Fairfield Institute of Management and Technology

Composition of Arbitral tribunal and judicial Intervention

Alternate Dispute Resolution

309

Submitted to: Submitted by:

Mr. Nitin Gahlot Sir Name: Rahul Choudhary

Enrollment no: 02890103519
Course: BBA LL. B
Semester/Section: 5 A
 TABLE OF CONTENTS

CONTENTS PAGE NO.

INTRODUCTION 3
COMPOSITION OF ARBITRAL TRIBUNAL 3-6
OBJECTIVE 6
CONCLUSION 7
BIBLIOGRAPHY 7
 INTRODUCTION
Litigation is considered as a dull process. It is not only costly but also time-consuming. The reason
why private parties and organizations have come up with alternative methods of dispute resolution.
Arbitration is one such alternative machinery that is used to resolve commercial disputes in India.

Whenever a commercial dispute gets up between two or more parties, and they agree to resolve
the dispute through arbitration, an arbitral tribunal is to be set up. It contains of one or more
arbitrators that arbitrate and resolve the dispute and deliver an arbitral award.

The Indian Council of Arbitration has given by a set of rules recognized as the ‘Rules of
Arbitration’ that are to be took by the parties experiencing the arbitration process as well as the
arbitrators. Rule 2 of these regulations gives the definition of Arbitral Tribunal as “an arbitrator or
arbitrators appointed for shaping a particular dispute or alteration” Section 2(d) of the Arbitration
and Conciliation Act, 1996 also describes an arbitral tribunal as a individual arbitrator or panel of
arbitrators.

Composition of an Arbitration Tribunal

Chapter 3rd of the Arbitration and Conciliation Act, 1996 place down the provisions for the
Composition of an Arbitral Tribunal. Also, Rule 22 of the Rules of Arbitration placed down by the
Indian Council of Arbitration states that when a submission for arbitration procedure is received,
the Council takes essential steps for the composition of an arbitral tribunal to arbitrate the disputes
or differences between parties. Several provisions concerning the constitution of an arbitral
tribunal are as follows:

Number of arbitrators in an Arbitration Tribunal

Section 10 of the Act references the number of arbitrators that will be a part of the arbitral tribunal.
According to clause (1) of the Section, the parties to the dispute are permitted to mutually decide
the number of arbitrators that shall establish the arbitral tribunal to arbitrate the dispute. It is,
however, essential that the number of arbitrators fixed shall be an odd number and not an even one
certifies that there are no ties. Also, Section 10 also states that if the parties to the disagreement
are incompetent to decide the number of arbitrators, in that case, only one arbitrator will be
appointed.

Rule 22 of the Rules of Arbitration offers that if the worth of the claim made under arbitration is
10000000/- (One Crore) or less, a single arbitrator can solve the disagreement if the parties reach
agreement to it. In cases where the claim to the dispute exceeds one Crore, the arbitral tribunal will
be composed of three arbitrators with the contract of the parties.

In the case of Narayan Prasad Lohia vs Nikunj Kumar Lohia the Supreme Court detected that
if two arbitrators are appointed for an Arbitral Tribunal in its place of three, and they give an
reward through mutual opinion, there will be no prevention of proceedings.

What is the Procedure for appointment of arbitrators?

The procedure and appointment of arbitrators under the arbitral tribunal is stated under Section 11
of the Arbitration and Conciliation Act. Its conditions are the following:

Nationality- The parties to the disagreement may, on contract, appoint an arbitrator belongs to
any nationality.
Appointment by Parties- The procedure to hire one or more arbitrators can be definite by the
parties. If the parties fail to do so, they may individually hire an arbitrator each, and the two
arbitrators, equally decide the third one.
Appointment by Court- if the parties do not appoint an arbitrator inside 30 days from the
receiving of the request, the Supreme Court, the High Court, or any other official selected by
the Court may appoint an arbitrator.

In Golden Chariot Recreations Pvt. Ltd. v Mukesh Panika & Anr., the Court held that a party
to the disagreement can file an submission for the appointment of an arbitrator by the Court only
afterward the finishing of 30 days.

Payment of fees- the High Court has the authority to frame rules regarding the determination
of fees of the arbitral tribunal and the method of its payment.
The Rules of Arbitration also deliver the means of the appointment of a sole arbitrator or three
arbitrators under Rule 23. According to this rule, on receiving of the application, the Registrar
of the Arbitration Committee may ask the parties to the disagreement to select an arbitrator
 from amongst the Panel of Arbitrators in the interior 30 days. In case of fail, the Registrar
himself appoints a sole arbitrator to solve the dispute between parties. Likewise, the Registrar
can also appoint three arbitrators if the parties to the disagreement do not arrive at an
agreement.

