December 3, 2020

COMPOSITION OF THE ARBITRAL TRIBUNAL

In international commercial arbitration the arbitral tribunal plays a very important and a decisive role in the adjudication of the dispute. A commercial dispute can go to arbitration on the basis of an agreement between the disputing parties to submit the dispute to resolution by arbitration, where an arbitrator or a tribunal of arbitrators is appointed and has been given the legal authority to act by the parties.

The composition of the arbitral tribunal or the appointing of the sole arbitrator is a characteristic and crucial issue in arbitration. The composition of the arbitral tribunal will have a huge effect on the resolution of the dispute.

Not only this, but the composition of the tribunal will have some important legal consequences related to the starting date for the arbitration and can have repercussions if a party applies to have the award set aside or enforced later on.

Chapter 3 of the arbitration act deals with the composition of the arbitral tribunal. Section 10 of the act deals with the concept of the number of the Arbitrators. It state the party are free to choose the number of arbitrators as they may deem fit the only deciding factor been that the number must be a even number In case where Sub Section 1 of the Act is not followed then in those cases the three will be a sole arbitrator.

Section 11 of the Act talks about with respect to the nationality of the arbitrator the person may be of any nationality or may as the party may decide the same. The process of appointing a arbitrator may be the decided by the parties according to Sub- Section 6.

In Sub Section 3 of Section 11 states the circumstances where the parties fail to choose a arbitrator under Sub Section 3 the automatic appointment of three arbitrator would be done and those three be selecting a fourth presiding arbitrator.

Section 12 of the Act talks about the grounds of challenging the arbitrators. There lie two basis grounds on which a arbitrator can be challenged. The first remains the doubts of been impartial or the independence of the arbitrator. If the parties or party feels that the arbitrator is impartial or has connection to one of the parties then the challenge can be raised. On the other side if the there is a incapacity on the grounds of his Qualification then on that ground too disqualification process can be initiated. It is also the duty of the party to fully disclose any contact with the arbitrator if any which will prejudice the hearing at any moment.

Section of 13 of the act states about the challenge procedure and the proceedings. Sufficient time is been provided to the arbitrator to prove the fact that he is innocent. If successful the Arbitrator may be removed from the panel and also new arbitrator may be appointed. If not successful the arbitrator will be continuing to be in the panel. The appointment of a new or the appointment of the substitute arbitrator is mentioned in Section 17. In case where the arbitrator fails to perform his duty, he may be terminated from his position.in other circumstances the parties my ask the court to pass a interlocutory order against him.

Section 14 of the act deals with the situation of failure or the impossibility to act by a arbitrator and the duty of the arbitrator terminates in a de jure or de facto unable to perform his function or in another case he has withdrawn from his office or the parties have together agreed to the terminate of his mandate.

Section 15 of the act deals with the termination and substitution of the arbitrators. Two conditions are put forward where he has withdrawn from office for any reason and or by the pursuant to agreement of the parties. Where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced. In case where an arbitrator is replaced under sub-section (2), any hearings previously held may be repeated at the discretion of the arbitral tribunal.

In the Case of N.P Lohia vs N.K Lohia[1] it was held that Section 10 of the said provision or award can be set aside by the court. The arbitral award can be challenged on the grounds with regard to the composition of the arbitral tribunal.

In the Case of Konkan Railway Corporation Ltd vs Rani Construction Pvt Ltd.[2] It was decided that Section 16 provides with the power to the rule on its own jurisdiction and decide the same. It also was decided that “under Section 16 is not confined to the width of its jurisdiction but goes also to the root of its jurisdiction”

Therefore Section 10 can be interpreted in the lights of Section 11. Section 10 remains more clear than section 11 in a sense that section 10 provides the number of arbitrators. On the other hand, Section 11 provides only the appointment in cases where there is one arbitrator or three arbitrators. The SC has held that the agreement does not becomes void just because of the fact that the parties have decided for appointment of two arbitrators.

Further in the case Renusagar Power Co Ltd Vs GE Co as views of Lohia the interest of India as it was termed is a component of public policy the same was decided in the landmark case of ONGC vs Saw Pipes Ltd.[3]

CONCLUSION

It is a highly debatable point at to the choice of choosing a even number of arbitrator. The landmark case of the Lohia is as per the prevailing legal system correct and up to the mark with regard to the parties been allowing to choose even number of arbitrators under section 10 of the said act. It is also true that the case is much more stable and provides for a developed jurisprudence as compared to all over the world. Also, as a matter of fact the case does not have a major impact on the entire selection process since majority of the arbitral tribunal have a sole arbitrator or three arbitrators.

[1] Appeal (civil) 1382 of 2002

[2] Appeal (civil) 5880-5889 of 1997

[3] Appeal (civil) 7419 2001 of 518

Disclaimer:

The Juscholars aims to provide legal education and spread legal awareness. Hence, the copyright over this article rests with the author and the Juscholars by publishing the article does not, in any manner, aim to infringe the copyright of the any person concerned. Any concerns regarding the same must be brought to the knowledge of the Juscholars asap.

Author Details: Shubhang Gomasta (LLM student, MATS University, Raipur, Chattisgarh).

Leave a Reply