Ambiguous Arbitration “Right to Appeal” Waivers Do Not Bar Second Circuit Review; Anti-Injunction Act Limits Federal Injunctions of State Foreclosures

1. Introduction

In Lanesborough 2000, LLC v. Nextres, LLC (2d Cir. Feb. 6, 2026), the Second Circuit confronted a recurring post-arbitration problem: when an arbitration agreement says the parties “waive the right to appeal,” does that eliminate appellate review of a federal district court’s judgment confirming (or vacating) an arbitral award?

The dispute arose from a $2 million building loan in which Respondent-Appellant Nextres, LLC agreed to fund Petitioner-Appellee Lanesborough 2000, LLC’s construction of a self-storage facility in Corning, New York. The parties executed a “Building Loan Agreement” and a separate “Arbitration Agreement,” governed by New York law, requiring arbitration under AAA rules for “Disputes” (including breach of contract and breach of the covenant of good faith and fair dealing), while excluding certain actions for “provisional remedies” and “a permanent injunction based upon an arbitration award.”

After the arbitrator largely ruled for Lanesborough—awarding damages, declaratory relief, and attorney’s fees—the Southern District of New York confirmed most of the award, awarded post-award prejudgment interest, and entered an injunction that included enjoining a related New York state foreclosure proceeding (the “Batchwood Foreclosure Action”). Nextres appealed. Lanesborough sought dismissal, invoking the agreement’s broad “Waivers” clause: the parties “WAIVE … THE RIGHT TO APPEAL.”

The Second Circuit (i) refused to treat the “right to appeal” waiver as a clear bar to appellate review, (ii) affirmed confirmation of the award and the post-award prejudgment interest, but (iii) vacated and remanded the injunction insofar as it enjoined the state-court foreclosure action, because the district court did not analyze the Anti-Injunction Act.

2. Summary of the Opinion

  • Appellate jurisdiction: The FAA provides statutory jurisdiction (9 U.S.C. § 16(a)(1)(D), (a)(3)). A contractual waiver of appellate rights must be clear and unequivocal; the clause “waive the right to appeal” was ambiguous in context and therefore could not foreclose review. The court expressly declined to decide whether a clear waiver of appellate review of a district court’s arbitration judgment would be enforceable.
  • Merits—confirmation: The court affirmed the district court’s partial confirmation of the Interim Award and confirmation of the Final Award. Nextres’s challenges did not satisfy FAA vacatur standards for “misconduct” or “exceed[ing] powers” (9 U.S.C. § 10(a)(3)-(4)).
  • Attorney’s fees: Even though the arbitration agreement stated each party would bear its own fees, the arbitrator could award fees as a sanction for bad-faith conduct under controlling Second Circuit precedent.
  • Anti-Injunction Act: The district court enjoined the state foreclosure proceeding without analyzing whether an exception to the Anti-Injunction Act (28 U.S.C. § 2283) applied. That was legal error; the injunction was vacated and remanded for proper analysis or reformulation.
  • Post-award prejudgment interest: Affirmed. The arbitrator’s denial of pre-award interest did not bar a judicial award of post-award prejudgment interest.

3. Analysis

A. Precedents Cited

1) Appellate waivers, jurisdiction, and clarity requirements

The opinion’s central doctrinal move is to import a “clarity” requirement—already familiar in forum-selection and arbitration contexts—into contractual appellate waivers.

