I would like thank Dr Patricia Živković Professor at the University of Aberdeen who, through her seminars in International Commercial Arbitration in the Asia Pacific, inspired the writing of this article.

Arbitration is a difficult field to regulate because many different actors intervene in the arbitration process.[1] At the heart of everything, there is the parties’ autonomy. Then, the state of the seat as well as the state of enforcement are going to provide rules to control the arbitration process, and where applicable, the arbitration’s institutions own rules may also apply. The challenge or the enforcement of an award reflect this delicate balance which is influenced by all those elements.[2]

The definition of an arbitral award reveals several key issues. If most international arbitral awards are voluntarily applied by parties because it is a biding legal instrument, a dispute may rise at that time.[3] When arbitrators draft an award they have to minimise the chance that it will be set aside or refused recognition.[4] Therefore, it becomes essential to determine which decisions of the arbitral tribunal may be able to be enforced but also to be set aside.[5] Indeed, the support of a state national judicial system is needed to give the same effect as a national court judgment to an arbitral award.[6]

The absence of definition of an arbitral award

The New York Convention was a decisive step for the international acceptance and development of the arbitral proceedings.[7] Indeed, this Convention, created an unified regime that allowed interaction between the different provisions provided by the several domestic laws.[8] This pro-enforcement regime conveyed by the Convention only foresees limited grounds to refuse recognition of an arbitral award.[9] It results from this protection of the award a greater enforceability abroad than a national court’s judgment.[10] Hence, parties benefit of better clarity, simplicity and reduce the legal uncertainty.[11]

However, this main international convention dealing with arbitration does not give a definition of an arbitral award because it is too difficult to reach a consensus on the question.[12] The New York Convention only says that “[t]he term “arbitral award” shall include not only awards made by arbitrators appointed for each case but also those made by permanent arbitral bodies to which the parties have submitted”.[13] Hence, this article only determined which body is allowed to made arbitral award but no what it should contain.

Some authors agree on some elements which define an award. First it should be final and binding on the parties, that is to say a “decision of the arbitral tribunal which finally determines any question of substance or the question of its competence or any other question of procedure”.[14] Secondly the decision should affect the rights between parties and lastly should be able to be enforced before national jurisdictions in particular thanks to the New York Convention.[15] If this definition gives a lead it does not have any legal force and require some clarifications.

However, it will be seen that the definition of an arbitral award has crucial practical consequences.

The issues raised by the lack of definition

During the arbitration process, the arbitral tribunal may have to decide upon different issues related to the case.[16] Those decisions can take many forms and are not always considered as award even when the arbitral tribunal call it so, which increases the legal uncertainty.[17] Through a brief nomenclature of tribunal arbitral decisions, depending on the nature of the decision and not the terminology employed by the arbitral tribunal, it will be seen what kind of issues they can raise for the parties.

Final and partial awards

The final award by settling the last aspect of the dispute terminates the arbitral proceedings and therefore the tribunal is functus officio.[18] They must be distinguished from partial award even if they both resolve definitely a matter of the dispute.[19] If the final award can cover all or part of the dispute, the partial award will necessarily cover only a particular aspect.[20] Hence the partial award contrary to the final award will not end the arbitral process.

Furthermore, if it is mandatory for an arbitral tribunal to issue a final award because its role is to settle the dispute, concerning a partial award it may be able to decide if it is appropriate or not unless otherwise stated by the parties.[21]

The arbitrators should take into account the circumstances of the case, in particular when there is an issue on the arbitration jurisdiction or the applicable law.[22] In this case a partial award can simplify the proceedings and allow to save time and cost.[23] However, it can also create an uncertainty and delay the arbitral proceedings. As other award, partial award can be enforced or set aside hence, it can be used as a strategy to delay the proceedings.[24] To avoid those disadvantages, the Model Law provides in its article 16(3) that a partial affirmative award on jurisdiction may be revised on parties’ request within thirty days after the reception of the award notification and the decision cannot be appealed.[25]

