In Denbury Onshore, LLC v. Texcal Energy South Texas LP, et al., the Fourteenth Court of Appeals was asked whether the parties contracted to expand judicial review of the arbitration award under conventional appeal standards from a final judgment, instead of the limited grounds for reversal under the Federal or Texas arbitration acts.
Relying upon the U.S. Supreme Court's decision in Hall St. Assocs., LLC v. Mattel, Inc, the Fourteenth Court of Appeals held that parties to an arbitration agreement governed by the FAA, but not the TAA, may not contractually supplement the statutory bases for vacatur denied in the statute. In Nafta Traders, Inc. v. Quinn, however, the Texas Supreme Court held that when only the TAA applies, or when both the TAA and the FAA apply, parties may contract for expanded court review of the arbitration award by agreeing that the arbitrators do or do not have the power or authity to reach a decision based on reversible error.
Here, the Court of Appeals held presumed that both the FAA and the TAA applied to the arbitration agreement, however, the parties did not clearly agree to expand judicial review of the arbitration award. The provision in question--"An appeal from an order or judgment of the Panel shall be taken in the manner and to the same extent as from orders or judgment in civil cases under Texas law"--is ambiguous because arbitration panels issue awards, not judgments. According to the Court, the language also refers to an "appeal" bu there is no avenue of an "appeal" from an arbitration award.
In conclusion, the Court held that the language does not "clearly expand judicial review of an arbitration award to encompass reversible error."
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