MODULE 4

4) Arbitration Tribunal (05)

4.1 Appointment
4.2 Jurisdiction of Arbitral Tribunal
4.3 Interim Measures
4.4 Grounds of Challenge
4.5 Procedure/Proceedings of Arbitral Tribunal
4.6 Court Assistance

Meaning
Arbitral Tribunal means a sole arbitrator or a panel of arbitrators. It is a panel of one or more
adjudicators which is convened and sits to resolve a dispute by way of arbitration. The
tribunal may consist of a sole arbitrator or there may be two or more arbitrators, which might
include either a chairman or an umpire.

Appointment of Arbitrators
The Act grants the liberty to the parties to appoint an arbitrator mutually. The Act provides
that the parties are free to determine the number of arbitrators, provided that such number
shall not be an even number. However, if the parties fail to do so, the arbitral tribunal shall
consist of a sole arbitrator.

Section 11
 The procedure in relation to appointment of arbitrators is provided under Section 11
of the Act.
 A person of any nationality may be an arbitrator, unless otherwise agreed by the
parties.
 In a Tribunal consisting of three members, each party shall appoint one arbitrator and
two appointed arbitrators shall appoint the third or presiding arbitrator. If a party fails
to appoint an arbitrator within 30 days from the receipt of a request to appoint, or 2
appointed arbitrators fail to agree on appointment of the presiding arbitrator within 30
days from the date of their appointment, a party has to file an application under
Section 11 before the High Court, Supreme Court (in case of international commercial
arbitration) or any person or institution designated by such Court.
 In case of sole arbitrator, if parties fail to agree upon within 30 days from receipt of
request by one party, the appointment will be made by High Court, Supreme Court (in
case of international commercial arbitration) or any person or institution designated
by such Court, in an application under Section 11.
 Section 11(6-B) has been inserted to make it categorical that the designated of any
person or institution by the Supreme Court or High Court shall not be regarded as a
delegation of judicial power.
 Section 11(13) provides that the High Court, Supreme Court (in case of international
commercial arbitration) or any person or institution designated by such court shall
dispose of the application for appointment as expeditiously as possible and within a
period of 60 days from the service of notice. 2019 act amends to ‘Court’ to replace
with ‘arbitral institution’.
 Section 11(14) provides that for determination of fee of the tribunal, the High Court
may frame rules considering 4th Schedule, except in international commercial
arbitration and institutional arbitration in case of arbitration other than ICA. 2019 Act
amends this provision to state that the arbitral institution shall determine the fees of
 the arbitral tribunal and the manner of its payment to the arbitral tribunal subject to
the rates specified in the 4th Schedule. It further explains that this sub-section shall not
apply to international commercial arbitration and in arbitrations (other than
international commercial arbitration) where parties have agreed for determination of
fees as per the rules of an arbitral institution.

Jurisdiction of Arbitral Tribunal

The jurisdiction of an Arbitral Tribunal is laid down by Chapter IV of the Act. As per Section
16 of the Act, the Tribunal’s core competence is determined by the Arbitration Agreement
itself, whereby parties may choose to expressly limit or determine the manner of conduct of
the Tribunal.
Determination of Jurisdiction
 In consonance with kompetenz-kompetenz principle, sub-section (1) of Section 16 of
the Act states that the Arbitral Tribunal may rule on its jurisdiction, including ruling
on any objections concerning the existence or validity of the Arbitration agreement.
 Though the Arbitration Agreement or the Arbitration clause is essentially a part of the
main contract, it is treated as an independent agreement outside of the main contract.
If the Tribunal finds that the primary contract is null and void, it does not entail ipso
jure, i.e., by the law itself, invalidity of the Arbitration clause.
 Thus, the Arbitral Tribunal whose jurisdiction is determined by the Arbitration
agreement/arbitration clause, may very well exercise its jurisdiction even if the main
contract is void, giving sanctity to the Tribunal’s jurisdiction.
Challenging the Jurisdiction of Arbitral Tribunal
 Section 16(2) of the Act enables a party to raise a plea challenging the jurisdiction of
the Arbitral Tribunal not later than the submission of the statement of defence by the
Respondent. However, a party’s conduct of participating in the appointment, or
appointing the Arbitrator cannot preclude such party from raising a plea challenging
jurisdiction.
 Further, a plea challenging the jurisdiction of the Arbitral Tribunal may be raised
during the proceedings, if a party to the proceedings finds that the Tribunal’s conduct
is beyond its core competence as provided in Section 16(3) of the Act.

Nav Sanad Vihar Cooperative Housing Society v. Ram Sharma and

Associates 2000, Delhi High court held that in terms of Section 16 of the Act, if the Arbitral
Tribunal rejects the challenge to its jurisdiction, the party aggrieved by the determination
cannot appeal against the same to the Tribunal.
Such party has to wait till the final award is made, as it is the legislative intent to let the
Tribunal proceed with the Arbitral proceedings and make an award without delay or
interference at any stage by the Court of law arising from the Court’s supervisory jurisdiction.
The determination of jurisdiction by the Tribunal can be challenged by the aggrieved party
after conclusion of Arbitral proceedings under Section 34 of the Act.

