Unit 2-

Jurisdiction of Arbitral Tribuunal

There is no inherent jurisdiction of an arbitral tribunal. Instead, its jurisdiction is derived from the
agreement between the parties to decide a particular dispute by way of arbitration. Thus, the
jurisdiction of an arbitral tribunal is not derived from any legislation. There is a high level of party
autonomy. As a result, the arbitration tribunal enjoys the power to rule on its own jurisdiction, and
Section 16 of the Arbitration and Conciliation Act, 1996, envisages the same.
The number of arbitrators, their qualifications, the venue of arbitration, the jurisdiction and scope of
authority of the arbitral tribunal, as well as the procedure for the conduct of arbitral proceedings, are
decided by the parties mutually and are the creation of the agreement.
Section 16 of the Arbitration and Conciliation Act, 1996
The provisions under Section 16 of this Act are framed in accordance with Article 23 of the
UNCITRAL Arbitration Rules.
Section 16 (1): Power to decide the jurisdiction
It provides that an arbitration tribunal is competent to rule on its own jurisdiction. The doctrine of
Kompetenz-kompetenz or competence de la competence applies to the arbitration tribunal recognizing
that the law is competent to rule on its own jurisdiction. This is a way to minimize judicial
intervention in the arbitration proceedings. Thus, where a party raises a question as to the jurisdiction
of the arbitral tribunal, he shall apply before the tribunal itself, and the tribunal shall either accept or
reject such a plea.
Sub-section (1) of Section 16 of the Act also empowers the arbitral tribunal to decide on the
objections regarding the existence or validity of the arbitration agreement. The powers under Section
16 (1) are discretionary in nature, as it contains the expression “may rule,” which means that the
arbitral tribunal may exercise this power on its own motion or at the request of a party.
Further, for determining the validity of the arbitration agreement following two things are specified:-
(a) Where an arbitration clause forms part of a contract, the said arbitration clause shall be considered
an independent agreement, and it becomes self-sustaining. An arbitration clause, while being part of a
contract, becomes independent of the other terms of the contract.
(b) Where the arbitration tribunal declares the contract null and void, the arbitration clause contained
in that contract does not become invalid by itself.
Thus, the invalidity of the contract shall not automatically render the arbitration agreement invalid.
Section 16 (2): Objection upon the jurisdiction
This sub-section lays down a two-fold provision:
(1) If any party wants to raise an objection regarding the jurisdiction of the arbitration tribunal, such
objection shall be raised at the first instance, i.e., before or along with the submission defence
statement but not later than that.
(2) A party who appointed or participated in the appointment of an arbitrator is not deprived of the
right to raise such an objection.
In the case of UP Rajkija Nirman Nigam Ltd. v. Indure (P) Ltd. (1996), it was observed that a party
will not be restricted from raising a plea/objection as to jurisdiction merely because he was a party to
the appointment of the arbitrator.
Section 16 (3): Plea on exceeding the scope of authority
This sub-section states that as soon as the matter alleged to be beyond the scope of authority of the
arbitration tribunal is raised during the arbitral proceedings, a plea that the arbitration tribunal is
exceeding the scope of authority shall be raised
Section 16 (4): Condonation of delay
Sub-section (4) of Section 16 is to enable the tribunal to condone the delay in raising the plea against
