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A federal court in Ohio held that an arbitrator did not exceed his authority by clarifying an award to replace the "clear and convincing" standard with the appropriate "preponderance of the evidence" standard.
In Oakwood Laboratories v. Howrey Simon Arnold & White, LLP, Nos. 1:04 CV 2270, 1:05 CV 2070, 2007 WL 1544577 (N.D. Ohio May 24, 2007), Oakwood and the Defendants were in dispute over legal fees. The dispute was submitted to arbitration and an award was issued in favor of the Defendants.
The arbitrator referred to application of the "clear and convincing evidence" standard throughout the arbitration award. The proper standard of proof to be applied was actually a "preponderance of the evidence."
Oakwood moved to vacate the award on the basis that the arbitrator manifestly disregarded the law. The Defendants asked the arbitrator for clarification of the award; opposed by Oakwood. The arbitrator issued a clarification, stating that his reference to the clear and convincing standard was "inadvertent" and that he had applied the preponderance standard.
Arbitrators may clarify an award to "correct any clerical, typographical, or computational errors… [but are] not empowered to redetermine the merits of any claim already decided." See American Arbitration Association (AAA) Rule 46. Oakwood argued that substituting a different standard of proof was equal to a modification of the award on its merits.
This Court rejected Oakwood's argument, finding that the arbitrator did not exceed his authority. The arbitrator clearly stated that his reference to the clear and convincing standard had been merely inaccurate. This could not be discounted by the Court. Further, the arbitrator did not reevaluate the evidence nor issue a different award.
Accordingly, the Court held that the arbitrator had "properly corrected [the misstatement] pursuant to AAA [rules.]"
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