Arbitration may be an option to reach a speedy resolution in a sticky situation. When you agree to an arbitration process with other parties, an important part is deciding the kind of final arbitration award for a tribunal to issue.
According to Global Arbitration News, the International Chamber of Commerce reported a steady increase in arbitration cases from 2012 to 2019. As a business, you may want to revise or implement arbitration agreements as these numbers rise. Each type of final arbitration award has its pros and cons.
The standard award
A standard award in arbitration indicates that the tribunal states their decision in a conclusory manner without providing any insight or detail as to how they viewed the evidence and arguments. These may have the advantage of getting to a decision quicker, but do not provide much context to the participating parties.
The reasoned award
When you decide on this award, tribunals set out the bases and reasoning for their decision. This requires more paperwork and potentially more cost, but offers more transparency.
The detailed award
This award involves a relatively exacting standard of detail where the tribunal includes its findings of fact and conclusions of law. This is the most comprehensive amount of context, but usually takes longer and may risk unwanted court challenges based on the substantive analysis.
Enforcing arbitration awards
If after a tribunal decides on an award and a party refuses to comply, you may need to work through the particular laws of each party to enforce these awards. You may apply to secure a court order for arbitration enforcement within a year. The more detailed an arbitration award, the more legal precedence there is to support the tribunal’s decision.
Your business needs to walk the careful balance of getting to a decision quickly while also ensuring that the arbitrators do enough legwork to come to the right decision.