An important decision for the construction industry was handed down by the Colorado Supreme Court on April 13, 1981. The case made a number of rulings favorable to the arbitration process.
More specifically, the court upheld provisions in the American Institute of Architects "General Conditions" (A201) requiring that all claims and disputes between the parties be resolved by arbitration in accordance with the construction industry rules of the American Arbitration Association.
The court also held that an award rendered by the arbitrators could be made a judgment in the Colorado state courts without prior notice to the other party to the arbitration proceedings of the court application. The other party is nevertheless entitled to court consideration of any challenges there may be to the contract establishing arbitration proceedings, the fairness of arbitration proceedings themselves, or the award as rendered.
In the case mentioned a contractor had received a net award of $132,300.00 against a school district which refused to pay the award. The contractor's counsel then moved to require a special assessment of the taxpayers in the school district under Colorado statute and the district went to court.
The school district argued that the judgment on the arbitration award should not have been entered without prior notice. It also claimed that there had been an agreement requiring the arbitrators to make detailed findings of fact and conclusions of law. The trial judge disagreed and the Colorado Supreme Court affirmed the trial court's ruling.
Despite that very recent Colorado Supreme Court ruling, the law has since changed as to agreements to arbitrate which were entered into after July 14, 1975. In those instances the Colorado Uniform Arbitration Act (effective as of that date) applies and notice to the opposing party of an application for entry of a court judgment is specifically required. Other wise, the law appears to be substantially as announced in the cited decision.
1 Columbine Valley Construction Company v. Board of Directors, Roaring Fork School District RE-1, 626 P.2d 686 (Colo. 1981). :
The significance of the Columbine Valley decision is that in Colorado there is now clear-cut authority of its highest court that arbitration agreements are favored by the courts, they are fully effective, and arbitration awards are enforceable through court process.
The decision also places a stamp of approval upon the administration of arbitration proceedings by the American Arbitration Association, pursuant to detailed rules adopted and followed by that organization.