Making Arbitral Award More Transparent: The need for adequate reasoning

Abstract

Disputes are inevitable- it is part and parcel of human life. Especially with the growing need for trade and businesses, parties tend to enter into cross-border transactions which ultimately leads to a conflict. The nature of the disputes that arise from such dealings are for the most part commercial. Ultimately, one of the preferred modes to resolve commercial disputes, between parties across national borders, is by way of International Commercial Arbitration. Party autonomy being the bedrock of arbitral practice allows the parties to agree upon their own set of terms, varying from choosing the applicable law, to the type of final award to be rendered on the disputed matter. Generally, final award is categorised into—(i) standard, and (ii) reasoned. While the standard award essentially elucidates the facts, issues and laws, the reasoned award involves a detailed analysis as to why the arbitrator(s) reached that opinion. In International Arbitration regime, parties largely opt for reasoned award to avoid future potential disputes. However, the procedural responsibility of an arbitrator to provide for reasons and the extent of reasoning in an award, has been a long-term controversy. Thus, the essence of this paper targets at development of international arbitration in terms of arbitrator competence and by setting out a format in rendering reasoned awards. This practice ultimately results in transparency of arbitral proceedings which is a pressing priority of most of the parties.