Factors vitiating an arbitral awards

PRELIMINARY

Arbitration, is a form of alternative dispute resolution (ADR), is a way to resolve disputes outside the courts. The dispute will be decided by one or more persons (the "arbitrators", "arbiters" or "arbitral tribunal"), which renders the "arbitral award". An arbitral award is legally binding on both sides and enforceable in the courts.

Arbitration is often used for the resolution of commercial disputes, particularly in the context of international commercial transactions. In certain countries such as the United States, arbitration is also frequently employed in consumer and employment matters, where arbitration may be mandated by the terms of employment or commercial contracts and may include a waiver of the right to bring a class action claim. Mandatory consumer and employment arbitration should be distinguished from consensual arbitration, particularly commercial arbitration.

Arbitration can be either voluntary or mandatory (although mandatory arbitration can only come from a statute or from a contract that is voluntarily entered into, in which the parties agree to hold all existing or future disputes to arbitration, without necessarily knowing, specifically, what disputes will ever occur) and can be either binding or non-binding. Non-binding arbitration is similar to mediation in that a decision cannot be imposed on the parties. However, the principal distinction is that whereas a mediator will try to help the parties find a middle ground on which to compromise, the (non-binding) arbitrator remains totally removed from the settlement process and will only give a determination of liability and, if appropriate, an indication of the quantum of damages payable. By one definition arbitration is binding and non-binding arbitration is therefore technically not arbitration.

An arbitral award or arbitration award refers to a decision made by an arbitration tribunal in an arbitration proceeding. An arbitral award is analogous to a judgment in a court of law. An arbitral award can be of a non-monetary nature where the entire claimant's claims fail and no money needs to be paid by either party.

An arbitration award can be made for payment of a sum of money, declaration upon any matter to be determined in the arbitration proceedings, injunctive relief, specific performance of a contract and for rectification, setting aside or cancellation of a deed or other document.

FACTORS VITIATING AN  ARBITRAL AWARD (DOMESTIC AWARD)

If the award is against the public policy, public policy is the means by which a goverment maintains orders or adress the needs of it’s citizens through actions difined by it’s constitution. If the award is contrary to the substantive provisions of law or the provisions of the Act or against the terms of the contract, it would be patently illegal. Award could also be set aside if it is as unfair and unreasonable as to shock the conscience of the court as it is against public policy.

Whatever tends to injustice of operation restraint of liberty, commerce, natural or legal rights, whatever tends to the obstruction of justice or to the violation of a statute and whatever is against good moral when made the object of contract is against public policy and therefore, void and susceptible to enforcement.

In Christ for all Nation Vs Apollo Insurance Company ltd (2002) 2 EA366, it was held that, the applicant has to show either the award was inconsistence with constitution or that the award is inimical to public interest or that the award is contrary to justice and morality.

Legal incapacity of the parties, under law of contracts, the parties are required to fulfill some requirements so as to form legally accepted contract. When happens parties enter into an agreement without capacity, a contract will be void. The incapacity of a party to enter into an agreement can be caused by, unsoundness of mind, consent and age.

Unsound mind is incapacity to think, to reason and understand for oneself. During formation of a contract, a party is required to have a sound mind so as to enter into a contract, without that, a contract can be classified as invalid.

If the award deals with a dispute that the arbitration agreement does not cover, it is a common notion that, all disputes to be taken to arbitration must be covered within an agreement between parties, but when happen a tribunal decide a matter which is not mentioned in an agreement, that award will be void.

In NUCC and TE Vs Uganda Book Shop 1965, EA 539, it was held that, it is trite law that it is a duty of an arbitrator to decide neither more nor less than the dispute submitted to him and to comply with the terms of reference.

Mis-conduct or fraud of arbitrator; is where an arbitrator committed a corrupt or fraudulent act or there was a reasonable apprehension of bias as supported by section 18[1].

In National Social Security Fund and Anor V. Alcon and Anor[2], not all kinds of mis-conduct could give rise to set aside an award, it is only gross mis-conduct which give power to the court to set aside an award.

If the applicant was not treated equally and fairly, an applicant has to be given an opportunity to present a case or to respond to another party’s case. The applicant also have a right to be given proper notice of arbitration or the appointment of an arbitrator. Therefore if the applicant will not be treated equal and fairly and where all procedures were not followed, then the arbitrator award will be void.

In NSSF V ALCON ARB cause No 4 of 2001, it was held that, considering the seriousness of the allegation, the rules of natural justice or fair play dictate that the other party must be given sufficient particulars of an allegation

The composition of the arbitral tribunal was not in accordance with the arbitration agreement, or if the agreement did not deal with matter or was not in accordance with the domestic arbitration Act under section 5[3]. The law provide for a specific corrum of a number of arbitrators who is to sit to decide at matter, if the law which provide a number of arbitrators who are to sit in arbitration is not followed, then the decision of the arbitration is  invalid.

The procedure followed in the arbitration did not comply with the domestic Act; there are special procedures which are designed under law to be followed to conduct an arbitration session. When happen arbitrators or parties failed to follow procedures in resolution of a dispute, the arbitral awards will be invalid when a court try it.

In N. chellapan Vs secy kerala estate electricity board of 1975. It was held that when a proposition of law is stated in the award and which is the basis of award and it is erroneous, the award can be set aside on the ground of error of law apparent on the face of record.

The arbitration award is unchallengeable unless happen those reasons as discussed above.                                  

BIBLIOGRAPHY

BOOKS.

Bansal A.K (2005) Arbitration & ADR, Universal Law Publishing Co. Pvt. Ltd,  Delhi.

Court of Appeal of Tanzania (2004) the History of Administration of Justice in Tanzania, 1^st edition, Mathews books & Stationeries, Dar-es-salaam.

Hornby, A. S, (2002), Oxford Advanced Learners Dictionary, 6^th Edition, Oxford university Press, New York.

JOURNALS AND ARTICLE

Bedman, B “From Litigation to ADR: Brown & Root’s Experience”, in Dispute Resolution Journal. Vol. 50 1995

Berman, Gray, S “Facilitated Negotiation: An Effective ADR Technique” in Dispute Resolution Journal Vol. 50 April, 1995

Caudorn, “Blow the Whistle on Employment Dispute” in Workforce Vol. 76, (1996)

OTHER PUBLISHED MATERIAL

Vinod, A. & B. Owasanoye, “Dispute Resolution Mechanism & Constitutional Rights in Sub-Sahara Africa Alternative Dispute Resolution Methods”. Paper written following a UNITAR Sub-Regional Workshop on Arbitration & Dispute Resolution [Harare Zimbabwe 11 to 15 September. 2000]

STATUTES

Arbitration Act Cap 15 R:E 2002

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[1] Arbitration Act  Cap 15 R:E 2002

[2] National Social Security Fund and Anor V. Alcon and Anor (CA) Civ app No 2 of 2008

[3] Arbitration Act  Cap 15 R:E 2002