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Without a showing that the moving party both objected to the arbitrator’s delay before the award was issued and suffered prejudice or harm from that delay, an arbitration award will not be vacated based on its untimeliness, according to an Ohio appellate court.
In Buchholz v. W. Chester Dental Group, No. CA2007-11-292, 2008 WL 4541954 (Ohio Ct. App. Oct.13, 2008), Buchholz sued WCDG for breach of contract and related claims. The parties entered into a post-dispute arbitration agreement and proceeded to arbitrate the claims. After approximately two years of proceedings and five months awaiting a decision, Buchholz moved to vacate the arbitration agreement, alleging that the arbitrator lost jurisdiction through delay.
Within a week of Buchholz’s motion and before the trial court could rule on it, the arbitrator issued an award in favor of WCDG. Buchholz then moved to vacate the award, alleging the decision was untimely. The trial court confirmed the award.
On appeal, Buchholz argued that the arbitrator’s five-month delay in rendering a decision divested him of jurisdiction to arbitrate the dispute. The Court observed that rules invoked by the parties’ agreement required an award “no later than 30 days from the date of the closing of the hearing,” but found that language did not unequivocally state that the arbitrator would lose jurisdiction if that limitation was surpassed.
Instead, the Court interpreted this limitation as discretionary, not mandatory, and that “courts should uphold late awards unless an objection to the delay has been made prior to the issuance of the award and a showing of harm or injury related to the delay has been made.” See Martich v. City of Cleveland, 603 N.E.2d 381, 382 (Ohio Ct. App. 1972).
Here, Buchholz clearly objected to the delay by filing his initial “motion to vacate the arbitration agreement,” but failed to show any prejudice or harm from the delay. For example, the Court noted that the proceedings had lasted over two years. The five month delay between hearing and decision was not longer than other delays during the proceedings, and that Buchholz had only alleged harm from the result, not the delay. Under those circumstances, the Court held the late award should not be vacated.
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