LD 1218
pg. 81
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LR 468
Item 1

 
court observed that although parties may elect to be governed by
any rules they wish regarding the arbitration itself, it is not
clear whether the court can review an arbitration award beyond
the limitations of FAA Sections 10 and 11. Congress never
authorized a de novo review of an award on its merits, and
therefore, the Court concluded that it had no choice but to
confirm the award when there are no grounds to vacate based on
the FAA.

 
The court reviewed Kyocera and Gateway and observed:
"Notwithstanding those cases, we do not believe it is a
foregone conclusion that parties may effectively agree to
compel a federal court to cast aside Sections 9, 10, and 11 of
the FAA." It then quoted at length from Judge Mayer's dissent
in Kyocera and concluded by emphasizing its view of the
differing role of the courts in reviewing arbitration awards
and judgments from a court of law. Because the holding of UHC
was based on the parties' intent, the thoughts of the Eighth
Circuit regarding this matter can be accurately characterized
as dictum. However, there is no doubt that it, like the
Seventh Circuit in Chicago Typographical Union, finds
contractual provisions requiring the courts to apply
contractually-created standards for judicial review of
arbitration awards to be dubious.

 
After Kyocera and UHC the tally stands at two United States
Circuit Courts of Appeals approving contractual opt-in
provisions and two United States Circuit Courts of Appeals
effectively rejecting those provisions. Given this diversity
of judicial opinion in the federal circuit courts of appeals,
it is fair to say that law remains in an uncertain state.

 
4. The few state courts that have addressed the "creating
jurisdiction" issue are similarly split. In Dick v. Dick, 534
N.W.2d 185, 191 (Mich. Ct. App. 1994), the Michigan Court of
Appeals characterized the contractual opt-in provision before
it (which permitted appeal to the courts of "substantive
issues" pertaining to the arbitrator's award) as an attempt to
create "a hybrid form of arbitration" that ["did] not comport
with the requirements of the [Michigan] arbitration statute."
The Michigan court refused to approve the broadened judicial
review and held that the parties were instead "required to
proceed according to the [Michigan arbitration statute]." The
appellate court observed further that "[t]he parties'
agreement to appellate review in this case is reminiscent of a
mechanism under which the initial ruling is by a private
judge, not an arbitrator. * * * What the parties agreed to is
binding arbitration. Thus, they are not entitled to the type
of review
[of the merits of the award] they agreed to."


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