LD 1218
pg. 79
Page 78 of 94 An Act To Enact the Revised Uniform Arbitration Act Page 80 of 94
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LR 468
Item 1

 
However, the specter of FAA preemption is balanced by the
assertion that the principle of Volt Information Sciences,
Inc. v. Stanford University, 489 U.S. 468 (1989) - that a
clear expression of intent by the parties to conduct their
arbitration under a state law rule that conflicts with the FAA
effectively trumps the rule of FAA preemption - should serve
to legitimize a state arbitration statute with different
standards of review. This assertion is particularly persuasive
if one believes that an arbitration agreement by the parties
whereby they provide for judicial review of an arbitrator's
decisions for errors of law or fact cannot be characterized as
"anti-arbitration." By this view, such an opt-in feature of
judicial review of arbitral awards for errors of law or fact
is intended to further and to stabilize commercial arbitration
and therefore is in harmony with the pro-arbitration public
policy of the FAA. Of course, in order to fully track the
preemption caveat articulated in Volt and further refined in
Mastrobuono v, Shearson Lehman Hutton, Inc., 514 U.S. 52
(1995), the parties' arbitration agreement would need to
specifically and unequivocally invoke the law of the adopting
State in order to override any contrary FAA law.

 
3. The second major impediment to inclusion of an opt-in
provision for judicial review in the RUAA (and contractual
provisions to the same effect) is the contention that the
parties cannot contractually "create" subject matter
jurisdiction in the courts when it does not otherwise exist.
The "creation" of jurisdiction transpires because a statutory
provision that authorizes the parties to contractually create
or expand the jurisdiction of the state or federal courts can
result in courts being obliged to vacate arbitration awards on
grounds they otherwise would be foreclosed from relying upon.
Court cases under the federal law show the uncertainty of an
opt-in approach. See, e.g., Chicago Typographical Union v.
Chicago Sun-Times, 935 F.2d 1501, 1505 (7th Cir. 1991) ("If
the parties want, they can contract for an appellate
arbitration panel to review the arbitrator's award. But they
cannot contract for judicial review of that award; federal
[court] jurisdiction cannot be created by contract.") (labor
arbitration case); but see Gateway Technologies, Inc. v. MCI
Telecommunications Corp., 64 F.3d 993, 996 (5th Cir. 1995)
(The court, relying on the Supreme Court's contractual view of
the commercial arbitration process reflected in Volt,
Mastrobuono, and First Options of Chicago v. Kaplan, 514 U.S.
938, 947 (1995), the court held valid a contractual provision
providing for judicial review of arbitral errors of law. The
court concluded that the vacatur standards set out in
Section10(a) of the FAA provide only the default option in
circumstances where the parties fail to contractually
stipulate some alternate criteria for vacatur).


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