Supreme Court Limits Review of Arbitration Awards

    The U.S. Supreme Court on Tuesday issued its long awaited decision in Hall Street Associates v. Mattell   resolving what had been a conflict in the federal courts of appeal about whether parties, by contract, could provide a broader review by courts of arbitration awards than what is provided under the Federal Arbitration Act. The Court had before it an agreement of the parties, entered as an agreed order in an ongoing case pending before a court, that permitted broader review of questions of law than the very limited review permitted by the federal statute. Rather than honor the parties' private agreement to allow greater review, the Court opted to protect the finality of arbitration decisions by holding that parties could not change the standard of review permitted by the statute.

    Although the Court's decision contemplated that a different result might be reached if the parties sought review by some avenue other than the federal act, such as a state arbitration statute, it is difficult to be optimitic about such an outcome since the federal act applies to a broad range of arbitration agreements and many state courts are likely to follow the lead of the U.S. Supreme Court in interpreting their own statutes. Many of these are based on the Uniform Aribtration Act, which applies the same limited grounds for review as the federal act.

Update on Thursday, April 10, 2008 at 07:15AM by Joseph E. Conley, Jr.

    The importance of the Hall Street decision is evident from the blog traffic on this case following its release.  We raised some concern for how the result might be avoided by drafting, but the Civil Procedure Profs Blog brought to our attention some useful observations about that by Seattle's Perkins Coie (here).  For anyone involved in drafting arbitration clauses for clients, this is a useful place to start.