The hallmarks of a good arbitral award

The writing of an award is the culmination of the arbitrator’s task. It involves considerable intellectual exercise, skill and much effort on the part of the arbitrator. It is a stage not to be taken lightly. The parties affected by the award are entitled to a product of good quality and which achieves its purpose. Put simply, an award which works.

Our law requires the issuance of a reasoned award. Such an award likely to be more palatable to the parties. A party adversely affected by the arbitrators’ decision may not like it, but they will understand it and such an award withstands any legal scrutiny.

Courtesy also requires a presentable award. In my view, that means a document well-finished in appearance, perhaps on paper of reasonable quality and having some reasonable form of binding. It means much more than stapling the document at the corner or tying it as documents used to be tied, with green ribbon!

This article takes the view that substance (content) is more important over form (structure) in writing an arbitration award. In general, that is the essence of arbitration. I will therefore not suggest a possible structure or standard way of preparing and writing an award.

Arbitrators are idiosyncratic and have their own ways. There are many paths to the written opinion as there are to a romantic encounter! Reminds me of the brilliant work of Sir Alan Herbert in Board of Inland Revenue vs Haddock, Rex vs Haddock wherein he stated that an award can be written on the back of a cow! Even Lord Justice Donaldson concurs and asserts that an arbitrator could write a letter or scribble the award on the back of an envelope. He gave useful guidance to arbitrators in Bremer Handelsgesellschaft mbH vs Westzucker GmbH (No 2); Westzucker GmbH vs Bunge GmbH (1981) Lloyds’ Rep 130 CA, at page 132: “No particular form of Award is required . . . All that is necessary is that the arbitrators should set out what on their view of the evidence, did or did not happen, and should explain why in the light of what happened, they have reached their decision and what that decision is. This is all that is meant by a ‘reasoned award’.” Theses opinions by Sir Alan Herbert and Lord Justice Donaldson cast a kindly but searching light on the whole award writing process, which upon reflection simply means that the content of an award is more important than anything else.

When writing an award, the arbitrator should consider two most important parties. First I would put the loser. He needs to be satisfied that his case was heard and considered and that so far as is possible, the arbitrator has been fair. He will have been the customer, after all and will have paid for it. The loser should feel that the arbitrator has paid sufficient attention to his needs. The discussion should be polite. For instance, it is needless to label someone a liar, or to question their motives. Preferably, the arbitrator might say “I prefer the evidence of Mr So-and-So on this issue” Remember, the arbitrator’s call is to judge the issues, not the people. That is a fundamental distinction, often forgotten. The arbitrator must be forthright and must avoid gratuitous advice or discourse not essential to the matters at hand; neither should he express an agony encountered in making the award.

Secondly, the award is intended for a magistrates’ court or High Court which may have to enforce it; the Labour Court or Supreme Court to hear any appeal as provided for in the Labour Act or the Arbitration Act. It is therefore imperative for the award to be clear in its legal reasoning so that the court can decipher precisely what is intended. The arbitrator must not to try to fudge the reasoning in the hope of getting past a Judge.

There are six primary requirements of a good arbitral award. These are that it should be cogent, complete, certain, final, substantively compliant and procedurally compliant. Briefly, these requirements may be summarised as follows:
Cogent: The award must be based on sound premises and convincing in its reasoning. The premises upon which an award is based are the facts of the matter. Clarity is important in an arbitration opinion. One tip to ensure this is to test your writing by reading it aloud to yourself. If you stumble over a word, phrase or sentence whose meaning is ambiguous, it needs revision. The document should make clear what the arbitrator had in mind. It must be open to the light of day. In the words of the distinguished American jurist, Benjamin Cardozo: “Sunlight is the best disinfectant.” That should be the test, perhaps of all matters in arbitration — are they open to the light of day?

Complete: The award must deal with all issues properly submitted to the arbitrator, except in circumstances where the arbitrator is only required to issue a partial award.

Certain: The award must state what has been decided or direct what is to be done and by whom. There must be no scope for doubt.
Final: The award must deal finally with all the issues as given in the terms of the reference; nothing should be left to the decision of another, although it is possible that the effect of an award may be conditional upon some future event. The making of awards for specific performance should be discouraged unless nothing else is possible. An arbitrator who orders that, “X shall rebuild this wall to Y’s satisfaction” makes room for continuation of a dispute.

Substantively compliant: Generally speaking, the decisions in the award should be in conformity with the applicable laws governing the dispute in question. Otherwise, the court may not enforce them.

If an arbitration award violates public policy, for example, this will be one of the grounds that may persuade a court not to enforce it. Let me hasten, however, to say that the arbitrator need not enter into detailed analysis of the law in the way that a court judge might choose to do, except in cases where one party or both parties have argued that a particular authority or line of authority is pivotal to the resolution of a dispute.

Procedurally compliant: Failure to comply with the agreed process in terms of the relevant law, for example, failing to accord each party an acceptable opportunity to present its case will be a reason for the court to refuse enforcement.

The award is not merely a final product; it is the instrument by which the object of arbitration is to be given effect. The arbitrator must therefore observe the principles of natural justice in drafting a valid, legally satisfactory and enforceable award.

Isaac Mazanhi is a labour analyst. He writes in his own capacity. He can be contacted on e-mail: imazanhi@hotmail.com or cell: 0773 063 653

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