Meaning
Legal reliefs and awards granted by a tribunal to resolve a commercial dispute form the basis of private contract enforcement. Arbitral remedies operate within the boundaries established by the arbitration agreement and the governing procedural law. These measures determine the financial or operational recovery available to an injured party when a distribution agreement is breached.
Contractual Power
Arbitrators derive their authority to order specific performance or award damages directly from the arbitration clause embedded in the distribution contract. This delegated power allows the panel to craft custom arbitral remedies that match the commercial reality of the supply failure. For instance, the tribunal may command a manufacturer to resume shipments to an exclusive distributor during the proceedings.
Financial Compensation
Compensatory awards represent the most common outcome of a dispute over territory infringement or unpaid inventory. In these situations, the panel calculates the net profit the distributor lost because of the unauthorized sales by the supplier in the exclusive region. The award translates these losses into a single, lump-sum payment that includes pre-award interest to restore the financial position of the claimant.
This remedy focuses on direct losses rather than speculative future profits.
Enforcement Boundary
The final utility of any award depends on its portability and the ease of its execution under the New York Convention. Although a tribunal possesses wide discretion in defining the relief, the resulting arbitral remedies must not violate the public policy of the country where enforcement is sought. If a remedy goes beyond compensatory measures and imposes punitive damages, local courts in many jurisdictions will refuse to execute the order.
