Source: http://www.heintzmanadr.com/international-commercial-arbitration/when-may-an-arbitral-tribunal-correct-its-award/
Timestamp: 2019-04-22 02:16:30+00:00

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Arbitrators are mortal. They may make mistakes in issuing their awards. In what circumstances may they correct an award?
The scope of the authority of an arbitral tribunal to alter its award after the issuance of the award has been examined in a recent Scottish case – NKT Cables A/S v. SP Power Systems Limited,  CSOH 38. The Scottish court held that the arbitrator did not have the authority to issue an amended award. This decision raises important issues about the authority of an arbitral tribunal to amend its award.
an arbitral tribunal should have power to amend patent mistakes in its award, such as an arithmetic or grammatical mistake.
The other theory is that the arbitral tribunal should have power to properly express its substantive intention, and if it has failed to do so in its award, it should be able to amend the award to make that intention clear.
The second theory is controversial because it might be used by the arbitral tribunal to change its award, and such a result is contrary to the finality of arbitral and judicial decisions, and the rule that after making his or her decision, a judge and arbitrator is functus officio, that is, his or her office and function is ended.
It should be noted that there may a “slip or omission” provision in the Rules of Civil Procedure governing court orders and judgments. In Ontario, that provision is found in Rule 59.06. One issue is whether the arbitral and judicial “slip or omission” provisions should be similarly interpreted, or whether the judicial rule should be interpreted differently because of the public nature of court proceedings, because of the way that judicial orders and judgments are pronounced, issued and entered, and because judicial orders and judgments are appealable.
NKT applied to court to enforce an adjudication award made under the Housing Grants, Construction and Regeneration Act 1996 in the amount of about £2.1million. That amount was specified in an amended decision of the Adjudicator. In the alternative, NKT sought to enforce the Adjudicator’s original decision in the amount of about £1.8 million.
In his Award, the Adjudicator inserted the wrong number for the gross value of the Contract, namely of £9,376,220.72. In the court proceedings, the parties agreed that this number was a “rogue” figure and could not be derived from any part of the Adjudicator’s award.
That night, the Adjudicator sent an email to the parties correcting his award, adopting the numbers set forth in NKT’s letter.
In this process, the Adjudicator did not ask for or receive any submissions from SP, which thereafter complained about an absence of natural justice.
The Adjudication regime applicable to this Adjudication contained a “slip or omission” provision, which enabled the Adjudicator to “correct his decision so as to remove a clerical or typographical error arising by accident or omission.” However, the court held that this provision did not, for timing reasons, apply to this Adjudication. Nevertheless the court found that this provision was incorporated into the Adjudication agreement as an implied term.
The court held that, while the Adjudicator had the authority to correct the gross value of the Contract, since both parties agreed that there was an error in its calculation, he had no authority to insert the amounts for the Agreed Claims or Agreed Interest. Those amounts were in contention, were not dealt with in the original award, and the Adjudicator had no jurisdiction to insert them into the award by way of a correction.
The decision in NKT Cables A/S v. SP Power Systems Limited may be contrasted with a 100 year old decision of the Saskatchewan court in Debret v. Debret, 1917 CarswellSask 123, 10 Sask. L.R. 366.
Both of these decisions dealt with the attempted correction by the arbitrator/adjudicator of something that did not appear on the face of the original award, that is, to correct an omission. In NKT v. SP, the correction was not allowed, whereas in Debret it was allowed. What is the difference?
It seems that, in NKT v. SP, the Agreed Clams and Agreed Interest, while referred to as ‘Agreed’ were still in substantial dispute as to whether they should be allowed in the award. Moreover, these amounts were necessary ingredients in arriving at the final award. The Adjudicator did not, in his original award, make an explicit decision about how these items should be taken into account, even though the parties expected him to do so. Therefore, his subsequent award was not a correction of his original award but a new award.
