Errare Humanum Est

IN a moment of personal reflection, I recently asked myself whether I had made any wrong decisions in my arbitration career. I can still hear the imaginary chorus shouting, "Yes, you have."

No-one is happy about a loss and, even if they realised from the outset that they had a weak case, there is still hope. As a friend of mine once said, people go to arbitration because they are trying to postpone the inevitable, and, if that doesn't work, there's still hope for a miracle.

Putting the sour grapes syndrome aside, there are attorneys and parties who, after losing a case, will consider it a thing of the past and look forward to more successful projects. And then there are others who, after years, will still let you know they didn't agree with certain decisions. It is difficult to be totally unemotional about it.

When I did my research and contacted people in the shipping industry and the admiralty bar worldwide, I frankly didn't expect to get much response. To my great surprise, many responded, and in many different ways. The most forceful response I received was, 'I'd shoot the son of a b - - - -.' For an appreciation of the less explicit views, I will quote from some of the responses:

'Arbitrators are infallible. Provided they first address the basics, they cannot make mistakes.

`The parties select, and are willing to pay, an arbitrator on the basis of his perceived ability to make a sound judgment call - as long as he does this, by definition, he cannot make a mistake. He is not bound to 'follow the law,' if it leads him to a result he cannot countenance, and he is not obligated to defer to the text writers where they are out of line with his own predilections.

'The only error, or mistake, an arbitrator can make is to render a decision without a clear understanding of the facts, and/or of the question(s) he is being asked to resolve. Without attending to these basics, an arbitrator strips himself of the ability to exercise judgment that is sound within the context of the case before him - the very task for which he has been asked to serve, and for which he is being paid.'

'If an award can be immediately noticed to be obviously wrong, and not just clerical mistakes, I doubt much can be done these days given the emphasis on finality. If it is a London arbitration, as a party, I might seek an urgent opinion from counsel to see if it is worth seeking leave to appeal under "The Nema" guidelines. Usually the answer is no.

'As a user, I rather feel the system should be improved by giving more transparency to the work by individual arbitrators. That goes back to the old argument of publication of awards.'

'What I would like the arbitrator to do in the circumstance of an arbitrator thinking his award was incorrect would depend on whether my client was the beneficiary of the original award or the revised belief of the arbitrator.'

'Nothing. For over thirty years I've tried not to talk to arbitrators about their decisions after the decision is released. It keeps things on a more even keel all the way around.'

'The greatest virtue of arbitration, in my mind, is its finality. It is not a court where appeals may be taken. It is the contractual vehicle for allocating disputed risks. Given the trend in courts to allow ever more freedom to contract, it is now more important that you get what you paid for in your commercial transaction, than that you obtain more perfect justice.

'Once arbitrators accomplish their contractual purpose, rendering an impartial award according to their best ability, their office ceases. The parties to the contract have received what they bargained for. This certainty of result enables both sides to make their commercial plans with a reasonable degree of confidence.'

'Often, the insight into the error will arise from a communication from the losing side or from some third party having an interest, other than academic, in the outcome of the case. Having reasoning reconsidered, proceedings reopened and awards undone . . . undercuts the goals of efficiency, economy and finality which underlie the commercial and public policies favouring arbitrator and arbitration law.

'In the adversary system decision-makers at all levels of the dispute resolution process can be, and sometimes are, led into error. It seems to me that faith in arbitration as an institution is less shaken by a wrong result than it would be by arbitrators trying to undo it or confessing to it, other than by reaching the right result the next time.'

'Over the years I have, in common with other practitioners, been disappointed by awards, some of which have, in my view, been wrong in whole or in part, but generally I have been able to take my lumps and get on with it. I believe that I am able to accept an adverse result with some degree of grace when satisfied that the award was free of bias or corruption.'

'As certain as I am that all of us have been convinced at one time or another that an arbitration panel had committed error in reaching its decision, I continue to believe that arbitration panels should become functus officio once they have rendered their final awards. To establish procedures whereby arbitrators may amend or re-do their findings and/or conclusions would result in endless petitions by counsel and participants for reconsideration. It would also result in continued re-examination of concluded matters by arbitrators, and would substantially erode the finality which makes the arbitral process so appealing.'

'I have never considered the question. . . . right now I would say that I would do nothing, simply because the decision is final and cannot be remedied. The risk of erroneous decisions is inherent in any arbitration which is known to the users.'

'Having been both an advocate and an arbitrator, I think I have some objectivity about this interesting question, and I appreciate several twists to the issue. But, no matter what the perspective, the answer to me does not change from any perspective taken. It is clear and obvious. It is my view that, when an arbitrator is faced with the opportunity to acknowledge and correct a previously held position, he should readily do so. While this might be perceived as an act of indecisiveness, I think it is quite the opposite. It is an act of self-confidence. The result of taking such an action is the betterment of the arbitration process.

'On the one hand, in a purely technical sense, arbitration decisions are not binding precedent so, you could say, why change it since it makes no difference to any future award, and the parties originally involved are certainly not affected. Just change quietly and do not acknowledge the mistake. But there is an intellectual dishonesty about such an approach which demeans the system. Today, maritime arbitration is not only a means to resolve private disputes. It is also a process which, at least loosely, establishes normative guidelines. To allow a wrong decision to sit without comment, knowing it is wrong, invites confusion and misdirection about community expectations, and it demeans the system. This is wrong, and so easily correctable with a noble admission of error. Courts do it, arbitrators can and should do it also, with perhaps even greater need since, in the US at least, their decisions and virtually without review.'

