Proskauer Rose International Practice Guide Proskauer Rose LLP |
      Proskauer on International Litigation and Arbitration:
       Managing, Resolving, and Avoiding Cross-Border Business or Regulatory Disputes
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A final award should be distinguished from other awards and orders that an arbitrator or arbitral tribunal might render throughout the course of the arbitration. In general, a final award will dispose of all of the issues presented for resolution in the arbitration.
  1. That said, U.S. courts have held that arbitral awards that concerned severable, separate, discrete or self-contained issues may be deemed “final” awards for the purpose of subjecting the award to confirmation. See, e.g., Yasuda Fire & Marine Ins. Co. of Europe v. Continental Cas. Co., 37 F.3d 345 (7th Cir. 1994); Pacific Reinsurance Mgmt. Corp. v. Ohio Reinsurance Corp., 935 F.2d 1019 (9th Cir. 1991); Island Creek Coal Sales Co. v. City of Gainesville, 729 F.2d 1046 (6th Cir. 1984); Sperry Int’l Trade v. Israel, 689 F.2d 301 (2d Cir. 1982), abrogated on other grounds, Cortez Byrd Chips, Inc. v. Bill Harbert Construction Co., 529 U.S. 193 (2000).
  2. Above all, it is the content of an award – and not its nomenclature – that determines whether an arbitrator’s or arbitral tribunal’s decision will be deemed “final.” See Publicis Communic. v. True North Communics. Inc., 206 F.3d 725, 728 (7th Cir. 2000).
  3. Interim or partial awards (and orders), by contrast, generally are intended to assist the arbitral process toward the achievement of the final award. The form and content of such awards are virtually limitless. Also, in addition to final and interim awards, an arbitrator or arbitral tribunal may hand down default awards (which result when one party fails or refuses to take part in the arbitration) and consent awards (which result from the parties’ settlement of their dispute (see, e.g., ICC Article 26)).
  4. Depending upon the precise make-up of an arbitral tribunal (and the arbitral organizations under whose auspices the arbitration is conducted, if any), an award may include unanimous, separate, concurring and/or dissenting opinions. Although the arbitral organizations generally require some statement regarding the reasons upon which an award is based (see, e.g., ICC Article 25, AAA Article 27 and LCIA Article 26), the U.S. Supreme Court has held that “[a]rbitrators have no obligation to the court to give their reasons for an award.” United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 598 (1960).
  5. In some arbitrations, a time limit may be imposed within which an award must be rendered. For example, the ICC Rules (Article 24) provide that the arbitral tribunal must render its final award within six months of the signing of the last signature to the Terms of Reference (and either sua sponte or upon the request of the tribunal, the ICC Court may grant an extension). In addition, each of the arbitral organizations has specific rules which govern the requirements for the making of an award, as well as specific rules governing the correction or interpretation of awards previously rendered (see, e.g., ICC Article 29, AAA Article 30, LCIA Article 27).
  6. The remedies that might be included in an arbitral award are fairly wide ranging, including:
    1. Monetary relief (i.e., damages, restitution, or disgorgement);
    2. Punitive damages;
    3. Specific performance;
    4. Injunctive or declaratory relief;
    5. Rectification or adaptation of contracts;
    6. Interest;
    7. Attorneys’ fees; and
    8. Costs.

      Practice Note: Some arbitral organizations (e.g., the LCIA and AAA) have specific rules regarding the currency (or currencies) in which a monetary award must be made, and all of them have special rules concerning awards of costs.
  7. Like awards issued by national courts, arbitral awards can have res judicata effect. An arbitral award can finally resolve the dispute(s) between the parties that were submitted to arbitration. Short of the award being nullified, therefore, an arbitral award operates as res judicata as between the parties.
    1. Where a subsequent dispute may arise between the same parties, however, it is perhaps somewhat less clear that a prior arbitral award in an arbitration as between those same parties will have preclusive effect (the doctrine of stare decisis generally does not exist in arbitration). Nonetheless, such an award can have a significant impact (including, at least potentially, preclusive effect) on a subsequent proceeding. With respect to third parties, however, because arbitration is a matter of consensus, the general rule applies that an arbitrator or arbitral tribunal has no power to compel a person that is not a party to the arbitration agreement (unless, of course, that person has in some fashion acquiesced in the arbitration or otherwise shown an intent to arbitrate). Accordingly, an arbitral award confers no rights or obligations on any person not a party to the arbitration agreement (which is not to say that an arbitral award cannot have some sort of indirect effect on a third party).
  8. Finally, one of the characteristics that often distinguishes arbitration from litigation before a national court is the generally confidential and private nature of the proceedings. The advantages of confidentiality generally also apply to the award. Because, however, an award is only as good as its ability to be enforced, and because proceedings before national courts generally are a matter of public record, a party seeking to confirm or enforce an award should be in mind that some element of confidentiality or privacy may be lost in doing so.

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