Arbitration in India is governed by the Arbitration and Conciliation Act, 1996, which provides a comprehensive legal framework for the resolution of disputes outside the traditional court system. The Act empowers arbitrators with various powers to ensure a fair and efficient resolution of disputes between parties. This article explores the key powers granted to arbitrators under Indian law.

1. Power to Determine Jurisdiction

Under Section 16 of the Act, an arbitrator has the authority to rule on their own jurisdiction, including objections regarding the existence or validity of the arbitration agreement. This is known as the "competence-competence" principle, which allows arbitrators to decide whether they have the authority to adjudicate a particular dispute. (Kvaerner Cementation India Ltd. v. Bajranglal Agarwal, (2012) 5 SCC 214)

2. Power to Grant Interim Measures

Section 17 of the Act empowers the arbitrator to grant interim measures of protection, similar to those granted by courts under Section 9. These measures may include:

• Preserving the subject matter of the dispute.
• Securing the amount in dispute.
• Granting injunctions or orders to prevent the dissipation of assets.

The arbitrator's interim orders are enforceable as if they were orders of a court. (Sundaram Finance Ltd. v. NEPC India Ltd., (1999) 2 SCC 479)

3. Power to Conduct Proceedings

Arbitrators have the discretion to determine the procedure to be followed in the arbitration proceedings, subject to the agreement between the parties. This includes:

• Setting timelines for submissions and hearings.
• Adopting procedural rules, including the taking of evidence and witness examination.
• Holding hearings at a venue convenient to the parties.

4. Power to Take Evidence

Under Section 19, arbitrators are not bound by the Indian Evidence Act, 1872, allowing them to adopt a flexible approach in admitting and evaluating evidence. They can:

• Examine witnesses under oath.
• Order the production of documents.
• Seek expert opinions if necessary. (Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2001) 6 SCC 356)

5. Power to Appoint Experts

Section 26 grants arbitrators the authority to appoint one or more experts to report on specific issues in the dispute. The expert may be required to participate in hearings and be cross-examined by the parties.

6. Power to Make Awards

The arbitrator has the ultimate power to render an arbitral award, which is binding on the parties. The award may include:

• Monetary compensation.
• Specific performance of contractual obligations.
• Apportionment of costs and interest.

An award can be challenged only on limited grounds as prescribed under Section 34 of the Act. (Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705)

7. Power to Decide on Costs

Section 31A empowers arbitrators to determine the allocation of costs incurred during the arbitration process. These costs may include:

• Arbitrators' fees.
• Legal expenses.
• Administrative charges.

8. Power to Facilitate Settlement

Arbitrators are encouraged to facilitate settlements at any stage of the proceedings. If parties agree to a settlement, the arbitrator can record it in the form of a consent award, which has the same status as a final arbitral award. (Haresh Dayaram Thakur v. State of Maharashtra, (2000) 6 SCC 179)

9. Power to Correct and Interpret Awards

Under Section 33, arbitrators have the power to correct clerical or typographical errors in the award and to provide an interpretation of the award if requested by the parties.

10. Power to Proceed Ex Parte

If one of the parties fails to participate in the proceedings without sufficient cause, the arbitrator can proceed ex parte and render a decision based on the available evidence. (Choudhary Brothers v. Indian Railway Construction Co. Ltd., (2002) 10 SCC 308)

Conclusion

Arbitrators in India enjoy wide-ranging powers to ensure the efficient and fair resolution of disputes. Their authority to determine jurisdiction, grant interim reliefs, manage proceedings, and deliver enforceable awards makes arbitration a viable alternative to traditional litigation. However, these powers are subject to judicial oversight to prevent any miscarriage of justice.

Share this News