jurisdiction under Section 16 (2) as well as for the plea on exceeding the scope of authority by the
arbitration tribunal under Section 16 (3). In other words, it empowers the arbitration tribunal to admit
a delayed plea if the arbitration tribunal considers that the reason for the delay was justified.
In S.N. Malhotra & Sons. v. Airport Authority of India & Ors (2008), it was observed that if the delay
is not justified, the tribunal may reject such a plea.
Section 16 (5): Decision on plea u/s 16 (2) or 16 (3) and further proceedings
This sub-section mandates the arbitration tribunal to decide the plea raised u/s 16 (2) or 16 (3). It
further states that if either of the pleas is rejected, the arbitration tribunal should continue with the
arbitration proceedings and declare the final award.
In Odisha State Road Transport v. Arss Bus Terminal Pvt. Ltd. (2021)., Orissa High Court observed
that Sec 16(5) lays down that once the arbitration tribunal rejects the challenge to its jurisdiction, it
can continue arbitration proceedings and make an award & the aggrieved party has to wait for the
final award to challenge the same.
In Smt. Arati Dhar vs Sri S.K. Dutta (2002), the Court stated that the question of jurisdiction goes to
the root of the matter and it should be decided first before submitting the final award. In this case, the
court also referred to the case of Konkan Railway Corporation v. Rani Construction (P) Ltd. (2002).
Section 16 (6): Remedy against such an arbitral award
The last sub-section of Section 16 provides a remedy to a party who is aggrieved by an award as per
sub-section (5). It gives the aggrieved party an option to file an application in accordance with Section
34 for setting aside the said arbitral award. This provision is available only after the award is made by
the tribunal, and the party cannot directly file an appeal based on the rejection of its plea under
Sections 16 (2) or 16 (3).
Thus, where the plea under Sections 16(2) or 16(3) is rejected and an arbitral award is passed, parties
may challenge the final award, but they cannot appeal the rejection of the plea under Sections 16(2)
and 16(3) of the Act. The reason is that such an order of rejection is considered an interim order and
not an interim award. However, if the plea under Sections 16(22) or 16(3) is allowed by the arbitral
tribunal and the proceedings are terminated, then the parties may prefer an appeal under Section 37 of
the Act. Section 37 provides for certain specific orders that are open for appeal.
Relevant case laws related to Section 16 of the Arbitration and Conciliation Act, 1996
Some of the relevant case laws related to Section 16 of the Arbitration and Conciliation Act, 1996, are
discussed as follows:
 1. Union of India v. East Coast Boat Builders & Engineers Ltd. (1998)--
The Learned Delhi High Court, in this case, noted that if the arbitration tribunal rejects the plea
challenging jurisdiction, the Court cannot interfere at that stage. The only remedy available to the
party arises after the declaration of the final arbitral award.
2. M/s Uttam Singh Dugal v. M/s Hindustan Steel Ltd (1981)---
In this case, it was held that the finding on the question of jurisdiction is not an interim award as no
part of the dispute is decided. Thus, such a finding is not appealable.
3. S.B.P. & Co vs Patel Engineering Ltd. & Anr (2005)----
The Hon’ble Supreme Court of India in this case observed that a remedy available to the party
aggrieved is to challenge the award in accordance with Section 34 or Section 37 of the Act. Section 34
comes into play when the application against the jurisdiction is overruled and the arbitration
proceedings are completed accordingly, and Section 37 provides for appeal when the application
challenging the jurisdiction is allowed.

