When Can an Arbitrator Change an Award? Finality Matters More Than the Label
Once an arbitrator issues an award, how much power remains to change it?
A recent Arizona case provides a useful illustration of the sometimes-fuzzy boundary between completing an unfinished award and impermissibly reconsidering the merits. The answer can depend not only on the governing arbitration statute, but also on whether the award was truly final and on the arbitration rules the parties selected.
In Town of Gilbert v. Cooley Black Canyon, LLC, No. 2 CA-CV 2025-0316, 2026 WL 2861205 (Ariz. Ct. App. Sept. 23, 2026), the Arizona Court of Appeals held that an arbitrator could modify an earlier award because the award had not finally and definitely resolved the entire claim submitted to arbitration. The decision is unpublished and nonprecedential under Arizona rules, but its reasoning raises an important issue for practitioners handling arbitrations under both state law and the Federal Arbitration Act (“FAA”).
The Arbitrator Changed More Than a Typographical Error
The dispute arose from the Town of Gilbert’s acquisition of property owned by entities affiliated with the Cooley family. The parties’ agreement required arbitration of the compensation the Town would pay.
In August 2024, the arbitrator determined the fair market value and awarded approximately $6.5 million in compensation, expressly stating that the amount did not include interest. In valuing property subject to a gas-line easement, the arbitrator applied a 50% discount. Cooley then asked the arbitrator to reconsider that discount. The arbitrator did so. He concluded that 50% was “too much,” reduced the discount to 25%, and issued an October award increasing the compensation to approximately $7.07 million, again excluding interest.
That is important. The arbitrator was not correcting a transposed number, mathematical mistake, or typographical error. He reconsidered a substantive valuation judgment and changed it.
The Town argued that he no longer had authority to do so.
Arizona Law Focused on Whether the First Award Was Final
Arizona’s arbitration statute permits an arbitrator to modify an award when “the arbitrator has not made a final and definite award on a claim submitted” to arbitration. A.R.S. § 12-3020(A)(2).
The Arizona Court of Appeals concluded that the August award was not final because it expressly excluded pre-award interest. Under Arizona law, the court reasoned, pre-award interest was part of the merits of the compensation claim. Because that component remained unresolved, the arbitrator had not yet issued a “final and definite award” on the claim.
That finding allowed the court to uphold something considerably broader than merely adding the omitted interest: the arbitrator’s reconsideration of the underlying easement valuation itself.
The distinction is significant. The court effectively treated the claim as a whole. Because one component of compensation remained undecided, the earlier determination had not become sufficiently final to prevent the arbitrator from revisiting another component of that same claim.
AAA Commercial Rule 52: Clarification Is Not Reconsideration
The parties had also selected the AAA Commercial Arbitration Rules.
Current Commercial Rule R-52 permits an arbitrator, following a timely request, to clarify an award and to correct clerical, typographical, technical, or computational errors. But the critical limitation remains: the arbitrator may not “re-determine the merits of any claim already decided.” The AAA expanded the Rule in recent years to permit clarification while retaining the prohibition against merits reconsideration.
That creates the tension at the center of Town of Gilbert. If the 50% easement discount had been contained in an unquestionably final award, changing it to 25% because the arbitrator decided the original discount was excessive would ordinarily look precisely like re-determining a merits issue.
But the Arizona court concluded that the underlying compensation claim had not yet been finally decided because interest remained outstanding. On that reasoning, Rule R-52 did not prevent the later modification.
The lesson is that the prohibition against revisiting the merits cannot always be analyzed by looking at a particular finding in isolation. The threshold question may be whether the award containing that finding had become final at all.
The AAA Consumer Rules Reach Much the Same Result
The current AAA Consumer Arbitration Rules, effective May 1, 2025, contain similar language with an interesting procedural difference.
Consumer Rule R-49 allows either a party—or the arbitrator on the arbitrator’s own initiative—to seek clarification or correction within 20 days after transmission of an award. Permissible corrections include clerical, typographical, technical, and computational errors. But here, too, the Rule expressly states that the arbitrator is not empowered to re-determine the merits of a claim already decided. The Consumer Rules also expressly recognize interim, interlocutory, and partial awards.
That makes careful labeling and drafting important. An arbitrator who intends to resolve some issues while reserving others should say so clearly. Calling something a “Final Award” while leaving unresolved claims or relief creates unnecessary uncertainty over what can later be changed.
The FAA Adds the Doctrine of Functus Officio
The FAA approaches the question somewhat differently.
Section 11 of the FAA authorizes a federal court to modify or correct an award for three narrow categories: an evident material miscalculation or mistake in description; an award upon a matter not submitted to arbitration, if it can be corrected without affecting the merits; or an imperfection in form that does not affect the merits. 9 U.S.C. § 11.
Section 11 therefore should not be confused with a general power permitting an arbitrator to reconsider an award.
Federal law also recognizes the common-law doctrine of functus officio: once an arbitrator has issued a final award, the arbitrator ordinarily has exhausted the assigned authority and cannot reconsider the merits. The Ninth Circuit, whose federal jurisdiction includes Arizona, recognizes limited exceptions permitting an arbitrator to correct an obvious mistake, complete an incomplete arbitration, or clarify an ambiguity. International Brotherhood of Teamsters v. Silver State Disposal Service, Inc., 109 F.3d 1409, 1411–12 (9th Cir. 1997).
But again, finality comes first.
In Bosack v. Soward, 586 F.3d 1096, 1103 (9th Cir. 2009), the Ninth Circuit explained that even an “interim” award can be final for functus officio purposes if the award states that it is final and the arbitrator intended it to be final. Conversely, an award that genuinely leaves submitted matters unresolved may remain open to completion.
Thus, under the FAA, AAA rules, and Arizona law, labels matter—but substance and intent matter more.
What the Arbitrator Generally Can—and Cannot—Do
After an award, an arbitrator ordinarily may correct arithmetic, clerical, typographical, computational, or similar errors; clarify genuine ambiguity when the applicable rules permit it; and complete an award that did not finally dispose of matters actually submitted for decision.
What an arbitrator ordinarily may not do after issuing a final award is reconsider evidence, change a factual determination, adopt a different legal analysis, or revise damages simply because, upon reflection, a different result seems preferable.
Town of Gilbert sits near the boundary because the arbitrator did exactly what would normally raise concerns—he reconsidered a substantive valuation decision—but did so before the court considered the overall compensation claim finally resolved.
The Practical Lesson: Make Finality Intentional
For arbitrators, the safest practice is precision. If issues remain undecided, identify them expressly and make clear that the ruling is interim or partial and that jurisdiction is retained to resolve the specified remaining matters. If the intention is to issue the final disposition of all submitted claims, say that just as clearly.
For advocates, the same principle works in reverse. Before asking an arbitrator to “correct” an unfavorable award, identify exactly what remains undecided. A request to fix arithmetic is one thing. A request to reconsider the merits is something quite different once the award has become final.
The power to modify an arbitration award is narrow. But as Town of Gilbert illustrates, determining whether that power still exists may turn on the question that comes first: Was there actually a final award yet?
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