## Facts

- American Almond Products Co. and Consolidated Pecan Sales Co., Inc. entered a written commercial contract for the sale of pecans that required disputes to be resolved by binding arbitration.
- A dispute arose over performance and damages and was submitted to arbitrators pursuant to the arbitration clause.
- The arbitrators issued a written award fixing American Almond’s damages at $6,022.80 “without interest.”
- American Almond petitioned in federal district court to confirm the award and enter judgment under the Federal Arbitration Act (FAA).
- Consolidated Pecan opposed confirmation and moved to vacate, arguing the award was not “final and definite” because it did not award interest and allegedly failed to determine the entire controversy.
- The district court confirmed the award and entered judgment for American Almond.
- Consolidated Pecan appealed.

## Issues

1. Whether an arbitral award fixing a lump-sum damage amount and expressly stating it is “without interest” is a “mutual, final and definite award” under the FAA.
2. Whether a court may vacate or modify an arbitral award under the FAA based on the contention that arbitrators failed to award interest that would have been recoverable in court.

## Decision

- The Second Circuit affirmed the judgment confirming the award.
- The court held the award was “mutual, final and definite” because it fixed a specific sum and expressly addressed interest by denying it.
- The court rejected vacatur or modification based on the asserted legal entitlement to interest, treating the interest determination as part of the merits committed to arbitration.
- Absent statutory grounds such as corruption, partiality, misconduct, or failure to make a final and definite award, courts may not reexamine arbitrators’ decisions on damages or remedies.

## Legal Principles

- Under the FAA, judicial review of arbitral awards is limited to the statute’s specified grounds; errors of law or fact are generally not a basis to vacate or modify an award.
- An award that states a definite recovery “without interest” is final and definite because it resolves the interest question by denial rather than omission.
- By agreeing to arbitration, parties accept the risk of an incorrect merits determination and cannot use court proceedings to obtain error correction on remedial components such as interest, unless the arbitrators exceeded their powers or other statutory defects are shown.
- If parties intend to restrict arbitral authority over particular remedies (including interest), they must do so expressly in the arbitration agreement or submission.

## Conclusion

The Second Circuit held that an arbitral award fixing damages “without interest” fully and finally disposed of the submitted dispute under the FAA, and the alleged failure to award legally recoverable interest was not a permissible ground for judicial interference with the award.


American Almond Prods. Co. v. Consol. Pecan Sales Co., 144 F.2d 448 (2d Cir. 1944)