Georgia Choice-of-Law + AAA Rules Does Not Displace FAA Review Absent an Explicit Opt-Out (and Silence at Arbitration Can Waive the Objection)

1. Introduction

Univabs Solutions Private Limited (an India-based provider of radiology services) and The Radiology Group, LLC (“TRG”) litigated—through arbitration and then federal court—TRG’s attempt to undo an arbitration award entered in Univabs’s favor.

The dispute arose out of a long-running services relationship (2012–2023) and corporate governance facts: Vikas Verma invested in TRG and served as a manager with responsibility for finances and vendor payments, while also owning Univabs (a fact the arbitrator found TRG knew, though TRG denied it). Univabs sought payment for past services; TRG countered that Verma used insider knowledge to overcharge through Univabs.

Two appellate issues framed the Eleventh Circuit’s decision:

  • Governing arbitration law: whether the case should be decided under the Georgia Arbitration Act (“GAA”) rather than the Federal Arbitration Act (“FAA”), given a Georgia choice-of-law clause and an Atlanta arbitration seat.
  • Scope of arbitral authority: whether the arbitrator exceeded his authority by “modifying” TRG’s Operating Agreement (particularly a clause addressing managers’ non-exclusive duties) rather than interpreting it.

2. Summary of the Opinion

The Eleventh Circuit affirmed the district court’s confirmation of the arbitration award and the denial of TRG’s motion to vacate. It held:

  • The FAA applies—both because TRG failed to object during arbitration to the application of the FAA (waiver) and because, under Eleventh Circuit precedent, a Georgia choice-of-law clause does not displace the FAA absent a clear contractual directive.
  • The arbitrator did not exceed his authority under 9 U.S.C. § 10(a)(4) because the award reflected interpretation of the Operating Agreement (text and party intent), not an impermissible rewrite.
  • Univabs’s motion for sanctions was denied.

3. Analysis

A. Precedents Cited

1) Choice-of-law clauses, arbitral rules, and whether the FAA applies

Gulfstream Aerospace v. Oceltip Aviation PTY Ltd., 31 F.4th 1323 (11th Cir. 2022) did the heavy lifting on the FAA issue. The panel treated Gulfstream as establishing a practical drafting-and-default rule: unless the contract clearly and unmistakably opts into a non-FAA arbitration regime, the FAA will govern vacatur/confirmation in federal court.

The opinion emphasizes Gulfstream’s reasoning that where parties specify arbitration administration and rules—there, and here, the Commercial Arbitration Rules of the American Arbitration Association—it “makes little sense” to infer that a different state arbitration code silently controls judicial review. In this case, the governing-law paragraph referenced “laws of the State of Georgia” but also expressly required AAA Commercial Rules; it did not mention the GAA. That omission, under Gulfstream, pointed to the FAA rather than the GAA.

2) The narrowness of FAA vacatur—especially “exceeded powers”

The court situated the appeal within an entrenched line of authority restricting vacatur under 9 U.S.C. § 10(a)(4):

  • First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) for the proposition that vacatur is allowed “only in very unusual circumstances” and only those identified in the statute.
  • Bamberger Rosenheim, Ltd. v. OA Dev., Inc., 862 F.3d 1284 (11th Cir. 2017) (quoting AIG Baker Sterling Heights, LLC v. Am. Multi-Cinema, Inc., 508 F.3d 995 (11th Cir. 2007)) for the oft-repeated maxim that judicial review of arbitration is “among the narrowest known to the law.”
  • Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662 (2010) to underscore that even “a serious error” is not enough; the question is power, not correctness.
  • Inversiones y Procesadora Tropical INPROTSA, S.A. v. Del Monte Int'l GmbH, 921 F.3d 1291 (11th Cir. 2019) reinforcing deference to the arbitrator’s contract interpretation “no matter how wrong” a court thinks it is.
  • O.R. Sec., Inc. v. Prof'l Planning Assocs., Inc., 857 F.2d 742 (11th Cir. 1988) for the principle that an arbitrator need not even explain reasoning; the decision can suffice for confirmation.
  • Gherardi v. Citigroup Glob. Markets Inc., 975 F.3d 1232 (11th Cir. 2020) as the panel’s immediate doctrinal template: § 10(a)(4) is construed “very narrowly,” and vacatur is limited to situations where the arbitrator abandons interpretation and “dispenses his own brand of industrial justice.”
  • Major League Baseball Players Ass'n v. Garvey, 532 U.S. 504 (2001) (quoted in Gherardi) supplying that “industrial justice” formulation.
  • Wise v. Wachovia Sec., LLC, 450 F.3d 265 (7th Cir. 2006) (quoted in Gherardi) distinguishing impermissible merits appeals from legitimate challenges alleging violation of the agreement to arbitrate.

3) Interpretation versus modification

Wiregrass (cited in the opinion as “Wiregrass, 837 F.3d at 1087–1091”) supplied the operative test for TRG’s “modification not interpretation” theory. Under Wiregrass, courts look for “hallmarks” of interpretation, such as: textual analysis, use of extrinsic evidence to discern intent, framing the task as interpretation, and use of canons of construction.