In case of Oriental Insurance Company v M/S Narbheram Power and Steel Pvt, it was held
that the arbitration clause under an agreement is to be strictly taken. It expresses the intention of
the parties to hire an arbitrator for the clearance of any dispute. This clause cannot be renounced
in normal circumstances.

What are the grounds for stimulating the appointment of arbitrators and its procedure?

When a person is nominated as an arbitrator, he is mandatory to reveal his past or present

connection to either party or parties, whether direct or indirect. Also, he shall reveal if he has a
financial, business, professional or any other attention in any of the parties or in the subject matter
of the disagreement, which may prevent him from deciding in an unbiassed manner. Therefore, as
per Section12 of the Act, any party to the dispute may trial the appointment of an arbitrator on the
following grounds:

If there is a enough doubt that the arbitrator may act in a biased or partial manner.
If the designated arbitrator does not possess the qualifications required by the parties to the
disagreement.
The appointment of an arbitrator can be challenged in only accordance with the process
mentioned in Section 13 of the Arbitration and Conciliation Act, 1996. Either party can
challenge the appointment within 15 days after getting the knowledge of the composition of
the arbitral tribunal or after the information of circumstances stated above. The authority to
decide on the challenge is conferred in the hands of the arbitral tribunal.
In the case of Antrix Corp. Ltd. v Devas Multimedia Pvt. Ltd, the Court said that if any
party to the disagreement disagrees or is dissatisfied with the constitution of the arbitral
tribunal, it can approach the Court of law to challenge the arbitrator appointment by way of
application.

How can an arbitrator be terminated?

Not only the appointment of the arbitrator can be challenged but also his order can be terminated
under Section 14 and 15 of the Act in the subsequent cases:

If the arbitrator is incapable to carry out his functions in an effective manner or there is an
undue delay in the act of his duties.
If the arbitrator himself take out from his office or the parties agree to his termination.
Rule 27 of the Rules of Arbitration also states that an arbitrator can be terminated from his
order on account of his resignation or death, if he is neglectful in performing his duties or fails
to act in a speedy manner, and does not declare the arbitral award within a given time.
In the case of National Highways Authority of India vs Gammon Engineers and Contract,
the Court held that the Arbitral Tribunal is certain by the Arbitration contract between parties.
The Arbitration agreement cannot be redrafted and neither can the tribunal accept an
appointment in part.

Substitution of an arbitrator

If an arbitrator is terminated from his command, alternative arbitrator may be appointed as a

substitute by following the appointment procedure. In such a case, the arbitrational hearings can
be repeated at the pleasure of the arbitral tribunal. The provisions connected to the substitution of
an arbitrator are stated under Section 15 of the Arbitration and Conciliation Act, 1996.

OBJECTIVE
To develop further understanding of the theories and concepts covered in the course.
To develop a practice of learning new aspects of the subject and develop a habit of research
related to the subject.
After making this assignment I learned how to research about case law related to particular
topic.
During making this project I learned all the topic related to “ Composition of arbitral
tribunal” which will be helpful in my exam .
 Conclusion
The Indian Judiciary has suggested time and again that parties should take up arbitration as a
dispute settlement machinery to reduce the burden on the courts and for a speedy resolve of
disputes. Therefore, several modifications have been proposed in the Arbitration and Conciliation
Act, 1996. Sections 10-15 of this Act and Rules 22-27 of the Rules of Arbitration, place down
necessities for the composition of an Arbitral Tribunal. This is of utmost concern in the acceptance
of arbitration as a mechanism for dispute clearance. It is important for the parties to choose the
right arbitrator or arbitrators that establish the arbitral tribunal so that the award delivered by the
tribunal is fair and just and free of any discernment or biasness. It also ensures that the
disagreement is fixed in an effective and speedy manner. It was a delightful and knowledgeable
experience for me while working on this Project. This project gives me batter thinking and
knowledge about the arbitral tribunal and other related topic. I tried my best to include all the
necessary points that are required and related to the given topic. Some of the material which I
wrote in the project were taken from websites. I do hope that my project will give all the
information you required.

BIBLIOGRABPHY
Books: -

Bare act of the Arbitration and conciliation Act.

WEBSITES: -

www.agilelaw.com
www.clio.com
Guides.library.harvad.edu
www.law.gmu.edu