  • John Boutari & Son, Wines & Spirits, S.A. v. Attiki Importers & Distribs. Inc.: The court drew on the principle that jurisdiction, once conferred, is not treated as ousted or waived “absent a clear indication” of that purpose. This framed the waiver issue as one of clear expression, not merely generalized intent to arbitrate.
  • Glob. Seafood Inc. v. Bantry Bay Mussels Ltd.: Analogizing to forum-selection clauses, the court relied on the rule that clauses lacking “clear exclusionary or obligatory language” are not construed to deprive courts of jurisdiction. This analogy supports a reluctance to infer sweeping waiver effects from generic wording.
  • Hoeft v. MVL Grp., Inc. (and its partial abrogation on other grounds by Hall St. Assocs., LLC v. Mattel, Inc.): Hoeft demonstrated the Second Circuit’s willingness to reach the merits even where parties used broad anti-review language. The panel used it to reinforce that vague waiver text does not automatically eliminate judicial review pathways. By noting Hall St., the court preserved doctrinal accuracy about the FAA’s limits while keeping Hoeft relevant for the waiver/judicial review discussion.
  • MACTEC, Inc. v. Gorelick: The court adopted the Tenth Circuit’s formulation that waivers limiting appeal from a district court’s arbitration judgment must be “clear and unequivocal.” This supplied an explicit standard and positioned the Second Circuit alongside other circuits demanding precision.
  • Beckley Oncology Assocs., Inc. v. Abumasmah: Cited as an example of a waiver that did specifically mention the type of “judicial review or appeal” being relinquished, underscoring what was missing from the Nextres clause.
  • Dole v. United Steelworkers of Am.: Used for noscitur a sociis—words in a list take meaning from their neighbors. This was pivotal because “right to appeal” appeared among trial-centric procedural rights (“trial by judge or jury,” “pretrial discovery,” “rules of evidence”), suggesting a court-procedure cluster rather than a universal bar on appellate review.
  • Wise v. Wachovia Sec., LLC: Reinforced the conceptual point that appellate review of confirmation orders is not “review of arbitration awards” on the merits; it is statutory vacatur/confirmation review. This sharpened the ambiguity: did “appeal” mean merits-review of an arbitral award, or appeal of a district court judgment?
  • Brad H. v. City of New York: Supplied New York’s contract-law ambiguity framing (“susceptible to more than one reasonable interpretation”). The Second Circuit used it to justify treating the waiver as ambiguous rather than simply broad.

2) Contra proferentem and FAA-based “clear statement” approaches

  • Albany Sav. Bank, FSB v. Halpin: Recognized the New York rule construing ambiguity against the drafter, but only “as a matter of last resort.”
  • Lamps Plus, Inc. v. Varela: The Supreme Court rejected using contra proferentem where the FAA supplies a default rule for resolving arbitration-agreement ambiguity through a clear-statement requirement. The panel extended that logic here: rather than “tie goes to the non-drafter,” the governing principle is “waiver must be clear.”

3) Deference to arbitration; FAA vacatur standards; arbitrator authority

  • A&A Maint. Enter., Inc. v. Ramnarain and Scandinavian Reinsurance Co. v. Saint Paul Fire & Marine Ins. Co.: Provided the review standards and the “strong deference” posture—no de novo review of arbitral merits. The panel used these cases to narrow Nextres’s attacks into the specific statutory vacatur grounds.
  • Tempo Shain Corp. v. Bertek, Inc.: Set the “fundamental fairness” threshold for vacatur based on misconduct: the party must have been denied an adequate opportunity to present evidence and argument. The court used this to reject Nextres’s “prejudicial misconduct” framing.
  • ReliaStar Life Insurance Co. of New York v. EMC National Life Co.: The key precedent upholding an arbitrator’s authority to award attorney’s fees as a sanction for bad faith even where the contract says each side bears its own fees. The panel treated the fee-shifting language as regulating expected good-faith arbitration outcomes, not stripping sanction power for bad faith.
  • Westerbeke Corp. v. Daihatsu Motor Co.: Supported the proposition that arbitrator factual findings are generally not subject to judicial challenge, undermining Nextres’s attempt to relitigate bad faith findings.

4) Anti-Injunction Act limits

  • Wyly v. Weiss: Provided the Second Circuit’s articulation of the “in aid of jurisdiction” and “relitigation” exceptions and the standard of review (legal questions de novo).
  • Chick Kam Choo v. Exxon Corp.: Supplied the canonical warning that Anti-Injunction Act exceptions are “narrow” and not enlarged by “loose statutory construction.”
  • Atl. Coast Line R.R. Co. v. Bhd. of Locomotive Eng'rs: Reinforced the presumption against federal interference: doubts should be resolved in favor of allowing state proceedings to continue. This framed the district court’s omission—failure to analyze § 2283—as especially consequential.

