Types of Arbitral Awards in India
Types of Arbitral Awards in India
The Arbitration and Conciliation Act, 1996 (the Act) does not explicitly classify awards into categories, but through judicial interpretation and practice, awards are broadly classified based on their nature, form, and effects. Understanding these types is important for recognizing their legal consequences, challengeability, and enforcement.
1. Final Award
Definition:
A final award is a conclusive decision on all the issues submitted to arbitration.
It resolves the entire dispute between the parties and disposes of the arbitration proceedings.
Once passed, it can be enforced as a decree of the court.
Characteristics:
Decides all claims and counterclaims.
Terminates the arbitration.
Binding on parties (subject to challenge under Section 34).
Case Law:
M/s. Sree Meenakshi Mills Ltd. v. Union of India, AIR 1995 SC 1433
The Supreme Court held that the final award is the culmination of arbitration and carries the force of a decree.
The Court emphasized that such awards can be enforced and are subject to limited judicial scrutiny.
2. Interim or Partial Award
Definition:
An interim award deals with a particular issue or claims during the course of arbitration but does not finally determine the entire dispute.
It may address specific claims, issues, or grant temporary relief.
Characteristics:
May be passed to settle some matters provisionally.
Does not end arbitration.
Can be binding unless set aside or modified by a final award or tribunal.
Can be enforced if it disposes of a distinct issue.
Types of Interim Awards:
Interim decision on jurisdiction.
Partial award on liability or quantum.
Interim relief related to specific claims.
Case Law:
SSJ Engineering Construction (India) Pvt. Ltd. v. Union of India, (2005) 1 SCC 533
The Court recognized the validity of interim awards.
Held that partial awards may be enforced and also challenged if necessary.
N.R. Madhava Menon v. Govt. of Kerala, AIR 1997 SC 1317
Interim awards are binding until set aside but are not final and conclusive on the entire dispute.
3. Consent Award (Agreed Award)
Definition:
An award made by the arbitrator(s) based on the mutual consent or agreement of the parties during the arbitration.
The parties agree on the terms of settlement, and the arbitrator formalizes it as an award.
Characteristics:
No contentious adjudication by the arbitrator.
Reflects parties’ compromise.
Has the same enforceability as a final award.
Can be enforced under the Act.
May not be challenged unless it violates public policy.
Case Law:
Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705
The Supreme Court held that a consent award is an award in the sense of the Arbitration Act and is binding and enforceable.
It has the same finality as any other award.
4. Consent Award by Consent Terms
Sometimes, parties submit a consent decree or settlement agreement through arbitration.
The arbitrator records the settlement as an award.
The consent award cannot be challenged except on limited grounds like fraud or public policy violation.
5. Additional Award (Supplementary Award)
Definition:
An additional award is issued by the tribunal to supplement a final award when a party has failed to make a claim or raise an issue during arbitration.
It can also correct omissions or clarify ambiguities.
Characteristics:
Complements or completes the original award.
Does not change the fundamental nature of the original award.
Passed within a specified time after the final award.
Legal Provision:
Under Section 31(4) of the Arbitration Act, the tribunal can make an additional award on claims presented during arbitration but omitted in the final award.
Case Law:
Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly, AIR 1986 SC 1571
The Court recognized the concept of additional awards to avoid multiplicity of proceedings.
N.N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd., (2009) 9 SCC 552
Clarified scope and applicability of additional awards.
6. Erroneous or Void Award
Definition:
An award may be void or erroneous if the tribunal acts outside its jurisdiction or violates the principles of natural justice.
Such awards can be set aside under Section 34.
Characteristics:
Non-binding and without legal effect if set aside.
Can be challenged on grounds such as fraud, corruption, or violation of public policy.
Case Law:
Bharat Aluminum Co. v. Kaiser Aluminum Technical Services Inc., (2012) 9 SCC 552 (BALCO case)
The Court emphasized the limited grounds for setting aside an award.
Fazlur Rahman v. New India Assurance Co. Ltd., AIR 1969 SC 421
Highlighted that jurisdictional errors can render an award void.
Summary Table of Types of Awards
| Type of Award | Definition | Binding Nature | Enforcement | Challengeability |
|---|---|---|---|---|
| Final Award | Resolves entire dispute | Final and binding | Enforceable | Under Section 34 |
| Interim/Partial | Decides part of dispute temporarily | Binding on issues decided | Enforceable if final on issue | Can be challenged |
| Consent Award | Based on parties’ agreement | Final and binding | Enforceable | Limited grounds |
| Additional Award | Supplementary to final award | Binding | Enforceable | Under Section 34 |
| Void/Erroneous | Illegal/without jurisdiction | Not binding if set aside | Not enforceable if set aside | Can be challenged |
Conclusion
The types of arbitral awards under Indian law vary by their function and form. The Act provides flexibility for the tribunal to pass:
Final awards resolving the whole dispute,
Interim awards for partial or temporary relief,
Consent awards reflecting negotiated settlements,
Additional awards to cover omitted claims.
Each type has specific enforceability and challengeability criteria, with courts ensuring minimal intervention per the Act’s intent. The judiciary has played a vital role in defining these types through authoritative rulings that balance party autonomy with judicial oversight.
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