This article has been written by Prathamesh More pursuing a Diploma in Contract drafting, Negotiation and Dispute Resolution from LawSikho.
Arbitration is a popular form of alternative dispute resolution (ADR), practised all over the world. The object of arbitration is to ensure fair, efficient and faster dispute resolutions, unlike the courts. Arbitration involves an independent third party sitting as an arbitrator and determining a dispute between the parties to the case. The independent third party can be an individual who is qualified to be an arbitrator or a tribunal which may consist of any number of arbitrators though it is advised to have an odd number of arbitrators to avoid the tie. The good thing about arbitration is that the court cannot interfere in the arbitration proceedings. Thus, the arbitration is a private, of court, determination of a dispute by an arbitrator or an arbitral tribunal. Just like the court judgements an arbitrator or an arbitration tribunal gives an award that is considered to be binding and enforceable unlike other alternative dispute resolution i.e., mediation, negotiation and conciliation.
Five reasons to choose arbitration
- Arbitration is consensual
- The parties have the option to choose the arbitrator(s)
- Arbitration is neutral
- Arbitration is a confidential procedure
- The decision or award of the arbitration tribunal is final and easy to enforce.
What is an arbitration award?
The simplest answer to this question is a legal maxim arbitrium est judicium, which means an arbitration award is a judgement. An award is considered as an award of damages which may constitute payment of a sum of money, declaration as to any matter to be determined in proceedings, injunction order, specific performance of a contract and rectification of an agreement or any other kind of document. It is quite clear that an arbitration tribunal has similar powers as that of the court of law. Just like a judgement given by the court, an arbitral award must:
- Be in writing
- Be signed by the arbitrator or Arbitration Tribunal
- Give reasons for giving such an award
- Mention date and place of arbitration
An arbitral award is sub-categorized in various concepts by various legal jurisdictions breaking the phenomenon of considering the award as a single concept. The categories are as follows:
- Default award
- Partial award
- Final award
- Interim or preliminary award
- Additional award
- Award by Consent
What is an additional award?
An additional award is a type of award which is given after the principal award has been delivered. Generally, it is considered as an award that contains all the corrections and interpretations of the provisions provided in the principal award. But to acquire an additional award one has to write to the tribunal requesting to schedule a further hearing.
The reason behind asking for an additional award is human fallibility which may constitute omissions, ambiguities or mistakes. Just like court judgements, arbitral awards are subject to such defects which can be corrected by the arbitrators.
Usually, an award when it is given by the arbitrator or tribunal is a final award which means it is unambiguous and has dealt with all the issues which make it functus officio. Now functus officio means when an award is given by the tribunal it is considered as final award and is subject to limited exceptions for the correction and interpretation of the awards.
Correction and interpretation
It is pertinent to note that correction of an award takes place after the award has been given by the arbitral tribunal. So, the correction of an award contains only the requisite corrections of things that have been mistaken or omitted. This happens many times due to typographical errors and human errors. Mistakes in an arbitral award are unacceptable because the parties to the dispute have invested their time and money to ensure a fair and quicker solution to the dispute except for genuine cooperation from the arbitrators and tribunal. A human error can occur if the arbitrator(s) misses mentioning some important provisions in an arbitral award, which may affect the parties to the dispute and cause unfairness to one of them or both of them. A typo-graphical error is the result of human error which can further result in computation errors or clerical errors. Such errors can be corrected by the article provided the parties mutually agree to file for such corrections.
Sometimes, an arbitral award is so complex that it is not easy to interpret the award hence resulting in non-conveyance of the award. It is mandatory for the arbitrator(s) to maintain clarity while giving an award which can help both the parties to the dispute to agree with the meaning conveyed by the arbitral award. If one party agrees and others disagree then it can create problems.
It is possible to deal with and correct such errors in an arbitral award by the tribunal under the UNCITRAL model i.e., United Nations Commission on International Trade Law in which Article 33 provides that ‘within thirty days’ the tribunal can correct any typographical, computational or clerical errors or any errors of similar nature in the award upon the request of the parties in writing or on its own motion. The correction of the award is subject to lex loci arbitri i.e., the law of the place where arbitration has taken place. It merges with the original award under Section 33(2) of the Arbitration and Conciliation Act,1996.
How to draft an additional award?
The procedure of drafting an additional award under UNCITRAL Model Law
The correction of an arbitral award can amount to an additional award if the required provision for correction is not mentioned in the agreement between the parties. In such a case, each party can request the arbitral tribunal within ‘thirty days’ under Article 33(3) of the UNCITRAL Model Law subjected to lex loci arbitri, to make an additional award as to claims presented in the arbitral proceedings but omitted from the award. Both the parties are required to submit further written submissions regarding the dispute to make such a request or they are required to schedule another hearing if required.
