The failure to issue an arbitration award within the prescribed time period is not a common occurrence. It certainly was not in Texas when the Sims case arose. When it does happen, the purpose and intent of arbitration—party-driven, expedient, and cost-effective means of dispute resolution—is thwarted. Despite the potential for undermining expediency in the arbitration process, courts are willing to defer to the arbitrator’s late decision unless the act of the arbitrator is so egregious as to create actual or potential harm to the parties.

As Justice Brennan noted in United Steelworkers of America v. American Manufacturing Co., 363 U.S. 564 (1960), “arbitration is a creature of contract.” Therefore, the arbitrator’s authority is derived from the parties’ arbitration agreement, applicable arbitration rules (e.g., AAA, FINRA, JAMS, etc.), and applicable arbitration law, either state or federal. The arbitrator is the guardian of the integrity of the process. As such, a duty is imposed on such person or persons to hear and to decide only those issues the parties agreed to arbitrate and to follow any and all procedures agreed to by the parties.

Arbitrator’s Failure to Execute the Duty Granted

In Sims v. Building Tomorrow’s Talent, LLC, No. 07-12-00170-CV (Tex. App. Apr. 30, 2014), the arbitrator failed to issue a ruling within the time period fixed by the parties prior to the arbitration, and as a result the award was vacated. Doris Sims and Matthew Gay were former business partners who had a dispute regarding the enforcement of a mediated settlement agreement. The parties agreed to use arbitration to settle their dispute and to use the mediator who had facilitated the settlement agreement, Michael Whitten, as the arbitrator. The parties executed “proposed arbitration guidelines” in which they agreed to an “expedited process and schedule for arbitration.” The parties further agreed to hold the arbitration hearing on November 24, 2008, and to set a deadline for the reasoned written ruling containing findings of fact and conclusions of law within 14 days of Gay’s written submission. Gay submitted his written brief on December 22, 2008, which meant that the arbitrator’s ruling was due on January 6, 2009. One year after the arbitration hearings, with no ruling having been issued and with Sims’s attorney having contacted Whitten’s office several times, Sims sued Whitten for breach of contract and fraud. Gay intervened and accused Sims of hijacking the arbitration process, noting he had not consented to withdraw from the arbitration.

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