Perini Corporation sued over an arbitration award in a hotel renovation dispute. The New Jersey Supreme Court upheld the arbitrator's decision, ruling that courts cannot overturn arbitration awards just because they disagree with how the arbitrator interpreted the law. The court said arbitration awards can only be vacated for gross, obvious legal errors—not for simple mistakes or different legal opinions. This means subcontractors should expect arbitration decisions to stick, even if they think the law was misapplied.
Arbitration awards are extremely hard to overturn in court. You need to prove a gross, unmistakable legal error, not just disagreement with the arbitrator's interpretation.
Before agreeing to arbitration in your contract, understand that you're giving up most of your right to appeal on legal grounds. Choose arbitrators carefully.