Arbitral Tribunal

●​ Arbitration is an alternative method provided for dispute resolution in civil matters. It is a

way in which a dispute is decided by private individuals appointed and not the judicial
officers appointed to the courts and tribunals of the country directly. These private
individuals are called arbitrators, and they are quasi-judicial officers. However, all the
matters cannot be decided by way of arbitration. Such matters involve matters related to
crimes, matrimony, insolvency and winding up, guardianship, tenancy, testamentary
matters, trusts, etc. This bifurcation is made by keeping in mind the kind of right affected,
i.e., ‘right in rem’ or ‘right in personam’ and also the jurisdiction of special courts and
the analysis of public policy.
●​ Whenever a dispute arises between two parties and they decide to resolve the dispute
through arbitration, an arbitral tribunal is to be set up. An “arbitral tribunal” means a sole
arbitrator or a panel of arbitrators. Their task is to adjudicate and resolve the dispute and
to provide an arbitral award.

Composition of Arbitral Tribunal

Chapter-III of the Arbitration and Conciliation Act, 1996 talks about the composition of the
arbitral tribunal.

The provisions which are discussed in detail in Chapter-III are mentioned below-

1.​ The number of arbitrators

2.​ Their appointment
3.​ Power of the Central Government to amend the schedule
4.​ Grounds on which the appointment of the arbitrator can be challenged
5.​ Procedure to challenge the appointment
6.​ Failure or impossibility on the part of the arbitrator to act
7.​ Termination of the mandate and substitution of the arbitrator

The number of arbitrators should be odd and not even. It helps in determining the clear majority
of the tribunal and avoids any sort of discrepancy in that regard.

Also, the Arbitration and Conciliation (Amendment) Act, 2019 provided for the establishment of
the Arbitration Council of India with the view of promoting the other alternative dispute
redressal mechanisms such as arbitration, mediation and negotiation. Also, the composition as
well as the functions of the council were provided in the same amendment Act.
Composition of the Arbitration Council of India

It consists of a Chairperson who is either:

●​ A judge of the Supreme Court

●​ A judge of a High Court
●​ Chief Justice of a High Court
●​ An eminent person with expert knowledge in the conduct of arbitration.

Other members will include an eminent arbitration practitioner, an academician with experience
in arbitration, and government appointees.

Selection of arbitrators

In the same amendment Act, the provisions regarding the selection of arbitrators were also
modified.

●​ A person of any nationality can be an arbitrator in a case unless specifically provided in

the agreement. As per the new provisions, if the parties or the two arbitrators(in the case
of three arbitrators tribunal) are not able to appoint the required arbitrator then the
Supreme Court and High Courts have the responsibility to designate arbitral institutions
as per their respective jurisdictions.
●​ Parties to the dispute approach the courts for the appointment of arbitrators to decide
upon the dispute at hand.
●​ Appointments for international commercial arbitration are made by the institution
designated by the Supreme Court.
●​ For domestic arbitration, appointments are made by the institution designated by the
concerned High Court.
●​ If a situation arises in which no arbitral institutions are available, then the Chief Justice
of the concerned High Court may maintain a panel of arbitrators to perform the functions
of the arbitral institutions.
●​ An application for the appointment of an arbitrator is required to be disposed of within
30 days, and the appointment of the arbitrator should take place.

Also, as per the Arbitration and Conciliation (Amendment) Act, 2021, the previously provided
qualification criteria were removed and replaced with a provision that the qualifications,
experience, and norms for accreditation of arbitrators were to be specified under the regulations.
Removal of arbitrators

●​ The provisions for the removal of arbitrators are mentioned in Section 12(3).
●​ As per Section 12(3), if the circumstances suggest that a person is either related to the
parties or has a self-vested interest in the dispute and will not be able to be impartial in
the proceedings, then removal proceedings can be initiated against the arbitrator.
●​ Also, an arbitrator can leave the case in between in case of some special circumstances
in which he is not able to act according to the needs of the case and in that case a new
arbitrator is appointed. An arbitrator can also be removed if he/she misconducts in the
proceedings in any manner.

