- February 11, 2021
- Posted by: cord
- Categories: Arbitration, Blogs
It is indisputable that one of the many reasons that makes arbitration a preferred mode for resolution of disputes is its ability to offer final, binding and enforceable awards. With the shift into the digital ecosystem it is important to answer the question of enforceability of e-awards. This write-up covers the basics of legal recognition of e-awards.
Place of Arbitration
Under Section 36 of the Arbitration Act, an award shall be enforced in the same manner as if it were a decree of a Court. The definition of a ‘Court’ under Section 2(e) of the Arbitration and Conciliation Act, 1996 (the “Arbitration Act”) states that the enforcement of an award is dependent on the subject matter of the arbitration. This dependency in turn negates any issue regarding the place of arbitration in an online setting.
An arbitral award is subjected to several form requirements which are governed by the lex arbitri. The question whether an e-award meets these requirements can squarely be answered by taking a look at the Arbitration Act, and electronic form equivalents of the form requirements under the Information Technology Act, 2000.
Under Section 31(1) of the Arbitration Act, the two foremost traditional form requirements are that an arbitral award needs to be made in writing and that the award shall be signed by the members of the arbitral tribunal.
- Written form
Section 4 of Information Technology Act, 2000 states that “Where any law provides that information, or any other matter shall be in writing or the typewritten or printed form, then, notwithstanding anything contained in such law, such requirement shall be deemed to have been satisfied if such information or matter is- (a) rendered or made available in an electronic form; and (b) accessible so as to be usable for a subsequent reference.” The Arbitration Act and the Information Technology Act, 2000 complement each other, satisfying the specification of an award to be in writing.
- Signed by the members of the arbitral tribunal
The requirement of a ‘signature’ should be read along with Section 5 of the Information Technology Act, 2000 which provides that a digital signature will have the same effect as a paper signature.
Relying upon the functional equivalence doctrine, an e-written award which is electronically signed satisfies the form requirements under Section 31(1) of the Arbitration Act.
Delivery to the Parties
The electronically signed award can be emailed to the parties, uploaded on the case management platform (the Centre for Online Resolution of Disputes [“CORD”] provides an end-to-end case management platform where an e-award can easily be uploaded) if used by the parties during the course of the proceedings or through any other electronic means of communication. Alternatively, the award can be printed, signed, subsequently scanned and sent to the parties. Section 31(5) of the Arbitration Act is drafted with such flexibility that it can readily accommodate digital delivery of the award.
In addition to this, as held by the Supreme Court of India in Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal, a 65-B certificate under the Indian Evidence Act, 1872 is a condition precedent to the admissibility of electronic record. Therefore, during the enforcement procedure, it is important that both the original award as well as a 65-B certificate for any electronic record is produced before the execution authorities.
More recently, the High Court of Andhra Pradesh in Sulphide Corporation v. New Way Vyapaar Pvt. Ltd., directed the Respondent(s) to maintain status quo under an application made under Section 9 of the Arbitration Act, pending the enforcement and subsequent execution of the final e-award rendered in an ICC arbitration. This indicates the acceptance of e-awards by the courts.
Therefore, enforcement of an e-award is looked at fairly considering that the Information Technology Act, 2000 provides a backbone to this regime. There should be no reservations about opting for online arbitrations which in fact aid in efficient discharge of procedures.