This post first appeared on the Securities Arbitration Alert blog.  The blog’s editor-in-chief is George H. Friedman, Chairman of the Board of Directors for Arbitartion Resolution Services, Inc.

A firm’s experience in enforcing a FINRA Award underscores the need to comply with the FAA’s technical requirements for award confirmation.

Federal Arbitration Act (“FAA”) section 13 provides:

“The party moving for an order confirming, modifying, or correcting an award shall, at the time such order is filed with the clerk for the entry of judgment thereon, also file the following papers with the clerk: (a) The agreement; the selection or appointment, if any, of an additional arbitrator or umpire; and each written extension of the time, if any, within which to make the award. (b) The award. (c) Each notice, affidavit, or other paper used upon an application to confirm, modify, or correct the award, and a copy of each order of the court upon such an application.”

Must all elements be met? “Yes,” says the Court in UBS Fin. Servs. Inc. v. Harrison, No. CV-22-00386-PHX-DJH, 2023 WL 3178866 (D. Ariz. Apr. 27, 2023).

Award on Promissory Note

The Arbitrators in UBS Fin. Servs. Inc. v. Harrison, FINRA ID No. 19-03751 (Phoenix, AZ, Jul. 29, 2021), awarded the firm $635,492.85 in compensatory damages on seven unpaid promissory note balances; $58.328.67 in interest; $33.01 per diem until the Award is paid; $40,376 in attorneys’ fees; and $2,150 in FINRA fees. UBS then moved to confirm the Award under the FAA. The rep did not appear.

Initial Confirmation Attempt Rejected …

The Court rejects UBS’ initial Award confirmation attempt because the firm did not comply fully with FAA section 13:

“Here, UBS has attached the FINRA Award to its Complaint and alleges that ‘neither party seeks to vacate, modify, or otherwise correct the Award’. However, apart from stating the seven promissory notes each contain an arbitration clause, UBS has not provided copies of the alleged promissory notes with the agreements to arbitrate as required under 9 U.S.C. § 13(a)” (internal citation omitted). Is there a cure? Says the Opinion: “The Court will allow UBS to file a supplemental brief to cure this deficiency. Failure to do so will result in the Court’s denial of its Motion for Default Judgment.”

… But Defect Cured

UBS promptly addressed the defect, as we see in UBS Fin. Servs. v. Harrison, No. CV-22-00386-PHX-DJH (D. Ariz. May. 19, 2023):

“[T]he Court deferred on conducting a damages analysis because UBS had not yet provided copies of the alleged arbitration agreements as required by Section 13 of the Federal Arbitration Agreement (‘FAA’). 9 U.S.C. § 13(a). UBS has since done so. For the following reasons, the Court grants UBS’ Motion for Entry of Default Judgment on the basis of the underlying arbitration award.”

(ed: Right outcome, but this case is a reminder that the FAA’s technical award confirmation requirements must be met.)