## Facts

- A Mexican construction subcontractor performed work in Saudi Arabia under a subcontract with a Belgian company that was part of a consortium holding the main contract with a Saudi governmental entity.
- During performance, the Belgian company made unilateral payment deductions tied to alleged noncompliance or performance deficiencies.
- The Mexican company sent a notice terminating the subcontract; the Belgian company sent its own termination notice the next day.
- The Mexican company commenced ICC arbitration seated in Switzerland.
- The tribunal issued a partial award determining, among other matters, that the Mexican company’s termination was valid; the tribunal characterized this determination as important to multiple remaining issues.
- The Belgian company did not pursue any timely challenge to the partial award in the Swiss courts.
- In later stages of the same ICC arbitration, the Belgian company continued to contest the validity of the Mexican company’s termination, seeking to reopen what the partial award had resolved.

## Issues

1. Whether a partial award that conclusively decides a separable issue is final and binding within the same arbitration once the time to challenge it under the law of the seat has expired.
2. Whether a party that did not timely challenge a partial award may later re-argue the same decided issue before the tribunal in subsequent phases of the arbitration.
3. Whether the Mexican company’s termination notice was the effective termination of the subcontract for purposes of allocating liability and monetary consequences.

## Decision

- The tribunal treated the partial award as final and conclusive on the issues it expressly decided, including the validity of the Mexican company’s termination.
- Because the Belgian company did not timely challenge the partial award under Swiss law, the tribunal declined to revisit the termination determination during the continuing proceedings.
- The tribunal proceeded on the basis that the Mexican company’s termination was effective, and structured the remaining adjudication and relief on that premise.

## Legal Principles

- A partial award is an “award” with binding effect as to the issues it finally determines, even though the arbitration continues on other issues.
- Once the challenge period under the law of the seat expires without a set-aside action, the determinations in a partial award are final for purposes of the same arbitration.
- A party may not circumvent seat-court review mechanisms by attempting to re-litigate before the tribunal an issue conclusively decided in an unchallenged partial award.
- Issue preclusion principles apply within a single arbitration to bar renewed contest of an issue that was distinctly raised, decided, and left unchallenged within the applicable time limits.

## Conclusion

The tribunal enforced the finality of its earlier partial award, holding that an unchallenged partial award binds the parties on the issues it decides and prevents later re-argument of those issues in subsequent phases of the same arbitration.


Mexican Constr. Co. v. Belgian Co., 12 Y.B. Com. Arb. 87 (1987)