Additional award by its name itself provides that it does not form the part of the initial award; rather it represents a whole new award which contains a well-drafted award consisting of all the omitted parts from the initial award. It is pertinent to note that the additional award does not only contain the omitted part from the initial award but also the correction of some important claims which were mistaken earlier.
The procedure of drafting an additional award under the International Chamber of Commerce (ICC) Arbitration Rules
Under International Chamber of Commerce (ICC) Arbitration Rules, Article 36 (3) states that – “any application of a party for an additional award as to claims made in the arbitral proceedings which the arbitral tribunal has omitted to decide must be made to the Secretariat within 30 days from the receipt of the award by such party.
Further Article 36(4) provides that- “after transmission of an application to Article 36 (3) to the arbitral tribunal, the latter shall grant the other party or parties a short time limit, normally not exceeding 30 days, from receipt of the application by that party or parties, to submit any comments thereon. The arbitral tribunal shall submit its decision on the application in draft form to the court not later than 30 days from the expiry of the time limit for the receipt of any comments from the other party or parties or within such other period as the court may decide. The decision to grant the application under paragraph 3 of Article 36 shall take the form of an additional award. The provisions of Articles 32A decision to grant the application under paragraph 3 shall take the form of an additional award. The provisions of Article 32 stating making of the award, Article 34 stating scrutiny of the award by the court and Article 35 stating notification, deposit and enforceability of the award shall apply mutatis mutandis.
The procedure of drafting an additional award under the Arbitration and Conciliation Act,1996 (India)
Sub-section (4) of Section 33 of Arbitration and Conciliation Act,1996, gives the power to the Arbitral Tribunal to provide an additional arbitral award pertaining to the claims made by the parties to the Tribunal in the arbitral proceedings but missed out or omitted by the Arbitral Tribunal provided that:
- The party to the dispute shall give prior notice to the other party to the dispute so as to request the arbitral tribunal to make an additional award;
- The parties make such a request within Thirty Days after receiving the arbitral award;
- The arbitral tribunal approves such a request to ensure justice is done, which creates an obligation on the part of the arbitral tribunal to deliver the additional arbitral award within Sixty Days (sub-section 5 of Section 33);
- The arbitral tribunal has also the power to extend the time limit mentioned in the previous statement on the basis of rational grounds (sub-section 6 of Section 33).
In the Union of India vs Nav Bharat Nirman Company case, the decision of the Delhi High court clarified the scope of an additional award and the power of an arbitrator to make an additional award. The court held that: –
Under Section 33(4) of the Arbitration and Conciliation Act,1996, the party has a right to request to make an additional award as to the claims stated in the arbitral proceedings but omitted from the final arbitral award, within 30 days from the receipt of the final arbitral award. The arbitrator is empowered to draft an additional award pertaining to any item of the claim which the arbitrator omitted to mention and give an award replacing the original award as an additional award does not merge with the original award. Where the arbitrator did not award any amount against some original claims, the arbitrator is allowed to award an additional award and such additional award is not liable to set aside.
So, it is quite clear that additional arbitral awards under Section 33(4) of the Arbitration and Conciliation Act,1996, Article 36(4) of ICC Arbitration Rules and Article 33(3) of the UNCITRAL Model law play a vital role to ensure a well-drafted award, fairness in the arbitral proceedings and delivering justice under its respective jurisdictions. The concept of the Additional Arbitral Award also helps to protect the interests of the parties to the dispute and ensures that none of them has to suffer from the typographical errors or omissions of various claims made by the parties before the Arbitral Tribunal.
The United Nations Commission on International Trade Law, International Chamber of Commerce (ICC) Arbitration Rules and the Arbitration and Conciliation Act,1996, also plays a vital role in making sure that the Arbitral Tribunal and arbitrators are under a strict obligation to deliver justice to the parties and making it clear that if the parties request to make any corrections in the awards or additional arbitral award or schedule another hearing or deliver the additional arbitral award, so as to avoid the incomplete or ambiguous award which lacks the claims presented by the parties to the dispute. The Arbitral Tribunal is also under an obligation to give the additional award within the time limit provided by the act and also has the power to extend the time limit on a reasonable basis. Hence, the concept of the Additional Arbitral Award helps the parties to the dispute before the Arbitral Tribunal to deal with the ambiguous arbitral award and acquire fairness after the award has been delivered. Thus, opting for arbitration over regular court proceedings is protected, which also helps to prevent wastage of time and money. The main objective of the concept of Arbitration is saved.
Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.
LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join: