Tennessee Business Litigation Law Blog

In CARTA v. LOCAL 1212 AMALGAMATED TRANSIT UNION, the Tennessee Court of Appeals recently summarized the enormous deference afforded to arbitration awards. See below:

Tenn. Code Ann. §29-5-313 provides that an arbitration award shall be vacated where it is shown that the arbitrator exceeded his/her powers. The trial court cannot vacate an award just because the court feels that the arbitrator erred - the court is limited to the statutory grounds only. We are required to apply a “deferential standard of review”, and accept the facts as found by the trial court unless they are erroneous. We are “not permitted to consider the merits of an arbitration award even if the parties allege that the award rests on errors of fact or misrepresentation of the contract.” When the issues presented are questions of law, we are required to resolve them with “utmost caution, and in a manner designed to minimize interference with an efficient and economical system of alternative dispute resolution.” An arbitration award cannot be vacated because the arbitrator made a mistake of fact or law, and it also cannot be vacated because it is irrational, or provides relief that could not or would not be granted by the court.

(internal citations omitted). In the words of the Tennessee Supreme Court, "admittedly, our investment in this process is heavy; nevertheless, if alternative dispute resolution is to succeed, there must be finality--finality of arbitration awards and decisions." Arnold v. Morgan Keegan & Co., 914 S.W.2d 445, 451-52 (Tenn. 1996).