Arbitral Agreements and AwardsArbitral Agreements and Awardsby Thomas Carbonneauby Thomas CarbonneauOrlando Distinguished Professor, Orlando Distinguished Professor, Penn State LawPenn State Law

(Canadian law references (Canadian law references supplied by Frédéric supplied by Frédéric Bachand,Bachand,www.mcgill.ca/arbitration/www.mcgill.ca/arbitration/law)law)

Finality of Arbitral Finality of Arbitral AwardsAwards Advantage of arbitration: highly Advantage of arbitration: highly

restrained appealrestrained appeal Contemporary statutory regulation Contemporary statutory regulation

have curtailed arbitral review:have curtailed arbitral review:– UNCITRAL Model Law on ICAUNCITRAL Model Law on ICA– New York Arbitration ConventionNew York Arbitration Convention– U.S. Arbitration Act (FAA)U.S. Arbitration Act (FAA)– French law on arbitrationFrench law on arbitration– 1996 UK Arbitration Act1996 UK Arbitration Act

Little enthusiasm among States for Little enthusiasm among States for aggressive policing of awardsaggressive policing of awards

Decisional sovereignty of arbitrator is Decisional sovereignty of arbitrator is well-establishedwell-established

Arbitrator also controls the arbitral Arbitrator also controls the arbitral procedureprocedure

Arbitrator is sovereign as to construction Arbitrator is sovereign as to construction of contract and arbitration agreementof contract and arbitration agreement

Courts only decide whether arbitration Courts only decide whether arbitration agreement existsagreement exists

Basis for Judicial Basis for Judicial SupervisionSupervision Bribery or corruptionBribery or corruption Failure to disclose conflicts of Failure to disclose conflicts of

interestinterest Fundamental procedural Fundamental procedural

unfairnessunfairness Excess of authorityExcess of authority Failure to follow the agreementFailure to follow the agreement

Manifest Disregard of Manifest Disregard of the Lawthe Law Hall Street Associates v. MattelHall Street Associates v. Mattel Allows court to vacate award for Allows court to vacate award for

alleged error of lawalleged error of law Arose in Arose in Wilko v. Swan Wilko v. Swan (collective (collective

bargaining arbitration)bargaining arbitration) Imported into statutory law (FAA s. 10)Imported into statutory law (FAA s. 10) Conflicts with statutory rationaleConflicts with statutory rationale Allows courts to disagree with Allows courts to disagree with

arbitrator’s reasoningarbitrator’s reasoning

Correction of AwardsCorrection of Awards

Evident mistakes, apparent on the face Evident mistakes, apparent on the face of awardof award

Action to clarify awardsAction to clarify awards Court-dictated order to the arbitral Court-dictated order to the arbitral

tribunaltribunal Party-requested clarificationParty-requested clarification Post-rendition appealPost-rendition appeal Imposition of damages to sanction Imposition of damages to sanction

frivolous appeal (11frivolous appeal (11thth Cir.) Cir.)

USSC – too much litigation about USSC – too much litigation about arbitrationarbitration

Federal policy to never decide Federal policy to never decide against arbitrationagainst arbitration

Challenge to adversarial Challenge to adversarial representationrepresentation

Judicial PolicyJudicial Policy

Similar in the U.S. and CanadaSimilar in the U.S. and Canada– U.S.: U.S.: Moses Cone, Keating, ByrdMoses Cone, Keating, Byrd– Canada: Canada: Dell v. Union des Dell v. Union des

ConsommateursConsommateurs– Desputeaux v. Editions ChouetteDesputeaux v. Editions Chouette

Freedom of Contract is controlling Freedom of Contract is controlling legal principlelegal principle– U.S.: U.S.: Volt Info. SciencesVolt Info. Sciences– Canada: Canada: La Laurentienne-vie v. L’EmpireLa Laurentienne-vie v. L’Empire

Arbitrator determinations are Arbitrator determinations are essentially sovereign (essentially sovereign (The Gazette v. The Gazette v. Blondin)Blondin)

Even erroneous application of law will Even erroneous application of law will not entail nullificiation (not entail nullificiation (Desputeaux, Desputeaux, Gingras v. Entreprises FGS Inc)Gingras v. Entreprises FGS Inc)

Action to set aside award must be Action to set aside award must be filed within 3 month period (filed within 3 month period (Standard Standard Life v. Fagan)Life v. Fagan)

Pitfalls – Agreement Pitfalls – Agreement

ClarityClarity ComplexityComplexity Expression of party intentExpression of party intent Pathological ProvisionsPathological Provisions Agreements must be “implementable”Agreements must be “implementable” How much detail should there be?How much detail should there be? Use of standard clausesUse of standard clauses Brief and clear expression of intentBrief and clear expression of intent Other pitfallsOther pitfalls

Pitfalls - ProceedingsPitfalls - Proceedings

Who is in charge?Who is in charge? Damages allowedDamages allowed Kaplan and Kaplan and kompetenz-kompentenzkompetenz-kompentenz Use of expertsUse of experts DiscoveryDiscovery Cross-examinationCross-examination Time LimitsTime Limits Trust arbitrators?Trust arbitrators? Trust administrators?Trust administrators?

Pitfalls – Awards Pitfalls – Awards

Reasons?Reasons? Party Consultation?Party Consultation? Type of Relief?Type of Relief? Deadlines and time-limitsDeadlines and time-limits Place of enforcementPlace of enforcement

Arbitration Arbitration AgreementsAgreements WritingWriting Final and binding process (Final and binding process (Zodiak v. Zodiak v.

Polish People’s Republic)Polish People’s Republic) Liberal construction (Liberal construction (Laurentienne –vie Laurentienne –vie

v. Empire)v. Empire) Few subject matter constraints (even Few subject matter constraints (even

bankruptcy)bankruptcy) Consumer and adhesion contracts Consumer and adhesion contracts

((Dell)Dell)

Agreement re Agreement re ArbitratorsArbitrators Independent and ImpartialIndependent and Impartial Neutrality (US: Neutrality (US: Commonwealth Coatings; Commonwealth Coatings;

Canada: Canada: Desbois v. Industries A.C. Davie)Desbois v. Industries A.C. Davie) Judicial immunity of arbitratorsJudicial immunity of arbitrators No arbitrator malpractice (AAA arbitration No arbitrator malpractice (AAA arbitration

rules, rules, Zittrer v. Sport Maska Inc)Zittrer v. Sport Maska Inc) Party discretion controls selection of Party discretion controls selection of

arbitrators and character of proceedingsarbitrators and character of proceedings

General PointsGeneral Points

Need for judicial support and Need for judicial support and cooperationcooperation

Provision for internal arbitral appealProvision for internal arbitral appeal Selection of arbitrators is criticalSelection of arbitrators is critical Market vs. statist arbitrationMarket vs. statist arbitration Adhesionary ArbitrationAdhesionary Arbitration Congressional partisan hostility to Congressional partisan hostility to

arbitrationarbitration