Requirements of a valid award
While drafting the award, one must make sure that the following requirements are met:
- a party was under not under some incapacity; or
- the arbitration agreement is valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
- the party making the application was given proper notice of the appointment of an arbitrator or of the arbitral proceedings and was otherwise able to present his case; or
- the arbitral award deals with a dispute contemplated by or falling within the terms of the submission to arbitration and it does not contain decisions on matters beyond the scope of the submission to arbitration;
- the composition of the arbitral tribunal or the arbitral procedure was in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of the Act;
- the subject-matter of the dispute is capable of settlement by arbitration under the law for the time being in force
- The arbitral award is not in conflict with the public policy of India;
- The award must be certain and consistent and not be vague.
Form and contents of an arbitral award:
To be made in writing and to be signed:
An oral award is not a valid one. An arbitral award must be made in writing and must be signed by the members of the arbitral tribunal.
For the purposes of subsection (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.
Statement of reasons:
Under the 1940 Arbitration Act, it was not required of the arbitrators to give reasons as to how it arrived at the award, resulting in vagueness. The Act, however, is based on the UNCITRAL Model Law on International Commercial Arbitration, which requires the arbitrators to state the reasons upon which it is based.
The Act requires that the arbitral award to 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 arbitral award on agreed terms under Section 30.
Date and place:
The arbitral award shall state its date and the place of arbitration as determined in accordance with Section 20 of the Act and the award shall be deemed to have been made at that place.
Signed copy to the parties:
After the arbitral award is made, a signed copy is to be delivered to each party.
Payment of money and interest
Where an arbitral award is for the payment of money, the arbitral tribunal may add interest upon the sum for which the award is made. It may apply the interest:
- at such rate which it deems to be 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.
The rate of interest on the sum directed to be paid by an arbitral award shall, unless the award otherwise directs, shall be at the rate of two percent higher than the current rate of interest prevalent on the date of the award. The time period for the calculation of interest shall be from the date of the award to the date of payment.
Costs of the arbitration:
The costs of arbitration shall be fixed by the arbitral tribunal in accordance with Section 31A.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.