Reaffirming the Narrow Grounds for Vacating Arbitration Awards under the FAA: Commentary on Loans on Fine Art LLC v. Ian S. Peck

I. Introduction

This Second Circuit summary order in Loans on Fine Art LLC, et al. v. Ian S. Peck, et al., No. 24‑3140‑cv (2d Cir. Nov. 24, 2025), arises from a highly specialized commercial context: financing transactions involving valuable fine art. Despite its setting in the art-finance world, the decision is fundamentally about the law of arbitration, specifically:

How strictly federal courts confine themselves when asked to vacate an arbitral award under the Federal Arbitration Act (“FAA”), and
How the “manifest disregard of the law” doctrine continues to operate in the Second Circuit as an extraordinarily narrow avenue for challenging awards.

The case involves two groups:

The “Peck Parties” (Respondents-Appellants): Ian S. Peck and several affiliated entities engaged in art-related financing and credit services.
The “Greenberg Parties” (Petitioners-Appellees): Loans on Fine Art LLC and related investment entities, engaged in similar fine art financing activity, along with (in the underlying Settlement Agreement) an individual, Gary Greenberg.

The dispute centers on a January 20, 2021 Settlement Agreement resolving earlier disagreements in their art-financing businesses. Instead of paying cash, the Peck Parties agreed to satisfy their obligations through proceeds from the sale of a specific painting:

The Work: An oil painting, Ottaviano de’ Medici, attributed to the Italian Renaissance master Andrea del Sarto.

Under the Settlement Agreement, the Peck Parties had to produce the Work for evaluation by February 12, 2021. They failed to do so. The Greenberg Parties commenced arbitration on April 29, 2021, claiming breach and damages. The arbitrator found for the Greenberg Parties and awarded them $7,198,960.30 in damages.

On appeal from the Southern District of New York’s judgment confirming this arbitral award, the Peck Parties asked the Second Circuit to vacate the award on three principal grounds:

That the award was “procured by fraud” under FAA § 10(a)(1), based on an expert appraiser’s alleged failure to disclose a prior, lower valuation of the same painting;
That the arbitrator was guilty of “misconduct” under § 10(a)(3) by refusing to admit additional evidence concerning that alleged fraud; and
That the arbitrator acted in “manifest disregard of the law” in how he applied the Settlement Agreement and calculated damages.

The Second Circuit affirmed confirmation of the award and rejected each vacatur theory. Although the order expressly notes that it is a non‑precedential summary order (per Federal Rule of Appellate Procedure 32.1 and Local Rule 32.1.1), it nonetheless:

Reaffirms the extreme narrowness of judicial review of arbitral awards
Clarifies how the standards for fraud, arbitrator misconduct, and manifest disregard apply when parties discover alleged fraud before the award and when the dispute concerns expert appraisals and contract interpretation in a specialized asset context.

II. Summary of the Opinion

A. Procedural Posture

The Greenberg Parties prevailed in arbitration after the Peck Parties breached the Settlement Agreement by failing to produce the painting for evaluation by the agreed date. The arbitrator, relying in part on a 2021 appraisal by Dr. Timothy Hunter (the “2021 Appraisal”), awarded damages of $7,198,960.30.

The Peck Parties moved in the Southern District of New York to vacate the award; the Greenberg Parties moved to confirm it. Judge Jennifer H. Rearden confirmed the award. The Peck Parties appealed to the Second Circuit.

B. The Peck Parties’ Grounds for Vacatur

The Peck Parties advanced three main arguments:

Fraud under FAA § 10(a)(1).
They alleged that the award was “procured by fraud” because Dr. Hunter, the Greenberg Parties’ appraisal expert, allegedly “intentionally and fraudulently” failed to disclose that he had done a 2019 appraisal of the same painting (the “2019 Appraisal”) at a much lower valuation. They argued that this nondisclosure bore on his credibility and thus tainted the award.
Misconduct under FAA § 10(a)(3).
They asserted that the arbitrator committed “misconduct” by refusing to admit additional evidence they wished to submit to rebut Dr. Hunter’s testimony that he had “forgotten” about the 2019 Appraisal.
Manifest disregard of the law.
They contended the arbitrator manifestly disregarded black-letter law:
- By effectively permitting Dr. Hunter to rely on precontractual statements regarding the painting’s condition, despite a merger clause in the Settlement Agreement; and
- By miscalculating damages, particularly by:
  - Relying on the 2021 Appraisal rather than the lower 2019 Appraisal; and
  - Failing to apply a 10% “sales expenses” deduction set forth in the Settlement Agreement’s “waterfall provision.”