'Where an arbitrator realises he has made an erroneous decision, in our country [Spain] there will be no remedy because the only appeal available against his award will be on the grounds of his conduct of the proceedings, not on the merits of his decision. What I would do or what I would like a panel to do in the circumstances of non-review of the award is extremely difficult to say, because the appointment of an arbitrator is always based on trust and knowledge that leads one party, or both, to make the choice. A wrong decisionmay cause a loss of such confidence, so the panel will bear the consequences for future appointments.'

'As I rot through ageing I grow less and less enchanted with the long, reasoned awards, and tend to favour simple, conclusive awards. You don't always like them, but you get over them quicker, and it certainly saves on time and expense. With such awards, reconsideration or appeal becomes extremely difficult, even if the rule limiting the arbitrator's power is loosened. Accordingly, less reliance on reasoned awards could be a solution in itself.'

This being an intellectual exercise - and neither the blueprint for a revolution nor an attempt to rewrite arbitration acts - I should like to mention a number of other suggestions. One contributor suggested a preventive solution.

'Rather than discuss what a panel can do after the fact, I have a comment about what it can do to avoid a mistake.

'. . . Since I lost the case, I guess this constitutes sour grapes, but there is a lesson for future panels. The claimant argued one theory of law and I argued another. The panel decided it on a different theory, one that I expected the claimant to argue. Since he did not, I did not brief it. So, while the result may not have been different had I had an opportunity to brief the issue, it was unfair to blindside me (and the client). And, frankly, the result may have been different.

'So, the suggestion to arbitrators is simple. If the case is going to be decided on a theory of law not argued by the parties, give them a chance to brief it. The same goes for issues of fact, of course.'

One response covered a post-arbitration discussion with an arbitrator. The writer stated:

'I see no reason why an arbitrator should not enter into a dialogue with a disappointed party if the party were willing first to waive any and all rights of appeal or objection and any right of action against the arbitrators. (The latter is provided for in many arbitration rules, but even there I would recommend a specific waiver before entering into any post-award conversation.) I haven't thought this through entirely, but assuming such a waiver is valid under all circumstances, why would an arbitrator not be willing to subject his decision to further inquiry? Other than not wishing to be harassed (understandable, I guess), I think arbitrators owe it to the community of owners, charterers and others who use their services to be as forthcoming as possible within the bounds of courtesy and respect. I do not, however, despite my occupations, believe that arbitrators owe this same duty to lawyers. Lawyers are, or should be, accustomed to both winning and losing, and most of us will never be reconciled to a loss, no matter how extensive the explanation. It is tot hose who risk their cargoes and ships upon the sea that maritime arbitrators owe a post-award consultation - but only when the waiver described above is signed.'

Although this approach does not sound unreasonable, it entails a potential danger, as it could violate the sanctity of the panel deliberation. It may also readily lead to an abuse of this concept when dissenters speak to parties by whom they were appointed. It would appear that whoever conceived the notion of the independent status of the arbitrator, with no accountability other than the statutory limits and the arbitrator's conscience, made a wise decision.

Others made the suggestion that there should be a review, aside from the statutory appeals process.

'If the arbitrator or the panel accept that they got it wrong, they should welcome another possibility to have the matter reviewed by either the court or some form of committee. What I have in mind is a type of appeal which is available in sporting associations where the panel or arbitrators accept either the fact that they got it wrong in the first place or that the award raises such important principle issues that it would not be in the interest of the industry as a whole that the decision is made either by a panel or an arbitrator, but should be the subject of a broader discussion among peers.

'The system I have in mind has some similarity to the en banc hearings in the US legal system.'

'Judges (and arbitrators) are free to reassess their previous decisions in subsequent cases where such intellectual honesty is likely to be admired. But I think an arbitrator who volunteered mea culpa in a journal would be regarded as having done something distasteful.'

Let me quote from another contribution, which refers to the case of the Abner Doubleday (1946 AMC 971), where the Court of Appeals for the Second Circuit reversed by a 2:1 decision the lower court's ruling. In response to a petition for a rehearing, which was denied, the court stated,

PER CURIAM : July 8, 1946. 'It is true that those aboard the "Doubleday" said that the "Mary" swung to port, and not to starboard; it is also true that the "Doubleday" was not overtaking the "Mary". In these respects we were in error. However, they make not the slightest difference in the result; to suppose that they do, shows a complete failure to understand the grounds on which we put our decision. This will not be mended by repetition. Petition denied.'

Michael Marks Cohen delivered a paper at the VIII International Congress of Maritime Arbitrators in Madrid in 1987, entitled, "Post Award Blues: What arbitrators should do when they have made a mistake in their award." He opened the paper with the statement that everybody makes mistakes, and that's why there are erasers. But when an arbitrator makes a mistake, it is often not so easy to correct it. He went on to state:

'. . . it is essential that an arbitrator re-read his award when parties complain that a mistake was made. Some arbitrators apparently take the position that once they have published an award, they have no obligation ever to go back to it or to comment about a complaint about a mistake. But, I disagree. Without the co-operation of the arbitrator at least to identify a mistake, injustice could result. Moreover, arbitrator aloofness leaves the parties with no alternative other than an expensive trip to the courts to undo the damage. In my opinion, an arbitrator has a duty to consider a complaint that he made a mistake; and, if one were made, he has a duty to acknowledge it as well as to take what action he can to correct it.'

Let me close with a reference to another response received.

'I believe that the SMA practice of delivering reasoned awards, and publishing them, forces SMA arbitrators to think more carefully about their reasoning and conclusions so that the need for re-hearing and re-consideration is not as great as it is in the case of venues where no reasoned awards are published.'

Did I ever make a mistake? Yes. And to describe it, I will paraphrase New York's colourful Mayor Fiorello LaGuardia, who said, "When I make a mistake, it's a beaut" - and I'll leave it at that.