Lessons from Persero: Everything gets to be final.

When is an interim arbitral award a final arbitral award?

When final is redefined to be “final until revised.”

This is what was done by the Singapore Court of Appeal in

PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation, [2015] SGCA 30

See the following at para 51:

 

51. The term ‘final’ award can be understood in a number of ways. First, it can refer to an award which resolves a claim or matter in an arbitration with preclusive effect (ie, the same claim or matter cannot be re-litigated). Even provisional awards are ‘final’ in this sense. As Born states (at pp 3013-3014): 

‘… Even awards granting provisional relief can be considered to be “final”, notwithstanding the fact that they will be superseded by subsequent relief, because they finally dispose of a particular request for relief … [E]very award rendered during the course of an arbitration, before its final conclusion, is “final” because of the preclusive effect that it enjoys.’

  
This is akin to saying a judge faced with the following scenario:

  1. Based on the fact that the moon is liquid Party A’s buddy D makes a decision that Party B owes Party A $100 immediately.
  2. Party B says we disagree that the moon is liquid and so the award of $100 should not be owed.
  3. Party A complains to Arbitrator F that Party B hasn’t paid the $100 that buddy D said was owed and hasn’t immediately complied with the decision. Party B sends a defence to Arbitrator F that the issue of non-payment of $100 shouldn’t be dealt with, without considering whether the moon is liquid or not.
  4. Arbitrator F issues a final award saying Party A immediately owes $100.
  5. Judge says: The D award is “final” in that it “finally” resolved the Party A’s complaint about not being paid the debt of $100, even if the debt may be based on a ludicrous premise.

  
This is a true trivialisation of the notion of what constitutes an award as ‘final’ probably because the arbitration enforcement legislation in Singapore was not enacted in support of “interim” awards, and the judges felt completely cowed by years of bullying in various forums by international practitioners whose awful contract drafting led to the mess.

Note the following reasoning at para 100 of page 31:

This point was answered in the affirmative by the 2011 Majority Arbitrators in the Interim Award, and that answer is not susceptible to change regardless of whatever award the 2011 Tribunal might eventually make on the parties’ Underlying Dispute over the merits of DAB No 3. The only thing that is provisional in this context is the set of financial effects and consequences of the Interim Award, and that is so because the Conditions of Contract provide that in certain circumstances, a DAB decision may be revised by an arbitral award that settles the underlying merits of that decision. If and when an award on the merits of DAB No 3 is eventually made, that award would not alter the Interim Award or render it any less final, even though it might alter the financial effects and consequences that flow from the Interim Award.

  
So, the learned judge is saying an a financial award is final even if the amount to be paid is completely varied. I wonder if the judge will consider the award “final” and worthy of enforcement if the parties to the award were likely to be changed.

One also wonders what is the damage to be suffered if payment still does not occur. Non-compliance with non-payment of an immediately owing amount would, I assume, result in damages related to financing charges.What are the other damages suffered from non-payment? (Assuming consequential damages are disallowed) What if the underlying dispute in the meantime is decided the other way. In that scenario, the interest/financing charges would be owed by the other party, potentially from even further back.