LECTURE 16

ARBITRAL AWARDS
Ashwin Mishra
Assistant Professor
Jindal Global Law School
 Section 28 – Rule Applicable to Substance of Dispute
(1)Where the place of arbitration is situated in India,—
(a)in an arbitration other than an international commercial arbitration, the
arbitral tribunal shall decide the dispute submitted to arbitration in accordance
with the substantive law for the time being in force in India;
(b) in international commercial arbitration,—
(i) the arbitral tribunal shall decide the dispute in accordance with the
rules of law designated by the parties as applicable to the substance of
the dispute;
(ii) any designation by the parties of the law or legal system of a given
country shall be construed, unless otherwise expressed, as directly
referring to the substantive law of that country and not to its conflict of
laws rules;
(iii) failing any designation of the law under clause (a) by the parties, the
arbitral tribunal shall apply the rules of law it considers to be
appropriate given all the circumstances surrounding the dispute.
(2)The arbitral tribunal shall decide ex aequoet bono or as amiable compositeur
only if the parties have expressly authorized it to do so.
(3)While deciding and making an award, the arbitral tribunal shall, in all cases, take
into account the terms of the contract and trade usages applicable to the
transaction.
 Section 29 – Decision making by panel of arbitrators
(1)Unless otherwise agreed by the parties, in arbitral proceedings with more
than one arbitrator, any decision of the arbitral tribunal shall be made by a
majority of all its members.
(2)Notwithstanding sub-section (1), if authorized by the parties or all the
members of the arbitral tribunal, questions of procedure may be decided
by the presiding arbitrator.
Section 30 – Settlement
(3)It is not incompatible with an arbitration agreement for an arbitral tribunal to
encourage settlement of the dispute and, with the agreement of the parties,
the arbitral tribunal may use mediation, conciliation or other
procedures at any time during the arbitral proceedings to encourage
settlement.
(4)If, during arbitral proceedings, the parties settle the dispute, the
arbitral tribunal shall terminate the proceedings and, if requested by the
parties and not objected to by the arbitral tribunal, record the settlement
in the form of an arbitral award on agreed terms.
(5)An arbitral award on agreed terms shall be made in accordance with section
 Section 29A – Time Limit for Arbitral Award
(1) The award in matters other than international section (5) is pending, the mandate of the arbitrator
commercial arbitration shall be made by the arbitral shall continue till the disposal of the said application:
tribunal within a period of twelve months from the Provided also that the arbitrator shall be given an
date of completion of pleadings under sub-section opportunity of being heard before the fees is reduced.
(4) of section 23:
(5) The extension of period referred to in sub-section
Provided that the award in the matter of (4) may be on the application of any of the parties and
international commercial arbitration may be may be granted only for sufficient cause and on
made as expeditiously as possible and endeavor such terms and conditions as may be imposed by
may be made to dispose of the matter within a period the Court.
of twelve months from the date of completion of
pleadings under sub-section (4) of section 23. (6) While extending the period referred to in sub-section
(4), it shall be open to the Court to substitute one
(2) If the award is made within a period of six months or all of the arbitrators and if one or all of the
from the date the arbitral tribunal enters upon arbitrators are substituted, the arbitral proceedings
the reference, the arbitral tribunal shall be shall continue from the stage already reached and on
entitled to receive such amount of additional fees the basis of the evidence and material already on
as the parties may agree. record, and the arbitrator(s)appointed under this
(3) The parties may, by consent, extend the period section shall be deemed to have received the said
specified in sub-section (1) for making award for a evidence and material.
further period not exceeding six months. (7) In the event of arbitrator(s) being appointed under this
(4) If the award is not made within the period section, the arbitral tribunal thus reconstituted
specified in sub-section (1) or the extended period shall be deemed to be in continuation of the
specified under sub-section (3), the mandate of the previously appointed arbitral tribunal.
arbitrator(s) shall terminate unless the Court has, (8) It shall be open to the Court to impose actual or
either prior to or after the expiry of the period so exemplary costs upon any of the parties under
specified, extended the period: this section.
Provided that while extending the period under this
sub-section, if the Court finds that the proceedings (9) An application filed under sub-section (5) shall be
 Section 29B – Fast Track Procedure
(1) Notwithstanding anything contained in this Act, the parties to an arbitration agreement, may, at
any stage either before or at the time of appointment of the arbitral tribunal, agree in writing to
have their dispute resolved by fast track procedure specified in sub-section (3).
(2) The parties to the arbitration agreement, while agreeing for resolution of dispute by fast track
procedure, may agree that the arbitral tribunal shall consist of a sole arbitrator who shall be
chosen by the parties.
(3) The arbitral tribunal shall follow the following procedure while conducting arbitration proceedings
under sub-section (1):—
(a) The arbitral tribunal shall decide the dispute on the basis of written pleadings,
documents and submissions filed by the parties without any oral hearing;
(b) The arbitral tribunal shall have power to call for any further information or
clarification from the parties in addition to the pleadings and documents filed by them;
(c) An oral hearing may be held only, if, all the parties make a request or if the arbitral
tribunal considers it necessary to have oral hearing for clarifying certain issues;
(d) The arbitral tribunal may dispense with any technical formalities, if an oral hearing is
held, and adopt such procedure as deemed appropriate for expeditious disposal of the case.
(4) The award under this section shall be made within a period of six months from the date
the arbitral tribunal enters upon the reference.
(5) If the award is not made within the period specified in sub-section (4), the provisions of
subsections (3) to (9) of section 29A shall apply to the proceedings.
