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JUDICIAL INTERVENTION IN ARBITRATION PROCEEDINGS

Author: Shiwanjali Tripathi, V year of B.B.A.,LL.B. from New Law College, Bharati Vidyapeeth University, Pune.


INTRODUCTION

Arbitration law is based on the notion of removing a dispute from the usual courts and allowing the parties to choose a domestic body to resolve it. It should come as no surprise that arbitration, unlike other administrative adjudications, does not take place entirely on its own, but does come under court jurisdiction at some point. With the goal of resolving disputes quickly, it is critical that arbitration cases be determined only on the basis of affidavits and other relevant papers, rather than on the basis of oral evidence.


SCOPE OF JUDICIAL INTERVENTION

Despite the fact that arbitration is a distinct method for resolving a dispute, the courts have the authority to intervene in the proceedings under the Arbitration and Conciliation Act, 1996. The Act aimed to divert cases from the traditional route of litigation to arbitration, so legislators included provisions to limit time-consuming judicial intervention and allowing speedy resolution. There are three types of court intervention in arbitration:-

  • Section 5 of the 1996 Act (prior to proceedings)

  • Section 9 of the 1996 Act- During the course of the proceedings

  • Following the processes, in terms of arbitral awards


JUDICIAL INTERVENTION BEFORE ARBITRATION PROCEEDINGS

Section 5 of the Arbitration and Conciliation Act of 1996 specifies the scope of court action. This part is strikingly similar to Article 5 of the UNCITRAL Model Law. It clearly intended for Section 5 of the Act to limit the involvement of the Court in arbitration. In order to fulfill the twin goals of expedited justice and cost-effective conflict settlement, parties are allowed to control court's intervention. It eliminates the prospect of judicial intervention. The wording "no judicial power" is broad enough, and the Act additionally assures that there is no judicial discretion involved by employing the verb "must interfere". The duty of the judiciary is purely administrative, not judicial.


JUDICIAL INTERVENTION DURING PROCEEDINGS

The act's section 9 deals with the court's ability to give interim measures. Section 17 gives arbitral tribunals the authority to make orders in accordance with the section. While Section 9 has the same authority as the Judiciary, the two sections serve fundamentally different purposes. The power granted in Section 9 is mandatory and not subject to the autonomy of the parties in dispute. Section 9 application is not a civil matter. The court's role is confined to ensuring that an arbitral panel's rights to adjudication are not violated. One of the issues with Section 17 is the lack of an appropriate legislative framework in the Act itself for the execution of interim orders of the arbitral tribunal.


JUDICIAL INTERVENTION AFTER PROCEEDINGS

The application for setting aside the arbitral award is described in Section 34 of the Act. It states that judicial involvement is prohibited, but it also explains the exceptions to this rule, such as when an arbitral award can be set aside by a court. Section 34(2)(a) states that the courts may set aside an arbitral judgement if:


The arbitration agreement is not legitimate under the law to which the parties to the agreement were subjected, and the party was incapacitated, the arbitrator's appointment or the proceedings were not properly announced, the case was not one that could be referred to arbitration, or the award contained a decision that was outside the scope of the arbitration, the tribunal's composition did not follow the parties' agreement, the arbitration agreement is not valid under the law to which it was subjected by the parties to the agreement etc.


The courts may also set aside an award under Section 34(2)(b) of the Act if the subject matter of the dispute cannot be resolved through arbitration or the arbitral award is contrary to Indian public policy. The grounds set forth in section 34(2)(a) are so narrow that the courts are unable to intervene in arbitral judgements. The only confusing phrase in this section is the phrase "Indian public policy." It leaves itself open to interpretation, resulting in court involvement.


IS JUDICIAL INTERVENTION IN ARBITRATION JUSTIFIED ?

If a disagreement emerges, the court will refer the parties to an arbitration panel or bench before intervening. The government and related agencies are simply turned into antagonistic parties. The center's arbitrators are government employees who may be biased in favour of one party or the other for a variety of reasons. Politics, power, and money are all tools that can be used to purchase justice.


Arbitration proceedings are more informal, and arbitrators are often inexperienced with them. The majority of Arbitrators appointed by the Courts under Section 11 of the Act are retired judges who rely on long-standing procedures and submissions, resulting in a lengthy and grueling process akin to that of court proceedings. As a result, arbitration entails issues, oral and documentary evidence, chief and cross-examination, and other procedures. Hence, Court intervention to preserve a party's right, in administering justice is JUSTIFIED.


CONCLUSION

Therefore, under the circumstances, judicial action is necessary. However, judicial intrusion dilutes arbitration's basic goal and objective, necessitating a middle-ground approach, which can be achieved with a sufficient number of competent, trained, and honest arbitrators and well-equipped arbitral institutions which is important for the future success of arbitration in India. If there is a rising perception that choosing arbitration over litigation reduces the chances of achieving high-quality justice, arbitration's future is bleak.