Arbitration Award Vacated for Delay

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The grounds for vacating an arbitration award are very limited and primarily relate to the integrity of the process and not the result.   The Amarillo Court of Appeals recently expanded those grounds to include arbitrator delay in rendering a decision.

The Appellate Court said it found no other Texas cases that had vacated an arbitration award for being untimely but in the present case, the intent of arbitration to obtain a quick and inexpensive final disposition was defeated by the arbitrator’s excessive delay.  The decision was based on a finding that the arbitrator violated a provision of the Texas Civil Practice and Remedies Code by issuing his decision so long after a trial judge set a new deadline for the ruling.

The underlying dispute was between two partners of a consulting firm and their settlement over royalties and copyright ownership from a book written during the partnership.  The original schedule for arbitration required a ruling 14 days after the hearing.  Months passed and the arbitrator refused to issue a decision without a court order, claiming his impartiality was compromised.  A trial court then set a 60-day deadline to issue a written award.  Over a year later, the arbitrator finally ruled in favor of one partner.

The Court then vacated the award on the grounds that the Legislature clearly and unambiguously requires an arbitrator to issue a decision within the time established by the parties or according to a court-ordered schedule. The partner who received the favorable ruling from the arbitrator plans to appeal to the Texas Supreme Court arguing that the proper remedy would have been to hold the arbitrator in contempt instead of vacating the award.

This column is published for informational purposes only. It should not be construed as legal advice and is not intended to create an attorney client relationship. The views expressed are those of the author and do not necessarily reflect the views of the author’s law firm or its individual partners.

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