By Chris Bankler

The Texas Business Court continues to develop its role in resolving disputes arising out of arbitration proceedings. In BNSF Railway Co. v. Level 3 Communications, LLC, Judge Bouressa denied an application to vacate an arbitration award and granted a counter-application to confirm the award following a bench trial. The opinion highlights three points business litigants should note: (1) the Business Court’s expanded jurisdiction over arbitration-related disputes, (2) the Texas Business Court’s ability to resolve those disputes efficiently, and (3) the extremely limited scope of judicial review of arbitration awards.

Case Background

The dispute arose from a right-of-way agreement under which BNSF Railway allowed Level 3 Communications to install fiber-optic facilities along railroad rights-of-way. When the agreement approached expiration, the parties attempted—but failed—to negotiate a renewal rate.

Level 3 initiated arbitration under the agreement’s dispute-resolution provisions. After the arbitration panel issued a final award in favor of Level 3, BNSF filed an application in the Texas Business Court seeking to vacate the award, while Level 3 counterclaimed to confirm it.

Expanded Jurisdiction Over Post-Arbitration Disputes

The case illustrates the Texas Business Court’s expanded statutory jurisdiction over arbitration matters. In 2025, the Texas Legislature amended the Business Court statute to expressly authorize the court to hear actions involving arbitration—including proceedings to enforce arbitration agreements and confirm or vacate arbitration awards—when the underlying dispute falls within the court’s jurisdiction. See Tex. Gov’t Code § 24A.004(d-1).

Efficient Resolution Through Bench Trial

The case also demonstrates the Texas Business Court’s ability to resolve complex commercial disputes efficiently. BNSF filed its application to vacate the arbitration award in June 2025. The court entered a scheduling order in September 2025 and conducted a bench trial on January 12, 2026, to resolve the parties’ competing applications to vacate and confirm the award. Following the trial, the court denied the motion to vacate and entered judgment confirming the arbitration award.

The Texas Business Court’s Limited Review of Arbitration Awards

On the merits, BNSF argued that the arbitration panel exceeded its authority by deciding a renewal-rate dispute that BNSF claimed should have been resolved through a contractual appraisal process. The court rejected that argument because the parties’ arbitration clause incorporated the AAA Commercial Rules, which delegate questions of arbitrability to the arbitrator.

As the court explained: “[A]s a general rule, an agreement to arbitrate in accordance with the AAA or similar rules constitutes a clear and unmistakable agreement that the arbitrator must decide whether the parties’ disputes must be resolved through arbitration.” Because the parties adopted the AAA rules, the arbitration panel had authority to decide both substantive arbitrability and procedural arbitrability issues arising under the agreement.

The opinion also underscores the narrow scope of judicial review of arbitration awards. Under both the Texas Arbitration Act and the Federal Arbitration Act, courts must confirm an arbitration award unless a statutory ground for vacatur is established. Judge Bouressa emphasized that judicial review does not extend to reconsidering the correctness of the arbitrator’s decision: “Judicial review of an arbitration award is extraordinarily narrow” and “focuses on the integrity of the process, not the propriety of the result.” Even clear legal or factual mistakes generally do not justify vacating an award: “Review of an arbitration award is so limited that even a mistake of fact or law by the arbitrator is not a proper ground for vacating an award.” Because the arbitration panel acted within the authority delegated by the parties’ contract, the court denied BNSF’s motion to vacate and confirmed the award.

Key Takeaways

• The Texas Business Court now has express statutory jurisdiction over arbitration-related disputes, including confirmation and vacatur proceedings.
• The court can resolve those disputes efficiently, including through prompt bench trials.
• Judicial review of arbitration awards remains extremely limited, particularly when the parties’ agreement incorporates arbitration rules delegating arbitrability to the arbitrator.

For businesses that rely on arbitration clauses in commercial contracts, the case reinforces a familiar lesson: once a dispute is sent to arbitration, courts will rarely disturb the result.

The opinions expressed are those of the authors and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice. For more information, please contact Chris Bankler or a member of the Trial & Appellate Litigation practice.

Meet Chris

Chris Bankler focuses on the resolution of disputes for businesses and financial institutions. He counsels clients through the process of complex business litigation, including general business disputes, fraud claims, breach of fiduciary duty cases, and complex business bankruptcy litigation. He has served as litigation counsel in more than 100 cases in state and federal courts, as well as FINRA and AAA arbitrations.