CONDUCT OF ARBITRAL PROCEEDING-

Notice required prior to referral of disputes-
Notice by one party to another party under Section 21 of the Act is mandatory before referring the
disputes to arbitration.
Appointment of arbitrators=
One of the advantages of arbitration is that it allows parties to an arbitration agreement to submit a
dispute to judges of their own choice. Under Section 10 of the Act, the parties are free to determine
any odd number of arbitrators. In cases where the parties fail to determine the number of arbitrators,
the arbitral tribunal shall consist of a sole arbitrator.
Under Section 11 of the Act, the parties are free to agree on a procedure for the appointment of
arbitrator or arbitrators. But if the appointment of the arbitrator is not consensual, the arbitrator has no
power to make a binding order or award and if he makes any award it will be a nullity.
The appointment of an arbitrator by a party is complete only on its communication to the other party.
Members involved in the proceeding--
Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to an arbitrator
or to a tribunal of several arbitrators who give a decision on the dispute that is binding on the parties.
Section 7 of the Act defines an arbitration agreement. It is an agreement by the parties to submit to
arbitration all or certain disputes which have arisen or which may arise between them in respect of a
defined legal relationship.
The parties to the arbitration agreement under Section 10 of the Act are free to determine the number
of arbitrators but such number shall not be an even number.
So, the members involved in any arbitration proceedings are the parties to the arbitration agreement
and a sole arbitrator, or a tribunal of several arbitrators.
Arbitration Proceedings-
Section 21 of the Act provides the rules which govern the commencement of arbitral proceedings. It
gives freedom to the parties to agree and determine when the arbitration proceeding can officially
commence. But in the absence of such an agreement or where the parties fail to arrive at an
agreement, the arbitral proceedings can commence when one party issues a notice to the other party,
in writing, showing its intention to refer the dispute to arbitration.
So in respect of a particular dispute, the arbitral proceeding commences on the date on which a
request for that dispute to be referred to arbitration is received by the other party. In order to
determine the date of receipt, the provisions of Section 3 of the Act must be looked into.
Rules and legislation
Limitation period-
Section 43 of the Act provides that the Limitation Act, 1963 shall apply to arbitrations as it applies to
civil suit proceedings in the courts, except to the extent expressly excluded by the Arbitration and
Conciliation Act. Thus, the date of commencement of arbitral proceedings assumes relevance for
calculating the time-limit for arbitral proceedings under the Limitation Act, 1963. Any arbitration
proceedings commenced after the limitation period, i.e., three years from the date on which the cause
of action arose, will be time-barred.
Equal Treatment of Parties-
Section 18 of the Act has two fundamental principles. Firstly, it provides that the parties to an
arbitration proceeding shall be treated with equality and secondly, that each party shall be given a full
opportunity to present their case. This section is a mandatory provision and the arbitral tribunal has to
comply with it. The tribunal has to act in an impartial manner to the parties and no party has to be
given an advantage over the other.
Procedure of Arbitral Proceedings=
Section 19 of the Act recognises the right of the parties to agree on the procedural rules which are
applicable in conducting the arbitral proceedings. This provision establishes the procedural autonomy
of the parties.
When the parties fail to agree on a procedure or frame the procedure, it grants the arbitral tribunal a
wide range of discretionary powers to frame the arbitral proceedings. The Act does not prescribe any
default rules regulating the arbitral proceedings.
This provision also provides that the application of the Code of Civil Procedure, 1908 or the Evidence
Act, 1872 to the arbitral proceeding is also at the discretion of the parties.
Place of Arbitration --
Section 20 of the Act provides that the parties are free to agree on the place of arbitration and if they
fail to agree then the arbitral tribunal has to determine the place of arbitration in a judicial manner,
considering the circumstances of the case and convenience of the parties.
Also, the place of arbitration is of paramount importance because the laws of the place of arbitration
play a fundamental role in the arbitral proceeding. It determines the substantive laws for the time
being in force in India.
Language to be used in Arbitral Proceedings --
Section 22 of the Act deals with the language which has to be used in arbitral proceedings. The parties
to the arbitration agreement are free to choose the language or languages which have to be used in the
arbitral proceedings. In cases where the parties fail to arrive at such an agreement then it is the role of
the arbitral tribunal to determine the language or languages to be used in the arbitral proceedings. The
language shall also apply to any written statement by a party, any hearing and any arbitral award,
decision or other communication by the arbitral tribunal.
When the arbitral tribunal agrees on the language to be used in arbitral proceedings, it may order that
any documentary evidence shall be accompanied by a translation into the language agreed. The
arbitral tribunal must ensure that all the parties are able to follow and understand the proceedings.
Statement of Claim and Defence --
Section 23 of the Act provides for pleadings of the parties before the arbitral tribunal. After the
arbitral tribunal has been established, the usual practice is to exchange and file their pleadings before
the tribunal.
The claimant states the facts and other relevant matters, while the respondent opposes the facts and
the averments made in the claim statement and contests the relief claimed by the claimant. The
contents of pleading may vary from case to case depending upon the facts and circumstances of each
case.
Within six months of the appointment of the arbitral tribunal, the statement of claim and defence has
to be completed under this section.
Hearing and written proceedings--
Section 24 of the Act discusses the manner in which arbitral proceedings are to be conducted. In the
absence of any prior agreement between the parties relating to this matter, the arbitral tribunal has the
power to decide whether the proceedings shall be held orally or on the basis of documents and other
materials.
Default of Party--
Section 25 of the Act deals with three situations where the parties are at default.
Firstly, the arbitral tribunal terminates the proceedings when the claimant without showing sufficient
cause, fails to communicate his statement of claim in accordance with Section 23(1). Secondly, the
arbitral tribunal continues the proceeding when the respondent fails to communicate his statement of
defence in accordance with Section 23(1).
Thirdly, if there is sufficient cause then the termination is recalled and proceeding gets restored.
Appointment of Experts--
Section 26 of the Act gives the arbitral tribunal power to appoint one or more experts based on the
requirement or request of the parties. It requires the parties to provide relevant information to the
experts.
Also, the arbitral tribunal cannot appoint experts and delegate the duty of determination of the dispute.
Court Assistance-
Section 27 of the Act provides the arbitral tribunal with the power to apply for the court assistance in
taking evidence. Persons can also be held guilty and tried before the court, if they refuse to give
evidence or do not cooperate.
Termination --
The arbitral proceedings are terminated either by the final arbitral award or by an order of the arbitral
tribunal terminating the arbitral proceedings.
The arbitral tribunal terminates the arbitral proceedings in any of these cases where:

