Prospects for Judicial Review of Arbitration Awards Under State Law

Binding arbitration offers parties a means to resolve their dispute without the cost and delay of litigation. To ensure that arbitration is not merely a prelude to litigation, 49 jurisdictions have adopted arbitration statutes with an identical list of grounds on which a court can review and vacate an arbitral award. Congress has enacted the Federal Arbitration Act, 9 states have adopted arbitration statutes based on that act, and 38 states and the District of Columbia have adopted the Uniform Arbitration Act. Under the Federal Arbitration Act, as recently interpreted by the Supreme Court in Hall Street Associates v. Mattel (2008), and under 38 state courts’ interpretations of their arbitration statutes, a court cannot vacate an arbitration award for an arbitrator’s mistake or disregard of fact or law. Critics argue that this lack of substantive review gives too much discretion to arbitrators, and that fear of “maverick” arbitrators drives parties away from arbitration.

Virginia is indicative of this national trend away from judicial review of arbitration. Virginia adopted the Uniform Arbitration Act in 1986, and its highest court has consistently held that the grounds for vacatur under that act are exclusive. This paper examines the possible avenues that exist under current state law, using Virginia as a case study. Moreover, this paper suggests statutory amendments, some of which have been adopted in a few other jurisdictions, that might serve to better balance the competing concerns of arbitral finality and judicial oversight. These proposals under Virginia law serve as a model that can be applied in the other jurisdictions that grapple with those same concerns under similar arbitration statutes.