Arbitration awards are decisions made by arbitrators, or representatives chosen by the parties to a dispute, which are legally binding The award is the end result of an arbitration proceeding, a dispute resolution method that is often utilized in lieu of traditional litigation in civil courts, and is a type of alternative dispute resolution (ADR). Examples of arbitration awards are most commonly seen in labor-management disputes, contractual disputes between businesses, and international commercial disputes.
Example 1: In 2002, the International Centre for Settlement of Investment Disputes (ICSID) made an arbitration award in the case of Lone Star v. Costa Rica. The dispute arose when Lone Star, a U.S.-based investment company, made a claim that the Costa Rican government had not met the terms of a 1998 concession contract. The ICSID found that the government did indeed violate their terms, and awarded Lone Star over 100 million in damages.
Example 2: In 2008, the U.S. National Labor Relations Board (NLRB) issued an arbitration award that set limits on fees charged to unionized employees. Specifically, the award stated that union employers could only charge up to 3% of an employee’s total wages for union dues and other costs associated with union representation.
Example 3: In 2007, the Canadian Labour Relations Board (CLRB) issued an arbitration award in the case of Canadian Pacific Railway and the Teamsters Canada Rail Conference. The dispute arose after the union claimed that the company violated a collective agreement by refusing to pay employees for the time spent during safety inspections. The CLRB found that the employees were indeed entitled to payment, and ordered the company to provide the necessary compensation.
Example 4: In 2019, the World Bank International Centre for Settlement of Investment Disputes (ICSID) made an arbitration award in the case of Perenco v. Ecuador. The dispute arose from a breach of contract between the oil company Perenco and the Ecuadorian government. The ICSID found that the government had unlawfully denied Perenco the right to dispose of damaged oil and ordered them to pay over $80 million in damages.
Example 5: In 2014, the UK Commercial Court issued an arbitration award in the case of Sakhalin Energy Investment Company Ltd (SEIC) v. Russia. The dispute arose when the Russian government tried to retroactively withdraw the license it had granted to SEIC to operate in a non-fiscal zone. The court found that Russia had breached its obligations under the contract and awarded SEIC more than $125 million in damages.