The opinion of the court was delivered by: Royce Lamberth, District Judge.
This case comes before the Court on plaintiffs' petition to correct, modify or vacate arbitration award . This Court previously granted [27-28] defendants' motions [4, 12] to stay the proceedings pending completion of arbitration pursuant to the arbitration clause in the parties' original agreement. Now that the arbitration has been completed and the award of the arbitrator has been announced, plaintiffs seek an order declaring that the arbitration was non-binding. Defendants oppose plaintiffs' request and submit their own request that the Court issue an order confirming the arbitration award [33-34]. Upon consideration of the parties' filings and the applicable law, the Court finds that plaintiffs' motion should be denied, that the arbitration award should be confirmed, and that plaintiffs' claims as to all defendants should be dismissed.
This Court issued an Order  and Memorandum Opinion  dated March 9, 2000 which, inter alia, granted defendants' motion to stay the proceedings pending completion of arbitration. That opinion held, over plaintiffs' objections, that the arbitration clause*fn1 in the parties' original Partnership Agreement ("Agreement") was valid and binding, and pursuant to Section 3 of the Federal Arbitration Act, ordered a stay in the proceedings until the arbitration was completed. Mem. Op.  at 15-19. This Court imposed the stay as to all defendants, including those who were non-signatories to the Agreement (including its arbitration clause), Zedakah Foundation ("Zedakah") and Planned Investments, Inc. ("Planned Investments") on the basis of its inherent equity powers. Id. at 20.
Subsequently, plaintiffs and defendant Kenneth A. Gere ("Gere"), the only remaining defendant who was also a signatory to the Agreement, submitted to arbitration (Floyd Collins, another general partner, also participated in the arbitration). After a five-day hearing, the arbitrator denied all of plaintiffs' claims in the Award of Arbitrator entered on August 1, 2002 ("Award") for lack of evidence, Plaintiffs' Supp. Pet.  Exh. 7. Plaintiffs now reassert their claim that the arbitration was non-binding and ask this Court to vacate the Award and/or clarify its earlier order to that effect.
Defendant Gere objects to plaintiffs' petition, arguing that the Award is binding as to any claims against him because he was a signatory to the Agreement, which provided for a binding arbitration. Zedakah and Planned Investments, as non-parties to the arbitration and non-signatories to the Agreement, object to plaintiffs' petition on the basis that any claims against them are now precluded by the arbitration award in Gere's favor. More specifically, they argue that since plaintiffs' claims against Zedakah and Planned Investments are based on principal-agency theory and/or the doctrine of respondeat superior, defendant Gere's exoneration as an agent serves to exonerate him as a principal of those organizations. Plaintiffs reply that Zedakah and Planned Investments, as nonsignatories and non-participants, lack standing to request dismissal of the Award and that the issue of collateral estoppel is not ripe until this Court has ruled on plaintiffs' petition to correct, modify or vacate the arbitration award.
A. Plaintiffs' Motion to Correct, Modify or Vacate Arbitration Award
The parties concede, and this Court has previously determined, that this dispute is governed by the Federal Arbitration Act, 9 U.S.C. § 1 et. seq. (1988) ("FAA"). Diversity actions brought to determine the validity of an arbitration award fall within the provisions of the Act as long as the arbitration agreement involves or affects interstate commerce. Fairchild & Co. v. Richmond, Fredericksburg & Potomac R.R. Co., 516 F. Supp. 1305, 1310 (D.D.C. 1981) (Sirica, J.) The Agreement in this case, which formed a partnership among residents of several different states for real estate investment, falls within the scope of the FAA.
Under the FAA, a court may correct, modify or vacate an arbitration award only when there are grounds for doing so. Generally, in order to vacate an arbitration award, a court must find misconduct on the part of the arbitrator or other irregularities in the arbitration proceedings that resulted in prejudice against the rights of one party. 9 U.S.C. § 10. In order to modify or correct an award, Section 11 requires that the award is based on miscalculations, that it is in excess of the arbitrator's authority, or that other imperfections are present not relating to the merits of the controversy. 9 U.S.C. § 11. Under those limited circumstances, a court has authority to modify and correct the award "so as to effect the intent thereof and promote justice between the parties." Id.
Plaintiffs offer no basis on which this Court could assert the authority to correct, modify or vacate the Award of Arbitrator under the FAA. They rely on the assertion that the arbitration clause in the Agreement contemplated non-binding arbitration, which is essentially a question of contract interpretation. As such, any decision on that question would provide an insufficient basis under the FAA for this Court to correct, modify or vacate the award.
