“If You Seek To Limit The Authority Of Your Arbitrators, Your Arbitration Clause Must Be Clear”

Allison Snyder of Porter Hedges LP explains the importance of clearly definited parameters of an arbitrator’s authority in her discussion of the Fifth Circuit’s decision in Soaring Wind Energy LLC (SWE) v. CATIS USA Inc., et al., denying an effort to vacate an arbitration panel’s award for exceeding its powers. The panel awarded almost $63 million in lost profits even though the arbitration agreement provided as follows:

17.10 No Consequential or Punitive Damages.  IN NO EVENT SHALL ANY MEMBER OR ANY OF ITS RESPECTIVE REPRESENTATIVES OR AFFILIATES BE LIABLE TO THE COMPANY OR TO ANY OTHER MEMBER OR ITS REPRESENTATIVES OR AFFILIATES FOR ANY EXEMPLARY, PUNITIVE, SPECIAL, INDIRECT, CONSEQUENTIAL, REMOTE OR SPECULATIVE DAMAGES.