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Judicial Support of Arbitration

In addition to a country's local laws that guide the arbitration process, the courts of that jurisdiction play a pivotal role in exercising supervisory jurisdiction over arbitration and marking a "good seat" of an arbitral institution. While arbitration requires the autonomy of parties, judicial cooperation is vital if the law of arbitration is to be applied. Therefore, an effort must be made to identify those measures which, at pre, during and post arbitral proceedings, would establish a good balance between the judiciary and arbitration. This would involve court intervention in upholding / restraining arbitral awards, providing timely assistance to the court where necessary, and recognizing party autonomy in the arbitral process.

In the Indian context, court interference has been identified as one of the main reasons for arbitration delays. The award in 2011 in White Industries Vs. Republic of India is an example of this. In this case, an Australian corporation successfully sought compensation from the Indian government due to judicial delay equal to the value of the award. Two issues emerge from the above award: one is court interference, and two arbitration delays. As regards court interference, it is well debated and agreed that the judiciary should minimize its involvement in arbitration, as is done in various other jurisdictions. For example, in China the Supreme Court alone can intervene in matters of arbitration.

Another problem recognized as a cause of concern is the lack of clarity in Indian judicial rulings on arbitration and arbitration rulings. Judicial oversight is lacking in uniformity to the degree that, due to the federal system of states and central ties in India and each State having its own judiciary, the possibilities of individual courts for appeals under Section 34 of the Arbitration and Conciliation Act vary according to local conditions. This calls for action by judicial academies to be required to provide judges with instruction on how to deal with cases that are difficult and seeking to set aside arbitral awards and other related issues, in addition to ensuring that frequent transfer of judges holding such tribunals is avoided.

Strong reliance on retired judges as arbitrators was also seen as problematic. This has two impacts on the proceedings. One, it is assumed that with retired members of the judiciary as arbitrators, the case takes on a very lingering pace, with conventional hierarchy taking precedence in this matter. It is combined with the exorbitant fee paid by retired judges for arbitration which is seen to have a deterrent impact on the parties. It was proposed that setting a lump sum fee for the arbitrators rather than offering remuneration per hearing could be a solution to this issue. At present, the law on this issue is silent as to who can be appointed arbitrator, generally arbitrators are appointed from judicial background. The base of arbitration needs to be expanded not only from the judiciary, but also members of the bar should be involved in this area.

Another aspect of concern is the low support provided by civil courts when referring arbitration matters. Article 89 of the Code of Civil Procedure (CPC) provides: "Where it appears to the court that there are elements of a settlement that may be acceptable to the parties; The court shall formulate the terms of settlement and give them to the parties for their observations, and after receiving comments from the parties , the court may reformulate the terms of the settlement and refer the same for arbitration , conciliation, judicial settlement, including settlement through Lok Adalat”.

Judges need to be willing to refer civil disputes for arbitration on the one hand and to maintain arbitral awards / their enforcement Assistance from the Court during arbitration proceedings is required, in particular in order to enforce awards within a time frame and to initiate contempt proceedings in the event of failure to comply with interim arbitration orders. This would include that arbitral orders pursuant to section 17(2) may be treated as court orders and recourse may be made to the provisions of section 25(5) of the Act in conjunction with CPC 's order 39 Rule 2-A. There is definitely a need to make judges and customers aware of this.

Clearly, it is important to make the judges and the consumers of justice aware that the parties will be bound by arbitration, and that confidence in arbitrators must be implemented. The fact that in various countries in the world the case is referred to as a "action" inevitably means that the proceedings are pursued as an action resulting in delay. The court should only intervene in exceptional situations, and the definition of public policy should not be interpreted too broadly under section 34 of the Act. If an arbitration agreement is to be enforced, the courts must hold parties to their agreement to resolve issues through the agreed mode of dispute resolution – arbitration. In the United Kingdom, for example, there are only two narrow grounds for appealing the arbitration award: (a) whether the arbitration tribunal lacked authority and whether the very law of the arbitration tribunal was not legitimate, and (b) discrimination caused by significant misconduct, or a case in which the arbitrator went so wrong.

The judiciary and the arbitration proceedings should be mutually supportive roles-when the arbitrator decides a case's merits, the court should support the decision and its implementation. The courts should be broadly encouraging arbitration in the following ways: Where referral of the matter to arbitration is mandatory; Interim steps which take on significance in the absence of any provision for the appointment of emergency arbitrators and the position of the court become all the more important; in the case of an application under Section 11, reference may be made to specified institutions rather than to individual arbitrators. The court can provide for effective arbitration by setting up special / appointed benches.

  • Introduction
  • Issues emerged
  • Grounds of Arbitral award

BY : Sunaina Jain

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