Question: Hall St . Associates LLC ( Hall ) entered a lease agreement with Mattel Inc. Mattel broke the lease before the appointed time and also
Hall St Associates LLC Hall entered a lease agreement with Mattel Inc. Mattel broke the lease before the appointed time and also failed to indemnify Hall for cleaning up the property in order to comply with state environmental law. The case went to trial, and the court ruled in favor of Mattel in relation to its right to terminate the lease. After this, the parties agreed to arbitrate the issue of the cleanup indemnification under the terms of the arbitration clause in the lease agreement. The arbitrator found in favor of Mattel, noting that state law did not require the indemnification. Hall asked the court to review the decision of the arbitrator, arguing that the arbitration clause in the lease agreement permitted the court to review and reverse the decision of the arbitrator, something not allowed under the FAA. The court ruled that the arbitrator had made an error of law in the decision and ordered the case sent back to the arbitrator, who changed the ruling in favor of Hall. The case then went to the court of appeals, which reversed the order in favor of Mattel, noting that the only ways that a court can overrule an arbitrator are the four ways listed in the FAA. In other words, the parties cannot, by agreement, broaden the conditions under which the arbitrator can be overruled. The case then went to the US Supreme Court. Will the High Court uphold the ruling of the appeals court?
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