How Arbitration Works in Tennessee: From Agreement to Award

What is arbitration?

Arbitration is a process in which parties to a dispute agree to have a neutral person, the arbitrator, hear the evidence and decide the dispute instead of a judge or jury. It is private, it is usually less formal than a trial, and the parties have considerable control over the procedure through their agreement.

Arbitration is different from mediation. A mediator helps the parties reach their own settlement and does not decide anything. An arbitrator issues a decision, called an award, that resolves the claims submitted. Whether that award is binding depends on the parties' agreement.

Arbitration is used in many civil matters: contract and commercial disputes, construction and vendor disputes, business partnership disagreements, property damage and some insurance-related disputes. Some subjects carry special rules or limits under other laws, so confirm that the dispute can be arbitrated before relying on it.

Do you need an agreement to arbitrate?

Yes. Arbitration is consensual. There are two common forms of agreement: an arbitration clause written into a contract before any dispute exists, and a submission agreement the parties sign after a dispute arises in which they agree to send that specific dispute to arbitration.

Under Tenn. Code Ann. § 29-5-307, an agreement contained in a record to submit an existing or later dispute to arbitration is generally valid, enforceable and irrevocable, except on grounds that exist at law or in equity for revoking a contract. The same section generally gives the court the job of deciding whether an agreement to arbitrate exists and whether a dispute falls within it, while the arbitrator decides whether conditions precedent have been met.

Read the agreement first. It may name a set of procedural rules, a location, the number of arbitrators, how they are chosen, deadlines, how fees are split, whether the award is binding, and what law applies. Those terms generally control, within the limits the governing law sets.

Which law governs arbitration in Tennessee?

Two bodies of law commonly apply. The Tennessee Uniform Arbitration Act, Tenn. Code Ann. § 29-5-301 et seq., was replaced with a revised version effective July 1, 2023. Under § 29-5-304, the current Act governs agreements to arbitrate made on or after July 1, 2023, and applies to earlier agreements only if all parties to the agreement or proceeding agree in a record. Older agreements may therefore be governed by the prior version of the Act, which had different section numbers.

The Federal Arbitration Act, 9 U.S.C. § 1 et seq., generally applies to arbitration agreements in contracts involving interstate commerce, and it can apply alongside or in place of state law depending on the facts and the agreement. Which law governs a particular question, and how they interact, is a legal question for counsel.

The parties' chosen procedural rules sit on top of the statutes. Many agreements adopt a published set of arbitration rules; others write their own procedures or leave procedure to the arbitrator.

How is a neutral arbitrator selected?

The agreement usually says how. Common methods include the parties agreeing on one arbitrator by name, each party picking from a list, or a panel of three where each side picks one and those two pick the chair. Under Tenn. Code Ann. § 29-5-312, if the agreed method fails, or there is none, a court may appoint the arbitrator on a party's motion.

Neutrality is the core requirement. The same section generally bars a person with a known, direct and material interest in the outcome, or a known, existing and substantial relationship with a party, from serving as a neutral arbitrator. Under § 29-5-313, before accepting an appointment a prospective arbitrator must make a reasonable inquiry and disclose facts a reasonable person would consider likely to affect impartiality, such as financial or personal interests and relationships with the parties, counsel or witnesses, and that duty continues through the case.

Parties should review disclosures carefully and raise any objection promptly. A timely objection to a disclosed fact can later support a motion to vacate, while silence may weaken it.

What are the steps in a typical arbitration?

Procedures vary with the agreement and the rules adopted, but most civil arbitrations follow a similar path.

1. Initiation: the claimant gives notice of the claim in the manner the agreement requires, describing the dispute and the relief sought.
2. Response: the other party answers and may assert counterclaims.
3. Arbitrator selection and disclosures: the neutral is chosen under the agreed method and makes required disclosures.
4. Preliminary conference: the arbitrator and parties set a schedule, exchange of documents, witness lists, hearing dates and location.
5. Information exchange: documents and, if the arbitrator permits, depositions or other discovery.
6. Hearing: each side presents evidence and argument; witnesses may testify under oath.
7. Award: the arbitrator issues a written award resolving the submitted claims.
8. Post-award: a party may ask a court to confirm, vacate or modify the award within the applicable time limits.

