THE ROLE OF SUBSTANTIVE LAW IN BUSINESS ARBITRATION AND THE IMPORTANCE OF VOLITION

Most arbitration statutes do not address the role that substantive law is to play in decision-making by arbitrators. Commonly referenced arb itration rules and most agreements to arbitrate also are silent on thi s issue. Arbitration statutes do provide for appellate review by the c ourts on limited grounds, but not including error of law. In this envi ronment, arbitral practice consists of a discretionary combination of law and common sense. The notion that arbitration awards may significa ntly deviate from the law does not sit well with some members of the j udiciary. Nevertheless, arbitration is a useful alternative to litigat ion. As such, it should not be scrutinized in terms of justice accordi ng to the law. Because arbitration does not assure legal rights, howev er, arbitrant volition ought to be of primary importance. Arbitration, without devotion to the law, should only pertain when arbitration is knowledgeably and freely selected.