C. The Court’s Holding

The Second Circuit affirmed the district court’s confirmation of the arbitral award, holding:

No fraud under § 10(a)(1): Because the Peck Parties discovered the 2019 Appraisal before the evidentiary hearing, cross-examined Dr. Hunter on it, and introduced it into evidence, they could not satisfy the requirement that the alleged fraud was undiscoverable through due diligence before the award issued. Their complaint was essentially an attack on the arbitrator’s credibility determination, which is not reviewable.
No misconduct under § 10(a)(3): The arbitrator did not err in refusing additional evidence that would have been cumulative of Dr. Hunter’s cross-examination. An arbitrator is not required to hear every piece of evidence proffered if it is not material or would be duplicative.
No manifest disregard of the law:
- The Settlement Agreement’s merger clause bound only the contracting parties and did not limit what information a non-party expert appraiser (Dr. Hunter) could consider.
- Any mistaken reference by the arbitrator to a precontractual representation as if it were part of the Settlement Agreement was, at most, a simple legal error—not the intentional defiance of clearly applicable law required for manifest disregard.
- The arbitrator reasonably relied on the 2021 Appraisal and articulated several rational grounds for discounting the 2019 Appraisal (including its conservative, collateral-lending purpose and differing assumptions), consistent with the principle that doubts in damage estimation are resolved against the breaching party.
- Refusing to deduct 10% “sales expenses” was reasonable because no sale ever occurred, and therefore no such expenses were actually incurred; the court could “discern [a] valid ground” for that decision even though the arbitrator did not spell it out at length.

Accordingly, the court held that none of the statutory grounds for vacatur, nor the non-statutory “manifest disregard” standard, were met.

III. Analysis

A. Precedents and Authorities Cited

The Second Circuit’s analysis is tightly grounded in its established FAA jurisprudence. The opinion functions less as a source of new law and more as a reaffirmation and specific application of longstanding principles.

1. Duferco Int’l Steel Trading v. T. Klaveness Shipping A/S, 333 F.3d 383 (2d Cir. 2003)

Duferco is the key framing precedent. It emphasizes that vacatur is available only in:

“a very narrow set of circumstances delineated by statute and case law.”

Duferco supports two central themes in this order:

The heavy deference accorded to arbitral awards; and
The notion that, even where an arbitrator’s explanation is sparse or imperfect, an award must be upheld so long as the court can find a “justifiable” or “valid” ground for the result.

Later in the order, the court cites Duferco again for the proposition that even “deficient or non-existent” explanations do not doom an award if a legally valid rationale can be inferred from the record.

2. FAA § 10(a) and the “Manifest Disregard” Doctrine

The court restates that § 10(a) of the FAA allows vacatur only where the arbitrators engaged in:

“corruption,”
“fraud,” or
other “impropriety.”

The opinion then cites Schwartz v. Merrill Lynch & Co., 665 F.3d 444 (2d Cir. 2011), to reaffirm that “manifest disregard of the law” survives in the Second Circuit as:

“judicial gloss on the[se] specific grounds for vacatur.”

This continues the Second Circuit’s post–Hall Street line, treating manifest disregard as a severely cabined application of the statutory standards—not a free-floating, alternative basis for review.

3. Fraud under § 10(a)(1): Odeon Capital Group LLC v. Ackerman and Karppinen v. Karl Keifer Machine Co.

To define the fraud standard, the court cites:

Odeon Cap. Grp. LLC v. Ackerman, 864 F.3d 191 (2d Cir. 2017) — A petitioner must show, among other elements, that even with due diligence he could not have discovered the alleged fraud before the award issued.
Karppinen v. Karl Keifer Mach. Co., 187 F.2d 32 (2d Cir. 1951) — Where the fraud allegation concerns credibility issues, the party must show that he could not have discovered the fraud during the arbitration; otherwise, he should have raised it as a defense then.

These precedents reinforce that fraud as a ground for vacatur cannot be premised on information actually known and used in the arbitration itself. If the allegedly fraudulent conduct is exposed during the proceeding and is subject to cross-examination and argument, then the complaint is really about how the arbitrator weighed that evidence.

