INTRODUCTION
Arbitration in India has been more popular in recent years. However, the role and power of courts in Arbitration have been the topic of continuous debate and controversy. In light of arbitration’s track record as an effective means of conflict resolution, the practice must evolve along with other industries. In the context of the rule of law, a court is any individual or body having the authority to hear and rule on issues involving civil, criminal, and administrative law.
Private parties may utilize arbitration to resolve their disputes as an alternative to going to court. Arbitration is when two or more parties agree to settle a dispute via a third party (rather than through the courts). The four parts of the Arbitration and Conciliation Act 1996 outline what arbitration is and how it will be conducted in India. General rules that apply to domestic arbitration are discussed first. The second part explains how to recognize and carry out judgments rendered in other countries. The most critical factors are Part I, which is based on the UNCITRAL Model Law, and Part II, which is based on the New York Convention. For a simplified arbitration agreement, the following procedures must be met:
When a disagreement arises between the parties to a contract or agreement, and arbitration is included in the contract or agreement, one party serves the other party with a notice of dispute and requests that the matter is resolved by arbitration. The arbitrator, rules, procedures, place, and language of the arbitration will be decided once the opposite side answers. As soon as the arbitration process starts, there will be official hearings and written procedures. The arbitrator’s temporary remedy and the ultimate award will be binding on both parties. If one of the parties is unsatisfied or doesn’t think the other was correct, they may challenge the award in court. In the event of a challenge to the prize, the matter must be heard by the Supreme Court or the relevant court of appeals.
DIFFERENCE BETWEEN ARBITRATIONAL PROCEEDINGS AND COURT PROCEEDINGS
The arbitration procedure is started promptly. Whereas a matter in court can only be heard when the judge has time to do so, at a time and date established by the judge, in arbitration, the case may be heard as soon as an arbitrator or tribunal is appointed, depending on the circumstances. On the other hand, arbitration takes place behind closed doors and employs a more casual mode of communication than court procedures.
The arbitration process has evolved and polished to the point where it is more cost-effective and less costly than a court hearing, in contrast to the costlier court proceedings. The parties select the arbitrator in an arbitration proceeding, but in court, the judge is appointed by the court without input from the parties.
JUDICIAL INVOLVEMENT
The scope of judicial involvement is laid forth in Section 5 of the Arbitration and Conciliation Act, 1996: “notwithstanding anything contained in any other legislation for the time being in effect, in cases covered by this Part, no judicial authority shall interfere unless when so authorized in this Part.” Part I of the Act 1996 (as amended) shall apply if the venue of arbitration is in India. This Section shall not affect any other legislation for the time being in effect by which certain disputes may not be brought to arbitration.
APPOINTMENT AND TERMINATION OF MANDATE OF AN ARBITRATOR
Before initiating arbitration proceedings, the Parties are free to agree upon the method for selecting the arbitrator. Nonetheless, if the parties fail to choose an arbitrator for conducting arbitration procedures, the court has the authority to do so.
The mandate of the arbitrator must end following Section 14 if the arbitrator’s ruling is terminated for any of the following reasons:
If the arbitrator is legally or factually prevented from performing their duties, or if they fail to act promptly for any other reason, then resign if the parties to the arbitration mutually agree to terminate the arbitrator’s mandate.
Furthermore, other grounds for rescinding an arbitrator’s appointment are listed in section 15:
If he resigns from office for whatever reason, Per the terms of the parties’ agreement.
Section 15 also addresses the issue of an arbitrator being replaced, as stated in the following:
When an arbitrator’s term ends, the established procedures must select a new one. Except as agreed upon by the Parties, the arbitral tribunal has the authority to reopen any previously concluded hearings with the prior arbitrator. A change in the composition of the arbitral panel will not render null and void any award or decision reached before the arbitrator was removed from the case.
INTERIM MEASURES BY THE COURT
The Arbitration and Conciliation Act of 1996, Section 9, states that a party may apply to the court for an interim measure of protection at any time before, during, or after the arbitral proceedings, including after the making of the arbitral award but before it is enforced by Section 36. Intercessory prayers for temporary safety may include:
- Goods that are the subject of the arbitration agreement and their storage, temporary custody, or sale.
- Protecting the arbitration’s at-issue monetary stake.
- Permitting the entry of any person upon any land or building in possession of any party to detain, preserve, or inspect any property or thing which is the subject of the dispute in arbitration or as to which any question may arise therein; Permitting the taking of any samples; Permitting the making of any observations; Permitting the conducting of any experiments; Permitting any other activities which may be necessary or expedient for obtaining complete information.
- Appointment of a receiver or temporary restraining order.
- The court may impose any further protective measures it deems necessary as an interim measure. Furthermore, the court must have the same authority to make orders for and in connection to any proceedings before it.
APPEALABLE ORDERS
Provisions about appealable orders are addressed in Section 37 of the Arbitration and Conciliation Act, 1996. Procedures related to PART I and domestic arbitration are discussed in Section 37. Part II proceedings and international arbitration appeals are addressed under Section 50 of the Act. The following are concise descriptions of the provisions included in Section 37(1), which govern Court orders that may be appealed:
- Rejecting the request to submit the dispute to arbitration under Article 8.
- Allowing or rejecting requests for measures under Section 9.
- Cancellation or denial of an arbitration award according to Section 34.
WHO CAN APPEAL?
Those unhappy with the decision made by a court or tribunal often have the option to file an appeal. However, one new rule of thumb has emerged from arbitration hearings: may a third party challenge the arbitrator’s decision?
The BOMBAY HIGH COURT issued a lenient ruling on September 11, 2018. According to a high court ruling in Prabhat Steel Traders Pvt. Ltd. v. Excel Metal Processors Pvt. Ltd.[1], a person who is “directly or indirectly impacted by a such judgment given by the tribunal under section 17 of the Act” may file an appeal to the order u/s 37 of the Act. This precedent-setting decision establishes that a third party impacted by Section 17 of the Act may file an appeal under Section 37.
CONCLUSION
Finally, while legislation has been passed to ensure that a layperson can understand the principles of the arbitration process, more work has to be done to ensure that the primary goal of arbitration is to resolve disputes and is not undermined. This is the case after a thorough examining, arbitration reaches India and the court’s role in the process. In addition, the courts should be kept out of it as much as possible so that they don’t slow down the arbitration procedure.
NAME: Sandali Gupta
COLLEGE: Symbiosis Law School, Noida
YEAR: 2nd
BATCH: 2021-26
COURSE: BBA LLB
[1] 2018 SCC OnLine Bom 2347.
