Arbitral Agreements and Awards by Thomas Carbonneau Orlando Distinguished Professor, Penn State Law (Canadian law references supplied by Frédéric Bachand,

Finality of Arbitral Awards Advantage of arbitration: highly restrained appeal Advantage of arbitration: highly restrained appeal Contemporary statutory regulation have curtailed arbitral review: Contemporary statutory regulation have curtailed arbitral review: –UNCITRAL Model Law on ICA –New York Arbitration Convention –U.S. Arbitration Act (FAA) –French law on arbitration –1996 UK Arbitration Act

Little enthusiasm among States for aggressive policing of awards Little enthusiasm among States for aggressive policing of awards Decisional sovereignty of arbitrator is well- established Decisional sovereignty of arbitrator is well- established Arbitrator also controls the arbitral procedure Arbitrator also controls the arbitral procedure Arbitrator is sovereign as to construction of contract and arbitration agreement Arbitrator is sovereign as to construction of contract and arbitration agreement Courts only decide whether arbitration agreement exists Courts only decide whether arbitration agreement exists

Basis for Judicial Supervision Bribery or corruption Bribery or corruption Failure to disclose conflicts of interest Failure to disclose conflicts of interest Fundamental procedural unfairness Fundamental procedural unfairness Excess of authority Excess of authority Failure to follow the agreement Failure to follow the agreement

Manifest Disregard of the Law Hall Street Associates v. Mattel Hall Street Associates v. Mattel Allows court to vacate award for alleged error of law Allows court to vacate award for alleged error of law Arose in Wilko v. Swan (collective bargaining arbitration) Arose in Wilko v. Swan (collective bargaining arbitration) Imported into statutory law (FAA s. 10) Imported into statutory law (FAA s. 10) Conflicts with statutory rationale Conflicts with statutory rationale Allows courts to disagree with arbitrator’s reasoning Allows courts to disagree with arbitrator’s reasoning

Correction of Awards Evident mistakes, apparent on the face of award Evident mistakes, apparent on the face of award Action to clarify awards Action to clarify awards Court-dictated order to the arbitral tribunal Court-dictated order to the arbitral tribunal Party-requested clarification Party-requested clarification Post-rendition appeal Post-rendition appeal Imposition of damages to sanction frivolous appeal (11 th Cir.) Imposition of damages to sanction frivolous appeal (11 th Cir.)

USSC – too much litigation about arbitration USSC – too much litigation about arbitration Federal policy to never decide against arbitration Federal policy to never decide against arbitration Challenge to adversarial representation Challenge to adversarial representation

Judicial Policy Similar in the U.S. and Canada Similar in the U.S. and Canada –U.S.: Moses Cone, Keating, Byrd –Canada: Dell v. Union des Consommateurs –Desputeaux v. Editions Chouette Freedom of Contract is controlling legal principle Freedom of Contract is controlling legal principle –U.S.: Volt Info. Sciences –Canada: La Laurentienne-vie v. L’Empire

Arbitrator determinations are essentially sovereign (The Gazette v. Blondin) Arbitrator determinations are essentially sovereign (The Gazette v. Blondin) Even erroneous application of law will not entail nullificiation (Desputeaux, Gingras v. Entreprises FGS Inc) Even erroneous application of law will not entail nullificiation (Desputeaux, Gingras v. Entreprises FGS Inc) Action to set aside award must be filed within 3 month period (Standard Life v. Fagan) Action to set aside award must be filed within 3 month period (Standard Life v. Fagan)

Pitfalls – Agreement Clarity Clarity Complexity Complexity Expression of party intent Expression of party intent Pathological Provisions Pathological Provisions Agreements must be “implementable” Agreements must be “implementable” How much detail should there be? How much detail should there be? Use of standard clauses Use of standard clauses Brief and clear expression of intent Brief and clear expression of intent Other pitfalls Other pitfalls

Pitfalls - Proceedings Who is in charge? Who is in charge? Damages allowed Damages allowed Kaplan and kompetenz-kompentenz Kaplan and kompetenz-kompentenz Use of experts Use of experts Discovery Discovery Cross-examination Cross-examination Time Limits Time Limits Trust arbitrators? Trust arbitrators? Trust administrators? Trust administrators?

Pitfalls – Awards Reasons? Reasons? Party Consultation? Party Consultation? Type of Relief? Type of Relief? Deadlines and time-limits Deadlines and time-limits Place of enforcement Place of enforcement

Arbitration Agreements Writing Writing Final and binding process (Zodiak v. Polish People’s Republic) Final and binding process (Zodiak v. Polish People’s Republic) Liberal construction (Laurentienne –vie v. Empire) Liberal construction (Laurentienne –vie v. Empire) Few subject matter constraints (even bankruptcy) Few subject matter constraints (even bankruptcy) Consumer and adhesion contracts (Dell) Consumer and adhesion contracts (Dell)

Agreement re Arbitrators Independent and Impartial Independent and Impartial Neutrality (US: Commonwealth Coatings; Canada: Desbois v. Industries A.C. Davie) Neutrality (US: Commonwealth Coatings; Canada: Desbois v. Industries A.C. Davie) Judicial immunity of arbitrators Judicial immunity of arbitrators No arbitrator malpractice (AAA arbitration rules, Zittrer v. Sport Maska Inc) No arbitrator malpractice (AAA arbitration rules, Zittrer v. Sport Maska Inc) Party discretion controls selection of arbitrators and character of proceedings Party discretion controls selection of arbitrators and character of proceedings

General Points Need for judicial support and cooperation Need for judicial support and cooperation Provision for internal arbitral appeal Provision for internal arbitral appeal Selection of arbitrators is critical Selection of arbitrators is critical Market vs. statist arbitration Market vs. statist arbitration Adhesionary Arbitration Adhesionary Arbitration Congressional partisan hostility to arbitration Congressional partisan hostility to arbitration