Making of Arbitral Awards

3.1.1 The Arbitral Award - Overview

The arbitral award is the culmination of the arbitration process - the final decision of the tribunal resolving the dispute. A well-crafted award must not only decide the substantive issues correctly but must also meet formal requirements to be enforceable and resistant to challenge.

Section 31 - Form and Contents of Award

Section 31 of the Arbitration and Conciliation Act, 1996 sets out the essential requirements:

1. In Writing: The award must be in writing
2. Signed: Signed by members of the arbitral tribunal
3. Reasoned: Must state reasons for the award (unless settlement)
4. Dated: Must state the date of award
5. Place: Must state the place (seat) of arbitration

3.1.2 Form Requirements

Writing Requirement

The award must be in writing. Unlike the arbitration agreement, there is no provision deeming electronic awards as "in writing," though modern practice accepts electronically signed PDFs.

Signature Requirements

Section 31(1) requires signatures of the tribunal members:

• Three-Arbitrator Tribunal: Majority signatures sufficient if reason for omission stated
• Sole Arbitrator: Single signature required
• Dissenting Arbitrator: May sign with dissent or decline to sign
• Signature Location: Typically at the end of the award

Date and Place

• Date of Award: The date is critical for limitation purposes (Section 34 application within 3 months)
• Place/Seat: Determines the nationality of the award and supervisory court jurisdiction

3.1.3 Reasoning Requirements

Section 31(3) mandates that the award shall state the reasons upon which it is based, unless the parties have agreed that no reasons are to be given, or the award is a consent award under Section 30.

Purpose of Reasoning

• Demonstrates the tribunal's engagement with the issues
• Allows parties to understand how the tribunal reached its decision
• Provides basis for challenge (or resistance to challenge)
• Assists enforcement courts in understanding the award

What Constitutes Adequate Reasoning?

The standard is not as rigorous as court judgments, but must cover:

1. Issues in Dispute: Clear identification of the questions to be decided
2. Summary of Parties' Positions: Brief overview of each party's case
3. Key Evidence: Reference to evidence relied upon
4. Legal Analysis: Application of law to facts
5. Conclusions: Clear findings on each issue

Reasoning Best Practices

• Address each issue raised by the parties
• Explain why certain evidence was preferred over others
• Show the logical progression from facts to conclusions
• Reference relevant legal provisions and precedents
• Deal with counterclaims and set-offs separately

3.1.4 Award Structure and Content

Standard Award Structure

Costs Allocation

Section 31(8) and 31A deal with costs:

• Tribunal's Discretion: Unless parties agree, tribunal determines costs
• "Costs follow the event": General principle - loser pays
• Includes: Tribunal fees, institutional fees, legal costs, witness expenses
• Section 31A: (2015 Amendment) Tribunal shall determine "reasonable costs" having regard to various factors including conduct of parties

3.1.5 Majority Decisions and Dissent

Section 29 - Decision Making

Unless otherwise agreed by parties:

• Decision by majority of arbitrators
• Presiding arbitrator may decide procedural questions if authorized

Dissenting Opinions

Where an arbitrator disagrees with the majority:

• May sign with dissent noted
• May prepare separate dissenting opinion
• May decline to sign (majority signatures with reason stated sufficient)
• Dissent does not affect validity of award