Well, the arbitrator(s) has made his or her decision. You’re now either “very happy”, “confused” (yes, confused), “disappointed” or “outraged” by the result. So, is that the end of it? The short answer is “no”(!) You have to confirm the arbitrator’s award or decide if you can successfully appeal the arbitrator’s decision.
CONFIRMING AN ARBITRATOR’S DECISION IN NEW JERSEY
Confirmation of a NJ Arbitration Award or by Filing an Arbitration Appeal
To collect on your victory and/or enforce the arbitrator’s award (if the other side ignores the arbitrator’s award), you need to “confirm it”. New Jersey has specific statutes that provide for the enforcement of arbitration awards against parties unwilling to comply with the arbitrator’s decision. The winning party can petition the Superior Court of New Jersey to confirm the arbitration award. Confirming the arbitration award is the substantial equivalent of filing a civil judgment against a losing party.
New Jersey law at N.J.S.A. 2A:23B-22 provides, in part:
A party to an arbitration may, within 3 months after the award, commence an action for the confirmation of an award or for its modification, correction or avoidance.
The courts in NJ are required to confirm an arbitration award unless there are legal reasons not to. Once a court confirms the arbitration award, the award becomes a legal judgment, subject to enforcement and execution against the losing side.
If the other side refuses to pay or follow the arbitrator’s decision, you should speak to an experienced arbitration attorney before spending significant additional money. Contact Fredrick P. Niemann, Esq., an experienced NJ arbitration law attorney, toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com to discuss the enforcement of a NJ arbitration award. You will find Mr. Niemann easy to talk to and objective in offering his professional opinion.
Can You Appeal and Vacate an Arbitration Award? The Answer is Yes, but the Grounds for Appeal Are More Limited
The New Jersey Arbitration Act provides very limited grounds for challenging an arbitrator’s award, as arbitration is generally considered a final and binding process. A court can vacate an award when there is:
1. Arbitrary or Capricious Conduct: If the arbitrator exhibits clear and manifest disregard of the law or exhibits conduct that is arbitrary or capricious, it may serve as a basis for appeal.
2. Violation of Public Policy: If the arbitrator’s decision clearly violates a well-defined public policy, the award may be challenged.
3. Bias or Lack of Impartiality: If there is evidence of bias or the arbitrator fails to disclose any conflict of interest or relationship that may affect their impartiality, it may be possible to appeal the award.
4. Lack of Jurisdiction: If the arbitrator exceeded their limited authority or jurisdiction in issuing the award, it can be grounds for appeal.
5. Fraud or Corruption: If there is clear evidence of fraud or corruption that significantly affected the outcome of the arbitration, an appeal may be warranted.
6. Where the arbitrator(s) exceeded his/her power.
7. Where the arbitrator refuses to postpone a hearing, upon good cause shown or refuses to hear material and relevant evidence to the controversy, or of any other behavior or prejudicial to the rights of any party.
8. A miscalculation of damages or other material calculations set forth in the award.
9. When the arbitrator makes a decision on an issue not before him/her and outside the scope of the arbitration; and
10. Where the award is so poorly written and unclear as to its terms that further clarification is necessary to enforce its provisions.
Only in those limited instances listed above will a court in NJ modify or correct an arbitration award.
It is important to note that the court’s review of an arbitration award is generally limited to questions of law, rather than reevaluating the factual findings or reaching a different outcome.
Judicial review of an arbitrator’s decision is extremely limited under the New Jersey Arbitration Act. A court will not overturn an arbitrator’s decision for mistakes of law or fact, as long as the arbitrator and his or her decision were not corrupt in any way and the arbitrator did not exceed his or her powers. The parties are free to expand the scope of judicial review by including in their contract an agreement that an arbitrator must make their decision in conformance with New Jersey law, and that such awards may be reversed for mistakes of New Jersey law or for gross mistakes of fact-finding or procedure, but they must define those criteria in their agreement. Absent such specificity including safeguards and procedures for appealing an unjust or poor arbitrator award the law in the state is generally against you.
Fredrick P. Niemann Esq.
Having read this site, hopefully you now see why having an experienced arbitration law attorney is so important, especially early on if you can influence the drafting a mandatory arbitration provision under your contract. If you require advice on an arbitration matter, contact NJ arbitration attorney Fredrick P. Niemann, Esq. at toll-free (855) 376-5291 or email him at fniemann@hnlawfirm.com.