The Judicial Bodys interventions and duties

A critical analysis of Arbitration and Conciliation Act,1996

Introduction
Indian Alternate Dispute Resolution Laws are still in their nascent-early stages. Bulk of the
laws governing these out-of-court dispute resolutions derive power from The Arbitration and
Conciliation Act, 1996. The framework on which these laws have been constituted is based
on the UNICITRAL Model on International Commercial Arbitration, 1985 and UNCITRAL
Arbitration Rules, 1976 and UNCITRAL Conciliation Rules, 1980. The reason for adopting
these frameworks was to establish a law which will be uniform throughout the commercial
trading world, and provide for a more transparent and efficient settlement of disputes.
The Act is a synthesized piece of literature. It governs or provides remedy for disputes on
domestic as well as international practices. It provides for arbitration at a national and foreign
stage, enforces foreign arbitral award and also conciliation.

Scheme of the Act:

The Act presents itself as an amalgamation of four parts. The bulk of the provisions are
present in the 1st and 2nd Part. Part 1 entails provisions for dispute redressal for domestic and
international commercial arbitration taking place in India. All international and national
arbitration taking place in India shall be governed by Part 1, for both international and
national parties. Part 2 deals with foreign awards.

Part 1 has its provisions based on the framework of the aforementioned Model Law, it
provides for resolution of disputes arbitrarily, with no intervention of the judicial structures,
visa- vis the Courts. It provides for the requisite characteristics of an Arbitration Officer,
where he obtains his power from, and strength and procedure for conducting an arbitration
proceedings, also sets the recourse for obtaining and challenging arbitral awards deemed fit
by the arbitration tribunal.

Part 2 deals with enforcement of foreign awards, which in turn are governed by either the
New York or Geneva Convention.

Locus Standi of Indian Courts in International Commercial Affairs-

A question was raised before the Honble Supreme Court in the case of Bhatia International
V. Bulk Trading, where the party which was seeking interim relief in the form of protection to
an arbitration proceeding under the ICC Rules sought to invoke the jurisdiction of the Indian
Courts. The question arose that is it possible? And if it is. Is it legal?

The proviso for interim measure, which was sought as a relief by the party, found its
statement under Section 9 of Part 1, which technically only applied for domestic arbitration
cases. The challenge faced by the Honble Court was that they faced a scenario where there
was , as such, no proprio vigore legal proviso, under whose ambit it could have offered the
aggrieved party, an interim measure of protection. This called for a unique interpretation of
the Act, by the Honble Court. Here the Honble Supreme Court stated that, unless expressly
or implicitly implied to exclude its applicability, the scope of the General Provisions found
in Part 1, extended their applicability to international arbitrations as well.

The same was interpreted and confirmed by the Honble Court in the subsequent decision in
Shreejee Traco (I) Pvt. Ltd. V. Paperline International Inc where the Honble Court stated that
it cannot intervene in all cases, and it exercises its scope of territorial jurisdictions only in
some cases. Here the Honble Supreme Court intervened and helped in the assignment of an
arbitrator for an international arbitration proceeding, outside the country. The power to assign
arbitrator was found in Part 1, Section 11 of the Act. Here the Court stated it had no
Jurisdiction as the proceeding were to take place elsewhere, that is New York, and the
arbitration law that would govern the same would be U.S. Arbitration Law.

Exordium to the Role of Judicial Bodys -

The act garners distinction, as a fundamental feature of the same is that the role of judicial
authorities has been restricted. The Courts intervention, though restricted can be of
significance. The example of Section 8 can be taken here, where it is stated that, when any
matter before the Honble Courts or Judicial Authority, contains an arbitration agreement,
shall be referred to arbitration. The intervention of Judicial Authority is restricted to the
powers derived from Section 5 of the Act.

With respect to an arbitration proceeding, the Honble Court can be approached in the
following scenarios

i) For an interim measure of protection or injunction, as stated in the Bhatia Intl.

case or for any appointment of receiver of award.
ii) For the appointment of an arbitration officer/ arbitrator, when either party fails to
appoint one, or if two of the appointed arbitrators fail to agree upon the third
arbitrator. It is in such a case, that the act has empowered, the Chief Justice of the
High Court may appoint an arbitrator of his choice and in case of an international
Arbitration, the Supreme Courts Chief Justice may appoint one, this has been
granted by Section 11 of the Act.
iii) The Court may also be approached when a controversy may arise, to the fact
whether an arbitrator has been unable to perform his functions or has failed to act
without undue delay or there is a dispute on the same. In such an event, the court
may decide to terminate the mandate of the arbitrator and appoint a substitute
arbitrator. This has been granted by Section 12 of the Act
 Arbitration Act and the Court
- Defining the Court

Section 2(e) defines Court as the Civil Court having original jurisdiction, including the
High Court exercising its jurisdiction, but does not include Civil Courts inferior to the
District Court, or any Court of Small Causes.

