Why Arbitration?There are few advantages that parties to a dispute get in arbitration than approaching courts and these include the following:Parties are free to appoint the arbitrators as per their aggrement unlike in courts where parties are bound by the judgments of the judges.Litigation in the courts is generally lethargic and takes much more time than the arbitration.Arbitration is much more cheaper than the litigation in the courts and is less formal as well in comparision to the courts.
Because of the force of New York Convention 1958, arbitration awards can be made enforceable in the other nations as well unlike the court judgments which don’t have their force in other nations. The authors in this article try to compare the UNCITRAL Model Law, English Law and the Indian Law with respect to the arbitral awards and the recourses available against such awards. UNCITRAL Model Law is considered to be the central law and based on this various other countries have framed their own domestic arbitration laws.
Now the reason why English Arbitration Law is taken for comparison is that the English arbitration law is considered to be one of the best arbitration laws in the world and also English Legal System though has taken UNCITRAL Model Law as the model to frame their domestic arbitration laws but significantly have not adopted the same blindly rather gave their individualistic approach. Another reason for English Arbitration Law comparision is their being a model common law country.ESSENTIALS OF A VALID ARBITRAL AWARDBefore going to the essentials of a valid arbitral award, it is essential to understand as to what constitutes an arbitration award and what is the difference between an award and other arbitration decisions.
Surprisingly this being such an essential term has not been defined either in any international convention or in any national legislation. As per Russell, arbitration award is the final determination of the claim or issue in the arbitration. However no definition has been given for an award in any international convention but the nearest definition can be deduced from the New York Convention whose Article 1(2) states: The term arbitral awards shall include not only awards made by arbitrators appointed for each case but also those made by permanent arbitral bodies to which the parties have submitted.Now further to ascertain the definition of an arbitration award we can go to the forms and contents that an award should contain and for that purpose we need to look into various other international conventions. As per Article 31 of the UNCITRAL Model Law on Arbitration which provides that: Article 31. Form and contents of award (1) The award shall be made in writing and shall be signed by the arbitrator or arbitrators. In arbitral proceedings with more than one arbitrator, the signatures of the majority of all members of the arbitral tribunal shall suffice, provided that the reason for any omitted signature is stated. (2) The award shall state the reasons upon which it is based, unless the parties have agreed that no reasons are to be given or the award is an award on agreed terms under article 30. (3) The award shall state its date and the place of arbitration as determined in accordance with article 20(1). The award shall be deemed to have been made at that place.(4) After the award is made, a copy signed by the arbitrators in accordance with paragraph (1) of this article shall be delivered to each party.From above provisions two requirements can be pointed out. First, that the arbitration award should be in written form and also signed by the arbitrators and second requirement is that the award should be reasoned and there should be the statement of that reason in the award. However there are two exceptions to the second requirement which are as follows:1. The parties can agree otherwise that the reason can be given in different form or that no reason is required to be given at all.2. In the case of an award on agreed terms under Article 30. Award on agreed terms here mean that there was mutual consent of both the parties in the passing of the award.Now when we look at the third requirement of the Model Law, it states that the award shall contain the date and place of award i.e. when and where it has been passed and place stated in the award shall be assumed to be the place of the award. Now the fourth requirement of the Model law states that the signed copy of the award made shall be delivered to the parties. So these are the requirements of a valid arbitration award as per the UNCITRAL Model Law and now we will look into the requirements of a valid arbitration award as per the English Law. Section 52 of Arbitration Act, 1996 under English Law states the requirements of a valid arbitration award, which are as follows:Form of award. (1) The parties are free to agree on the form of an award. (2) If or to the extent that there is no such agreement, the following provisions apply. (3) The award shall be in writing signed by all the arbitrators or all those assenting to the award. (4) The award shall contain the reasons for the award unless it is an agreed award or the parties have agreed to dispense with reasons. (5) The award shall state the seat of the arbitration and the date when the award is made.Now what we can deduce from the above section is that the award under English Law can be of a particular form which is agreed by both the parties but if there hasn’t been any such agreement with regard to the form of the award then the provisions