Making of the award

A recent decision of the Court of Appeal of Venice (decision no. 1855 of 17 August 2016, Italian text available here) deals with the topic of the making of the award in the case of “filibustering” arbitrators.

The case heard by the Court of Appeal, in a nutshell, is as follows.

The claimant requested the setting aside of an arbitral award on a number of grounds.

In particular, he claimed that the award had not been made by a decision of the Arbitral Tribunal, as per Article 823 of Italian Code of Civil Procedure.

In this respect, the Court found that when the arbitrators met to make the award, one of the three arbitrators left the meeting as soon as he realised that the majority did not share his view on a preliminary issue.  Therefore the award, as to the merits, was only made by the two remaining arbitrators.

The Court of Appeal of Venice set aside the award, and it was right. Indeed, the arbitral award has to be made by the Arbitral Tribunal as a whole; that is to say, all the arbitrators shall take part in the decision process, even tough the decision is taken by majority. On the other hand, Italian law usually does not require the arbitrators to meet in person: therefore, for example, the Chair might send by email a draft, subject to comments and amendments by the co-arbitrators.

A question then arises: in the factual framework of the case heard by the Court of Venice, was there a remedy? In other words: is there a remedy in the (hopefully rare) case of a “filibustering” arbitrator?

Italian law provides for a remedy.  Indeed, under Article 813(b) of Italian Code of Civil Procedure, the arbitrator who omits to carry out an act related to his office (e.g., an arbitrator refusing to make the award) may be replaced. Moreover, he could also be liable, if the parties suffered damage because of his behaviour (in this respect, for instance, see Supreme Court, I Civil Chamber, decision no. 4823 of 27 February 2009, Italian text available here).

2 Replies to “Making of the award”

  1. This is a very interesting case about which one would be glad to learn more. How unfortunate is the linguistic limitation of this lazy Englishman!
    I had understood that the wilful refusal of one arbitrator to take part could be grounds for removal or justification for an Award absent the recalcitrant arbitrator.
    The detailed justification a) by the Chairman for making the Award and b) by the Court for setting aside would make interesting reading. I know of one ICC matter (not my own) which went to Award after two arbitrators effectively excluded the third, who compiled an extensive dissent.

    1. Dear Geoffrey, thank you for your comments. Unfortunately, the full text of the award is not available. From the Court’s decision, it appears that the Chair claimed that the award had been already made (that is, the decision had been already agreed upon) before the meeting, whose alleged purpose was to write down the award. Therefore, according to the Chair, the “filibustering” arbitrator only refused to take part to that final meeting. The Court’s findings were quite different. Indeed, even though the decision process began before the meeting, the decision on the merits was made during the meeting, without the “filibustering” arbitrator. As a consequence, the Court set aside the award because under Italian law “The award shall be made by majority vote with the participation of all the arbitrators” (Article 823(1) of Italian Code of Civil Procedure). As to the available remedy, please note that under Italian law, although the “filibustering” arbitrator may be excluded, he also has to be replaced (by the parties – or failing them by the Court) before the making of the award.

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