Harshitha Ram
This article is the tenth installment in a 12-part series on domestic arbitration, designed to provide a clear and practical roadmap through each stage of the process. In this edition, “The Arbitration Award: Types and Drafting Considerations” we present the different types of awards (interim, final, consent) and the key elements of a well-drafted arbitration award that is enforceable. Stay tuned for Part 11: “Post-Award Issues: Challenging, Modifying, or Confirming the Award” coming next month.
An arbitration proceeding culminates in the issuance of an award by the arbitrator or arbitral panel. This final product is not only the resolution to the dispute at hand, but also the legal instrument that may be enforced or challenged in court. Therefore, understanding the types of arbitration awards and the essential elements of drafting a legally enforceable award is crucial for both arbitrators and practitioners.
Arbitration awards come in several forms, each serving distinct procedural or substantive purposes within the arbitration process. Interim awards are issued before the final resolution, addressing urgent or provisional matters such as temporary injunctive relief, security for costs, or asset preservation; however, their enforceability varies, especially under the U.S. Federal Arbitration Act (FAA), where they must be sufficiently final to merit confirmation. Partial awards resolve some issues—like liability—while leaving others, such as damages, for later determination, commonly used in complex cases to streamline proceedings; like interim awards, they must also meet finality standards to be enforceable. Final awards conclude the arbitration by resolving all submitted issues, including liability, damages, costs, and attorneys’ fees if authorized, and are binding and enforceable under the FAA and international treaties like the New York Convention, with limited time allowed for clerical corrections. Consent awards arise when parties settle during arbitration, recording their agreement as a formal, enforceable award that combines the benefits of arbitration enforcement with the parties’ negotiated terms; arbitrators must ensure these settlements comply with public policy and ethical standards.
Drafting Considerations for a Valid and Enforceable Award
The enforceability and integrity of an award hinge not only on its reasoning but also on its structure, clarity, and compliance with applicable legal and institutional requirements. A well-drafted award should include the following components:
Jurisdictional Foundation
A well-drafted arbitration award must clearly establish the arbitrator’s jurisdiction to decide the dispute, as this is critical to safeguarding the award from jurisdictional challenges.
This includes a reference to the arbitration clause or submission agreement that conferred authority on the arbitrator, as well as confirmation that both parties were given proper notice and a full opportunity to be heard during the proceedings. These foundational elements reinforce the legitimacy of the award and its enforceability.
Recitals and Procedural History
Including recitals and a detailed procedural history in an arbitration award, though not always legally required, significantly enhances the transparency and perceived integrity of the proceedings. This section typically outlines the appointment and constitution of the arbitral tribunal, provides a summary of hearings, motions, and key procedural orders, and identifies the specific issues submitted for decision. Such documentation helps establish a clear record of the process followed and reinforces the fairness and legitimacy of the award.
Summary of Claims and Defenses
A comprehensive arbitration award should include a clear summary of the parties’ claims and defenses, setting the stage for the arbitrator’s reasoning and conclusions. This section outlines the relief sought by the claimant, as well as the defenses and any counterclaims raised by the respondent. Presenting the parties’ positions in a structured manner provides context for the arbitrator’s analysis and demonstrates that each side’s arguments were duly considered.
Factual Findings and Legal Reasoning
This section forms the heart of the arbitration award. Arbitrators are required to make factual findings based on the evidence presented in the record and apply the relevant legal principles or contractual provisions to those facts. Each determination should be accompanied by a clear explanation of the rationale behind it.
While not all jurisdictions mandate a reasoned award, providing a detailed and transparent analysis not only reinforces the legitimacy of the decision but also helps minimize the risk of judicial vacatur by demonstrating that the arbitrator has thoughtfully considered the issues before rendering the award.
Relief Granted
The award must clearly articulate the relief granted to the prevailing party. This includes any monetary awards, specifying amounts and applicable interest, as well as non-monetary remedies such as injunctions or orders for specific performance. Additionally, if authorized by the governing rules or agreement, the arbitrator should address the allocation of arbitration costs and attorneys’ fees. Each element of the relief should be precise, unambiguous, and self-contained to ensure enforceability and avoid the need for further clarification or interpretation.
Signature and Date
For an arbitration award to be valid and enforceable, it must be properly signed by the arbitrator or all members of the panel, with any dissenting opinions clearly noted where applicable. The award must also be dated, as this establishes the timeline for enforcement or for any potential challenges under applicable laws. Omitting the signature or date can undermine the award’s validity and may result in its rejection by courts during enforcement proceedings.
Form and Style
A well-drafted arbitration award should be clear, logically organized, and professionally presented. The use of headings and subheadings enhances readability and helps structure the decision for both parties and any reviewing court. The tone must remain neutral and objective, avoiding emotional language, bias, or personal remarks. Additionally, the award should be meticulously reviewed for clerical, typographical, or computational errors, as such mistakes may lead to requests for correction or grounds for challenge, potentially undermining the finality of the award.
Best Practices and Common Pitfalls
When drafting arbitration awards, it is essential to follow best practices and avoid common pitfalls to ensure enforceability and procedural integrity. First, ambiguity should be strictly avoided, as unclear findings or relief can lead to enforcement challenges. Arbitrators must also stay within the scope of their authority, adhering strictly to the powers granted by the arbitration agreement. Maintaining impartiality is equally crucial; the language of the award should reflect neutrality and professional detachment at all times. Lastly, meeting deadlines is imperative, as many institutional rules and jurisdictions impose strict timelines for the issuance of awards, and failure to comply can undermine the validity of the award.
