Matthew DeVries | Best Practice Construction Law
Arbitration has long been viewed as a faster, more efficient alternative to litigation. But anyone involved in construction disputes today knows that is not always the case. The process can be just as costly, sometimes taking as long as a court case. Yet one thing remains consistent, and it is the most important point for everyone in the construction process to understand before signing an arbitration clause: once an arbitrator decides, that decision is almost always final.
That reality was reinforced in a recent Tennessee Court of Appeals decision, MidSouth Construction, LLC v. Burstiner (June 12, 2025) (pdf). The case involved a homeowner who tried to overturn an arbitration award following a dispute about defective deck construction. The homeowner argued that the arbitrator’s decision was “fundamentally irrational.” The court rejected that argument.
Under the Tennessee Uniform Arbitration Act (TUAA), a court may vacate an arbitration award only in very limited circumstances, such as corruption, fraud, partiality, or if the arbitrator exceeded his powers. The idea of a “fundamentally irrational” or “completely irrational” award does not exist under Tennessee law, although some federal courts have recognized this standard. See, e.g., Kyocdera Corp. v. Prudential-Bache Trade Services, Inc., 341 F.3d 987, 997 (9th Cir. 2003) (finding that arbitrators “exceed their powers,” thus requiring a court to vacate an award, when the award is ‘completely irrational.”)
The Court of Appeals in Midsouthconfirmed that Tennessee courts cannot overturn arbitration awards simply because they might involve factual or legal mistakes. One key issue in this case was whether the contractor had been given a reasonable opportunity to cure defective work. The arbitrator found that MidSouth had offered to make repairs two or three times but that the homeowner refused access to the property. Even though the work was imperfect, the arbitrator ruled in favor of the contractor, finding that the owner had breached the duty to allow a reasonable opportunity to cure. The appellate court did not reweigh the evidence or second-guess that conclusion.
The lesson for everyone in the construction process (owners, developers, contractors, and subcontractors) is clear. Arbitration gives the arbitrator wide discretion, and once an award is issued, it is rarely disturbed. Whether you win or lose, the decision is almost always final.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.