Moreover, if some arbitration status require that an award should settle a matter on the substance of the dispute, procedural questions should not be automatically be excluded from the award’s qualification.[26] A particularly interesting example are preliminary rulings on jurisdiction, whether they are negative or affirmative, due to their consequences on the parties’ rights and on the arbitral proceedings, an immediate recourse against them should be possible.[27] Otherwise they constitute a risk for parties to spent time and money in vain, or being deprive from any recourse.[28] However, some jurisdiction refuse to consider them as award because they leave unresolved all the substantive claims.[29] For those jurisdictions even if they can end the arbitration the aggrieved party can pursue its claim before other jurisdictions.[30]

Default awards

A party may refuse to participate in the arbitration proceedings. If the defaulting party was properly invited to attend the arbitration and has the opportunity to present its case, then the requirements of due process and equal treatment will be respected, and the arbitral tribunal can make a valid default award.[31]

Contrary to summary judgements which are automatically in favour of the party which is present in the proceedings, in default awards, the arbitral tribunal “cannot blindly accept the submissions of the participating party”.[32] On the contrary the tribunal must test its evidences and assertions, hence the award will need to be motivated and some claims against the defaulting party may be rejected.[33]

Procedural orders and provisional measures

Procedural orders are purely procedural or administrative decisions, they do not deal with substantive issues and they can be modified or set aside during the arbitration process.[34] Seen as procedural steps, those orders can be about the hearing of witnesses, the language or the production of documents.[35] It is because they do not resolve directly the dispute that they are unanimously not considered as an award, even if they may have an impact on the merits.[36]

Regarding provisional measures, there is a controversy to determine if they must be considered as awards or not.[37] They do not settle a matter permanently and do not terminate the arbitral proceedings, hence they can be overturned by the arbitral tribunal in the last award.[38] Therefore, those decisions contravene one of the essential elements of an arbitral award which is it must be final. Nonetheless, those measures answer to a need, which is to prevent one party to hide assets for example.[39]

Some countries like Australia will deny the qualification of award to interim measures which means refuse its recognition and enforcement.[40] The ground of this point of view is that those decisions “may be rescinded, suspended, varied or reopened by the tribunal which pronounced”, therefore they do not decide on an issue finally.[41] However, such decisions can have impact on the parties’ rights and on the outcome of the case that is the reason why where appropriate they should be subject to annulment or recognition.[42] Otherwise it would call into question the efficiency of the arbitration process.[43] In that sense the US District Court for the Southern District of New York confirmed an interim measure because “it is an end in itself, for its very purpose is to clarify the parties’ rights in the ‘interim’ period pending a final decision on the merit”.[44] This approach is shared by many countries.[45]

Consent awards

Another confusing category of award is consent awards. During the arbitration process, parties may reach an agreement and settle their dispute by themselves.[46] However, instead of formalizing their agreement by a contract they can request to the arbitral tribunal to record their settlement as a consent award to benefit from the New York Convention enforcement and recognition procedure.[47]

If consent awards are expressly allowed under many arbitrations statutes or institutional rules, one may wonder whether they really can be identified as tribunal arbitral awards.[48] Indeed, if arbitrators just rubber stamp parties’ agreement without drafting or adding anything it goes against the function of the arbitral tribunal which is to resolve the dispute.[49] By admitting that a consent awards “has the same status and effect as any other award on the merits of the case” it allows parties to benefit from the New York convention without having to go through the arbitration process.[50]

It also questions the power of the arbitral tribunal to refuse to make a consent award. Parties should not be able to force the tribunal to exercise its own authority to approve that settlement particularly when it disagrees with the agreement’s provisions or if it violate the law.[51] This is certainly the reason why the Model Law provides consent award can be made if “not objected to by the arbitral tribunal”.[52]

Awards on costs

The arbitral tribunal has to determine the costs of arbitration in the award in accordance with the arbitration agreement, the applicable procedural rules and the lex arbtri.[53] The term ‘Costs follow the event’ designate a practice widely shared in arbitration which ensure that the unsuccessful party will bear the cost of the arbitration.[54] However, this principle is not recognised in all jurisdictions, hence the decision on costs can be contested by one party and lead to the challenge of the award. This is what happened in the Luzon Hydro Corporation v Baybay and Transfield Philippines Inc decision, made by the Philippines Court of Appeals.[55] The court set aside an award in which the arbitrators applied this principle on the ground that “a litigant cannot be penalised for exercising its right to litigate”.[56]

This nomenclature shows that a lot of decisions are issued by arbitral tribunals whether they are not always considered as awards by arbitral tribunals themselves or national jurisdictions. It demonstrates how important a definition of an arbitral award is because it is the source of parties’ rights.