• the claimant withdraws the claim and respondent does not object to it,
• both parties are in consensus and agree to terminate the arbitral proceedings, or
• the continuation of the arbitral proceedings has become impossible or irrelevant considering
the present facts of the case.
Also, the termination of the arbitral proceedings terminates the mandate of the arbitral tribunal and the
arbitral tribunal becomes functus officio. The term “functus officio” means no longer holding office or
having official authority once a decision is rendered.

FAST TRACK ARBITRATION—

Fast Track Arbitration was introduced in India by the Arbitration and Conciliation Amendment Act
2015, to expedite the process of arbitration in India and it does not run by ordinary rules and
regulations. Initially, the International Chambers of Commerce came up with this idea and has been
using it in a number of cases, imbibing it in Article 30 and Annexure V of the Rules. In India, the
concept of fast track arbitration means that the proceedings shall end within 6 months and there is no
provision for oral proceedings, instead of written pleadings suffice the matter.
THE ESSENTIAL FEATURES OF A FAST TRACK ARBITRATION PROCEEDING ARE
1. It is majorly governed by strict time limit policies and which have to be complied with by
both the arbitrators and the parties. Basically, it means to accelerate the arbitral
proceedings and to resolve the matter in the shortest deadline possible.
2. If the time limit is not followed then the mandate of the arbitrator shall terminate, unless
the court has extended the time period. If while extending the period the Court finds out
that the delay has been caused without any substantial reasons, then there is a reduction of
fees of the arbitrator by not exceeding five -percent for each month of the delay. This
punishment procedure has been mentioned under Section 15 of the Act.
3. It does not provide a fixed set of elements or procedures to be followed as done in
ordinary arbitral proceedings, mentioned in the following head, any practice which helps
in resolving the issue as soon as possible is accepted under fast track arbitration.
4. Mostly in Fast Track Procedures for Arbitration, no oral proceedings are required and
only written submissions are relied upon.
5. The parties can appoint a sole arbitrator and the submissions majorly have to be written.
6. It protects the cost, speed and time without infringing any law and sometimes the
procedures like examination of a witness is also avoided.
How does fast Track Arbitration proceedings differ from normal Arbitration proceedings

• The first difference is about the presence of three arbitrators in ordinary arbitral proceedings
each party appointing one arbitrator and these two arbitrators shall appoint one arbitrator who
shall be the presiding arbitrator provided under Section 11(3) of the Arbitration and
Conciliation Act with the amendments of 2016. Whereas, the fast track arbitration provides
 for a sole arbitrator appointed by the parties for the arbitration tribunal under Section 29B of
the Act.
• For an ordinary arbitral award, section 29A(1) of the Act provides for the award shall be made
within a period of twelve months from the date the arbitral tribunal enters upon the reference.
If the award is made within a period of six months from the date the arbitral tribunal enters
upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional
fees as the parties may agree. The time period can be exceeded but not more than six months.
Under section 29B(4) for fast track arbitration, the award under this section shall be made
within a period of six months from the date the arbitral tribunal enters upon the reference. If
the award is not passed within the specified period then the provisions of 29A shall apply here
also, i.e. ordinary arbitral proceedings.
• In a fast-track proceeding under section 29B(6) the fees payable to the arbitrator and the
manner of payment of the fees shall be such as may be agreed between the arbitrator and the
parties. Whereas in ordinary proceedings according to section 11(14), the rules for the
payment of costs to the arbitral tribunal, shall be determined by the High Court, as the rates
are provided in the Fourth Schedule of the Act.
• For an ordinary arbitral proceeding, whether to hold an oral proceeding or have awards passed
on the basis of documents shall be decided by the arbitral tribunal. Under section 24 it is
provided that oral hearing can be allowed by the tribunal at a particular stage when the party
requests for it. Under section 29B for fast track procedures, written submissions are relied
upon for proceedings and no oral proceeding is appreciated unless requested by the party.
When to apply for Fast Track Arbitration
UNDER SECTION 29B OF THE ACT, PEOPLE WHO ARE PARTIES TO AN ARBITRATION
AGREEMENT CAN APPLY FOR FAST-TRACK ARBITRATION IN TWO WAYS,

