How to Vacate an Arbitration Award in Minnesota

What grounds let a Minnesota court vacate an arbitration award?

A Minnesota court must vacate an award, on a party’s motion, when one of six grounds in Minn. Stat. § 572B.23(a) is shown. Every ground concerns the integrity of the process, and several also require proof that the defect hurt the party asking.

Minn. Stat. § 572B.23(a) begins: “Upon motion of a party to the arbitration proceeding, the court shall vacate an award if” one of six grounds is shown:

1. “the award was procured by corruption, fraud, or other undue means”
2. “evident partiality by an arbitrator appointed as a neutral,” corruption by an arbitrator, or “misconduct by an arbitrator prejudicing the rights of a party to the arbitration proceeding”
3. “an arbitrator refused to postpone the hearing upon showing of sufficient cause for postponement, refused to consider evidence material to the controversy, or otherwise conducted the hearing contrary to section 572B.15, so as to prejudice substantially the rights of a party to the arbitration proceeding”
4. “an arbitrator exceeded the arbitrator’s powers”
5. “there was no agreement to arbitrate, unless the person participated in the arbitration proceeding without raising the objection under section 572B.15, subsection (c), not later than the commencement of the arbitration hearing”
6. “the arbitration was conducted without proper notice of the initiation of an arbitration as required in section 572B.09 so as to prejudice substantially the rights of a party to the arbitration proceeding.”

Grounds 3 and 6 require that the defect “prejudice substantially” a party’s rights, and the misconduct branch of ground 2 requires prejudice to a party’s rights. The sections below take the procedural grounds in turn: arbitrator conflicts, hearing conduct, an arbitrator acting beyond the agreement, and the objections a party must raise to keep them.

Why won’t a court vacate an award for getting the law or facts wrong?

A court will not vacate an award for a wrong answer because the parties chose the arbitrator to decide the merits. Minnesota courts treat the arbitrator as the final judge of law and fact, put the burden on the party seeking vacatur, and do not re-examine the merits.

In City of Richfield v. Law Enforcement Labor Services, Inc., 923 N.W.2d 36 (Minn. 2019), a city asked a court to vacate a labor arbitrator’s award reinstating a police officer under a collective bargaining agreement. The Minnesota Supreme Court described arbitrators as the “final judge of both law and fact, including the interpretation of the terms of any contract.” It said that “judicial review of arbitration decisions is generally extremely limited” and that “The burden lies with the party seeking to vacate the arbitration award to demonstrate that the award should be vacated.” The court assumed, without deciding, that a narrow public-policy exception exists, and held that enforcing that award did not violate a well-defined and dominant public policy.

In Hennepin Healthcare System, Inc. v. AFSCME Minnesota Council 5, 990 N.W.2d 454 (Minn. 2023), which also reviewed an award under a collective bargaining agreement, the court reversed a decision vacating the award and wrote: “it is not the role of this court (or any court) to re-examine the merits of the case and vacate the award merely because we believe that our interpretation of the collective bargaining agreement is better than the arbitrator’s interpretation.”

The statute also rules out one argument. For remedies other than punitive damages and attorney fees, which have their own conditions, Minn. Stat. § 572B.21(c) provides: “The fact that such a remedy could not or would not be granted by the court is not a ground for refusing to confirm an award under section 572B.22 or for vacating an award under section 572B.23.”

Federal court is no different. The Eighth Circuit, the federal appeals court for Minnesota, held in Medicine Shoppe International, Inc. v. Turner Investments, Inc., 614 F.3d 485 (8th Cir. 2010), a franchise dispute under Missouri law, that “an arbitral award may be vacated only for the reasons enumerated in the FAA.” A claim “that the arbitrator disregarded the law” was “not cognizable.”

I suggest testing any complaint about the result against the six grounds before filing. A motion that argues only that the arbitrator was wrong gives the court nothing it can act on, and a denied motion ends with the court confirming the award, as the section on what happens after the court rules explains.

What counts as evident partiality or an undisclosed arbitrator conflict?

