Albtelecom SH. A v. UNIFI Commun., Inc., 2017 U.S. Dist. LEXIS 82154 (S.D.N.Y. May 30, 2017), illustrates this latest case. The parties commenced arbitration proceedings, but reached an agreement during the proceedings. Instead of rejecting the arbitration, the parties jointly requested that the arbitrator describe a “consent award” reflecting their terms of agreement, and the parties reviewed and approved the proposed award. Id. at 4-5.
The award was handed down and the arbitration was dropped. But timing is important. Here`s a recent Type A case. In Castro v. Tri Marine Fish Co. LLC, 921 F.3d 766 (9th Cir. 2019), the complainant was a dockhand who was injured while working for TriMarine, and her employment contract required arbitration in American Samoa. But the parties reached an agreement before initiating arbitration. However, shortly before the agreement was signed, the employer called in an arbitrator to verify the document with Mr. Castro and to have him sign a joint application for dismissal.
The arbitrator then signed a unilateral order recognizing the terms of the transaction. Apart from a brief meeting in the lobby of an office building, Mr. Castro had never met or interacted with the arbitrator. The conciliation agreement has the same position and effect, as if it were an arbitral award on the conditions authorized for the subject of an arbitration tribunal`s dispute under Section 30 of the Arbitration and Conciliation Act of 1996. Section 36 of the Act provides that the arbitral award under the 1908 Code of Civil Procedure is carried out in the same process, as if it were a Court of Justice decree after the expiry or application to quash an application to quash the sentence under Section 34 of the Act. It seems reasonable that there is no justification for authorizing a petition to quash an arbitration award on agreed terms, but it appears that there is no exception for a fixed-term arbitration award. It is therefore possible to argue that Section 36 applies to all arbitration awards, including an arbitration bonus on agreed terms. Therefore, an application for the execution of an arbitration award under agreed conditions cannot be made unless the time limit for filing an application to quash the award under section 34 of the Act has expired.
The necessary consequence is that a petition for the annulment of an arbitration award may also be preferred. This argument can be rebutted by the absence of a derogation clause in section 34 of the statute concerning an arbitral award on agreed terms. Since a conciliation agreement must be regarded in legal literature as an arbitral award on agreed terms, a petition under Section 34 of the Arbitration and Conciliation Act 1996 cannot be characterized as foreign knowledge to a conciliation agreement.