The “Finality” Principle and Partial Awards - Chapter 30 - AAA Handbook on Commercial Arbitration, Third Edition
John Wilkinson is Of Counsel at Fulton, Rowe, Hart & Coon in New York City. He has served on the American Arbitration Association’s Large, Complex Case Panel and on its Greater New York Advisory Council for Large Complex Cases. He is the editor co-author of CONOVAN LEISURE ADR PRACTICE BOOK, John Wiley & Sons (1991) and is a member of the Board of Editors of the American Arbitration Association’s ADR Currents.
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.
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.