{"id":899000,"date":"2021-08-04T15:29:25","date_gmt":"2021-08-04T21:29:25","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=899000"},"modified":"2021-08-04T15:29:32","modified_gmt":"2021-08-04T21:29:32","slug":"arbitration-award-failed-to-mediate","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/arbitration-award-failed-to-mediate\/","title":{"rendered":"Read Your Contract: It May Cost You Your Arbitration Award"},"content":{"rendered":"\n<p>Sydney M. Warren and J. David Pugh | <a href=\"https:\/\/www.buildsmartbradley.com\/2021\/07\/read-your-contract-it-may-cost-you-your-arbitration-award\/?utm_source=Bradley+Arant+Boult+Cummings+LLP+-+BuildSmart&amp;utm_campaign=bad03a1da2-RSS_EMAIL_CAMPAIGN&amp;utm_medium=email&amp;utm_term=0_b504caf31b-bad03a1da2-78863422\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Buildsmart<\/a><\/p>\n\n\n\n<p>Imagine receiving an <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/binding-arbitration-award-ends-coverage-litigation\/\" target=\"_blank\" rel=\"noreferrer noopener\">arbitration award<\/a> in favor of your client. You move to confirm the award, and the award is vacated because the parties failed to mediate prior to arbitration. That is exactly what happened in\u00a0<em><a href=\"https:\/\/www.buildsmartbradley.com\/wp-content\/uploads\/sites\/34\/2021\/07\/Sup-Materials.Blog_.BuildSmart.-Burke-v.-Roberson.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Burke v. Roberson<\/a><\/em>.<\/p>\n\n\n\n<p>In December 2020, the First Court of Appeals in Houston affirmed the vacatur of an arbitration award because a condition precedent to arbitration under the governing contract \u2013 i.e., mediation \u2013 was not satisfied or waived by the parties prior to arbitration. In affirming the vacatur, the court held that the dispute was never properly before the arbitrator and that the arbitrator therefore exceeded his powers in issuing the award.<\/p>\n\n\n\n<p>Texas law favors arbitration, and the construction industry is no exception in the pursuit of finality and findings generally not susceptible to challenge. An arbitration award \u201chas the same effect as a judgment of a court of last resort,\u201d thus \u201call reasonable presumptions are indulged in its favor\u201d (see\u00a0<em><a href=\"https:\/\/www.buildsmartbradley.com\/wp-content\/uploads\/sites\/34\/2021\/07\/Sup-Materials.Blog_.BuildSmart.-Port-Arthur-Steam-Energy-LP-v-Oxbow-Calcining-LLC.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Port Arthur Steam Energy LP v. Oxbow Calcining LLC<\/a><\/em>). Under the Texas Arbitration Act, a trial court\u00a0<em>shall\u00a0<\/em>confirm an arbitration award \u201cunless grounds are offered for vacating\u201d the award. The\u00a0<em>exclusive<\/em>\u00a0grounds for vacating an arbitration award are set forth in Section 171.088, the relevant ground in\u00a0<em>Burke<\/em>\u00a0being when an arbitrator exceeds his or her powers. An arbitrator exceeds his or her powers \u201cby deciding a matter not properly before\u201d them.<\/p>\n\n\n\n<p>In&nbsp;<em>Burke,&nbsp;<\/em>the agreement at issue stated: \u201cany controversy which touches or concerns [the Agreement]&nbsp;<em>shall<\/em>&nbsp;be resolved by mediation, and if such mediation is unable to resolve the controversy then exclusively by binding arbitration.\u201d The court held this conditional language established mediation as a condition precedent to arbitration. Unless and until the parties mediated, the court reasoned that the controversy was not properly before the arbitrator. Notably, the court was not sympathetic to the appellant\u2019s repeated attempts to mediate with appellees prior to arbitration and held such \u201cinaction\u201d was not a waiver of their right to mediate.<\/p>\n\n\n\n<p>While it was a straightforward decision and premised on the very terms the parties agreed to in the governing contract, the court\u2019s decision in&nbsp;<em>Burke&nbsp;<\/em>is every client\u2019s nightmare that affects all parties equally \u2013 i.e., the party attempting to confirm an arbitration award. The decision suggests a potential broadening of what courts consider an arbitrator exceeding his or her powers \u2013 and yet another basis upon which a seemingly final arbitration award can be vacated.<\/p>\n\n\n\n<p>To avoid the result in\u00a0<em>Burke<\/em>\u00a0when faced with a similar agreement, the parties should either mediate as required under the agreement or enter into an agreed waiver of mediation. The parties can always mediate later on should they decide to do so.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Sydney M. Warren and J. David Pugh | Buildsmart Imagine receiving an arbitration award in favor of your client. You move to confirm the award, and the award is vacated because the parties failed to mediate prior to arbitration. That is exactly what happened in\u00a0Burke v. Roberson. In December 2020, the First Court of Appeals&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/arbitration-award-failed-to-mediate\/\">Continue reading <span class=\"screen-reader-text\">Read Your Contract: It May Cost You Your Arbitration Award<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[41,9],"tags":[9895,42,10482,224],"class_list":["post-899000","post","type-post","status-publish","format-standard","hentry","category-arbitration","category-construction-contracts","tag-advise-consult","tag-arbitration-2","tag-arbitration-award","tag-construction-contract","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Read Your Contract: It May Cost You Your Arbitration Award - Advise &amp; 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