'International Practice' Returns: Unreason in Reasoned Awards (Web)
September 2, 2009
BY ADAM SAMUEL
The author is an attorney and a barrister in London. He is a neutral and is on the panels of the World Intellectual Property Organization and Hong Kong International Arbitration Centre. His website is www.adamsamuel.com.
Half a century ago, it was quite common in Anglo-U.S. arbitrations for arbitrators to issue unreasoned awards. There are some areas of U.S. arbitration where this is still common.
In England, the practice arose in the 1970s of producing reasons that were not part of the award so that the parties could see why they had lost without being able to attack the decision in court for errors contained in it.
On both sides of the Atlantic, the belief reasonably grew that issuing an unreasoned decision was unsatisfactory in many situations. The parties were entitled to know why the arbitrator had reached his or her decision. In addition, there was the belief that expressing reasons helped the decision-maker to ensure that the result was coherent and related to the evidence heard.
Since the mid-1970s, there has been a huge increase in the number of awards published and a number of organizations routinely post on their websites full, reasoned decisions. With reduced levels of merits review around the world, these publications have become the caselaw for the fields that they cover.
This increased transparency has brought temptations for arbitrators. Back in the 1970s, Cedric Barclay, an England-based maritime arbitrator, was complaining that awards, often written by the arbitrator’s assistant, were tracing Swiss law back to William Tell. Perhaps, as a result, awards have become a little less like essays--although one arbitrator turned three of his awards into a mind-numbing book in the 1980s.
The widespread publication of decisions creates informal systems of precedent, and as with the judiciary, increasing temptations for arbitrators to lay down key principles of law. Sometimes this is unavoidable. It can be desirable just to set a clear path for other practitioners to see what is going on.
Nevertheless, there is a tendency in a number of awards to lay down “grand” and unnecessary principles for dealing with certain types of case, which actually restrict unnecessarily the freedom of other arbitrators to reach sensible decisions without going through the analysis laid down in the earlier decision.
Arbitrators need to return to first “judging” principles. They should resist the temptation to decide points that are not necessary for the decision while not dodging those that are. A grand statement based on submissions that have never been made to the tribunal should be avoided. The arbitrator can never be aware of a fact-pattern that might make nonsense of his or her statement of principle. In this way, the key issues will be decided on appropriate facts and the pattern of caselaw will be far more coherent.
Good awards consist of a presentation of the facts, the submissions, and the rules which need to be applied to the facts and the result. Anything more is almost invariably less.