The need to protect predictability without jeopardize arbitration flexibility and party autonomy

To try to mitigate confusions and uncertainty a potential definition of an arbitral award could be necessary, with a certain margin of appreciation left to the arbitral tribunal or national jurisdictions to not affect the benefits of arbitration.

The fact that the award should be written and signed by the arbitrators is widely shared by arbitration rules or status.[57]

Regarding the motivation of the award, most arbitration rules state that parties may agree to dispense the arbitral tribunal from giving reasons.[58] Moreover, the standard of reasoning should not be the same in arbitration and before a national court.[59] Indeed, arbitrators do not need “to make a detailed analysis of the law, they need only summarise the arguments and express their conclusion in an intelligible manner”.[60]

Furthermore, the fact that a decision seems to breach one ground to refuse recognition of an award under the New York Convention should not in itself avoid its qualification as an award. Indeed, article V precise that an “award may be refused”, a contrario it means that it can also be enforced by a state.[61]

Arbitration as it is flexible allows parties to adapt the dispute resolution process to their needs. Therefore, it would not be an advantage to try to set strict definition of an award. A margin of appreciation needs to be left to parties, arbitral tribunal and nationals’ jurisdictions. Thereon, the judgment of the English Court in 2019 has a particularly interesting reasoning.[62] If the label put on the decision by the arbitrators should be an indication of the nature of the decision, the English Court reminds us that the form does not prevail over the substance.[63] It is through a bundle of clues that a court must determine the nature of the decision, and if necessary, “consider how a reasonable recipient of the tribunal’s decision would have viewed it”.[64] The nature of the issue settled and its consequences on parties’ substantive rights and liabilities are essential.[65]

Therefore, the qualification of an arbitral award must be carried out on a case-by-case basis, taking into account parties’ interests.

Conclusion

It is difficult to pretend to an uniform definition of an arbitral award when the arbitration rule and practices around the world are very different. However, it may be interesting to determine a global framework. A legitimate tool, like the New York Convention which is widely accepted could be the perfect instrument. If some characteristics should be mandatory, the definition should not be too precise to respect parties’ autonomy and the flexibility of arbitration. It would provide a framework that would be useful for arbitrators and reduce parties’ legal uncertainty, without affecting the power of states to legislate.

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Footnotes :

[1] Simon Greenberg, Christopher Kee and J. Romesh Weeramantry, International commercial arbitration An asia Pacific perspective (1st edn Cambridge University Press 2011) para 9.2.

[2] ibid para 9.2.

[3] Gary B. Born, International Commercial Arbitration (2nd edn Kluwer Law International 2014) 2898; Greenberg, Kee and Weeramantry (n 1) para 9.1.

[4] Greenberg, Kee and Weeramantry (n 1) para 8.28.

[5] Born (n 3) 2898; Fouchard, Gaillard and Goldman, International Commercial Arbitration (1st edn Kluwer law international 1999) para 1351.

[6] Greenberg, Kee and Weeramantry (n 1) para 9.14; Alexis Mourre, “Judicial penalties and specific performance in international Arbitration” in Filip J.M De Ly and Laurent Lévy, Auxiliary and alternative remedies in International arbitration (1st edn Dossiers of the ICC institute of World Business law Volume 5 Kluwer law international 2008) 62; Born (n 3) 2903.

[7] Convention on the Recognition and Enforcement of Foreign Arbitral Awards (adopted 10 June 1958, entered into force 7 June 1959) 330 UNTS 38 (New York Convention); Born (n 3) 68.

[8] Dirk De Meulemeester and Paul Lefebvre, “The New York Convention: An Autopsy of its structure and modus operandi” (2018) Journal of International Arbitration 413.

[9] Born (n 3) 79.

[10] ibid 80.

[11] De Meulemeester and Lefebvre (n 8) 413.

[12] Blackaby Nigel, Constantine Partasides, Alan Redfern and al., Redfern and Hunter on International Arbitration (6th edn Kluwer Law International Oxford University Press 2015) 502; Fouchard, Gaillard and Goldman (n 5) para 1350.

