Arbitral Tribunal

February 19, 2023

This Article has been written by Ms Sejal Dhakad, 1^st year BBA LLB Student at Indian Institute of Management Rohtak.

This Article discusses the Arbitral Tribunal and its compositions and procedure for appointment, roles and powers.

Introduction

Indian judiciary is amongst the oldest system in the world, and it is also widely acknowledged that it is becoming less effective at handling cases. Indian courts are overburdened with protracted unresolved issues. The situation is that despite the establishment of more than a thousand fast-track courts that have previously resolved millions of cases, the issue is still far from being resolved as backlogs of unresolved cases continue to grow.

A different option for resolving disputes in civil cases in arbitration. It is a method through which a dispute is resolved by private individuals appointed rather than the judicial officers directly appointed to the country’s courts and tribunals. These are private individuals who serve in a quasi-judicial capacity and are known as arbitrators. Unfortunately, arbitration cannot be used to settle every dispute. They include issues including crimes, marriage, insolvency and winding up, guardianship, tenancy, testamentary issues, trusts, etc. This division is created by considering the type of right involved, such as a “right in rem” or “right in personam,” as well as the Authority of special courts and an examination of public policy. Creating an arbitral tribunal is necessary if two parties disagree and conclude that arbitration is the best way to resolve the issue. Any individual arbitrator or panel of arbitrators is referred to as an “Arbitral Tribunal.” Their duty is to decide the case, render an arbitral judgement, and adjudicate the dispute.

Arbitral Tribunal Composition

The composition of the arbitral tribunal is covered in Chapter III of the Arbitration and Conciliation Act 1996. According to Rule 22 of the Arbitration Rules established by the Indian Council of Arbitration, when an application for arbitration is received, the Council takes the appropriate actions to establish an arbitral tribunal to resolve disputes or disagreements between parties. The following provisions pertain to the composition of an arbitral tribunal:

Number of arbitrators in a tribunal of arbitrators – The number of arbitrators who must be a part of the arbitral panel is mentioned in Section 10 of the Act. The number of arbitrators who will make up the arbitral tribunal to settle the issue may be jointly determined by the parties to the dispute, as stated in clause (1) of the Section. To ensure that there are no ties, it is vital that the number of arbitrators assigned be an odd number rather than an even one. Moreover, Section 10 says that just one arbitrator shall be chosen in the event that the parties to the dispute are unable to agree on the number of arbitrators.
According to Rule 22 of the Rules of Arbitration, if all parties agree, a single arbitrator may settle the dispute if the amount of the claim submitted for arbitration is One Crore or less. With the consent of the parties, the arbitral tribunal shall consist of three arbitrators in cases where the claim in the dispute exceeds one Crore.

Choosing arbitrators: what is the process?

Section 11 of the Arbitration and Conciliation Act specifies the process and selection of arbitrators for the arbitral tribunal. It reads as follows:

Nationality, With the consent of both parties, an arbitrator of any nationality may be chosen.
Appointment by Parties, The parties may select how to choose one or more arbitrators. The parties may independently designate one arbitrator each, and the two arbitrators will decide on the third arbitrator if the parties fail to do so.
The Supreme Court, the High Court, or any other person designated by the Court may appoint an arbitrator if the parties fail to do so within 30 days of receiving the request for arbitration.
Payment of fees, The High Court has the power to establish regulations governing the amount and mode of payment of the arbitral tribunal’s fees.

The Rules of Arbitration also outline how a single arbitrator or three arbitrators under Rule 23 are to be chosen. This regulation states that the Registrar of the Arbitration Committee may request the parties to the dispute to choose an arbitrator from the Panel of Arbitrators within 30 days of receiving the application. In the event of a deadlock, the sole arbitrator for the case is chosen by the Registrar himself. In a similar vein, if the parties to the dispute cannot agree, the Registrar may also choose three arbitrators.

