TL;DR
An arbitral award is the binding decision an arbitrator passes to close a dispute, and its form is governed by Section 31 of the Arbitration and Conciliation Act, 1996. A party can move to have it set aside under Section 34, but only on limited grounds and within three months of receiving it.
CADRE, India’s simplest online dispute resolution platform, runs your arbitration with a dedicated case officer from claim to award.
An arbitral award is what makes arbitration worth choosing. It is the point at which a resolved dispute becomes a decision the law will enforce, and a defect in how it is written can cost a party the whole outcome.
This blog covers what an arbitral award is, the section that governs it, the essential elements every award must carry, what a bare award looks like, and when it can be challenged.
This is general information about the law, not legal advice on a specific dispute.
What is an arbitral award?
An arbitral award is the final, binding decision passed by an arbitrator or arbitral tribunal that resolves a dispute. It is the endpoint of arbitration, one of the main forms of alternative dispute resolution used to settle matters outside court.
The award is issued to both parties: the claimant who filed the claim and the respondent it was brought against.
The relief can be monetary, such as a sum payable by one party, or non-monetary, such as directing a party to stop a specific act.
The execution of an arbitration award is much like a court decree under Section 36, but it can be challenged in certain circumstances.
Arbitral awards are of three main types:
- Final award: Decides all remaining issues and ends the proceeding
- Interim award: Decides a specific matter mid-proceeding under Section 31(6)
- Award on agreed terms: Records the terms the parties have agreed under Section 30
Which section governs the arbitration award format?
The arbitral award section that governs the format is Section 31 of the Arbitration and Conciliation Act, 1996, titled “Form and contents of arbitral award.”
It sets out everything an award must contain to be valid, from being in writing and signed, to stating reasons, the date, the place, interest, and delivery to each party.
Costs are handled by Section 31A, the regime for costs. Two further provisions decide what happens to the award afterward. Section 34 lists the grounds for setting it aside, and Section 36 governs its enforcement.
Essential elements of an arbitral award under Section 31
A valid arbitral award usually includes the following elements. Some are always required. Others are conditional: reasons can be waived if the parties agree, and interest and costs apply only where the award is monetary, or the parties have agreed to them.
1. In writing and signed
The award must be in writing. An oral award has no legal standing in India. It must be signed by the arbitrator, or by all the arbitrators where there is a panel.
Where there is more than one arbitrator, the signatures of the majority of all the members are enough, so long as the reason for any omitted signature is stated (Section 31(2)).
2. Reasons for the decision
The award must state the reasons on which it is based. They show how the arbitrator arrived at the decision, and they give the other party a basis to assess a challenge.
Reasons can be left out in only two situations: the parties agreed that none are needed, or the award is on agreed terms under Section 30.
3. Date and place of arbitration
The award must state its date and the place of arbitration, which is the legal seat the parties chose for the proceedings. This matters in online arbitration, where the parties and arbitrator may never share a room.
The law treats the award as made at that stated place, even if the arbitrator signed it elsewhere. This determines which court has authority over the award, whether for a challenge or for enforcement.
It also fixes the point from which interest runs, and starts the three-month limitation period for a Section 34 challenge.
4. Interest on the awarded sum
Where the award is for money, the arbitrator may include interest. It can award interest for the period between the cause of action and the date of the award, at a rate it considers reasonable.
For the period after the award, a default applies. Unless the award directs otherwise, the sum carries interest at 2% above the current rate of interest, as defined in the Interest Act, 1978, prevalent on the date of the award, running from the date of the award to the date of payment (Section 31(7)(b)).
5. Costs of the arbitration
The arbitrator fixes the costs of the arbitration under Section 31A. The general rule is that the unsuccessful party pays the successful party’s costs. The arbitrator can order otherwise, but must record the reasons in writing.
Costs cover the fees and expenses of arbitrators and witnesses, legal fees, institutional or administrative fees, and other related expenses.
Under Section 31A(5), an agreement making one party bear all or part of the costs, whatever the outcome, is valid only if made after the dispute arose.
6. Delivery of a signed copy
A signed copy of the award must be delivered to each party. This step is important, as the time limits for challenging and enforcing the award begin only when a signed copy reaches the party.
7. Stamp duty on the award
A domestic award attracts stamp duty, and the rate is set by the state in which it is enforced. Confirm the rate under the relevant state Stamp Act before enforcement. An insufficiently stamped award can be impounded and stall at the execution stage.
When can an arbitral award be challenged?
If one or both parties are unhappy with the award, Section 34 of the 1996 Act sets out specific grounds to have it set aside.
Setting aside means a court cancels or voids the arbitrator’s decision. The award becomes legally invalid and unenforceable, and the dispute reopens for the parties to address afresh.
The Act allows setting aside an arbitral award only on specific grounds such as:
- Incapacity of a party: A party lacked legal capacity to enter the agreement
- Invalid arbitration agreement: The agreement was not valid under the applicable law
- Lack of proper notice: A party was not properly notified or could not present its case
- Beyond the scope of reference: The award covers matters not submitted to arbitration. Only the excess is severed
- Irregular composition or procedure: The procedure did not follow the agreement or the Act
- Non-arbitrable subject matter: The dispute could not be resolved by arbitration
- Conflict with public policy: The award involves fraud, corruption, or a breach of fundamental legal principles
What are the other grounds and time limits for a challenge?
There are a few other grounds worth noting. A unilateral arbitrator appointment, where one party alone names the arbitrator, is no longer valid, and an award from such a tribunal can be challenged.
For domestic awards, there is one more. Patent illegality appearing on the face of the award is a ground under Section 34(2A). This is available only for awards that do not arise from an international commercial arbitration.
