Conduct of Arbitral Proceeding: Section 20 of Arbitration and Conciliation Act

Conduct of Arbitral Proceeding: Section 20 of Arbitration and Conciliation Act

Place of arbitration

STATEMENT: (1) The parties are free to agree on the place of arbitration.

(2) Failing any agreement referred to in sub-section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.

(3) Notwithstanding sub-section (1) or sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property.

Convenient Venue

It is not open to the arbitrator to fix the venue of arbitration of his choice regardless of the convenience of the parties. When there is no condition in the arbitration agreement empowering the arbitrator to fix the venue of arbitration as he thought fit, the arbitrator in fixing the venue of the meeting must take into account all material circumstances including the residence of the parties and their witnesses, the subject matter of the reference and the balance of convenience. Where the parties have constituted an arbitral tribunal, but have not designated the seat of the tribunal, the arbitral tribunal may itself designate the seat.

Parties Choice for Venue

The section gives the choice to the concerned parties to choose the venue of their choice and the same is not available with the arbitral tribunal. However, if the parties fail to reach an agreement on the choice of venue, then and only then the matter goes to the arbitral tribunal for determining the place for holding arbitration meetings and that too not arbitrarily but having regard to the circumstances of the case, including the convenience of the parties. Notwithstanding an agreement between the parties with regard to the choice of the venue, the arbitral tribunal has been given a wide discretion to decide when and where part of the proceedings shall take place, subject to an agreement in writing between the parties for holding discussions amongst themselves or for hearing witnesses, experts or the parties or for inspection of documents, goods or other property. This discretion has been given to the arbitral tribunal subject to the condition that there is no bar placed on the arbitral tribunal not to meet at a place other than the one fixed by them.

Interim Award for Venue

Section 2 (6) and 20 leads to the conclusions that in the event the parties don’t agree with regard to the place of arbitration, though they were free to determine the same then they had the right to authorise any person including an institution and if the Joint Committee is such an institution for deciding the venue of arbitration and such decision of the committee shall not partake the character of adjudication of a dispute arising out of the agreement, so as clothe it the character of an award. The Supreme Court in the case of Sunshin Chemicals Industry vs. Oriental Carbons and Chemicals Ltd. (2001), held that, the decision of the Committee on the question of the venue under the arbitration clause is not a decision, deciding legal rights of the parties under the contract. There is no mutuality and the said Committee is merely a machinery for deciding the question of venue. Such a decision doesn’t have the characteristics of an arbitration award nor even can it be held an interim award.

Venue According to Law

Arbitration Act, 1996 makes the seat of arbitration as the centre of gravity of arbitration. The courts where the arbitration takes place would be required to exercise supervisory control over the arbitration process. If the arbitration is held in Delhi, where neither of the parties are from Delhi and the tribunal sitting in Delhi passes an interim order under section 17, the appeal against such order would lie in the courts at Delhi.

Related Articles:

• Section 18: Equal treatment of parties
• Section 19: Determination of rules of procedure
• Section 20: Place of arbitration
• Section 21: Commencement of Arbitral Proceedings
• Section 22: Language
• Section 23: Statement of claim and defence
• Section 24: Hearing and written proceedings
• Section 25: Default of a Party
• Section 26: Expert appointment by arbitral tribunal
• Section 27: Court assistance in taking evidence
• More notes on Arbitration and Conciliation Act
• More law notes

Author Details: Vaibhav Goyal (BA LLB Student, Panjab University)