South-Western Legal Studies in Business

Arbitration Agreement That Precludes Appeal Will Be Enforced
Description Appeals court upheld the decision of the district court to not review a decision by an arbitrator. The arbitration agreement held that the decision of the arbitrator was final and could not be appealed, and so there was no right to appeal.
Topic Alternate Dispute Resolution
Key Words Arbitration; Appeal
C A S E   S U M M A R Y
Facts Gorelick and others developed a new technology that was patented. Under an agreement, Gorelick was to receive one-sixth of net royalty income from the patent. His rights were sold to MACTEC. Gorelick signed a new agreement with Gorelick in which he would receive $1,500 or $3,000, depending on circumstances, for each application of the technology. The agreement contained an arbitration clause that stated that the arbitrator’s decision “shall be final and nonappealable.” The arbitrator awarded Gorelick $4.5 million in damages. MACTEC appealed. The district court held that the arbitrator’s decision would stand. MACTEC appealed to the court of appeals.
Decision

Affirmed and dismissed. The clause in the contract made it clear that the parties intended to preclude review of the judgment of the arbitrator. As such, the decision of the arbitrator was res judicata; the matter had been decided. MACTEC could not raise new issues on appeal in an effort to avoid the decision of the arbitrator. The merits of the matter were complete upon the decision of the arbitrator. That decision has the same effect as a judgment by a court.

Citation MACTEC, Inc. v. Gorelick, 20005 WL 2767135 (---F.3d---, 10th Cir., 2005)

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