Remission of an arbitral award refers to the process where a court sends the arbitral award back to the same arbitrator(s) for reconsideration on technicalities which may include the curing of procedural defects, clarification of syntax to make the award less ambiguous or for grant of sufficient hearing. There has been significant debate in respect of the benefits and challenges of remission of arbitral awards. One school of thought supports remissions stating that it helps the curing of procedural defects, curing of insufficient grant of hearing and assists in making the arbitral award less ambiguous whereas the second school of thought treats remission as a challenge as it affects the finality of the award and may even risk the arbitrator in reconsidering the issues on merit. Therefore, this article is written with the intention of ascertaining as to if provisions of remission of arbitral awards in arbitration laws across India, United Kingdom and Singapore have proven to be truly beneficial or if they have increased the qualms of parties.
Under the Indian Arbitration and Conciliation Act 1996, Section 34(4) does not permit the remittal of arbitral awards unless an application is made by one of the parties for curing of a technical defect. The nomenclature states that the court can only make a direction for the purposes of permitting the arbitrator to cure a technical defect in the award which cannot be exercised suo moto but upon application of one of the parties. This view was also upheld by the Supreme Court of India in more than one occasion.
Under the Arbitration and Conciliation Act 1996 of the United Kingdom, Section 68(3) confers specific powers of remittal to the court and under Section 71(3) the arbitral tribunal has to render its award in the remitted proceedings within three months from the date of such remittal. The England & Wales High Court has held that if the technical defect results in a severe irregularity, then remittal of award is not justified and the award must be set aside.
Under the Singapore International Arbitration Act conjointly read with the UNCITRAL Model Law, powers of remission of arbitral awards exist. This has also been affirmed by the Singapore Court of Appeal. However, the same Court has also limited the contours of the powers of remission by holding that remission cannot be done to a newly constituted tribunal and it is the same arbitral tribunal which must cure the procedural or technical defect in question. The Singapore Court of Appeal further determined that the powers of remission cannot be exercised once an award is annulled, and since the arbitral tribunal’s authority ceases after the award is issued, the remitted arbitral award cannot yield a new decision or a reconsideration of merits, but solely a review aimed at rectifying technical and procedural deficiencies.
From the aforesaid discussion, what pristinely emerges is that powers of remission are clearly available under English Law whereas limited powers of remission are available under Singaporean Law and Indian Law with specific court jurisprudence in its respect. When two parties decide to oust the jurisdiction of courts and specifically choose arbitration in their respective contract, finality and the binding nature of such outcome of the arbitration is the essence and the substrate reason. The possibility of an enforcing court exercising such powers poses risks to such finality. Additionally, for jurisdictions where courts are infamous for interfering with arbitral awards, the power of remission may result in an unnecessary interference and a decision on the merit of the matter even though an enforcing court does not have the powers to review the merits of the dispute as held under the arbitral award. But, at the same time, the existence of a power of remission with the enforcing court enables such court to opt for remission instead of setting aside the entire arbitral award for technical and procedural defects which could have been cured. This can be a benefit in some instances as the arbitration process can be saved from being rendered otiose by way of exercise of powers of remission by the enforcing court.
From jurisprudence across India, UK and Singapore, it is evident that the powers of a court to remit an arbitral award has been a double-edged sword with benefits and challenges alike. The need for remission of awards by enforcing courts has been increasingly witnessed in ad- hoc arbitrations as opposed to institutional arbitrations which tend to have a more structured process. The invocation of remission powers has not been witnessed regularly in Singapore and the United Kingdom but is regularly occurring before Indian courts as most of the arbitral awards coming up for enforcement are awards which have been rendered by ad- hoc arbitral tribunals.
So far, the use of powers of remission of arbitral awards has been limited in the United Kingdom because of clear legislation in its respect. On the other hand, courts in Singapore and India have developed the jurisprudence in respect of remission of arbitral awards as the laws of remission in these jurisdictions are heavily based upon the UNCITRAL Model Law and continued to remain open for interpretation up till specific judgments were rendered by the respective domestic courts in its respect.
However, domestic courts in India, Singapore, and the UK have consistently limited the scope and discretion of remission orders. In India, courts must expressly delineate the specific defect and the tribunal re-engagement under Section 34(4) is tightly controlled. Singapore’s superior courts have reiterated that remission is confined to the terms of the order, and tribunals may not reopen issues beyond those specified. The UK judiciary also prefers setting aside awards in cases involving serious procedural irregularities that cannot be cured via remission. The fact that an enforcing court possesses leeway to undertake remission of an arbitral award for curing procedural defects and technical defects assists the parties greatly as immense costs and time have been spent by the parties in such arbitration process. If an arbitral award is set- aside despite the technical and procedural defects being curable, then the legitimacy of the arbitration process could be undermined. Due to this, remission of arbitral awards can come to the rescue of the parties and instead of the award being set- aside, the remitting court can direct the same arbitral tribunal to cure the procedural and technical defects in the arbitral award which can pave the path to finality of such awards. Hence, the powers of remission of arbitral awards of courts in Singapore, United Kingdom and India seem to have created significant benefits for parties who choose to arbitrate their disputes and hence, it can safely be concluded that remission of arbitral awards is really beneficial in the arbitration process.
About the Author
Ashutosh Shukla is a 3rd year B.A., LL.B. (Hons.) student at the Hidayatullah National Law University, Raipur, Chhattisgarh, India.
