A New Jersey appellate court has held that a party to a private arbitration proceeding may not seek vacatur of an award based on "manifest disregard of the law" under the New Jersey Arbitration Act.

In Maguire v. Freehold Subaru, L.L.C., No. A-1258-07T2, 2008 WL 2796393 (N.J. Super. Ct. App. Div. July 22, 2008), Maguire and Freehold entered into a buyer's order and automobile lease. Both documents contained an arbitration agreement. Maguire later brought suit against Freehold, alleging violations of the New Jersey Consumer Fraud Act. Freehold responded with a successful motion to compel arbitration.

At arbitration, Maguire objected to the appointed arbitrator because of his prior representation of automobile dealerships. The arbitration administrator denied Maguire's petition to appoint a different arbitrator. Ultimately, the arbitrator found for Freehold on all claims. Maguire moved to vacate the award, alleging bias, manifest disregard of the law, and violation of public policy. The trial court found Maguire's allegations "speculative" and denied the motion.

On appeal, the Court affirmed the denial, finding Maguire's arguments without merit. However, the Court did comment on some confusion as to whether the Federal Arbitration Act (FAA) or the New Jersey Arbitration Act (NJAA) applied to the parties' dispute. The Court noted that a challenge based on manifest disregard of the law was only available under the FAA, not the NJAA. Furthermore, the Court refused to consider vacatur on "public policy" grounds, observing that this ground was only available when "awards sufficiently implicate public policy concerns," and generally not when awards are rendered in purely private arbitration.