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This article discusses the jurisdiction of the Arbitral Tribunal. Article 16 of Chapter IV of the UNCITRAL model rules on International Commercial Arbitration established in India by Section 16 of Chapter IV of the Arbitration and Conciliation Act 1996 mention that “The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose” which implies that the arbitral tribunal has the independence of choosing its own jurisdiction and freedom from the interference of courts regarding any matter related to arbitration.
The honourable court interpreted the intention of the plea of non-jurisdiction of an arbitral tribunal under section16(5) of the Act in the case of Union of India vs. M/s. East Coast Boat Builders & Engineers Ltd. where the court held that
“From the scheme of the Act, it is apparent that the legislature did not provide appeal against the order under section 16(5) where the arbitral tribunal takes a decision rejecting the plea that the arbitral tribunal has no jurisdiction. The intention appears to be that in such case; the arbitral tribunal shall continue with the arbitral proceedings and make an award without delay and without being interfered in the arbitral process at that stage by any court in their supervisory role.”
An arbitral tribunal cannot be said to have a statutory jurisdiction. The tribunal makes and decides its own jurisdiction to fit the requirements of the parties. The arbitral agreement decides the scope and extent of jurisdiction of the arbitral tribunal. The principal of party-autonomy states that when two parties have the right to settle their disputes on their own then they have the right to present this right to any third party, to decide overt that dispute.
Thus it is extremely important to consider a well-drafted agreement because it ensures giving full power to the tribunal to decide matters regarding the jurisdiction. The Arbitration and Conciliation Act 1996 additionally mentions the jurisdiction over deciding certain matters in Section 17 of the Act.
- Appoint a guardian for minor/unsound person during the process of arbitration
- Protection/Preservation/ Detention/ temporary injunction of the subject matter of the arbitration.
There are certain cases in which the competence of the arbitral tribunal subject to getting questioned.
Section 11(6) of the Arbitration and Conciliation Act states that “a party may request the Chief Justice or his designate to take required steps when under an appointment procedure agreed to by the parties, one of them fails to act as required under the procedure, or the parties or the two arbitrators fail to reach an agreement expected of them under the procedure, or a person or institution fails to perform a function entrusted to him under such procedure”.
And section 11(7) states that a decision was taken by the Chief justice or his designate under section 11(4), section 11(5) or section 11(6) shall be final. This implies a restriction on the part of the tribunal to look into its own jurisdiction when the Chief Justice has already looked into it.
In the case of Konkan Railway Corporation Ltd. vs. Rani Construction Pvt. Ltd. the judgment
“It might also be that in a given case the Chief Justice or his designate may have nominated the arbitrator though the period of thirty days had not expired. If so, the Arbitral Tribunal would have been improperly constituted and be without jurisdiction. It would then be open to the aggrieved party to require the Arbitral Tribunal to rule on its jurisdiction. Section 16 provides for this. It states that the Arbitral Tribunal may rule on its own jurisdiction.”
Similarly in the judgment of the SBP and Co. vs. Patel Engineering Ltd. case, the power of the arbitral tribunal was relegated to that of the choice of Chief Justice in deciding over its jurisdiction.
The question, in the context of sub-section (7) of Section 11 is, what is the scope of the right conferred on the Arbitral Tribunal to rule upon its own jurisdiction and the existence of the arbitration clause, envisaged by section 16(1), once the Chief Justice or the person designated by him had appointed an arbitrator after satisfying himself that the conditions for the exercise of power to appoint an arbitrator are present in the case.
Prima facie, it would be difficult to say that in spite of the decision of the Chief Justice, the Arbitral tribunal can still go behind that decision and rule on its own jurisdiction or on the existence of an arbitration clause.
Sundaram Finance Ltd. v. NEPC India Ltd. held that an order under Section 11 of the Act was an “administrative order”. This would mean that no appeal could lie under Article 136(1) of the Constitution. This case showcases a clear reluctance on the part of the Court to impinge upon the autonomy enjoyed by the arbitration process and by holding that the function exercised by the Chief Justice was administrative, the Court essentially prohibited the Chief Justice from ruling upon questions such as the existence or validity of the arbitration agreement.