from Section 52(3) to Section 52(5) shall apply. There isn’t any such requirement in an award to be described as an award anywhere. Thus the requirements of a valid award under the English Law are all the most similar to the requirements under Model Law. However under English Law there are certain substantive requirements as well for a valid award such as the award must contain the decision by the tribunal and that decision must be complete and final with regard to the issue or the claim it dealt with and finally there should be certainty with respect to the duties and obligations as imposed in the award.Now we further go on to the comparison and look into the essentials of a valid arbitration award in Indian Law. Section 31 of The Arbitration and Conciliation Act, 1996 states the essential requirements of a valid arbitral award, which are as follows: Section 31 in THE ARBITRATION AND CONCILIATION ACT, 199631. Form and contents of arbitral award.”1. An arbitral award shall be made in writing and shall be signed by the members of the arbitral tribunal.2. For the purposes of sub-section (1), in arbitral proceedings with more than one arbitrator, the signatures of the majority of all the members of the arbitral tribunal shall be sufficient so long as the reason for any omitted signature is stated.3. The arbitral award shall state the reasons upon which it is based, unless”(a) the parties have agreed that no reasons are to be given, or(b) the award is an arbitral award on agreed terms under section 30.4. The arbitral award shall state its date and the place of arbitration as determined in accordance with section 20 and the award shall be deemed to have been made at that place.5. After the arbitral award is made, a signed copy shall be delivered to each party.6. The arbitral tribunal may, at any time during the arbitral proceedings, make an interim arbitral award on any matter with respect to which it may make a final arbitral award.7. (a) Unless otherwise agreed by the parties, where and in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.(b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of eighteen per centum per annum from the date of the award to the date of payment.8. Unless otherwise agreed by the parties,”(a) the costs of an arbitration shall be fixed by the arbitral tribunal;(b) the arbitral tribunal shall specify”i. the party entitled to costs,ii. the party who shall pay the costs,iii. the amount of costs or method of determining that amount, andiv. the manner in which the costs shall be paid. Explanation.”For the purpose of clause (a), costs means reasonable costs relating to”I. the fees and expenses of the arbitrators and witnesses,II. legal fees and expenses,III. any administration fees of the institution supervising the arbitration, andIV. any other expenses incurred in connection with the arbitral proceedings and the arbitral award.The very first requirement of a valid arbitral award is similar to that of Model Law requirement. It states that the award must be in writing and shall be signed by the members of the arbitration but the second provision says that if there are more than one member in the arbitration panel then there is no mandate of the signatures of all the arbitrators but the signatures of the majority of the members will also do. It is important to notice that in Arbitration Tribunal, the number of arbitrators should always be odd i.e. 1, 3, 5 etc.Further clause 3 is with regard to the reason of the award which is similar to the provision of the Model Law and it is also same in the English law as well. Clause 4 states about the place and date of the award which is also similar to that of the Model Law and the English Law. Further, clause 5 which is with regard to the delivery of the signed copy of the award to the parties which is same in the Model Law and the English Law. Arbitral Tribunal can also make interim award during the proceedings. Unlike in Model Law and the English Law, The Arbitration and Conciliation Act, 1996 states that the tribunal can fix the reasonable interest in the payment of money in award, from the date of the award and the payment of money and if the tribunal does not fix any such interest than the interest at the rate of 18% applies. Tribunal shall also fix the arbitration cost and the party which has to pay.It is to be noted that none of arbitration institutions set out any specific requirement or obligation with respect to the arbitrator except ICSID (International Center for Settlement of Investment Disputes) which is an international arbitration institution which was established on October 14, 1966 for the disputes resolution between the international investors. It is a part of World Bank Group. ICSID under rule 47 states the following:(1) The award shall be in writing and shall contain: (a) a precise designation of each party;(b) a statement that the Tribunal was established under the Convention, and a description of the method of its constitution; (c) the name of each member of the Tribunal, and an identification of the appointing authority of each; (d) the names of the agents, counsel and advocates of the parties; (e) the dates and place of the sittings of the Tribunal; (f) a summary of the proceeding; (g) a statement of the facts as found by the Tribunal; (h) the submissions of the parties; (i) the decision of the Tribunal on every question submitted to it, together with the reasons upon which the decision is based; and (j) any decision of the Tribunal regarding the cost of the proceeding.