About the author: Harshitha Ram is an international disputes attorney, arbitrator, mediator, and lecturer in law. She is the President of the Global Arbitration Mediation Academy (GAMA), Chair of the ADR Section of the DBA, and the Co-Chair of the ABA Arbitration Committee. To learn more or connect, visit: www.harshitharam.com | www.adracademy.us
An arbitration proceeding culminates in the issuance of an award by the arbitrator or arbitral panel. This final product is not only the resolution to the dispute at hand, but also the legal instrument that may be enforced or challenged in court. Therefore, understanding the types of arbitration awards and the essential elements of drafting a legally enforceable award is crucial for both arbitrators and practitioners.
Arbitration awards come in several forms, each serving distinct procedural or substantive purposes within the arbitration process. Interim awards are issued before the final resolution, addressing urgent or provisional matters such as temporary injunctive relief, security for costs, or asset preservation; however, their enforceability varies, especially under the U.S. Federal Arbitration Act (FAA), where they must be sufficiently final to merit confirmation. Partial awards resolve some issues—like liability—while leaving others, such as damages, for later determination, commonly used in complex cases to streamline proceedings; like interim awards, they must also meet finality standards to be enforceable. Final awards conclude the arbitration by resolving all submitted issues, including liability, damages, costs, and attorneys’ fees if authorized, and are binding and enforceable under the FAA and international treaties like the New York Convention, with limited time allowed for clerical corrections. Consent awards arise when parties settle during arbitration, recording their agreement as a formal, enforceable award that combines the benefits of arbitration enforcement with the parties’ negotiated terms; arbitrators must ensure these settlements comply with public policy and ethical standards.
Drafting Considerations for a Valid and Enforceable Award
The enforceability and integrity of an award hinge not only on its reasoning but also on its structure, clarity, and compliance with applicable legal and institutional requirements. A well-drafted award should include the following components:
Jurisdictional Foundation
A well-drafted arbitration award must clearly establish the arbitrator’s jurisdiction to decide the dispute, as this is critical to safeguarding the award from jurisdictional challenges.
This includes a reference to the arbitration clause or submission agreement that conferred authority on the arbitrator, as well as confirmation that both parties were given proper notice and a full opportunity to be heard during the proceedings. These foundational elements reinforce the legitimacy of the award and its enforceability.
Recitals and Procedural History
Including recitals and a detailed procedural history in an arbitration award, though not always legally required, significantly enhances the transparency and perceived integrity of the proceedings. This section typically outlines the appointment and constitution of the arbitral tribunal, provides a summary of hearings, motions, and key procedural orders, and identifies the specific issues submitted for decision. Such documentation helps establish a clear record of the process followed and reinforces the fairness and legitimacy of the award.
Summary of Claims and Defenses
A comprehensive arbitration award should include a clear summary of the parties’ claims and defenses, setting the stage for the arbitrator’s reasoning and conclusions. This section outlines the relief sought by the claimant, as well as the defenses and any counterclaims raised by the respondent. Presenting the parties’ positions in a structured manner provides context for the arbitrator’s analysis and demonstrates that each side’s arguments were duly considered.
Factual Findings and Legal Reasoning
This section forms the heart of the arbitration award. Arbitrators are required to make factual findings based on the evidence presented in the record and apply the relevant legal principles or contractual provisions to those facts. Each determination should be accompanied by a clear explanation of the rationale behind it.
While not all jurisdictions mandate a reasoned award, providing a detailed and transparent analysis not only reinforces the legitimacy of the decision but also helps minimize the risk of judicial vacatur by demonstrating that the arbitrator has thoughtfully considered the issues before rendering the award.
Relief Granted
The award must clearly articulate the relief granted to the prevailing party. This includes any monetary awards, specifying amounts and applicable interest, as well as non-monetary remedies such as injunctions or orders for specific performance. Additionally, if authorized by the governing rules or agreement, the arbitrator should address the allocation of arbitration costs and attorneys’ fees. Each element of the relief should be precise, unambiguous, and self-contained to ensure enforceability and avoid the need for further clarification or interpretation.
Signature and Date
For an arbitration award to be valid and enforceable, it must be properly signed by the arbitrator or all members of the panel, with any dissenting opinions clearly noted where applicable. The award must also be dated, as this establishes the timeline for enforcement or for any potential challenges under applicable laws. Omitting the signature or date can undermine the award’s validity and may result in its rejection by courts during enforcement proceedings.
Form and Style
A well-drafted arbitration award should be clear, logically organized, and professionally presented. The use of headings and subheadings enhances readability and helps structure the decision for both parties and any reviewing court. The tone must remain neutral and objective, avoiding emotional language, bias, or personal remarks. Additionally, the award should be meticulously reviewed for clerical, typographical, or computational errors, as such mistakes may lead to requests for correction or grounds for challenge, potentially undermining the finality of the award.
Best Practices and Common Pitfalls
When drafting arbitration awards, it is essential to follow best practices and avoid common pitfalls to ensure enforceability and procedural integrity. First, ambiguity should be strictly avoided, as unclear findings or relief can lead to enforcement challenges. Arbitrators must also stay within the scope of their authority, adhering strictly to the powers granted by the arbitration agreement. Maintaining impartiality is equally crucial; the language of the award should reflect neutrality and professional detachment at all times. Lastly, meeting deadlines is imperative, as many institutional rules and jurisdictions impose strict timelines for the issuance of awards, and failure to comply can undermine the validity of the award.
About the author: Harshitha Ram is an international disputes attorney, arbitrator, mediator, and lecturer in law. She is the President of the Global Arbitration Mediation Academy (GAMA), Chair of the ADR Section of the DBA, and the Co-Chair of the ABA Arbitration Committee. To learn more or connect, visit: www.harshitharam.com | www.adracademy.us
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