Arbitration-award termination

THIS is an additional article to the ones I have written before on arbitration. In this article, I look at what is involved in the making of an arbitral award and termination of the arbitration proceedings in terms of the Arbitration Act (Chapter 7:15), “the Act”. I address the following:

Rules applicable to substance of dispute Decision-making by panel of arbitrators Settlement

Form and content of award Termination of proceedings Correction and interpretation of award.

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Rules applicable to substance of dispute

According to Article 28 of the Arbitration Act, the arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute.

Any designation of the law or legal system of a given State shall be construed, unless otherwise expressed, as directly referring to the substantive law of that State and not to its conflict of laws rules.

If there is no designation by the parties, the arbitral tribunal shall apply the law determined by the conflict of laws rules which it considers applicable.

The arbitral tribunal shall decide ex aequo et bono (according to what is equitable and good) or as amiable compositeur (fair and just rather strictly according to the rule of law) only if the parties have expressly authorised it to do so. In all cases, the arbitral tribunal shall decide in accordance with the terms of any contract and shall take into account any usages of any trade applicable to the transaction.

Decision-making by the panel of arbitrators

In terms of Article 29, where there is more than one arbitrator a decision shall be made by a simple majority unless otherwise agreed by the parties to the dispute.

Settlement

At times during arbitral proceedings, the parties may settle their dispute. According to Article 30, the arbitral tribunal shall terminate the proceedings. If the parties request and the tribunal agrees, the settlement will be recorded in the form of an award on agreed terms. Such an award has the same status and effect as any other award made on the merits of the case.

Form and content of the award

This part is very important. It is regulated by Article 31 of the Act. The salient features are that:

◆ The award shall be made in writing and signed by the arbitrator or arbitrators. 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. The award shall state its date and the place of arbitration.

A signed copy of the award shall be delivered to the parties.

Unless otherwise agreed by the parties, the costs and expenses of an arbitration including the legal and other expenses of the parties, the fees and expenses of the arbitral tribunal, and other expenses related to the arbitration, shall be as fixed and allocated by the arbitral tribunal in its award. Where the award does not specify otherwise, each party shall be responsible for his own legal and other expenses and an equal share of the fees and expenses of the arbitral tribunal and any other expenses related to the arbitration.

An arbitral award may carry interest until the judgment debt is settled.

Termination of arbitral proceedings

This is covered in Article 32. The arbitral proceedings are terminated by the final award or by an order of the arbitral tribunal in accordance with paragraph (2) of this article.

The arbitral tribunal shall issue an order for the termination of the arbitral proceedings when:

◆ The claimant withdraws his claim unless the respondent objects thereto and the arbitral tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute.

◆ The parties agreed on the termination of the proceedings.

The arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.

Article 33 provides for the correction or interpretation of the arbitral award. Within thirty days of receipt of the award, unless another period has been agreed upon by the parties:

◆ A party, with notice to the other party, may request the arbitral tribunal to correct in the award any errors in computation, any clerical or typographical errors or any errors of similar nature.

If so agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to give an interpretation of a specific point or part of the award. If the arbitral tribunal considers the request to be justified, it shall make the correction or give the interpretation within thirty days of receipt of the request. The interpretation shall form part of the award.

An understanding of arbitral awards and termination of arbitral proceedings is essential in arbitration.

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Correction and interpretation of award

This simplified article is for general information purposes only and does not constitute the writer’s professional advice. Godknows (GK) Hofisi, LLB(UNISA), B.Acc(UZ), Hons B.Compt (UNISA), CA(Z), MBA(EBS, Heriot-Watt, UK) is the Managing Partner of Hofisi & Partners Commercial Attorneys, chartered accountant, insolvency practitioner, registered tax accountant and advises on deal and transactions. He has extensive experience in industry and commerce and is a former World Bank staffer in the Resource Management Unit. He writes in his personal capacity. He can be contacted at +263 772 246 900 or gohofisi@gmail.com