Arbitration Act LLB noted in Q & A format

 Q. What do you mean by Arbitrator?

Q. What are the powers of arbitrator in the Arbitration  Act 1996. Can he be removed by any party or court?

Q. What are the Procedures to challenge the appointment  of arbitrator?

The term “arbitrator” is not defined in the Arbitration and Conciliation Act. But “arbitrator” is a  person who is appointed to determine differences and disputes between two or more parties by  their mutual consent.  

It is not enough that the parties appoint an arbitrator. The person who is so appointed must also  give his consent to act as an arbitrator. His appointment is not complete till he has accepted the  reference.  

He is an extra-judicial tribunal whose decision is binding on the parties. 

The arbitrator must be absolutely disinterested and impartial. Any interest of the arbitrator  either in one of the parties or in the subject-matter of reference unknown to either of the parties  or all the parties, as the case may be, is a disqualification for the arbitrator. Such disqualification  applies only in the case of a concealed interest. If the arbitrator has an interest in the subject 

matter of reference well-known to the parties before they sign the submission, the award is good  notwithstanding his own interest.  

The parties may appoint whomsoever they please to arbitrate on their dispute. Usually the parties  themselves appoint the arbitrator or arbitrators. In certain cases, the Court can appoint an  arbitrator or umpire.  

Appointment of the Arbitrator 

The appointment of arbitrator is given under Section 11 of the Act. The Act provides full freedom  to the parties to appoint an arbitrator as of any nationality unless agreed by the parties. However,  in the case of failure to appoint an arbitrator the parties can approach the court to make such an  appointment. In case of domestic arbitration, the Chief Justice of the High Court has the  authority to appoint an arbitrator to the parties and in case of International Commercial  Arbitration, the Chief Justice of India has the authority to make such appointment as in India,  the foreign disputes must be dealt by the highest judicial officers. 

In the case of Konkan Railway Corporation v. Rani Construction Pvt Ltd, 2002 the Supreme Court  held that the function of Chief Justice of India and his designates is to ensure the nomination of  an arbitrator who is independent, competent and impartial and settles the dispute between the  parties to the best of his knowledge.

Power and Duties of Arbitrator 

Power	Duties
Pass Interim Order	Order of Appointment
Decide the Process of Arbitration Proceedings	Timely adjudicate the matter
He has the power to Terminate the procedure	Act Judicially and Impartial
Appointing an Expert person	Encourage settlement of the matter
Seeks Court permission in taking evidence	Misconduct is not allowed
Correct the error in interpretation of the award	Pass the final award

Challenging an Arbitrator 

An arbitrator can be challenged under Section 12 of the Act in the following two circumstances  as 

• Grounds related to his independence or impartiality. 

• If he does not possess sufficient qualifications as to agreed by the parties. 

Section 13 talks about the challenge procedure and specifies the time limit under Section  13(2) as within 15 days after becoming aware of the constitution of the Arbitral Tribunal and any  other circumstance, the party can make a written statement specifying the reasons to the  Arbitral Tribunal and it is the Arbitral Tribunal and not the court who will decide on the matter  of challenge. 

Termination of an Arbitrator

The Act provides for the termination of an arbitrator under Section 14 of the Act and it can be  made in two circumstances which are: 

• If he fails to act without undue delay, & 

• If he is unable to perform his function due to De jure or De facto. 

In case of any controversy in regard to the situation, the parties can approach the court. 

Failure or impossibility to act as an arbitrator- The mandate of an arbitrator shall terminate,  if he becomes unable to perform his functions, or fails to act without undue delay due to some  other reasons. Mandate is also terminated, if he withdraws from his office, or the parties agree  to the termination of his mandate. 

Further, if there is a controversy about an arbitrator’s inability to function or occurrence of  undue delay, a party may seek intervention of the Court. 

However, withdrawal by arbitrator on his own or by agreement between the parties does not  constitute acceptance of the grounds of challenge. It is considered that the procedure for  challenge to the appointment of an arbitrator need not be a matter of agreement by parties.  

Substitution of Arbitrator [Section 15] In addition to the circumstances referred to in Section  13 or Section 14, the mandate of an arbitrator shall terminate— where he withdraws from office  for any reasons; or by or pursuant to agreement of the parties. Where the mandate of an  arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were  applicable to such appointment being replaced. Unless otherwise agreed by the parties, where an  arbitrator is replaced under Sub-section (2), any hearings previously held may be repeated at the  discretion of the arbitral tribunal. Unless otherwise agreed by the parties, an order or ruling of  the arbitral tribunal made prior to the replacement of an arbitrator under this Section shall not  be invalid solely because there has been a change in the composition of the arbitral tribunal.