The Indian arbitration procedures are safeguarded by the Arbitration and Conciliation Act, 2019. From the appointment of arbitrators to the conclusion and giving of the arbitral award, the Act umbrellas all the procedures. However, the lesser-known fact about the subject matter is that each state has its own instituted arbitral tribunal to oversee the arbitral disputes and proceedings that arise in that particular state. These tribunals may or may not be created in line with a State-formulated Act with provisions for the same. The main question of law arises when a State Tribunal acts in a manner that is not consistent with the umbrella legislation being the Arbitration and Conciliation Act, 2019 but does not comply with the State laws on arbitration.
Facts of the Case:
In the case of the State of Gujarat and Ors. v. Amber Builders, the respondent moved to the court to question the authority and jurisdiction of the Gujarat Public Works Contract Disputes Arbitration Tribunal (GPWCD Arbitral Tribunal), which was constituted under the Gujarat Act of 1992, in the passing of interim relief orders in arbitration cases and whether the Tribunal could do so, given the existence of s.17 of the Arbitration and Conciliation Act, 2019.
Ratio and Judgement:
The case was presented before the Supreme Court of India, wherein the Hon’ble judges made the following points:
- The Apex Court pointed out that the GPWCD Tribunal was constituted after establishing the Gujarat Act, which was laid down to adhere to public works contracts- which included any contract entered into by the state government another civilian.
- Following the process above, the undertaking of the GPWCD Tribunal of this particular was legitimate as the nature of the contract before the tribunal was of a public works contract. Hence the jurisdiction of the tribunal was upheld.
- The Court also stated that the Tribunal and the Act were both in line and were consistent with the provisions of the umbrella Act, meaning that the Tribunal was empowered to order interim measures, owing to the consistency of the State act with the Arbitration and Conciliation Act, 2019.
- The Hon’ble Court further commented on the judgement made in the Gangotri Enterprises Ltd. Case of arbitration to highlight a per incuriam judgement, which arose out of an older decision, which was later overruled.
It is safe to say that while there is no particular bar on the existence of State Tribunals, it must be noted that as long as they are in line with the provisions of the Arbitration and Conciliation Act, 2019, there is no prospect of clashes, in contrary to which, if a collision is observed, the rule of law as per the Act, will prevail, owing to its superior nature.
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