Professional Documents
Culture Documents
ARBITRATION AGREEMENT
Project submitted by
MANOJ KUMAR.A
Semester VIII
Section-B
Introduction
The source of the jurisdiction of the arbitrator is the arbitration
clause. The arbitration clause is normally a part of the main contract
governing the parties. An arbitration agreement on the other hand
constitutes a separate agreement, distinct from the main contract, and is
binding on the parties. Parties can, even after the disputes have arisen,
agree to have their disputes referred to arbitration. The agreement,
however, must be in writing. Although contracts are required to be signed
by the parties, arbitration clause need not be signed by the parties. An
arbitration clause is binding if the parties have given their express or
implied or tacit consent to refer the disputes to arbitration. Subject to the
law of limitation, parties can refer their disputes to arbitration any time.
The Arbitrator while drafitng an Arbitration agreement takes into account
the several para meters for smooth fuctioning of the process. He plays a
key role in drafting and constructing the Arbitration agreement. The
following are essential attributes
Arbitration Agreement
An arbitration agreement is collateral to the substantial stipulation
of the contract. It is merely procedural and ancillary to the contract and it
is a mode of settling the disputes, though the agreement to do so is itself
subject to the discretion of the court. It is distinguishable from other
clauses in the contract.
Legal Advice
No part of this Guidance Note should be taken as legal advice. You
should seek legal advice when adopting the sample arbitration agreement
or clause so that they can be tailored to your particular scenario.
seek
assistance
from
experts
and
from
the
court.
that:
When the court has to form an opinion upon a point of foreign law or of
science or art, or in questions as to identity of handwriting or finger
impressions, the opinions upon that point of persons specially skilled in
such foreign law, science or art, or in questions as to identity of
handwriting or finger impressions are relevant facts. Such persons are
called experts.
To take the assistance from experts in solving an issue has been an old
tradition of the courts. In some matters, there is need of professional or
technical skill which the courts do not always possess. So in such cases
the opinion of experts becomes crucial. As for example, when the court
has to determine the cause of a ship-wreck or an air-crash, there may be
many technical causes behind it and, therefore, the court will need the
assistance
acquainted
such
cases1
parties
in
the
arbitration.
The decisions of the Supreme Court fail to take notice of Section 27 (5) of
the Arbitration and Conciliation Act, which expressly confers the power on
the arbitral tribunal to punish for its contempt.
Section 27 (5) specifies that Persons failing to attend in accordance with
such process, or making any other fault, or refusing to give their evidence,
or guilty of any contempt to the arbitral tribunal during the conduct of
arbitral proceedings, shall be subject to the like disadvantages, penalties
and punishments by order of the Court on the representation of the
arbitral tribunal as they would incur for the like offences is suits tried
before the Court.
Delhi High Court on interpretation of Section 27 (5) of Arbitration and
Conciliation Act
In a case titled Sri Krishan v. Anand, the Delhi High Court was seized of
the question whether a whether a petition under Section 9 of the
Arbitration and Conciliation Act would lie for the same interim measure
which has already been granted by the arbitral tribunal under Section 17.
The petitioner had sought to justify the petition under Section 9 on the
ground that orders passed by an arbitral tribunal are toothless and
unenforceable.
The Arbitrators have no Power:
Duties of Arbitrator
1. Duty to follow rules of natural justice:
An arbitrator must observe the rules of natural justice. He must act in a
judicial manner.
complete. He must give due notices and maintain proper record of the
proceedings. He ought not hear one side in the absence of the other side.
Any departure from the rules of natural justice is sure to vitiate the award.
2. Duty to act fairly to both parties:
The arbitrator must act fairly to both parties. He must not favor one party
more than another, or do anything for one party which he does not do for
another.
3. Duty not to delegate:
An arbitrator must not delegate his duties to a third person, or to a coarbitrator. Since one who has an authority to do an act for another, must
do it himself and cannot delegate to another. This rule is, however, subject
to the exception that an arbitrator may delegate to another the
performance of an act of ministerial character only.
4. Duty to decide according to law:
It is duty of an arbitrator, in the absence of a provision to the contrary, to
decide the question according to legal rights of the parties and not
according to what he may consider to be fair and reasonable under the
circumstances. If an arbitrator decides honestly, through wrongly, he is
not guilty of misconduct. But deliberate disregard of law in matters of
arbitration is misconduct.
5. Duty not to exceed his authority:
An arbitrator cannot go beyond the scope of his authority. He derives his
authority from the arbitration agreement. He cannot take upon himself an
authority which is not conferred by the submission. If the arbitrators go
beyond the scope of reference and decide a dispute not referred to them,
the award is bad.
American
Arbitration
Association
and
the
American
Bar
Arbitrators
should
comply
with
codes
that
are
Misconduct of an arbitrator
The following is an illustrative list of what has been held to
constitute misconduct in the context of arbitral proceedings:
Findings
The Arbitrator has to uphold the dignity by not making a bias towards any
party and must duly serve the duty imposed on him through the
agreement.
Only a competent arbitrator can be presided over and he must meet out
the requirements mentioned by the parties in the agreement.
The role and duties of the arbitrator and the parties relationship with the
arbitrator has to be clearly defined.
Likewise any government record which is kept confidential the arbitrator
must protect the confidentiality of the parties to the arbitration
agreement, which is a implied duty. If the arbitrator has to seek any
assistance with regard to the dispute, he can share the matter on the
basis.
Conclusion
The Arbitrator has the implied duty to follow the guidelines and rules
which is prescribed under the 1996 Act and has a duty to be bound to the
parties by whom he is appointed. To act fairly and impartially between the
parties, and to allow each party a reasonable opportunity to put their case
and to deal with the case of their opponent complying with the rules of
"natural justice" and to adopt procedures suitable to the circumstances of
the particular case, so as to provide a fair means for resolution of the
dispute. As the importance of the arbitration is to avoid the interference of
the court, so the arbitrator must be competent enough with that of the
court and the parties while choosing the arbitrator must ensure that he
act in accordance with the agreement between the parties.