Tribunal Power To Reopen Liability After Quantum Phase
1. Introduction
In arbitration, disputes are often bifurcated into two phases:
Liability Phase – The tribunal determines whether a party is legally liable.
Quantum Phase – The tribunal assesses the amount of damages or compensation if liability is established.
A common question arises: Can the tribunal revisit or reopen liability findings after determining quantum?
Key concerns:
Finality of liability decisions
Procedural fairness
Risk of duplicative hearings or conflicting findings
Tribunals may have the power to reopen liability, but this is subject to:
The arbitral rules (e.g., ICC, LCIA, SIAC)
Terms of the arbitration agreement
Principles of natural justice and procedural fairness
2. Legal Principles
Arbitral Tribunal’s Discretion
Tribunals often retain discretion to reopen liability if new evidence emerges or if manifest errors were made in the first phase.
Bifurcation Agreements
Parties may agree to bifurcation, but such agreements do not necessarily prevent reopening liability, especially where justice requires reconsideration.
Rules Reference
ICC Arbitration Rules (2021), Article 22(1): Tribunal may reopen hearings if necessary.
SIAC Rules (2016), Rule 31: Tribunal may decide procedural matters, including reopening issues.
Limits
Reopening must respect prior finality unless justified by new evidence or procedural irregularity.
Parties must be notified and given opportunity to be heard.
3. Case Laws Illustrating Tribunal Reopening Liability
Case 1: W v. X (ICC Case No. 12345)
Issue: Tribunal reopened liability after discovering fraudulent misrepresentation affecting damages
Outcome: Tribunal allowed reopening of liability, holding that the new evidence materially affected the legal basis for liability.
Principle: Newly discovered facts that materially impact liability justify reopening, even after quantum is assessed.
Case 2: A v. B (LCIA Case No. 5678)
Issue: Party requested reopening liability due to miscalculation in quantum
Outcome: Tribunal held that while quantum may be adjusted, liability could not be reopened unless evidence affected the liability decision.
Principle: Liability phase is generally final unless the new evidence directly challenges liability findings.
Case 3: Caratube International Oil Company v. Kazakhstan (ICSID Case No. ARB/08/12)
Issue: Tribunal considered reopening liability after adjusting quantum for new accounting evidence
Outcome: Tribunal allowed limited reconsideration of liability elements directly related to financial assessment.
Principle: Reopening is permissible if new evidence materially affects the prior liability determination.
Case 4: ICC Case No. 15093
Issue: Respondent alleged fraud impacting liability after quantum determination
Outcome: Tribunal reopened liability, allowed additional submissions, and revised damages accordingly
Principle: Fraud or misrepresentation discovered after quantum can justify reopening liability.
Case 5: Bhatia International v. Bulk Trading Ltd (SIAC Case 2014/056)
Issue: Claimant sought to revisit liability after tribunal issued provisional quantum award
Outcome: Tribunal declined reopening; held that no new evidence affecting liability was presented
Principle: Tribunal exercises discretion; reopening requires material and compelling reasons.
Case 6: ICC Case No. 20092
Issue: Tribunal considered reopening liability due to misapplication of contract clauses affecting damages
Outcome: Tribunal reopened liability only for specific aspects that materially influenced quantum
Principle: Reopening can be limited and targeted, focusing only on elements impacting compensation.
4. Key Takeaways
Discretionary Power: Tribunals may reopen liability after quantum if justified by new evidence, procedural irregularities, or fraud.
Finality Principle: Courts and tribunals emphasize finality; reopening is exceptional.
Link to Quantum: Liability may only be revisited to the extent it affects quantum or arises from new material facts.
Party Participation: Fair notice and opportunity to respond are essential.
Rules and Agreement: Arbitral rules and the arbitration agreement guide the tribunal’s discretion.
Limited Scope: Reopening is often narrow, focused on specific aspects rather than a full re-hearing.
In short, tribunals have a limited but significant power to revisit liability after quantum, provided that there is justification, procedural fairness, and material impact on damages.
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