Arbitral Tribunal Appointment Procedure

February 19, 2023

This article has been written by Suhani Singh, a student studying B.A.LLB[H.] from Terrthanker Mahaveer College of Law and Legal Studies, Moradabad. The author is a 3^rd year law student.

Introduction

Arbitrator and arbitration tribunal are synonyms for the same authority, individual, or group of individuals. According to the Arbitration and Conciliation Act of 1996, the parties who bring a dispute to arbitration are free to choose either a single arbitrator or a panel of arbitrators. The parties decide mutually on the number of arbitrators, their qualifications, the location of the arbitration, the jurisdiction and authority of the arbitral tribunal, as well as the process for holding arbitral proceedings. tribunal established through arbitration lacks inherent jurisdiction Instead, it derives its authority from the parties’ agreement to submit a specific dispute to arbitration. As a result, no law gives an arbitral tribunal the authority to hear cases. High levels of party autonomy exist. As a result, Section 16 of the Arbitration and Conciliation Act, 1996 provides for the arbitration tribunal to have the authority to make decisions regarding its own jurisdiction. The numerous subtleties of Section 16 of the Arbitration and Conciliation Act, 1996, with pertinent case laws, have been explored below after briefly mentioning what categories of disputes are arbitrable.

Nature of disputes that can be referred to arbitration

Certain problems cannot be referred to arbitration for any reason. A company’s dissolution, an insolvency declaration, a matrimonial conflict, a testamentary dispute, a criminal matter, or an issue that is expressly not subject to arbitration are examples of such situations A correctly designed arbitration agreement gives the arbitration tribunal full authority to decide all issues, even those not expressly covered by the contract and those that involve tort and equity In general, disputes involving rights in personam may be arbitrated, while those involving rights in rem are not eligible for arbitration. The arbitration tribunal decides an issue according to the law that the parties have agreed to employ for conflict resolution, or if there is no such agreement, it applies the law that is appropriate in the given situation. The arbitration tribunal decides an issue according to the law that the parties have agreed to employ for conflict resolution, or if there is no such agreement, it applies the law that is appropriate in the given situation.

Procedure for the appointment

Section 11 only gives the High Court authority to name an arbitrator or presiding arbitrator in the following circumstances:

A) where an arbitration agreement is in force,

B) one or more arbitrators may be appointed per the terms of the agreement;

C) All parties to the case must agree to the arbitrator’s appointment in advance.

D) Disagreements between the arbitrators, or between the parties to the arbitration agreement;

E) The disagreements center on arbitrators’ appointment or appointments.

Appointment of Arbitrator

The appointment of arbitrators is covered under Section 11 of the Arbitration and Conciliation Act, 1996. A person of any nationality may be chosen as an arbitrator unless the parties specifically state otherwise. The method for choosing an arbitrator or arbitrators is up to the parties’ discretion. In the absence of three arbitrators being chosen by the parties, one arbitrator shall be chosen by each party, and the two arbitrators shall select the third arbitrator. Therefore, choosing three arbitrators is required. the third serving as the arbitrator who preside.

The appointment shall be made, upon request of a party, by the Chief Justice of the High Court or any person or institution designated by him, if a party fails to appoint an arbitrator in accordance with the third arbitrator within thirty days from the date of receipt of a request to do so from the other party or if two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment.

The appointment of the arbitrator shall be made upon request of a party, by the Chief Justice of the High Court or any person or institution designated by him, in the absence of any procedure to appoint a sole arbitrator, if the parties fall to agree on the arbitrator within 30 days from receipt on a request by one party from the other party to so agree.

Composition of an Arbitration Tribunal

The provisions for the composition of an arbitral tribunal are set forth in Chapter Il of the Arbitration and Conciliation Act, 1996 (herein referred to as the “Act”). Additionally, Rule 22 of the Arbitration Rules established by the Indian Council of Arbitration states that upon receipt of an application for arbitration, the Council shall take such action as may be necessary for the establishment of an arbitral tribunal to determine any disputes or differences between the parties.

Number of arbitrators in an Arbitration Tribunal

The number of arbitrators who must be a part of the arbitral tribunal is specified 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. Additionally, 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. The arbitral tribunal will be constituted of three arbitrators with the agreement of the parties in cases when the claim in the dispute exceeds one crore.

How can an arbitrator be Terminated?

Under Sections 14 and 15 of the Act, not only the arbitrator’s appointment but also the arbitrator’s mandate may be revoked in the following circumstances.

If the arbitrator is unable to fulfil his duties effectively or if there is an excessive delay in carrying them out,
Unless the arbitrator voluntarily leaves his position or the parties agree to have him terminated,

In accordance with Rule 27 of the Rules of Arbitration, an arbitrator’s appointment may be terminated due to his resignation or death if he is negligent in the performance of his responsibilities or fails to act promptly and fails to declare the arbitral decision within the allotted period.

Relevant Case Laws

In Indian Drugs & Pharmaceuticals Ltd. v. Indo Swiss S. Gem Mfg., Co. Ltd., it has been held that no retired High Court judge can be appointed as an arbitrator by the court when the arbitration clause states categorically that the difference/dispute shall be referred e to an arbitrator by the Chairman and Managing Director of iPDL who is the appellant in this case.
In National Aluminum Co. Ltd v. Metalimpex Ltd. a Bangladeshi company falled to nominate its arbitrator in terms of the arbitration agreement on an application under S.11 of the Arbitration and Conciliation Act, 1996, the Chief justice of India nominated an arbitrator to act on behalf of the Bangladeshi company.
In Golden Chariot Recreations Prt. Ltd. Mukesh Panika & Anr.,” the Supreme Court held that a party to the dispute can file an application for the appointment of an atbitrator by the Court only after the expiry of 30 days.
In Oriental insurance Company v M/S Narbheram Power and Steel Pyt,” it was held that the arbitration clause under an agreement is to be strictly interpreted. It expresses the intention of the parties to appoint an arbitrator for the setiement of any dispute. This clause cannot be waived off in normal circumstances
In the case Union of India v. East Coast Boat Builders & Engineers Ltd (1998) The Learned Delhi High Court, in this case, plea challenoine: tribunal rejects noted that if the arbitration tribunal the plea challenging jurisdiction, the Court cannot interfere at that stage. The only remedy available to the party arises after the declaration of the final arbitral award.

In the case of Vishram Varu and ors. v. Union of India (2022), the Supreme Court held that an application made under Clause 6 of Section 11 is barred by limitation. In this case, the arbitration clause was invoked nearly thirty-two years after the emergence of the dispute.
In the case of New Eureka Travels Club v. South Bengal State Transport Corporation (2022), the Calcutta High Court held that an interested party can neither be the arbitrator to a dispute or appoint an arbitrator to a dispute under Section 11.
Conclusion

The judiciary had a crucial role in the first stages of the appointment of arbitrators under Section 11 However, the arbitral institutions are now accountable for it. It is clear that the 2019 Amendment Act marked a turning point in the development of Section 11, which helped to constitutionalize the arbitration system and actually achieve the goal of decreasing court interference. However, there are a few errors in the Act’s drafting. The phrasing of the changes from 2015 and 2019 may be more precise because the uncertainty allows for more judicial intervention.

Sources Uses For Research

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February 19, 2023