(6) The fees payable to the arbitrator and the manner of payment of the fees shall be such as may be
agreed between the arbitrator and the parties.
 Section 31 – Form and contents of arbitral award
(1) An arbitral award shall be made in writing and payment of money, the arbitral tribunal may
shall be signed by the members of the include in the sum for which the award is made
arbitral tribunal. interest, at such rate as it deems
reasonable, on the whole or any part of the
(2) For the purposes of sub-section (1), in arbitral money, for the whole or any part of the
proceedings with more than one arbitrator, the period between the date on which the
signatures of the majority of all the members cause of action arose and the date on
of the arbitral tribunal shall be sufficient so which the award is made.
long as the reason for any omitted signature
is stated. (b) A sum directed to be paid by an arbitral award
shall, unless the award otherwise directs, carry
(3) The arbitral award shall state the reasons upon interest at the rate of two per cent. higher than
which it is based, unless— the current rate of interest prevalent on the
(a) the parties have agreed that no reasons are date of award, from the date of award to the
to be given, or date of payment.
(b) the award is an arbitral award on agreed Explanation.—The expression “current rate of
terms under section 30. interest” shall have the same meaning as
assigned to it under clause (b) of section 2 of
(4) The arbitral award shall state its date and the the Interest Act, 1978 (14 of 1978).
place of arbitration as determined in accordance
with section 20 and the award shall be deemed to (8) The costs of an arbitration shall be fixed by the
have been made at that place. arbitral tribunal in accordance with section 31A.
(5) After the arbitral award is made, a signed copy Explanation.—For the purpose of clause (a),
shall be delivered to each party. “costs” means reasonable costs relating to—
(i) the fees and expenses of the arbitrators
(6) The arbitral tribunal may, at any time during the and witnesses,
arbitral proceedings, make an interim arbitral
award on any matter with respect to which it (ii) legal fees and expenses,
may make a final arbitral award. (iii)any administration fees of the institution
 Section 31A – Regime for Costs
(1) In relation to any arbitration proceeding or a including
proceeding under any of the provisions of this Act (a) Conduct of all the parties;
pertaining to the arbitration, the Court or arbitral
tribunal, notwithstanding anything contained in (b) Whether a party has succeeded partly in
the Code of Civil Procedure,1908 (5 of 1908), shall the case;
have the discretion to determine— (c) Whether the party had made a frivolous
(a) whether costs are payable by one party to counterclaim leading to delay in the
another; disposal of the arbitral proceedings; and
(b)the amount of such costs; and (d)whether any reasonable offer to settle the
dispute is made by a party and refused by
(c) when such costs are to be paid. the other party.
Explanation.—For the purpose of this sub-
section, “costs” means reasonable costs relating (4) The Court or arbitral tribunal may make any order
to— under this section including the order that a party
(i) the fees and expenses of the shall pay—
arbitrators, Courts and witnesses; (a) a proportion of another party’s costs;
(ii) legal fees and expenses; (b)a stated amount in respect of another
(iii)any administration fees of the party’s costs;
institution supervising the arbitration; (c) costs from or until a certain date only;
and (d)costs incurred before proceedings have
(iv) any other expenses incurred in begun;
connection with the arbitral or Court (e) costs relating to particular steps taken in
proceedings and the arbitral award. the proceedings;
(2) If the Court or arbitral tribunal decides to make an (f) costs relating only to a distinct part of the
order as to payment of costs,— proceedings; and
(a) the general rule is that the unsuccessful (g)interest on costs from or until a certain
party shall be ordered to pay the costs of date.
 Section 32 – Termination of Proceedings
(1)The arbitral proceedings shall be terminated by the final
arbitral award or by an order of the arbitral tribunal under
sub-section (2).

(2) The arbitral tribunal shall issue an order for the termination of
the arbitral proceedings where—
(a)the claimant withdraws his claim, unless the respondent
objects to the order and the arbitral tribunal recognizes a
legitimate interest on his part in obtaining a final settlement of
the dispute,
(b)the parties agree on the termination of the proceedings, or
(c)the arbitral tribunal finds that the continuation of the
proceedings has for any other reason become
unnecessary or impossible.
 Section 33 – Correction & Interpretation of Award;
Additional from
(1) Within thirty days from the receipt of
Award
the date of the arbitral award.
the arbitral award, unless another period
(4) Unless otherwise agreed by the parties, a
of time has been agreed upon by the
party with notice to the other party, may
parties—
request, within
(a)a party, with notice to the other thirty days from the receipt of the arbitral
party, may request the arbitral award, the arbitral tribunal to make an
tribunal to correct any additional arbitral award as to claims
computation errors, any clerical or presented in the arbitral proceedings
typographical errors or any other but omitted from the arbitral award.
errors of a similar nature
occurring in the award; (5) If the arbitral tribunal considers the
request made under sub-section (4) to be
(b)if so agreed by the parties, a party,
justified, it shall make the additional
with notice to the other party, may
arbitral award within sixty days from
request the arbitral
the receipt of such request.
tribunal to give an interpretation of
a specific point or part of the award. (6) The arbitral tribunal may extend, if
necessary, the period of time within which
(2) If the arbitral tribunal considers the
it shall make a correction, give an
request made under sub-section (1) to be
interpretation or make an additional
justified, it shall
arbitral award under sub-section (2) or
make the correction or give the
sub-section 5).
interpretation within thirty days from
the receipt of the request and the (7) Section 31 shall apply to a correction or
interpretation shall form part of the interpretation of the arbitral award or to