I recently came across a decision form the District Court for the Southern District of Mississippi that caught my attention. Although it was not construction related, it addressed a situation where the parties had included the right to appeal an arbitration award in their agreement to arbitrate. [click for decision] This would appear to be inconsistent with the concept of finality, which is one of the public policy reasons for arbitration. Further, under the Mississippi Arbitration Act, Miss. Code Ann. §§ 11-15-1, et seq. and the Mississippi Construction Arbitration Act, Miss. Code Ann. §§ 11-15-101, et seq. there are extremely limited grounds for having an arbitration award challenged.
Nonetheless, in this district court decision, the federal judge thought that even though there were no Mississippi court decisions addressing this issue, that if confronted with the question of whether parties could include a right to appeal an arbitration award for reasons stated in the arbitration clause, the Mississippi court would enforce the provision allowing an appeal. The district court, quoting the Fifth Circuit, stated that "when, as here, the parties agree contractually to subject an arbitration award to expand judicial review, federal arbitration policy demands that the court conduct its review according to the terms of the arbitration contract." (citation omitted)
There remain no Mississippi decisions adopting the position of the district court. However, this decision should highlight the need for contractors to carefully read arbitration clauses included in their contract. If you have concerns with any aspect of the arbitration clause, those concerns should be resolved before you sign the contract.
I recently came across a decision form the District Court for the Southern District of Mississippi that caught my attention. Although it was not construction related, it addressed a situation where the parties had included the right to appeal an arbitration award in their agreement to arbitrate. [click for decision] This would appear to be inconsistent with the concept of finality, which is one of the public policy reasons for arbitration. Further, under the Mississippi Arbitration Act, Miss. Code Ann. §§ 11-15-1, et seq. and the Mississippi Construction Arbitration Act, Miss. Code Ann. §§ 11-15-101, et seq. there are extremely limited grounds for having an arbitration award challenged.
Nonetheless, in this district court decision, the federal judge thought that even though there were no Mississippi court decisions addressing this issue, that if confronted with the question of whether parties could include a right to appeal an arbitration award for reasons stated in the arbitration clause, the Mississippi court would enforce the provision allowing an appeal. The district court, quoting the Fifth Circuit, stated that "when, as here, the parties agree contractually to subject an arbitration award to expand judicial review, federal arbitration policy demands that the court conduct its review according to the terms of the arbitration contract." (citation omitted)
There remain no Mississippi decisions adopting the position of the district court. However, this decision should highlight the need for contractors to carefully read arbitration clauses included in their contract. If you have concerns with any aspect of the arbitration clause, those concerns should be resolved before you sign the contract.
