Grounds on which an Arbitration Award can be Challenged

Arbitration is a process of Alternative Dispute Resolution in which a third party which is called the arbitrator helps the parties in the dispute to solve the case by providing them the Arbitration award. This process has many benefits because it helps you to solve the case without consuming much time and money. Many companies take the help of this process to solve their company disputes without going to court.

What is an Arbitration award?

An Arbitration award is the final decision of the arbitrator in the case solved with the help of arbitration. This decision is binding on both the parties, and it is given by the arbitrator after hearing both the parties. There is no need to go to the court for the Arbitration award because the arbitrator helps to solve the case outside the court.

Characteristics of Arbitration Award

Final decision

This award shows the final decision given by the arbitrator by listing both parties and checking all the oral and documentary evidence. This decision cannot be altered once the case has been decided.

Binding nature

This award shall be binding for both the parties in the disputes. It means, that both parties must accept this decision. This can only be challenged in the court on some terms. If one party does not follow this decision or award, then the other party can ask the court to punish the defaulted party.

Written and signed

The award provided by the arbitrator is written and signed by the arbitrator. If there is more than one arbitrator, then most of the arbitrators can sign this award. The parties shall also sign this award by giving their consent that they will take the actions according to the award provided by the arbitrators.

Reasoned award

The award must have written the reason upon which the award is given. The reason written in the award shows the transparency in the decision-making process. This reason or award can be used as evidence in the court in future if either party tries to break the conditions and decision mentioned in this award.

Content

The award shall contain the names and addresses of the parties and full details of the arbitrators. It also covers the issue between the parties with the decision given by the arbitrator. The parties decide the process of arbitration according to their choice so there is no need to write down the process. If the parties are ready to choose any procedure, then the arbitrator will mention that in the document.

Grounds to challenge the Arbitration award

Although the Arbitration award is binding for both parties still there are some Grounds on which an Arbitration award can be challenged. The parties who are not happy with the decision of the arbitrator can challenge the award on these grounds.

Public policy violation

As per the laws, the award given by the arbitrator should not be contrary to the public policies which are existing at present. Though the arbitrator takes care of this but still if there is any conflict between the award and policies, then this award can be challenged in the court.

Issues related to jurisdiction

The law has provided some restrictions on the award which can be provided by the arbitrator.

  • The capacity of the party is one of the major challenges which says that at the time of the decision, both the parties must be capable of doing the agreement.
  • The arbitration agreement made by the parties must be aalid, it should not contain cillegal conditions
  • The scope of the arbitration process is bind to civil cases only. The arbitrator has no jurisdiction to give a decision in the cases which are not civil disputes.

Procedural Irregularities

  • Improper notice of appointment of the arbitrator and proceedings.
  • If the arbitrator has not given the right to present the case to one party and has not followed the principle of natural justice.
  • If the parties have chosen the procedure for the process of arbitration but the arbitrator did not follow that procedure.

Arbitrator Misconduct

  • The arbitrator was biased in nature or doing partiality with either party.
  • The arbitrator has failed to maintain the confidentiality in the dispute.

Award given fraudulently

  • If the arbitrator is found guilty of giving the award fraudulently.
  • The decision of the arbitrator was given undue influence or the corruption activity was found.

Legal errors

  • If there are legal errors in the award given by the arbitrator.
  • If the arbitrator did not follow the present laws or give the decision without going into details of the case.

Conclusion

Challenge an arbitration award in India, you should know these grounds given under the Arbitration and Conciliation Act, 1996. An arbitrator is a person who is appointed by the parties only with mutual consent. But if the parties fail to choose the arbitrator mutually, then they can ask the court to provide the arbitrator to solve the dispute outside the court.  The number of arbitrators are depending on the party’s choice. They can decide the process, place, and arbitrator to solve their dispute. I hope now you are clear on this topic. If you still have doubts, you can ask in the comments.

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