[13] Convention on the Recognition and Enforcement of Foreign Arbitral Awards (adopted 10 June 1958, entered into force 7 June 1959) 330 UNTS 38 (New York Convention) art I.2.

[14] Blackaby Nigel, Constantine Partasides, Alan Redfern and al., Redfern and Hunter on International Arbitration (6th edn Kluwer Law International Oxford University Press 2015) 503; Greenberg, Kee and Weeramantry (n 1) para 8.34, 8.44; Fouchard, Gaillard and Goldman (n 5) para 1353.

[15] Greenberg, Kee and Weeramantry (n 1) para 8.34, 8.44.

[16] Nigel, Partasides, Redfern and al. (n 14) 501-502.

[17] Greenberg, Kee and Weeramantry (n 1) para 8.44; Fouchard, Gaillard and Goldman (n 5) para 1352.

[18] UNCITRAL Model Law on International Commercial Arbitration (adopted in 1985 with amendments as adopted in 2006) UN Doc A/40/17 art 17H; New Zealand Arbitration Act 1996 art 32(1) <http://www.legislation.govt.nz/act/public/1996/0099/latest/DLM1075876.html> accessed 13 January 2020; Fouchard, Gaillard and Goldman (n 5) para 8.53.

[19] Fouchard, Gaillard and Goldman (n 5) para 1359-1360; Greenberg, Kee and Weeramantry (n 1) para 8.53-8.55.

[20] ibid para 1359-1360; para 8.53-8.55.

[21] Fouchard, Gaillard and Goldman (n 5) para 1360-1361.

[22] Fouchard, Gaillard and Goldman (n 5) para 1362; Nigel, Partasides, Redfern and al. (n 14) 508.

[23] Arbitration Law of the People’s Republic of China art 55 <https://www.wipo.int/edocs/lexdocs/laws/en/cn/cn138en.pdf?crazycache=1> accessed 13 January 2020; Fouchard, Gaillard and Goldman (n 5) para 1362; Nigel, Partasides, Redfern and al. (n 14) 508.

[24] Nigel, Partasides, Redfern and al. (n 14) 509-510.

[25] UNCITRAL Model Law on International Commercial Arbitration (adopted in 1985 with amendments as adopted in 2006) UN Doc A/40/17 art 17H; New Zealand Arbitration Act 1996 art 16(3) <http://www.legislation.govt.nz/act/public/1996/0099/latest/DLM1075876.html> accessed 13 January 2020.

[26] Malaysian Arbitration Act 2005 Art 2(1) “award” means a decision of the arbitral tribunal on the substance of the dispute and includes any final, interim or partial award and any award on costs or interest but does not include interlocutory orders” <http://www.agc.gov.my/agcportal/uploads/files/Publications/LOM/EN/Act%20646%20-%20Arbitration%20Act%202005.pdf> accessed 13 January 2020; Singapore International Arbitration Act 2012 art 2(1) <https://sso.agc.gov.sg/Act/IAA1994#pr19-> accessed 13 January 2020; New Zealand Arbitration Act 1996 art 2(1) <http://www.legislation.govt.nz/act/public/1996/0099/latest/DLM403282.html> accessed 13 January 2020; Lawrence Boo, “Ruling on Arbitral Jurisdiction — Is that an Award?” (2007) Volume 3/Issue 2 Asian International Arbitration Journal, Singapore International Arbitration Centre in co-operation with Kluwer Law International 134.

[27] Boo (n 26) 133.

[28] ibid 140.

[29] PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA [2007] Singapore Court of Appeal cited in Boo (n 26) 135, 141.

[30] ibid 135, 141.

[31] Hainan Machinery Import and Export Corporation v Donald & McArthy, Singapore High Court. (29 September 1995) in Yearbook Commercial arbitration [1997] Volume XXII Van den Berg edn 771; Fouchard, Gaillard and Goldman (n 5) para 1363; Greenberg, Kee and Weeramantry (n 1) para 8.67; Nigel, Partasides, Redfern and al. (n 14) 512; Born (n 3) 3027.

[32] Greenberg, Kee and Weeramantry (n 1) para 8.68; Nigel, Partasides, Redfern and al. (n 14) para 9.30.

[33] ibid para 8.68; para 9.30.

