'Arbitral Tribunals Must Draft Awards That Would Withstand Judicial Scrutiny': Justice Ujjal Bhuyan

Justice Ujjal Bhuyan spoke about how the decision of an arbitrator, called an award, lies at the heart of the every arbitration process. 

“An award is much more than a technical decision. The award is the intellectual decision of the dispute, and a formal written record of the decisions because the award carries significant legal consequence,” he said.

Justice Bhuyan stressed upon how the award must record and specify the remedy sought in enforceable terms, such as mandatory amounts, timeline or other obligation. 

He said that it is the duty of the arbitrator to draft an award that will withstand the judicial scrutiny. In order for an award to attain the critical status of the enforceability, it must satisfy certain legal prerequisites. Firstly, the award must conclusively determine the dispute between the parties. Secondly, the award must be conformity with the substantive law concerning the claims and counter claims.

Justice Bhuyan highlighted how the A&C Act 1996 was enacted with the objective to minimize judicial supervisory role of the Courts in the arbitration proceedings. The Act ensures that an arbitration award is enforced in the same manner as that of a decree by a civil court. This comprehensive piece of legislation provides the substantive and procedural law for the domestic arbitration in one part, and for the International Commercial Arbitration, enforcement of foreign award, and conciliation in another.

He stated that the Parliament's keeness to keep the courts out of the arbitration proceedings is available at every stage of legislation. 

However, he noted that in Delhi, almost 70% of the cases proceed to the appellate stage, i.e., Section 34 and Section 37 of the A&C Act. In Bombay, almost 90% of the arbitration cases proceed to the appellant stage. 

These statistics clearly reveal that most arbitral award are subjected to judicial scrutiny at both the stages under Section 34 and Section 37 of the A&C Act, he stated.

Justice Bhuyan stressed upon the need to draft awards that are executable in nature. Article 31(2) of the UNCITRAL Model Law requires an award to be a reasoned one. 

“An award has to give a conclusive decision premised upon detailed reasoning. In the context of International Commercial Arbitration, the parties are not native to English language; therefore, the award should use simple language, which is easy to comprehend. In Indian context, Section 31 of the A&C Act lay down the guidelines for drafting an award,” he said.

He stated that the Arbitral Tribunal when drafting the award has to be in conformity with the substantive law and must provide sufficient legal reasoning demonstrating how the facts and law combine to justify the decision.

Lastly, the Justice Bhuyan highlighted how the use of conditional language for example 'unless' or 'on condition', used in the deposit portion of the award should not be used. Such use of language undermines finality and therefore should be avoided, he said.