The fact that, in NKT v. SP, the Adjudicator had not referred to the Agreed Claims and Agreed Interest in his original award should not, it is submitted, be dispositive of the issue. Otherwise, an “omission” could never fall within the “slip or omission” provision; and the decision in Debret could not be correct. Rather, the issue is whether the omitted item was in fact disputed or undisputed. Even if agreed upon as to amount, a claim may still be contentious for any number of reasons. But if it is truly undisputed as to fact and as to its proper inclusion in the award, then the “slip or omission” provision should apply to it if the arbitrator fails to refer to it in the award. The decision in NKT v SP seems to be justifiable only on the basis that the Agreed Claims and Agreed Interest were disputed so far as their inclusion in the award.
It is possible to conceive of situations in which even an omission of a disputed issue from the award should be correctible, even under the narrow form of the “slip or omission” provision. If the arbitral tribunal accidentally left out a page of its award on which it dealt with that issue – and can positively demonstrate that this has occurred – it seems that the tribunal should be able to issue a corrected award with that page in it.
A number of issues arise from an Ontario perspective in relation to the NKT decision. Would the “omission” in NKT fall within section 44(2) of the AA as amounting to “an injustice caused by an oversight on the part of the arbitral tribunal” or within section 44(3) as “an additional award to deal with a claim that was presented in the arbitration but omitted from the earlier award”? Or would the omission fall within Article 33(3) of the Model Law, if that Law had applied and NKY had applied to the tribunal for “an additional award as to claims presented in the arbitral proceedings but omitted from the award”?
There are a number of other decisions in Canada dealing with the “slip or omission” section in arbitration statutes. Perhaps the leading case is the decision of the British Columbia Court of Appeal in Westnav Container Services Ltd. v. Freeport Properties Ltd., 2010 CarswellBC 124, 315 D.L.R. (4th) 649, from which leave to appeal to the Supreme Court of Canada was denied. The factual situation in Westnav decision is opposite to that in the NKT v. SP. Instead of remedying an omission, the arbitrator deleted something from the original award.
Freeport subleased land to Westnav. Westnav exercised a right to renew the sublease. The parties agreed to submit the fair market rent to arbitration. In his award, the arbitrator accepted the direct comparison method. In his analysis of the direct comparison approach, the arbitrator mistakenly said the rent for a particular property (the Ewan property) was $4.38 per square foot for the building, whereas that rent represented the rent for both the building and the land.
Westnav applied to the arbitrator for correction of “what appears to be an accidental or arithmetical error” or alternatively for clarification pursuant to s. 27 of the Act. Freeport contended the award should remain as it was. The arbitrator released a corrected award, acknowledged the error, but stated that the decision as to rent was the same. The corrected award deleted the mention of the particular property from the analysis and included fresh passages explaining the original conclusion.
Under section 27(1) of the Commercial Arbitration Act of British Columbia, the arbitrator had the authority to correct: a clerical or typographical error, an accidental error, slip, omission or other similar mistake or an arithmetical error made in a computation.
A decision which demonstrates a much broader approach to the power to correct the arbitral award is the decision of the Ontario Divisional Court in Canadian Broadcasting Corp. v. Joyce, 1997 CarswellOnt 2861, 34 O.R. (3d) 493. In that case, the arbitrator had held, in his interim decision, that the employee had been terminated for just cause. Then in his final award, the arbitrator found that he had been incorrect, that the job was incapable of performance, and that the employer was 75 percent at fault.
This decision is a quite remarkable recognition of the arbitrator’s right to change his mind on a central ingredient in the arbitration. Even though the arbitrator had made a key finding – that the dismissal was for cause – the arbitrator was entitled to change that finding because it was incorrectly stated. That approach, clearly, is a different and broader one than that adopted in the previous decisions referred to in this article.
To minimize the chances that the arbitral tribunal may issue an award with a mistake in it, the tribunal may consider issuing the award in draft form. In doing so, it may advise the parties that it will not permit re-argument but will allow the parties to draw any slips or omissions in the draft award to the tribunal’s attention and allow an opportunity to settle the terms of the order contained in the award. This is my practice in issuing awards. This practice depends on the good faith of the parties and assumes that they will not abuse this process by taking ex parte or secret steps to frustrate the settlement, issuance and enforcement of the award.
See Heintzman and Goldsmith on Canadian Building Contracts (5th ed.), chapter 11.

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