SW Legal Educational Publishing

Common Law Rules Apply to Arbitration Agreement Not Tied to Arbitration Statute
Description The New Jersey high court held that challenges to the result of an arbitration proceeding are subject to common law rules of appeal if the arbitration agreement did not specify that the proceedings would follow the rules of the New Jersey Arbitration Act.
Topic Alternate Dispute Resolution
Key Words Arbitration; Judicial Review
C A S E   S U M M A R Y
Facts The Policeman's Benevolent Association (PBA) claimed that an employer-city violated the terms of its collective bargaining agreement. The arbitrator held on behalf of the PBA. Under the New Jersey Arbitration Act, either party may bring an action in court to have an award confirmed or vacated within three months of the award. Four months after the award, the PBA sued for confirmation; the city requested the award be vacated. The collective bargaining agreement did not specify if arbitration was subject to the New Jersey Arbitration Act. If not, then it is subject to common law requirements for further proceedings. That was the issue that went to the New Jersey high court.
Decision The Arbitration Act does not repeal common-law arbitration. Since this agreement did not state that it was subject to the Arbitration Act, it is subject to common law rules. Under common law, arbitration awards are invalidated for fraud, corruption or undue influence. The common law does not have a three month rule, as does the Arbitration Act, hence, the parties may proceed to court for confirmation or to have the award vacated and are not bound by the three-month rule of the Arbitration Act.
Citation Policeman's Benevolent Assn. v. Borough of North Haledon, 730 A.2d 320 (Sup. Ct., N.J., 1999)

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