California Arbitration: Reviewing Awards And Applicable Law

Arbitration is an alternative method for resolving legal disputes. In California, arbitration awards are treated as contracts between the involved parties. However, the law provides avenues for confirming, correcting, or vacating an arbitration award through court proceedings. This process is governed by the California Arbitration Act (CAA) and related provisions in the Code of Civil Procedure. The CAA allows for limited judicial review of an arbitrator's award, and any review must consider specific principles and adhere to strict timelines. While arbitration awards are generally immune from judicial review, there are exceptions, such as when the award is a result of corruption or fraud, or when there is a miscalculation or mistake in the award. Understanding the applicable rules and laws is crucial when navigating post-arbitration procedures, as they can vary depending on whether the case is governed by state or federal acts, contractual rules, or arbitration service rules.

Confirmation of an arbitration award

Petition to Confirm, Correct, or Vacate

A party can petition the superior court to confirm, correct, or vacate an arbitration award. This process involves requesting the court to either approve the arbitrator's decision and make it enforceable as a court judgment, or to modify it in cases of errors or omissions. The relevant form for this petition is ADR-106, which can be filed with the California Courts.

Limited Judicial Review

Judicial review of an arbitrator's award is generally limited in scope. The court does not reconsider the merits of the dispute but focuses on specific grounds for potential correction or vacation of the award. These grounds include instances where the award was procured by fraud or corruption, there was corruption in the arbitrator, the arbitrator committed misconduct resulting in substantial prejudice, the arbitrators exceeded their powers, the arbitrator refused to postpone a hearing, hear evidence, or otherwise violated the CAA, resulting in substantial prejudice, or the arbitrator refused to disclose grounds for disqualification.

Finality of the Award

The CAA allows for the review of final awards, but not interim awards. A final award is one that resolves all issues in the arbitration. If an award is interim, the court lacks jurisdiction to vacate or correct it. Therefore, it is essential to determine whether the arbitration award is final before seeking confirmation.

Timely Filing

Deadlines for filing petitions to confirm, correct, or vacate an arbitration award are crucial. In California, a petition to vacate or correct an award must be served and filed no later than 100 days after the award is served. However, if another party has already moved to confirm the award, the response seeking to vacate it must be filed within 10 days. These timelines are stringent, and failure to adhere to them can impact the court's jurisdiction to vacate the award.

Arbitrator's Jurisdiction to Modify

It is important to note that an arbitrator's jurisdiction to modify their award is limited. The functus officio doctrine states that an arbitrator cannot re-examine or revise their final decisions. However, there are exceptions to this doctrine, such as the common-law exception recognized under federal law, which allows arbitrators to correct apparent mistakes or clarify ambiguities.

In conclusion, confirming an arbitration award in California involves seeking court approval to validate and enforce the arbitrator's decision. The process is governed by the CAA and relevant Code of Civil Procedure sections, with specific deadlines and limited grounds for review. It is essential to carefully consider the finality of the award, the jurisdiction of the arbitrator, and the applicable laws before initiating the confirmation process.

Vacating an arbitration award

Grounds for Vacating an Arbitration Award

Under the California Arbitration Act (CAA), there are limited grounds on which an arbitration award can be vacated. According to Code of Civil Procedure Section 1286.2, the court shall vacate the award if any of the following circumstances are determined:

• The award was procured by corruption, fraud, or other undue means;
• There was corruption in any of the arbitrators;
• The rights of a party were substantially prejudiced by misconduct of a neutral arbitrator;
• The arbitrators exceeded their powers, and the award cannot be corrected without affecting the merits;
• The rights of a party were prejudiced by the arbitrator's refusal to postpone a hearing, hear evidence, or by other conduct contrary to provisions;
• An arbitrator failed to disclose grounds for disqualification, or was subject to disqualification upon specified grounds but failed to disqualify themselves.

Timing and Procedure

A party against whom a judgment is entered under an arbitration award has a limited timeframe to move to vacate the judgment. In California, a motion to vacate must be made within six months of the entry of judgment. The motion must be heard upon notice to the adverse parties, the arbitrator, and it may only be granted with clear and convincing evidence that the grounds are valid and the motion was made promptly after learning of those grounds.

Interim Awards

It is important to note that a court generally lacks jurisdiction to vacate or correct an interim award, which is an award that does not resolve all issues in the arbitration. However, a party may seek writ review of an interim award, although such petitions are rare and discretionary.

Judicial Review and Arbitral Reconsideration

Judicial review of an arbitrator's final award is very limited under the CAA. The merits of the dispute are not considered, and legal errors are not grounds for challenging the award. However, an exception exists if the arbitration agreement specifically provides for the review of legal errors. This highlights the importance of carefully reviewing and drafting arbitration agreements.

