New York Convention, 1958
The New York Convention is the most successful treaty in private international law. It laid the foundations of international arbitration and is followed by more than 160 countries. New York Convention proposed the definition of ‘award.’ There are many kinds of awards in an arbitral proceeding. The definition of an award meant a final award disposing off all the issues submitted to an arbitral tribunal. All the other decisions of the arbitral tribunal determining the questions of fact, competence or procedure shall be termed as a decision/interim award. Although, the solutions for differentiating awards which are final or not have been adopted. Under the New York Convention, awards made in one country can be enforced in another country freely.
Types of Awards
Interim Award – This is a temporary award until the tribunal has given its final decision. A provisional award can only be made if the parties have agreed that “the tribunal may have the power to order on a provisional basis any relief which it would have the power to grant in a final award”. This includes making a provisional order for the payment of money or the disposition of property between the parties or an order to make an interim payment on account of the costs of the arbitration.
Partial Award – Some elements of the parties’ claim have been determined but other issues remain and need to be resolved before the final award is made. Parties can continue arbitrating the remaining issues.
Consent Award – Usually the parties have reached a settlement and agreed to terms which are then incorporated into an award which can be enforced similarly to a judgment by consent. A consent award enables one party to take enforcement proceedings when another party fails to comply with the terms of the settlement. Consent awards usually expedite the conclusion of arbitration proceedings.
Performance Award – It is most common to see awards made in monetary terms, however, a party can be ordered to perform specific works, or hand over goods or rights. For example, a contractor may be required to carry out remedial works in a building to ensure work is finished to the quality required. The difficulty is that these types of awards create grounds for further dispute. An arbitrator should award a monetary award where possible in these instances to avoid escalation of conflict.
Draft Award -This is not binding on the parties until it has been confirmed by the tribunal.
Final Award – This should usually be in writing and signed by all the arbitrators. The award must contain reasons and state where the arbitration took place. It must also be dated (this is important for calculating interest on payments). Once the final award is made these ends proceedings.
Additional Award – Usually once the final award it made, the tribunal has no further authority. However, the parties can request an additional award be made on an undecided issue still in dispute.
Arbitration and Conciliation Act, 1996
In complicated and long issues, every issue is held separately having an individual award which can be enforced individually because of the 2015 amendment. All these interim orders during the course of hearings combine to make a final award.
An Arbitral Tribunal can pass Interim Orders under Section 17 during the arbitral proceedings or at the time after making an arbitral award, upon request of any party. Such Orders shall be passed before the enforcement of the award shall be enforceable under the Code of Civil Procedure, 1908. Such application to the arbitral tribunal can be made for the following reasons:
- appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings
- the preservation, interim custody or sale of any goods which are the subject matter of the arbitration agreement
- securing the amount in dispute in the arbitration
- the detention, preservation or inspection of any property or thing which is the subject matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party or authorising any samples to be taken, or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence
- interim injunction or the appointment of a receiver
- such other interim measure of protection as may appear to the arbitral tribunal to be just and convenient
The above interim order can be passed by courts as well under Section 9 of the act.
Under Section 35, arbitral awards shall be final and binding on the parties and persons claiming under them. An Arbitral Award can be challenged under Section 34 and set aside under Section 37. For correction and interpretation of the award along with any additional award, an application under Section 33 must be made.
Whether Orders passed by the Tribunal amount to any award?
In Harinarayan G. Bajaj v. Sharedeal Financial Consultants, Pvt. Ltd. Reported in AIR 2003 Bombay 296
- An order passed in course of continuing proceedings does not amount to an award.
- The application for court assistance in taking evidence was rejected under section 27 of the Arbitration and Conciliation Act in the above case. It was held that it is neither an interim nor final award. It is an order.
- Every order passed by Arbitral Tribunal is not an award.
- Such orders are not interim awards and may not be challenged under section 34.
In Societe Industrial Export-Import v. Societe GECI et GFC 1993 Rev arb 303
- The court was asked to determine whether procedural orders were awarded.
- The arbitral tribunal had held that as it was competent to rule on its own jurisdiction, it could determine the applicable procedural rules and had rejected an application for suspension of the arbitral proceedings.
- The Paris Court of Appeal held that in each case the decisions of the arbitral tribunal were in fact awards because they constituted decisions of a jurisdictional nature.