The Arbitration proceeding’s journey toward resolving a dispute through arbitration introduces a variety of awards, such as interim, partial, final, default, additional, consent, and performance awards. Each of these awards plays a crucial role in the arbitration process, from providing temporary relief and addressing specific issues early on, to concluding the dispute entirely or enforcing agreed-upon settlements. Understanding these awards and their implications is essential for navigating the arbitration landscape effectively, whether it involves domestic or international disputes. This article delves into the nuanced world of arbitration awards, shedding light on their types, significance, and the conditions under which they are rendered, offering a comprehensive overview of the arbitration awards landscape.
In arbitrations, there are many stages before a “final” award is rendered by the Tribunal. This may include a likelihood of “interim awards” (akin to interim relief granted to parties in a litigation), “partial awards” (decision on a particular issue by the Tribunal at an earlier stage) and many more. While these types of awards are often differentiated in terms of the process of arbitration, awards can also be categorized as being an international award or a domestic award.
Final Awards
The term “final award”, while it might seem to connote a straightforward meaning, has been often interpreted across the globe in different manners. One understanding is that the term “Final” connotes that the Award puts an end to the arbitration proceedings. This understanding stems from Article 32(1) of the UNICITRAL Model Law, which provides:
The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal…[1]Â
In other words, a Final award, as per this understanding, would mean that the mandate of the Tribunal stands expired and the Tribunal would become functus officio.[2]
The other understanding of the term “Final” connotes that it is the final (or last) in a series of awards, which would decide the last remaining aspect of the dispute or “it might put an end to at least one aspect of the dispute”.  However, this interpretation does not seem to find favour with some jurisdictions given the possibility of partial awards deciding an aspect of the dispute finally. Hence, the former understanding seems more apt in light of the term finding mention in the UNCITRAL Model Law.
Partial Awards
Partial Awards and “interim awards” are terms which are, at times, used interchangeably in certain jurisdictions. Certain other jurisdictions interpret these to mean two different types of awards – partial awards being ones where a substantive claim might be decided at an earlier stage before the other claims; whereas interim awards being awards on an aspect of the dispute such as jurisdiction, limitation, or law applicable or generally speaking, awards which decide an issue in the form of an interim relief and not absolutely and finally.
Keeping in mind the 1996 Act’s inclusion of “interim awards” in the definition of “awards” to render them the same enforceability as that of a final award, it would not be out of place to state that as far as India is concerned, interim awards and partial awards seem to be used interchangeably as every partial award would be deemed to be an interim award under the 1996 Act, as was held in McDermott International Inc. v Burn Standard Co Ltd[3]
- …. Some arbitrators instead and in place of using the expression “interim award” use the expression “partial award”. By reason thereof the nature and character of an award is not changed.
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With regards to the enforceability of the partial awards or interim awards, in the international context, institutional rules would be the foremost source to ascertain the power of the Tribunals to issue such awards. In this regard, it must be mentioned that most of the international arbitration rules do provide for the power of the Tribunal to issue “partial awards” or “interim awards” during the proceedings, with the only variance being in the terminology being used.
Enforceability and subsequent challenge to these “partial awards” or “interim awards” in India have never been in doubt. This has recently been clarified by the Supreme Court of India in IFFCO Ltd v Bhadra Products[4] with the Court holding that “interim awards” are wide enough to cover a determination on any point of dispute between the parties and that the same can be challenged separately and independently as per section 34 of the 1996 Act.
Default Awards
The concept of a default award is rather straightforward. These are awards issued by the Tribunal in instances where one of the parties fails to appear in the arbitration. However, even in instances where a Tribunal is issuing a default award, it has to be mindful of all due-process considerations, especially ensuring that an opportunity to be heard is accorded to the other party at every stage of the arbitration. It is pertinent to mention here that in cases where a defaulting party fails to appear before the Tribunal in the arbitration, a higher onus is cast upon the Tribunal for determination of the claims in as much as the same are deemed to have been denied in the same manner as if a denial was received from the other party. Thus, a default award would have a full determination on the claims of the Claimant.
Additional Awards
Additional awards are generally issued by the Tribunal to either fill gaps or to rectify the final award (only minor apparent errors) which has already been rendered by the Tribunal. Hence, they are more in the nature of awards for correction of the final awards than being substantive on their own self. Most leading institutional arbitration rules provide for the possibility of issuing additional awards to rectify the errors or at the very least, provide the scope for the Tribunal to correct apparent errors.[5] UNCITRAL Model Law and some jurisdictions even provide for an additional award on an issue which had not been adjudicated upon by the Tribunal in the final award.[6]
Consent Awards
As the name suggests, consent awards are drawn by the Tribunal in cases where the parties decide to mutually settle their disputes. While there is no apparent need to have a settlement converted into an award, it is advisable for the parties to do so in order to have a better opportunity of having it enforced in case of a potential breach.
Performance Award
It is most common to see awards made in monetary terms, however, a party can be ordered to perform specific works, hand over goods or rights. For example, a contractor may be required to carry out remedial works in a building to ensure work is finished to the quality required. The difficulty is that these types of award create grounds for further dispute. An arbitrator should award a monetary award where possible in these instances to avoid escalation of conflict.
References:
[1] UNICITRAL Model Law; Article 32
[2] See, Gary B. Born, International Commercial Arbitration, 3rd Edition, Kluwer Law International, 2021, pg.3148.
[3] (2006) 11 SCC 181
[4] (2018) 2 SCC 534
[5] UNCITRAL Arbitration Rules 2013, Article 39; ICC Rules 2021, Article 36; SIAC Rules 2016, rule 33; LCIA Rules 2014, Article 27
[6] UNCITRAL Model Law, Article 33(3); 1996 Act, section 33(4)