- Extent of Judicial Intervention

Section 5 states the confines of Judicial Intervention, it explicitly states that no judicial
authority can intervene with an arbitration proceeding, other than when stated explicitly
in Part I, or any other law present and enforceable states otherwise.

- Interim Measures by the Court

Section 9 states that, a party to the Arbitrational Proceedings, before, after or during the
proceedings may apply to the Court, in accordance with Section 36. The same cant be done
post enforcement of Arbitral Award.
An appeal can be made as to the follows with respect to the trial process
1- Assigning a guardian for a minor or person of unsound mind
2- For interim protection such as interim custody or sale of any goods. Securing
Arbitration Dispute Amount. The Detention, Preservation or Investigation of any
Property. Appointment of Receiver or Interim Injunction and Protection the way or
when the Court deems fit.

- Challenge Procedure
Section 13(6) states that upon setting aside of the Arbitral Award under 13(5), the Court may
decide whether the Arbitrator shall charge fees.
- Impossibility Clause
Section 14(2) states in the scenario where controversy remains on anything stated in Clause
14(a)(1) , application to the Court can be made for termination of mandate.
- Court assistance in obtaining Evidence

Section 27(1) states that the Arbitral Tribunal or either Party may take the assistance of
the Court to obtain Evidence. Section 27(3) warrants that the Court can order that the
Evidence to be directly provided to the Arbitral Tribunal. Section 27(4) warrants the need
to call upon Witnesses while Section 27(5) warrants the Court to charge the said
witnesses in contempt on their failure to act with respect to appearing before the
Tribunal.
- Recourse Against Arbitral Award
Section 34 makes application for setting aside of the Award assigned by the Arbitral
Tribunal. Section 34(1) grants recourse for the application aforementioned and Section 34(2)
expresses the confines of / limitations of Section 34. Application can be made under the
following sub sections of this Section
a) Incapacity of the Party
b) Being void/ invalid under Law
c) Party given application was not given a proper intimation/ notice
d) Arbitral Award deals with a dispute matter not Arbitrated upon
e) Composition of Arbitral Tribunal was not that the parties agreed upon, same goes with
Arbitral Proceedings
Subsection (b) further states that an application can be brought forwards the Court if
a) Subject matter of the dispute is not fit to be put for Arbitration
b) Arbitral Award is in direct or indirect conflict of Public Policy in India
c) If three months have elapsed since awarding the Arbitral Award and there is no monetary
response
d) If a request for the same has been made under Section 33
e) If induced by fraud or Award is void by virtue of Section 75
f) If the Award is deemed void by virtue of Section 81

- Enforcement of Arbitral Awards Section 36

Section 36 deals with the Courts power to help Enforce the Arbitral Award when the time
stipulated U/s 34 has expired, or when the award has been refused, it can be enforced under
the Code of Civil Procedure, 1908 as if it were a Court Decree
- Appeals to the Court
Section 38 states the orders appealable in front of the Court. These appeals can lie only
in the following scenarios and not otherwise

a) Refusing to grant or allowing a grant U/s 9

b) Refusing to set aside or setting aside an Arbitral Award U/s 34
c) Order from Arbitral Tribunal in pursuant from an order U/s 16(2) or U/s 16(3)
d) Granting or refusing to grant an interim order under the virtue of Section 17
e) Nothing in this section shall give allowance for a second appeal and no law can
prevent an appeal to the Honble Supreme Court of India

- Lien on Arbitral Awards

Section 39(2) deals with cases where Arbitral Tribunal refuses to award an Arbitral
Award unless and until all costs and expenses are paid.

- Jurisdiction and the Court

Section 42 explicitly states that -
 Notwithstanding anything contained elsewhere in this Part or in any other law for the
time being in force, where with respect to an arbitration agreement any application under
this Part has been made in a court, that court alone shall have jurisdiction over the
arbitral proceedings and all subsequent applications arising out of that agreement and the
arbitral proceedings shall be made in that court and in no other court.

Which states to say that the Court shall only have jurisdiction over Arbitral Proceeding in
certain cases as mentioned in this Section.

- Limitations of the Act, and respective Court Functions

Section 43 sets the Scope of the Act setting its limitations and iin cases where the Court
has to intervene if the Arbitral Tribunal conducts Proceedings on matter of Law
mentioned in the Limitation Act or has enough reason to state the Arbitral Tribunal is
acting ultravires.