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Massachusetts High Court Rules That Parties Cannot Agree to Change the Scope of Judicial Review of Arbitration Awards

Following a well-known Supreme Court case addressing the same issue at the federal level, the Massachusetts SJC issued a decision today holding that judicial review of arbitration awards is limited to the specific grounds set forth in the Massachusetts Arbitration Act. In other words, the parties to a commercial arbitration agreement cannot agree to alter the scope or grounds of judicial review.

Like most arbitration statutes, the Massachusetts statute embraces a strong policy favoring arbitration as an expedient alternative to litigation. As a result, arbitration awards can only be overturned in very narrow circumstances.

The parties in this case agreed to an arbitration provision that purported to broaden the scope and grounds for judicial review. Rejecting this provision, the SJC stated that allowing parties to expand the grounds for judicial review would undermine the predictability, certainty and effectiveness of the arbitral forum and lead to more cumbersome, “case-within-a-case” litigation. The court concluded that such an agreement is fundamentally contrary to the intent and purpose of the Massachusetts Arbitration Act.

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