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Procedural Posture

Defendants appealed the affirmation of an arbitration award by the Superior Court of California, County of Orange.

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Overview

Plaintiffs and defendants agreed to alternative dispute resolution in their dispute over claims of breach of contract, fraud, and request for recission of a partnership agreement. The stipulation agreed to the American Arbitration Association arbitrating with a panel of three arbitrators. The parties granted the arbitrators immunity as judicial officers but, at the hearing, the panel members concluded that the matter was an arbitration and proceeded thusly. After finding against the defendants, the defendants sought to have the award thrown out alleging that this was not an arbitration. Upon rehearing by the panel the award was again in favor of the plaintiffs and the defendants appealed. The court found that the proceedings were actually an arbitration and noted that, when the panel decided that it was an arbitration both parties affirmatively agreed. The court also held that the arbitrators were not bound by an express remedy but only had to choose a remedy that bore some rational relationship to the contract and the breach. Therefore the court remanded the decision with directions to conform the award of the arbitrator and awarded plaintiffs their appellate costs.

Outcome

Defendants’ appeal of the arbitrator’s award was denied and the decision was remanded back to the lower court with directions to conform the award.

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