According to a California state appellate court, prevailing party determinations by arbitrators are not subject to judicial review, unless the narrow statutory grounds for vacating or correcting an award are present.

In Daher v. Nazer, No. B190271, 2007 WL 4201303 (Cal. Ct. App. Nov. 29, 2007), Daher and Nazer reached a settlement agreement which contained a provision for arbitration of disputes related to the agreement. A dispute arose, was arbitrated, and resulted in an award in favor of the respondent Nazer. The award included attorney fees for Nazer as the prevailing party.

Daher petitioned the trial court to correct the award, eliminate the reference to Nazer as the prevailing party, and rescind the portion awarding attorney's fees. The trial court confirmed the award, finding the arbitrator had jurisdiction to hear the dispute, declare a prevailing party, and award attorney fees.

On appeal, the Court affirmed the trial court's findings. After the Court reiterated the trial court's holding that the arbitrator had jurisdiction to hear the dispute, the Court rejected Daher's contention that the arbitrator was without power to declare a prevailing party.

First, the Court explained that a prevailing party determination was immune to judicial review, unless the challenging party could allege grounds for vacatur under Cal. Code Civ. P. § 1286.2 or grounds for correction under Cal. Code Civ. P. § 1286.6. According to the Court, the rule limiting review of awards necessarily extended to any determination of a prevailing party, as the identity of the prevailing party was clearly part of the dispute submitted to arbitration.

Second, the Court opined that, even absent the limitations on review of arbitration awards, the arbitrator's prevailing party determination was well-supported by the law and not clearly erroneous. The arbitrator cited prior cases holding that dismissals with prejudice, like that in the instant case, "had the effect of a final judgment, and was the most that [Nazer] could hope to achieve." The Court agreed that "for all practical purposes [Nazer] [wa]s the prevailing party."