When parties agree to submit their contract disputes to binding arbitration, they agree to accept even those decisions that may be puzzling or poorly explained. Judicial authority to vacate or modify an arbitration award is narrow.
A clause in a construction contract stated that if owner-caused delays were concurrent with contractor-caused delays, the contractor would not be entitled to an extension of time. And, any “float” in the scheduled sequence of critical activities would be used at the discretion of the project owner.
After a panel of arbitrators awarded the contractor a time extension for owner-caused delays that were concurrent with existing contractor-caused delays, an appellate court refused to find the award “irrational” or a “manifest disregard of the law.” The court would not review the correctness of the arbitrators’ contract interpretation.
The other case in this issue involved a public project owner’s rejection of a low bid due to the bidder’s lack of responsibility. Did a modest line of credit and only four years in business justify this determination?