An arbitrator must disclose, before accepting the appointment and throughout the case, any known facts a reasonable person would think likely to affect the arbitrator’s impartiality. A neutral arbitrator who fails to disclose a known, direct, and material interest in the outcome, or a known, existing, and substantial relationship with a party, is presumed partial. Minn. Stat. § 572B.12(a) requires a person asked to serve, after a reasonable inquiry, to disclose “any known facts that a reasonable person would consider likely to affect the impartiality of the arbitrator in the arbitration proceeding,” including “a financial or personal interest in the outcome of the arbitration proceeding” and “an existing or past relationship with any of the parties to the agreement to arbitrate or the arbitration proceeding, their counsel or representatives, witnesses, or the other arbitrators.” Under subsection (b), “An arbitrator has a continuing obligation to disclose” facts learned after appointment.

What follows depends on what was disclosed and when you objected:

• A disclosed fact you objected to in time. Under § 572B.12(c), “the objection may be a ground to vacate the award under section 572B.23, subsection (a)(2).”
• A fact the arbitrator did not disclose. Under § 572B.12(d), “If the arbitrator did not disclose a fact as required by subsection (a) or (b), upon timely objection of a party, an award may be vacated under section 572B.23, subsection (a)(2).”
• A serious undisclosed interest or relationship. Under § 572B.12(e), “An arbitrator appointed as a neutral who does not disclose a known, direct, and material interest in the outcome of the arbitration proceeding or a known, existing, and substantial relationship with a party is presumed to act with evident partiality under section 572B.23, subsection (a)(2).”

If your arbitration ran under a provider’s rules (see AAA, JAMS, or a private arbitrator), § 572B.12(f) adds a step. When the parties agree to “the procedures of an arbitration organization or any other procedures for challenges to arbitrators before an award is made, substantial compliance with those procedures is a condition precedent to a motion to vacate an award on that ground.” I suggest raising a conflict through the provider’s challenge process as soon as you learn of it, because skipping that process can cost you the partiality ground later. A contract also has limits here: under Minn. Stat. § 572B.04(b), before a controversy arises the parties may not “unreasonably restrict the right under section 572B.12 to disclosure of any facts by a neutral arbitrator.”

How do hearing errors like a refused postponement or excluded evidence lead to vacatur?

A court will vacate an award when the arbitrator refused a postponement for which sufficient cause was shown, refused to consider material evidence, or otherwise ran the hearing contrary to § 572B.15, if the error substantially prejudiced a party. The ground protects a party’s chance to be heard, not its view of how the evidence should have been weighed.

The hearing rights come from Minn. Stat. § 572B.15(d): “If an arbitrator orders a hearing under subsection (c), the parties to the arbitration proceeding are entitled to be heard, to present evidence material to the controversy, and to cross-examine witnesses appearing at the hearing.” The arbitrator still controls the evidence. Under § 572B.15(a), “The authority conferred upon the arbitrator includes the power to hold conferences with the parties to the arbitration proceeding before the hearing and to determine the admissibility, relevance, materiality, and weight of any evidence.”

The Minnesota Supreme Court drew the line in Seagate Technology, LLC v. Western Digital Corp., 854 N.W.2d 750 (Minn. 2014). An arbitrator in a trade-secret dispute under an employee’s agreement found that evidence had been fabricated and, as a sanction, barred the losing side’s evidence and defenses on three claimed trade secrets, then awarded over $500 million. The court held this was not a refusal to hear evidence, because the evidence had been received at the hearing. The evidence ground “is properly limited to situations involving the presentation and admission of evidence at the hearing, not situations involving the use or weighing of evidence in constructing the final award or other form of relief.” The court decided the case under Minnesota’s former arbitration statute because the arbitration began in October 2006, and it described the current sections as containing “substantially similar language.”

A refused-evidence claim depends on the hearing record. I suggest asking for a court reporter, or making a written offer of proof whenever the arbitrator excludes evidence, because the court will ask what you offered, what was refused, and how the refusal prejudiced you, and the court in Seagate noted “the absence of a transcript in many informal arbitration proceedings.”

When does an arbitrator exceed the arbitrator’s powers?

