A party that has lost before an arbitral tribunal faces an uphill battle if it wishes to set aside or vacate the award. Courts rarely overturn an arbitral award. Because arbitral awards are considered to be final and binding, for the most part they cannot be challenged on the merits, but only on procedural grounds or grounds of arbitrator misconduct or bias. One of the touted advantages of an arbitration is the finality of the award, and arbitration laws and rules support finality by making it difficult to set aside an award. Nonetheless, steps can be taken by a determined party that believes an award was improperly made.

METHODS OF CHALLENGE

The most common method of challenge is to bring an action to annul, set aside, or vacate the award (the terms differ in different jurisdictions) in the court at the situs of the arbitration. This is the appropriate place to challenge the award, because the court at the situs is considered to have supervisory jurisdiction over the arbitral process to ensure that it was conducted in a fair and noncorrupt manner. The law that will govern the action will be the lex arbitri, or the curial law, which governs the arbitration proceedings at the situs. In at least seventy jurisdictions, the procedural law for challenging an award will be based on the UNCITRAL Model Law on International Commercial Arbitration, which will provide the grounds on which an award can be challenged.