Challenging and Enforcing Arbitration Awards

Although arbitration is a very effective alternative method for resolving legal disputes, challenges may arise after an arbitrator designates an award to the succeeding party. In California, pursuant to Code of Civil Procedure § 1287.6, an arbitration award has “the same force and effect” as a contract between the parties. However, the parties have the option of confirming or vacating the award through court proceedings. To discuss the benefits and challenges facing arbitration awards, call the Law Offices of Salar Atrizadeh to speak with an attorney who is experienced in this area of alternative dispute resolution. A knowledgeable legal professional can help you take the necessary steps to ensure protection of your rights and interests under an arbitrator’s award.

Under Code of Civil Procedure § 1285, after arbitration proceedings come to an end with an award, either party may petition the court to “confirm, correct, or vacate” the arbitration award. The prevailing party will petition the court (i.e., request from the court) to confirm the award and enter judgment stating the same. The losing party may petition the court to modify or vacate the award and enter judgment dismissing the award entirely.

In general, arbitration awards are immune from judicial review unless the award falls under certain statutory exceptions. For instance, per Code of Civil Procedure § 1286.2, a court may vacate an arbitration award if it finds, among others, that the award was a result of corruption or fraud, i.e., the arbitrator was corrupt, or the arbitrator’s misconduct substantially prejudiced the parties’ rights. Additionally, per Code of Civil Procedure § 1286.6, a court may correct an arbitration award if it finds that the award contains miscalculated figures or mistaken descriptions of people or property. Under this section, courts may also correct arbitration awards where there is evidence of the arbitrator’s abuse of power, but the court can modify the award such that it does not hinder the party’s rights. In the event that the arbitration award is flawed, but the merits of the case are intact, a court may also modify the award.

In California, errors of law committed by the arbitrator, no matter how substantial, are generally not grounds for challenging the arbitrator's award. The rationale is because the parties have agreed that the arbitrator's decision, whether right or wrong, would be final and conclusive. In addition, the risk of arbitral error has been reduced by statutory provisions allowing courts to vacate or correct for serious problems with the award itself or with the fairness of the arbitral process.

It is important to remember that there is no due process right to court review of an arbitration award. While parties may choose to seek court confirmation of the award, the court is limited in its capacity to alter or amend the award. Therefore, while a court may be able to review the arbitration if there are allegations that the arbitrator abused his or her power, the courts generally cannot review the merits of the controversy to confirm or vacate the award.

The decision to confirm an arbitration award proves to be beneficial in the event that the losing party fails to pay the award. In this case, the successful party reserves the right to seek legal remedies against the losing party for failing to comply with the court order confirming the arbitrator’s award.