हिंदी

Judicial intervention in Arbitration: A reality or a Myth?

INSIGHT OF ADR

Alternate dispute resolution techniques are no doubt the future of the country what is in the world and the advancement of legal and judiciary system starts from here only. During the Covid times the ADR sector and its use has been exponentially increased and the awareness about this sector or technique has also been realized or known to the general public. The ADR techniques not only are efficient but also work as a speedy redressal of disputes mechanism in which the parties to the suit do not have to measure the walls of the court rooms rather sit in a place and decide the possible outcomes of the conflict mutually or less formally. Undoubtedly these techniques are now a new normal and one of the most preferred way of dispute resolution since it involves various dispute redressal mechanisms like mediation, negotiation, conciliation and arbitration along with another miscellaneous method of resolution of disputes like Lok Adalat. The ADR techniques are very in famous for solving the disputes between the parties in a very short span of time and very effectively with considering the interests of both the parties in the suit.

ARBITRATION IN ADR

“Arbitration” is defined in Section 2 of the Arbitration and Conciliation Act of 1996 as “any arbitration, whether or not administered by a permanent Arbitral Institution, and (b) “Arbitration Agreement,” means an agreement referred to in Section 7.” Basically, when we talk about resolving disputes with the help of ADR techniques or arbitration for that matter it is a process in which resolution of disputes is done outside the court premises the conflict will be decided and enumerated by the parties to the suit or the conflict and this present conflict of dispute will be decided by the persons authorized by the court they are known as arbitrators or arbiters or arbitral tribunal which renders the arbitration award. The arbitration award is basically legally binding on Courts as well as on the parties and also enforceable in the courts. With the goal of resolving disputes quickly, it is critical that arbitral cases be determined only on the basis of affidavits and other relevant papers, rather than on the basis of witness testimony.

Arbitration Agreement: A pertinent aspect

Arbitration agreement is also very pertinent aspect when it comes to the enforcement of arbitration has a resolution of dispute mechanism since in the absence of any consensual agreement between the parties to the suit the jurisdiction of arbitration as a resolution process cannot be invoked in any of the matter unless and until there is a pre-existence of a specific agreement clause or an agreement to decide the dispute through ADR or arbitration for that matter. However, invoking or incorporating an arbitration clause in the agreement is the best way to invoke the arbitration award right after the dispute arises. Calling to the principle of severability the two agreements can come into the effect if the first one will be the main agreement between the parties and the second one will be a mere agreement of arbitration or a close to refer all the disputes related to the contract which may arise in the future be settled through the mode of arbitration. Once the arbitration award has been passed it is binding on both the parties along with the court of law.

Judiciary and Arbitration

Since ADR techniques are a part and parcel of judiciary or rather speedy redressal of disputes mechanism so it is very obvious that judicial intervention under arbitration is a facet of smooth running of ADR techniques. Although As per Section 5 of Arbitration and Conciliation Act 1996, “Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.” This section tries to define that there is no scope of judicial intervention when it comes to arbitration proceedings. Since arbitration award includes the intervention of judiciary or judicial authority into the arbitration proceedings this can be called as a vague statement or provision.

Usually the judicial authority or courts does not interrupt in between any arbitration proceedings or arbitration award first handedly. The concept of non-intervention is typically based upon the premise that when both the parties do any contract by their own consensual act have planned to resolve the disputes by the way of arbitration or ADR techniques by invoking any arbitration clause or mediation clause the judiciary and the situation would not have any valid reasoning to intervene in the due process of arbitration or any other ADR technique.

The Section 8 of Arbitration and Conciliation Act, 1996 it says If the parties enter into an Arbitration Agreement, the judicial courts shall, at the outset, refer any case presented before them to arbitration for consideration. Generally, judicial courts enjoy the pecuniary powers to intervene or to recognise and consider any matter where it feels any need of prima facie consideration or where there is no valid contract of arbitration is there between the parties and in this matter any of the parties may file a court complaint with the Original Arbitration Agreement or a duly approved copy of the Contract.

In a case where one of the party to the suit does not provide or possess any arbitration contract or agreement the provisions of Arbitration and conciliation act gives the court of law exhaustive powers to entail all such matters for intervention in arbitration matters. When the court is satisfied that the applying party does not have a copy of the Arbitration Agreement and will not obtain one in the normal course of arbitral proceedings, it has the power to engage and give appropriate orientation to the other party to start producing the Original Arbitration Agreement or its duly signed copy. However, the court’s minor action in instructing the other party to provide an original arbitral award or a certified true copy of the agreement before the court does not preclude the parties from referring the case to arbitration. Section 27 of the Act was implemented to (a) seek the Court’s assistance in receiving evidence and carrying out the order placed by the arbitral tribunal or the parties with the arbitral tribunal’s approval; and (b) assist the arbitral tribunal or a party in taking evidence in order to expedite the arbitral proceedings. As an arbitration court does not have the authority to issue witness summons, enforce the appearance of eyewitnesses, or compel the submission of materials, such assistance or, as Section 27 of the Act puts it, “execution” of the arbitral tribunal’s request is considered important and required. As a result of the arbitral tribunal’s lack of coercion powers, the parties must not pay.

The court also enjoys some other instances where it can step in between the arbitration proceedings which has been enumerated in Section 34 of the Arbitration and Conciliation Act, 1996 mentions the grounds on which an arbitration award can be set aside, which says that the judicial court enjoys pecuniary powers to set aside any arbitral award when it proves that-

• Either party to the arbitration has been rendered incompetent at some point throughout the procedures.

