In Duke Energy v Republic of Peru, (D.D.C., Sept. 14, 2012), Duke Energy petitioned the district court for confirmation of an ICSID arbitration award against the Republic of Peru. The Republic of Peru responded with a motion to dismiss or, in the alternative, a request to remand the dispute back to the tribunal for further clarification. The court was unconvinced by Peru's objections and confirmed the award.

The underlying dispute involved disagreement over Peru's taxation of a Peruvian subsidiary of Duke Energy. Duke Energy contested the tax assessment under prior government guarantees and initiated ICSID arbitration proceedings. Duke Energy won an arbitration award against Peru of damages plus simple interest calculated using the actual interest rate(s) stipulated for that period by the Peruvian tax authorities. Peru tendered payment of the damages called for in the award and interest at the then current statutory rate. When Peru subsequently modified the statutory interest rate, Duke Energy brought action in the district court to confirm the award, seeking a judgment of the difference between the original interest rate and the new increased rate. Peru argued that the applicable interest rate in the arbitral award was vague so the award should be remanded to the ICSID tribunal for clarification.

Although remand is a last resort , courts have authority to remand if the award is so ambiguous that the court is unable to discern how to enforce it. This presumption is based on concerns of judicial economy and finality of arbitral awards. In this case, the court declined the request for remand because it determined that the award was not ambiguous or indefinite. The court looked to the plain meaning of the award and emphasised that the tribunal set the interest rate at whatever the current applicable statutory rate was, which could fluctuate over time. Accordingly, the court confirmed the award to cover the difference owed due to changes in the applicable interest rate.

This case emphasises the very narrow grounds for remand of ambiguous arbitral awards and reflects the importance of judicial economy and finality in the context of arbitration.