Chapter 32 - § 32.7 • CHALLENGING THE ARBITRATION AWARD

• Jurisdiction: Colorado

§ 32.7 • CHALLENGING THE ARBITRATION AWARD

In American Numismatic Ass'n v. Cipoletti, 254 P.3d 1169 (Colo. App. 2011), the Colorado Court of Appeals considered the threshold question of what constitutes an arbitration "award" subject to review. A former employee challenged a district court order denying his application to vacate the arbitrator's order dismissing his claim, asserting that the order of dismissal was not an "award" subject to confirmation or challenge until a pending request for fees and costs had been decided. Under the 1975 Colorado Act applicable in that case, an application to confirm or vacate an award had to be made within 30 days after the delivery of the "award" to the applicant. C.R.S. § 13-22-230. Examining the meaning of an "award" under both the FAA and the Colorado Act, the court concluded that an "award" is subject to confirmation or challenge if it "entirely disposes of the case on the merits." 254 P.3d at 1173. The court further held that an outstanding question of attorney fees or costs under a fee-shifting provision does not alter the character of a decision on the merits as an award; therefore, the fact that a motion for fees and costs remained pending did not preclude an application to confirm or challenge the award. Id. at 1173-74.

There are only a few grounds on which to challenge an arbitration award. New York Air Brake Corp. v. General Signal Corp., 873 F. Supp. 747, 752 n.3 (N.D.N.Y. 1995). Grounds for attacking an arbitrator's award are set forth in the statute under which the arbitration was conducted. See generally 4 Am. Jur. 2d Alternative Dispute Resolution §§ 234-249. Section 10 of the FAA provides that the United States district court for the district where the award was made may vacate the award upon application of a party to the arbitration where:

1) The award was procured by corruption, fraud, or undue means;
2) There was evident partiality or corruption;
3) The arbitrators were guilty of misconduct in refusing to postpone the hearing or in refusing to hear evidence pertinent and material to the controversy, or of any other misbehavior by which the rights of any party have been prejudiced; or
4) The arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award was not made.

9 U.S.C. § 10.

Courts generally refuse to enforce arbitration awards only where the awards do not draw their essence from the parties' underlying agreements, and "in determining whether an arbitrator has exceeded his authority, the agreement must be broadly construed with all doubts resolved in favor of the arbitrator's award." Int'l Brotherhood of Elec. Workers, Local Union No. 545 v. Hope Electrical Corp., 380 F.3d 1084, 1100 (8th Cir. 2004); see also Lackawanna Leather Co. v. United Food & Commercial Workers Int'l Union, 706 F.2d 228, 230-31 (8th Cir. 1983) (en banc)...