Court Opinion

ID: 9474819
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:09:54.962821+00
Date Added: 2024-06-11T17:44:21.525596
License: Public Domain

FEINBERG, Chief Judge,
dissenting:
I respectfully dissent from the decision to affirm Judge Bramwell’s confirmation of the partial final award of an arbitration panel. I do so because I believe that the award was not final, and, accordingly, the district court should not have confirmed it. In addition, it is my view that confirmation of this type of award will generally encourage piecemeal review of arbitration awards and is therefore inconsistent with the purpose of arbitration.
It is axiomatic that litigants must ordinarily wait for final resolution of all issues submitted to a federal court before they can enforce a judgment or obtain appellate review. The final judgment rule is embodied in Title 28 of the United States Code, section 1291, and the policies behind the rule are compelling, see American Express Warehousing, Ltd. v. Transamerica Insurance Co., 380 F.2d 277, 280 (2d Cir.1967). It is true that a few exceptions to the rule have been judicially or legislatively created, but the former, principally the collateral order doctrine, see, e.g., Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), are not relevant here. As to the *284latter, examples of congressionally-authorized exceptions to the final judgment rule are interlocutory orders involving injunctions, 28 U.S.C. § 1292(a)(1), unresolved questions of law certified for appeal by the district court, see § 1292(b), or, most directly relevant here, cases involving multiple claims, where the district court makes “an express determination that there is no just reason for delay” and orders the entry of a final judgment as to fewer than all the claims, pursuant to Fed.R.Civ.P. 54(b).
A similar rule of finality applies to arbitration proceedings under the Federal Arbitration Act, 9 U.S.C. §§ 9 and 10(d). Lack of finality is a statutory ground for vacating an arbitration award and for refusing confirmation; section 10(d) provides for vacation of an award that is not “mutual, final, and definite ....” (emphasis supplied). See also Michaels v. Mariforum Shipping, S.A., 624 F.2d 411, 413-14 (2d Cir.1980) (interim award did not purport to finally resolve issues and was not subject to confirmation). Final and complete resolution of the issues submitted to arbitration has usually been considered a prerequisite to confirmation by the district court. The exception the majority now engrafts onto this requirement of finality is not authorized by Congress and gives the district court authority to confirm an award that it would not otherwise have. This exception for separate and independent claims creates, in effect, an arbitration analogue to Rule 54(b).1
I do not believe the courts should ordinarily create exceptions to the final judgment aspect of the arbitration statute. Such an exception may be necessary where a district court’s failure to enforce an award “would render meaningless the arbitrators’ power to grant ... equitable relief.” Southern Seas Navigation v. Petroleos Mexicanos of Mexico City, 606 F.Supp. 692, 694 (S.D.N.Y.1985); see also Sperry International Trade, Inc. v. Government of Israel, 532 F.Supp. 901 (S.D.N.Y.), aff’d, 689 F.2d 301 (2d Cir.1982). But this is not contrary to the rule of finality, since the court’s action is needed to ensure that a final award eventually can be rendered. Furthermore, this exception relies on an analogy to the traditional equitable powers of the courts, cf. Island Creek Coal Sales Co. v. City of Gainesville, 729 F.2d 1046, 1048-49 (6th Cir.1984), not invoked here. The exception to the final judgment rule now embodied in Rule 54(b) required the approval of Congress. That body should do the amending of the arbitration statute to provide a separate and independent claim exception to the finality requirement of section 10(d), if it finds such an amendment consistent with the goals of the arbitration statute. That the parties contracted for the payment of freight “without discount” may make delay in payment seem unfair, but it should not enlarge the district court’s power to confirm the award, any more than the parties could contract to appeal or enforce interlocutory district court judgments.
As the majority recognizes, arbitration is designed “to permit a relatively quick and inexpensive resolution of contractual disputes ....” Diapulse Corp. v. Carba, Ltd., 626 F.2d 1108, 1110 (2d Cir.1980). The majority points out that appellees could have obtained summary judgment on their claim for freight, had they chosen to submit it to a court rather than to an arbitration panel, and suggests that appellant might then have been able to appeal to this court immediately. The majority therefore believes that its decision is necessary to encourage use of arbitration rather than litigation in similar situations in the future. Even if the courts were the appropriate source of such an exception to the requirement of finality embodied in section 10(d), I do not agree that confirmation of *285partial final awards ultimately furthers the goals of arbitration. Indeed, the function of arbitration should make considerations of finality even more compelling in arbitration than they are in conventional litigation.
It is true that allowing the district court to confirm a partial final award of freight would provide appellees here with a speedier resolution of one of their counterclaims than if they had to await a decision on the remaining claims. Nevertheless, in the long run, I fear that confirmation of such separate and independent claims will make arbitration more complicated, time consuming and expensive. After this decision, use of partial final awards will doubtless increase2 and, if the successful parties can get partial awards confirmed by the district courts, it stands to reason that they will do so. See, e.g., Liberian Vertex Transports v. Assoc. Bulk Carriers, 738 F.2d 85, 86 (2d Cir.1984) (shipowner unsuccessfully sought confirmation of partial final award). Just as piecemeal review disrupts and delays ongoing litigation in the courts, confirmation of partial awards will inevitably interrupt and extend arbitration proceedings. See id. at 87; Compania Panemena Maritima v. J.E. Hurley Lumber Co., 244 F.2d 286, 289-90 (2d Cir.1957). It will make arbitration more like litigation, a result not to be desired. It would be better to minimize the number of occasions the parties to arbitration can come to court; on the whole, this benefits the parties, the arbitration process and the courts.
Nor would refusal to allow confirmation of these awards necessarily allow the charterer to delay the arbitration proceeding unduly in order to postpone payment of freight. Arbitrators can conduct the arbitration in such a way as to discourage delay. For example, in this case, they could charge interest on their award of freight, calculated from the date it became due or order the freight deposited in escrow pending resolution of the remaining claims. If the arbitrators believe that the charterer has delayed the proceedings to avoid paying freight, under the applicable agreement they can impose costs and attorneys fees. Moreover, they can schedule hearings at shorter intervals, in order to expedite the process. Similar techniques, short of confirmation of these partial final awards, would, I believe, prove sufficient to minimize the incentives for delay in other arbitration proceedings.
For all of the above reasons, I respectfully dissent.

. The policy behind Rule 54(b) was referred to in a prior opinion of this court, Liberian Vertex Transports v. Assoc. Bulk Carriers, 738 F.2d 85, 87-88 (2d Cir.1984), a case quite similar on its facts to this one, in which we indicated that the district court was correct in refusing to confirm a partial final arbitration award. While the policy of Rule 54(b) was cited as justification there for holding the district court’s order unappealable, the opinion did not suggest that Rule 54(b) applies to arbitration awards.

. Amicus Society of Maritime Arbitrators indicates that such partial final awards already account for "a significant percentage” of maritime awards, in excess of 16% of all awards rendered last year, despite uncertainty as to whether or not they are subject to confirmation.