Archive for September, 2015

No, it isn’t.  This is not a Note of Proposed Findings; it’s a note about the Note.  I’d better call it the NPF hereinafter.  It’s probably not best to have finished the last sentence with a preposition – if preposition it is – be it never so long but, as I often quote, “the moving finger writes and having writ moves on; nor all your piety nor wit can lure it back to cancel half a line, nor all your tears wash out one word of it” [the Rubaiyat of Omar Khayyam].

That’s especially true of Arbitral Awards, which is why I have a disinterested friend – in confidence of course – read mine before they are published to the Parties.  But perhaps it is literally true when the keyboard is replaced with a touchscreen.  Did Omar Khayyam anticipate the age of the tablet and smartphone when he wrote the verse?

Be that as it may, the NPF originated in the practice of Scottish arbitration.  When Parties desired to have an arbitration award that could be reviewed by the Court, they could ask for the award to be made in the form of a case stated for consideration.  It was helpful if the arbitrator or arbitrators produced an NPF so that Parties could ask for the award to take that due form.

A useful feature of the NPF was that it enabled a party to correct any mistaken impression of the evidence or argument.  Not that if drafted with care it would allow aspects of the matter to be reheard.

There seems to be no legal reason why an arbitrator should use the NPF more widely in most jurisdictions.  I suggest that it could be especially useful where one Party, perhaps tactically or through lack of understanding, has absented itself from the process and the Arbitrator has been appointed by default.  After all the details the recalcitrant or ill-advised Party will have been given, the NPF will become a final warning that absence will have consequences.

Some may object that an NPF would be giving a recalcitrant Party a second bite of the cherry and that would be unfair to the participating Party.  Arbitration isn’t a Court, however, where he who plays the better game wins.  Of course, in Court a Default Judgment may be overturned if an Appeal is successful.  Arbitration, however, is the product of an agreement in which one implication is that both parties intend the arbitrator or arbitrators to find the right solution to their mutual problem.  The Award, once written, is final, it might as well be carved in stone.  In the premises, what can be wrong with giving that absentee one last chance to say his piece before the die is cast – and the metaphor well and truly mixed?

It’s not a situation with which I have had to deal, but I would expect to consider a reasoned application before permitting the absentee to present evidence and argument.  That evidence and argument would be confined to that needed to deal with the NPF.  The compliant Party would be entitled to a rejoinder before the Award was made.

There is a possibility that a late Counterclaim might arise.  I don’t think that should delay the Award, which could be a Partial Award, final as to the matters with which it deals.  Directions for disposing of the Counterclaim could be added to the Partial Award.  I think that a Dispositive section in the Partial Award could well be so separated that it was clear what had been decided finally and what remains to be settled.

In an International context, I think it might be as well to give directions for settling the late counterclaimed matters in a separate document.  The Partial Award would then be final for the purposes of the New York Convention 1958 [http://www.hartwell.pwp.blueyonder.co.uk/ nyc_text.htm] of which Article V.1(e) provides, inter alia, that:

  1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that:

. . .

(e) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

The first subclause of this provision is the basis for the assertion that an interim decision will not be legally enforced but it should be noted a) that the burden of proof is upon the party against whom recognition and enforcement of an Award is invoked and b) that even then the word “may” suggests that the Court has to be satisfied that its discretion should be exercised.  The curious wording of the Article is worthy of attention.  Scholars argue the distinction between recognition and enforcement, but I think it noteworthy that the Convention uses the singular phrases “it is” and “is sought”, denoting the two as a singular practical concept.

My argument is that, in the context of arbitration – or, for that matter, adjudication or expertise – it remains perfectly proper for the decision-maker to say to the Parties, and particularly any absentee, “On the basis of what you have told me I am minded to find thus and so”, making it clear that his or her mind remains open and flexible.  The NPF is a formal representation of that principle.

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