London Maritime Arbitration

Clare Ambrose; Karen Maxwell and Michael Collett KC

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CHAPTER 19 Arbitration awards

A. Introduction

19.1 There is no definition of an award in the 1996 Act, although section 52 identifies the formal requirements and section 58 describes an award as the final and binding decision of the tribunal made pursuant to an arbitration agreement.1 As a matter of substance an award is a decision finally disposing of a relevant matter in dispute.2 19.2 It is important that an award should be final since this reflects the choice of the parties to use arbitration to resolve their disputes and not merely as a precursor to court proceedings. Moreover, as a matter of policy, finality is important since the object of arbitration is to provide an efficient and speedy means of resolving a dispute once and for all. The significance of finality in arbitration means that the procedures available for challenging an award in court are limited (see ). The courts are always reluctant to allow challenges to be used to prolong a dispute and to this end they are inclined to adopt a generous approach to the interpretation of awards.3

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19.3 The making of an award has important legal consequences. The arbitrator has discharged his duty and except for limited powers to correct mistakes (discussed below) no longer has jurisdiction to make binding decisions in respect of the matters decided in the award – he is described as functus officio (having discharged his duty). The successful party will also be able to enforce the award, invoking, if necessary, the enforcement procedures discussed in . Awards are confidential to the parties and may not ordinarily be disclosed to third parties (confidentiality of awards is discussed in ). 19.4 Different types of award are recognised in the 1996 Act and also as a matter of practice and principle. The Act recognises the distinction between an award and a provisional order (section 39), and between a final award dealing with all issues and a partial award dealing finally with one or more issues (section 47), an agreed award (section 51) and an additional award or correction of an award (section 57). More broadly there is recognition of the distinction between declaratory, monetary and injunctive awards. The 1996 Act also recognises that arbitrators may make decisions of different sorts by referring to the tribunal’s power to make awards, rulings, orders, decisions, declarations and directions.4 The terminology or title used will usually not be decisive as to the effect of a decision or whether it amounts to a binding award although the form a decision takes would affect its enforceability under the New York Convention or section 66.5 The most significant distinction is one of substance between awards and other decisions.6 19.5 A distinction is sometimes drawn between the dispositive part of an award containing the tribunal’s orders and declarations, and the reasons for the award. The dispositive section is usually the most important part of the award for the purpose of enforcement and identifying the outcome. However, the reasons for the award will invariably form part of the award7 (unless the parties agree otherwise, perhaps by requesting no reasons under paragraph 24 of the LMAA Terms).

B. Decision-making

19.6 In the interests of candour, the deliberations of arbitrators when forming their decisions are confidential. Apart from the reasons given with an award the parties are not entitled to know how the decision was reached.8 If a dispute is determined by a sole arbitrator, then he clearly acts alone in deciding the case and writing the award. Decision-making is less simple where there is more than one arbitrator. The position of dissenting arbitrators and their reasons is considered below. 19.7 The governing principle is that after the end of the hearing (or close of written submissions) the parties are entitled to an impartial and fair consideration of all the issues in the case by all the arbitrators acting together.9 Decision-making must not be delegated: “it

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is the function of the tribunal itself to decide on the findings of fact, to evaluate and analyse the submissions of law and to arrive at their own reasons for their decisions.”10 The tribunal may use an assistant to deal with administrative tasks relating to the award. In large international arbitrations a tribunal secretary may sometimes be appointed by the tribunal to deal with correspondence, attend deliberations and assist with drafting. In commodity cases a legal advisor is sometimes appointed to assist with drafting.11 These practices would be unusual in a shipping case. Deliberations may take place by correspondence and it is usual practice for one arbitrator to volunteer to draft the award and then to circulate it to the other arbitrators for comments and eventual approval.12

In European Grain & Shipping Ltd v Johnston 13 one of the arbitrators went to Australia after submissions were made but before an award had been drawn up. He signed three blank award forms and left these with a letter stating his views with the third arbitrator. The other two arbitrators disagreed with his views and issued a majority award on the signed forms. The Court of Appeal held that, subject to a defence of waiver, the award should have been set aside since “an arbitration conducted by a tribunal of several arbitrators necessarily requires a joint process of full and complete adjudication by all of them, so that the ultimate award represents the state of mind of all of them at the time when they sign it”.

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