## Facts

- A vessel owner chartered the M/V Wave to Transnitro, Inc. to carry prilled urea from Holland to Saginaw, Michigan.
- Unloading difficulties led the vessel to discharge the cargo in Norfolk, Virginia.
- Transnitro filed an in rem action against the vessel in federal court; the vessel was arrested and released after the owner posted a $200,000 bond.
- The court stayed litigation and sent the dispute to arbitration under the charter party.
- The arbitrators awarded the owner detention damages, attorney’s fees, and the cost of the release bond plus interest; Transnitro paid all amounts except the interest component.
- After the award, the owner learned the bond collateral had earned about $34,000 in interest and that it had failed to present approximately $28,147.01 in certain expenses during arbitration.
- Transnitro sought district court modification of the award to reduce the interest owed by $34,000 to account for interest earned on the collateral; the owner argued the court lacked authority to alter the award and also sought an offset for the unclaimed expenses.

## Issues

1. Whether a district court may modify an arbitration award under 9 U.S.C. § 11 by reducing the awarded interest based on post-award information about interest earned on bond collateral.
2. Whether § 11’s reference to promoting justice allows a court to reallocate substantive amounts not reflected as an obvious computational error in the award.

## Decision

- The Fourth Circuit reversed the district court’s modification order.
- The court held that § 11 authorizes only narrow corrections and did not permit the district court to reduce the interest component based on later-discovered facts.
- The court reinstated the arbitration award as issued and directed entry of judgment consistent with the award without judicial adjustment.

## Legal Principles

- Judicial modification of arbitration awards under 9 U.S.C. § 11 is limited to the statute’s enumerated grounds (e.g., evident material miscalculation, evident material mistake in description, awards on matters not submitted, or non-merits form defects).
- An “evident material miscalculation” generally must be apparent from the face of the award; post-award discoveries about underlying facts do not qualify.
- The statutory language permitting modification to effect the award’s intent and promote justice does not create free-standing equitable authority to revise substantive relief.
- Courts may not substitute their judgment for the arbitrators’ on damages adjustments driven by new or omitted factual considerations; such matters belong in arbitration absent a valid statutory basis for judicial action.

## Conclusion

The Fourth Circuit enforced a strict reading of FAA § 11, holding that a district court cannot alter an arbitration award’s interest component based on post-award discoveries and must limit modifications to the specific, face-of-award errors the statute permits.


Transnitro, Inc. v. M/V Wave, 943 F.2d 471 (4th Cir. 1991)