1. The UNCITRAL Arbitration Rules:
Award
The UNCITRAL Arbitration Rules:
“The xxx shall be made in writing and shall be final and binding on the parties. The parties undertake to carry out the xxx without delay”

3. International Commercial Arbitration
Lecture 8: Award
by Feruza Bobokulova

4. Definition of an Award
There is no internationally accepted definition of the term ‘award’. No definition can be found in conventions dealing with arbitration
Despite the NY Convention is directed to the recognition and enforcement of awards, the nearest it comes to a definition is:
“The term ‘arbitral award’ shall include not only awards made by arbitrators appointed for each case, but also those made by permanent arbitral bodies to which the parties have submitted”

5. Definition of an Award
The term ‘award’ should be reserved for decisions that finally determine the substantive issues with which they deal
This involves distinguishing between awards and procedural orders and directions (which are concerned with the conduct of the arbitration)
Procedural orders and directions help to move the arbitration forward
They do not have the status of awards

6. Remedies Arbitration awards may cover a range of remedies including:
Monetary compensation
Punitive damages and other penalties
Specific performance and restitution
Injunctions
Declaratory relief
Rectification
Adaptation of contracts and filling gaps
Interest and
Costs

7. Monetary Compensation
The type of award most often made by an international arbitral tribunal is one that directs the payment of a sum of money by one party to the other
This payment may represent money due under a contract (debt) or compensation (damages) for loss suffered or both
The sum of money awarded is usually expressed in the currency of the contract of the currency of the loss

8. Specific Performance
An AT may be authorized by the parties or by the applicable law to order specific performance of a contract
An international AT sitting in the US will have the power to award specific performance and English law empowers and AT siting in England to ‘order specific performance of a contract’ (other than a contract relating to land) unless a contrary intention is expressed in the AA
In civil law jurisdictions, specific performance (rather than contractual damages) is the principal remedy for breach of contract

9. Restitution
Restitution represents an attempt to put the clock back: it seeks to put the aggrieved party in the same position as that party would have occupied if the wrongful act had not taken place
A good example of the use of this remedy in public international law is provided b the Temple of Preha-Vihaer case, in which the ICJ ordered the government of Thailand to restore the Cambodia certain sculptures and other objects that it had removed from the temple on the border between the two countries

10. Restitution
In practice restitution is rarely ordered, since it is usually impracticable to restore the status quo ante
An award of monetary compensation is generally the best available remedy, particularly in commercial disputes
The relief sought and granted in investor-state arbitrations confirms that monetary compensation rather than restitutions, is the principal remedy in international arbitration

11. Injunctions
There is no objection in principle to an AT granting relief by way of injuction, if requested to do so, either on an interim basis or as final relief
An AT is not usually empowered to make effective orders against third parties and if injunctive relief is required, it is generally quicker and more effective to seek it direct from the court
Most sets of international and institutional rules make it clear that the arbitration clause is not to be taken as excluding the jurisdiction of the relevant national court or courts to make orders for interim measures of protection

12. Delaratory Relief
An AT may be asked to make an award, which is simply declaratory of the rights of the parties
Modern arbitration legislation often makes express provision for the granting of declaratory relief
Even when there is no such provision, however, there is no reason in principle why an At should not grant such relief
Instead, declaratory relief has become a common remedy in international arbitration, with requests for contractual damages often coupled with a request for a declaration that there has been a breach of contract

13. Declaratory Relief
A declaratory award establishes the legal position definitively and has binding effect as between the parties
It is a useful device, particularly where the parties have a continuing relationship and want to resolve a dispute between them without the risk of damaging that relationship by a demand for monetary compensation
It is capable of recognition, but it is not itself capable of enforcement

14. Rectification
Rectification of a contract is a remedy virtually unknown in civil law countries, where it tends to be treated in the same sense as adaptation of contracts and filling gaps
In common law countries these concepts are considered separately
However, in general an AT may make an order for rectification of a contract if empowered to do so by the parties
If no express power is conferred by the AA, the question of the AT’s jurisdiction to order rectification requires closer examination

15. Adaptation of Contracts and Filling Gaps
The adaptation of a contract or the filling of gaps in it raises a different issue from that of rectification
When parties have a continuing business relationship, but have failed to provide in their contract for a particular contingency that arises, it may be useful if they are able to refer to a helpful outsider, such as an AT for a decision on how the contingency should be dealt with
In the same way, where the parties have entered into a long- term agreement, but circumstances change, it may be helpful if they are able to refer to an AT for a decision as to what is to happen in the changed circumstances

