Opinion ID: 767038
Heading Depth: 2
Heading Rank: 2

Heading: The District Court Decision to Vacate in Part and Confirm in Part

Text: 16 VCW argues, and we agree, that the district court erred when it used section 10 of the FAA to vacate in part and confirm in part the arbitration panel's first order. We review de novo a district court's decision to vacate an arbitration award. See Executive Life Ins. Co. v. Alexander Ins. Ltd., 999 F.2d 318, 320 (8th Cir. 1993). 17 The FAA creates only two avenues for attacking an arbitration award. Under section 10, a district court may vacate an award; under section 11, a district court may modify an award. Section 10 allows a district court to vacate an arbitration award when: the award was procured by corruption; the arbitrators had a conflict of interest; the arbitrators committed prejudicial misconduct in refusing to postpone a hearing or in refusing to hear material evidence; or the arbitrators exceeded their powers. See 9 U.S.C. § 10. Section 11 allows a district court to modify an arbitration award when: an award contains an evident material miscalculation or misdescription; an award was made by the arbitrators in a matter not submitted to them; or an award is imperfect in form. See 9 U.S.C. § 11. In this case, the district court, applying section 10, decided to vacate in part and confirm in part the award because it determined that the arbitration panel exceeded its authority in arbitrating the letters of credit issue. 18 While this determination is of concern to us, we make no finding at this time as to whether the district court was correct. Under the conditions of this appeal, we need not reach the question of panel authority. 19 Our review of the initial arbitration order convinces us that the arbitration panel intended the award of premiums to be indivisible from the award on the letters of credit. Whatever the rule may be under different circumstances, when a panel by the language it uses makes clear that it intends its award to be indivisible, the district court must take the award as it finds it and either vacate the entire award using section 10 or modify the award using section 11. 5 Moreover, in this instance, to vacate only a portion of the award would result in an unintended windfall in favor of Legion. Because the district court erred when it decided to vacate only part of the award using section 10 and did not determine whether the award could be modified using section 11, we remand for further consideration of the dispute.