5) Post-award prejudgment interest and “law of the case”

  • Fed. Ins. Co. v. Am. Home Assur. Co.: Established abuse-of-discretion review for prejudgment interest awards.
  • ExxonMobil Oil Corp. v. TIG Ins. Co.: The critical distinction: New York recognizes pre-award and post-award prejudgment interest; post-award prejudgment interest is “a statutory requirement” within judicial authority and outside an arbitrator’s.
  • Waterside Ocean Navigation Co. v. Int'l Navigation Ltd.: Noted a presumption in favor of post-award prejudgment interest (there, in the Convention context), reinforcing that such interest is typically appropriate.
  • Quern v. Jordan: Used to limit “law of the case” to issues previously determined—supporting the conclusion that the arbitrator’s denial of pre-award interest did not decide post-award interest.

B. Legal Reasoning

1) The new (or clarified) rule: “Right to appeal” waivers must be clear and unequivocal

The court recognized that the FAA itself authorizes appeals from district court orders confirming or denying confirmation of awards (9 U.S.C. § 16(a)). Against that statutory backdrop, the panel held that a contractual waiver cannot be read to foreclose appellate review unless it is clear and unambiguous.

The clause at issue failed because it did not specify what “appeal” meant. The court found two reasonable readings:

  1. Broad reading: no appeals of anything (including district court orders about injunctions and post-award interest).
  2. Narrow/contextual reading: no appeal (in some sense) of arbitral merits, consistent with the clause’s surrounding waivers of courtroom procedures.

Because both readings were plausible, the waiver was ambiguous and could not bar appellate review. Notably, the panel avoided resolving the harder question: whether an unmistakably drafted waiver of appellate review from a district court’s FAA judgment is enforceable. That restraint keeps the holding modest: ambiguity alone defeats the waiver.

2) Confirmation and vacatur: confining review to FAA grounds

Nextres’s attacks on the Interim Award—complaints about “law of the case” treatment of emergency awards, alleged attorney testimony, evidentiary sufficiency, and proof of liability—were treated as either (i) not rising to “fundamental fairness” concerns under 9 U.S.C. § 10(a)(3) as construed by Tempo Shain Corp. v. Bertek, Inc., or (ii) merits disagreements that do not show the arbitrator lacked power under 9 U.S.C. § 10(a)(4). The confirmed portions (contract and implied covenant breaches, damages, and declaratory relief) were squarely within the arbitration clause’s definition of “Dispute.”

3) Attorney’s fees: “each party bears its own fees” does not eliminate sanction authority for bad faith

Relying on ReliaStar Life Insurance Co. of New York v. EMC National Life Co., the court held that the “each party shall bear their own attorney[’]s fees” provision did not strip the arbitrator of authority to award fees based on bad faith conduct during arbitration. The arbitrator’s repeated emphasis on “bad faith conduct” and detailed findings of obstruction and misrepresentation grounded the award as a sanction, and the Second Circuit treated factual disputes about those findings as non-reviewable under Westerbeke Corp. v. Daihatsu Motor Co..

4) Anti-Injunction Act: the district court must fit the injunction within a statutory exception

The district court enjoined the Batchwood Foreclosure Action based on practical financing harm—i.e., the state foreclosure’s “continued existence” impeded alternate financing. The Second Circuit held that this rationale did not engage the controlling federal limitation: 28 U.S.C. § 2283 forbids federal injunctions against state proceedings unless one of three narrow exceptions applies (“expressly authorized,” “necessary in aid of jurisdiction,” or “to protect or effectuate its judgments”).

The panel did not decide whether an exception ultimately applies; it vacated and remanded because the district court did not perform the required analysis. This is a process-centered holding: when a federal court enjoins a state proceeding in an arbitration-confirmation aftermath, it must justify the injunction under § 2283, mindful of Chick Kam Choo v. Exxon Corp. and Atl. Coast Line R.R. Co. v. Bhd. of Locomotive Eng'rs.