[34] Born (n 3) 2927, 2929; Moreau with the collaboration of Glucksmann and Feng (n 20) para 239.

[35] Fouchard, Gaillard and Goldman (n 6) para 1355; Moreau with the collaboration of Glucksmann and Feng (n 20) para 239.

[36] Fouchard, Gaillard and Goldman (n 6) para 1355; Born (n 1) 2928; Greenberg, Kee and Weeramantry (n 9) para 8.28; Bertrand Moreau with the collaboration of Eloïse Glucksmann and Pierre Feng “International arbitration” [2016 updated in 2019] Dalloz Répertoire de procédure civile para 239 (Bertrand Moreau avec la collaboration d’Eloïse Glucksmann et de Pierre Feng “Arbitrage international”, Dalloz Répertoire de procédure civile, juin 2016 actualisation juillet 2019 §239).

[37] Born (n 3) 2934.

[38] Greenberg, Kee and Weeramantry (n 1) para 8.56; Fouchard, Gaillard and Goldman (n 5) para 1359.

[39] Hans-Patrick Schroeder, “Mareva Injunctions and Freezing Orders in International Commercial Arbitration” (2004) Volume 2/issue 1 German Arbitration Journal in Jörg Risse, Guenter Pickrahn, et al. edn, Kluwer Law International 26.

[40] Resort Condominiums International Inc v Resort Comdominums Australasia Pty Ltd and Ray Bolwell [29 October 1993] The Supreme Court of Queensland, Australia in Yearbook Commercial arbitration [1995] Volume XX Van den Berg edn 629; Western Technology Services international Inc and Sociedad Chilena Cauchos Industriales v SA (Cainsa) Rol 5468-2009 [11 May 2010] The Supreme Court of Chile in Investment and Commercial Arbitration Review (Sentencia de la Corte Suprema (Rol-5468-2009), de 11 de mayo de 2010, Western Technology Services international Inc and Sociedad Chilena Cauchos Industriales v SA (Cainsa) en la Revista de Arbitraje Comercial y de Inversiones); Greenberg, Kee and Weeramantry (n 9) para 8.60; Álvaro López de Argumedo Piñeiro, “Recognition and enforcement in Spain of judicial and arbitration provisional measures in support of a Foreign Arbitration Procedure: Regulation 1215/2012, International Legal Cooperation Law and New York Convention” [2019] Volume 2019/Issue 34 Spain Arbitration Review Spanish Arbitration Club Wolters Kluwer España 19 (Álvaro López de Argumedo Piñeiro, “Reconocimiento y ejecución en España de medidas cautelares judiciales y arbitrales en apoyo de un Procedimiento Arbitral Extranjero: Reglamento 1215/2012, Ley de Cooperación Jurídica Internacional y Convenio de Nueva York” [2019] Revista del Club Español del Arbitraje, (Club Español del Arbitraje, Wolters Kluwer España, Volume 2019 Issue 34) p.19).

[41] Resort Condominiums International Inc v Resort Comdominums Australasia Pty Ltd and Ray Bolwell [29 October 1993] The Supreme Court of Queensland, Australia in Yearbook Commercial arbitration [1995] Volume XX Van den Berg edn 629.

[42] Born (n 3) 2935; Schroeder (n 39) 26.

[43] Greenberg, Kee and Weeramantry (n 1) para 8.61.

[44] Southern Seas Nav Ltd v Petroleos Mexicanos of Mexico City [1985] US District Court for the Southern District of New York 606 F Supp 695 cited in Greenberg, Kee and Weeramantry (n 9) para 8.62.

[45] UNCITRAL Model Law on International Commercial Arbitration (adopted in 1985 with amendments as adopted in 2006) UN Doc A/40/17 art 17H; New Zealand Arbitration Act 1996 art 17L <http://www.legislation.govt.nz/act/public/1996/0099/latest/DLM1075876.html> accessed 13 January 2020; Zivilprozessordnung §1041(2) <https://www.gesetze-im-internet.de/englisch_zpo/englisch_zpo.html> accessed 13 January 2020; English Arbitration Act 1996 section 42 <http://www.legislation.gov.uk/ukpga/1996/23/section/42> accessed 13 January 2020.

[46] Fouchard, Gaillard and Goldman (n 5) para 1364; Greenberg, Kee and Weeramantry (n 1) para 8.64; Born (n 3) 3022.

