Arbitration, Mediation and Conciliation · Preparation and Execution of Arbitral Award

Reasoned Award, Award on Agreed Terms and Additional Award

Updated 11 October 2026 · Fact-checked

An arbitral award must state its reasons, unless the parties agreed that none be given or it is an award on agreed terms under Section 30. If parties settle during proceedings, the tribunal terminates them and may record the settlement as an award with the same status as any other award. Omitted claims need an additional award under Section 33.

Understand Reasoned Award, Settlement Award and Additional Award

An arbitral award is the tribunal's final decision. The general rule in Section 31(3) is that the award must state the reasons on which it is based. Reasons let the parties and a court see why the tribunal decided as it did.

There are two exceptions. First, the parties may agree that no reasons are to be given. Second, the award is an award on agreed terms under Section 30. In a settlement, the parties themselves chose the outcome, so the tribunal has no decision to justify.

Section 30 deals with settlement. The tribunal may encourage settlement and, with the parties' agreement, use mediation, conciliation or other procedures at any time during the proceedings. If the parties settle, the tribunal shall terminate the proceedings. If the parties request it and the tribunal does not object, it records the settlement as an award on agreed terms.

This award must be made in accordance with Section 31 and must state that it is an arbitral award. It has the same status and effect as any other award on the substance of the dispute. So it can be enforced like an ordinary award. Section 74 gives a conciliation settlement agreement the same status and effect as an award on agreed terms under Section 30.

Sometimes a tribunal leaves out a claim that was actually presented. Section 33(4) lets a party ask for an additional award on such claims. It also lets a party seek correction of errors. Do not confuse an additional award with a fresh decision on a claim never raised.

Key rules to remember

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.

How to solve Reasoned Award, Settlement Award and Additional Award questions

Use this method for any case question on reasons, settlement awards or additional awards.

1Identify the stage: is the dispute still before the tribunal, has it settled, or has an award already been delivered?
2If the question is about reasons, check whether the parties agreed that no reasons be given, or whether the award is on agreed terms.
3If the parties settled, state that the tribunal shall terminate the proceedings under Section 30(2).
4Check the conditions for recording: a request by the parties and no objection by the tribunal.
5Check the form: it must comply with Section 31 and state that it is an arbitral award.
6State the effect: same status and effect as any other award, so it is enforceable as an award.
7If a claim was omitted, apply Section 33(4): request within 30 days with notice, decision within 60 days.
8Conclude clearly in one or two lines, naming the section.

Quickest way: Three-question check

When to use it: When you have little time and the facts are short.

Did the parties settle? If yes, think Section 30: terminate, record on request, state it is an award.
Are reasons missing? Allowed only if parties agreed so or it is an agreed-terms award.
Was a presented claim left out? Think Section 33(4) additional award within 30 days of receipt.
Write the section number next to each conclusion.

Common mistakes in Reasoned Award, Settlement Award and Additional Award

Saying every award must always contain reasons.
Students remember the general rule and forget the exceptions.
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.
Confusion between recording a settlement and deciding the dispute.
Fix: Section 30(2) says the tribunal shall terminate the proceedings on settlement.
Treating the agreed-terms award as a weaker document than a normal award.
It has no reasons, so students assume lesser force.
Fix: Section 30(4): same status and effect as any other award on the substance.
Forgetting that the award must state it is an arbitral award.
Focus is on the settlement terms, not the form.
Fix: Quote Section 30(3): made under Section 31 and stating that it is an arbitral award.
Mixing up additional award with correction or interpretation.
All three sit in Section 33 with similar 30-day periods.
Fix: Additional award is for claims presented but omitted. Correction is for computation or clerical errors. Interpretation needs the parties' agreement.
Assuming the tribunal must record every settlement as an award.
Students skip the conditions.
Fix: Recording needs the parties' request and no objection from the tribunal.

Worked examples

Example 1

Rao Textiles Ltd and Sharma Dyes Pvt Ltd are in arbitration over unpaid dues. After two hearings, they settle and ask the tribunal to record the settlement as an award. The tribunal agrees. Must the award state reasons? What is its effect?

Show the solution

Parties settled during arbitral proceedings, so Section 30 applies.
The tribunal shall terminate the proceedings, and as both parties requested recording and the tribunal does not object, it records the settlement as an award on agreed terms.
Section 31(3)(b) exempts an award on agreed terms from the duty to state reasons.
The award must be made in accordance with Section 31 and state that it is an arbitral award (Section 30(3)).
Under Section 30(4) it has the same status and effect as any other award on the substance of the dispute.

Answer: Reasons are not required. The award on agreed terms must state that it is an arbitral award and has the same status and effect as any other award.

Example 2

A tribunal delivers a final award on 1 March, received by Mehta Infra Ltd on 3 March. The award does not deal with a counterclaim of ₹8,00,000 that Mehta had presented. Parties have not agreed otherwise. What can Mehta do?

Show the solution

The counterclaim was presented in the proceedings but omitted from the award.
Section 33(4) allows a party, with notice to the other party, to request an additional award within 30 days from receipt of the award.
So Mehta must apply within 30 days of 3 March, giving notice to the other side.
If the tribunal finds the request justified, Section 33(5) requires it to make the additional award within 60 days of receiving the request.
The tribunal may extend this time if necessary (Section 33(6)), and Section 31 applies to the additional award.

Answer: Mehta may request an additional award within 30 days of receiving the award, with notice to the other party. The tribunal, if satisfied, must make it within 60 days of the request.

Exam tips

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.
Do not mix time limits: 30 days to request, 60 days for the tribunal to make an additional award.
Close with a one-line conclusion.

Practice questions from Preparation and Execution of Arbitral Award

Reasoned Award, Settlement Award and Additional Award: frequently asked questions

When is a reasoned award not required under the Arbitration Act?

Under Section 31(3), reasons are not required if the parties agreed that none be given, or if the award is an award on agreed terms under Section 30. In all other cases the award must state its reasons.

What is the difference between a reasoned award and an award on agreed terms?

A reasoned award is the tribunal's own decision with reasons. An award on agreed terms records the parties' settlement and needs no reasons. Both are made under Section 31, and both have the same status and effect.

What is the status of an award on agreed terms?

Section 30(4) says it has the same status and effect as any other arbitral award on the substance of the dispute. It must state that it is an arbitral award.

Does a conciliation settlement have the same effect?

Yes. Section 74 says a conciliation settlement agreement has the same status and effect as if it were an arbitral award on agreed terms under Section 30.

Can I get an additional award if the tribunal missed a claim?

Yes. Under Section 33(4), unless the parties agreed otherwise, you may request one within 30 days of receiving the award, with notice to the other party. The tribunal must make it within 60 days of the request if it finds the request justified.