Relevant Provisions
Chapter 8 of Part 2 of the Arbitration and Conciliation Act 1996 deals with finality and enforcement of arbitral award. Section 35 deals with the finality of arbitral awards while Section 36 deals with the enforcement of arbitral awards.
Finality of arbitral awards
According to section 35 award shall be final and binding on the parties and persons claiming under the arbitral award.
Award is final in the sense that there can neither be further award nor an appeal against the award. The aggrieved party may apply to court if there is a ground for setting aside the award.
Essential Conditions for finality of Awards
In order to an award be final, it must fulfill the following namely –
- It must be legal.
- It must be reasonable and possible.
- It must dispose of the matter.
It must be legal
An award is final if it is in accordance with the principles of relevant laws. If it is not in accordance with the laws it will be illegal. For example – award passed for ownership in perpetuity, against section 14 of the transfer of property Act. It would be void because it is against the rule against perpetuity.
Section 28(1)(a) of the the Arbitration and Conciliation Act 1996 requires that in an arbitration which is not international commercial arbitration the tribunals should decide the dispute in accordance with the substantive law for the time being in force in India.
According to Section 34 award passed against the public policy of India is liable to be set aside. Though as per section 28(2) arbitral tribunal may decide the dispute ex aequo at bono or as amicable compositeur only if parties have authorised to do so.
It must be reasonable and possible
An award to be final must be reasonable and possible an Award that one of the parties should do a thing which is not out of his power to do is void because it requires a party to do impossible act.
It must dispose of the matters.
An award to be final it must disposes the matter completely an award which leaves some of the questions on undecided cannot be enforced.
Effect of award when final
Power of the Arbitral Tribunal to decide the matter is the same as the court if the matter would be before Court The award passed by tribunal puts the matter to the end of the proceedings.
The court will not interfere with the findings of awards there can be no appeal against it.
Section 35 of the arbitration and conciliation act 1996 expressly provides that arbitral award shall be final and binding on parties and person claiming under them. Section 36 Provides the award enforceable in the same manner as court of decree.
Union of India Vs. Bungo Steel Furniture (P) Ltd. 1967 the court held that the court has no jurisdiction to investigate into the merits of the case and to examine the documentary or oral evidence for the purpose of finding out whether or not the arbitrator had committed and error of law.
The only remedy against the award is Section 34 which deals with the setting aside of the arbitral award on certain grounds mentioned in the section.
