Arbitration is the most accepted mode of settling commercial disputes both nationally and internationally. However, although arbitration is an expeditious way of settling disputes, the significance and importance of interim measures or orders founded on the principles of justice and equity cannot be questioned. Arbitration law grants powers to the national courts to order interim measures of protection in cases of urgency and where the situation so warrants. Even arbitral tribunals are empowered to issue interim orders which remain effective until a dispute has been finally determined by way of an arbitral award.
Arbitration Award is a determination on the merits by an arbitration tribunal in arbitration, and is analogous to the judgment in the Court of Law. Arbitration is particularly a means of dispute resolution in the commercial sphere. One of the reasons for doing so is that in international trade it is often easier to enforce a foreign arbitral award than to enforce a judgment of the Court. The closing decades of the twentieth century saw arbitration gain worldwide acceptance as the normal means of resolving commercial disputes. National laws on arbitration have been modernized on all continents. The Arbitration & Conciliation Act, 1996 is one such step by India to make the arbitration law more responsive to contemporary requirements, taking into account the Model law and Rules adopted by the United Nations Commission on International Trade Law (UNCITRAL). International treaties on arbitration have been signed or adhered to with impressive success. With the gradual removal of political and trade barriers and the rapid globalization of the world economy, new challenges have been created for arbitration institutions in response to the growing demand of parties for certainty and predictability, greater rapidity and flexibility as well as neutrality and efficacy in the resolution of disputes.
Arbitration is a legal process, which takes place outside the courts, but still results in a final and legally binding decision similar to a court judgment. Arbitration is a flexible method of dispute resolution, which can give a quick, inexpensive, confidential, fair and final solution to a dispute. It involves the determination of the dispute by one or more independent third parties rather than by a court. The third parties, called arbitrators, are appointed by or on behalf of the parties in dispute. The arbitration is conducted in accordance with the terms of the parties’ arbitration agreement, which is usually found in the provisions of a commercial contract between the parties.

For an arbitration to take place, the disputing parties must agree to take their dispute to arbitration. In practice, this agreement is often made before the dispute arises and is included as a clause in their commercial contract. In signing a contract with an arbitration clause, the parties are agreeing that their dispute will not be heard by a court but by a private individual or a panel of several private individuals. If parties have agreed to arbitration, they will generally have to go to arbitration rather than court as the courts will normally refuse to hear their case by staying it to force the reluctant party to honour their agreement to arbitrate.


A dispute can go to arbitration on the basis of an agreement between the disputing parties to submit the dispute to resolution by arbitration, where an arbitrator or a tribunal of arbitrators is appointed and has been given the legal authority to act by the parties.
The composition of the arbitral tribunal or the appointing of the sole arbitrator is a characteristic and crucial issue in arbitration. There can be little doubt that the composition of the arbitral tribunal will have a huge affect on the resolution of the dispute. Not only this, but the composition of the tribunal will have some important legal consequences related to the starting date for the arbitration and can have repercussions if a party applies to have the award set aside or enforced later on. These consequences will be explained in greater detail below but are mostly related to the validity of the appointments of the individuals who will act as arbitrators under the conditions set out in the Turkish International Arbitration Code.
The tenet of freedom of choice for the parties forms a basis for the Turkish International Arbitration Code and as far as possible this tenet is honoured at all stages of the arbitration process. As a result of this principal, the disputing parties can appoint an arbitrator by their direct decision, or alternatively indirectly by specifying in the arbitration agreement that a third party can be selected as the appointing authority.


According to the Section 18 of Arbitral Tribunal :

“Competence of the arbitral tribunal to rule on its jurisdiction”

The arbitral tribunal rules on its own jurisdiction, including any objections to the existence or validity of the arbitration agreement.
For the purpose of rulings pursuant to subsection 1, an arbitration agreement that forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not in itself entail that the arbitration agreement is null and void.
An objection that the arbitral tribunal does not have jurisdiction over the case or the claim shall be raised no later than the submission of the first statement of such party on the merits of the case. The arbitral tribunal may allow such an objection to be raised later if the party is not significantly to be reproached for not raising the objection earlier. A party is not precluded from raising such an objection by the fact that he has participated in the appointment of the arbitral tribunal.
The arbitral tribunal may rule on an objection to its jurisdiction either during the arbitral proceedings or in an award on the merits. If the arbitral tribunal rules during the arbitral proceedings that it has jurisdiction, any party may, within one month after he received notice of that ruling, bring the issue before the courts, which shall determine the issue by way of interlocutory order. While such issue is pending before the courts, the arbitral tribunal may continue the arbitral proceedings and make an award.


The doctrine of competence – competence states that the Arbitral Tribunal has the jurisdiction to determine the scope and ambit of its own powers, i.e., the tribunal has the “competence” to decide its own “competence”.

Importance of the doctrine of competence: According to Section 16 of the 1996 Act contains the doctrine of competence- competence. The importance of Section 16 in the scheme of the 1996 Act is paramount as it demonstrates the faith that is reposed in the authority of the Arbitral Tribunal. The legislature by way of Section 16 has placed abundant trust and reliance on the ability of the Arbitral Tribunal to do justice even where their decisions may affect their own

existence. Another reason why Section 16 has been introduced is to ensure brevity in proceedings allowing the tribunal to deal with jurisdictional questions, which are generally treated as preliminary issues. The principles contained in Section 16 is a central tenet and must be kept in mind for the purpose of the interpretation of any of the provisions of the 1996 Act. Section 16 shows that the legislature believes that the Arbitral Tribunal can be entrusted with issues that are as grave as their own jurisdiction.


The Place or ‘Seat’ of Arbitration (Possibility, and/or Sometimes Necessity of its Transfer) – