Preparation and Execution of Arbitral Award: formula sheet

Key formulas

Form of award (s 31(1))

Award = in writing + signed by members of the tribunal

Oral awards are not valid.

Signatures where more than one arbitrator (s 31(2))

Signatures of majority of ALL members + reason for each omitted signature stated

Majority is of the whole tribunal. The reason for the missing signature must be stated.

Reasons (s 31(3))

Reasons required unless (a) parties agreed no reasons, or (b) agreed-terms award under s 30

Both exceptions are the only ones listed.

Date and place (s 31(4))

Award states date + place of arbitration (as per s 20); deemed made at that place

Deemed place is the place of arbitration, not where it was physically signed.

Delivery (s 31(5))

Signed copy delivered to each party

Receipt starts the three-month period under s 34(3).

Interim award (s 31(6))

Interim award allowed at any time during proceedings on any matter that a final award could decide

It is an award, so s 31 requirements apply.

Reasons in the award

Award must state reasons, unless (a) parties agreed no reasons, or (b) award on agreed terms under s.30

Section 31(3). Two exceptions only.

Settlement during proceedings

Parties settle → tribunal terminates proceedings → on request and without tribunal's objection, settlement recorded as award on agreed terms

Section 30(2). Termination is mandatory; recording needs a request.

Form of agreed-terms award

Made under s.31 + must state it is an arbitral award

Section 30(3).

Status of agreed-terms award

Same status and effect as any other award on the substance of the dispute

Section 30(4). Section 74 gives a conciliation settlement agreement the same effect.

Additional award

Request within 30 days of receiving award, with notice to the other party; tribunal makes it within 60 days of the request

Section 33(4) and (5). Request period applies unless parties agreed otherwise; tribunal may extend its time under s.33(6).

Correction of errors

Request within 30 days of receipt; tribunal decides within 30 days; own initiative within 30 days of the award date

Section 33(1), (2), (3). Interpretation only if the parties agreed.

Pre-award interest (Section 31(7)(a))

Interest period = date cause of action arose → date of award; rate = what the tribunal deems reasonable

Applies unless the parties have otherwise agreed. It may cover the whole or any part of the money and of the period.

Post-award interest (Section 31(7)(b))

Rate = current rate of interest on date of award + 2% ; period = date of award → date of payment

Applies unless the award otherwise directs. Current rate is as in section 2(b) of the Interest Act, 1978.

Simple interest calculation

Interest = Principal × Rate ÷ 100 × Time (in years)

A calculation aid for exam numbers. Section 31(7) does not itself state simple or compound, so state your assumption in the answer.

General rule on costs (Section 31A(2))

Unsuccessful party pays successful party's costs, unless a different order is made for reasons recorded in writing

Applies once the tribunal or court decides to make an order as to costs.

Factors for deciding costs (Section 31A(3))

All circumstances, including: conduct of parties; partial success; frivolous counterclaim causing delay; reasonable settlement offer made and refused

Use these four as a checklist in case answers.

Agreement on costs (Section 31A(5))

Agreement that a party pays all or part of costs in any event is valid only if made after the dispute has arisen

A clause in the original contract to this effect is not valid.

Date and place in the award

Award must state: date + place of arbitration (as per section 20); award deemed made at that place

Section 31(4). Place is the one determined under section 20, not where the members happened to sign.

Delivery of signed copy

After the award is made → signed copy delivered to each party

Section 31(5). Every party gets a signed copy.

Deemed receipt of communication

Delivered personally or at place of business, habitual residence or mailing address = received; deemed received on the day delivered

Section 3(1) and (2). Applies unless parties agree otherwise.

Fallback delivery

If no address found after reasonable inquiry → last known address by registered letter or other means giving a record of the attempt

Section 3(1)(b). Section 3 does not apply to proceedings of any judicial authority (section 3(3)).

Post-award interest

Unless the award otherwise directs: interest at 2% higher than the current rate of interest on the date of award, from date of award to date of payment

Section 31(7)(b). Shows why the date of the award matters.

Limitation in arbitration

Limitation Act, 1963 applies to arbitrations as to court proceedings; arbitration deemed commenced on the date in section 21

Section 43(1) and (2).

Lien of the tribunal (Section 39(1))

Tribunal has a lien on the award for unpaid costs, subject to sub-section (2) and any contrary provision in the arbitration agreement

The agreement can exclude or change the lien.

Court order on refusal to deliver (Section 39(2))

Tribunal refuses award except on payment → Court may order delivery on payment of demanded costs into Court → reasonable sum paid to tribunal → balance refunded to applicant

The Court may hold such inquiry as it thinks fit.

Who may apply (Section 39(3))

Any party may apply, unless the fees demanded were fixed by written agreement between that party and the tribunal

The tribunal is entitled to appear and be heard.

Costs where award is silent (Section 39(4))

Question on costs + award has no sufficient provision on costs → Court may make such orders on costs as it thinks fit

Read with Section 31A on the regime for costs.

Quick revision

• An award must be in writing and signed by the members of the tribunal.
• With more than one arbitrator, majority signatures suffice if the reason for any omitted signature is stated.
• Reasons must be stated unless the parties agreed otherwise or the award is on agreed terms under Section 30.
• The award must state its date and place of arbitration, and is deemed made at that place.
• A signed copy of the award must be delivered to each party.
• The tribunal may make an interim award on any matter on which it could make a final award.
• Pre-award interest is at a reasonable rate, unless parties agree otherwise; post-award interest is two per cent higher than the current rate, unless the award directs otherwise.
• Costs follow Section 31A: general rule is that the unsuccessful party pays, with a different order allowed for reasons recorded in writing.
• An agreement to pay costs in any event is valid only if made after the dispute has arisen.
• Under Section 33, a party may request correction of computation, clerical or typographical errors within thirty days of receiving the award, unless the parties agreed another period. The tribunal may also correct such errors on its own within thirty days of the award date.
• Interpretation of a specific point under Section 33 is available only if the parties have so agreed. A request for an additional award on claims omitted from the award is available unless the parties agreed otherwise, and must be made within thirty days of receiving the award.
• The tribunal has a lien on the award for unpaid costs, but this is subject to Section 39(2) and to any contrary provision in the arbitration agreement. A party can apply to Court for delivery on paying the demanded costs into Court.
• An application under Section 39(2) cannot be made by a party if the fees were fixed by written agreement between that party and the tribunal.

Common mistakes

• Saying all arbitrators must always sign. Fix: Remember: majority of all members suffices if the reason for each omitted signature is stated.
• Counting the majority only from arbitrators who attended or agreed. Fix: Count against the full tribunal. In a three-member tribunal, two signatures are a majority.
• Saying every award must always contain reasons. Fix: Learn both exceptions in Section 31(3): agreement of parties, and award on agreed terms.
• Saying the tribunal may continue the proceedings after the parties settle. Fix: Section 30(2) says the tribunal shall terminate the proceedings on settlement.
• Saying post-award interest is at the tribunal's reasonable rate. Fix: Reasonable rate is for the pre-award period. After the award the default is the current rate + 2%, unless the award otherwise directs.
• Ignoring a contract clause on interest. Fix: Always check the agreement first for pre-award interest under Section 31(7)(a).
• Saying the award is made where the arbitrators signed it. Fix: Section 31(4) deems the award made at the place of arbitration stated in it, determined under section 20.
• Writing that the copy goes only to the successful party. Fix: Section 31(5) says a signed copy is delivered to each party.
• Saying the tribunal's lien is absolute. Fix: Always add: subject to sub-section (2) and any contrary provision in the arbitration agreement.
• Thinking the Court simply orders the party to pay the tribunal's demand. Fix: The party pays the demanded sum into Court. The Court pays the tribunal a reasonable sum and refunds the balance.

Exam tips

• Quote the sub-section numbers: 31(1) writing and signature, 31(2) majority, 31(3) reasons, 31(4) date and place, 31(5) delivery.
• In problem questions, follow provision, facts, conclusion, and name the exact defect.
• Always state both exceptions to the reasons rule.
• Link delivery under section 31(5) to the section 34(3) time limit to show depth.
• Keep interest and costs under section 31(7) and (8) for their own topic, but mention them in one line if asked about contents.
• Write the section numbers: 30, 31(3) and 33(4). Examiners reward the provision first.
• In case questions, tie each fact to a condition: settlement, request, no objection, statement that it is an award.
• Compare reasoned award and agreed-terms award in two lines: reasons required versus not required, same enforceable status.