Powers and Duties of the Arbitral Tribunal in Managing the Arbitration Process

Powers and Duties of the Arbitral Tribunal in Managing the Arbitration Process.

Ø Powers and Duties of Arbitral Tribunal

1. Power to Rule on its Own Jurisdiction

The authority of an arbitral tribunal to adjudicate on any challenge to the existence and legality of the arbitration agreement is addressed in Section 16 of the Act. The arbitration clause, which is to be regarded as a separate agreement from the other conditions of the contract, is unaffected by the arbitral tribunal’s ruling that the contract is void and unenforceable.

In Wellington Associates Ltd. vs Mr. Kirit Mehta (2000), the Supreme Court ruled that Section 33 of the Arbitration Act, 1996 makes it clear that any dispute regarding the “existence” of the arbitration agreement may only be resolved by application to the Court and not by the arbitrator. Section 16 of the Arbitration and Conciliation Act of 1996 has since eliminated the arbitrator’s incapacity. A decision about the “existence” of an arbitration clause in a contract can now be therefore made by the arbitral tribunal under Section 16.

2. Power to Make Interim Measures

Section 17 states the power of the arbitral tribunal to order interim measures if–

A. a party during the arbitral proceedings apply to the arbitral tribunal for the appointment of guardian for minor and person of unsound mind for arbitration proceedings; or

B. Interim measures for preservation, interim custody or sale of any goods which are the subject matter of the arbitration agreement; or

C. Securing the amount in dispute or appointment of receiver and interim injunction.

3. Power to Hold Oral Hearing

According to Section 24 of the Act, the arbitral tribunal may determine whether to conduct the proceedings solely on the basis of papers and other material or whether to have oral hearings for the presenting of evidence or for oral argument. The parties must be informed in advance of the hearing, and any comments or materials submitted to the arbitral tribunal by one side must be shared with the other party.

4. Power to Proceed Ex-parte

Where without stating sufficient cause, under Section 25 of the Act, the claimant or respondent fails to communicate his statement of claim or defence under sub-section (1) of Section 23 of the Act the arbitral tribunal shall proceed ex-parte.

5. Power to Appoint an Expert

Section 26 of the Act says that the arbitral tribunal may appoint one or more experts to report to it on specific issues to be determined by the arbitral tribunal. The expert shall, after submitting his oral or written report, participate in an oral hearing where parties will put questions to him. The expert also on the request of a party presents all documents, goods or other property, which are in his possession, placed before that party for examination.

6. Power to make Arbitral Award

Sections 28 to 33 in Chapter 06 of the Arbitration and Conciliation Act, 1996 deals specifically about the arbitral awards. Which regulations apply in the event of a dispute between the parties is a crucial point to make here. The answer to this question is that if the arbitration takes place in India, the arbitral tribunal will decide the dispute in accordance with Indian substantive law in all other arbitrations other than international commercial arbitrations, but it will decide the dispute in accordance with the rules established by the parties in international commercial arbitrations.

The majority of the arbitrator’s members must agree on the decision in an arbitral process. In cases other than those involving international commercial arbitration, the arbitral tribunal must issue the award within a year of the filing date of the initial complaint. If parties reach a settlement during the arbitration process, the arbitral tribunal must end the proceedings and record the agreement in the form of an arbitration award.

The arbitral tribunal’s members must all sign an arbitral award before it may be considered final. The basis for the arbitral award must be stated in the award itself. A signed copy of the arbitral award must be given to each party after it is made.

In relation to the arbitration proceeding the arbitral tribunal shall have a discretion to determine whether the costs are payable by one party to another, the amount of such costs and when such costs are to be paid. The arbitral proceedings shall be terminated by the pronouncement of final arbitral award or by the order of the arbitral tribunal when the claimant withdraws his claim, parties agree on the termination of the proceedings or tribunal finds that continuation of the proceedings become unnecessary or impossible.

Ø Duties of Arbitral Tribunal

Apart from powers given to the arbitral tribunals under Arbitration and Conciliation Act, 1996 these tribunals also have certain obligations to perform towards the parties. These duties are enumerated below:

1. Duty to be Impartial

Section 18 of the arbitration and conciliation act says that it is the duty of an arbitral tribunal to be impartial, that means the arbitral tribunal shall treat each party equally and each party shall be given full opportunity to present his case.

2. Duty to Choose Time, Place and Language of Arbitration

Section 20 of the Act says that parties are free to choose the place of arbitration according to their convenience but if they fail to do so then it is the duty of the arbitral tribunal to determine such place regarding circumstances of the case. In Sanshin Chemicals Industry vs Orientals Carbons And Chemicals (2001), the Supreme Court ruled that a joint reading of Section 2(6) and Section 20 leads to the conclusion that, even though the parties were free to choose the location of the arbitration, they had the right to authorise anyone, including an institution, to make that decision. In the case at hand, the Joint Committee is such an institution, and its decision will not be subject to appeal. According to Section 22, the arbitral tribunal will choose the language or languages to be utilised in the arbitration if the parties are unable to agree on one or more of them.

3. Duty to Disclose Relevant Facts Required to be Known by the Parties

When an arbitrator is appointed in such a manner then it is his duty that he shall disclose, under Section 12 of the Act, in writing all past and present connections whether direct or indirect with the parties or the subject matter in dispute which shall affect his ability to devote sufficient time to the arbitration proceedings.

In Steel Authority Of India Ltd vs British Marine Plc (2016), the Delhi High Court evaluated whether the AT members’ argument that they were not obligated to make a disclosure other than the one they had already made was valid or not. In other words, the Court decided whether the arbitrators were required to follow the Fifth Schedule’s criteria, namely Item 24 of that Schedule or not. The Court had taken into account Explanation 2 to Section 12 (1), which allows for potential exceptions in situations where parties typically choose the same arbitrators for various instances.

4. Duty to Correct the Award

Section 33 says that if the a party within thirty (30) days from the receipt of the arbitral award, with a notice to other party, request the arbitral tribunal to correct any computational, clerical or typographical error in the award or request the arbitral tribunal to give an interpretation of a specific point of the award then it is the duty of the arbitral tribunal to make the correction or give the interpretation which shall form the part of the arbitral award.

5. Duty to Avoid Misconduct

It is the duty of the arbitral tribunal to avoid passing any award which is opposed to public policy. It must not engage in bribery and corruption also it must not break the rule of natural justice.

References:

1. Characteristics of Alternate Dispute Resolution (ADR) and Advantages and Disadvantages of Alternate Dispute Resolution (ADR)

2. Legal Education in India: Challenges, Innovations, and a Vision

3. Sources of Law

4. Salient features of Arbitration and Conciliation Act, 1996.

5. Disscuss the Differences between Arbitration and Conciliation

6. What type of Matter Cannot be subject to ADR (Alternative Dispute Resolution)

7. Discuss the historical background and objectives of the Arbitration and Conciliation Act, 1996

8. What is an Interim Measure by Court Under Section 9 of the Arbitration and Conciliation Act 1996

9. Differences between Arbitration and Mediation

10. Difference between Mediation and Conciliation

11. Difference between Arbitration and Conciliation