Opinion ID: 2564358
Heading Depth: 2
Heading Rank: 2

Heading: The Propriety of the Circuit Court's Remand to the Arbitrator Under HRS Chapter 658

Text: Initially, we note that, in remanding the matter to the arbitrator, the circuit court specifically indicated it was persuaded by the argument and the authorities cited by UPW, which cited-authority included HRS § 658A-20. However, inasmuch as we have held that HRS chapter 658A does not govern this case, UPW's arguments based upon HRS chapter 658A are inapplicable. We must, nevertheless, examine whether the circuit court's remand order was authorized under HRS chapter 658 and, therefore, the following discussion is limited to the parties' arguments as they relate to HRS chapter 658 and not chapter 658A. [21] However, as previously stated, Dawson, in entering into the October 18, 2004 stipulation, clearly reserved its right to pursue any claims, defenses or positions with respect to prior proceedings and decisions. In other words, the stipulation as Dawson's counsel pointed out only . . . applied prospectively. Thus, UPW's judicial estoppel argument is without merit. Dawson argues that [t]here is nothing in Chapter 658 . . . that gives the [circuit c]ourt authority to delegate to the [a]rbitrator its statutory jurisdiction and authority to modify an award under HRS § 658-10. UPW, on the other hand, contends that, even under the old arbitration law, the circuit court has the power to remand the award to the arbitrator under the well-recognized common law exception to functus officio, which permits the arbitrator to review the award upon instructions from the court. We have previously stated in the context of HRS chapter 658 that [t]he [circuit] court cannot act except as allowed by that [c]hapter. Bateman Constr., Inc. v. Haitsuka Bros., 77 Hawai`i 481, 484, 889 P.2d 58, 61 (1995). In that regard, HRS § 658-8 mandates that the circuit courts shall grant . . . an order [confirming an arbitration award] unless the award is vacated, modified, or corrected, as prescribed in sections 658-9 and 658-10. HRS § 658-8; see also Morrison-Knudsen Co. v. Makahuena Corp., 66 Haw. 663, 672, 675 P.2d 760, 767 (1983) (HRS § 658-8 contemplates a judicial confirmation of the award issued by the arbitrator, unless the award is vacated, modified, or corrected in accord with HRS §§ 658-9 and 658-10. (Internal citation and quotation marks omitted.)). We have also stated that HRS § 658-9 provides only four specific grounds upon which an award can be vacated, while HRS § 658-10 provides only three grounds for modifying or correcting an award. Labrador v. Liberty Mut. Group, 103 Hawai`i 206, 212, 81 P.3d 386, 392 (2003) (footnote, citation, and internal quotation marks omitted). Under HRS § 658-9, the four specific grounds for vacating an award are: (1) Where the award was procured by corruption, fraud, or undue means; (2) Where there was evident partiality or corruption in the arbitrators, or any of them; (3) Where the arbitrators were guilty of misconduct, in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence, pertinent and material to the controversy; or of any other misbehavior, by which the rights of any party have been prejudiced; (4) 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. And, under HRS § 658-10, the three grounds for modifying or correcting an award are: (1) Where there was an evident miscalculation of figures, or an evident mistake in the description of any person, thing, or property, referred to in the award; (2) Where the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the decision upon the matters submitted; (3) Where the award is imperfect in a matter of form, not affecting the merits of the controversy. Clearly, none of the above enumerated grounds includes the authority to remand the award to the arbitrator for any purpose, let alone remanding for a determination whether modification of the original award is warranted. Moreover, as previously noted, [ w]hen an award has been made, the authority of the arbitrator comes to an end. He becomes functus officio. Under general principles of arbitration law[,] he cannot in any way change or explain his award unless his authority is reinstated in writing by all parties, or the matter is returned to him by the appropriate court. Jeffers, 73 Haw. at 207, 830 P.2d at 507 (format altered) (citation omitted) (emphases added). The authority of the appropriate court to return a case to the arbitrator, however, is limited. In Labrador, this court acknowledged two judicially recognized exceptions to confirmation:  one, to allow remand to the arbitrator to clarify an ambiguous award; an[d] another, to allow vacation of an arbitration award clearly violative of public policy. 103 Hawai`i at 212, 81 P.3d at 392 (citation and internal quotation marks omitted) (emphases added). Thus, remand to the arbitrator by the circuit court would be proper where an ambiguous arbitration award requires clarification. Clarification of an ambiguous award, however, is distinguishable from a court's vacation, modification, or correction of an award in that the clarification [can]not change[] the amount of the award. Jeffers, 73 Haw. at 214, 830 P.2d at 511 (emphasis added) (holding that the appellees in Jeffers were actually seeking a modification or correction of the award in the guise of a clarification because the requested clarification would substantially change the amounts the parties could receive from [the appellants]). In the instant case, UPW concedes that the circuit court remanded the case to the arbitrator to consider whether there was an evident mathematical miscalculation, not to clarify any ambiguity. Accordingly, by UPW's own admission, the circuit court's remand does not fall within the judicially recognized exception of allowing remand for purposes of clarifying an ambiguous award that would not result in a substantial change in the amounts awarded. In examining UPW's motion to modify, the circuit court is confined to acting only within the authority conferred by HRS §§ 658-9 and -10 and the judicially recognized exceptions set forth in Labrador. Inasmuch as the requisite finding of ambiguity was not made by the circuit court and, because HRS chapter 658 does not authorize the circuit court to remand the case to the arbitrator to modify or correct the award, we hold that, based on the circumstances of this case, the circuit court erred in remanding the matter to the arbitrator. [22]