cases strictly construing the three-month deadline as flowing from the date of the final award, not a motion to clarify. See id. The district court recognized that the federal case law relied upon by FKTC involved arbitration awards that were not yet final.

The Texas Arbitration Act

At least one Texas court has interpreted this 90-day limitations period as beginning to run from the date of the partial award that conclusively decided a discreet issue, rather than from the resolution of the entire arbitration.² However, the terms of the parties’ arbitration agreement may determine whether an award is conclusive and, thus, when the 90-day limitations period begins to run.³

In Teleometrics Intern., Inc. v. Hall, appellants requested to vacate an arbitration award in excess of 90 days after the award was first delivered but within 90 days after the arbitrator’s denial of a motion to clarify the award was delivered.⁴ Appellants argued that this request to vacate was timely because it was filed less than 90 days after the final ruling in the case and that, in effect, the opposing party’s motion for post-trial conference and for clarification of award extended the 90-day deadline.⁵ The First Court of Appeals rejected this, finding no authority for the notion “that the mere filing of a motion to clarify an award extends the limitations period to file a motion to vacate the award.” Instead, the court held the 90–day limitations period began to run “from the date of the conclusive award itself.”⁶

Practical Tips

There is a common sense rationale for these rulings. If a ruling on a motion to clarify/correct an arbitration award served as the new trigger date, parties could then file subsequent motions to clarify/correct an award and theoretically continue to extend their deadlines forever. Second, the scope of a motion to clarify/correct under the ICDR or American Arbitration Association Rules is much narrower than the grounds for vacatur under the FAA and TAA. 

Bottom line: If a party believes that an arbitration award could be construed as final, it should file its calculate its deadline to file a motion to vacate under the FAA/TAA as running from the date the award was issued, even though motions to clarify/correct an award are pending before a tribunal. Once the motion to vacate is filed, the movant could request an abatement/stay to determine if the tribunal clarifies or corrects the underlying award.

   
¹ See 9 U.S.C. § 12; Tex. Civ. Prac. & Rem. Code § 171.088. Under the TAA, a party may also, in cases of corruption, fraud, or other undue means, make a motion to vacate no later than 90 days after such grounds are known or should have been known.

² See Teleometrics Int'l, Inc. v. Hall, 922 S.W.2d 189, 190 (Tex. App.—Houston [1st Dist.] 1995 writ denied) (holding that motion for post-trial conference and for clarification of award did not extend the time to file a motion to vacate the award); Bob Bennett & Assocs., P.C. v. Land, No. 01-12-00795-CV, 2013 WL 2445369, (Tex. App.—Houston [1st Dist.] June 4, 2013, pet. denied) (holding that motion to modify award did not extend time to file a motion to vacate the award).

³ Lincoln v. C&N Grp., Inc., No. 05-97-00114-CV, 1997 WL 672626, at *2 (Tex. App.—Dallas Oct. 30, 1997, no pet.).

⁴ Teleometrics Int’l at 191.

⁵ Id. at 192.

⁶ Id.