The contract with this arbitration clause was signed several years ago, at a time when it was common to have an arbitration panel of three members, two of whom would be selected by the parties (and expected to be partial) who would then pick a neutral, third arbitrator. Since then, the AAA has changed its rules to provide that all three arbitrators should be impartial.

Applying those new rules, the AAA disqualified the first arbitrator nominated by one of the parties. Eventually, a panel of three impartial arbitrators was selected, consistent with the new version of the AAA rules. When that panel came back with an unfavorable award, the party moved to vacate it on the ground that it was inconsistent with the parties' agreement.

The Texas Supreme Court split 5-4 over the propriety of vacating the award. The majority held that the award should be vacated because the parties' agreement should control over the AAA rules. It held that, by specifying other characteristics ("knowledgeable" and "independent"), the parties meant to speak comprehensively and thus the agreement was "not in need of gap-filling from the AAA rules." Thus, the arbitration procedure followed was not the one agreed.

The dissent argued that, if the parties had meant to freeze the AAA rules at a specific moment in time, they could have specified that. Instead, the AAA rules provide that each arbitration is governed by the rules in effect when arbitration is commenced, not when the agreement was signed. The dissent would have held that the new provisions in the AAA rules could be harmonized with the parties' agreement and thus would have upheld the award.