• Before the appointment of arbitration tribunal by the parties,

• Or at the time of the appointment of arbitration tribunal by the parties.
This has to be submitted in writing by the parties that they want to be governed by the fast-track
procedure under subsection 3. They shall also agree for the sole arbitrator to be chosen by them for
the tribunal.
Procedure of Fast Track Arbitration proceedings
THE PARTIES SHALL AGREE WITH EACH OTHER TO SOLVE THE ISSUES THROUGH FAST
TRACK PROCEDURE BY THE FOLLOWING RULES,
1. The dispute shall be decided on the basis of written pleading, with the use of documents,
submissions provided by the parties and there shall be a sole arbitrator depending on the
interest of the parties and relying on his skill and efficiency.
2. There shall be no oral hearing.
3. The tribunal can ask the parties for any other information or any kind of clarification to be
provided to help in the matter of resolving the issue.
4. There is a provision for an oral hearing if the parties request the tribunal or if the tribunal
considers it necessary to resolve the issues.
5. With the use of technical formalities, the tribunal shall resolve such issues and do
whatsoever required for a speedy disposal of the case.
6. The award shall be given within six months from the date the tribunal starts taking notice
of the case and if such award is not passed within the time prescribed then the procedure
for extension of time provided under 29A is followed.
 7. If the award could not be given in the prescribed time period for fast track arbitration
which is six months, an extension period of six months is provided. This extension period
is provided under Section 29A of the Act as ordinarily provided for normal arbitral
proceedings. The authority of the arbitrator shall terminate if before the lapsing of the six
month time period the Court has not extended the period.
8. If the proceedings have been delayed due to the error of the arbitral tribunal and thereby
an extension is required the Court can order for the reduction of fees to be given to the
arbitrator.
9. While extending the period, the Court can substitute the arbitrator and is such a thing
happens the proceedings shall continue from the stage it has already reached, and the
arbitrator shall be deemed to have the knowledge of the evidence and material already
presented.
10. The fees to be paid to the arbitrator shall be fixed between the parties and the arbitrator.
Advantageous Features of Fast Track Arbitration--

• The most significant advantage of opting for Fast Track Arbitration is that the proceedings are
governed by a very stringent timeline within which the parties and the arbitrators have to
attempt to the fullest to reach a solution that satisfies everybody involved in the sessions.
• Flouting the time limit prescribed by the provision regarding Fast Track Arbitration leads to
invalidating any award or order that the arbitrator chooses to give the parties vis-à-vis the
arbitration procedure.
• The lack of importance given to oral proceedings in favour of written submissions not only
fastens the process of arbitration but also ensures maximum clarity of subject matter between
the parties and the arbitrator.

Making of Arbitral Award-

According to the definition given under Section 2(c) it’s clear that the 1996 Act doesn’t provide a
concrete definition of Arbitral awards. It solely affirms that arbitral awards include interim awards
too. However, the ultimate call given by the arbitral tribunal [as per Section 2(d)] is the arbitral award.
Accordingly, an arbitral award could be defined as the binding and final decision made by an arbitral
tribunal or a sole arbitrator, that resolves, wholly or in part, the dispute submitted to his/its
jurisdiction.
Requirements Of An Arbitral Award
The requirements are:
1. Must be a decision by the majority:
All decisions, including an award, must be made through the majority. An award must also be
complete concerning all issues that are submitted to the arbitral tribunal for adjudication.
2. Must be made in writing, signed and dated:
Section 31(1)(a) requires an award to be in writing and have the signature of the members of the
arbitral tribunal. It is not an award unless these two conditions are fulfilled. It is quite possible that a
particular arbitrator may not agree with the contents of the award. Therefore, the law only requires a
majority of the arbitrators to sign. The law, however, requires the award to state the reason for any
omitted signature. The date of the award is of equal importance since it helps in determining various
timelines, for instance, within how much time can an award be challenged before the court, etc.
3. Must be reasoned:
A mandatory requirement for an award is that it should be reasoned. Failure to state reasons would
make the award invalid. The arbitral tribunal is required to reach a decision and it also has to show
why it reached a particular decision. The presence of reason would show that the arbitrators had
applied their minds to the matter, taken into consideration all materials put before them and only then
arrived at a decision. In other words, the decision would not be arbitrary. The only exception is when
the parties have agreed that no reasons need to be given for the award.
4. Should be capable of being performed:
The award should be capable of being performed. The award must be realistic in what it suggests, and
should not ask parties to do something that is not possible or illegal. An unenforceable award would
be set aside.
5. Must not be illegal (against public policy):
Under the law, a particular award that violates public policy would be set aside. The public policy
represents some of the most cherished and important principles and policies of the State. An award
would be in violation.
Remedy-
The award can give a spread of remedies to the parties depending on the issue of the dispute. This
include:

