Arbitration Affirmed

MUSA Auto Holdings, LLC v. Frunzi illustrates Texas’s narrow judicial review of arbitration awards when a party claims the arbitrator exceeded his powers.

The Fifth Court emphasized that the question is whether the arbitrator was empowered by the parties’ agreement to decide the issue, and whether the award is rationally connected to that agreement. Under that standard, “even a mistake of fact or law by the arbitrator in the application of substantive law is not a proper ground for vacating an award.”

Applying that standard, the Court held the arbitrator acted within his authority by interpreting and applying the employment agreement’s specific “for Cause” definition—including its “willful” component—to the evidence, rather than imposing an extra-contractual standard.

The appellant’s main argument—that the arbitrator “rewrote” the agreement by requiring proof of scienter and by questioning whether the stated grounds were the “true reason” for the termination—failed because the arbitrator’s analysis was rooted in the contract’s text and was thus “rationally inferable from the parties’ agreement.” No. 05-24-00184-CV; Oct. 1, 2025.