4. Arbitrator as Factfinder: Nicholls and Wallace v. Buttar

The court cites:

Nicholls v. Brookdale Univ. Hosp. & Med. Ctr., 204 F. App’x 40 (2d Cir. 2006) (summary order), and
Wallace v. Buttar, 378 F.3d 182 (2d Cir. 2004)

for the proposition that it is the arbitrator’s role to:

make factual findings,
weigh evidence, and
assess witness credibility.

Federal courts may not conduct a “reassessment of the evidentiary record.” This case is a clear application of that rule: the panel refuses to reweigh Dr. Hunter’s credibility or substitute its view of the appraisal evidence for the arbitrator’s.

5. Arbitrator’s Control of Evidence: Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Trust

The decision cites Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Tr., 729 F.3d 99 (2d Cir. 2013), to emphasize that an arbitrator need not “hear all the evidence proffered by a party,” particularly when the proffered evidence would be cumulative.

This is crucial to rejecting the Peck Parties’ § 10(a)(3) argument: the refused evidence was not “pertinent and material” in the requisite sense, because the same points had already been explored on cross-examination.

6. Manifest Disregard: STMicroelectronics, N.V. v. Credit Suisse Securities (USA) LLC

STMicroelectronics, N.V. v. Credit Suisse Sec. (USA) LLC, 648 F.3d 68 (2d Cir. 2011), is cited for two key propositions:

The high threshold for manifest disregard: an award will be vacated only when a party shows the arbitrator “intentionally defied the law”—mere error or misunderstanding is not enough.
Even when arbitrators do not explain their decisions, courts will uphold them if any valid ground can be discerned.

These principles are directly applied to the merger clause issues and the damages “waterfall” dispute.

7. Damages and the Breaching Party’s Risk: Process America, Inc. v. Cynergy Holdings, LLC

The arbitrator cited, and the Second Circuit quotes, Process Am., Inc. v. Cynergy Holdings, LLC, 839 F.3d 125, 141 (2d Cir. 2016), for the damages standard:

“Doubts are generally resolved against the party in breach. Therefore, a plaintiff need only show a stable foundation for a reasonable estimate of the damage[s] incurred as [a] result of the breach. At that point the burden of uncertainty as to the amount is on the breaching party.”

In this case, the Peck Parties’ breach made it impossible to determine with precision what the painting would have fetched at sale. Process America’s principle justifies the arbitrator’s reliance on the 2021 Appraisal (favorable to the non-breaching Greenberg Parties) where the breaching Peck Parties generated the uncertainty by failing to produce the asset.

B. The Court’s Legal Reasoning

1. Fraud under FAA § 10(a)(1)

Under § 10(a)(1), an award may be vacated “where the award was procured by corruption, fraud, or undue means.” Building on Odeon and Karppinen, the court emphasizes a critical requirement:

The alleged fraud must not have been discoverable with due diligence before the award. If the purported fraud was discovered in time to be presented to the arbitrator, it ordinarily cannot justify vacatur.

Applying that rule:

The Peck Parties conceded they learned of the 2019 Appraisal before the evidentiary hearing.
- They cross-examined Dr. Hunter about it “extensively.”
- They introduced the 2019 Appraisal as an exhibit.
Thus, the alleged fraud goes not to hidden information that distorted the arbitral process, but to the arbitrator’s assessment of a credibility contest the parties fully aired in arbitration.

The Second Circuit characterizes the fraud claim as:

“merely an invitation for us to second-guess the Arbitrator's determination that Dr. Hunter was a credible witness.”

That is categorically impermissible under Nicholls and Wallace. The arbitrator’s role as factfinder and credibility assessor is sacrosanct; courts cannot revisit it under § 10(a)(1) or otherwise.

Key point: If a party discovers purported fraud during the arbitration and litigates that issue before the arbitrator, a later attack on the award framed as “fraud” is almost certainly doomed. The proper time to press that issue is in the arbitration itself, not in a post-award collateral attack.

2. Misconduct in Refusing to Hear Evidence (§ 10(a)(3))

Section 10(a)(3) allows vacatur where the arbitrators are guilty of “misconduct in refusing to hear evidence pertinent and material to the controversy.” The Peck Parties argued that the arbitrator committed misconduct by denying them the opportunity to submit additional evidence impeaching Dr. Hunter’s claim that he had “forgotten” the 2019 Appraisal.

Relying on Kolel Beth Yechiel, the Second Circuit underscores that:

An arbitrator need not accept all evidence a party wishes to offer; and
Refusal to hear cumulative or marginally relevant evidence is not misconduct.

