The Olympics Chiles Arbitration Debacle, Part 4: When Is an Arbitral Award an Arbitral Award?
When is an arbitral award final?
Is it when the dispositive operative part is provided to the parties? Or is it later, when the signed and dated full-reasoned award is provided to the parties?
These inquiries appear to be an interesting question of first impression for the Swiss Federal Tribunal in the saga of the U.S. gymnast Jordan Chiles--Romanian gymnast Sabrina Maneca-Voinea--Romanian gymnast Ana Bărbosu bronze medal.
The drama has moved to the Swiss Federal Tribunal, where Chiles filed a Sept. 16 appeal. Romanian gymnast Maneca-Voinea filed an appeal on Aug. 27.
Chiles’ brief, in German, was made available in a Sept.16 press release. (Available at https://bwnews.pr/3MPsxq3.) That brief has been translated by a technology called DEEPL into English.
As a slight digression but possibly of interest, with respect to Maneca-Voinea, I made an Aug. 28 request to Maneca-Voinea’s lawyers to see if I could have a copy of their filing as it was not available on the Swiss Federal Tribunal website. They responded that day, stating, “We have received an information that your services were retained by the USA Gymnastics, Jordan Chiles and/or USOC. Before responding to your request, could you please disclose such important information?”
I immediately responded, stating,
The information that you have received is false. My services have not been retained by USA Gymnastics, Jordan Chiles, and/or USOC or any other entity or person such as CAS or IOC or FIG or any of the arbitrators on the arbitral tribunal. If you are given any information that I have been or am retained by anyone in this matter, please rest assured that information is false. That is true also for my co-authors on the [Aug. 12] commentary linked to in my [Aug. 19] commentary. I am copying them in here for good order’s sake and complete transparency. I hope that dispels any question in your mind. I retired from the arbitration practice when I became a law professor in 2000. I teach international and domestic arbitration and sometimes write articles or short commentaries like the one I linked to about topics in arbitration that interest me. At first I thought the four-second formalism on Jordan Chiles was absurd and that piqued my interest on 11/8 about this matter and I helped write a first commentary on [Aug. 12] which is linked to in the link I sent. As I read more into the matter, it seemed to me that all three wonderful athletes who had worked so hard were not being treated properly in an abnormal arbitration procedure and thus wrote more to that on [Aug. 19] in the piece I linked. . . .
That being stated, upon instructions of their client, Maneca-Voinea’s lawyers declined to provide her brief.
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With that caveat, the discussion here will focus on the translated version of Chiles’ brief. That brief alleges two basic grounds for set aside: 1) conflict of interest of the presiding arbitrator and 2) violation of the right to be heard.
The facts surrounding the presiding arbitrator and his concurrent representation of Romania, and how this was reflected in the substance of the award, has been discussed earlier in this series of academic reflections. [See CPR Speaks for the three previous posts in this series.]
This post focuses on whether the arbitral award is final when the dispositive operative part alone is provided to the parties, or whether it is final when the full reasoned award is provided later.
The New York Convention does not define an award. Article 189 of the Swiss Federal Act on Private International law helps somewhat but may not address the situation of a dispositive followed by an award with its reasons:
1 The arbitral award shall be rendered in conformity with the procedure and form agreed by the parties.
2 In the absence of such an agreement, the award shall be made by a majority decision or, in the absence of a majority, by the chairperson. It shall be in writing, reasoned, dated and signed. The signature of the chairperson suffices.
The Court of Arbitration for Sport Ad Hoc Rules do not define an award either.
None of those texts would seem to indicate what is the appropriate way to characterize, for purposes of res judicata and whether an arbitral tribunal is functus officio—meaning that the arbitrators’ jurisdiction has ceased in the face of the final award--each of the documents that consist of a dispositive alone, followed later by an award with its reasons.
This point is important to decide the powers of the arbitral tribunal during the interregnum: complete or merely residual? One answer to this question would appear to be provided in international arbitration under French law in the cases cited in Jeremy Jourdan-Marques, “Arbitration Chronicle: Motivation at the Heart of Control,” Dalloz (Dec. 14, 2018) (available at https://bit.ly/3TBTvoW). Giving reasons is not an express condition for enforcement of an international award under the French 2011 Decree discussed in the article, but the Paris Court of Appeal says, "the requirement to provide reasons for court decisions is an element of the right to a fair trial; that it is necessarily included in the mission of the arbitrators, even if it does not appear in the arbitration rules to which the parties have submitted.”
