Lord Donaldson in 1981
There can be little doubt that Lord Donaldson’s advice to arbitrators, given in this extract from the famous judgment in Westzucker, is the most splendid common-sense.
Thirty years on, it still repays study if Awards are not to become over-stuffed treatises on legal theory.
Yet another feature of the old Special Case procedure which made for delay was the form of the award. This was necessarily stylised, being divided into four parts – preamble, findings of fact, submissions of the parties and conclusions. It was not something which most arbitrators felt that they could draft without professional assistance and those who provided such assistance had other clients and commitments to consider. This produced still further delay.
It is of the greatest importance that trade arbitrators working under the 1979 Act should realise that their whole approach should now be different. At the end of the hearing they will be in a position to give a decision and the reasons for that decision. They should do so at the earliest possible moment. The parties will have made their submissions as to what actually happened and what is the result in terms of their respective rights and liabilities. All this will be fresh in the arbitrators’ minds and there will be no need for further written submissions by the parties. No particular form of award is required. Certainly no one wants a formal “Special Case” . 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 succinctly 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” .
For example, it may be convenient to begin by explaining briefly how the arbitration came about – “X sold to Y 200 tons of soyabean meal on the terms of GAFTA Contract 100 at US.$Z per ton c.i.f. Bremen. X claimed damages for non-delivery and we were appointed arbitrators” . The award could then briefly tell the factual story as the arbitrators saw it. Much would be common ground and would need no elaboration. But when the award comes to matters in controversy, it would be helpful if the arbitrators not only gave their view of what occurred, but also made it clear that they have considered any alternative version and have rejected it, e.g. “The shippers claimed that they shipped 100 tons at the end of June. We are not satisfied that this is so” , or as the case may be, “We are satisfied that this was not the case” . The arbitrators should end with their conclusion as to the resulting rights and liabilities of the parties. There is nothing about this which is remotely technical, difficult or time consuming.
It is sometimes said that this involves arbitrators in delivering judgments and that this is something which requires legal skills. This is something of a half truth. Much of the art of giving a judgment lies in telling a story logically, coherently and accurately. This is something which requires skill, but it is not a legal skill and it is not necessarily advanced by legal training. It is certainly a judicial skill, but arbitrators for this purpose are judges and will have no difficulty in acquiring it. Where a 1979 Act award differs from a judgment is in the fact that the arbitrators will not be expected to analyse the law and the authorities. It will be quite sufficient that they should explain how they reached their conclusion, e.g. “We regarded the conduct of the buyers, as we have described it, as constituting a repudiation of their obligations under the contract and the subsequent conduct of the sellers, also as described, as amounting to an acceptance of that repudiatory conduct putting an end to the contract”. It can be left to others to argue that this is wrong in law and to a professional judge, if leave to appeal is given, to analyse the authorities. This is not to say that where arbitrators are content to set out their reasoning on questions of law in the same way as judges, this will be unwelcome to the Courts. Far from it. The point which I am seeking to make is that a reasoned award, in accordance with the 1979 Act, is wholly different from an award in the form of a Special Case. It is not technical, it is not difficult to draw and above all it is something which can and should be produced promptly and quickly at the conclusion of the hearing. That is the time when it is easiest to produce an award with all the issues in mind.