An arbitration panel may award attorney's fees, even if not otherwise authorized by law to do so, if both parties submit the issue to arbitration. See First Interregional Equity Corp. v. Haughton, 842 F.Supp. 105, 112-13 (S.D.N.Y. 1994) (applying New York law). Barington concedes this point, but argues that the arbitrators' application of California law is nonetheless grounds for vacatur because California law mandates an award of attorney's fees under the circumstances, while New York law is permissive. Under Barnes, we need not consider the possible consequences of the mandatory/permissive distinction. The Barnes harmless error standard inquires only whether the arbitrators acted in manifest disregard of New York law by awarding attorney's fees to the Coutees.

An arbitrator has the authority to award attorneys' fees if the parties' agreement to arbitrate grants such authority. Synergy Gas Co. v. Sasso, 853 F.2d 59, 64-65 (2d Cir.1988); First Interregional Equity Corp. v. Haughton, 842 F. Supp. 105, 112 (S.D.N.Y. 1994). Because the traditional American Rule dictates that attorneys' fees are generally not awarded, it is the burden of the party seeking attorneys' fees, in this case Fidelity, to demonstrate that the arbitrator had the authority to award those fees.

This Court may consult rulings from New York State courts in arbitration matters. El Hoss Eng'g & Transp. Co. v. Am. Indep. Oil Co., 289 F.2d 346, 350 (2d Cir. 1961) ("Although we are not required to apply [New York] state law, it will not be amiss for us to consider it."); First Interregional Equity Corp. v. Haughton, 842 F. Supp. 105, 112 (S.D.N.Y. 2004) ("[T]he courts in this circuit may look to the logic of rulings of New York State courts in arbitration matters."). Even assuming arguendo that New York law applied to the arbitration, the arbitrators would not have been required to apply the American Rule to resolve the attorneys' fees issue.

Marshall & Co. v. Duke, 941 F.Supp. 1207, 1213–15 (N.D.Ga.1995) (confirming a NASD attorneys' fees award and stating, “The parties mutual agreement to have any and all fee issues decided by the panel is evidenced by their joint submission of the issues to the panel.”), aff'd,114 F.3d 188 (11th Cir.1997), cert. denied,522 U.S. 1112, 118 S.Ct. 1043, 140 L.Ed.2d 108 (1998); First Interregional Equity Corp. v. Haughton, 842 F.Supp. 105, 112–13 (S.D.N.Y.1994) (finding a joint submission of attorneys' fees when a party's NASD statement of claim seeks “costs and attorneys' fees incurred in connection with this proceeding”); see also Cassedy v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 751 So.2d 143, 149 (Fla. 1st DCA 2000) (finding a joint submission of attorneys' fees to NASD arbitrators when “both parties agreed to submit to arbitration all the claims raised in the statement of claim, which included the claim for attorney's fees”). The Fund's statement of claim requests in the prayer for relief “[a]n award of reasonable attorneys' fees.” (Doc. 1–3, at 10) Therefore, perforce the submission agreement, the Fund in the statement of claim “submit [ted] the present matter [‘of reasonable attorneys' fees'], as set forth in the attached [s]tatement of [c]laim ... to arbitration....” Similarly, Morgan Stanley's arbitration answer requests the arbitrators to “award Morgan Stanley its costs for defending this claim, including attorney's fees.”

Pursuant to these FINRA rules, Petitioners filed a SOC that specified relevant facts and requested attorneys' fees. By signing the Submission Agreements, the parties submitted the issue of attorneys' fees to the Panel. See Hollern, 458 F.3d at 1174 ("By incorporating their pleadings, including their parallel requests for attorneys' fees, into the Uniform Submission Agreement, the parties expressly empowered the arbitrators to award attorneys' fees."); see also First Interregional Equity Corp. v. Haughton, 842 F. Supp. 105, 112 (S.D.N.Y. 1994) (finding that arbitrators were empowered to award attorneys' fees based on virtually identical submission agreement where the SOC requested attorneys' fees). CGMI cites to nothing in the FINRA rules requiring that a statement of claim enumerate the statutory basis for the claim.

[ Id., p. 22 of 22]. New York state and federal courts have recognized the authority of arbitrators to grant legal fees based on arbitration agreements, disclosure and custodial agreements and uniform submission agreements. See Application of Ras Securities Corp., 251 A.D.2d 98, 674 N.Y.S.2d 303 (N.Y. App. Div. 1st Dep't 1998); Matter of McLaughlin Piven Nogel Sec., Inc. v. Ferrucci, 2008 Slip Op 51347U (N.Y. Sup. Ct. 2008); PaineWebber Inc. v. Bybyk, 81 F.3d 1193, 1202 (2nd Cir. 1996) First Interregional Equity Corporation v. Haughton, 842 F.Supp. 105, 112 (S.D.N.Y. 1994). Moreover, both Whitney and Merrill Lynch requested attorneys fees in their initial filings with FINRA, and at the conclusion of the hearing, Whitney submitted an accounting of attorneys fees totaling $319,732.

In support of an "arbitrary and capricious" standard of review, petitioner refers the Court to 9 U.S.C. §§ 10, 11, but neither of these provisions contains any reference to such a standard. Indeed, other courts in this district have found that no such standard applies to petitions brought pursuant to the FAA.See Companhia de Navegacao Maritima Netumar v. Armada Parcel Serv., No. 96 Civ. 6441, 1997 U.S. Dist. LEXIS 309, at *16 (S.D.N.Y. Jan. 17, 1997) ("[A]lthough several other circuits have vacated arbitrations on the basis of arbitrariness, capriciousness, or irrationality, this Court has found . . . no case authority in this Circuit for applying such a test."); see also First Interregional Equity Corp. v. Haughton, 842 F. Supp. 105, 111-12 (S.D.N.Y. 1994); Refino v. Feuer Transp., Inc., 480 F. Supp. 562, 565 (S.D.N.Y. 1979). Even if an "arbitrary and capricious" standard applied in this action, it would not provide grounds for disturbing the arbitration panel's award.

There the court determined that the arbitrators were within the scope of their authority to decide the issue of attorneys' fees.Accord First Interregional Equity Corp. v. Haughton, 842 F. Supp. 105 (S.D.N.Y. 1994).

Pursuant to 9 U.S.C. § 9, any party to an arbitration may apply to a federal court for an order confirming the award resulting from the arbitration, and the court "must grant . . . an order [confirming the arbitration award] unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title." 9 U.S.C. § 9;see First Interregional Equity Corp. v. Haughton, 842 F. Supp. 105, 108 (S.D.N.Y. 1994) ("A district court must grant a petition to confirm an arbitration award that is properly brought unless one of the bases for vacating or modifying the award is established."). The Court of Appeals for the Second Circuit "adhere[s] firmly to the proposition . . . that an arbitration award should be enforced, despite a court's disagreement with it on the merits, if there is a `barely colorable justification for the outcome reached.'"

Because no basis has been established to vacate the award, Klaveness' cross-petition is granted to the extent that it seeks to confirm the disputed portions of the award. See First Interregional Equity Corp. v. Haughton, 842 F. Supp. 105, 108 (S.D.N.Y. 1994) ("A district court must grant a petition to confirm an arbitration award that is properly brought unless one of the bases [set forth in 9 U.S.C. § 10 (a)] for vacating or modifying the award is established."); Cragwood Managers. L.L.C. v. Reliance Ins. Co., 132 F. Supp.2d 285, 287 (S.D.N.Y. 2001) ("If a barely colorable justification for the arbitration award exists, the award should be confirmed." (Internal quotation marks and citation omitted.)).