The question would therefore appear to be whether for the Swiss Federal Tribunal the requirement of giving reasons is part of the mission of the arbitrators. If it is, then should arbitrators be considered to still be in their mission in the interregnum between providing a dispositive-only document and a document that it considers the award with its reasons. Is it possible that the dispositive only would amount to res judicata and the arbitral tribunal be functus officio before the issuance of the award with reasons ?
But I am neither a French nor Swiss legal expert.
This appears to be the interesting question in this case because it bears on what the arbitrators could do after issuing the dispositive only: plenitude of their powers or functus officio?
It would seem, barring the waiving of reasons being provided, that an arbitral award can only be final when the reasoned award is provided at the later date. It is only at that point that the parties can see the arbitral tribunal’s reasoning to then determine whether they want to set aside the award or seek its enforcement.
If the award is final when the dispositive operative part is made available to the parties, that might suggest that the arbitrators’ mandate has finished at that point and that they are functus officio and the dispositive operative document is res judicata.
If that were the case, then any writing of the award after the dispositive operative part document was provided would suggest the arbitral tribunal was doing something without having the power to do it anymore. If the later award with its reason could only conform to the earlier-provided dispositive section, it would seem that the arbitrators’ power to change their minds as part of the deliberations would be constrained in a way that maybe we would prefer not to constrain them.
The power to write the reasons would seem integral to the arbitral function and not just a constrained power akin to a residual power. Residual powers are the ones permitted under some arbitral rules for the arbitrator to correct or interpret the award but only after the award is final and the arbitrators are functus officio.
I would take this opportunity to note that interpreting or correcting the award is a function of the arbitral tribunal and not of the arbitral institution administering the arbitration. I must admit I have been dismayed by some of the announcements of the Court of Arbitration for Sport seeming to interpret the award.
If the award is only final when the reasons are provided with the dispositive operative part, there seems to be more coherence with the concepts of res judicata and functus officio applying, and any remaining residual powers to correct or interpret the award coming into being under the relevant rules. For example, it is only with the award with reasons that a question of issue preclusion, sometimes looked at in tandem with res judicata, might be able to be examined.
One question, however, could be that once the dispositive operative part is known and before the award with reasons is provided, the parties know the direction of the arbitral tribunal’s decision. If the arbitrators are not functus officio in that interregnum, then this opens the way for a party that does not like the result as expressed in the dispositive part to make new submissions.
Confronted with these new submissions, if the panel members are not rendered functus officio by revealing the dispositive operative part, the arbitral tribunal would seem to have the power to reopen the hearing or evidentiary portion of the case. In re-opening that portion of the case, they could have further exchanges of the parties and then examine the admissibility of new submissions and, if admissible, the merits, including further exchanges of the parties.
If the arbitral tribunal were functus officio in this interregnum, its hands would be tied as it no longer has the power to consider the post-dispositive operative part revelation submissions.
One might think that the revealing of the dispositive operative part alone implies that the reasons for the award are still being drafted. If the reasons were already cast in stone, they could be revealed with the dispositive operative part and the question of the later reasons being provided would not arise.
The idea of the dispositive operative part creating a provisional kind of functus officio as to new submissions might be floated as a kind of compromise. Such a compromise position might avoid revelation submissions being considered by the arbitral tribunal, which might encourage efficiency and an early finality. But it might tend to encourage dispositive revealing, which may not be an unalloyed benefit as the dispositive ruling would not have the benefit of the full reasoning being explained and agreed by the arbitral tribunal.
And what happens if--without any submission--the arbitral tribunal decides to change the dispositive from what it revealed because the panel members think, upon reflection, the result of the fully expressed reasons is the correct one? The problem of constrained arbitral decision making comes back to rear its head.
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Another interesting twist that is not unusual in CAS arbitration is the issue of formal review in some manner by the arbitral institution as contemplated by the relevant applicable rules.
Under Article 19 of the CAS Ad hoc rules (available here), any award is mandatorily reviewed by the president of the division for form and substance before it is issued.
Would a dispositive operative-only award be reviewable? If so, then the question arises whether the fully reasoned award would also be subject to such a review. It is not clear what the impact of this double review would be--particularly if the dispositive changed between the dispositive operative part-alone “award” and the fully reasoned “award.”
Moreover, until the “award” is reviewed by the division president–something we have no information about–the “award” might better be characterized as preliminary views of the arbitral tribunal and as such are not considered an award that could be subject of a set aside or confirmation procedure. This kind of rule formalism may seem a bit strained, but the kind of rule formalism in the award in this case would lead a careful reader in this direction.
