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Noting the narrow review given to decisions of arbitration panels, the First Circuit confirmed an arbitration panel's interpretation of a contract.
In In re Vital Basics, Inc., No. 05-2741, 2006 WL 3821401 (1st Cir. Dec. 29, 2006), Vital Basics (VBI) asked the Court to vacate an arbitration award issued in favor of Ventrue Incorporated.
The parties had an agreement whereby VBI would receive commissions for selling Ventrue memberships. VBI claimed that the contract required Ventrue to pay a partial commission for "Paid Cancels," memberships that were cancelled before the one-year term but after the 30-day period during which a full refund would be granted.
VBI argued that the arbitration award should be vacated because the arbitration panel ignored the plain language of the contract when it failed to award VBI commission payments for the "Paid Cancels."
However, this Court disagreed, and confirmed the arbitration panel's award. Although VBI did point to one clause of the contract that appeared to require Ventrue to pay partial commissions on "Paid Cancels," the Court noted that the contract as a whole could also be read to only provide for commission payments on fully-paid memberships.
Because of the narrow review given to decisions of arbitration panels, the Court deferred to the panel's interpretation of the contract and refused to vacate the award.
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