This Article has been written by Aakriti Singh, a 3rd Year student of LLB (Hons.) from Amity Law School, Amity University Noida.
INTRODUCTION
An arbitrator is a professional who helps the parties in dispute to arrive at a final, harmonious agreement or settlement. They are also referred to as an umpire or referee. Section 10 of this Act provides that the parties have the power to decide the number of arbitrators, but this number cannot be even. According to Section 11, the parties are free to decide the procedure of appointing an arbitrator or arbitrators in the arbitration agreement. If no such procedure is determined, then each party is required to appoint one arbitrator, and the two arbitrators must then appoint a third one. If the parties fail to appoint an arbitrator according to the above procedure within 30 days of the request made, or the arbitrators appointed cannot agree on one person, any party may request the Chief Justice to nominate an arbitrator. However, if the parties have not agreed on the procedure of appointing one arbitrator, or fail to agree on one person within 30 days of the receipt of a request made by another party, the nomination shall be made by the Chief Justice upon the request of one of the parties. Where an appointment procedure has been agreed upon by the parties, but they fail to act as required, a party may request the Chief Justice to nominate an arbitrator, and the decision of the Chief Justice will be final.
The Arbitration and Conciliation Act, 1996 provides the arbitrator with the power to grant an arbitral award and take other necessary measures. He may swear in parties and witnesses as well as issue interrogatories to them if he deems it necessary. There is no specific stipulation within the Act regarding this power; nevertheless, the fact that the arbitrator functions in a quasi-judicial capacity suggests it is implicitly included.
POWERS OF THE ARBITRATOR
The arbitrator has the authority to swear in the parties and witnesses and can issue interrogatories to the parties, if necessary. Although there is no express provision given in The Arbitration and Conciliation Act, 1966, it is implicitly assumed that he acts as a quasi-judicial figure in arbitration.
As stated in Section 17 of this Act, when a party seeks an interim measure during the arbitration or at any time after an arbitral award is made, the arbitration tribunal has the power to take such interim measures, including the appointment of a guardian for minors or people of unsound mind, protecting goods subjected to the arbitration agreement, securing amounts in dispute, preventing the inspection or detention of any property or thing subjected to arbitration, and the appointment of a receiver, among other things.
The arbitrator may proceed ex-parte in favour of one party if the other party violates any provision of the Act. This can be done according to Section 25 if the claimant fails to communicate their statement of claim in accordance with Section 23(1) of the Act, the respondent fails to communicate their statement of claim, or any party fails to appear for an oral hearing, or produce a document or produce documentary evidence. Before proceeding ex-parte, the court must give the other party notice of its intention to do so, specifying the date, time, and place.
Section 26 of the Act provides the power to the arbitrator to appoint one or more experts to report to him on a particular issue if it is found necessary. Furthermore, the arbitrator has the power to give the expert relevant information, documents, or property to be inspected. The arbitrator may also appoint the expert as a participant in a hearing, but they must be shown to have expertise in matters related to the case.
Making awards is the most crucial power and duty of the arbitrator given under the Arbitration and Conciliation Act, 1996. The rules for an arbitration proceeding differ depending on the nature of the case, for international commercial arbitration the parties decide the rules of procedure, if they fail to do so, then the arbitrator himself decides, whereas for other matters the rules should be decided in accordance with the substantive law. At the time of making an award, the arbitrator must consider factors such as who is entitled to costs, who pays for costs, the amount and method of determining those costs, the manner in which the costs are payable, and the cost of the arbitration proceeding or any other expenses fixed by the arbitration tribunal. If there is more than one arbitrator, then the decision must be signed either by all the arbitrators or by the majority of them.