Here, the proposed additional evidence would have simply added more weight to the same point already made on cross-examination: that Dr. Hunter’s explanation for not mentioning the 2019 Appraisal was suspect. Because this evidence was “cumulative of testimony already placed in the record,” the arbitrator’s decision to exclude it fell squarely within his discretion and did not deprive the Peck Parties of a fundamentally fair hearing.

In essence, the court treats § 10(a)(3) as guarding against truly unfair procedures (e.g., refusal to hear crucial, non-cumulative, outcome-determinative evidence), not as a vehicle for relitigating ordinary evidentiary rulings.

3. Manifest Disregard of the Law

The court next addresses the Peck Parties’ various contentions that the arbitrator “manifestly disregarded” the law. These claims fall into three sub-issues:

Whether the Settlement Agreement’s merger clause barred reliance on precontractual statements in the 2021 Appraisal.
Whether the arbitrator could reasonably rely on the 2021 Appraisal (versus the 2019 Appraisal) in setting damages.
Whether the arbitrator erred in not applying a 10% “sales expenses” deduction under the contract’s waterfall when calculating damages.

a. The Merger Clause and the Expert Appraisal

The Settlement Agreement contained a standard integration / merger clause:

“This Agreement constitutes the entire agreement and understanding of the Parties with respect to the subject matter hereof and thereof and supersedes all prior agreements and understandings, both written and oral, of the Parties regarding the subject matter hereof and thereof.”

The Peck Parties argued that, because of this clause, the arbitrator should have barred Dr. Hunter from using any precontractual statements by the Peck Parties about the painting’s condition (i.e., statements not embodied in the written Settlement Agreement) when preparing his 2021 Appraisal.

The Second Circuit rejected that argument on two grounds:

Scope of the Clause: The merger clause binds only the “Parties” to the Settlement Agreement—the Greenberg and Peck Parties—not third parties such as Dr. Hunter. It does not restrict what information an expert appraiser may consider in forming his opinion.
Degree of Error Required: Even if the arbitrator mistakenly treated a precontractual representation as though it were part of the Settlement Agreement, that would at most constitute a “simple error in law or a failure…to understand or apply it,” not an intentional flouting of clearly applicable law. Under STMicroelectronics, manifest disregard requires a showing that the arbitrator “intentionally defied the law.”

Thus, the court emphasizes that:

The concept of a merger clause is fundamentally about limiting contractual obligations and representations between the contracting parties, not about controlling what an expert witness may or may not consider as part of his valuation methodology; and
Even clear misapplications of contract law rarely amount to manifest disregard; the doctrine is reserved for situations where the arbitrator knew the applicable law and deliberately chose to ignore it.

b. Choice Between the 2019 and 2021 Appraisals

The court rejects the argument that relying on the 2021 Appraisal constituted manifest disregard. The arbitrator articulated three reasons for discounting the 2019 Appraisal:

It was “conservatively calculated” for collateral / loan purposes, not necessarily reflective of open-market value at the relevant time.
Valuation had to be as of the date of breach—2021—not 2019.
The 2019 appraisal rested on different assumptions than the 2021 Appraisal, and those assumptions were not appropriate for assessing damages in this breach-of-contract context.

In addition, the arbitrator explicitly invoked the rule from Process America:

Where the breaching party has created uncertainty about the amount of damages (here, by not producing the painting for sale or inspection), doubts are resolved against the breaching party; the non-breaching party need only provide a reasonable estimate with a “stable foundation.”

The Second Circuit held that, far from ignoring the law, the arbitrator properly applied this principle:

The Greenberg Parties presented a grounded valuation (the 2021 Appraisal);
The Peck Parties, as breaching parties, bore the risk of uncertainty they themselves had created; and
The arbitrator’s preference for the 2021 Appraisal was reasonable and consistent with established contract damages law.

Importantly, even if another decision-maker might have weighed the evidence differently, that does not matter. Manifest disregard is not about whether the arbitrator’s reasoning was persuasive or optimal; it is about whether the arbitrator knowingly chose to ignore controlling law—a much higher threshold.

c. The 10% “Sales Expenses” Deduction

The Settlement Agreement contained a “waterfall provision” in § 1(c) calling for a 10% reduction for “sales expenses” in connection with the painting’s sale. The Peck Parties argued that the arbitrator was legally bound to incorporate this 10% deduction into his damage calculation.

The arbitrator did not apply the 10% deduction, and the Second Circuit endorsed that choice. Relying again on STMicroelectronics and Duferco, the court notes that:

Even where arbitrators do not fully explain a particular aspect of their decision, courts must confirm the award if they can discern “any valid ground” or “justifiable” rationale for it.

