Arbitration and Conciliation Act- Arbitral Award (Meaning, Types, Form, Validity)

Introduction

It is a conclusive determination of question, issues or dispute brought forward to the arbitral tribunal.

Tribunal will give reasonable opportunity to all parties, it will hear all parties then finally come to conclusion about award or final decision.

In earlier post, wherein we have discussed proceedings of arbitration, we know one party submit for claim and other party defend it. Arbitral award is final determination, whether to grant a claim, or refuse a claim, or a decision about rights and liabilities of parties in disputes which are brought forward to arbitral tribunal.

Below are some actions which arbitral tribunal can take based on proceedings, hearing and evidence produced before it.

  • the tribunal may order the payment of a sum of money (conventional damages)
  • the tribunal may make a "declaration" as to any matter to be determined in the proceedings
  • in most jurisdictions, the tribunal has the same power as a court to: 
    • order a party to do or refrain from doing something ("injunctive relief") 
    • to order specific performance of a contract
    • to order the rectification, setting aside or cancellation of a deed or other document.

Kinds of Awards

Final Award

Final award is an award that is "Final"!!  This is an award which is made with requirements of law including signature, reason, date(For interest calculation) and delivery , and would be final adjudication on dispute submitted to arbitration tribunal.

Interim Award

Sometimes it becomes necessary to grant a temporary relief to a party. Take an example of dispute between Nirav and Vijay. Nirav is retail trader in beers, and Vijay is supplier. Vijay is not performing his obligation of supply of beers due to which Nirav is suffering loss daily. In this case, tribunal can ask Vijay to start supply immediately or may ask to pay some of the loss incurred by Nirav, until final decision is made as to how much loss Nirav had incurred and dispute thereto.

Issue will continue till final award is granted. This award will be in force till final award is conferred.

This is also a case, when multiple disputes are in question, and tribunal grant relief in some of the dispute before final orders.

There are below interim award
  • Which will remain in force till final award is granted.
  • In case of multiple dispute say D1,D2,D3, if award is granted for one dispute say D1, then this will be final with respect to that dispute , D1 in this case.

Settlement Award

Parties again, if tired of process and proceedings, and want to make settlement, they can go to arbitrator, saying that they wanted to settle the matter. In such a case Arbitrator will facilitate the settlement among parties. Once both the parties arrived at acceptance of some award, such an award would be settlement award. Also, such settlement could also be made of award, if there are multiple dispute, and settlement is arrived for one of the dispute.

Additional Award

For example there is dispute between Nirav and Vijay, and both go to arbitrator. Nirav claims damages of 10 Lakh Rs from Vijay. Arbitrator grant claim of Nirav. Later Nirav figured out that damages are more say 12 Lakh Rs, then in such case arbitrator can issue an additional award of 2 Lakh Rs.

There is catch however, the request for additional award has to made withing 30 days after final award is granted. Section 33(4) specifies this time limit

Characteristics of Arbitral Award to be Valid

First, Section 31(1)(1) requires that award must be signed, in writing and dated. Signature is important, and it should be of majority of arbitrators. If dissenting arbitrator don't sign the award it is well and good. Date is important to determine validity, time limit of appeal etc. 

Second, if there are more than one member, then decision of award must be agreed by majority of the arbitrator.

Third, Whatever the award given, reason for that must be stated in an award.  However, parties can agreed that mentioning of reason in arbitral award is not mandatory, in that case, it won't be mandatory of tribunal to mention the reasons.

Fourth, award should be clear and there should be no ambiguity as to awards. Kehna kya chahte ho  should not be reaction of the reader of the award.

Fifth, It is important that award should be enforceable and party have capacity to perform or against the public policy. Impossible award or illegal award would be void or set aside.

These are some of the characteristics for valid arbitral award.

Content of Arbitral Award


Tribunal can also specify below things
  • Party entitle to cost
  • The party who shall pay the cost
  • The amount of costs or method of determining that amount 
  • The manner in which such cost shall be paid
What is Cost here ?

It  includes below things
  • The fees and expenses of the arbitrators and witnesses
  • Legal fees and expenses
  • Any administration fees of the institution supervising the arbitration
  • Any other expense incurred in connection with the arbitral proceedings and the arbitral awards




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