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An Ohio appellate court has reversed a lower court’s decision to vacate a pair of arbitration awards sua sponte. A court does not have discretion to vacate an award on its own, and a signature on an arbitration agreement is not required for confirmation, the Court held.
In NCO Portfolio Management, Inc. v. McGill, No. 21229, 2006 WL 2041476 (Ohio Ct. App. Jul 21, 2006), and MBNA America Bank, N.A. v. O'Brien, No. 21216, 2006 WL 2041478 (Ohio Ct. App. Jul 21, 2006), the consumers, McGill and O’Brien, opened up credit card accounts with MBNA. Pursuant to the terms of the cardholder agreements, the two agreed to arbitrate all disputes. When both consumers defaulted on the accounts, MBNA and NCO, MBNA’s assignee, submitted successful claims to arbitration.
The credit card companies sought to confirm the awards, providing the district court with the arbitral award, the credit card agreement containing the arbitration clause, and an affidavit from their attorney authenticating the award and agreement. Neither McGill nor O’Brien had attended the hearings or submitted any brief in the matter. Nevertheless, in both cases, the court, sua sponte, required MBNA and NCO to produce a signed arbitration agreement or a witness that could testify that there was a signed arbitration agreement. When the companies could not produce either, the court vacated the awards.
While the Federal Arbitration Act requires that arbitration agreements be in writing, it does not require the writings to be signed by the parties. On appeal, the Court stated that a court must confirm an arbitration award unless a timely motion to modify or vacate is made and cause to vacate or modify is shown. A court does not have discretion to deny an application to confirm an arbitration award. A court cannot, as it did in the instant cases, require additional evidence of the agreement to arbitrate, “particularly in the absence of any challenge.” McGill, 2006 WL 2041476, at *3.
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