Role of arbitrators in arbitration

Now, talking about the role of an arbitrator in an arbitral proceeding, it is the same as that of a
judge in a judicial proceeding. An arbitrator plays the role of a private judge. They are appointed
by the arbitral institutions and their main roles include the following:

1.​ Interpreting and applying the rules and laws applicable to arbitration
2.​ Managing the scope of investigation so that all the evidence and witnesses are verified
extensively
3.​ Conducting the arbitration hearing in which testimonials of both the parties are
submitted
4.​ Analysing the evidence and testimonials thoroughly
5.​ Making a decision to resolve the dispute
6.​ Declaring the arbitral award

While performing all the above functions within the capacity of an arbitrator, he/she has to be
impartial and should disclose all the facts required to be known by the parties before the start of
the proceedings.

Powers of an arbitrator in India

●​ Now, let’s discuss the powers provided to the arbitrator. The Arbitration and Conciliation
Act, 1996 provides some powers to the arbitrator to assist him/her in delivering the
award. These measures can be taken by the tribunal to facilitate the delivery of arbitral
awards in the concerned dispute. These powers include the following provisions-
Power to administer an oath to the parties and witnesses

The Arbitration and Conciliation Act, 1996 provides arbitrators with the power to administer an
oath to the parties and all the witnesses. He can also issue interrogatories to the parties if he/she
finds it necessary to do so. This function is available to the arbitrator because he/she acts as a
quasi-judicial officer.

Power to take interim measures

Section 17 of the Arbitration and Conciliation Act, 1996 provides the power to the tribunal to
take an interim measure when a party to the dispute approaches the tribunal for the same. The
interim measures that can be taken by the arbitration tribunal include the following:

1.​ Appointment of a guardian for a minor or person of unsound mind for the purposes of
arbitral proceedings
2.​ Preservation, interim custody, or sale of any goods which is the subject-matter of the
arbitration agreement
3.​ Securing the amount in dispute in the arbitration
4.​ Interim injunction or the appointment of a receiver
5.​ Such other interim measures of protection as may appear to the arbitral tribunal to be
just and convenient.

The power to grant interim relief by the arbitral tribunal and enforcing them as orders of the
courts ensures that the relief granted by tribunals is not ambiguous and holds an impartial value.
The parties no longer have to engage in the tedious process of approaching the courts for
effective interim relief, which contributes to increasing the convenience for the parties opting for
arbitration and strengthens the appeal of arbitration in India.

Power to proceed ex-parte

The arbitration tribunal has the power to proceed ex parte (an order which is given in absence of
one of the parties caused on their own will) if any of the following conditions arise-

●​ In cases where the claimant fails to submit or communicate their statements as per
Section 23 of the Arbitration and Conciliation Act, 1996;
●​ In cases where the respondent fails to submit or communicate their statements as per
Section 23 of the Arbitration and Conciliation Act, 1996; and
 ●​ In cases where, any of the parties to the dispute fails to appear at an oral hearing or to
produce the document or any sort of documentary evidence asked by the tribunal.

Although it is to be noted that an arbitration tribunal cannot pass an ex parte order on the mere
filing of an interim application as the Arbitration and Conciliation Act, 1996 mandates sufficient
advance notice for any hearing.

Power to appoint an expert

Section 26 of the Arbitration and Conciliation Act, 1996 authorises the arbitral tribunal to
appoint one or more experts to assist him on a specific issue if he finds it necessary in any case.

The arbitrator also has the power to give any relevant information, documents, or property to the
experts for the purpose of inspection. If necessary, then the arbitrator also has the power to
appoint the expert as a participant in a hearing.

There is only one condition to be satisfied to exercise this power, which is that the expert must
have to show the parties that he has expertise in matters related to this case.

Power to make awards

An arbitral award is similar to a judgement of the court. It is based on the interpretation of the
facts and evidence by the arbitral tribunal. The decision of the tribunal is what resembles an
arbitral award.

The main motive of the arbitral proceeding is the determination of the arbitral award and the
power to declare it lies with the arbitral tribunal. However, the rules applicable in an arbitration
proceeding are to be verified on the basis of the below-mentioned provisions:

1.​ In matters related to international commercial arbitration, the dispute shall be decided
according to the rules of proceedings which are decided by the parties, but if they fail
to decide upon the rules, then the arbitrator himself decides them and they become
applicable.
2.​ In other matters, the arbitral tribunal shall have the right to decide the rules which are
in accordance with the substantive law.
Declaring an arbitral award is not only a power conferred on the arbitral tribunals but also a duty
on their part to assess all the information related to the dispute and then decide upon the same.

