Introduction
The Arbitration and Conciliation Act, 1996, serves as the cornerstone for arbitration in India. One of its primary objectives is to minimize judicial intervention, thereby making arbitration a more efficient and autonomous method of dispute resolution. This chapter will explore the nuanced roles that courts play in arbitration, as well as the impact of various amendments to the Act.
Minimization of Judicial Intervention
The 1996 Act was a transformative moment in Indian arbitration law. It aimed to limit the role of courts in the arbitral process, allowing them to intervene only in specific circumstances as outlined in the Act itself. For instance, Section 9 of the Act empowers courts to grant interim measures before or during arbitral proceedings, but otherwise, the Act discourages judicial involvement.
The Supreme Court in BALCO v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 5521, emphasized the significance of the 1996 Act in bringing Indian arbitration law in line with international standards and minimizing judicial interference.
Section-wise Role of Courts
The Act is meticulous in delineating the roles and powers of courts in different sections:
- Under Section 9, courts have the authority to grant interim measures to protect the subject matter of the arbitration.
- Sections 13(5) and (6) allow courts to adjudicate on challenges against arbitrators, ensuring that the arbitral tribunal remains impartial and independent.
- Section 14(2) empowers courts to decide on the termination of an arbitrator’s mandate, thereby safeguarding the integrity of the arbitration process.
- Section 17 ensures that interim orders passed by an arbitrator are enforceable as if they were court orders, thereby reinforcing the authority of the arbitral tribunal.
- Section 27 permits courts to assist arbitrators in taking evidence, ensuring that the arbitration process is as thorough as possible.
- Section 29A gives courts the discretion to extend the time limit for making an award, thereby providing flexibility in the arbitration process.
- Section 34 allows courts to set aside an arbitral award on limited grounds such as incapacity of a party, invalidity of arbitration agreement, lack of proper notice, excess of jurisdiction, violation of natural justice, contravention of public policy or patent illegality.
- Section 37 provides for appeals before courts from certain orders such as granting or refusing interim measures, appointing or refusing to appoint an arbitrator, setting aside or refusing to set aside an arbitral award. However, no second appeal shall lie from such orders except to the Supreme Court on a question of law.
Jurisdictional Aspects
The jurisdiction of Indian courts is intricately linked to the ‘seat’ of arbitration. According to Section 2(2) and Section 20 of the Act, courts at the seat have the exclusive jurisdiction to supervise the arbitration proceedings. This principle has been reaffirmed in various judgments and serves as a cornerstone of arbitration law in India.
In BGS SGS Soma JV v. NHPC Ltd., (2020) 4 SCC 2342, the Supreme Court held that when an arbitration clause specifies a particular place as “the seat” or “the venue” or “the place” of arbitration, it implies that such place has been chosen as the juridical seat by mutual consent. Therefore, only courts at such place would have jurisdiction over arbitral matters.
Conclusion about Judicial Intervention
The Arbitration and Conciliation Act, 1996, and its subsequent amendments have carefully crafted the scope and extent of judicial intervention in arbitration. While the Act aims to minimize such intervention, it also provides for necessary judicial oversight to ensure the integrity and effectiveness of the arbitral process.
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