16. Adaptation of Contracts and Filling Gaps
In the case of filling gaps, there is a gap in the contract to be filled whereas in the adaptation of contracts, the contract may need to be amended, in whole or in part, to meet changed circumstances
In legal theory, the filling of gaps in a contract poses fewer problems than its adaptation
It may only be a matter of degree, but adding an additional term to the contract, on the basis that it meets the presumed intention of the parties, is a less speculative undertaking than actually changing the contract to meet new circumstances

17. Interest and Costs
An award for the payment of a monetary sum generally includes an award of interest and an award in respect of the other forms of relief discussed may carry with it an award of costs

18. How an AT Reaches its Decision
There must be a deliberation or formalized interchange of views before AT makes its award
Rule 15 of the ICSID:
‘(1) The deliberations of the Tribunal shall take place in private and remain secret.
(2) Only members of the Tribunal shall take part in its deliberations. No other person shall be admitted unless the Tribunal decides otherwise.’

19. Majority Voting Ideally, decisions are made unanimously
Some favor majority voting, others give the presiding arbitrator a decisive role
The UNCITRAL Arbitration Rules provide for the majority voting. However, Art 31(2) makes an exception to this rule, in relation to questions of procedure and allows the presiding arbitrator to decide such questions on his own, subject to revision by the AT
In ICSID arbitrations, majority voting prevails

20. The Role of Party-Nominated Arbitrators
Parties rarely abuse the arbitral process to the extent of nominating an arbitrator whose specific function is to vote for the party who nominated him
But parties appoint arbitrators whom they believe are likely to be sympathetic to the case they wish to advance during the proceedings

21. Categories of Awards: Final Awards
The term ‘final award’ is customarily reserved for an award that completes the mission of the AT
Subject to certain exceptions, the delivery of a final award renders the AT functus officio
It ceases to have any further jurisdiction over the dispute and the special relationship that exists between the AT and the parties during the currency of the arbitration ends

22. Categories of Awards: Final Awards
An AT should not issue a final award until it is satisfied that its mission has actually been completed
If there are outstanding matters to be determined, such as questions relating to costs or interest or further directions to be given relating to the disposal of property, the AT should issue an award that is expressly designated as a partial or interim award

23. Categories of Awards: Partial and Interim
A partial award is an effective way of determining matters that are susceptible to determination during the course of the proceedings and which, once determined, may save considerable time and money for all involved
One example is where an issue of jurisdiction is involved; an interim award on such an issue may shorten or at least simplify the proceedings considerably

24. Categories of Awards: Partial and Interim
The power of an AT to issue partial or interim awards may derive from the AA or from the applicable law
The UNCITRAL Rules:
‘In addition to making a final award, the AT shall be entitled to make interim, interlocutory, or partial awards.’

25. Categories of Awards: Partial and Interim
Another example of a situation in which the device of an interim award is likely to prove useful is where there is a dispute between the parties as to the law or laws applicable to the merits of the case
If this is not resolved at an early stage, the parties must argue their respective cases by reference to different systems of law
In such circumstances, it is often sensible for the AT to issue a preliminary decision on the question of the applicable law

26. Categories of Awards: Partial and Interim
The main disadvantage of a partial or interim award, whether it is on an issue or jurisdiction, applicable law or other matters in dispute is that a further avenue for judicial review is created
Judicial intervention during the course of the arbitration may occur on an application by one of the parties to nullify the interim or partial award or on an application to confirm it

27. Default Awards
Occasionally, ICAs are held in which one party (usually the respondent) fails or refuses to take part
This failure or refusal may be complete: it may occur from the beginning of the proceedings or it may happen during the proceedings as a result of a change of mind or policy
The task of an AT is made more difficult by the failure of one of the parties to take part in the proceedings
In such a case, the AT takes on itself the burden of testing the assertions made by the active party and it must call for such evidence and legal argument as it may require to this end

28. Consent Awards
Parties to an ICA often arrive at a settlement of their dispute during the proceedings
If this occurs, the parties may simply implement the settlement agreement and in effect revoke the mandate of the AT
This means that the jurisdiction and powers previously given to the AT by the parties are terminated

