By Bruce Jervis
Arbitration is a matter of contract. The parties agree to submit disputes to binding, non-judicial resolution. But arbitration is also a legislative and judicial creature. Federal and state arbitration statutes authorize the procedure and call for judicial confirmation of arbitration awards, giving them the same weight as court judgments.
This raises an interesting question. Can parties to a contract, under the terms of an arbitration clause, limit the scope of judicial review of that arbitration award? A Georgia court recently answered in the negative.
The arbitration clause in question said the parties agreed not to challenge the arbitration decision or award. This “no challenge” provision was ruled void and unenforceable. Parties to a contract cannot agree to waive access to the courts when that access is granted by statute.
What is your opinion? If arbitration resolution is established by contract, shouldn’t the parties be free to agree that the award will in fact be binding and not subject to further judicial review? Or, is the arbitration process so intertwined with the judicial system that any such restriction should be viewed with skepticism? Your comments are welcomed.