It cannot be invoked merely because the tribunal applied the law wrongly or weighed the evidence differently. An unreasoned award can fall within this, which is why a defect in the required elements can be fatal.
To challenge the decision, you need to file it within three months of receiving the arbitration award. A court may allow a further 30 days for sufficient cause under the proviso to Section 34(3), but not beyond.
Can a court modify an award instead of setting it aside?
A court does not always have to set the award aside. In Gayatri Balasamy v. ISG Novasoft Technologies Ltd. (2025 INSC 605), a five-judge Constitution Bench ruled 4:1 that a court can also modify an award in limited cases.
It can sever an invalid part, fix a clerical or computational error on the face of the record, or adjust post-award interest. Beyond these, only the Supreme Court can change an award, under Article 142.
Most challenges trace back to how the award was run, not just how it was written. CADRE (India’s simplest dispute resolution platform) assigns a dedicated case officer to every matter and draws on a certified panel of arbitrators and mediators. So, the process behind your award is as sound as the document itself.
What a valid arbitral award looks like
An arbitral award has no fixed length. It can range from a few pages, say 5 to 10, to 50 or more, depending on the type of dispute being resolved. What stays constant is the structure. Here is the structure a bare arbitration award format follows.
- Title and cause title: Names of the parties, the arbitrator or tribunal, and the case reference
- Recital: The arbitration agreement and the appointment of the tribunal
- Procedural history: How the proceedings ran, in brief
- Issues: The questions the arbitrator had to decide
- Submissions: The case made by each party
- Reasoning and findings: The analysis behind the decision (Section 31(3))
- The operative award: The relief granted, including any sum, interest (Section 31(7)), and costs (Section 31A)
- Date and place: As required under Section 31(4)
- Signatures: Of the arbitrators (Section 31(1) and 31(2))
This order is standard practice, not a legal requirement. The award stays valid as long as all the Section 31 elements are present, wherever they sit in the document.
Getting every element in place is easier when the process is built for it. CADRE handles the whole matter online through asynchronous, documents-only proceedings, so nothing procedural is left to chance on the way to a binding award.
What if there is a mistake in the award?
A slip in the award does not always mean a Section 34 challenge. Section 33 allows a party to remedy certain defects through the tribunal itself.
Within 30 days of receiving the award, a party can ask the tribunal to correct a computational, clerical, or typographical error. If the parties have agreed to it, a party can also seek an interpretation of a specific point.
This matters for the limitation clock. Where the award is corrected, the three-month window for a Section 34 challenge runs from the date the corrected award is received.
Sample arbitration award format
Sample Legal Document
In the Matter of Arbitration Under the Arbitration and Conciliation Act, 1996
Between:
[Claimant name, address] … Claimant
And:
[Respondent name, address] … Respondent
1. Recital
This award arises from the arbitration agreement dated [date], under clause [x] of [contract]. The tribunal was appointed on [date] by [appointing party / method].
2. Procedural history
[Brief account of how the proceedings ran: notice, pleadings, hearings or documents-only process, dates.]
3. Issues for determination
[The specific questions the arbitrator had to decide.]
4. Submissions of the parties
Claimant: [Summary of the claim and relief sought] .
Respondent: [Summary of the defence] .
5. Reasons and findings
[The analysis and the basis for the decision, issue by issue.]
6. Operative award
The tribunal directs that:
- [Relief granted, sum payable if any] .
- Interest: [Pre-award and post-award interest, rate and period] .
- Costs: [Who bears the costs of the arbitration] .
7. Date and place
Made at [Place of arbitration] on [date].
8. Signature
[Signature of the arbitrator, or of all arbitrators where there is a panel. State the reason for any omitted signature.]
Illustrative format for reference only. The contents should be adapted to the facts and legal requirements of each arbitration.
Note: This is a rough draft. A complete arbitral award may differ in form and detail.
The right award format is what makes arbitration enforceable
The arbitral award is the enforceable factor in arbitration. It is the document that turns a resolved dispute into a decision the law will back.
Subject to the rest of Part I, an arbitral award is final and binding on the parties and on persons claiming under them (Section 35). It carries the force of a court decree, giving the winning party a real route to recovery.
The finality and enforcement of an arbitral award still depend on its form. If the award misses a required element under Section 31, that defect becomes a ground for setting aside the arbitral award under Section 34.
Even then, a challenge must come within three months and only on the specified grounds. Arbitration gives parties a private route to a binding decision, and in most matters, it reaches a decision considerably faster than a contested court case.
CADRE is India’s simplest online dispute resolution platform, administering your arbitration matter end-to-end with a dedicated case officer and asynchronous, documents-only proceedings.
FAQs on arbitral award
Largely, yes. Section 35 makes an award final and binding on the parties and those claiming under them. There is no appeal on the merits – the only route is a Section 34 challenge on the limited grounds the Act specifies, within three months.
Filing a Section 34 challenge does not by itself stay the award. The award-debtor must apply separately under Section 36(3), and the court decides whether to grant a stay. Once any stay is refused or the challenge fails, the award-holder can execute it as a decree.
A domestic award is enforced as a decree, so it generally attracts the twelve-year limitation period under Article 136 of the Limitation Act, 1963.
The general rule under Section 31A is that the unsuccessful party pays the successful party’s costs. The arbitrator can order otherwise, but must record its reasons in writing.
Yes, but only under Section 34 and only on the specific grounds it lists, such as an invalid agreement, lack of proper notice, or conflict with public policy. The challenge must be filed within three months, extendable by 30 days for sufficient cause.