An arbitrator exceeds the arbitrator’s powers by deciding a question, or granting relief, that the arbitration agreement and any rules it adopts do not authorize. The challenger must show the arbitrator clearly exceeded those powers; a disagreement with how the arbitrator read the contract is not enough.

The agreement is the measure. In Seagate, the court wrote that “The arbitrator’s ability to issue punitive sanctions is controlled by the arbitration agreement.” That agreement let the arbitrator “grant injunctions or other relief,” and it adopted the American Arbitration Association’s rules, which authorized relief “that would have been available to the parties had the matter been heard in court.” The court held the sanction fell within that grant and that the arbitrator did not clearly exceed his authority.

The burden is heavy. Hennepin Healthcare repeated that an award “will be set aside by the courts only when the objecting party meets its burden of proof that the arbitrators have clearly exceeded the powers granted to them in the arbitration agreement.” In that collective bargaining case, the court applied the “essence test” to the award. It held that the arbitrator did not exceed the arbitrator’s powers because the award drew its essence from the agreement, even though the hospital, the court of appeals, and two dissenting justices read the agreement differently. The court reversed the court of appeals and sent the case back to that court for the hospital’s other challenges to the award.

For a company drafting its next contract, the lesson is that the place to limit an arbitrator is the agreement. The Seagate court said parties “are always free to fashion arbitration agreements in ways that limit the arbitrator’s power to award certain types of relief.” The choices that matter are which disputes go to arbitration, what relief the arbitrator may award, which provider’s rules apply, and whether to use one arbitrator or a panel of three. The rules for drafting the arbitration clause cover those terms.

Which objections must be raised during the arbitration to keep them?

Several grounds can be lost by taking part in the arbitration without objecting. A party’s appearance at the hearing waives a notice objection not raised by the start of the hearing, and a party that participated in the arbitration without raising the no-agreement objection by then loses that ground. A conflict ground under § 572B.12(c) or (d) turns on a timely objection, and an objection that the award came too late must reach the arbitrator before you receive notice of the award.

• Notice of the hearing. Under Minn. Stat. § 572B.15(c), “Unless a party to the arbitration proceeding interposes an objection to lack of or insufficiency of notice not later than the commencement of the hearing, the party’s appearance at the hearing waives the objection.”
• Notice starting the arbitration. Minn. Stat. § 572B.09(a) requires that “The notice must describe the nature of the controversy and the remedy sought,” and subsection (b) applies the same waiver: “the person’s appearance at the hearing waives any objection to lack of or insufficiency of notice” unless the objection was raised “not later than the commencement of the arbitration hearing.”
• No agreement to arbitrate. Ground 5 in the list of six is lost if the person “participated in the arbitration proceeding without raising the objection.” The better time to fight the clause is earlier: challenge the arbitration clause before the arbitration starts.
• Arbitrator conflicts. Vacatur under § 572B.12(c) and (d), for a fact the arbitrator was required to disclose, turns on a timely objection.
• A late award. Under Minn. Stat. § 572B.19(b), “A party waives any objection that an award was not timely made unless the party gives notice of the objection to the arbitrator before receiving notice of the award.”

Seagate addressed which grounds needed an objection under the former statute. The court held that “an objection during arbitration is required only for challenges brought under subdivision 1(5) and is not required for challenges brought under the other clauses of that subdivision,” so the losing side could argue that the arbitrator exceeded his powers and refused evidence without having objected during the arbitration. One justice wrote separately to question the court’s waiver analysis. I suggest putting every objection in writing to the arbitrator when it arises, because the statute keeps several grounds only for a party who objected in time, and a written objection builds the record the court will review.

How do you file a motion to vacate in Minnesota?

You ask a Minnesota court to vacate an award by filing a motion in the district court for the county the venue statute, § 572B.27, names, which turns first on where the agreement sets the hearing or where the hearing was held. The motion must be filed within the period in § 572B.23(b), and you may join a request to correct the award or first ask the arbitrator to fix it.

