Originally from World Arbitration and Mediation Review, (WAMR)

I. INTRODUCTION

The effect of exceeding the time limit to issue an award is not clear absent a provision in the law or the arbitration agreement.   The analysis of national reports, as published in the “ICCA international handbook on commercial arbitration,” confirms that there are various methods by which the effect of exceeding the time limit to issue an award could be measured.   These various methods can be formulated in three approaches:

 –   Some jurisdictions presume that imposing a time limit for issuing an award is linked to the effectiveness of the arbitration agreement.  Therefore, exceeding the time limit turns the arbitration agreement inoperative and the parties will have to go to the national courts to handle their dispute. 

–    A group of jurisdictions understands that the time limit for the award relates to the mandate of the arbitrators.  Therefore,         exceeding the time limit terminates the mandate of the arbitration tribunal.  While some positions propose that the                   arbitration proceedings be terminated and a new tribunal is appointed to start new arbitration proceedings, others suggest        that the proceedings should stay pending while a new tribunal is appointed to resume the proceedings. 

–    Most jurisdictions hold that exceeding the time limit to issue an award makes the arbitral proceedings irregular since they were not in accordance with the parties’ agreement or the lex arbitri.  Therefore, the effect of exceeding the time limit for issuing an award could be addressed under Article V(1)(d) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the “New York Convention”) and Article 36(iv) of UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”). 

       Each approach suffers from a legal defect and causes some impractical ramifications putting the parties' interests in jeopardy and worsening the situation entirely. The idea of establishing a time limit for the award is to help prevent delays and preserve the speediness of arbitration as one of its oldest "professed" advantages. Nonetheless, the effects of exceeding the time limit to issue an award, as recognized by these approaches, do not offer a remedy that ensures the goal of having a time limit.  The expiration of the arbitration agreement, terminating the mandate of the arbitral tribunal, restarting the proceedings, and denying the arbitral award simply mean the dispute will be retried or restudied from the very beginning.

        To avoid the malfunction of these approaches, their application should be restricted. This article will assess the impact of exceeding the time limit to issue an award on the arbitration agreement, the arbitration proceedings as linked to the mandate of the arbitrators, and the award itself.