Michaels v. Mariforum Shipping, S.A.

Issue Discussed: “Interim” v. “Final” Decisions

Submitted by Aluyah I. Imoisili, H. Josh Ji*

Date Promulgated: June 27, 1980

Michaels v. Mariforum Shipping, S.A., 624 F.2d 411 (2d Cir. 1980)

Court: United States Court of Appeals, Second Circuit

Issues Decided: Whether an arbitration award determining liability, but not damages, is a final award that is judicially reviewable

Key Holding

An arbitration award determining liability, but not damages, was deemed an interim award because it was not a “complete determination” of the claims submitted for arbitration.

In this case, a ship charter company demanded arbitration against the owner for restitution of hire payments already made after the charter company terminated the agreement based on commercial frustration when the ship had a number of accidents.  The owner filed counterclaims in the arbitration.  After ten merits-hearings, the arbitration panel delivered a “Decision & Interim Award,” which decided the issue of liability on counterclaims, but did not decide the charterer’s claims and left open the question of damages.  The charter company moved to vacate the interim ruling in district court.  The district court denied vacatur of the arbitrators’ decision after assessing the merits.

The Second Circuit rejected the district court’s ruling and held that judicial review was improper because a final award had not been issued.  The Second Circuit reasoned that a final award is one intended by the arbitrators to be the complete determination of all claims submitted, which includes the calculation of damages and a district court review of interim rulings would open the door to “delaying tactics” in a proceeding intended to produce a speedy decision.

Key Takeaways

Judicial review of interim arbitration decisions is generally unavailable.  An award is final if it was intended to be a complete determination of all claims, including calculation of damages.

* Aluyah I. Imoisili is a Partner and H. Josh Ji is an Associate at Greenberg Gross LLP, where they specialize in commercial litigation and arbitration.