The Tennessee Supreme Court ruled that it has subject matter jurisdiction to review a trial court’s order vacating an arbitration award while remanding the dispute to a new arbitration panel without expressly declining to confirm the award. See Morgan Keegan & Co., Inc. v. Smythe, Tenn. Sup. Ct., No. W2010-01339-SC-R11-CV, (4/25/13); http://op.bna.com/srlr.nsf/r?Open=jkoo-979qp7.
The Court interpreted the Tennessee Uniform Arbitration Act to permit an investor to appeal the award prior to a second arbitration proceeding. This allows for a review of the award without first having another arbitration.
The case involved investments in junk bonds that offered potential high rates of return, but with a higher degree of risk. The investment collapsed and allegedly cost investors billions of dollars. The claimant won a FINRA arbitration proceeding, but the broker-dealer sought to vacate the award, and was successful. The investor appealed, and the intermediate court refused to hear it saying it did not have jurisdiction. The State Supreme Court determined that the plain language of the statute confers on Tennessee’s appellate courts the subject matter jurisdiction over such appeals, and would permit the review.
In short, the decision allowed the court to side-step the ultimate issue, and obtain a second arbitration panel’s perspective.