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Challenging the Competency of Arbitral Tribunals
The purpose of alternative dispute resolution has always been to limit judicial intervention as far as it can go to provide a platform for parties to settle their disputes without undertaking the pressure of being in a strictly legal setting, where they are free to include more humane aspects to come to a mutual understanding and agreement. While the base foundation of alternative dispute resolution revolves around this principle, it cannot be denied that instances of incompetent arbitral awards or insufficient roles being played by the mediators/conciliators do take place.
Especially in the case of arbitration, since the arbitral award is legally binding post the final approval and signature of the arbitrators of the dispute themselves, the possibility of dissatisfaction by the parties to such a case does exist and the Arbitration and Conciliation Act, 1996 makes provisions for such aggrieved parties to question the competency of such an arbitral tribunal.
Section 16- Answering Questions of Arbitral Jurisdiction
Following Article 16 of the UNCITRAL Model, S.16 of the Arbitration and Conciliation Act, 1996 also makes a provision dealing with the competence of an arbitral tribunal vis-à-vis the jurisdiction it has.
Critical features of s.16-
- This section allows an arbitral tribunal to rule on its jurisdiction and any questions that arise during the proceedings regarding the validity of an arbitral agreement.
- It instructs that raising such a question regarding the jurisdiction cannot be extended later than the ‘statement of defence’ during an arbitral proceeding.
- If there has been a delay in conveying such an issue or opposing view to the arbitral jurisdiction, the tribunal may permit such an admission based on the tribunal's discretion.
- If such a question of competence and jurisdiction of the tribunal has been approved and worked out, or if the arbitral tribunal finds no merit in such opposition, then the arbitral proceedings are continued to pass an award.
- The most significant feature of this provision is that despite such a power being given to the arbitral tribunal of deicing whether the questioning of its competency/jurisdiction, the recourse of challenging the same still rests with the party who is aggrieved due to the same, in the case of which, a court can be approached under s.34 of the Act.
Takeaway from S.16
While provision reinstates the power to the aggrieved party for challenging the competency of the tribunal, it also allows an angle that increases the judiciary's interference into alternative dispute resolution mechanisms. While this seems a little counterproductive to the principle of ADR, the primary purpose of such a provision is to ensure that recourse is available to parties who believe they are either being wronged or demand a different and expedited set of individuals to arbitrate over their dispute, by extension, ensuring the delivery of justice.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre shall not be responsible for any errors caused due to human error or otherwise.
- Background Information
- Section 16- Answering Questions of Arbitral Jurisdiction
- Takeaway from s.16
