This article has been written by Suhani Singh, a student studying B.A.LLB[H.] from Teerthanker Mahaveer College of Law and Legal Studies, Moradabad. The author is a 3rd year law student.
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.
A 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 After briefly mentioning what types of disputes are arbitrable, the various nuances of Section 16 of the Arbitration and Conciliation Act, 1996, with relevant case laws, have been discussed below.
- Types of disagreements that must be submitted 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 brought before an arbitrator, whereas disputes involving rights in rem cannot
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.
- SECTION 16 of the Arbitration and Conciliation Act, 1996
Section 16 of the Arbitration and Conciliation Act 1 996, confers power on arbitral tribunal to rule on its own jurisdiction. The provision of this section 16 are borrowed from Article 16 of the UNCITRAL Model Law.
The arbitral tribunal will rule on any disputes regarding the existence or legality of the arbitration agreement in addition to its own authority. The arbitral tribunal shall take the following into consideration when deciding the aforementioned questions:
A] An arbitration provision included in a contract is to be viewed as a separate agreement from the other provisions;
B] Even if the arbitral tribunal rules that the contract is void, that does not automatically mean that the arbitration clause is also void.
- OLD POSITION
Under section 33 of the old Act, 1940 any questions as to the existence” of the arbitration agreement was to be decided only by application to the Court and not by the arbitrator. This disability on the part of the arbitrator has been removed by section 16 of the new Act’1996. Section 16 of the new Act confers power on the Arbitral Tribunal to decide whether there is an existence of an arbitration clause.
This authority granted to the arbitral tribunal, often known as the “Kunstkompetenz,” is a crucial and widely acknowledged aspect of contemporary arbitration. According to the Kompetenz-Kompetenz-Prinzip, an arbitral tribunal is qualified to make decisions on its own jurisdiction with respect to the arbitral proceedings.
The requirement to assert a defence that the arbitral tribunal lacks jurisdiction to hear and decide the dispute in question is that it be asserted no later than the submission of the statement of defence. However, a party is not prohibited from asserting such a defence on the grounds that he appointed or assisted in the appointment of the arbitral tribunal.
- EXCEEDING AUTHORITY’S PERMISSION
A party may argue that the arbitral tribunal is acting outside the bounds of its power. However, this argument must be made as soon as the alleged subject exceeds the authority of the arbitrator. It must also be made during the arbitral proceedings as soon as the alleged issue exceeds the authority of the arbitrator.
- CONDUNE DELAY
If the arbitral tribunal believes the delay was warranted, it may admit a later argument in either of the situations mentioned in subsection (2) or subsection (3).
- TRIBUNAL RULES OUT PLEA
Tribunal rejects if the arbitral tribunal rejects the parties’ argument, it has the authority to uphold the arbitral decision. A party that feels wronged by such an arbitral award may contest it under section 34 of the Act, which calls for the award to be set aside
- AGGRIEVED PARTY
A party that feels wronged by such an arbitral award may contest it under section 34 of the Act, which calls for the award to be set aside
The term “jurisdiction” has a wide range of meanings. The ability of the Arbitral Tribunal to make decisions on its own jurisdiction is covered by Section 16 of the Act. Understanding the expressior’s “jurisdiction” and the reach of the appeal provision must be done within the context of the numerous sub-sections of section 16.
It is evident from section 16(6) that the parties must use section 34 of the Act to revoke the decision in a situation when the Arbitral Tribunal passes an award after resolving the jurisdictional challenge. However, the party who has been wronged is not without recourse if the tribunal decides to exercise its jurisdiction or refuses to make an award and dismisses the arbitration. Such such instance is covered by Section 37(2).
- WRIT JURISDICTION
The arbitrator has the authority to choose its own jurisdiction, and this decision is not subject to writ petition appeal. After the hearing has concluded and the award has been given, the aggrieved party may contest the same as permitted by section 16(6) of the Act.
- RELEVANT CASES
KONKAN RAILWAY CONSTRUCTION LTD V MEHUL CONSTRUCTION CO.,
When the matter is placed before the chief justice or his nominee under section 1 1 of the Act, it is imperative for the said Chief Justice or his nominee to bear in mind the legislative intent that the arbitral process should be set in motion without any delay whatsoever and all contentious issues are left to be raised before the arbitral tribunal itself. At that stage, it would not be appropriate for the Chief Justice or his nominee to entertain any contentious issue between the parties and decide the same.
WELLINGTON ASSOCIATES LTD V KRITI MEHTA
In my view, section 16 does not take away the jurisdiction of the Chief Justice of India or his designate if need be, to decide the question of the ‘existence’ of arbitration agreement. Section 16 does not declare that except the Arbitral Tribunal none else can determine such a question. Merely because the new Act permits the arbitrator to decide this question, it does not necessarily follow that at the stage of section 11 the Chief Justice of India or his designate cannot decide a question as to the existence of the arbitration clause.
Union of India v. East Coast Boat Builders & Engineers Ltd. 
The Learned Delhi High Court, in this case noted that if the arbitral tribunal rejects the plea challenging jurisdiction, the court cannot interface at the stage. The only remedy available to the party arises after the declaration of the final arbitral award.
Sources Uses For Research
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