29. Validity of Awards
An At should do its best to ensure that its award is not only correct, but also valid and enforceable
The validity of the award must be considered under two headings: form and content
In general the requirements of form are dictated by:
AA and
Lex arbitri

30. Validity of Awards: Form
The AA
It is necessary to check whether the AA specifies any particular formalities for the award
In practice this means examining any set of rules that the parties have adopted
The UNCITRAL Rules lay down the following requirements:
The award shall be made in writing;
The reasons upon which the award is based shall be stated;
The award shall be signed by the arbitrators and shall contain the date on which and the place where it was made;
Where there are three arbitrators and one of them fails to sign, the award shall state the reason for the absence of the signature

31. Validity of Awards: Form
Lex arbitri
The requirements of form imposed by national systems of law vary from the comprehensive to the virtually non-existent
The Swiss Concordat, which may still govern domestic arbitrations in Switzerland, lays down detailed requirements, but for international cases these are narrowed to just four, namely that the award be in writing, reasoned, dated, and signed

32. Validity of Awards: Form
The introductory section of an award
Awards usually contain a brief narrative setting out a number of facts relating to the arbitration
These may include an identification of the AA or document containing the arbitration clause, a brief description of the disputes that have arisen between the parties, the way in which the AT was established, with dates, and any specific procedural agreement of the parties or rulings of the AT
The requirement that the parties should be identified is often fulfilled by giving the award a formal title on a separate title page

33. Validity of Awards: Form
Signatures
Some national systems of law require that all arbitrators should sign the award in order for it to be valid
This is highly unsatisfactory, since in such cases a dissenting arbitrator may frustrate an arbitration simply by refusing to sign the award
The rules of arbitration of the major international arbitral institutions all deal expressly or implied with signature of the award
The ICC Rules make it clear that the award must be signed, but that the award of a majority of the arbitrators of if there is no majority, the award of the presiding arbitrator alone, is effective

34. Validity of Awards: Form
Language of Award
The award will normally be rendered in the language of the arbitration, although occasionally it may be made either in the language, which is the de factor working language of the AT or in the language that is most convenient for the parties
Any mandatory rule of law of the place of arbitration concerning the language of the award must be respected. It is condition of NY Convention

35. Validity of Awards: Content
The contents of an award are dictated primarily by: AA
The lex arbitri
AAs usually provide that the award is to be final and binding upon the parties
It follows that the award should deal with all matters referred to arbitration, in so far as they have not been dealt with by any interim or partial awards

36. Validity of Awards: Content
Unambiguous
So far as national systems of law are concerned, the laws of most states require an award to be both unambiguous and dispositive
Ambiguity and inconsistency are frequently capable of being cured, either by the AT interpreting the award at the request of the parties or alternatively, by an application to the relevant national court for an order that the award should be remitted to the AT for clarification

37. Validity of Awards: Content
Effective determination of the issues
An award must also be dispositive, in that it must constitute an effective determination of the issues in dispute
It is not sufficient for the AT to issue a vague expression of opinion
The award must be formulated in an imperative tone: ‘we award’, ‘we direct’, or the equivalent

38. Validity of Awards: Content
Effective determination of the issues
If there is more than one respondent and a monetary award is made in favor of the claimant, it is essential for the AT to make it clear whether one of the respondents and if so, which one, has the obligation to make the payment
An award should not direct the parties to perform an illegal act or require the parties to do anything, which may be considered contrary to public policy. Nor may the award contain any directions that are outside the scope of authority of the AT

39. Validity of Awards: Content
Reasons
The Model law:
‘The award shall state the reasons upon which it is based, unless the parties have agreed that no reasons are to be given or the award is an award on agreed terms under Article 30’
The Washington Convention calls for a reasoned award without any exception

40. Validity of Awards: Content
Notification of Awards
International and institutional rules of arbitration generally make provision for the notification of the award to the parties
The UNCTIRAL Rules provide that:
‘Copies of the award signed b the arbitrators shall be communicated to the parties by the AT’

41. Reading Materials
Redfern, A., Hunter, M., Blackaby, N., and Partasides, C., Law and Practice of International Commercial Arbitration, 4th edn. London: Sweet and Maxwell.
Tweeddale, A. and Tweeddale, K., Arbitration of Commercial Disputes: International English Law and Practice. Oxford: Oxford University Press.

42. Thank You for your attention!