Key Concepts

Rules Applicable to the Substance of the Dispute

1. Party Autonomy (Section 28):
   • Parties are free to agree on the rules of law applicable to the substance of the dispute.
   • In the absence of such an agreement, the tribunal applies the laws of the country most closely connected to the subject matter.
2. Equity and Justice:
   • The tribunal may decide ex aequo et bono (on principles of fairness) if expressly authorized by the parties.

Settlement

1. Encouragement of Settlement (Section 30):
   • Tribunals can encourage parties to settle disputes during proceedings.
   • A settlement reached during arbitration can be recorded as an arbitral award on agreed terms, which has the same status as an award on the merits.
2. Conciliation within Arbitration:
   • Tribunals may use conciliation techniques to help parties reach a mutually acceptable resolution.

Form and Contents of an Arbitral Award (Section 31)

1. Essential Elements:
   • Must be in writing and signed by all arbitrators or the majority, with reasons for dissent noted.
   • Should include the date, place of arbitration, and reasons unless parties agree otherwise.
2. Specific Provisions:
   • Must detail the tribunal’s reasoning, orders, and allocation of costs.

Termination of Proceedings (Section 32)

1. Modes of Termination:
   • By Award: Completion of arbitration through an award.
   • By Agreement or Withdrawal: If the claimant withdraws the claim or the parties agree to terminate.
   • Impossibility: If arbitration becomes unnecessary or impossible.
2. Finality:
   • Termination precludes further arbitral proceedings unless challenged or set aside.

Effect of an Award

1. Binding Nature (Section 35):
   • The award is final and binding on the parties.
2. Enforcement (Section 36):
   • An award is enforceable as a decree of the court once the period for challenge expires or after the rejection of a challenge.

Types of Arbitral Awards in India

1. Final Award:
   • Resolves all substantive issues between the parties.
2. Interim Award:
   • Decides preliminary issues or grants interim relief before the final award.
3. Consent Award:
   • Issued when the parties settle arbitration proceedings.
4. Additional Award:
   • Issued to address claims omitted in the final award if requested within a specified period.
5. Partial Award:
   • Addresses specific issues in the dispute while the arbitration continues on other matters.

Understanding the Significance of Seat and Venue in Arbitration

1. Seat of Arbitration:
   • Determines the applicable procedural law (lex arbitri).
   • Governs the arbitration’s legal framework, including court jurisdiction for challenges and enforcement.
2. Venue of Arbitration:
   • Refers to the physical location where hearings and meetings are conducted.
   • Does not affect the applicable procedural law unless expressly agreed by parties.
3. Key Differences:
   • The seat is critical for legal jurisdiction, while the venue is logistical.
   • The seat impacts the enforceability and recognition of the award.
4. Judicial Precedents:
   • Indian courts have clarified the distinction between seat and venue, emphasizing the seat’s importance in determining jurisdiction.

Key Terms

Making of Arbitral Award and Termination of Proceedings

1. Substantive Law (Section 28): Rules of law chosen by the parties or determined by the tribunal to resolve the dispute.
2. Settlement (Section 30): Agreement between parties during arbitration, recorded as an arbitral award on agreed terms.
3. Form of Award (Section 31): Written document signed by arbitrators, stating reasons (unless waived by parties).
4. Termination of Proceedings (Section 32): Closure of arbitration by issuance of the final award or other specified reasons.
5. Binding Award (Section 35): Final and enforceable decision, equivalent to a court decree.

Types of Arbitral Awards in India

1. Final Award: Resolves the entire dispute, concluding the arbitration.
2. Interim Award: Addresses preliminary issues or grants temporary relief during proceedings.
3. Consent Award: Based on a settlement agreement reached by the parties.
4. Additional Award: Issued to address claims inadvertently omitted in the final award.
5. Partial Award: Resolves specific issues, leaving other matters open for further deliberation.

Significance of Seat and Venue

1. Seat of Arbitration: Determines the procedural law (lex arbitri) and court jurisdiction.
2. Venue of Arbitration: Physical location where hearings are held, distinct from the seat unless explicitly agreed.
3. Jurisdictional Importance: Seat impacts enforcement and challenge of awards, while venue influences logistical arrangements.

Review Questions

Making of Arbitral Award and Termination of Proceedings

1. What rules apply to the substance of a dispute in the absence of an agreement between the parties?
2. How can an arbitral tribunal encourage settlement during proceedings?
3. What are the essential components required in the form and content of an arbitral award?
4. What are the grounds for terminating arbitral proceedings other than the issuance of the final award?
5. What is the effect of an arbitral award, and how is it enforced under the Arbitration and Conciliation Act, 1996?

Types of Arbitral Awards in India

1. What distinguishes a final award from a partial award?
2. Under what circumstances can a consent award be issued, and what is its legal standing?
3. What is an additional award, and when can a party request it?
4. How does an interim award benefit parties during arbitration proceedings?

Significance of Seat and Venue

1. What is the legal significance of the seat of arbitration in determining procedural law?
2. How does the venue of arbitration differ from the seat in terms of its purpose and impact?
3. Why is the seat of arbitration important for the enforcement of awards in India?
4. How have Indian courts clarified the relationship between seat and venue in arbitration proceedings?