Narrow View of Grounds for Appeal Under the Maine Uniform Arbitration Act

In a decision published last week in a case of first impression in Maine, the Law Court held that the Maine Uniform Arbitration Act (14 M.R.S. å¤ 5938) is the exclusive remedy for parties seeking to appeal an arbitration award, and specifically, that parties cannot reserve their right to appeal arbitration awards on grounds other than those enumerated in the Act.In HL1, LLC v. Riverwalk, LLC, 2011 ME 29, the court considered the effect of an arbitration agreement that said “each party shall retain his right to appeal any question of law arising at the hearing.” The agreement also provided that it was governed by Maine law and that any provision deemed unenforceable was severable.The parties to the agreement became involved in a dispute that was, in due course, submitted to arbitration before a three-member panel. When the party prevailing at arbitration moved for judicial confirmation of the award, the opposing party filed a notice of appeal in the Superior Court on the grounds that the arbitration panel had erred as a matter of law. The Superior Court confirmed the award and rejected the appeal, reasoning that the grounds for vacating an arbitration award enumerated in the Maine Uniform Arbitration Act are exclusive and do not include review for errors of law. An appeal to the Law Court followed.After noting, 2011 ME 29, å¦18, that errors of law are not among the grounds for vacating an arbitration award enumerated in Title 14 Section 5938, the Court proceeded to consider whether parties to an arbitration agreement could nevertheless expand the Act’s enumerated options by including an express term to that effect in the agreement. For an answer to the question, the Law Court looked to the United States Supreme Court’s decision in Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008), interpreting the Federal Arbitration Act (9 U.S.C.S. å¤ 10). In Hall Street, the Supreme Court considered the scope of review of an arbitration award under the terms of an arbitration agreement that also purported to allow an appeal based on errors of law. The Supreme Court noted that, under the FAA, (1) statutory grounds for vacatur were restricted to egregious and extreme conduct by arbitrators, and (2) nothing in the language of the Act suggested that the courts or the parties were meant to have flexibility to deviate from the requirement (like that in the Maine Act) that courts must confirm arbitration awards unless one of the enumerated conditions permitting vacatur can be shown to have occurred. 2011 ME 29, å¦20 (citing Hall Street, 552 U.S. at 586, 587).After considering similarities and differences in the FAA and the MUAA, the Law Court concluded that the differences were immaterial for purposes of the scope-of-review analysis at hand.åÊ Furthermore, in reviewing the decisions of the highest courts in other states with arbitration statutes similar to the MUAA, the court found the majority to have interpreted their statutes in a manner consistent with the reasoning of Hall Street. Finally, the Court rejected the argument that policy considerations favored allowing parties to an arbitration agreement to dictate the scope of review of any arbitration award rendered pursuant to the agreement. According to the Court, “The text of the statute reflects only one policy: when parties have agreed to arbitration that results in an award, the role of the court is to promptly confirm the award subject to narrow review upon application of a party.” 2011 ME 29, å¦ 27.The Law Court’s final conclusion: “[S]ection 5938(1) provides the exclusive grounds for a court to vacate an arbitration award and that the statute is not sufficiently elastic so as to allow parties to expand the court’s role by agreement.”