The Rhode Island Supreme Court once again adhered to its long-standing precedent that arbitration awards will not be overturned but for exceptional circumstances. In ABC Building Corporation d/b/a Advanced Building Concepts v. Ropolo Family, LLC, the plaintiff-general contractor demanded arbitration against the owner of a Newport restaurant where plaintiff performed construction work. The contract between the parties called for disputes to be decided by binding arbitration. The arbitrator issued an award in favor of plaintiff; thereafter the defendant moved to vacate this award, arguing that the arbitrator disregarded the clear and unambiguous language of the parties’ contract. The Court disagreed.
In confirming the award, the Rhode Island Supreme Court provided a comprehensive overview of a court’s limited role when reviewing arbitration awards. Despite some perceived flaws in the award, the Court determined that none of the narrow grounds for vacating the award existed. The Court also referenced the “strong public policy in favor of the finality of arbitration awards” and, that when reviewing awards, courts are to make “every reasonable presumption in favor of the award.” Finding that the award drew “its essence from the contract” between the parties, and also recognizing the “heavy burden” one bares to vacate an award, the Court had no trouble affirming the arbitrator’s award.
This decision provides a good reminder of the great deference that is afforded to arbitrators’ awards in Rhode Island. When considering the inclusion of a binding arbitration provision in a contract, it is good practice to keep in mind the heavy burden of vacating a potentially unfavorable award. Furthermore, due to this heavy burden, one should be sure to negotiate the process by which an arbitrator will be selected, to ensure that a qualified arbitrator is chosen to decide any disputes that may arise. For more information regarding inclusion of arbitration clauses in contracts, please contact Attorney Patrick J. McBurney at 401-824-5100 or email [email protected]. We welcome your comments, questions and suggestions.