The steps come from the statute:

1. The motion and its service. Under Minn. Stat. § 572B.05(a), “an application for judicial relief under sections 572B.01 to 572B.31 must be made by motion to the court and heard in the manner and upon the notice provided by law or rule of court for making and hearing motions.” Under subsection (b), “Notice of an initial motion to the court under sections 572B.01 to 572B.31 must be served in the manner provided by law for the service of a summons in a civil action unless a civil action is already pending involving the agreement to arbitrate.”
2. The county. Under Minn. Stat. § 572B.27, “A motion pursuant to section 572B.05 must be filed in the court of the county in which the agreement to arbitrate specifies the arbitration hearing is to be held or, if the hearing has been held, in the court of the county in which it was held. Otherwise, the motion must be filed in any county in which an adverse party resides or has a place of business or, if no adverse party has a residence or place of business in this state, in the court of any county in this state.” Later motions follow it: “All subsequent motions must be filed in the court hearing the initial motion unless the court otherwise directs.” In Seagate, the agreement set the hearing in Hennepin County, and the motion to vacate was heard in Hennepin County District Court.
3. The deadline. Minn. Stat. § 572B.23(b) states: “A motion under this section must be filed within 90 days after the movant receives notice of the award in a record pursuant to section 572B.19 or within 90 days after the movant receives notice of an arbitrator’s award in a record on a motion to modify or correct an award pursuant to section 572B.20, unless the motion is predicated upon the ground that the award was procured by corruption, fraud, or other undue means, in which case it must be filed within 90 days after such a ground is known or by the exercise of reasonable care should have been known by the movant.” I suggest reading the current text on the revisor’s site before calendaring the date, and recording the day notice of the award arrived, because the first period in that text runs from that notice.
4. A correction request. Under Minn. Stat. § 572B.24(a), a court corrects an award where “there was an evident mathematical miscalculation or an evident mistake in the description of a person, thing, or property referred to in the award” or where “the award is imperfect in a matter of form not affecting the merits of the decision on the claims submitted.” A correction motion must also be filed within the period stated at the start of § 572B.24(a), which runs from the same notice of the award. Under § 572B.24(c), “A motion to modify or correct an award pursuant to this section may be joined with a motion to vacate the award.”

You can also go back to the arbitrator first. Minn. Stat. § 572B.20(a) lets the arbitrator modify or correct an award “upon the grounds stated in section 572B.24, subsection (a)(1) or (3)” or “to clarify the award,” on a motion made and served within the shorter period in § 572B.20(b). The quoted § 572B.23(b) text also runs a period for a motion to vacate from when the movant receives “notice of an arbitrator’s award in a record on a motion to modify or correct an award pursuant to section 572B.20.”

Some of these rules are beyond the contract’s reach. Under Minn. Stat. § 572B.04(c), “The parties to an agreement to arbitrate may not waive or vary the requirements of” a list of sections that includes § 572B.23 and § 572B.24, so the grounds and the filing period apply whatever the contract says. Under § 572B.04(b), “Before a controversy arises that is subject to an agreement to arbitrate,” the parties also may not “waive or vary the requirements of section 572B.05, subsection (a)” or § 572B.27.

How do the federal rules for vacating an award differ?

In federal court, 9 U.S.C. § 10 lists four grounds that track Minnesota’s first four, and the U.S. Supreme Court has held them exclusive. Minnesota’s act adds the no-agreement and no-notice grounds. A federal court asked to decide a freestanding application to confirm or vacate also needs its own basis for jurisdiction.

9 U.S.C. § 10 covers an award procured by corruption, fraud, or undue means; “where there was evident partiality or corruption in the arbitrators, or either of them”; misconduct in refusing a postponement or refusing to hear pertinent and material evidence, or other misbehavior that prejudiced a party; and “where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.”

The federal deadline is stated differently. Under 9 U.S.C. § 12, “Notice of a motion to vacate, modify, or correct an award must be served upon the adverse party or his attorney within three months after the award is filed or delivered.” I suggest confirming the current text before relying on it, because the statute, not a summary of it, controls. Section 12 also provides that “any judge who might make an order to stay the proceedings in an action brought in the same court may make an order, to be served with the notice of motion, staying the proceedings of the adverse party to enforce the award.” For a math error, 9 U.S.C. § 11 allows a federal court to correct an award “Where there was an evident material miscalculation of figures or an evident material mistake in the description of any person, thing, or property referred to in the award.”

