The Arbitral Tribunal is the central authority in the arbitration process, acting as a private court to resolve disputes. Its composition, powers, and the grounds for challenging its decisions are strictly governed by the Arbitration and Conciliation Act, 1996.
1. Composition of an Arbitral Tribunal
The composition refers to the number and appointment of arbitrators who will hear the case.
Number of Arbitrators (Section 10): Parties are free to determine the number of arbitrators, provided it is not an even number. This prevents a "deadlock" in decision-making. If the parties fail to decide, the default is a sole arbitrator.
Appointment Procedure (Section 11): Parties can agree on any procedure for appointment.
Panel of Three: Typically, each party appoints one arbitrator, and those two appoint the third (the "Presiding Arbitrator").
Court Intervention: If a party fails to appoint an arbitrator within 30 days, or if the two arbitrators cannot agree on a third, the Supreme Court (for International Commercial Arbitration) or the High Court (for Domestic Arbitration) can be requested to make the appointment.
2. Jurisdiction, Powers, and Procedure
The Tribunal is empowered to manage its own process, often referred to as the principle of Kompetenz-Kompetenz.
Jurisdiction (Section 16): The Tribunal has the power to rule on its own jurisdiction. This includes deciding on objections regarding the existence or validity of the arbitration agreement itself. Even if the main contract is declared void, the arbitration clause remains valid for the purpose of resolving disputes.
Powers of the Tribunal:
Interim Measures (Section 17): It can grant interim protection (like injunctions or securing the amount in dispute) during the proceedings.
Conduct of Proceedings: It has the power to determine the admissibility, relevance, and weight of any evidence.
Expert Appointment (Section 26): It can appoint experts to report on specific technical issues.
Procedure (Section 19): The Tribunal is not bound by the strict rules of the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872. Parties are free to agree on the procedure; otherwise, the Tribunal can conduct the case in any manner it considers appropriate, ensuring equal treatment of parties.
3. Grounds for Challenging an Arbitral Award
An arbitral award is final and binding. It cannot be "appealed" on its merits like a court judgment; it can only be set aside by a court under very specific legal grounds provided in Section 34.
A. Grounds to be proven by the Applicant:
Incapacity: A party to the agreement was under some incapacity (e.g., a minor or of unsound mind).
Invalid Agreement: The arbitration agreement is not valid under the law.
Lack of Notice: The party was not given proper notice of the appointment of the arbitrator or the proceedings, or was otherwise unable to present their case.
Beyond Scope: The award deals with a dispute not contemplated by or falling within the terms of the submission to arbitration.
Improper Composition: The composition of the tribunal or the procedure was not in accordance with the agreement of the parties.
B. Grounds the Court may find on its own:
Non-Arbitrable Subject Matter: The dispute is of a nature that cannot be settled by arbitration under Indian law (e.g., criminal matters or matrimonial status).
Public Policy of India: The award is in conflict with the public policy of India. This is limited to:
Fraud or corruption.
Contravention of the fundamental policy of Indian law.
Conflict with basic notions of morality or justice.
Patent Illegality (Section 34(2A)): For domestic awards only, if the award is vitiated by an obvious illegality appearing on its face (this does not apply to International Commercial Arbitrations).
Time Limit: An application to challenge an award must be made within three months (plus a maximum 30-day extension if "sufficient cause" is shown) from the date the party received the award.
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