Alternative Dispute Resolution

Module IV
JURISDICTION OF ARITRAL TRIBUNAL
Semester VI, Section C
Class Summary
Mr. S.K.Sinha
Faculty of Law, HNLU

Competence - Competence
Section 16 under Chapter IV of the Act, contains the provisions on
jurisdiction of arbitral tribunals.
On the issue of jurisdiction also the power to decide vests with the arbitral
tribunal only. Sections 12 and 13 pertain to challenge made to arbitrators on
the grounds of impartiality, independence and qualifications. Section 16 pertains
to the ruling on any objections on the jurisdiction of the arbitral tribunals.
Jurisdiction means the Competence of the tribunal to
entertain the dispute in reference. Even that question must be decided
by the arbitral tribunal itself.
Thus, under the provisions of section 16(1) of the Act, the arbitral tribunal may
rule on its own jurisdiction including ruling on any objections with respect to
the existence or validity of the arbitral agreement, and for the purpose
(a) An arbitration clause which forms part of a contract shall be treated as an
agreement independent of the other terms of the contract; and
(b) A decision by the arbitral tribunal that the contract is null and void shall not
entail ipso jure the invalidity of the arbitration clause.

Contd.
Thus even though an arbitration clause is made in an agreement it shall be
treated as if it is an independent agreement and due to that reason, even if the
arbitral tribunal holds that the contract before it is null and void, by virtue of
that decision the proceedings of the arbitral tribunal will not turn out to be null
and void. But for this clause, otherwise the arbitration clause also turns to be
null and void and the award thereof will be a nullity. If such a decision that an
agreement is null and void is made by a court, the impact is different. Courts
are constituted under special statutes in accordance with the Constitution of
India. But arbitral tribunals are constituted by agreement. So, if the arbitral
tribunal holds that the agreement is null and void, automatically the arbitration
clause will turn to be null and void, and in turn the award turns out to be a
nullity. So, the provisions of Section 16 (1) avert such a catastrophe and grant
validity to such arbitral awards.
Under Section 16 (2), a time frame is provided to challenge the jurisdiction.
Thus, a plea that the arbitral tribunal does not have jurisdiction shall be raised
not later than the submission of the statement of defence. Even though a party
raising such a plea has appointed or participated in the appointment of an
arbitrator, he shall not be precluded from raising such a plea merely on those
grounds.
Contd.
A plea that the arbitral tribunal is exceeding the scope of its authority shall be
raised as soon as the matter alleged to be beyond the scope of its authority is
raised during the arbitral proceedings [ Section 16(3)]. In the event of any delay
in raising such plea, the arbitral tribunal is empowered to condone the delay in
raising any plea either on the jurisdiction or on the question of exceeding the
scope of authority, if the delay is justified. The discretionary power to condone
the delay vests with the arbitral tribunal [Section 16(4)]. The arbitral tribunal is
further empowered to decide on the pleas referred under section 16(2) and 16(3)
i.e. the question of jurisdiction and exceeding the scope of authority. If the
arbitral tribunal takes a decision rejecting the plea it shall continue with the
arbitral proceedings and make an arbitral award [Section 16(5)]. When such an
award is delivered by the arbitral tribunal, the aggrieved party can make an
application for setting aside such an arbitral award in accordance with section
34 [Section 16(6)].
Thus, the challenge procedure to the arbitrator(s) and the questioning the
jurisdiction and scope of authority are different from each other, even though the
power of adjudication of both the issues vests with the arbitral tribunal itself.
Contd.
The arbitral tribunals are independent. Even though the arbitrators are appointed
in some cases under Section 11 of the Act, by the Chief Justice, still the
arbitrators shall act independently without the further supervision of any Court.
This is evident by reading the provisions under Section 5 of the Act, which
provides that; -
Notwithstanding anything contained in any other law for the time being in force, in
matters governed by this part, no judicial authority shall intervene except where
so provided in this part.
The intervence of judicial authority is on a limited sphere. Only under Sections
14, 34, 37 and 39 of the Act, the judicial authority can interfere with the
functioning and decisions of arbitral tribunals.
Interim Measures Ordered by Arbitral Tribunal
Section 17 of the Arbitration and Conciliation Act, 1996 provides for
granting of interim measures by arbitral tribunal.
Basically this power is subject to the agreement of the parties. This
provision aims at granting interim measures and also requiring a party to
provide appropriate security.
Under Section 17(1) of the Act, unless otherwise agreed by the parties,
the arbitral tribunal may, at the request of a party, order a party to take
any interim measure of protection as the arbitral tribunal may consider
necessary in respect of the subject-matter of the dispute. Under sub-
section (2) to Section 17, the arbitral tribunal may require a party to
provide appropriate security in connection with a measure ordered under
sub-Section (1) to Section 17.


Thank you for your time
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www.hnlu.ac.in