Parties resort to arbitration to obtain a final and binding resolution of their dispute. It is the arbitrators’ role to resolve the dispute by deciding all of the disputed issues and recording their decision in a document, called an arbitral award. Arbitral awards should be prepared with the greatest care to ensure they conform with the terms of the arbitration agreement, including any arbitration rules and the law of the place of arbitration , and are enforceable under the New York Convention.3 Any failure to comply with the agreed process and the requirements as to form and content may lead to challenges and create difficulties with enforcement.
Arbitrators have a wide discretion to resolve the disputes in arbitration by issuing different types of awards. Consequently, most national laws and arbitration rules do not define the various types of awards that are available but, when they do, they have taken an inconsistent approach to the labelling of awards. Even though the title of the award does not determine its legal effect, choosing the wrong title may lead to misunderstandings. Accordingly, arbitrators should be careful to use the appropriate title in order to avoid being prematurely and unintentionally deprived of power.
- Arbitrators should make it clear that a decision is an award by including the word ‘Award’ in the title, if it is indeed intended to be an award.
- Arbitrators should structure an award in a logical sequence and express their decision in a clear, concise and unambiguous manner.
- Arbitrators should endeavour to make an award that is valid and enforceable.
- Arbitrators should make their award in a timely and efficient manner.
- Once arbitrators have made their award, they should communicate it to the parties and to any arbitral institution administering the arbitration following the method provided for in the arbitration agreement, including any arbitration rules.
In the course of an arbitration arbitrators normally issue various decisions. Decisions relating to the organisation and general conduct of the arbitral proceedings which are purely procedural and/or administrative in nature should be made in the form of procedural orders or directions.4 Such decisions should be clearly distinguished from arbitral awards, which are intended to include a determination on the merits or affect the parties’ substantive rights and which can generally be enforced under the New York Convention.
- a) Arbitrators should keep in mind at all times that awards are first and foremost written for the parties. The clearer an award is, the more likely it is to be accepted by the parties and the less likely it is to be
challenged. For these purposes, awards should be in a format and layout which aids the communication of the arbitrators’ decision and invites reading. They may be written as a flowing narrative dealing with the
evidence as it arises naturally in the sequence of things or, where there are many different issues, on an issue-by-issue basis, dealing with the evidence and argument applicable to each issue separately.
- b) Arbitrators should consider using short sentences. As soon as a sentence ceases to have a clear and logical link to the preceding sentence, arbitrators should write a new paragraph. Arbitrators should use
numbered paragraphs. The award should also include informative headings and sub-headings. A table of contents is especially helpful in lengthy awards. To the extent possible, awards should avoid using technical or legalistic expressions and should be written in plain and simple language which sets out the decision in a coherent and unambiguous manner.
- c) When drafting an award arbitrators should also consider the wider audience who may read and are invited to take actions in relation to the award, including judges exercising a supportive or supervisory role and/ or third parties (such as insurers) whose interests may be affected by it.
An award should contain sufficient information to enable its audience to understand the issues and/or its meaning without the need to make further enquiry into the matter. They should not give rise to any questions as to their interpretation and they should not need clarifications.5 Arbitrators should not attach extensive documents to the award and/or refer to documents attached to the award. If it is necessary to refer to key documents it is good practice to quote the relevant passage(s)/part(s) in full. However, sometimes, arbitrators may attach certain documents to the award, such as the terms of reference, provisional orders and/or earlier awards when required under the relevant rules or for ease of reference.
Making a valid and enforceable award
- a) Awards are of no value if they are invalid and of limited value if they are not enforceable internationally. To be valid, an arbitral award needs to conform with the arbitration agreement, including any arbitration rules and the lex arbitri. To be enforceable internationally an award should also comply with the requirements of the New York Convention.
If one of the parties makes it clear that it may intend to enforce the award in another jurisdiction, the arbitrators may consider it appropriate to take account of any procedural requirements of the law of that
jurisdiction to the extent that they are made aware of these. Additionally, arbitrators may consider it appropriate to consider the law of the place where the debtor resides and/or has assets, and/or any other place(s) of likely enforcement, if known and, if so, to seek assistance from the party
expecting to enforce as to any particular requirements in such places.
- b) Arbitrators are not expected to consider the laws of every possible country where enforcement may be sought by the parties, it suffices to seek to minimise the risk that their award is set aside and/or refused
recognition and/or enforcement under the New York Convention.
Time limits for making awards
- a) Many national laws and arbitration rules do not specify any time limits within which the arbitrators must make their final award, leaving the matter to the arbitrators’ discretion. However, some expressly include provisions regarding time limits to expedite the arbitral proceedings and avoid delays in concluding the final award.8 Parties to the arbitration agreement may also prescribe a time limit, albeit this is less common.
- b) If any time limits for issuing a final award are specified in the arbitration agreement, including any applicable rules. arbitrators should manage the whole of the arbitration with this in mind.
If they are unable to comply, they should apply for or order an extension following any mechanism set out in the applicable rules. arbitri. If there is no specified mechanism for granting an extension of time limit, arbitrators should address the matter as early as possible and ask the parties to grant them the power to extend it. Alternatively, arbitrators may invite one or more of the parties to approach the national
courts at the place of arbitration to extend it, or apply themselves.
- c) In the absence of any specified time limit arbitrators should determine the appropriate time frame for making an award after taking into account the particular circumstances of the case, bearing in mind that good practice is to conduct the arbitral proceedings without delay and make awards in a timely manner. Additionally, arbitrators should, at the end of a hearing, inform the parties of the time frame within which they expect to make their award.
- d) The rules of some arbitral institutions administering arbitrations provide that they must review all awards in draft before they are communicated to the parties and/or their representatives. In those situations arbitrators must take the delay this may cause into consideration. If an award is not
made and communicated within the time specified, it may be set aside on the grounds that it was not made in accordance with the procedure agreed by the parties.