[When is it permissible to reject the arbitrator’s judgment?]

Answer – and success is from Allah – is that when the arbitrating judge has ruled between the two disputants, it is obligatory to be content with his judgment, and it is not permissible for either of the disputants to reject it.
The proof for that is His saying, Exalted is He: “O you who have believed, fulfill [all] contracts.” [al-Māʾidah:1]. Except if he has ruled without justice; in that case it is permissible to reject it, but on condition that this be done through another judge who rules that it is invalid. If that occurs, then there is no objection to rejecting it; but without that, it is not permissible.
And the proof that a judgment is annulled and may be rejected if it contravenes justice is His saying, Exalted is He: “Indeed, Allah commands you to render trusts to whom they are due and when you judge between people to judge with justice.” [al-Nisāʾ:58], and His saying, Exalted is He: “[We said], ‘O David, indeed We have made you a successor upon the earth, so judge between the people in truth and do not follow [your own] desire, as it will lead you astray from the way of Allah.’” [Ṣād:26].
Furthermore, the scholars of the madhhab have mentioned – as in al-Azhār and its commentary – that judges are of three types:
1 – The judge appointed by an Imām or a muḥtasib.
2 – The judge appointed by “the five.
(The judge appointed by “the five.” It is the view of Imām al-Mu’ayyad bi-llāh (Peace be Upon Him) that it is a condition for the judge that he be appointed by five upright men from the people of the town; while the position of the madhhab is that whoever is fit for something may carry it out. Completed by the author.)
3 – The arbitrating judge appointed by the two disputants.

Source: Min Thimār al-ʿIlm wa al-Ḥikmah vol.2