[47] ibid para 1364; para 8.64; 3022.

[48] Arbitration Law of the People’s Republic of China art 49 <https://www.wipo.int/edocs/lexdocs/laws/en/cn/cn138en.pdf?crazycache=1> accessed 13 January 2020; UNCITRAL Model Law on International Commercial Arbitration (adopted in 1985 with amendments as adopted in 2006) UN Doc A/40/17 art 30; Singapore International Arbitration Act 2012 §18 <https://sso.agc.gov.sg/Act/IAA1994#pr18-> accessed 13 January 2020; China International Economic and Trade Arbitration Commission (CIETAC) arbitration rule art 47 <http://www.cietac.org/index.php?m=Page&a=index&id=106&l=en> accessed 13 January 2020; The 2018 Hong Kong International Arbitration Centre Administered Arbitration Rules art 37.2(a) <https://www.hkiac.org/arbitration/rules-practice-notes/administered-arbitration-rules/hkiac-administered-2018-2#37> accessed 13 January 2020.

[49] Fouchard, Gaillard and Goldman (n 5) para 1366.

[50] UNCITRAL Model Law on International Commercial Arbitration (adopted in 1985 with amendments as adopted in 2006) UN Doc A/40/17 art 30(2).

[51] Born (n 3) 3024.

[52] UNCITRAL Model Law on International Commercial Arbitration (adopted in 1985 with amendments as adopted in 2006) UN Doc A/40/17 art 30(1).

[53] Greenberg, Kee and Weeramantry (n 1) para 8.78.

[54] ibid para 8.86.

[55] Luzon Hydro Corporation v Baybay and Transfield Philippines Inc, [2004] 4 S.L.R. 705 (HC).

[56] Greenberg, Kee and Weeramantry (n 1) para 8.87.

[57] UNCITRAL Model Law on International Commercial Arbitration (adopted in 1985 with amendments as adopted in 2006) UN Doc A/40/17 art 34; The 2018 Hong Kong International Arbitration Centre Administered Arbitration Rules art 35 <https://www.hkiac.org/arbitration/rules-practice-notes/administered-arbitration-rules/hkiac-administered-2018-2#37> accessed 13 January 2020; Singapore International Arbitration Act 2012 art 31(1) <https://sso.agc.gov.sg/Act/IAA1994#pr18-> accessed 13 January 2020.

[58] Arbitration Law of the People’s Republic of China art 54 <https://www.wipo.int/edocs/lexdocs/laws/en/cn/cn138en.pdf?crazycache=1> accessed 13 January 2020; The 2018 Hong Kong International Arbitration Centre Administered Arbitration Rules art 35.4 <https://www.hkiac.org/arbitration/rules-practice-notes/administered-arbitration-rules/hkiac-administered-2018-2#37> accessed 13 January 2020; China International Economic and Trade Arbitration Commission (CIETAC) Arbitration Rules art 49.3 <http://www.cietac.org/index.php?m=Page&a=index&id=106&l=en> accessed 13 January 2020; Singapore International Arbitration Act 2012 art 31(2) <https://sso.agc.gov.sg/Act/IAA1994#pr18-> accessed 13 January 2020.

[59] BHP Billiton Ltd v Oil Basins Ltd [2006] VSC 402 Victorian Supreme Court on the contrary regarding a domestic award the court stated that “arbitrators were under a duty to give reasons of a standard which was equivalent to the reasons to be expected from a judge deciding a commercial case”. The decision was confirmed by the Victorian Court of Appeal in Oil Basins Ltd v BHP Billiton Ltd [2007] VSCA 255 cited in Greenberg, Kee and Weeramantry (n 1) para 8.15-8.16.

[60] Greenberg, Kee and Weeramantry (n 1) para 8.17.

[61] Convention on the Recognition and Enforcement of Foreign Arbitral Awards (adopted 10 June 1958, entered into force 7 June 1959) 330 UNTS 38 (New York Convention) art V.

[62] ZCCM Investment Holdings plc v Kansanshi Holdings Plc [2019] EWHC 1285 (Comm).

[63] ibid para 40 a); Boo (n 26) 135.

[64] ibid para 40 e).

[65] ibid para 40 c).