Award, Arbitral

Term of art used to describe the judgment of an arbitral tribunal. An award becomes legally enforceable under the law of the Seat of Arbitration once published, i.e., sent to the parties.

There are various types of awards:

  1. A standard award which is simply a written award states the decision of the tribunal and the monetary amount or other relief the tribunal has seen fit to grant. It does not explain the tribunal’s rationale, damages calculous or explain how the tribunal viewed the evidence, arguments and applied the law in reaching its decision.
  2. A “reasoned” award in which the tribunal explains the basis for its decision, and the calculus underlying the award but does not necessarily address every argument made by the parties or the evidence adduced.
  3. A “finding of facts and conclusions of law” award where the tribunal explains and justifies relevant findings of fact, how it reached those factual conclusions, its conclusions as to applicable law, and applies the law to the facts and its calculation of any award and its authority to issue any final directions to the parties.

Article 31(2) of the UNCITRAL Model International Arbitration Law, which forms the basis for the national arbitration law of many jurisdictions, such as Japan, Ireland, etc. provides:

(2) 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.

Even where jurisdictions’ laws differ from the UNCITRAL law, may mandate that arbitral tribunals must render reasoned awards, for example s52 of the UK’s 1996 Arbitration Act:

The award shall contain the reasons for the award unless it is an agreed award or the parties have agreed to dispense with reasons.

However, US Federal Law only requires that an award be in writing, but does not require reasons for the award, unless this is required by the Parties’ arbitration agreement or the rules of the arbitration organisation. While international arbitration favours at least reasoned awards, whether standard awards are typical or required depends much on local law and practice. The American Arbitration Association or AAA is inconsistent on this issue, its rules requiring reasoned awards in employment matters, but not in commercial cases.

Related Terms