Originally from American Review of International Arbitration - ARIA

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Regrettably, but understandably, arbitrators sometimes make mistakes. Since there generally is no appeal from an arbitral award and judicial attacks upon arbitral awards are usually quite limited by statute and the New York Convention, the question arises as to how to deal with errors that do not justify vacatur, or nonenforcement, of the award. Hyle v. Doctor’s Associates, Inc. provides a telling illustration of the deficiencies in the present legal and institutional regimes.

In this arbitration, the claimant had prayed for termination of a franchise agreement as against four partners and for damages and injunctive relief against Hyle, one of the partners. The arbitrator, proceeding under AAA auspices, rendered an award dated March 30, 1998, for termination against all four partners, but awarded damages and injunctive relief against Gruelich, one of the other partners, rather than Hyle. By letter dated April 22, 1998, the claimant wrote the AAA asking for “clarification.” The AAA sent the claimant, Gruelich, and the arbitrator, but not Hyle, a response to the effect that the arbitral authority ceased with the rendition of the award. In a letter, dated May 19, 1998, the arbitrator responded to the AAA stating that the award of damages and injunctive relief was intended to be effective only against Hyle and issued a “Corrected Arbitration Award,” replacing Gruelich’s name with Hyle’s. Hyle claimed that he did not receive a copy of the “Corrected Arbitration Award,” and the letter of the AAA until July 1998.