In affirming confirmation of an arbitration award, a California appellate court determined that a non-signatory to the arbitration agreement waived any objection to arbitral jurisdiction by participating in the arbitration proceedings.

In Liu v. Pham, No. C055054, 2008 WL 933553 (Cal. Ct. App. April 8, 2008), LeAnne Pham (LeAnne) entered into an agreement with Liu to purchase his business, One Touch Wireless. Liu loaned LeAnne a portion of the purchase money, which was to be repaid according to the terms of a promissory note and purchase agreement. An agreement to arbitrate was also contained in the purchase agreement.

Thereafter, LeAnne and her sister, Mai Pham (Mai), opened a partnership bank account in the name of One Touch Wireless. Subsequently, LeAnne fell behind in her installment obligations to Liu. In response, Liu served LeAnne and Mai with a demand for arbitration.

At the arbitration proceedings, Liu argued that LeAnne and Mai were equally liable for breach of the purchase agreement. Mai submitted a post-arbitration brief claiming that she had no liability to Liu because she was not a party to the purchase agreement. The arbitrator issued an award in favor of Liu and against LeAnne and Mai.

Lui filed a petition to confirm the arbitration award. In response, Mai filed a motion contesting arbitral jurisdiction and opposing confirmation of the award. The lower court confirmed the arbitration award and determined that because Mai appeared at the arbitration and did not object to the arbitrator's jurisdiction, she waived her right to object.

On appeal, Mai contended that the lower court erred in confirming the award because she was not a party to the purchase agreement, and any award against her exceeded the arbitrator's powers. The Court rejected Mai's argument. Four months passed between the demand for arbitration and the arbitration hearing, and Mai did not seek relief from the court.

Instead, Mai participated in the arbitration and attempted to obtain a favorable ruling. Because of her participation in the arbitration proceedings, her jurisdictional objection came too late. As the Court noted, "a party may not voluntarily submit to arbitration hoping for a favorable ruling, and then be allowed to change the arbitrability of the dispute if the outcome is unfavorable." Accordingly, the Court affirmed the lower court's decision to confirm the award in its entirety.