While arbitrators have extremely limited jurisdiction to modify their awards, there are certain circumstances where corrections can be made. Under the CAA, an arbitrator may correct an "evident miscalculation in figures" or "evident mistake in the description of any person, thing, or property" without affecting the merits of the case.

In summary, vacating an arbitration award in California is a process with specific requirements and limitations. The CAA outlines the grounds for vacatur, and parties must act within the specified time frames. Judicial review is limited, and arbitration agreements play a crucial role in determining the scope of review. Understanding these factors is essential when considering vacating an arbitration award in California.

Arbitrator's award and court jurisdiction

Arbitration in California is a less formal process than a court trial, but it still shares similarities with court proceedings. It involves legal disputes, lawyers, witnesses, and triers of fact (often retired judges).

Judicial arbitration is a process where an arbitrator applies the law to the facts of a case and issues an award. The arbitrator, a lawyer or retired judge, acts as a neutral party, deciding who is responsible and what compensation is owed. The arbitrator does not take sides or offer advice. The process is designed to provide an earlier, faster, less formal, and less expensive resolution compared to a trial.

The arbitrator's award may become the final judgment if all parties accept it, or if no trial de novo (new trial) is requested within the required time. If the arbitration was non-binding, either party may reject the award and request a trial de novo before the assigned judge.

In California, an adverse award is subject to judicial review under the California Arbitration Act (CAA). Any party may petition the superior court to either vacate or correct the award. However, such review is typically limited by statute, and petitions face significant procedural and substantive obstacles. Generally, only a final award can be challenged, and the merits of the dispute are not considered. The award can be vacated in specific circumstances, such as fraud, corruption, arbitrator misconduct, or the arbitrator exceeding their powers.

The functus officio doctrine further limits an arbitrator's ability to modify an award. This doctrine states that an arbitrator has no power to re-determine the merits of a claim they have already decided. Once an arbitrator has issued an award, they are rendered powerless under this doctrine as they have completed their duties. However, there are exceptions to this rule, such as correcting evident miscalculations or mistakes in the description that do not affect the merits of the case.

The CAA allows for narrow grounds for judicial review and correction of an arbitrator's award. The review process is time-sensitive, with short deadlines for seeking correction or vacating an award. While the CAA provides these opportunities for review, the Federal Arbitration Act (FAA) does not provide for the review of legal errors, even if agreed upon by the parties.

In summary, arbitrators in California have limited jurisdiction to modify their awards, and judicial review of arbitrator awards is constrained by the CAA and subject to strict timelines.

Grounds for vacating an award

In California, a trial court can only vacate an arbitration award if there are grounds to do so. California Code of Civil Procedure §1286.2(a) allows a trial court to vacate an arbitration award if it determines:

• The rights of a party were substantially prejudiced by misconduct of a neutral arbitrator (§ 1286.2(a)(3));
• The arbitrator exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted (§ 1286.2(4));
• The rights of a party were substantially prejudiced by the refusal of the arbitrator to postpone the hearing upon sufficient cause being shown or by the refusal of the arbitrator to hear evidence material to the controversy (§ 1286.2(a)(5));
• The award was procured by corruption, fraud or other undue means (§ 1286.2(a)(1));
• There was corruption in any of the arbitrators (§ 1286.2(a)(2));
• An arbitrator failed to make a timely disclosure of a conflict which would be a ground for disqualification.

In addition, the California Rules of Court state that a party against whom a judgment is entered under an arbitration award may, within six months after its entry, move to vacate the judgment on the ground that the arbitrator was subject to disqualification not disclosed before the hearing and of which the arbitrator was then aware.

Furthermore, judicial review of an arbitrator's final award is very limited. The merits of the dispute are not considered, and the award can only be vacated if one of the above grounds is met.

Deadlines for post-award challenges

The CAA sets out deadlines for arbitral reconsideration. A party has 10 days to ask arbitrators for a correction (Code Civ. Proc. § 1284). If a party misses this deadline, they can still ask the court to make corrections for obvious errors (typos).

The CAA also gives a party 100 days to petition the superior court to either vacate or correct an award (Code Civ. Proc. § 1288). However, if another party has already moved to confirm the award, any response seeking to vacate it must be filed within 10 days (Code Civ. Proc. § 1290.6). This means that a motion to confirm effectively shortens the 100-day period to file a motion to vacate. If a party brings a motion to confirm after 100 days, it does not extend the deadline to seek vacatur or correction.

In summary, parties seeking to overturn an award must be vigilant as to both deadlines and, if a petition to confirm is filed first, they must file on the earliest of the two dates.

Frequently asked questions