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What is an Arbitration Appeal?

An arbitration appeal is a request to review an arbitrator's decision, typically due to alleged errors in the process or application of law. Unlike traditional court appeals, this process is often limited and governed by specific rules. Curious about navigating these complex waters? Dive deeper to understand how arbitration appeals work and when they might be an option for you.
Alexis W.
Alexis W.

An arbitration appeal is a request made to an appellate court to reconsider the decision of an arbitrator. Arbitration appeals are generally somewhat limited due to the respect given to decisions of arbitrators and arbitration clauses under the law. When an arbitration appeal occurs, the appellate court will look at the process of arbitration and the way in which the rules of law were applied to determine whether the proceeding was fair, but will generally not alter the arbitrator's finding of facts or decision unless impropriety exists.

Arbitration is a form of alternative dispute resolution that has become more popular in the United States legal system in light of the Federal Arbitration Act passed in 1925. When two parties contract or become involved in a business relationship governed by a contractual agreement, many agreements contain clauses requiring that disputes be resolved in arbitration. These arbitration clauses are commonly found in employment law agreements and in the purchase of products such as cellular telephones or other products.

An abitration appeal is a request made to an appellate court to reconsider the decision of an arbitrator.
An abitration appeal is a request made to an appellate court to reconsider the decision of an arbitrator.

If an arbitration clause exists, the court will not hear a dispute or award a judgment. Instead, the parties will go before an arbitrator or panel of arbitrators. The procedure for how the arbitration will be conducted is normally spelled out in the arbitration clause of the contract. Generally, an impartial third party arbitrator must be used.

The arbitrator will hear the evidence and arguments of both sides. Witnesses may be presented in some circumstances and the procedure may be conducted in a manner similar to a court case. In other situations, the arbitration will be less formal or will follow different procedures. At the end of the case, the arbitrator will make a decision that is binding to both parties.

If an arbitration clause in a contract exists, the parties will go before an arbitrator or panel of arbitrators.
If an arbitration clause in a contract exists, the parties will go before an arbitrator or panel of arbitrators.

Each party involved in the arbitration must follow the commands of the arbitrator. If one party believes the process was unfair or the decision was wrong, however, that party may file an arbitration appeal. When filing the arbitration appeal, the party will explain why he believes the decision or arbitration process was not legally fair under the law.

The appellate court will review the request for appeal and will look at the process of arbitration and the behavior of the arbitrator. The court will generally respect the arbitrator's findings of fact. During the arbitration appeal, therefore, the decision of the arbitrator will be overturned only if procedural irregularities exist or if the arbitrator's findings can't possibly be supported given the facts and the applicable law.

Frequently Asked Questions

What is an arbitration appeal?

An arbitration appeal is a process by which a party in an arbitration case seeks to have the decision reviewed by a higher authority. This can occur when a party believes there has been a significant error in the arbitration process or in the application of the law. However, appeals in arbitration are generally limited compared to court litigation, as arbitration is designed to be a final and binding resolution method. According to the American Arbitration Association, the grounds for appeal are typically narrower and may require the agreement of all parties involved.

Can all arbitration decisions be appealed?

No, not all arbitration decisions can be appealed. Arbitration is intended to provide a final resolution to disputes, and as such, the ability to appeal is often contractually limited. Some arbitration agreements expressly waive the right to appeal, while others may allow for appeals on very narrow grounds, such as fraud or a clear disregard of applicable law. The Federal Arbitration Act and state laws also provide limited grounds for challenging arbitration awards in court.

What are the common grounds for an arbitration appeal?

Common grounds for an arbitration appeal include procedural errors that affected the fairness of the arbitration, evidence of partiality or corruption in the arbitrators, and a decision that exceeds the arbitrators' powers. Additionally, if an arbitrator has made a clear error in applying the law or if the award is in manifest disregard of the law, these may also be grounds for appeal. However, these standards are quite high and appeals on such bases are not often successful.

How does the arbitration appeal process work?

The arbitration appeal process typically begins with a party filing a notice of appeal according to the rules specified in the arbitration agreement or the rules of the arbitration institution overseeing the dispute. The appeal may be heard by a different panel of arbitrators or by a court, depending on the agreement and applicable law. The appealing party must demonstrate that one of the limited grounds for appeal exists, and the process is generally more streamlined than court appeals.

What is the difference between appealing an arbitration award and seeking judicial review?

Appealing an arbitration award within the arbitration system involves a review by a new panel of arbitrators or an appellate arbitration institution, based on the parties' agreement or institutional rules. Seeking judicial review, on the other hand, involves asking a court to vacate or modify the arbitration award. Judicial review is typically limited to specific statutory grounds such as fraud, arbitrator bias, or an arbitrator exceeding their powers, and courts give substantial deference to the original arbitration award.

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    • An abitration appeal is a request made to an appellate court to reconsider the decision of an arbitrator.
      By: uwimages
      An abitration appeal is a request made to an appellate court to reconsider the decision of an arbitrator.
    • If an arbitration clause in a contract exists, the parties will go before an arbitrator or panel of arbitrators.
      By: apops
      If an arbitration clause in a contract exists, the parties will go before an arbitrator or panel of arbitrators.