What about the appointment of sole or third Arbitrator in an International Commercial Arbitration ?

In case of an International Commercial Arbitration the Chief Justice of India or the person or institution designated by him may appoint an Arbitrator of a nationality other than the nationality of the parties where the parties belong to different nationalities. The Chief Justice may make such scheme as he may deal appropriate for dealing with matters entrusted to him under Section 11 of the 1996 Act. Where the matters referred to in Section 11and the sub-sections their under regarding appointment of an Arbitrator or the third Arbitrator arise in an International Commercial Arbitration, the reference to Chief Justice in the relevant sub-sections under Section 11 shall be construed as a reference to the “Chief Justice of India”. In any other Arbitration the reference to “Chief Justice” shall be construed as a reference to the Chief Justice of the High Court within whose limits the principal civil court which has Jurisdiction is situate and where the High Court itself is the Court referred to the Chief Justice of that High Court.

 

 

 

Can a party challenge the appointment of an Arbitrator?

Yes, if circumstances exist that give rise to justifiable doubts as to the Arbitrators independent or impartiality, or if he does not possess the qualification agreed to by the parties. A party may challenge an Arbitrator appointed by him, or in whose appointment he has participated only for reasons, of which he becomes aware, after the appointment has been made.

What is the procedure for challenging the appointment of an Arbitrator ?

The parties are free to agree on a procedure for challenging the appointment of an Arbitrator. Failing any agreement as aforesaid a party who intends to challenge an Arbitrator shall, within 15 days after becoming aware of the constitution of the Arbitral Tribunal or after becoming aware of any circumstances for challenging the appointment of any Arbitrator, send a return statement of the reasons for the challenge to the Arbitral Tribunal. Unless the Arbitrator so challenged withdraws from his office or the other party agrees to the challenge, the Arbitral Tribunal shall decide on the challenge. If the challenge is not successful, the Arbitral Tribunal shall continue the Arbitral proceedings and make an Arbitral award.

Where an Arbitral award is made in a case where there was unsuccessful challenge to the appointment of the Arbitrator, the party challenging the Arbitrator make an application for setting aside such an Arbitral award in accordance with Section 34 of the Act of 1996. Where an Arbitral award is set aside on an application made in case of challenge for appointment of an Arbitrator, the Court may decide as to weather the Arbitrator who is challenged is entitled to any fees.

 

What is to be done in case of failure or impossibility to act on the part of the Arbitrator or any of the Arbitrators ?

The power and authority of an Arbitrator shall terminate if he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay and he withdraws from his office or the parties agree to the termination of his mandate.

If a controversy remains concerning inability of the Arbitrator to perform his functions or his failure to act without undue delay, a party may, unless otherwise agreed by the parties, apply to the court to decide on the termination on the mandate.

Where the mandate of an Arbitrator terminates a substitute Arbitrator shall be appointed according to the rules that were applicable to the appointment of the Arbitrator being replaced. Section 12 to 15 of the Act of 1996 deal with the matters relating to grounds of challenge the procedures of challenge of Arbitrator, failure or impossibility to act by the Arbitrator, substitution of the Arbitrator and the procedure to be followed in case of substituted Arbitrator in the further conduct.

 

What is the extent of Jurisdiction of an Arbitrator or the Arbitral Tribunal and who is to decide about same?

The Arbitral Tribunal may rule on its on Jurisdiction, including ruling on any objections with respect to the existence of the validity of the Arbitration agreement and for that purpose an Arbitration clause shall be treated as an agreement independent of the other terms of the contract and a decision by the Arbitral Tribunal that the contract is null and void shall not entail if so jure the invalidity of the Arbitration clause. A plea with regard to Jurisdiction shall be raised not later than the submission of the statement of defense. However, a party shall not be precluded from raising such a plea merely because he has appointed or participated in the appointment of an Arbitrator. A plea that the Arbitral Tribunal is exceeding the scope of its authority shall be raised as soon as practicable during the Arbitral proceeding. The Arbitral Tribunal shall decide on a plea as to Jurisdiction and in case the plea is rejected by the Tribunal, they will continue with the Arbitral proceeding and make an Arbitral award. The party aggrieved by such an Arbitral award may make an application foe setting aside such an Arbitral award in accordance with Section 34.

What is the procedure for conduct of Arbitral proceedings ?

The Law provides that the parties shall be treated with equality and each party shall be given full opportunity to present his case. The Arbitral Tribunal shall not be bound by the court civil procedure 1908 or the Indian evidence Act, 1872. Subject to the above rules the parties are free to agree on the procedure by the Arbitral Tribunal in conducting its proceedings. In absence of any agreement as to the procedure to be followed, the Tribunal may subject to the rules led down above conduct the proceedings in the manner it considers appropriate. The power of the Arbitral Tribunal includes the power to determine the admissibility relevance, materiality and weight of any evidence.

What would be the place of Arbitration ?

The parties are free to agree on the place of Arbitration. Failing any agreement between the parties the place of Arbitration shall be determined by the Arbitral Tribunal having regard to the circumstance of the case, including the convenience of the party.

Notwithstanding with the above rules the Tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, or goods or other property.

 

When does the Arbitration commence ?

Unless otherwise agreed by the parties the Arbitration proceedings commence on the date on which a request for the dispute to be referred to Arbitration is received by the respondent.

What is the procedure generally to be followed in an Arbitration proceeding ?

First of all the claimant is to file within the period of time agreed upon by the parties or determined by the arbitrator a statement of facts supporting his claim, the points at issue and the relief or remedy sought and the respondent thereafter shall state his defense in respect of and in answer to the statement of claim, unless the parties have otherwise agreed.

The parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence they will submit.

Unless otherwise agreed by the parties, either party may amend or supplement his claim or defense during the course of the arbitral proceedings, unless the arbitrator considers it inappropriate to allow the amendment or supplement having regard to the delay in making it.

Unless otherwise agreed by the parties the Arbitrator shall decide whether to hold oral hearings for the presentation of evidence or for oral argument or whether the proceedings shall be conducted on the basis of documents and other materials. However it has been provided that the Arbitrator shall hold oral hearings at an appropriate stage of the proceedings on a request by a party, unless the parties have agreed that no oral hearing shall be held.

The parties shall be given sufficient advance notice of any hearing and of any meeting of the Arbitrator for the purposes of inspection of documents, goods or other property.

All statement documents or other information supplied to or application mate to the Arbitrator by one party shall be communicated to the other party and any expert report or evidentiary document on which the Arbitrator may rely in making his decision shall be communicated to the parties.

 

What happens if either of the parties commits default in course of the conduct of the Arbitration ?

If the claimant fails to communicate his statement of claim the Arbitrator shall terminate the proceedings unless otherwise agreed by the parties and without showing sufficient cause.

If the respondent fails to communicate his statement of defense in time without showing sufficient cause and unless otherwise agreed the Arbitrator shall continue the proceeding without treating the failure in itself as an admission of the allegations by the claimant.

If a party fails to appear at an oral hearing or to produce documentary evidence than the Arbitrator may continue the proceedings and make the award on the evidence before it.