Pacific Gas & Electric Co. v. Superior Court

This matter arises on a petition for a writ of mandate directing the superior court to overturn its order vacating a binding arbitration award. The award determines the rights and obligations of the parties to contracts for the purchase of natural gas. The superior court vacated the award for legal errors committed by the arbitrators in the construction of the contracts.

When the matter was first before us we granted the petition, determining that the scope of judicial review of an arbitration award ordinarily does not extend to such errors. The Supreme Court granted review and, after issuing Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1 [ 10 Cal.Rptr.2d 183 , 832 P.2d 899 ], remanded the matter for reconsideration in light of that opinion. Having reconsidered, we will again grant the petition.

The arbitration award resolves disputes concerning the construction of contracts for the purchase of natural gas by Pacific Gas and Electric Company (PG&E) from real parties in interest Anacapa Oil Corporation (Anacapa). The award construed the contracts to permit repricing of the gas at a market price below the ceiling price established by federal law.

The superior court…