The Supreme Court ruled in Golden Chariot Recreations Pvt. Ltd. v. Mukesh Panika & Anr. that a party to a dispute can only request that the Court appoint an arbitrator after a period of 30 days has passed. According to the ruling in Oriental Insurance Company v. M/S Narbheram Power and Steel Pvt., the arbitration clause in a contract must be read strictly. It reflects the parties’ desire to choose an arbitrator to resolve any disputes. This clause cannot, under normal circumstances, be waived.

Roles of Arbitrator

The arbitrator’s involvement in an arbitration process is equivalent to that of a judge in a judicial procedure, to be more specific. A private judge is a role that an arbitrator plays. Their primary responsibilities include the following, and they are chosen by the arbitral institutions:

Implementing and Interpreting the laws and regulations that apply to the arbitration.
Controlling the investigation’s breadth to ensure that every piece of evidence and every witness has been thoroughly vetted.
Holding the arbitration hearing during which both parties’ testimonials are presented Thoroughly analysing the evidence and testimonials.
Choose a course of action to end the conflict.
Announcing the arbitral decision.

Powers of Arbitrator

Let’s now talk about the arbitrator’s Authority. The Arbitration and Conciliation Act 1996 gives the arbitrator certain Authority to aid in presenting the judgement. The tribunal may take these actions to make it easier to deliver arbitral awards in the relevant dispute.

The Authority to take the parties’ and witnesses’ oaths

The Arbitration and Conciliation Act of 1996 gives arbitrators the Authority to swear all witnesses and the parties under oath. If he/she deems it necessary, he/she may also send the parties interrogatories. The arbitrator can perform this duty since they serve in a quasi-judicial capacity.

Authority to grant awards

An arbitral award is comparable to a judicial decision. It is based on how the arbitral tribunal has interpreted the facts and available evidence. The tribunal’s ruling resembled an arbitration verdict. The determination of the arbitral award is the primary goal of the arbitration process, and the arbitral panel has the Authority to do so. Nonetheless, the following clauses should be used to verify the rules that will apply in an arbitration proceeding:

In disputes involving international commercial arbitration, the dispute shall be resolved in accordance with the rules of procedure that are agreed upon by the parties; however, if the parties are unable to agree on the rules, the arbitrator determines the rules, and they take effect.
The arbitration panel will have the power to determine other norms that are compliant with substantive law.

The Authority to select experts

According to Section 26 of the Arbitration and Conciliation Act of 1996, the arbitral tribunal may, in any circumstance, select one or more experts to help him with a particular subject. The arbitrator also has the Authority to provide the experts with any pertinent data, papers, or items for inspection. The arbitrator also has the Authority to name the expert as a witness in a hearing if that is necessary. The expert must demonstrate to the parties that he is knowledgeable in the topics relevant to this case in order to exercise this power, and that is the sole requirement.

Possibility to act ex-parte

Whenever any of the following circumstances occur, the arbitration tribunal has the Authority to continue ex parte (an order granted while one of the parties is not present because of their own free will).

In situations where the respondent, claimant, or any other party to the dispute fails to submit or communicate their statements in accordance with Section 23 of the Arbitration and Conciliation Act, 1996; in situations where the claimant, respondent, or any other party to the dispute fails to submit or communicate their statements in accordance with the 1996 Arbitration and Conciliation Act’s Section 23; in situations where any party to the dispute fails to appear at an oral hearing or to produce any document or other type of documentary evidence requested by the tribunal.

Conclusion

As the delays brought on by the traditional court process for the relief delivery system are a major issue, the dispute resolution system of arbitration is proving to be very helpful in both domestic and international arenas. Additionally, the third-party justice delivery system is proving to be useful. Most civil disputes are now resolved through arbitration with the parties’ consent and will, which makes it considerably more likely that the disputes will be resolved successfully. Particularly in India, the laws governing alternative conflict resolution methods are changing over time. New institutions are offering their services to India as arbitration cases increase there, which could help in the future to alleviate the unwelcome state of court burden. We can only hope that the issue is resolved, that things become better over time, and that these new approaches to delivering justice will make it far more effective and efficient.

References

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February 19, 2023