TERMINATION OF THE MANDATE OF TH ARBITRATOR
Section 14 outlines the circumstances under which the mandate of an arbitrator can be terminated due to his failure to act, while Section 15 emphasises the withdrawal of the arbitrator’s office and the subsequent substitution of his mandate. Under Section 14, the grounds on which the arbitrator’s mandate can be terminated are as follows:
The arbitrator becomes legally or factually unable to carry out his duties:
De Jure refers to the arbitrator’s legal incapacity to perform his functions according to the law, such as if he becomes bankrupt or is convicted of a criminal offence. De Facto, on the other hand, refers to a factual inability due to a specific event during the arbitration process, for example if the arbitrator falls seriously ill or has some physical incapacity.
He fails to act without undue delay for some other reason:
This clause applies when the arbitrator takes too long to adjudicate the dispute, especially in the context of the 2015 Amendments, which provide strict timelines for rendering the award. If the arbitrator is taking too long to even hold the first hearing, let alone adjudicate the case, then the parties can terminate his mandate using this clause.
The arbitrator withdraws from office:
The arbitrator can withdraw from office for his own reasons and does not have to provide an explanation of why.
The parties agree to the termination of his authority:
If one of the parties wishes to remove the arbitrator, they must approach the court to do so. However, if both parties agree to remove the arbitrator, they can do so through an agreement under Section 15(1)(b) and terminate the mandate of the arbitrator without going to court. A single party cannot revoke the authority of the arbitrator on their own.
The procedure for terminating an arbitrator’s mandate is for the party wishing to terminate the mandate to approach the court. An application for the removal of the arbitrator can be made to the court within whose jurisdiction the contract was executed, or the subject matter of the work was performed, or within whose jurisdiction the arbitrator’s office is located.
The court’s power to remove an arbitrator is discretionary and not every application will be successful. However, if the conditions mentioned under Section 14 are satisfied, then the court is obliged to remove the arbitrator.
CONCLUSION
The Supreme Court of India (“SC”) has elucidated the scope of Section 11(6) with respect to Section 14(1)(a) of the Arbitration and Conciliation Act, 1996 (“Act”). Section 14(1)(a) encompasses the revocation of an arbitrator’s mandate in light of deferment or impossibility of the arbitrator to execute his responsibilities and Section 11 enables the parties to request the court to assign an arbitrator under certain conditions. In this instance, the SC held that the High Court is not permitted to annul the mandate of the sole arbitrator assigned by mutual accord of the parties in the absence of an arbitration contract under Section 11(6) of the Act, as Section 11(5) along with Section 11(2) is applicable.
The situation in this case revolved around a family partition disagreement between the parties and they had chosen to name a sole arbitrator with mutual agreement in the absence of an arbitration contract between them. Yet, due to procrastination in arbitral proceedings, the parties made an application to the trial court under Section 14(1)(a) of the Act to annul the mandate of the sole arbitrator. Concurrently, one of the parties filed a plea before the High Court under Section 11(6) of the Act to withdraw the mandate of the sole arbitrator and substitute with a new arbitrator. The High Court deemed the sole arbitrator’s delay in finalising the arbitration proceedings to be exorbitant and unsatisfactory, thus invalidating his mandate. Furthermore, it named a new arbitrator in this case by taking recourse to its authority under Section 11(6) of the Act. Displeased with the High Court’s judgment, the appellant submitted an appeal to the SC. The appellant alleged that the High Court did not possess the authority under Section 11(6) to abrogate the mandate of the sole arbitrator when the parties had assigned the arbitrator themselves and that there was no undue delay in this instance.
REFERENCES
Powers and functions of an arbitrator under arbitration and conciliation act, 1996 iPleaders, https://blog.ipleaders.in/powers-and-functions-of-an-arbitrator-under-arbitration-and-conciliation-act-1996/#Who_is_an_arbitrator (last visited Feb 27, 2023)
Latest news Termination of Mandate of the Arbitrator | VIA Mediation Centre, https://viamediationcentre.org/readnews/MTAxNw==/Termination-of-Mandate-of-the-Arbitrator (last visited Feb 27, 2023)
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