What Is a Supplementary Award?

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In arbitration, a supplementary award is issued by the arbitral tribunal to address any issues, claims, or matters that were omitted, overlooked, or left undecided in the final arbitral award. It ensures that the tribunal’s decision resolves all issues brought before it by the parties. The supplementary award is issued after the final award and is typically based on the tribunal's initial mandate.

The concept is particularly relevant when, during the arbitration process, a party’s claim is unintentionally left out or when there is an oversight in deciding a specific aspect of the dispute.

What Is a Supplementary Award?

A supplementary award is an additional award made by an arbitrator or arbitral tribunal to deal with an issue that was not fully addressed in the final arbitral award. It arises when:

  • A claim or counterclaim is overlooked,
  • The tribunal fails to rule on certain aspects of the dispute, or
  • An issue raised by the parties is unintentionally omitted from the original decision.

It does not alter the main findings or the final decision of the award but addresses any omitted claims, incomplete decisions, or specific relief that were left out unintentionally.

Circumstances Under Which a Supplementary Award Can Be Issued

Failure to Address All Claims or Issues

A supplementary award is typically issued if the tribunal fails to address one or more of the claims raised by the parties during the arbitration process. This may occur if, during the deliberations, some of the claims or issues are overlooked or not adequately resolved.

Example:

If a party claims damages for both direct and consequential losses, but the arbitrator only awards damages for direct losses, a supplementary award may be issued to cover the consequential losses.

Omissions in the Final Award

Sometimes, an arbitrator may inadvertently leave out an aspect of the dispute from the final award. A supplementary award can correct these omissions to ensure all claims are resolved.

Example:

If an arbitrator resolves the payment of principal amounts but omits to address interest claims, the tribunal may issue a supplementary award to include the interest.

Clarifications or Specific Implementation Instructions

A tribunal may issue a supplementary award to clarify ambiguities or provide further instructions for the implementation of the final award.

Example:

If the award specifies that a payment must be made but does not state the timeline or mode of payment, the tribunal may issue a supplementary award clarifying the payment terms.

Arbitrator’s Jurisdiction

The ability of the arbitrator to issue a supplementary award is usually within their jurisdiction to correct or finalize the terms of the award, provided that no finality has been reached on certain unresolved issues. The supplementary award does not change the core decisions but ensures the arbitration process is fully concluded.

Example:

If the arbitrator accidentally overlooks a specific remedy, such as attorney fees or costs, the tribunal can issue a supplementary award to resolve the issue.

Legal Framework for Supplementary Awards

Section 33 of the Arbitration and Conciliation Act, 1996

Under Section 33 of the Arbitration and Conciliation Act, 1996 (India), an arbitrator has the authority to make a supplementary award if a claim was omitted or if the award fails to cover the full extent of the dispute. The parties can request the tribunal to issue such an award if they believe an issue was not addressed adequately.

Example:

If one party believes that the award failed to address the issue of compensation for losses incurred due to delayed delivery, they can request the tribunal to issue a supplementary award to address this issue.

Time Limits for Requesting a Supplementary Award

The request for a supplementary award must generally be made within 30 days of the final award, as per the arbitration rules or the law governing the arbitration (such as the Arbitration Act, 1996 in India). If no request is made within the time frame, the tribunal's power to issue the supplementary award may lapse.

Example:

If a party fails to request a supplementary award within 30 days of receiving the final award, they may lose the opportunity to have the omitted claims addressed through a supplementary award.

Supplementary Award’s Relationship with the Final Award

A supplementary award does not change the finality of the original award. The final award remains binding, and the supplementary award simply deals with specific matters that were left out, ensuring the tribunal’s mandate is fully executed.

Example:

If the final award is challenged in court, the supplementary award is also subject to review under the same conditions, but it cannot change the overall ruling of the tribunal.

Differences Between Supplementary and Additional Awards

Although the terms supplementary award and additional award are often used interchangeably, there are subtle differences:

  • Supplementary Award
    • Deals with issues that were omitted, overlooked, or not addressed in the original award.
    • Does not revisit the core findings of the initial award, only addresses issues of omission or clarification.
    • Issued after the final award, addressing aspects that were missed.
  • Additional Award
    • Refers to a ruling on any additional claims or issues that were raised but not addressed in the original award.
    • It is issued to deal with unresolved claims that were presented but inadvertently excluded.
    • It may expand the scope of the original award to include matters that were considered during the arbitration but not decided upon.

Legal Protections and Consumer Actions

Timely Request for a Supplementary Award

If a party believes that the arbitrator has missed out on a crucial part of their claim or remedy, they should request a supplementary award within the stipulated time frame.

Example:

If a party notices that the arbitrator did not include damages for breach of contract, they should request a supplementary award to cover this omission.

Understanding the Scope of a Supplementary Award

A supplementary award cannot alter the substance of the final award but can only address omissions or clarifications. Parties should ensure that they are not attempting to reopen the entire dispute.

Example:

If the tribunal awards compensation for direct damages but omits consequential losses, the supplementary award can address these losses, but it cannot revisit the overall liability or change the original award’s decision.

Seek Judicial Review if Necessary

If a party believes that the supplementary award goes beyond its intended scope, they may approach the court for judicial review. However, this will be rare, as supplementary awards are meant to correct or clarify and should not involve substantive changes to the final award.

Example:

If a party believes that the supplementary award incorrectly adds new claims or revisits the final ruling, they may seek judicial review to determine whether the supplementary award is in line with the arbitration agreement and the tribunal’s authority.

Example

Suppose TechCorp Ltd. and Innovative Solutions were involved in an arbitration over a technology contract. The final award issued by the tribunal orders Innovative Solutions to pay ₹50,00,000 to TechCorp for breach of contract. However, the arbitrator inadvertently omits to address the issue of interest on the delayed payment.

Steps TechCorp Ltd. should take:

Request for Supplementary Award: TechCorp Ltd. files a request for a supplementary award to address the omission of the interest claim.

Arbitrator’s Action: The arbitrator issues a supplementary award directing Innovative Solutions to pay interest on the ₹50,00,000 from the date of breach until the payment is made.

Finality: The original award remains intact, and the supplementary award addresses the previously omitted aspect, ensuring TechCorp Ltd. receives the full relief it sought.

Answer By Law4u Team

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