Deciding on a plea challenging Jurisdiction

 Section 16(5) of the Act says that if someone questions the authority of the Arbitral
Tribunal, the Tribunal has to deal with that issue quickly. If the Tribunal decides that it
does have the authority, it can continue with the arbitration and make a final decision.
 Sub-section (4) of Section 16 of the Act gives the Tribunal the power to forgive or
overlook any delay in raising an objection about its authority. If a party is unhappy
with the Tribunal's decision on its authority, it can ask for the Arbitral award to be
cancelled through an application under Section 34 of the Act.
Pharmaceuticals Products of India v. Tata Finance Ltd. 2002: the Bombay High Court
held that the Arbitral Tribunal is authorised under Section 16(5) of the Act to resume the
Arbitral proceedings in the event that the Arbitral Tribunal rejects the plea challenging its
jurisdiction. However, if the Arbitral Tribunal accepts the plea challenging its jurisdiction,
then such a decision may be appealed under Section 37(2) of the Act.

Jurisdiction of the Arbitral Tribunal for Interim Measures

 Section 17 of the Act gives power to the Arbitral Tribunal to make temporary
decisions, called interim measures, when a party requests it. This power is similar to
the power of courts to make temporary decisions under Section 9 of the Act.
 A party can choose to ask either the Tribunal (Section 17) or the Court (Section 9) for
interim measures. However, the parties involved in the arbitration can decide to limit
the Tribunal's power to grant interim measures.
 The Arbitral Tribunal can grant the following types of interim measures under Section
17(1) of the Act:
o Appointing a guardian for someone who is underage or mentally incapable for
the arbitration proceedings.
o Taking temporary actions to protect and handle goods that are part of the
arbitration.
o Ensuring that the disputed amount of money in the arbitration is secured.
o Keeping, preserving, or examining any property or item that is part of the
dispute.
o Making a temporary order or appointing someone to manage certain things
during the arbitration.
o Granting other temporary measures that the Arbitral Tribunal considers fair
and helpful
 According to Section 17(2) of the Act, any interim measures given by the Arbitral
Tribunal are considered as orders of the Court and can be enforced using the rules
stated in the Code of Civil Procedure, 1908.

Alka Chandewar v. Shamshul Ishrar Khan (2017): the Supreme Court held that a party
failing to comply with the interim measures granted by the Arbitral Tribunal under Section 17
of the Act shall be deemed to be guilty of contempt of the Arbitral Tribunal, in accordance
with Section 27(5) of the Act.

Procedural Rules
 The parties involved in arbitration can decide on the rules and steps to follow during
the arbitration process.
 If the parties don't agree on a specific procedure, the tribunal (the group handling the
arbitration) has the authority to determine how the proceedings will be conducted in a
way they think is suitable.
 The tribunal doesn't have to follow the rules of the Code of Civil Procedure, 1908,
and the Evidence Act, 1872, when conducting the arbitration proceedings.
 If the arbitration agreement states that an arbitration institution will handle the
arbitration, the rules of that institution automatically become part of the arbitration
agreement.
 The Amendment Act made changes to the law that require the tribunal to try its best to
hold oral hearings regularly for presenting evidence and arguments, and it should
avoid postponing or delaying the proceedings unless there is a valid reason.
  The tribunal has the power to impose additional costs on a party that asks for
unnecessary postponements or delays in the proceedings. These costs are meant to
discourage frivolous adjournments.

Court Assistance
Assistance by the local courts
 Local courts can intervene in domestic arbitration proceedings.
 This includes the power to issue interim orders, order evidence to be produced
directly to the tribunal and appoint arbitrators.
 Local courts can assist in selecting arbitrators if the parties are unable to agree on the
appointment of a sole arbitrator of if the two party-arbitrators fail to appoint a
chairperson.

Section 27
 Section 27 provides a mechanism whereby the arbitral tribunal or a party to the
dispute (With the approval of the arbitral tribunal) can seek assistance of the court in
taking evidence.
 This is one of the rare provisions of the Act which allows for the court’s
interference/assistance in an arbitration proceedings governed by the provisions of the
Act.
 Section 27 of the Arbitration and Conciliation Act 1996 gives courts the power to
assist in obtaining evidence for a tribunal.
 If a party or the arbitral tribunal (with approval from the tribunal) wants to obtain
evidence from another party, they can apply to the court for assistance.
 The court can help in obtaining various information, such as the names and addresses
of arbitrators and parties, the nature of the claim, and details about witnesses or
documents.
 The court can take evidence according to its rules and order the evidence to be given
directly to the arbitral tribunal.
 The court can issue processes, such as summonses to produce documents or
summonses for the examination of witnesses, similar to those issued in regular
lawsuits.
 If a party fails to attend or refuses to give evidence, or engages in contemptuous
behavior towards the tribunal, the court can impose punishments or penalties.
 The term "processes" includes summonses for documents and witnesses.
 Section 27 allows the arbitral tribunal to seek court assistance in obtaining evidence,
as the tribunal lacks the power to compel parties to provide evidence.
 If an arbitrator is related to one of the parties, there is a risk of bias, so the other party
can seek assistance from the court to obtain evidence through a recorded process.
 This section is used when government authorities need to be called as witnesses in the
arbitration process.
 The court may issue summonses to parties to produce evidence, which helps build
trust and confidence in the proceedings.
 The arbitrator cannot use this section to compel parties but can seek the court's
assistance to send summonses for the examination of parties and obtaining evidence.
 It is important to note that court summonses only apply to witnesses and parties
involved in the evidence-taking process of the arbitral tribunal.
 Under Section 27, the arbitral tribunal can request court assistance to obtain evidence
from parties through witnesses or documents, following the methods outlined in the
Civil Procedure Code (CPC).
 Although international arbitration is widely used for resolving commercial disputes,
the arbitral tribunal lacks power in certain situations, particularly when it comes to
obtaining evidence from third parties. In such cases, assistance must be sought from
state courts.
 State courts may offer assistance in international arbitral proceedings, and a book
focusing on Switzerland and comparative aspects can be helpful for arbitrators
worldwide.