Supreme Court Justice Ujjal Bhuyan on Sunday emphasised that Indian courts must show restraint in arbitration matters, warning that excessive judicial intervention threatens the credibility of the system.

“Restraint is the key word here, and we should allow arbitration and arbitral proceedings to come to their logical conclusion with the bare minimum of, if not totally, judicial intervention,” he said.

The judge was chairing a session at the Delhi Arbitration Weekend 2025 on the theme Drafting of Enforceable Awards: International Best Practices.

The panel also featured Justice Shekhar Saraf of the Allahabad High Court, arbitrator and academic Dr. Jane Willems, Senior Advocate Gourab Banerji and Siraj Omar SC, Founding Director of Siraj Omar LLC, Singapore.

Justice Bhuyan noted that arbitral awards are more than technical documents — they tell the story of the parties, their dispute and its resolution. For arbitration to retain credibility, awards must be capable of execution like court decrees and withstand judicial scrutiny.

“The utility of an adjudicatory process rests not only on fairness and speed but also on whether the decision can be recognised and enforced by national courts. An enforceable arbitral award has the same legal effect as the decree of the court."

The judge flagged delays arising from frequent challenges to awards under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996.

A study of commercial litigation in Delhi and Bombay High Courts showed that:

• In Delhi, nearly 70% of awards challenged under Section 34 went on appeal under Section 37.

• In Bombay, the figure rose to close to 90%.

Such challenges extend enforcement timelines by 3.6 years on average at the Section 34 stage and 5.8 years when followed by a Section 37 appeal.

“The statistics clearly reveal that most arbitral awards are subject to judicial scrutiny at both stages…these are matters of serious concern, and need to be debated,” Justice Bhuyan said.

Banerji stressed that enforceability is the real test of any award. He underlined that arbitrators must always consider their audience — from counsel and clients to judges and institutions — when drafting awards.

“The first thing when an award comes before counsel is to look at the operative portion: who has won and who has lost. Lawyers will then examine the reasoning to decide whether to challenge or accept. And inevitably, judges will scrutinise it under Sections 34 or 37,” he explained.

He warned against pitfalls such as inadequate procedural history, mismatches between pleadings and findings and reliance on the so-called “Goldman formula” of leaving issues undefined.

“Unless you crystallise the issues, you will run into difficulty with enforcement,” he cautioned.

He also underscored the importance of interest and costs.

“By the time the award comes up, the principal is something one can settle on, but it is the interest which kills you,” Banerji remarked, urging arbitrators to award actual costs under Section 31A instead of symbolic figures.

Justice Saraf cautioned that enforcement problems are not caused by judicial scepticism alone but often by inherent defects in arbitral awards. Drawing from his experience with Sections 11, 34 and 36 proceedings, he said:

“The risk of non-enforcement arises not from judicial scepticism alone, but often from inherent defects in the award itself that unfortunately prevent enforcing courts from executing it as a decree…arbitrators, while being adjudicators, are not judges. Since the award emerges from a private process that ultimately requires enforcement by the court, it is justified that courts exercise prudence in reviewing such awards.”

Saraf cited a 2022 study analysing over 1,000 cases across 74 jurisdictions, which found that while 73% of awards were enforced, challenges often arose on grounds such as invalid agreements, improper notice, violation of procedure andlack of finality.

Dr Willems added a comparative perspective, highlighting how courts in Europe and Asia have refused enforcement where awards lacked adequate reasoning. She stressed that arbitrators must ensure that parties had a reasonable opportunity to be heard and that decisions clearly explain how conclusions were reached.

“Parties reading an award should understand how the tribunal reached its decision,” she said.

Omar drew from Singapore’s jurisprudence, pointing to recent cases where courts set aside awards for failing to address pleaded arguments or for adopting methods of valuation without giving parties a chance to respond.

“An unenforceable award is a worthless piece of paper and a fundamental failure of the tribunal’s mandate,” he observed.