What happens at an arbitration hearing?

A hearing looks like a streamlined trial. Each party, usually through counsel, makes an opening statement, presents witnesses and documents, cross-examines the other side's witnesses and makes a closing argument. Under Tenn. Code Ann. § 29-5-317, a party has the right to be represented by a lawyer.

The arbitrator controls the process. Under § 29-5-318, an arbitrator may issue subpoenas for witnesses and records, administer oaths, permit depositions in some circumstances, allow discovery the arbitrator considers appropriate, and issue protective orders for privileged or confidential information. Formal rules of evidence are often applied more flexibly than in court, depending on the agreement and rules.

Hearings can be held in person, by video or as a mix, and short disputes are sometimes decided on documents alone if the parties agree. A record of the hearing is made if the parties or the rules call for one.

What is an arbitration award and is it binding?

An award is the arbitrator's decision. Under Tenn. Code Ann. § 29-5-320, the award must be made in a record and signed or otherwise authenticated by an arbitrator who concurs with it, and the arbitrator or arbitration organization gives each party notice with a copy. The award must be made within the time the agreement specifies or, if none, a time the court orders, and the parties can extend it by agreement in a record.

Whether the award is binding depends on the agreement. In binding arbitration, the parties accept the award as final, subject only to the narrow court review the law allows. In non-binding arbitration, the award is advisory and either party may proceed to court. Read the agreement's language closely, because this point shapes everything that follows.

How is an award confirmed, vacated or modified in Tennessee?

Confirmation turns an award into an enforceable judgment. Under Tenn. Code Ann. § 29-5-323, after receiving notice of an award a party may move the court for an order confirming it, and the court must confirm unless the award is modified, corrected or vacated under the Act.

Vacatur is limited. Under § 29-5-324, grounds include an award procured by corruption, fraud or other undue means; evident partiality by a neutral arbitrator, corruption or misconduct prejudicing a party; refusing to postpone a hearing on sufficient cause, refusing to consider material evidence, or conducting the hearing in a way that substantially prejudiced a party; the arbitrator exceeding their powers; no agreement to arbitrate, if the objection was properly preserved; and initiating arbitration without required notice, with substantial prejudice. The motion generally must be filed within 90 days after the movant receives notice of the award, with a different starting point for claims of corruption, fraud or undue means.

Modification or correction under § 29-5-325 covers narrow problems such as an evident mathematical miscalculation, a mistake describing a person or property, an award on a claim not submitted, or a defect of form, and it also carries a 90-day window. Under the Federal Arbitration Act, 9 U.S.C. § 12 generally requires notice of a motion to vacate, modify or correct within three months after the award is filed or delivered. Missing these deadlines can forfeit the challenge, so calendar them as soon as the award arrives.

How DFS provides arbitrators and arbitration administration

Delator Field Services provides neutral arbitrators for civil disputes across most civil scopes, along with arbitration administration and logistics: intake, scheduling, document coordination, hearing logistics and records. A DFS arbitrator is neutral and impartial, has no stake in the outcome, discloses potential conflicts before accepting an appointment, and does not advise either party. DFS is not affiliated with any national arbitration organization.

Every DFS arbitration starts with a valid agreement to arbitrate, whether a contract clause or a submission agreement signed after the dispute arises. The agreement and governing law, including the Federal Arbitration Act or the Tennessee Uniform Arbitration Act as applicable, control the process and whether the award is binding.

This guide is general information, not legal advice. Delator Field Services does not provide legal advice, and its arbitrators do not advise parties. Each party should consult its own attorney about its rights, the agreement and deadlines.