This article has been written by Satya Vrat Pandey, 4th year / 8th Semester from Integral University
INTRODUCTION
Arbitration is a type of Alternate Dispute Resolution in which parties settle their disagreements without engaging the court system. Instead, an independent third party, called an arbitrator, makes the final decision on the dispute. Parties possess the freedom to jointly select an arbitrator, as well as in the event that they are unable to do so, they may not be allowed to designate a third person.
Subsequently, the judiciary have the authority to designate a neutral third party in such instances. The reason parties opt for arbitration instead of heading to judicial is due to the lengthy duration and high costs associated with court processes. In contrast, arbitration offers a faster process and is more cost-effective. Furthermore, security is a crucial benefit of arbitration compared to determination in the judicial system. The primary goal of arbitration is to facilitate prompt and mutually agreed-upon resolutions with minimal involvement from the courts. However, in order to accomplish this purpose, the courts must interfere in many aspects of the arbitration process, including the appointment of arbitrators and the possibility of appealing an arbitration verdict. In this approach paper, we will examine whether the judiciary’s involvement in arbitration is excessive or if it is successfully directing India towards becoming a state that is supportive of arbitration.
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Scope of judicial involvement
The continually evolving nature of arbitration in India renders the concept of judicial intervention in arbitration complex and multifaceted. The primary emphasis is on the permissible scope of the judiciary’s involvement in dispute resolution. To alleviate the burden on the court system and encourage arbitration as a dispute resolution method, the 1996 Act and subsequent amendments in 2015 and 2019 were adopted. Judicial interference is a time-consuming process that impedes the rapid resolution of alternative dispute resolutions, and the Act included provisions to restrict it. Intervention by the judiciary in arbitration proceedings is restricted to three categories: arbitral awards, intervention during proceedings, and interference prior to arbitration commencement. The objective of the article is to elucidate the extent of judicial intervention in arbitration proceedings, with a particular emphasis on the potential influence of judicial intervention on the resolution of disputes.
Involvement of Judiciary
The Arbitration & Conciliation Act, of 1996, regulates arbitration in India. Upon examining this statute, the involvement of the judiciary appears to be classified into three distinct stages-
Pre-arbitration phase-
Section 81 of the act pertains to the authority to direct the two sides to arbitration in cases wherein there is an existing arbitration mutual agreement. According to this section, if the party to an arbitration agreement submits a preliminary declaration regarding the core of the disagreement, the court may refer the disputants to arbitration, unless it determines that there is no enforceable settlement agreement on the face of it. Section 92 of the act pertains to interim relief granted by the presiding judge. It specifies that the judge has the authority to give interim remedies in line with section 36 of the act. Additionally, the judiciary has the ability to issue orders as it sees appropriate for the objective of any case facing it. Section 113 of the law grants the Supreme Court and High Court the authority to regularly choose arbitrators. This provision grants the Chief Justice or a designated individual the authority to select an arbitrator under specific circumstances. These circumstances include situations where the parties do not appoint an arbitrator within 30 days, two arbitrators fail to appoint a third arbitrator, a sole arbitrator and the parties cannot reach an agreement, or there is a failure to adhere to agreed-upon procedures regarding timing. The ultimate judgment will be made by the chief justice or their designated representative if several requests are presented. The chief judge has the power to execute suitable strategies for the subjects under their jurisdiction.
- During the Arbitration phase-
In the course of the arbitration process, Section 274 addresses the issue of courts providing aid in the collection of documentary proof. It specifies that arbitration panels have the authority to seek the help of the courts. Either side, with the consent of the arbitral panel, may request the aid of the judiciary in obtaining facts. Furthermore, in the Alka Chandewar v. Shamsul Ishar Khan case, it was determined that the courts had the authority to hold individuals in defiance for disobeying instructions issued by arbitration panels.
After Arbitration phase-
Section 346 empowers courts to get involved and invalidate a binding arbitration in the event of invalidity, invalid agreements concerning arbitration, insufficient details or selection of an arbitrator, award addresses that are beyond the purview of the contract, or disobedience with the agreement between the parties. If the award rendered by the tribunal is inconsistent with India’s national policy or if the dispute can’t be settled through arbitration, the decision may be invalidated by the courts. It is mandatory for the applicant to furnish enough knowledge or designate a third party.
Whether judicial Involvement in arbitration justified?
The arbitrator panel/bench is referred to by the court when necessary, as the Act of 1996 provides litigants the freedom of selecting arbitrators. Judicial Enforcement is included in the Act to assure the deliverance of equitable justice, control arbitrator actions, and protect the liberties of parties. Domestic arbitrations are particularly prevalent in India, resulting in adversarial action from government entities and employees. Hearings in arbitration are informal and frequently involve oral and official documentation, chief as well as cross-examination, and issues.
The absence of foreign elements and the absence of proficient party delegates frustrate the original intent and aim of arbitration law. The preponderance of arbitrators appointed by authorities under section 11 are former judges who rely on established procedures and recommendations. This leads to a protracted and taxing process that is reminiscent of judicial proceedings. The average individual will be stripped of justice and compelled to seek it in the court if the goals and intentions of the Act are not upheld or prosecuted by its adherents. Consequently, the courts’ intervention to protect a party’s rights, endeavour justice, and achieve the Act’s intention is justifiable.
CONCLUSION
A diverse and beneficial human resource in law and other disciplines will sustain India’s arbitral ecosystem. Reforms are a positive move toward enhancing India’s status as an arbitration hub. The judiciary’s involvement in arbitration is commendable, as demonstrated by arbitral-friendly judgments. Nevertheless, the primary concern is the establishment of a uniform code of conduct, infrastructure, and adjustments in arbitral institutions to establish India as an arbitration center. In India, judicial intervention is permissible; however, it undermines the fundamental objective of arbitration. This is a result of the government employees’ adaptation to difficult administrative and empirical requirements. A middle-ground approach is required, which involves fully prepared organizations and competent, trained, and honest arbitrators. The possible subsequent effectiveness of arbitration in India is contingent upon the availability of arbitrators who have been educated, competent, and honest. The likelihood of parties receiving high-quality justice is reduced when they opt for arbitration over litigation. A middle-ground strategy is therefore essential for the future of arbitration in India. The judiciary’s involvement in arbitration is neither excessive nor insufficient; however, it is essential to prioritize infrastructure development, raise awareness, while determining an integrated arbitration body.
REFERENCE
- AGARWALA, M. (n.d.). ROLE OF JUDICIARY IN ARBITRATION. Retrieved July 5, 2024, from https://ijcrt.org/papers/IJCRT2107483.pdf
- Role of courts in arbitration process | VIA Mediation Centre. (n.d.). Viamediationcentre.org. Retrieved July 5, 2024, from https://viamediationcentre.org/readnews/MTAz/Role-of-courts-in-arbitration-process#:~:text=Section%2011%20gives%20the%20courts
- Saravanan, A., & Subramanian, S. R. (2020). Role of domestic courts in the settlement of investor-state disputes : the Indian scenario. Springer.
- Tushar Kumar Biswas. (2014). Introduction to arbitration in India : the role of the judiciary. Wolters Kluwer.
- Verma, A. (2020, June 13). Role of Courts during Arbitration in India. IPleaders. https://blog.ipleaders.in/role-courts-arbitration-india/
