Arbitration decisions can be contested in court. Grounds exist under the Federal Arbitration Act and applicable state acts to challenge arbitration decisions. While the terms of some arbitration agreements call for the appointment of a specialized appellate arbitration panel to review contested decisions (such as in the FORUM’s New Jersey No-Fault program), even these “second level” arbitration decisions can be reviewed by a court if necessary.
A binding arbitration decision becomes legally enforceable when it is confirmed by a court. If a party believes that either the arbitration agreement itself is unfair (or unconscionable) or the manner in which the arbitration agreement is presented or administered is unconscionable, the arbitration decision may be challenged in court at the confirmation/vacatur hearing. A court will strike any portion of an arbitration agreement it finds unconscionable, and may even void (or vacate) the arbitration decision altogether and release the parties from the agreement.
Binding arbitration maintains its efficiency and cost benefit by limiting the grounds upon which a party can challenge decisions. It aspires to provide closure to all parties involved in the dispute. Parties must comply with the arbitrator’s decision unless they initiate a court challenge, claiming that the agreement, or the presentation and/or administration of the agreement, is unconscionable.
Back To FAQ's