Introduction

Final Awards in Arbitration are the ultimate goal of any abitration process.

In the realm of commercial dispute resolution, arbitration has established itself as a preferred method for resolving conflicts, particularly in international settings. Arbitration is known for its flexibility, confidentiality, and ability to offer finality in disputes. At the core of this process lies the arbitral tribunal’s final award—a binding decision that concludes the arbitration and provides a resolution to the case.

A final award is the outcome of the arbitration process. It typically determines the rights and obligations of the parties involved and addresses any claims and defenses raised during the proceedings. This final decision carries significant weight, as it is not merely advisory but legally binding, akin to a court judgment. The significance of a final award is underscored by its potential for enforcement across jurisdictions, particularly under treaties like the New York Convention.

Content of Final Awards in Commercial Arbitration

The final award is a comprehensive document that reflects the tribunal’s findings and conclusions. Its contents usually address the following key elements:

Decision on the Merits:

At its core, the award resolves the substantive issues of the case. Whether it’s a monetary claim, a performance obligation, or the cessation of certain activities, the tribunal’s decision aims to bring finality to the dispute.

Allocation of Costs:

Arbitration often involves considerable costs, including tribunal fees, expert fees, and legal representation. In the final award, the tribunal usually allocates these costs between the parties, which may be based on principles such as the “loser pays” or other equitable considerations.

Interest on Monetary Awards:

If the award includes a monetary sum, it often specifies interest—both pre- and post-award interest—until the amount is paid in full.

Relief Granted:

The tribunal may grant different types of relief, such as declaratory relief (clarifying the legal rights of the parties) or specific performance (requiring one party to fulfill a contractual obligation).

Reasoning:

A well-reasoned award is essential for transparency and legitimacy. The tribunal must provide a detailed explanation of how it arrived at its decision, outlining its assessment of the evidence, legal arguments, and applicable law. This not only serves the parties but also ensures that the award can withstand challenges in courts, where applicable.

Form Requirements:

Most arbitration laws and institutional rules require the award to be in writing, signed by the arbitrators, and include the date and place of issuance. Some jurisdictions and arbitration rules may also require the award to be “delivered” to the parties in a specific manner, such as through registered mail or electronically.

Timings of Final Awards

The timing of the final award is crucial, as arbitration is often chosen to avoid the lengthy processes typical of court litigation. The speed at which a final award is rendered varies depending on several factors:

Most arbitration institutions provide guidelines or rules on when a final award should be rendered. For example, under the rules of the International Chamber of Commerce (ICC), the award must be issued within six months after the last hearing, unless the tribunal requests an extension. Similarly, the Dubai International Arbitration Centre (DIAC) typically requires the award to be issued within six months of the closing of the proceedings.

There are instances where delays may occur, either due to the complexity of the dispute, the need for additional evidence, or the parties requesting more time. In such cases, the tribunal may request an extension from the administering arbitration institution or through party agreement. However, prolonged delays can be problematic, as they undermine one of the main advantages of arbitration—speed.

Many institutions offer expedited arbitration procedures where the timeline for rendering an award is significantly shortened, sometimes within three to six months from the start of proceedings. These procedures are particularly useful in low-value or urgent disputes.

Enforceability of Final Awards

One of the hallmarks of arbitration is that final awards are binding on the parties and carry the weight of res judicata—meaning that the issues addressed in the award cannot be re-litigated between the same parties.

The real strength of arbitration lies in the enforceability of its awards, particularly in international settings. The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) has over 170 signatory states, allowing arbitral awards to be recognized and enforced in most jurisdictions. This enforceability is often cited as one of the key advantages of arbitration over litigation, where judgments may not be as easily recognized across borders.

In terms of procedure, once the award is rendered, the winning party can seek its enforcement through the courts of the country where the losing party’s assets are located. The procedure usually involves filing a request for enforcement, accompanied by a certified copy of the award and the arbitration agreement.

Although final awards are intended to bring closure to disputes, they may be challenged on very limited grounds. Under most arbitration laws (e.g., the UNCITRAL Model Law), the grounds for setting aside an award include procedural defects (e.g., a tribunal exceeding its authority), lack of due process, or if the award violates public policy. However, challenges are rare and only succeed in exceptional cases, reinforcing the finality of arbitral awards.

Execution of Final Awards

Once an award is recognized, the next step is execution, meaning the enforcement of the tribunal’s decision, typically through the seizure of assets or other court-backed actions.

In many jurisdictions, including Dubai and other Middle Eastern countries, local courts play an essential role in the execution of arbitral awards. The party seeking enforcement must apply to the relevant court, which will verify the validity of the award before issuing an enforcement order. In the UAE, the Federal Arbitration Law, coupled with Dubai’s adherence to the New York Convention, ensures robust mechanisms for the enforcement of both domestic and foreign arbitral awards.

While the New York Convention offers significant protection for the enforceability of arbitral awards, practical issues can still arise, such as the losing party hiding or transferring assets to avoid execution. Additionally, local laws or procedural requirements in some jurisdictions may impose further hurdles, such as requiring the award to be translated into the local language or going through additional verification steps.

Conclusion

The final award in commercial arbitration represents the culmination of a process that prioritizes efficiency, confidentiality, and finality. The goal of arbitration is not merely to settle disputes but to ensure that these resolutions are enforceable across borders, providing certainty and security to commercial actors. With strong international frameworks like the New York Convention, final awards in arbitration offer a level of enforceability unmatched by many national court judgments, making arbitration an indispensable tool in global commerce.

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We trust that the above is of assistance when considering to start an arbitration or already involved in an arbitration. Expert advice is recommended at an early stage of the dispute to evaluate the best procedural route.

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**This publication is not intended as legal advice and rather as general information.