Post-Hearing Issues In International Arbitration - Chapter 2 - Awards of Punitive Damages
Jessica Jia Fei is a disputes Partner at Herbert Smith Freehills. She is an international arbitration and dispute resolution specialist with over 15 years' experience working with leading firms in New York and Asia. Her practice focuses on large-scale international arbitration, litigation and regulatory investigations in China, Asia, Europe and the US for clients that include Chinese state owned enterprises, multinationals and major regional corporates. Jessica covers disputes work concerning energy, construction, trade and international investment. She advises clients on commercial contracts, intellectual property rights and foreign direct investment, and deals with various Chinese government authorities on investigations and regulatory issues. Jessica is qualified in the PRC and New York. She has worked for 8 years at the China International Economic and Trade Arbitration Commission (CIETAC) in Beijing as a research fellow and case administrator, and International Centre for Dispute Resolution (ICDR) of AAA in New York. She is also listed on the international panel of arbitrators for ICDR, CIETAC, HKIAC, KLRCA and CEAC and several Chinese arbitration institutions. Jessica has contributed a number of articles on arbitration and is frequent speaker on topics related to international arbitration.
Damien McDonald is a former Senior Associate at Herbert Smith Freehills who specialises in international arbitration, commercial litigation and compliance related work in China (corruption and information risk). He has had extensive experience in many different types of contractual disputes in Mainland China, Hong Kong, the UK and Australia. He works mainly for large international and Chinese companies. Prior to joining Herbert Smith in early 2006, Damien worked for leading law firms in Australia (Melbourne and Darwin). He is admitted as a solicitor in England and Wales. He is also admitted as a barrister and solicitor in Australia (Victorian and Northern Territory Supreme Courts and High Court of Australia).
Eunice Bai is a trainee at Herbert Smith Freehills. She has worked in London and Beijing offices in the areas of general corporate, dispute resolution, etc.
I (Jessica Fei) first published a version of this article nearly ten years ago in 2003. It is now 2013 and I thought that it would be timely to revisit the law and my conclusions on punitive damages to see to what, if any, extent the law has changed. Although the focus of this article remains the United States, I have also taken the opportunity to work with colleagues here at Herbert Smith Freehills who are qualified in England and Wales to include a separate discussion on that jurisdiction (the aim of which was to introduce a separate comparative law perspective into the article).
“Punitive damages”, also called exemplary damages, have been referred to as “sums awarded apart from any compensatory or nominal damages, usually . . . because of particularly aggravated misconduct on the part of the defendant.”1
This class of damages is generally a creature of the common law rather than civil law jurisdictions. As noted in Redfern and Hunter, “[i]n civil law countries, the concept of punitive damages is scarcely known, whether in breach of contract cases or otherwise, with a limited exception in some countries where there has been a wilful intention to harm the claimant amounting, in effect, to fraud."2
Awards of Punitive Damages
Jessica J. Fei, Damien McDonald and Eunice Bai
II. The Functions of Punitive Damages
III. Whether Arbitrators have the Power to Award Punitive Damages?
A. Party Autonomy and the Availability of Punitive Damages
B. Party Autonomy and the Applicable Law
IV. Should Arbitrators Award Punitive Damages?
A. Risk of Non-Enforcement by National Courts
B. Public Policy
1. Brief Introduction
2. Application to Punitive Damages
3. Interpretation of Public Policy
C. Enforceability of Punitive Damage Award
V. United Kingdom Approach
A. Power of Courts and Arbitrators to Award Punitive Damages
B. The Applicable Law and the Availability of Punitive Damages