The Nature of Arbitral Authority: A Comment on Lesotho Highlands

Abstract

Arbitration unfolds within an enclosure created by the contract terms and the applicable arbitration law. Some measure of judicial scrutiny must be imposed to ensure that an award does not fall beyond an arbitrator’s authority. But how should one identify excess of authority? The House of Lords decision in Lesotho Highlands v. Impreglio serves as a prism through which to separate several themes that inhere in the nature of arbitral authority. In rejecting arguments that an error about the currency of an award represented an excess of jurisdiction, their Lordships confirmed a healthy appreciation that arbitrators do not exceed their powers simply by making a mistake. Moving past Lesotho Highlands, this article suggests that defining jurisdictional excess in arbitration implicates a tension between the principle that awards should be final on the merits and the equally important rule that arbitration must remain consensual.

Keywords: Lesotho Highlands, Arbitration, Excess of Authority, Arbitrator Error, Jurisdictional Excess, International Arbitration, Consensual Contract

JEL Classification: K33