The only other possible basis for altering the award appears in plaintiffs' response to defendants' attempt to assert collateral estoppel. Plaintiffs allege that their claims against Zedakah and Planned Investments should not be precluded because, inter alia, the arbitration proceeding was fraught with procedural deficiencies that denied plaintiffs the opportunity to fully and fairly litigate their claims. If plaintiffs intend to offer these alleged deficiencies as a basis upon which the Court may vacate the award, the effort must fail. Any misconduct alleged by the plaintiffs is on the part of defendants, not the arbitrator. Moreover, plaintiffs state that they lodged their complaints with the arbitrator and, although they were subsequently denied, plaintiffs do not assert any prejudicial error in the arbitrator's review of their objections. Absent substantial misconduct that prejudiced plaintiffs' case before the arbitrator, this Court has no authority to modify or vacate an award by a qualified arbitrator that is the result of a process that appears to have afforded plaintiffs an opportunity to fully and fairly adjudicate their claims. See Fairchild & Co., 516 F. Supp. at 1314.
B. Plaintiffs' Motion to Clarify Order
Notwithstanding this Court's ruling that the parties were bound to arbitrate their dispute, plaintiffs argue that the decision of the arbitrator is not binding on them. Consequently, they assert that they are free to pursue in litigation the claims which have been denied in arbitration. In support of this argument, plaintiffs rely on a case which states that "mandatory arbitration" and "binding arbitration" are "two different things." U.S. v. Bankers Ins. Co., 245 F.3d 315, 322 (4th Cir. 2001) This Court acknowledges that there is a conceptual difference between binding and mandatory arbitration and thus that two parties could theoretically agree to mandatory non-binding arbitration. However, that it is merely possible provides an insufficient basis on which to conclude that it actually occurred in this case.
In assessing whether the Agreement binds the parties to the decision of the arbitrator, this Court first notes that federal policy strongly favors enforcement of arbitration clauses. See, e.g., Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). Significantly, this policy in favor of arbitration has been interpreted to impute a presumption that arbitration will be binding. McKee v. Home Buyers Warranty Corp. II, 45 F.3d 981, 985 (5th Cir. 1995) ("We think that the `federal policy favoring arbitration' covers more than simply the substantive scope of the arbitration clause . . . and encowmpasses an expectation that such procedures will be binding." (emphasis added) (citations omitted)).
Thus, even though the question of whether the Award of Arbitrator shall be binding is properly characterized as a question of contract interpretation, such interpretation must be conducted in light of this liberal federal policy. McKee II, 45 F.3d at 984-85 (quoting Volt Info. Scis., Inc. v. Stanford Univ., 489 U.S. 468, 475-76, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989)) ("[I]n applying general state-law principles of contract interpretation . . . due regard must be given to the federal policy favoring arbitration, and ambiguities as to the scope of the arbitration clause itself resolved in favor of arbitration.")
Parties may overcome this policy favoring arbitration and the presumption that it will be binding by including in their agreement provisions to the contrary. Plaintiffs point to the use of "first referred" in the Agreement's arbitration clause as indicative of the parties' intent that the arbitration was to be merely a non-binding prerequisite to pursuing litigation or other avenues of resolution. However, such language does not overcome the policy and presumption favoring binding arbitration. Numerous courts have held that language implying that arbitration was a condition precedent to any other avenues of resolution is not sufficiently specific to call for non-binding arbitration. McKee II, 45 F.3d at 984; Rainwater v. Nat'l Home Ins. Co., 944 F.2d 190, 194 (4th Cir. 1991); Duke v. Crop Growers Ins., Inc., 70 F. Supp.2d 711, 715 (S.D.Tex. 1999) (respectively holding that clauses such as "shall precede," "shall be a condition precedent," and separate right-to-sue language, do not overcome the policy favoring arbitration). In this Court's opinion, "first referred" is sufficiently similar to the language used in these cases that it is reasonable to apply the same rule.
The Fourth Circuit explained that "condition precedent" language was traditionally included in arbitration clauses to overcome the federal courts' hostility toward enforcing such clauses. Rainwater. 944 F.2d at 194. Since the enactment of the FAA, courts are no longer reluctant to enforce arbitration clauses, so any "condition precedent" language is merely an artifact that should not be interpreted to indicate anything more than judicial confirmation or other subsequent procedures not undermining the binding nature of the arbitration. Id. Given this history and precedent, "first referred" is insufficiently specific to overcome the policy and presumption favoring binding arbitration.
Similarly, plaintiffs' reliance upon the rule that ambiguities are to be construed against the drafter is unpersuasive. As noted above, the Agreement must be interpreted in light of the liberal federal policy which includes the expectation that arbitration shall be binding. Given this presumption, the "first referred" language is not sufficiently unclear to constitute an ambiguity. Even if it were, the rule of ...