5) Post-award prejudgment interest: judicial authority unaffected by arbitrator’s denial of pre-award interest

The Second Circuit affirmed the award of prejudgment interest from the date of the Interim Award to judgment as permissible post-award prejudgment interest. Under ExxonMobil Oil Corp. v. TIG Ins. Co., post-award prejudgment interest is within the court’s authority and not something an arbitrator’s prior interest ruling controls. Accordingly, “law of the case” did not apply because the arbitrator neither decided nor could decide the post-award judicial interest question.

C. Impact

1) Drafting implications for arbitration clauses

The decision sends a clear drafting message: a bare “waive the right to appeal” provision is insufficient if the intent is to foreclose appellate review of a district court’s FAA judgment. Parties seeking that result must use language that unmistakably addresses appeals from court orders (e.g., confirmation/vacatur judgments) rather than relying on generic “appeal” language. Conversely, parties resisting an appellate waiver can leverage contextual ambiguity—especially when “appeal” appears amid waivers that read like trial-procedure waivers.

2) Litigation strategy after arbitration

Even after confirming an award, federal courts must be cautious about enjoining parallel state proceedings. This opinion empowers parties defending state actions to force a disciplined § 2283 analysis and constrains “practical harm” rationales untethered to Anti-Injunction Act exceptions.

3) Fee awards and arbitral discipline

By reaffirming ReliaStar Life Insurance Co. of New York v. EMC National Life Co., the court strengthens arbitrators’ ability to sanction bad-faith conduct notwithstanding contractual “bear your own fees” language—preserving deterrence against discovery obstruction and evidentiary misrepresentation in arbitration.

4) Interest awards

The decision continues the Second Circuit’s trend of treating post-award prejudgment interest as a normal judicial add-on, insulating it from arguments that the arbitrator already “decided interest.” This affects settlement leverage after interim/final awards, because the cost of delay may include interest accruing through confirmation.

4. Complex Concepts Simplified

  • “Waiver of the right to appeal” (in arbitration): This can mean different things—(a) no internal arbitral appeal; (b) no court review of the arbitrator’s merits; (c) no appeal from a court’s confirmation/vacatur judgment. If the contract does not specify which, courts may find the waiver ambiguous.
  • Noscitur a sociis: A rule of interpretation meaning a word takes meaning from nearby words in the same list. Here, “appeal” appeared next to courtroom trial procedures, suggesting the clause may have been aimed at trial-like rights rather than appellate review of court judgments.
  • FAA vacatur standards (9 U.S.C. § 10): Courts may vacate awards only on narrow grounds (e.g., misconduct denying a fair hearing, or the arbitrator exceeding powers). Disagreement with the outcome is not enough.
  • Anti-Injunction Act (28 U.S.C. § 2283): Federal courts generally cannot stop state-court cases. They may do so only if a specific statutory exception applies, such as preventing relitigation of an issue already decided or protecting the federal court’s jurisdiction.
  • Pre-award vs. post-award prejudgment interest: “Pre-award” covers losses before the arbitrator’s award; an arbitrator may address it. “Post-award prejudgment interest” covers the period after the award but before court judgment; courts typically handle it, and an arbitrator’s refusal to award pre-award interest does not decide the post-award question.
  • Law of the case: A doctrine preventing relitigation of issues already decided in the same case. It does not apply to issues that were never decided (or could not have been decided) earlier.

5. Conclusion

Lanesborough 2000, LLC v. Nextres, LLC establishes (at minimum) a Second Circuit clear-statement rule for appellate waivers in arbitration agreements: a contractual waiver of the “right to appeal” will not foreclose appellate review of a district court’s arbitration judgment unless it is clear and unambiguous about what appeals are waived. The decision also reinforces two practical guardrails in post-arbitration litigation: (i) fee-shifting limits do not disable arbitrators from sanctioning bad faith under ReliaStar Life Insurance Co. of New York v. EMC National Life Co., and (ii) federal courts must respect the Anti-Injunction Act’s strict limits before enjoining related state proceedings, even when doing so seems necessary to make federal relief effective.