Last fall, the California Supreme Court, in Cable Connection Inc. v. DIRECTV Inc. , 44 Cal. 4th 1334, took a cue from the U.S. Supreme Court and broadened the opportunity for judicial review of contractual arbitration awards beyond what is already permitted under the limited statutory grounds in the California Arbitration Act Code of Civil Procedure sections 1286.2 and 1286.6) or the Federal Arbitration Act (9 U.S. Code sections 9,10 and 11). Awards that are brought before a California state court for confirmation will be controlled by the state arbitration act and not preempted by its federal counterpart. What this means is that if an arbitration clause between parties so provides, the parties can contract for judicial review of an arbitrator’s legal error. But should they be so quick to do so?
Arbitrators, like judges, occasionally come to erroneous conclusions of law or fact but arbitration awards traditionally would not ordinarily be vacated because of such errors. And unless required to do so by the arbitration clause, an arbitrator was free to fashion a result based upon broad principles of justice, equity and, perhaps, common sense. The arbitrator was also free to come up with a result that, unless specified, was not necessarily in accordance with California law.
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