Jiitee Työt Oy v Finland
Unreasoned expedited arbitration award does not violate Article 6 ECHR
Core issue
The ECtHR held that a commercial party may validly waive the right to a reasoned arbitral award in voluntary arbitration, provided the waiver is free, lawful, unequivocal, and accompanied by procedural safeguards proportionate to the importance of the right waived. The Court rejected the argument that the duty to give reasons is an unwaivable minimum guarantee in voluntary commercial arbitration.
Background
The applicant, Jiitee Työt Oy, a Finnish company based in Vantaa, had entered into six contracts with another limited liability company, “M.”, for repair works to rail tunnels. The contracts contained arbitration clauses referring disputes to the Arbitration Institute of the Finland Chamber of Commerce, with a sole arbitrator.
When M. commenced arbitration in May 2022, both parties agreed that the FAI Rules for Expedited Arbitration would apply. At the first case management conference, Jiitee Työt Oy was represented by two lawyers, and the parties declared that the award did not need to contain reasons. The arbitrator later gave the parties a further opportunity to request a reasoned award within a set time limit; neither party did so.
The award was issued on 7 December 2022. It ordered Jiitee Työt Oy to pay EUR 329,781.48 plus late-payment interest for unpaid invoices, EUR 87,870.67 plus interest for M.’s legal costs, and certain arbitral fees. The award contained no statement of facts, legal reasoning, or grounds for the tribunal’s decision.
Domestic court proceedings
Jiitee Työt Oy challenged the award before the Helsinki District Court, arguing that an entirely unreasoned award violated Finnish public policy because courts could not review whether the award had a legal basis. The District Court rejected the challenge, holding that Finnish arbitration law did not require arbitral awards to contain reasons and that the applicant had agreed to an expedited procedure under which reasons would be provided only if requested.
The Helsinki Court of Appeal dismissed the appeal, accepting that an unreasoned award in voluntary arbitration was not contrary to Finnish public policy. The Finnish Supreme Court refused leave to appeal on 26 September 2024.
ECtHR’s reasoning
Finland argued that the applicant had freely chosen expedited arbitration, had expressly waived the right to reasons, had been legally represented, and had enjoyed the opportunity to present its case. Finland also stressed party autonomy, speed, finality, cost efficiency, confidentiality, and the narrow scope of judicial review in arbitration.
On the merits, the Court reiterated its settled distinction between compulsory and voluntary arbitration. Voluntary arbitration does not fall outside Article 6 altogether; rather, by accepting arbitration, parties may waive certain Article 6 rights. Such a waiver is Convention-compliant only if it is established in a free, lawful, and unequivocal manner, and if minimum guarantees commensurate with the importance of the waiver remain in place.
The Court found those conditions satisfied. Jiitee Työt Oy had voluntarily accepted expedited arbitration; there was no allegation of duress; Finnish law permitted party-agreed arbitral procedure; the FAI Rules allowed objections to procedural non-compliance; and Finnish law preserved limited annulment and nullity review.
The decisive point was that the applicant had agreed to the FAI expedited rules, had confirmed at the case management conference that no reasons were needed, had failed to request reasons within the arbitrator’s time limit, and had not objected to any procedural non-compliance. The Court also noted that the applicant was represented by two lawyers.
The Court accepted that Article 6 generally requires tribunals to examine parties’ submissions and provide reasons, but held that, in voluntary commercial arbitration, the obligation to state reasons is not such a fundamental procedural principle that its waiver is impermissible. It concluded that the waiver was free, lawful, unequivocal, and attended by adequate safeguards. There was therefore no violation of Article 6 § 1.
Interestingly enough, a similar issue of due-process waiver was brought up in passing in the majority opinion in Venezuela US SRL v Bolivarian Republic of Venezuela, where the D.C. Circuit cited Employers Insurance of Wausau v Banco de Seguros del Estado, 199 F.3d 937, 942 (7th Cir. 1999) for the proposition that New York Convention protections mirroring domestic due-process rights may be waived.