The panel applied that framework to conclude the arbitrator interpreted the Operating Agreement by parsing the clause’s structure and contrasting the obligations of named managers (Lalaji and Kolb) with those of “the unnamed Verma,” while repeatedly grounding the reading in party intent as found from the evidence.

B. Legal Reasoning

1) FAA applicability: waiver and (independently) contract-based default to the FAA

The opinion gives two independent reasons the FAA governed:

  • Waiver: The arbitrator’s preliminary order stated that AAA rules and the FAA would apply. The panel observed “nothing in the record” showing TRG objected at arbitration, and held TRG thus waived the argument.
  • Merits (under Eleventh Circuit law): Even setting waiver aside, the contract’s reference to Georgia law was insufficient to incorporate the GAA. The clause required arbitration under the Commercial Arbitration Rules of the American Arbitration Association and did not mention the GAA; under Gulfstream Aerospace v. Oceltip Aviation PTY Ltd., that is not a “clear and unmistakable” opt-out from FAA governance.

Notably, the district court also relied on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) because Univabs was foreign, but the Eleventh Circuit’s analysis as written ultimately rested on waiver plus Gulfstream’s FAA-default rule.

2) “Exceeded powers” under § 10(a)(4): the arbitrator stayed within interpretive bounds

TRG’s central attack was that the arbitrator did not “interpret” TRG’s Operating Agreement but instead “modified” it—particularly by reading its “Managers Have No Exclusive Duty to Company” clause as relieving Verma of fiduciary duties, thereby defeating TRG’s counterclaims.

The panel treated the question as procedural and jurisdictional (power) rather than substantive (correctness). Under Gherardi v. Citigroup Glob. Markets Inc. and the broader Supreme Court/Eleventh Circuit framework, the only viable path to vacatur was showing the arbitrator abandoned contractual interpretation and imposed extra-contractual notions of fairness.

Applying Wiregrass, the panel found interpretive hallmarks: the arbitrator parsed the clause’s text, contrasted the duties of specifically named managers against the broader category that included Verma, and tied the reading to findings about party intent and the relationship’s commercial context. That sufficed to keep the award within § 10(a)(4)’s narrow boundaries, even if TRG believed the arbitrator’s reading was wrong.

C. Impact

  • Contract drafting: In Eleventh Circuit practice, this decision (consistent with Gulfstream) reinforces that a generic Georgia governing-law clause plus AAA rules is not enough to make the GAA govern vacatur/confirmation. Parties who want GAA review standards must say so explicitly—and should do so in the arbitration clause itself, not by implication.
  • Arbitration procedure strategy: The waiver discussion is a warning: if an arbitrator (or preliminary scheduling/order) states the FAA applies, a party must promptly object in the arbitration record or risk losing the argument later.
  • Challenges to awards: The opinion underscores the practical reality of § 10(a)(4): “interpretation vs. modification” arguments rarely succeed if the award contains any plausible textual analysis and intent-based reasoning. Courts will not re-litigate the merits under the guise of “exceeded powers.”
  • Cross-border consequences: With a foreign party involved, parties should also anticipate New York Convention overlays in enforcement/confirmation posture, even where the seat is domestic and the arbitration looks “local.”

4. Complex Concepts Simplified

  • FAA vs. GAA: The FAA is the federal statute governing arbitration enforcement and limited grounds for vacating awards in federal court. The GAA is Georgia’s state analog. A contract can sometimes choose state arbitration law, but in this circuit it must do so clearly; a general “Georgia law governs” clause typically governs contract interpretation, not the standards for vacating an award.
  • New York Convention: A treaty framework (implemented in U.S. law) for recognizing and enforcing certain international arbitration agreements and awards. The district court viewed the foreign-party feature as placing the matter under the Convention’s umbrella.
  • “Vacatur” under 9 U.S.C. § 10(a)(4): A court can set aside an award only on narrow grounds. Under § 10(a)(4), the question is whether the arbitrator acted outside the authority the parties gave—e.g., deciding issues not submitted or abandoning contract interpretation.
  • Interpretation vs. modification: Interpretation means the arbitrator is trying to ascertain meaning from the contract’s text (and sometimes intent evidence). Modification suggests rewriting the deal. Under Eleventh Circuit law, even strained or erroneous interpretation is usually still “interpretation” for § 10(a)(4) purposes.
  • Waiver: If a party does not timely object during arbitration to a governing-law framework or procedural ruling, appellate courts may treat the argument as forfeited.

5. Conclusion

The Eleventh Circuit’s decision confirms two reinforcing themes in modern federal arbitration law: (1) the FAA is the default for judicial review in federal court unless parties explicitly opt into a different arbitration review regime; and (2) under § 10(a)(4), courts will uphold awards so long as the arbitrator is plausibly interpreting the contract, not dispensing free-form equity. In practical terms, the opinion rewards careful drafting and timely objections—and leaves merits disputes where the parties agreed to put them: in arbitration.