Originally from:

AAA Handbook on Commercial Arbitration, Third Edition

CHAPTER 30

THE “FINALITY” PRINCIPLE AND PARTIAL AWARDS

John Wilkinson

I. Introduction

The law concerning the finality of partial arbitration awards has been highly volatile. The U.S. Court of Appeals for the Second Circuit is primarily responsible for the checkered history of these cases, which have not always been notable for clarity in reasoning or for concern for the well-being of the arbitration process. The momentum in this area has recently been assumed by the First Circuit with a decision  that a partial award is final if the award completely disposes of a separate, independent claim, or finally determines liability under circumstances where the parties have agreed to bifurcate the liability issues from the damages issues. The policy concerns raised by this and earlier decisions are discussed below. Moreover, practitioners should be warned that the “firmness” of this holding may last only as long as the next case.

II. Judicial Review

Prior to the 1980s, there was little controversy over what rendered an arbitration award final for purposes of a motion to confirm or vacate under the Federal Arbitration Act (FAA).  An award was not final until all the issues in the arbitration were decided.