• Injunctive Remedies: Once a court orders that a party should take an action or stop an action,
it’s called an injunction. An arbitrator may offer the same award in a dispute wherever one
party needs such relief.
• Money: Several award can decide that one party will need to pay the opposite party based on
the contract or dispute controlling the award.
• Creative Relief: Typically, the dispute between the parties can have several underlying
emotions and interests that are driving the parties. Whereas the arbitrator will not have as
much freedom as a mediator to assist the parties come to a reasonable agreement, an arbitrator
could have one party issue an apology or provide a positive employment reference.
• Incentives: An arbitrator could add incentives for certain behaviours to encourage the parties
to suits the award.

Case-
❖ In Paradise Hotel v. Airport Authority of India Ltd[4] the enforcement of an award is
complete only when it has been implemented under CPC within the same manner as if wee a
decree of court.
❖ In Pandit Munsi Ram and associates v. Union of India[5] it was interpreted that since an
arbitral award is taken into account a decree as under Section 35 of the 1996 Act, the court
held that an arbitral award is an order which determines the rights of parties involved by
finally determining the actual claim or issue within the course of arbitral proceedings.

Types of Arbitral Award under Arbitration and Conciliation Act, 1996

There are two types of awards –
1. Domestic awards- this sort of award is governed under Part I of the Act
As per Section 2(7), Domestic awards, are altogether dealt with in part one till Section 43 of the
Arbitration and conciliation act whereas Sections 44 to 60 deal with different kinds of foreign
arbitral awards.
The arbitral award is worth solely to the extent of the parties’ ability to enforce the terms they ab
initio prescribed. Section 36 lays down provisions for the speedy enforcement of the domestic
awards. Under this very section, it is made clear that a domestic award is enforceable within the
same manner as that of a decree passed by a court. In domestic arbitrations, if the assets of the
parties are almost in one and the same jurisdiction, the enforcement of domestic award abundant
easier. And it is easier to enforce an arbitral award than judgment by a court.
2. Foreign awards- this type is subsequently governed under Part II
Part II of Chapter 1 deals with the New York Convention awards. In this Section 48 deals with the
refusal of enforcement of the foreign award. Chapter 2 Section 57 deals with the provisions
regarding the enforcement of Geneva Convention awards.
In Serajuddin v. Michael Golodetz[6] the Calcutta High Court laid down the essential conditions
of a ‘foreign arbitration’ where the award is further called a foreign arbitral award, the main points
of this case were:
❖ Arbitration should have been held in foreign a foreign country
❖ By a foreign arbitrator
❖ Arbitration by applying foreign laws
❖ One of the parties consists of foreign nationals
Provisions of Arbitration and Conciliation Act, 1996 dealing with Arbitral Award

• Section 28 of the Arbitration and Conciliation Act, 1996

An Arbitrator should decide the dispute in justice and in good faith. However, there’s a condition
precedent, given that each parties expressly authorize an arbitrator to adjudicate then solely he
will decide the dispute between them.
Domestic arbitrations should follow Indian arbitration law. However, for international arbitrations
agreements primarily based in India, the arbitral tribunal should follow the laws the parties have
agreed to apply in their agreement to settle disputes. The selected law as agreed within the
agreement should be construed unless expressly agreed otherwise.
It should also be kept in mind that while applying the law of a unique legal system, the
substantive laws of India shouldn’t be in conflict with them. Within the absence of any such
agreement or any indication of what would be the applicable laws once a dispute arises, the
arbitral tribunal shall apply laws that are applicable and relevant to the dispute.
Furthermore, the arbitral tribunal should apply provisions solely consistent with the terms of the
contract between parties. However, the tribunal should additionally take into account the usages
and also the current trade practices that are relevant to the contract.

