The Arkansas Court of Appeals has held that an aggrieved party may move to vacate an arbitration award by alleging that no agreement ever existed, even if the statutory time for such challenges has passed, provided that the party did not participate in the arbitration proceedings.

In Helton v. MBNA America Bank, N.A., No. CA07-759, 2008 WL 2266340 (Ark. Ct. App. June 4, 2008), MBNA filed an arbitration claim against Helton for an alleged credit card debt. Helton did not participate in the arbitration proceedings. The arbitrator issued an award against Helton, which MBNA sought to confirm. The trial court granted the motion for confirmation, holding that the 90-day time limit for challenges to awards in the state’s arbitration act barred any consideration of Helton’s argument that the debts were invalid and that an arbitration agreement did not exist between the parties.

On appeal, after first determining that the trial court erred in applying state arbitration law instead of the Federal Arbitration Act ("FAA"), the Court cited an Arkansas Supreme Court decision stating that the three month time period in which a party could move to vacate, modify, or correct an award under federal law does not apply unless an agreement to arbitrate actually exists. See Danner v. MBNA America Bank, N.A., No. 06-1429, 369 Ark. 435, __ S.W.3d ___ (Ark. 2007) (cardholder’s allegation that no agreement existed mandated remand for additional fact finding as to the agreement’s existence).

MBNA argued that Helton was given a full opportunity to present objections at arbitration and that this opportunity distinguished Helton’s case from Danner. See MBNA Bank America, N.A. v. Gilbert, No. CA 06-1324, 100 Ark. App. 221, __ S.W.3d ___ (Ark. Ct. App. 2007) (holding that the party could not raise an untimely challenge to the existence of the arbitration agreement where he was on notice of proceedings and had an opportunity to present objections at arbitration).

However, the Court held that Gilbert was distinguishable from the instant case and from Danner because the disappointed party in Gilbert allegedly "participated" in the arbitration proceedings. Helton may have been "given the opportunity to present evidence," said the Court, but there was no record "that both parties in fact did so." Because Helton’s objection raised an issue of material fact as to the existence of the agreement, the matter was remanded for further proceedings.

In a partial dissent, one justice agreed with the result, but opined that reaching the result required overruling the "participation" distinction in Gilbert. Specifically, the justice was troubled that Gilbert inferred participation from "notice of the proceeding." Gilbert, 100 Ark. App. at 225-26. Because "Helton’s own affidavit suggests that he was on notice of the arbitration proceeding," the dissenting justice maintained that the reaffirmation of the Gilbert distinction necessarily required Helton to be charged with "participation" through notice.