T.Co Metals, LLC v. Dempsey Pipe & Supply, Inc.

Issue Discussed: Functus Officio

Submitted by Linsey M. Routledge, Troy Shuman

Date Promulgated: January 14, 2010


T.Co Metals, LLC v. Dempsey Pipe & Supply, Inc., (592 F.3d 329)

Case Number: 08-3894-cv(L), 08-3897-cv(CON), 08-4379-cv(XAP)

Court: United States Court of Appeals for the Second Circuit

Issue Decided: Did the district court err in concluding that an arbitrator had exceeded his powers and violated the functus officio doctrine by modifying an arbitration award?

Short Answer: Yes, The parties had granted the arbitrator the authority to interpret the arbitral rules and he determined that the rules allowed for modification of the award.

A final award was issued in an arbitration between T.Co Metals, LLC (“T.Co”) and Dempsey Pipe & Supply, Inc. (“Dempsey”) concerning a dispute over an allegedly defective steel pipe that T.Co delivered to Dempsey (the “Original Award”).  Both parties petitioned the arbitrator to amend the Original Award pursuant to the International Dispute Resolution Procedures of the American Arbitration Association’s International Centre of Dispute Resolution (“ICDR”). In May 2007, the arbitrator issued an “Amendment Order,” which accepted a small portion of the requested changes and ordered that the Original Award be amended immediately. In June 2007, the arbitrator issued an amended award (the “Amended Award”).

T.Co and Dempsey filed competing petitions in the United States District Court for the Southern District of New York to modify or to vacate the Amended Award in part. The District Court denied T.Co’s petition and granted in part and denied in part Dempsey’s petition.  It found that the arbitrator was functus officio and, therefore, without power to amend the award and confirmed the original award.  T.Co appealed the District Court’s ruling.

On appeal, T.Co argued that the District Court erred in holding that the arbitrator violated functus officio doctrine and erred in vacating the Amended Award to confirm the Original Award. Reversing this holding, the Court of Appeals found that the arbitrator did not violate functus officio doctrine; the arbitrator justly acted on the parties’ petitions for reconsideration and revised the award pursuant to his interpretation of the arbitral rules.  Both parties had agreed that the arbitrator had the power to interpret these rules.

The Court concluded that the arbitrator had neither exceeded his powers in amending the Original Award nor violated the functus officio doctrine. The Court vacated the order confirming the Original Award and remanded with instructions that, upon application, the Amended Award should be confirmed.



[1] Linsey M. Routledge is Senior Counsel and Troy Shuman is an associate at Clyde & Co US LLP.