Recently, there seems to be an increased interest in the study and practice of arbitration. The surge for Alternative Dispute Resolution (ADR) mechanisms, amongst young wigs and law students alike, can be attributed to several distinguishing features.

One of the advantages of arbitration over litigation is the flexibility of process. More importantly, arbitration is preferred to other ADR mechanisms because of the finality of its awards. What this means, simply, is that arbitration awards are usually final and binding.

Let’s say, for instance, two parties submit their dispute to arbitration — either through an arbitration clause or a subsequent agreement — once an award (a determination on the merits by an arbitration tribunal in an arbitration, which is analogous to a judgment in a court of law) is given, this award is deemed enforceable and binding under the New York Convention; a convention signed by over 150 countries.

Let’s get to the point – the crux of this article.

Even though arbitration awards are final and binding, there are instances where an award can be set aside. The New York Convention has a central objective to facilitate the enforcement of foreign arbitral awards. It does this by subjecting the enforcement of awards to a limited number of conditions. The virtually-uniform provisions of Article V of the New York Convention and Article 36 of the UNCITRAL Model Law provide certain grounds upon which the enforcement of an arbitral award can be restricted.

Such grounds, however, limited to a narrow list of defects affecting the arbitral procedure or the award, include;

• Incapacity of the party

• Lack of valid arbitration agreement

• Procedural unfairness

• Excess of authority

• Composition of a tribunal or arbitral procedure not in accordance with the parties’ agreement

• annulment of the award at the seat

• Non-arbitrability of the dispute.

Now, let us reason together. If Arbitration is regarded as an out-of-court practice, who then sets aside the award given by an arbitral tribunal? The same court?
Oh, yeah! Arbitration is entirely an out-of-court practice, this simply means that conflicts are resolved outside of any formal court proceeding. And, of course, nothing in the New York Convention requires a contracting state to deny enforcement of the award. Instead, the court may overrule the defence to enforcement, or otherwise, give effect to an arbitral award.

That being said, the event of a court invalidating an arbitration award falls in some category of “super rare.” In essence, it rarely occurs!

While it is true that arbitrators enjoy a huge freedom to decide cases, deference to arbitration awards is, however, limited. The latitude given arbitrators is so high that challenging the award in court will be considered a waste of time and resources. The reason is that the standard used by courts in reviewing arbitration awards is whether the award “draws its essence” from the contract.

An end-of-year decision of the Third Circuit featured a rare rebuke of an arbitrator. It also affirmed a federal district court’s ruling vacating an arbitration decision. According to the appeals court, “the bar may be low to uphold an arbitration award, but it still exists.” See Monongahela Valley Hospital Inc. v. United Steel Paper and Forestry Rubber Manufacturing Allied Industrial and Service Workers International Union AFL-CIO CLC, No. 19-2182 (3rd Cir. Dec. 30, 2019).

The instant case resulted from a dispute over who is more preferred to select vacation days between a bargaining unit employee and her working supervisor (a non-bargaining unit employee at a hospital). There was a labour agreement between the employer and the union and this agreement contained a provision concerning the scheduling of vacation, which provided that: “Vacation will, so far as possible, be granted at times most desired by employees; but the final right to allow vacation periods, and the right to change vacation periods is exclusively reserved to the Hospital.”

The employer denied the bargaining unit employee’s vacation request because her working supervisor had requested that same week off and both could not be away at the same time. The bargaining unit employee subsequently filed a grievance alleging the requested vacation denial as a violation of the Collective Bargaining Agreement (CBA).

The union’s assertion was that the agreement’s language should have grantedthe bargaining unit preference.
The arbitrator ruled, in favour of the bargaining unit, that the employer violated the agreement. His interpretation of the provision of the agreement on scheduling of vocation was that the exclusive reserve of the employer in allocating vocations should be made subject to the “so far as possible” caveat. He also included in his ruling that, except there is an existing “operating need”, the agreement barred the employer from refusing the bargaining unit employees’ request of vocation.

On appeal, the court declined enforcement of the arbitration award because;
¶ The arbitrator ignored the plain language lof the contract. The right of the employer to deny bargaining unit employees their desired vacations was deemed ” final” and “exclusive” by the CBA. This remains true even with the “so far as possible’ caveat.

¶ The arbitrator was also said to have “deviated far beyond” the scope of his authority by introducing the “operating need” requirement. An arbitrator’s authority is drawn from the CBA itself and this “operating need” requirement does not appear anywhere in the agreement.

Needless to say, an arbitrator has no authority to “add to, detract from, or alter” an agreement in any way.
While Courts provide a “heavy degree of deference” to an arbitrator’s decision, “that deference is not unlimited.” Also worthy of note is the fact that the case considered brings to the fore the importance of drafting labor agreement provisions in a manner that clearly defines the authority of the employer, and gives no room for ambiguity.

On a final note, it is evident from this article that the court acts, in some regard, as a check on the process and outcome of arbitration proceedings. Such checks would be deemed necessary developments to ensure that the process of arbitration is kept safe from defective justice. A flip side consideration, however, reveals the corrupt practices that have eaten deep into the court system (which is supposed to be a check on “corruption”). It then becomes more important to uphold the tenets of the legal profession. Surely, justice must be done, whether or not the heavens fall!


Theodore M. & Novak E. D. (2020).
Federal Appeals Court Vacates Arbitration Award, Concluding Arbitrator Issued Own “Brand of Industrial Justice.” Retrieved on 20th January, from



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Emmanuel Adebanjo is a fourth year Law Student at Obafemi Awolowo university, Ile-Ife. He currently holds the post of the Director of Administration at Liberation Chambers, OAU.
Emmanuel is a strong believer in optimum human efficiency and this has spurred him into various extra curricular activities.
He has experience writing in a variety of forms and deciphering complex and data-driven information.He’s also skilled at rhetoric and public speaking, coupled with a special interest in international arbitration. He can be reached at