In any event, one of the hallmarks of the set aside or confirmation procedure is that the court to which recourse is sought–in this case the Swiss Federal Tribunal–has the power and duty to characterize the document submitted to it.
Given the above musings, if it was me, I would sacrifice some speed to avoid haste and its lengthy consequences. This would mean that the final award is the fully reasoned award, reviewed by the arbitration institution according to its rules, signed by the arbitral tribunal, dated with indication of the place of arbitration so the award’s nationality can be ascertained.
This would tend to discourage dispositive-only awards being final because it simply recognizes that the arbitrators are still working on their thinking through of the award. If the parties stipulate to no reasons being provided, then the dispositive operative part award is the award, but still having to go through the process of review by the arbitration institution under its rules, signing, and dating with indication of the place of arbitration. (Please note that, in the interest of brevity, I am trying to avoid the seat versus place of arbitration debates).
In such a binary vision in which anything else is not an award, the award is only final when reasons are provided and it is complete including any reviews by the arbitral institution.
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A final thought on dispositive revelation: In the drafting of the award, should the arbitral tribunal take into account in some kind of arbitral notice about what is being said in public forums in reaction to the dispositive revelation--that is, public comments not a party submission --and before the notification of the award, with its reasons?
It would seem that taking into account public statements without the benefit of party exchanges on whatever was said in the public sphere would be problematic. By leaving the public statements out of the reasons of the award--or at least in situations without party exchanges on the matters discussed in public--the arbitral tribunal would seem to be doing a better job of protecting the parties’ rights to be heard.
This situation reminds me of an arbitral tribunal doing its own research and coming up with something that seems important and that no party had raised such as a court decision or a commentary.
Arbitral tribunals can reopen the exchanges to seek the parties’ views on what was found. Parties finding in the award reasoning that implies the arbitrators are reacting to public statements of nonparties seems likely to cause surprise. Of course, this explanatory approach in the award may be an effort, based on the parties’ submissions alone, to help clarify for the parties the reasons for the award so that the result can be more susceptible of spontaneous enforcement by the parties.
Particularly in situations where states are involved, this can be a salutary educational function of the award for all entities involved. That being stated, distinguishing what is being done to educate and what is being done to respond to public statements may be difficult. And, clearly, dispositive-only revelation does not help provide that clarity.
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A further specific final thought is on the rule formalism in this award with respect to the 64 seconds in logging the Chiles score protest by Team USA.
I understand Olympic sports arbitration as a contractual superstructure of consent between all concerned including the federations, national entities, and the athletes. In such a setting, the one-minute rule seems more akin to what we call in U.S. law an “express condition.”
Express conditions play an important role in contracts and courts do enforce them. At the same time, the law of contracts does provide for various reasons that courts have determined permit the express condition to be excused.
Notwithstanding the award’s reference to applicable law, in my view the award is applying contractual provisions. Contracts may be “the law between the parties” but they are not law in the sense that state entities with such legislative power make law.
Moreover, within U.S. contract law there is law and equity. And even within law there is a doctrine of good faith. I am not familiar with whether similar concepts pertain in Swiss law or French law, but it seems that an exploration of those kinds of law that might be applicable, instead of mere contractual provisions, would have been merited.
But, as is noted by courts in the United States at least, arbitrators have the right to be wrong--at least to the extent that manifest disregard of the law remains a grounds for vacatur of a U.S. award. That is a subject of another discussion on our Supreme Court arbitration law. The fact that this arbitral tribunal refers to the applicable law and then applies contractual superstructure provisions rather than law seems unfortunate.
While stating in paragraph 147 it is applying the law before it, but rejecting good faith as being characterized as an equitable principle, it appears the tribunal rejects that and possibly other doctrines that form key parts of contract law (good faith as law and not just equitable principles), while also rejecting the equity aspect of contract law. The tribunal’s approach is something that would well be worth a law review reflection under the doctrines associated with manifest disregard of the law in the United States.
All we can do at this point is stay tuned to see what the Swiss Federal Tribunal decides. But while a regulated state court may be comfortable with issuing a dispositive followed by later reasoning, I wonder whether arbitral awards rendered by impermanent and largely self-regulating arbitral tribunals, with few procedural safeguards, and with limited grounds for review, merit a strict vision of res judicata and functus officio coming only when the award is rendered with its reasons.
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Benjamin G. Davis is Emeritus Professor of Law of the University of Toledo College of Law and a former Legal Counsel of the ICC International Court of Arbitration with 42 years of teaching and practice in international commercial arbitration. He received a 2022 Outstanding Contribution to Diversity in ADR award from the CPR Institute, which publishes CPR Speaks.
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