• Any arbitration clause utilised to secure an arbitral award is void under the law if it fails to pass the test of any notice made under the law to which the parties have agreed;

• Arbitration proceedings or any arbitral award in which the arbitration proceedings or any arbitral award did not follow the fair practises of law and it was proven by any party that one of the parties was not given appropriate notification of the selection of the Arbitrator;

• When all parties to the dispute are not properly informed about the arbitral process;

• If all parties are not given a proper and equal opportunity to state their case before the arbitrators, and any party’s right to justice is violated;

• If the arbitral award addresses a subject not covered by the arbitration agreement;

• If the arbitration agreement’s terms of reference were misinterpreted, mis-referred to, or disregarded while rendering an arbitral award;

• If the makeup of the arbitral award panel is not in accordance with the arbitration parties’ accord;

• If the arbitration award has made determinations on such subjects that are outside the scope or course of the arbitral submission. Only that portion of the arbitration awards that is out of context or relation may be thrown aside in this situation.

• In case the arbitrators’ procedure does not correspond to the procedure agreed upon by the parties;

• If the arbitrators’ method is in violation of the act’s policy framework;

• If the court determines that the subject matter of any arbitral award is such that it cannot be decided or settled by arbitration, the court may intervene.

• Any award that has been delivered has been influenced or inspired by fraud, corruption, or a violation of any law;

Any arbitration award that is in violation of any fundamental Indian law principle;

If any award violates the fundamental principles of morality, justice, or equity;

An arbitral award made outside of International Commercial Arbitration can be set aside by the relevant court if the court considers that the award is tainted by the law, or that it spoils or destroys legal principles, as it may look incorrect on the face of the decision.

These are some of the instances where judicial courts tried to intervene in the arbitration proceedings and enjoys enough power through The Arbitration and Conciliation Act, 1996 or correct to suggest amends in the arbitral proceedings or arbitral award for that matter if any omission or wrongful act has been noticed by the competent court. Only one of the grounds given out in Section 34(2)(a) or (b) can be used to overturn an arbitral judgement, effectively cementing the fact that if the request cannot hold within the confines specified by the sections, the petition has no standing. Due to the Act’s assertion on sovereign immunity, the majority of arbitral tribunals are ad hoc, and the lack of a streamlined system or qualified arbitrators has failed to achieve its goal of expeditious and economical resolution of disputes, as well as its goal of reducing the line of people flapping their dockets in a litigated case. Because most arbitrators appointed under Section 11 of the Act are retired judges, they rely on long-standing processes and arguments based on their expertise on the bench, resulting in a lengthy and gruelling process that is very similar to a court trial. Further it is to be mentioned that sometimes in the ongoing arbitral proceedings D advocates of both the parties try to procure unnecessary adjournments or raise unnecessary objections which may deter the proceedings to the suit and that’s why some scope of judicial intervention is necessary too.

Instituting the arbitral persons

The appointment of the arbitrators to the suit has been duly inaugurated under Section 11 of Arbitration and Conciliation Act, and the powers to appoint the arbitrators has been conferred in the hands of judiciary only. The 2019 amendments carried out the subtle thrust that the 2015 amendment indicated at through Section 11 (6)(B), which states that delegating of the ability to designate arbitrators does not imply delegation of judicial power. The clause calls for the establishment of specific arbitral institutions in India to take over the role of appointing arbitrators who have been recognised or graded by the Arbitral Council of India. As a result, any appeal that would have been made with the Supreme Court or the High Court must now be lodged with the arbitral institutions authorised for this purpose by the court with jurisdiction.

However in the matter of NTPC v Decona Services Pvt Ltd. The Supreme Court established the principle of minimum judicial interference and laid emphasis on the underlying principle of interpretation of the provisions of the Arbitration act. The apex court also involved into the arbitration awards and matters and numerate it that the courts must not sit in the appeal over arbitral proceedings or awards and the scope of intervention under Section 30 and 33 of the Arbitration and Conciliation Act, 1996 is very minimal. The Court’s Decision turned out to be a significant reassertion of the need of limited judicial intervention in the arbitral proceedings and the sanctity of arbitral awards.

We can say that the arbitration or the other ADR techniques or a facet of judiciary all the judicial justice system and included in the speedy dispute resolution process they are a part of judiciary. There is always a scope of intervention by the judiciary into the matters of arbitration or any other dispute resolution process since it is the judiciary only who keeps a check and balance to all of these proceedings and ensures the proper administration of the speedy redressal of the disputes. It is the judiciary only who takes the upper hand when it comes to arbitration proceedings only and it is a myth that judicial intervention is at every step in the arbitration proceedings since arbitration proceedings are also given a free hand when it comes to smooth functioning of the proceedings in case any dispute arises out of the proceedings then the judiciary has to interfere in the matter.

The post Judicial intervention in Arbitration: A reality or a Myth? appeared first on The Daily Guardian.

Recommended For You

About the Author: - -

Rajasthan HC Judge Justice Rajendra Prakash Soni Passes Away 3rd Accused In Surat Gang-Rape Case Arrested Madhya Pradesh HC Asks DGP To Ensure Upkeep Of ‘Malkhanas’ Delhi HC Clears Eviction In Yamuna Floodplain Amid Record Pollution “Survey In Gyanvapi Complex Incomplete, Seeks Direction To ASI”: Hindu Side