Tag Archive | Arbitration

When does a statute abrogate the common law and when may an arbitration award be vacated due to legal error?

By Brad McCullough

In 1793, the General Court of Maryland – which from 1776 to 1806 exercised both general and appellate jurisdiction – held that an arbitration award could be set aside for reasons “apparent on the face of the award.” Dorsey v. Jeoffray, 3 H & McH. 81 (Md. 1793). In the ensuing years, and well into the Twentieth Century, the Court of Appeals followed that general principle, holding that an arbitrator’s “gross and manifest” mistake can lead a court to set aside an award, Roloson v. Carson, 8 Md. 208, 220-21 (1853), and that an award may be set aside if there is a mistake of fact or law appearing on the face of that award, Parr Constr. Co. v. Pomer, 217 Md. 539, 544 (1958).

In 1965, however, Maryland adopted the Uniform Arbitration Act, Md. Code Ann., Cts. & Jud. Proc. §§3-201 et seq., which contains five specific grounds for vacating an arbitration award, but a manifest mistake of law is not among them. In the years following adoption of the Act, Maryland courts continued to rule – in cases not governed by the Act – that an arbitration award could be set aside for manifest disregard of the law. Baltimore Cty. Fraternal Order of Police Lodge No. 4 v. Balt. Cty., 429 Md. 533, 564 (2012); Downey v. Sharp, 428 Md. 249, 265 (2012); Board of Educ. of Prince George’s Cty. v. Prince George’s Cty. Educators’ Ass’n, 309 Md. 85, 101-02 (1987). But what about those cases covered by the Act? May an award in one of those cases be vacated for manifest disregard of the law? Or may an award in a case covered by the Act be disturbed only if based on a ground specified by the Act? In WSC/2005 LLC v. Trio Ventures Assocs. (Md. July 30, 2018), the Court of Appeals answered that question. Read More…

Schneider Electric in the Court of Appeals – So Much for Efficient Resolution of Surety Bond Disputes and Policies Favoring Arbitration over Litigation

By Alan B. Sternstein

Deciding in favor of litigation over arbitration, the Court of Appeals, in Schneider Elec. Bldgs. Critical Systems, Inc. v. Western Surety Co., 454 Md. 698, 165 A.3d 485 (2017) (“Schneider Electric”), affirmed a decision of the Court of Specials Appeals, discussed in this blog on June 26, 2017.

Schneider Electric Buildings Critical Systems, Inc. (“Schneider”), a contractor, had been given a performance bond by NCS, its subcontractor.  Despite their Master Subcontractor Agreement requiring dispute resolution by arbitration, and the performance bond, issued by Western Surety Company (“Surety”), binding NCS and the Surety “jointly and severally . . . to [Schneider] for the performance of the Construction Contract, which is incorporated herein by reference[,]” the Court of Appeals followed the intermediate appellate court in ruling that the Surety could choose litigation and need not participate with NCS in the arbitration that Schneider brought.   Read More…