What about the costs of Arbitration; who has to pay and to what extent ?

Unless otherwise agreed by the parties, the cost of Arbitration shall be fixed by the arbitrator. The Arbitrator shall specify the party entitled to cost, the party who shall pay the cost the amount of cost or method of determining that amount and the manner in which the cost shall be paid. Cost means reasonable costs relating to the fees and expenses of the Arbitrators and witnesses, legal fees and expenses, any administration fees of the institution supervising the Arbitration and any other expenses incurred in connection with the proceedings and the award-Section 31(8).

When does the Arbitration proceeding terminate ?

By the final award or when the claimant withdraws his claim, or when the parties agree on the termination of the proceedings or when the Arbitrator finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.(Section 32).

Can the Arbitrator correct or interpret the award or make an additional award ?

Yes, within 30days from the receipt of the award a party with notice to the other party may request the Arbitrator to correct any computation errors any clerical or hypographical errors or any other errors of a similar nature occurring in the award.

If so agreed by the parties, a party with notice to the other party, may request the Arbitrator to give an interpretation of a specific point or part of the award.

If the Arbitrator considers a request made by any party to be justified, it shall make the correction or give the interpretation within 30 days from the receipt of the request and the interpretation shall form part of the award. The Arbitrator may correct any error as specified in Section 33 on his own motive, within 30 days from the date of the award.

Unless otherwise agreed by the parties, a party with notice to the other party, may request within 30 days from the receipt of the award, to make an additional award as to claims presented in the arbitration proceedings but omitted from the award.

If the Arbitrator considers the request made for additional award to be justified, it shall make the additional award within 60 days from the receipt of such request.

The Arbitrator may extent if necessary, the period of time within which he shall make a correction give an interpretation or make an additional award. The correction and/or the interpretation and/or the additional award shall form part of the award (Section 33).

What is the legal consequences which follow the making of the award ?

The award shall be final and binding on the parties and person claming under them and where the time for making a application to set aside the award under Section 34 has expired or such application having been made, it has been refused, the award shall be in forced under the Court of civil procedure, 1908 in the same manner as if it were a decree of the Court.

 

This is a significant departure from the old Law of Arbitration. Under the old Law the procedure was that the Arbitrator shall file the award and then the same will come for judgement upon award and if an application for setting aside the award has been made or disposed of and dismissed a judgement and decree terms of the award will follow. This procedure has given a go by and the present Law is that upon the expiry of the time for making an application to set aside the award or upon dismissal of such application is made the award itself shall be enforced as a decree of Court. (Section 35 and 36).

 

Can the party aggrieved make an application for setting aside an award .

Yes, but the grounds are extremely limited. The party making the application if it furnishes prove that a party was under some incapacity, or that the arbitration agreement is not valid under the Law or that the party making the application was not given proper notice of the appointment of the Arbitrator or of the Arbitration proceedings or was otherwise enable to present his case. The award may be set aside.

The other grounds for setting aside the awards are that the award deals with a dispute not contemplated while or not falling within the terms of the submission to Arbitration, or it content decisions on matters beyond the scope of the submission to Arbitration.

Provided always that if the decisions on matters submitted to Arbitration can be separated from those not so submitted, only that part of the award which content decisions on matters not submitted to Arbitration may be set aside.

If the composition of the Arbitration Tribunal or the procedure follow was not in accordance with the agreement of the parties.

Apart from the above grounds for setting aside the awards, the award can be set aside if the subject matter of the dispute is not capable of settlement by Arbitration under the Law for the time being inforce or if the award is in conflict with the public policy on India. If the award was procure by fraud or corruption or was in violation of Section 75 or Section 81 the award will be treated as in conflict with the public policy in India-Section 34(1)and (2)

Is there any limitation for making an application for setting aside the award ?

An application for setting aside may not be made after 3 months have elapsed from the date on which the party making that application, had received the Arbitral award or if a request have been made for correction, interpretation or for additional award, than from the date on which that request had been disposed of by the Arbitrator.

Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the set period of three months, it may entertain the application within a further period of 30 days but not there after Section 34(3). This shows that the outer limit even for the Court to entertain an application for setting aside an award is 60 days even after extension of time.

 

Is there any other alternative to uphold the award, after the making of the application for setting aside the same and before decision thereon by the Court ?

Yes, on receipt on an application for setting aside the award the Court may where it is appropriate and it is so requested by a party, adjourned the proceeding for a period of time determine by it, in order to give the Arbitrator an opportunity to resume the proceedings or to take such other action as in the opinion of the Arbitrator will eliminate the grounds for setting aside the award. [Section 34(4)].

This is a new concept in the Law of Arbitration. Incases where it is appropriate and it is so requested by a party the Court may give an opportunity to the Arbitrator to resume the proceedings and to take such other action as in the opinion of the Arbitrator will illuminate the grounds for setting aside the Arbitral award. This could not be done under the old Law.

 

In what cases a party can go in appeal from an order of the Court?

An appeal shall lie from the following orders (and from no others) to the Court authorized by Law to hear appeals from original decrease of the Court passing the order namely:-

(a) Granting or refusing to grant any measure under Section 9.

(b) Setting aside or refusing to set aside an award under Section 34.

An appeal shall also lie from an order granting or refusing to grant an interim measure under Section 17 to a Court. (It is to be remembered that Section 17 relates to interim measures to be granted by an Arbitrator).

No second appeal shall lie from an order passed in appeal under this section that is Section 37, but nothing in this section shall effect or take away any right to appeal to the Supreme Court. (Section 37).

Can the Arbitrator Tribunal ask for deposit on account of cost ?

Yes, it can do so and fix the amount of the deposit or supplementary deposit as the case may be, as an advanced for the cost and in a case where there is a counter claim it may fix separate amount of deposit for the counter claim.

The deposit shall be payable in equal share by the parties. Provided where one party fails to pay his share of the deposit, the other party may pay that share. Provided further that where the other party also does not pay the aforesaid share in respect of the claim or the counter claim, the Arbitrator may suspend or terminate the proceedings in respect of such claim or counter claim, as the case may be.

Upon termination of the proceedings, the Arbitrator share render an accounting to the parties of the deposits received and shall return any unexpended balance to the party or parties as the case may be. (section 38)

Does the Arbitrator have lien on the award and deposit as to costs ?

Unless otherwise agreed the Arbitrator shall have a lien on the award for any unpaid costs of the Arbitration.

If in any case the Arbitrator refuses to deliver its award except on payment of the costs, demand by it, the Court may, on an application in this behalf, order that the Arbitrator shall deliver the award to the applicant on payment into Court by the applicant of the costs demanded, and shall after such inquiry, if any, as it thinks fit, further order that out of the money so paid into Court there shall be paid to the Arbitrator by way of costs such some as the court may consider reasonable and that the balance of the money if any, shall be refunded to the applicant. (Section 39