Federal courts are split on whether the U.S. Federal Arbitration Act permits courts to set aside arbitration awards that misapply substantive law.  While the U.S. Supreme Court decision in Wilko v. Swan has provided support for the position that a court may vacate an arbitration award upon a showing of “manifest disregard” for the law, its decision in Hall Street Associates, LLC v. Mattel, Inc. has suggested to some that courts must enforce awards, even when the arbitrators misstate the applicable law.

The law is certain, however, in Australia, where courts refuse to disturb arbitration awards on the basis of legal error. 

This article provides a background on the applicable laws in the United States and Australia for vacating arbitration awards.  Multiple cases have presented the U.S. Supreme Court the opportunity to settle the issue; Zeidman v. Lindell Management is a recent example.  This article argues the Court should follow Australia’s model for commercial disputes.  It does so by analyzing the arbitrary application of current U.S. law and noting the lower costs and greater efficiency Australia’s system provides.  It also considers alternatives to the American status quo proposed by other authors.

Insolvency prevention is a global priority, emphasized by institutions such as the World Bank, United Nations Commission on International Trade Law (UNCITRAL), International Monitory Fund(IMF) and the Organisation for Economic Cooperation and Development(OECD). Early Warning Systems are now encouraged worldwide to increase corporate resilience. India faces a parallel challenge: As observed by Mr. Rajeshwar Rao, Former Deputy Governor of the Reserve Bank of India, the average period between the date of default and the filing of an application for Corporate Insolvency Resolution Process (CIRP) often extends to several months. During this time, substantial enterprise value is destroyed, ultimately depressing recovery outcomes for all stakeholders. The real success of a formal insolvency framework lies in its role as a deterrent rather than in its actual use.

This paper argues that to avoid excessive reliance on debt recovery tools such as the Insolvency and Bankruptcy Code, 2016 (hereinafter IBC) and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, India requires a comprehensive Pre-Insolvency Early Warning Framework grounded in global best practices. Drawing upon international experience focused on crisis prevention rather than resolution, this paper proposes an Early Warning Framework comprising three core, interconnected pillars. First, a statutory duty on directors to install an internal risk management system and to act decisively when insolvency becomes probable rather than merely imminent. Second, an Artificial Intelligence/Machine Learning-Driven National Early Warning System Dashboard integrating data from Information Utilities, the Ministry of Corporate Affairs, the GST Network, and credit bureaus; And third, a Confidential Pre-Insolvency Mediation and Restructuring mechanism under the Financial Stability and Development Council. This integrated architecture ensures that distressed companies are identified early, that management is compelled to act swiftly, and that a discreet, efficient resolution platform exists that preserves viable businesses while significantly reducing reliance on formal insolvency proceedings.