The federal grounds cannot be expanded. In Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008), a lease dispute, the Court said: “We now hold that §§10 and 11 respectively provide the FAA’s exclusive grounds for expedited vacatur and modification.” The parties there had agreed that the court would vacate the award for erroneous conclusions of law or for findings not supported by substantial evidence, and the Court held that “the statutory grounds are exclusive.”

Getting a freestanding application into federal court is its own question. In Badgerow v. Walters, 596 U.S. 1 (2022), the Court held that “the federal court must have what we have called an “independent jurisdictional basis” to resolve the matter,” judged from the face of the application to confirm or vacate, such as parties from different states with more than $75,000 in dispute. “If she cannot, the action belongs in state court.” The Court treated a motion differently, because unlike a typical FAA application, a motion “is part of a case actually in court.” The Court added: “Jurisdiction to decide the case includes jurisdiction to decide the motion.”

What happens after the court rules on a motion to vacate?

If the court denies the motion and a motion to modify or correct the award is not pending, it confirms the award, and the award becomes a judgment. If it vacates the award, it may send the dispute back for a new hearing. The court may allow reasonable costs, and on a prevailing party’s application in a contested proceeding it may add post-award attorney fees to a judgment confirming, vacating without directing a rehearing, modifying, or correcting an award.

When the motion is denied, Minn. Stat. § 572B.23(d) controls: “If a motion to vacate an award is denied and a motion to modify or correct the award is not pending, the court shall confirm the award.”

When the award is vacated, § 572B.23(c) provides: “In vacating an award on a ground other than that set forth in subsection (a)(5), the court may order a rehearing before a new arbitrator. If the award is vacated on the ground stated in subsection (a)(3), (4), or (6), the court may order a rehearing before the arbitrator who made the award or the arbitrator’s successor. The arbitrator must render the decision in the rehearing within the same time as that provided in section 572B.19, subsection (b), for an award.”

The statute lists the orders that lead to a judgment. Under Minn. Stat. § 572B.25(a), “Upon granting an order confirming, vacating without directing a rehearing, modifying, or correcting an award, the court shall enter a judgment in conformity therewith.” The steps for confirming and enforcing an award as a judgment are covered separately.

Costs and fees can follow the ruling. Under § 572B.25(b), “A court may allow reasonable costs of the motion and subsequent judicial proceedings.” Under § 572B.25(c), on application of a prevailing party to a contested proceeding to confirm, vacate, modify, or correct an award, “the court may add to a judgment confirming, vacating without directing a rehearing, modifying, or correcting an award, attorney fees and other reasonable expenses of litigation incurred in a judicial proceeding after the award is made.”

An appeal is available from the orders on a list. Minn. Stat. § 572B.28(a) allows an appeal from, among other orders, “an order confirming or denying confirmation of an award,” “an order vacating an award without directing a rehearing,” and “a final judgment entered pursuant to sections 572B.01 to 572B.31.” The list does not include an order that vacates an award and directs a rehearing.

The fee provision can help either side. A company defending a sound award can ask the court to add its post-award fees, and a company with a weak motion should weigh that exposure before filing.

Next Steps When an Award Looks Flawed

A Minnesota court vacates an arbitration award for a flawed process, not for a wrong result. I suggest matching the complaint to one of the six grounds in § 572B.23(a) first, because a motion without a listed ground ends in confirmation. The next checks are whether any objection the statute requires was raised in time, and which starting point in § 572B.23(b) applies, beginning with the date notice of the award arrived. A correction by the arbitrator or the court may solve a math or form problem without vacatur. A company defending its award can run the same checks from the other side, starting with whether the motion names a ground on the list at all.

The same questions arise whether the award came out of a business dispute or one of the trust and estate disputes that went to arbitration. If you want to know whether an award fits one of the six grounds, email [email protected] with a short description of the dispute and the date you received notice of the award.