JURISDICTION FOR ENFORCEMENT OF ARBITRAL AWARD
The procedure for enforcement and execution of decrees in India is governed by the Code of Civil Procedure, 1908 while that of arbitral awards is governed by the Arbitration & Conciliation Act, 1996 (“Act”) as well as the CPC.
In the context of the foreign arbitral awards, India is a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 as well as the Geneva Convention on the Execution of Foreign Arbitral Awards, 1927 (“Geneva Convention”). According to which a party receives a binding award from any signatory of the conventions the award would be enforceable in India.
On the 15th of February 2018 in Sundaram Finance v Abdul Samad & Anr, a two-Judge Bench of the Hon’ble Supreme Court of India (Supreme Court) had erased the confusion regarding the jurisdiction for the enforcement of the arbitral award. The Supreme Court clearing this confusion mentioned that there any arbitral award under the Arbitration and Conciliation Act of 1996 can be enforced in any court of competent jurisdiction and that getting a transfer order from any court. It was indeed a landmark judgment that increased the scope and power of the arbitral tribunal.
APPEAL OF ARBITRAL AWARDS
There is no appeal of arbitral awards against the merits of the arbitral award. The Supreme Court has observed, “an arbitrator is a judge appointed by the parties and as such an award passed by him is not to be lightly interfered with.” In one of the recent judgments, the Supreme Court held that the consideration of the award being satisfactory cannot solely be decided on the basis of the whims of any person. This, however, does not make the arbitral award absolute and does not prevent from questioning the product of arbitration.
Certain remedies are ensured by law to ensure proper conduct of proceedings. In The repealed Arbitration and Conciliation act 1940 Act three remedies were mainly available against an arbitration award- modification, remission and setting aside which has been further mended by the Arbitration and Conciliation Act, 1996 and the remedies have been categorized into two parts. As far as the remedy for rectification of errors is concerned, it has been handed over to the parties and the Tribunal to decide.
The remedy for setting aside has been changed and now the award after the process of the Arbitration process will be returned back to the Tribunal for removal of defects. Section 34 provides certain grounds for setting aside the arbitral award which are incapacity, invalid agreement, inefficiency on the part of one of the parties, the incongruity in the subject of the arbitration proceeding and the arbitral award, discrepancy in the appointment of the arbitrators, opposing the public policy, etc.
The Amendment Act enumerates that an arbitral award will not be set aside by the court merely on an erroneous application of law or by re-appreciation of evidence. In the case of Brijendra Nath v. Mayank, the court held that where the parties have acted upon the arbitral award during the pendency of the application challenging its validity, it would amount to estoppel against attacking the award.
Each country has specific rules related to the setting aside or appealing of the arbitral award. However, there are three major principals for challenging the arbitral award.
- That the jurisdiction of the award does not let to a binding agreement between the parties
- The arbitral award can be challenged on the ground of substantive law, from the utilization of different guidelines to the mistake or misrepresentation caused during the process.
- That there was some defect of a procedure of any part of arbitration from the formation of the agreement to the creation of award or the selection of the arbitrator.
 Union of India vs. m/s. East Coast Boat Builders and Engineers Ltd. 76 (1998) DLT 958
 The Arbitration and Conciliation Act,1996.
 Konkan Railway Corporation Ltd. vs. Rani Construction Pvt. Ltd. (2002)2 SCC 388
 Sundaram Finance Ltd. v. NEPC India Ltd., 1999 (2) SCC 479 (India Sup. Ct.
 Bhatia, Gautam. “Section 11 of the Arbitration and Conciliation Act of 1996: The Jurisprudence of the Supreme Court and Implications for the Jurisdiction of an Arbitral Tribunal.” National Law School of India Review, vol. 21, no. 2, 2009, pp. 65–75. JSTOR, www.jstor.org/stable/44283804.
 AIR 1994 SC 2562