Making of Arbitral Award and Termination of Proceedings under Arbitration and Conciliation Act, 1996
Making of Arbitral Award and Termination of Proceedings
Under Arbitration and Conciliation Act, 1996
1. Making of Arbitral Award
a) Definition of Arbitral Award
An arbitral award is the final decision made by the arbitral tribunal on the disputes submitted to arbitration.
It is binding on the parties and enforceable like a court decree.
b) Time Frame for Making Award (Section 29A)
The tribunal is required to make the award within 12 months from the date it enters upon the reference (usually the date the tribunal is constituted).
This period can be extended by:
The parties’ agreement.
The court on application of the parties or tribunal, for reasons beyond control (like complexity, or delay due to parties).
If the tribunal fails to deliver the award within this time, a party may apply to the court to extend the time or request a fresh tribunal.
c) Form and Contents of Award (Section 31)
The award must be in writing and signed by the arbitrators.
It must state the date and place of the arbitration.
The award must deal with all claims submitted unless parties have agreed otherwise.
The tribunal may give reasons for the award but is not always obliged unless parties have agreed.
The award must be final and binding on the parties.
d) Types of Awards
Final Award: Decides the entire dispute.
Interim or Partial Award: Decides some aspects or issues but not the whole dispute.
Consent Award: Where parties agree on terms and request the tribunal to record it as an award.
2. Termination of Proceedings
a) How Arbitration Proceedings Terminate?
The proceedings terminate upon:
Final Award: When the tribunal makes and communicates the final award.
Settlement between Parties: If parties settle the dispute during proceedings, the tribunal can record the settlement as a consent award or terminate proceedings.
Withdrawal by Parties: Parties may agree to withdraw the arbitration.
Discharge or Resignation of Arbitrators: With consent or due to incapacity.
Court Termination: In rare cases, courts may terminate arbitration proceedings for non-compliance or other reasons.
b) Settlement during Arbitration (Section 30)
If parties settle the dispute, they may inform the tribunal.
The tribunal will terminate proceedings and record the settlement as a consent award if requested.
This consent award is binding and enforceable.
c) Effect of Termination
Termination marks the end of the arbitral tribunal’s mandate.
Parties may, if dissatisfied, approach courts for enforcement or challenge of the award.
If arbitration is terminated without an award (except consent), parties may seek resolution through other forums.
3. Important Case Laws
a) Bharat Aluminium Co. v. Kaiser Aluminium Technical Service, Inc., (2012) 9 SCC 552
Supreme Court emphasized the time-bound nature of arbitration and delivery of award.
Courts should not interfere unless justified.
b) Ssangyong Engineering & Construction Co. Ltd. v. National Highways Authority of India (2019) 10 SCC 745
Court ruled on the consequences of non-delivery of award within prescribed time.
Emphasized extension provisions and tribunal's duty to deliver award promptly.
4. Summary Table
| Aspect | Details |
|---|---|
| Time to Make Award | 12 months from reference, extendable by agreement/court |
| Form of Award | Written, signed, dated, final, may give reasons |
| Types of Award | Final, Interim, Consent |
| Termination of Proceedings | On final award, settlement, withdrawal, or court order |
| Settlement (Section 30) | Settlement recorded as consent award, terminates proceedings |
In brief:
The arbitral tribunal must deliver a final and binding award within a stipulated time (usually 12 months). Arbitration proceedings terminate when the award is made or parties settle. Settlement during arbitration can be recorded as a consent award, ending the process amicably. The Act provides mechanisms to ensure arbitration is efficient, final, and enforceable.
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