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Whether The Arbitrator Is Bound By The Terms Of The Contract?
Whether the Arbitrator is bound by the terms of the Contract?
The first code of ethics was created by the International Bar Association ("IBA") in 1987, and it was known as the IBA Rules. The IBA Code is made up of the IBA and its rules ("Code"). This code is optional, but if it is incorporated into an arbitration agreement, it must be followed by every arbitrator and party involved. In India, a major decision reaffirmed something similar. The courts ruled that, under section 28 of the Arbitration Act of 1996 ("Act"), the arbitrator must determine the case in accordance with the contract's provisions. In 2015, an amendment to section 28(3) was introduced, which made adherence to contract conditions a part and parcel of an arbitrator's duties, as opposed to the unamended section, which made such compliance mandatory. The topic of powers emerged as a result of this change, and it was argued whether an arbitrator was given more or less authority as a result of the alteration. Also, contrary of its name, the IBA does not pass members and has no authority to penalize them for non-compliance on any grounds.
In the case of Mahanagar Telephone Nigam Limited v. M/s Haryana Telecom Ltd[1]. The Court held that as per Section 28 of the Arbitration Act, 1996[2] the Arbitrator is bound to decide as per the terms of the Contract.The International Bar Association (“IBA”) developed the code of ethics for the first time in 1987 and it was called the IBA Rules. The IBA and its rules together make up for the IBA Code (“Code”). This code is voluntary and required to be followed by every arbitrator and party applicable to it if incorporated into an arbitration agreement. An Indian landmark judgment reiterated something on similar terms. The courts held that as per section 28 of the Arbitration Act, 1996 (“Act”), the arbitrator is bound to resolve as per the terms of thecontract. In 2015, an amendment was brought to section 28(3) which sort of made adherence of the terms of the contract a part and parcel of an arbitrator’s duty, unlike the unamended section which forced such adherence mandatorily. With this amendment, the question of powers arose which debated whether or not an arbitrator by the virtue of such amendment was gifted more or less on the power line. Also, the IBA regardless of its name does not pass members and cannot reprimand them on any ground for non-compliance.
[1] [Judgment dated March 14, 2020 in OMP 1113/2012]
[2] https://www.indiacode.nic.in/bitstream/123456789/1978/1/AAA1996__26.pdf
(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 Foundation shall not be responsible for any errors caused due to human error or otherwise.)
- The first code of ethics was created by the International Bar Association
- In India, a major decision reaffirmed something similar
- The courts ruled that, under section 28 of the Arbitration Act
