Originally from:

Journal of American Arbitration (JAA) - Vol. 1, No. 2

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ARTICLES

Co-opting the Federal Judiciary: Contractual Expansion of Judicial Review of Arbitral Awards

By Victoria L.C. Holstein

I. INTRODUCTION
The proliferation of expensive, lengthy and complex litigation has
led to an increased reliance on private adjudication to relieve
overcrowded court dockets.2 Implicitly recognizing the need to
maximize scarce judicial resources, the United States Supreme Court has
emphatically endorsed arbitration as a viable remedial alternative to the
judicial resolution of disputes. For more than a decade, the Court has
relied upon contract principles to promote arbitral autonomy and prevent
judicial and state legislative encroachment on the enforceability of
arbitration agreements and awards.3 However, the Court has yet to clarify
the extent to which party autonomy, based on freedom of contract
principles, can justify the contractual expansion of judicial review
permitted under the Federal Arbitration Act (FAA).4 Absent legislative or
Supreme Court guidance, federal circuit courts currently are split over
how to apply the Court’s pro-arbitration dicta in this question.5 Recently,
just weeks after the United States Court of Appeals for the Third Circuit
joined the United States Court of Appeals for the Fifth and Ninth Circuits
in recognizing the enforceability of contractual provisions requiring
substantive review of any resultant arbitral award,6 the United States
Court of Appeals for the Tenth Circuit became the first federal appellate
court to hold definitively that parties may not dictate how Article III
tribunals operate by contracting for a standard of review that departs
form that statutorily prescribed in the FAA.7 The ability of parties to
contract for an expanded scope of review has become a matter of
increasing concern in light of the development of arbitration as a
substitute for litigation in areas other than the commercial disputes for