California public policy favors arbitration as “a speedy and relatively inexpensive means of dispute resolution.” (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9.) By enacting the California Arbitration Act (CAA), the Legislature expressed “its strong support for private arbitration and the finality of arbitral awards.” (Moncharsh, supra, 3 Cal.4th at p. 32.) “To support this policy and encourage parties to settle their disputes through arbitration, it is essential that arbitration judgments be both binding and final. Thus, as a general rule, courts will indulge every reasonable intendment to give effect to arbitration proceedings.” (A.M. Classic Const., Inc. v. Tri-Build Development Co. (1999) 70 Cal.App.4th 1470, 1477-1478.)

“It is thus well settled that the scope of judicial review of arbitration awards is extremely narrow.... [W]ith limited exceptions... an arbitrator’s decision is not generally reviewable for errors of fact or law, whether or not such error appears on the face of the award and causes substantial injustice to the parties. Judicial review of private arbitration awards is ordinarily limited to the statutory grounds for vacating an award (Code Civ. Proc. § 1286.2) and correcting an award (Code Civ. Proc. § 1286.6).” (SunLine Transit Agency v. Amalgamated Transit Union, Local 1277 (2010) 189 Cal.App.4th 292, 302-303; Reed v. Mutual Service Corp. (2003) 106 Cal.App.4th 1359, 1365.)

If the court does not vacate or correct an arbitration award, “the court must confirm the award.” (Law Offices of David S. Karton v. Segreto (2009) 176 Cal.App.4th 1, 8.)

Legal Standard

“Any party to an arbitration in which an award has been made may petition the court to confirm, correct or vacate the award. The petition shall name as respondents all parties to the arbitration and may name as respondents any other persons bound by the arbitration award.” (Code of Civ. Proc., § 1285.)

Vacate

The court shall vacate an arbitration award if it determines any of the following:

1. The award was procured by corruption, fraud or other undue means.
2. There was corruption in any of the arbitrators.
3. The rights of the party were substantially prejudiced by misconduct of a neutral arbitrator.
4. The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted.
5. The rights of the party were substantially prejudiced by the refusal of the arbitrators to postpone the hearing upon sufficient cause being shown therefor or by the refusal of the arbitrators to hear evidence material to the controversy or by other conduct of the arbitrators contrary to the provisions of this title.
6. An arbitrator making the award either: failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware; or was subject to disqualification upon grounds specified in Section 1281.91 but failed upon receipt of timely demand to disqualify himself or herself as required by that provision.

(Code of Civ. Proc., § 1286.2(a).)

The party asserting a statutory basis for vacating an arbitration award bears the burden of establishing facts supporting their position. (Reed v. Mutual Service Corp. (2003) 106 Cal.App.4th 1359, 1370-1371.) Without evidence, the court cannot determine as a matter of fact that any impropriety occurred at the arbitration. (National Union Fire Ins. Co. v. Super. Ct. (1967) 252 Cal.App.2d 568, 573; Creative Plastering, Inc. v. Hedley Builders, Inc. (1993) 19 Cal.App.4th 1662, 1665.)

A party seeking to vacate an arbitration award on the ground that it was obtained through corruption, fraud, or other unfair means must satisfy a three-part test:

1. The movant must establish the fraud by clear and convincing evidence.
2. The fraud must not have been discoverable upon the exercise of due diligence prior to or during the arbitration.
3. The person seeking to vacate the award must demonstrate that the fraud materially related to an issue in the arbitration.

(Pour Le Bebe, Inc. v. Guess? Inc. (2003) 112 Cal.App.4th 810, 830.)

An arbitrator “must disclose all matters that could cause a person aware of the facts to reasonably entertain a doubt that the proposed arbitrator would be able to be impartial.” (Guseinov v. Burns (2006) 145 Cal.App.4th 944, 956.) “Whether an award is tainted by bias because an arbitrator failed to disclose a particular relationship is a factual determination made by the court reviewing the award. The party claiming bias bears the burden of establishing facts supporting its position.” (Id. at p. 957.)

“When a party contends it was substantially prejudiced by the arbitrator's exclusion of material evidence, a court should generally consider prejudice before materiality.” (Epic Medical Management, LLC v. Paquette (2015) 244 Cal.App.4th 504, 518.) “To find substantial prejudice, the court must first accept the arbitrator's theory and conclude the arbitrator might well have made a different award had the evidence been allowed.” (Id.)

Correcting the Reward

“[T]he court, unless it vacates the award pursuant to Section 1286.2, shall correct the award and confirm it as corrected if the court determines that:

1. There was an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award;
2. The arbitrators exceeded their powers but the award may be corrected without affecting the merits of the decision upon the controversy submitted; or
3. The award is imperfect in a matter of form, not affecting the merits of the controversy.”

(Code of Civ. Proc., § 1286.6.)

Arbitrator's Liability

“It is well settled that arbitrators do not exceed their powers merely because they assign an erroneous reason for their decisions.” (Moncharsh, supra, 3 Cal.4th at 28.) Instead, “[a]rbitrators may exceed their powers by issuing an award that violates a party’s unwaivable statutory rights or that contravenes an explicit legislative expression of public policy.” (Ling v. P.F. Chang’s China Bistro, Inc. (2016) 245 Cal.App.4th 1242, 1252.) “Absent a clear expression of illegality or public policy undermining this strong presumption in favor of private arbitration, an arbitral award should ordinarily stand immune from judicial scrutiny.” (Id.)

Procedure

The court may not vacate an award unless:

1. A petition or response requesting that the award be vacated has been duly served and filed; or
2. A petition or response requesting that the award be corrected has been duly served and filed and: all petitioners and respondents are before the court; or all petitioners and respondents have been given reasonable notice that the court will be requested at the hearing to vacate the award or that the court on its own motion has determined to vacate the award and all petitioners and respondents have been given an opportunity to show why the award should not be vacated.

(Code Civ. Proc., § 1286.4.)

“If [the party who lost in the arbitration does] not serve and file a petition to vacate or a response to [a] petition to confirm within the 100–day period from the date of service of the award... the award must be treated as final.” (Klubnikin v. California Fair Plan Assn. (1978) 84 Cal.App.3d 393, 398.)

An arbitrator may “correct the award upon any of the grounds set forth in subdivisions (a) and (c) of Section 1286.6 not later than 30 days after service of a signed copy of the award on the applicant.” (Code of Civ. Proc., § 1284.) “Under the statutory grounds for correction recognized in section 1284, the arbitrator may not reconsider the merits of the original award and make a new award under the guise of correction of the award.” (Cooper v. Lavely & Singer Professional Corporation (2014) 230 Cal.App.4th 1, 14.) “[A]n arbitrator has no power to use the incremental award process to correct or modify the terms of an original award.” (Roehl v. Ritchie (2007) 147 Cal.App.4th 338, 351.)