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American Review of International Arbitration - ARIA - Vol. 15 No. 1 2004
American Review of International Arbitration - ARIA - (U.S. Price)
American Review of International Arbitration - ARIA (International Price)
ARIA Vol. 15 No. 1 2004
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I. INTRODUCTION
Just as is true with the remainder of humankind, it would seem obvious that
arbitrators are sometimes fallible and sometimes make mistakes. Commentators
and the courts both nonetheless prefer to remind their readerships of that fact with
varying degrees of emphasis.1 The fact of this fallibility is established in numerous
court decisions finding or noting the occurrence of arbitral error,2 and essentially is acknowledged in the various institutional arbitration procedures that allow an
arbitral tribunal, upon a timely request by a party, to correct errors in an arbitral
award that are clerical, mathematical or computational in nature.3 Yet those same
rules, with one limited exception,4 fail to acknowledge that other unintentional
errors that concern objective matters, but which cannot be described as merely
clerical, mathematical or computational, are bound to occur from time to time; just
as arbitrators occasionally inject “ministerial” errors into their awards, arbitrators
are bound, periodically, to commit unintentional, substantive errors relating to the
correct operation and application of clearly established law, or the nature of
objective evidence in the record. Thus, and while the various institutions that
promulgate rules governing arbitrations in both international and domestic
commercial arbitrations5 have engaged in meaningful and deliberate efforts to
revise those rules to accommodate evolving perspectives and concerns relating to
commercial arbitration, none of the most widely utilized rules have yet to be
amended to provide for a formal procedure that would allow a party to request an
arbitral tribunal to correct an unintended error in the actual “reasoning” of a
reasoned arbitration award even when it is clear that the tribunal erroneously
interpreted objective evidence or clearly established law. 6 The predictable result is
that in an unknown number of instances the final arbitration award provides for a
result that was not knowingly intended by the tribunal, and which the tribunal
I. Introduction
II. Unintended Misstatements of Law and Fact in Arbitral Awards
A. The Issuance of Reasoned Awards Under Institutional Rules
B. The Nature of Potential Unintended Misstatements of Law or Fact
in Reasoned Awards
1. Arbitral Errors in Interpreting Applicable Law
2. Arbitral Errors Relating to Objective Evidence
III. International and Domestic Arbitration Procedures and the Absence of
a Right to Request the Arbitral Tribunal to Reconsider a Reasoned
Award
A. The Absence of a Right to Request an Arbitral Tribunal to Reconsider
a Reasoned Award in International Commercial Arbitrations
B. The Absence of a Right to Request an Arbitral Tribunal to Reconsider
a Reasoned Award in Domestic Commercial Arbitrations
IV. The Limited Ability of Courts to Remedy Inadvertent Substantive
Errors in Reasoned Awards
A. The Limited Ability of American Courts to Remedy Inadvertent
Substantive Errors in a Reasoned Domestic Award
1. Sections 10 and 11 of the Federal Arbitration Act
2. The Application of Section 11 of the FAA, and Relief
From Inadvertent Errors in the Application of Objective
Evidence
3. Relief from Inadvertent Errors in the Application of Law—
“Manifest Disregard of the Law”
4. Other “Common-Law” Exceptions to the Enforcement of
Domestic Awards
B. The Limited Ability of Courts to Remedy Inadvertent Substantive
Errors in the Reasoning of an International Arbitration Award
1. The Limited Opportunity to Obtain Vacatur of an International
Award
2. The Limited Grounds for Resisting the Recognition and
Enforcement of a Foreign Arbitral Award Containing Substantive
Errors in the Interpretation of the Governing Law or Relevant
Facts
a. The risk of recognition and enforcement of an annulled
award
b. The public policy exception to the recognition
and enforcement of foreign awards
V. Policy Considerations Relating to Whether Institutional Arbitration Rules
Should be Revised to Provide for a Limited Opportunity for Arbitral
Rehearing
A. The “Finality” of Arbitral Awards, and the Functus Officio
Doctrine
B. The Efficient Resolution of the Parties’ Dispute
VI. A Proposal for an Arbitration Procedure Providing for a Limited
Opportunity to Seek Arbitral Rehearing on Reasoned Awards
James M. Gaitis -Tucson, Arizona. BA, University of Notre Dame; JD, University of Iowa; Fellow,
College of Commercial Arbitrators; Fellow and Chartered Arbitrator, Chartered Institute
of Chartered Arbitrators. The author is a professional arbitrator who serves primarily in
complex oil & gas and commercial arbitrations. He is a member of the CPR Institute for
Dispute Resolution’s Oil & Gas Panel, the American Arbitration Association’s National
Energy Panel and National Roster of Neutrals, and the National Arbitration Forum’s Panel
of Arbitrators.