Here, the rationale is straightforward and “obvious”:

No sale of the painting ever occurred because the Peck Parties failed to produce it.
Therefore, no actual sales expenses were incurred.
The arbitrator’s decision to decline a hypothetical 10% offset for transactions costs that never materialized is well within reasonable contract interpretation.

This reflects a practical and common-sense reading of the waterfall provision: it is designed to net out real expenses incurred in an actual sale process, not to provide the breaching party with a cost deduction derived from a counterfactual transaction that never occurred due to its own breach.

C. Impact and Practical Implications

1. Arbitration Challenges under the FAA

The decision reiterates and concretizes several core principles of FAA practice in the Second Circuit:

Vacatur is exceptional. Courts will not disturb arbitral awards except in the most egregious cases involving corruption, undiscoverable fraud, fundamental procedural unfairness, or intentional defiance of clearly applicable law.
Fraud must be truly hidden and undiscoverable. If allegedly fraudulent conduct is discovered before or during the arbitration, and the complaining party had the opportunity to use it (as the Peck Parties did here), it generally cannot serve as a basis for vacatur afterwards.
Credibility and weighing of evidence are off limits. Disputes about which appraisal an arbitrator should have believed, or whether an expert was fully candid, are quintessential fact questions entrusted to the arbitrator.
Manifest disregard remains viable but tiny in scope. The order reinforces that the doctrine is reserved for cases in which the arbitrator saw a clear, controlling legal rule and consciously chose not to follow it—not mere disagreement with the arbitrator’s legal analysis.

2. Expert Witnesses and Merger Clauses

The case is a useful reminder for commercial practitioners:

A standard merger clause is about the parties’ contractual rights and obligations, not about evidence rules or expert methodology.
Non-party experts may consider a wide range of data, including precontractual statements, industry information, and other extrinsic sources, unless there is some separate evidentiary or contractual bar expressly directed at them.

Parties who wish to limit what information an expert may rely upon must do so explicitly—either by:

Contractually specifying the valuation methodology and data sources; or
Raising and litigating evidentiary objections in the arbitration.

3. Damages Where Collateral or a Specific Asset Is Not Produced

From a substantive law perspective, the case highlights a familiar but important contract principle applied to a distinct asset class (fine art):

When a breaching party fails to produce an asset that was to be delivered, sold, or used to satisfy an obligation, uncertainty about its precise value is resolved against that breaching party.
An expert’s reasonable, well-explained appraisal will generally be enough to satisfy the “stable foundation for a reasonable estimate” standard, particularly when the breaching party itself has impeded more precise valuation.

In practice, that means:

Debtors in asset-backed settlements (here, art-secured obligations) assume significant risk if they fail to cooperate in inspections or sales.
They cannot later complain that the valuation used to calculate damages is too high when their own breach prevented a real-world transaction that would have provided a market price.

4. Drafting Lessons for Settlement and Collateral Agreements

Although the order is not precedential, it provides some drafting guidance for lawyers structuring settlements tied to the sale of a specific asset:

Specify valuation mechanics. If parties want a particular appraisal method, date, or adjuster (e.g., automatic sales-cost deduction even if no sale occurs), they should spell that out explicitly.
Clarify how hypothetical expenses are treated. If a waterfall provision is intended to apply regardless of whether a sale actually occurs (e.g., a “deemed” 10% deduction in all damage calculations), that should be unambiguous. Otherwise, courts may interpret such provisions as applying only to actual sales.
Consider who bears the risk of non-performance in valuation. As this case shows, default rules generally place valuation risk on the breaching party, but parties could theoretically allocate it differently in a clear contractual clause.

5. Art-Finance and Specialized Collateral

While the court does not dwell on the fine art context, the decision quietly underscores:

That art and other unique assets (e.g., collectibles, rare instruments, luxury goods) pose special valuation challenges; and
That courts will rely heavily on domain-expert appraisers and arbitral factfinding in resolving disputes over such assets.

Specialized industries should anticipate that, in arbitration, expert appraisal battles are rarely revisited by courts on review. The key fight is at the arbitral level; appellate review under the FAA is not a second bite at the apple.

