CONDUCT OF ARBITRAL PROCEEDINGS

The arbitration process has become a powerful tool to bring business disputes to an end. The Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) was enacted to consolidate, codify and amend the laws pertaining to domestic as well as international commercial arbitration and enforcement of foreign awards. The Act also codified laws related to conciliation and connected matters. The Act ensures party autonomy and confidentiality in the matters of arbitration.

Section 18 to 27 of the Arbitration and Conciliation Act, 1996 mentioned the rule regarding the conduct of arbitral proceedings. Before studying these rules, it shall be proper to state that the Arbitral proceedings require all parties to be treated with equality and they should be given reasonable opportunity to present their case. ( Section 18) This means that the Arbitral are bound to act independently and without bias. They are required to be not guilty of misconduct. They are also not required to act during the absence of the parties. Actually this is the basic formula of independent and impartial proceedings.

Appointment of arbitrators

One of the advantages of arbitration is that it allows parties to an arbitration agreement to submit a dispute to judges of their own choice. Under Section 10 of the Act, the parties are free to determine any odd number of arbitrators. In cases where the parties fail to determine the number of arbitrators, the arbitral tribunal shall consist of a sole arbitrator.

Under Section 11 of the Act, the parties are free to agree on a procedure for the appointment of arbitrator or arbitrators. But if the appointment of the arbitrator is not consensual, the arbitrator has no power to make a binding order or award and if he makes any award it will be a nullity.

The appointment of an arbitrator by a party is complete only on its communication to the other party.

Arbitration Proceedings

Section 21 of the Act provides the rules which govern the commencement of arbitral proceedings. It gives freedom to the parties to agree and determine when the arbitration proceeding can officially commence. But in the absence of such an agreement or where the parties fail to arrive at an agreement, the arbitral proceedings can commence when one party issues a notice to the other party, in writing, showing its intention to refer the dispute to arbitration.

So in respect of a particular dispute, the arbitral proceeding commences on the date on which a request for that dispute to be referred to arbitration is received by the other party. In order to determine the date of receipt, the provisions of Section 3 of the Act must be looked into.