Why Getting the Wrong Result in Arbitration May Be What You Bought
Resolving disputes in arbitration can sometimes lead to surprising results, even ones that might be inconsistent with the underlying contract or with applicable state law, warns Ken Slavens for Husch Blackwell.
A recent Eighty Circuit decision is an example: The arbitrator in this case awarded attorney’s fee of nearly a million dollars more than the liability cap in the contract. Despite the possibility that this result was inconsistent with state law, the Eighth Circuit let the award stand.
“In the court’s words, ‘[t]he parties bargained for the arbitrator’s decision; if the arbitrator got it wrong, then that was part of bargain,’” writes Slavens.