Georgia Court of Appeals upholds award that arbitrator did not manifestly violate the law or exceed authority | Carlton Fields

The Georgia Court of Appeals, finding that the arbitrator did not manifestly violate the law of the contract or exceeded his authority, affirmed the arbitrator’s award and remanded the matter for consideration of post-award attorneys’ fees and interest.

Plaintiffs Southern Mountain Adventures LLC and Adventure Motorsports Reinsurance Ltd. Entered into an arbitration agreement with Interstate National Dealer Services Inc. (INDS) to resolve their claims that INDS overcharged Southern Mountain Adventures. The limited facts contained in the court’s decision confirm that the litigation between the plaintiffs and INDS “concerned payments collected by INDS under motorsport vehicle service contracts sold by to customers [Southern Mountain Adventures] and administered by INDS” and plaintiffs’ allegations that “INDS overcharged [Southern Mountain Adventures].” After the arbitrator ruled in favor of the plaintiffs, INDS challenged the upholding of the arbitral award. The Georgia Court of Appeals reversed the affirmation of the arbitral award, finding that the arbitrator had manifestly violated the law. The Court of Appeals based its decision in part on finding that “INDS charged an amount of money agreed by the parties in a price list” and that “the parties did not deviate from the price list structure.” Thereafter, the Georgia Supreme Court reversed the appeals court’s decision, ruling that the arbitrator did not manifestly violate the law. The Supreme Court found that “an arbitrator who misconstrues the law has not manifestly disregarded it. The referee simply made an error of law” and the legal norm for apparent disregard of the law is not met. The Supreme Court then referred the case back to the Court of Appeal.

While in custody, the Court of Appeal upheld the arbitrator’s award and concluded that the arbitrator did not manifestly violate the law of the contract. The court accepted the Supreme Court’s reasoning that the arbitrator had prepared an appeal that he deemed “just and equitable within the understandings of the parties.” The Court of Appeal also considered INDS’ argument that the arbitrator exceeded his powers under the Arbitration Law of Georgia, concluding that the excess “like the other grounds for annulment of arbitral awards is of a very limited scope” and “the improper handling of problems before the referee”. which the court concluded that was not the case in this case. Finally, the court addressed the plaintiffs’ argument that they were entitled to attorneys’ fees and interest pursuant to the award. The court found that “[b]Because the Court never addressed these issues, we seek consideration of the appropriateness of awarding attorneys’ fees arising out of the arbitration requested in Plaintiff’s motion for confirmation of the award, attorneys’ fees arising out of collection efforts as specified in the award , and post surcharge interest as specified in the award.”

Adventure Motor Sports Reinsurance, Ltd. v Interstate National Dealer Services, Inc.Nos. A20A0036, A20A0037 (Ga. Ct. App. 18 Oct 2022).

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