per share at the time of the merger. The debentures received and retained by the plaintiff were, at about that time, trading at $ 18.67.
Following notice of the proposed merger plaintiff advised Daley that he wished to vote against the merger and to perfect his dissenter's rights pursuant to Section 262 of the General Corporation Law of the State of Delaware. This statute provides, in pertinent part, that any stockholder of a Delaware corporation that has neither voted in favor of a merger or consolidation nor consented thereto in writing shall be entitled to an appraisal by the Court of Chancery of the fair value of his shares of stock. Section 262(i). The defendant failed to execute the plaintiff's order. The plaintiff lost his appraisal rights.
In the lawsuit filed in this Court, the plaintiff sought $ 500,000 in breach of contract and negligence damages for the loss of his appraisal rights. The defendant denied that the plaintiff suffered any damages and asserted the affirmative defense that Gandal failed to mitigate his damages and thereby caused in whole or in part or substantially contributed to any damages he may have suffered.
It is well settled that "judicial review of an arbitration award has been narrowly limited." Revere Copper & Brass, Inc. v. Overseas Private Investment Corp., 202 U.S. App. D.C. 81, 628 F.2d 81, 83 (D.C.Cir.), cert. denied, 446 U.S. 983, 64 L. Ed. 2d 839, 100 S. Ct. 2964 (1980); see also Sargent v. Paine Webber Jackson & Curtis, Inc., 674 F. Supp. 920, 922 (D.D.C. 1987), rev'd on other grounds, 280 U.S. App. D.C. 7, 882 F.2d 529 (D.C.Cir. 1989).
A court may vacate an arbitration award only under one of the reasons set forth in the Arbitration Act, 9 U.S.C. § 10 or if the arbitrators show a "manifest disregard of law" in rendering their decision. Our Circuit Court, noting that the Supreme Court has observed that arbitral awards may be made without explanation, Wilko v. Swan, 346 U.S. 427, 436, 98 L. Ed. 168, 74 S. Ct. 182 (1953), and following the Second Circuit's lead in Sobel v. Hertz, Warner & Co., 469 F.2d 1211 (2d Cir. 1972), has said that while forcing arbitrators to explain their award would increase the ability of "courts to spot the sort of 'manifest disregard' of the law that justified overturning an arbitral award," when grounds for their decision can be gleaned from the record, "an explanation requirement would unjustifiably undermine the speed and thrift sought to be obtained by the 'federal policy favoring arbitration'." Sargent v. Paine Webber Jackson & Curtis, Inc., 280 U.S. App. D.C. 7, 882 F.2d 529 (D.C.Cir. 1989), quoting Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24, 74 L. Ed. 2d 765, 103 S. Ct. 927 (1983).
There is nothing in the arbitrator's decision to suggest, as the plaintiff contends, that the NASD arbitration panel failed to consider applicable Delaware law. Daley's defense throughout has been that any damages which may have resulted due to their negligence and breach of contract and all liability flowing therefrom, is, under well settled principles of contract and tort law, subject to the non-breaching parties' duty to mitigate.
The plaintiff for his part argues that pursuant to the Delaware statute the arbitrators were obliged to "direct the payment of the fair value of the shares . . . to the stockholders entitled thereto." Section 262(i). Their alleged failure to do so, argues the plaintiff, evidences an express disregard of the law warranting this Court's order to vacate the award.
However, it is clear that nothing in Delaware law would have prevented the arbitrators from assigning a certain fair value to the debentures and assessing the liability of the parties under the facts alleged and legal theories expressed in the pleadings. On the contrary, it seems likely that the arbitrators have considered the mitigation argument put forth by the defendant and cannot be said to have understood the law and disregarded it nonetheless.
THEREFORE for the foregoing reasons, it is this 5th day of January, 1990,
ORDERED, that plaintiff's motion to vacate arbitration award is denied and the complaint of arbitration is dismissed with prejudice.