IV. Complex Concepts Simplified

1. The Federal Arbitration Act (FAA) and § 10(a)

The FAA is the federal statute that governs most arbitration in the United States. Section 10(a) lists the extremely limited reasons a federal court may vacate (set aside) an arbitration award. Relevant here:

§ 10(a)(1): If the award was “procured by corruption, fraud, or undue means.”
§ 10(a)(3): If the arbitrators were guilty of “misconduct” in refusing to postpone the hearing, refusing to hear material evidence, or otherwise conduct the hearing fairly.

If none of these (or the other limited bases) applies, the court must confirm the award, even if it disagrees with the arbitrator’s decision.

2. “Manifest Disregard of the Law”

“Manifest disregard of the law” is a judicial doctrine (not written in the statute) that the Second Circuit treats as a very narrow gloss on § 10(a). It does not mean:

The arbitrator made a legal mistake; or
The court thinks the arbitrator misinterpreted the contract or the law.

Rather, manifest disregard requires showing:

The applicable law was clear and explicitly applicable to the case; and
The arbitrator knew this law and deliberately chose not to follow it.

It is best thought of as: “The arbitrator looked right at the law, acknowledged it, and intentionally ignored it.” Anything less is not enough.

3. Merger (Integration) Clause

A merger clause (also called an integration clause) is a standard provision in contracts that says something like:

“This Agreement constitutes the entire agreement between the Parties and supersedes all prior agreements and understandings, whether written or oral.”

Its primary effect is:

To prevent a party from later claiming that some earlier oral or written promise is also part of the contract; and
To confine the parties’ rights and obligations to the four corners of the written agreement.

It does not, by itself:

Control what evidence an expert may consider for purposes of valuation; or
Bind non-parties, like an independent appraiser.

4. Appraisals and Damages Valuation

In disputes where an asset was supposed to be delivered or sold, and one party breaches, courts (and arbitrators) must estimate the value of that asset at a particular time—usually the date of breach. Appraisals are professional opinions about that value.

From a damages perspective:

The injured party need only present a reasonable, evidence-based estimate.
The breaching party, especially if its conduct made precise valuation impossible (e.g., by withholding the asset), generally bears the risk of uncertainty about the exact amount.

5. “Waterfall Provision” and Hypothetical Expenses

A waterfall provision is a clause that specifies the order in which proceeds (from a sale, settlement, etc.) will be applied. For example:

First, pay transaction costs (e.g., 10% sales expenses)
Then, pay creditor A
Then, pay creditor B
Any remainder to the debtor

In this case, the Peck Parties argued for a 10% reduction in damages to reflect “sales expenses” that would have been incurred if the painting had actually been sold, even though no sale occurred.

The Second Circuit accepted the arbitrator’s implicit view that:

The 10% deduction applied only when a real sale occurred and actual costs were incurred,
Not as a theoretical discount for a transaction blocked by the breaching party’s own failure.

V. Conclusion

Loans on Fine Art LLC v. Peck is a nonprecedential summary order, but it is nonetheless a clear reaffirmation of several bedrock principles of federal arbitration law in the Second Circuit:

Arbitral awards are extraordinarily difficult to overturn. Vacatur remains confined to truly exceptional cases involving corruption, undiscoverable fraud, fundamental unfairness, or intentional defiance of clearly applicable law.
Fraud claims must target genuinely hidden misconduct. Where alleged fraud is discovered before the award and litigated in the arbitration, a post-award challenge is essentially a request for impermissible reweighing of evidence.
Arbitrators have substantial discretion in managing evidence. They may exclude cumulative or marginal evidence without committing misconduct, so long as the hearing is fundamentally fair.
Manifest disregard is “almost never” satisfied. It does not cover mere misinterpretation of contracts or imperfect reasoning; only knowing and intentional disregard of controlling law suffices.
In valuation disputes, especially where the breaching party has hindered precise measurement, doubts are resolved against the breaching party. Reasonable expert appraisals provide a sufficient basis for damages, and hypothetical deductions (like unincurred sales expenses) will not be lightly implied.

For practitioners, the case is a practical reminder that the real battle over expert testimony, credibility, contract interpretation, and damages is fought in the arbitration itself. Once an award has been rendered, the Second Circuit’s framework—with its reliance on Duferco, STMicroelectronics, Process America, and the FAA’s narrow vacatur provisions—makes judicial second-guessing of the arbitrator’s decisions exceedingly unlikely, whether the underlying dispute concerns fine art financing or any other commercial field.

Reaffirming the Narrow Grounds for Vacating Arbitration Awards under the FAA: Commentary on Loans on Fine Art LLC v. Peck