The 1st U.S. Circuit Court of Appeals today issued an opinion, McCarthy v. Citigroup Global Markets Inc., reinstating an NASD arbitration award. In what the court described as an “unusual circumstance,” it was the second time the district court had vacated and remanded the same arbitration proceeding. But the circuit court — noting that the standard for overturning an arbitration award is that it was made “in manifest disregard of the law” — concluded that the district court erred by substituting its own decision on the merits for that of the arbitration panel. The decision reaffirms in strong language the deference courts should show to arbitration awards. (Full disclosure: I am a member of the NASD ADR panel.)