• Section 29 of the Arbitration and Conciliation Act, 1996

The decision of the Arbitral Tribunal are going to be in the majority. The arbitral award is the
conclusive stage of the arbitral proceedings. The choice made by the majority of the members of
the tribunal are going to be declared in the form of an award.
 • Section 30 of the Arbitration and Conciliation Act, 1996
Section 30 permits the encouragement settlement amongst the parties by the arbitral tribunal. If
the parties with success conform to a settlement then the same can be incorporated within the
form of an award. Such settlements are recorded because the Arbitral award on agreed terms.
Such amicable arbitral awards should be create according to Section 31. It has the same effect and
status as that of an arbitral award passed by an independent tribunal to substance a dispute.

• Section 31 of the Arbitration and Conciliation Act, 1996

According to Section 31 Arbitral awards shall be in signed and writing by all the members of the
tribunal.
The reason applied behind the award should be explicit clearly. However, if the parties have
agreed for settlement then no reason behind an arbitral award on agreed terms, need to be
showcased. The date of declaration of an Award and also the place wherever it’s made shall be
mentioned. Place of the award is additionally called as the seat of arbitration. A replica of the
award shall be issued to every party. Arbitral Tribunals can also pass an interim award.
In the case of Sukanya Holdings Pvt. Ltd. v. Jayesh H. Pandya[7] non-signatories to an arbitration
agreement can even participate in arbitration proceedings as long as the necessary and proper
parties to the agreement are present. This is often to both Indian seated International Commercial
Arbitration and domestic arbitration.

Termination of Arbitral Proceedings under Arbitration and Conciliation Act,

1996
Section 32 of the Arbitrational and Conciliation Act, 1996 is totally coherent with Article 32 of
UNCITRAL Model Law. According to Section 32(1) of the Act termination of Arbitral proceedings
takes place once the final award declared by the arbitral tribunal. The other three grounds of
termination of arbitral proceedings are given under Sub-section 2 of Section 32.
To terminate the arbitration proceedings arbitral tribunal shall issue an order:
The parties themselves agree to terminate the proceedings.

• If the arbitral tribunal finds that the continuation of the proceedings is either unnecessary
or impossible for any other reason.
• the plaintiff withdraws their claim. It can also be terminated if the respondent objects to
the arbitral award. Looking at which the arbitral tribunal come to a conclusion that it has
a legitimate interest in obtaining a final settlement.
In the last, The mandate of the arbitral tribunal will terminate with the termination of the procedure
itself. Sub-section (3) of this section lays down that the above provisions are subject to Section 34(4)
and section 33.
Recent Developments with respect to Termination of Proceedings-
In the case of Sai Babu v. M/S Clariya Steels Private Limited[8] in 2019 the Supreme Court held that
once the sole arbitrator terminates the arbitration proceedings under Section 32(2)(c) of Arbitration
and Conciliation Act, 1996 (“Arbitration Act”), the same cannot be subsequently recalled. In order to
reach a conclusion in the case of Sai Babu v. M/S Clariya Steels Private Limited the Apex Court
chalked out a difference between the termination of Arbitral proceedings under Section 32 and Section
25 of the Arbitration and Conciliation Act.
Case of SREI Infrastructure Finance Ltd v. Tuff Drilling Private Ltd[9] where it stated that “On the
termination of proceedings under Section 32 sub-section (1) and (2), Section 32 sub-section(3)
additional contemplates termination of proceedings by Arbitral Tribunal on any other grounds or due
to the fact that carrying out the arbitral proceedings is needless. The conditions laid down under
section 32 is missing in Section 25. However, if the claimant shows decent cause as to why he desires
the arbitral proceedings then it may be recommenced. The Apex court conjointly noted that section
32(3) provides for the termination of the mandate of the Arbitrator once a termination order is passed
under section 32.