Expenses of arbitral tribunals

As the Arbitration and Conciliation (Amendment) Act, 2019 provided that the appointment of
the arbitrators is to be made by the arbitral institutions assigned by the Supreme Court or the
High Court and all the decisions regarding the matters of expenses is to be made by the assigned
institution as per Section 31A of the Act.

The expenses are to be borne by the unsuccessful party as per the award. This rule can be
changed in certain cases where the court or arbitral tribunal may make a different order for which
they have to record the reasons in writing.

Expenses for the matter of arbitration proceedings as per the Indian Council of Arbitration,
which is one of the institutions, include the following-

1.​ The fees and expenses of the arbitrators and witnesses

2.​ Administrative and secretarial expenses
3.​ Expenses on the travel of the arbitrator and others concerned
4.​ Stenographic, translation, and interpretation charges
5.​ Stamp duty on an award
6.​ Expenses of witnesses
7.​ The cost of legal or technical advice
8.​ Other incidental expenses arising out of or in connection with the arbitration
proceeding or award.

Jurisdiction of arbitral tribunals

Arbitral tribunals don’t exercise statutory jurisdiction. They define their jurisdiction as per the
needs of the parties involved in the dispute.

Section 16 of Chapter-4 of the Arbitration and Conciliation Act, 1986 talks about the provisions
regarding the jurisdiction of the arbitral tribunal. It basically says that an arbitration clause will
be valid even if the contract is held void. It is to be read as another agreement. It also provides
for the provisions of interim orders and the power of the arbitral tribunal to make them as per
Section 17 of the statute.
Functions of arbitral tribunals

As per Section 2(1)(d) of the Arbitration and Conciliation Act, 2019, an arbitration tribunal
refers to a sole arbitrator or a panel of arbitrators. These people have quasi-judicial authority
because they act as private judges in civil matters. So, under this capacity, they also have some
functions to perform, which are as follows:

To fix time and place for the arbitration proceedings

It is the duty of the tribunal so assigned to finalise the place and time for the proceedings as per
the convenience and consent of the parties to the dispute. But after the finalisation of the time
and place, it is the duty of the parties to produce themselves for the proceedings, otherwise the
tribunal can give an ex parte order.

To decide upon the liability of arbitration-related expenses

It is the duty of the tribunal to decide upon the liability of the expenses of the arbitration
proceedings and then give the verdict on the issue with valid reasoning on their part.

To manage the scope of investigation

It is one of the most critical functions of the arbitration tribunal. An arbitration tribunal should
analyse all the evidence and witnesses to be sure of the circumstances and then take a stand on
the basis of which the arbitral award is given by the tribunal.

To maintain the secrecy of the case

There is an obligation for the arbitrators in the tribunal to maintain the secrecy of all the facts in
order to maintain the trust values defined, intact.

But at the same time, as per Section 12 of the Arbitration and Conciliation Act, 1996, they have
to disclose some facts to the parties so that no sense of partiality is found in the delivery of the
award.

To determine the rule of procedure

According to Section 19 of the Arbitration and Conciliation Act, 1996, the arbitration procedure
is not bound by any code of procedure. The arbitration organisation assigned the task of setting
up the tribunal for a particular arbitration case defines the rules for conducting the arbitration
proceedings. Most of these rules are pre-defined by the organisation, and some rules are
interpreted during the course of the proceedings. These have to comply with the other laws of the
country.

Duty to interpret or correct the award

According to Section 33 of the Arbitration and Conciliation Act, 1996, it is the duty of the
arbitral tribunal to correct or interpret the award passed by the tribunal assigned, within 30 days
from the date of receipt of the application for the same. It can be done in the following two cases:

1.​ A party with the notice to the other party may request arbitration tribunal to correct
any error of the sort of typographical, computation, clerical, or any other error of
similar nature;
2.​ A party may, with a notice to the other party, request the tribunal to interpret any
specific part or parts of the award again.

As per this section, the tribunal may correct any error of the award on its own initiative within
thirty days from the date of the arbitration award.