Parties May Not Expand Judicial Review of Arbitration Decisions

May 16, 2008
by JOHN GULLACE
Client Alert Newsletter May 2008

The Federal Arbitration Act ("FAA") provides for judicial review of arbitration decisions in very limited circumstances involving arbitral misconduct and the like. The limited scope of such review was recently reaffirmed in Hall Street Assoc. LLC v. Mattel, Inc., an environmental case between a land owner and tenant for cleanup costs, wherein the U.S. Supreme Court held that because the grounds for judicially challenging an arbitration award under the FAA are very limited, parties may not contractually agree to expand the scope of judicial review. Although the parties in this case contractually agreed to judicial review and the overturning of an arbitration award if it was based upon incorrect findings of fact or conclusions of law, the Supreme Court held that the parties could not expand the scope of review and grounds for overturning an arbitration award set forth in the FAA.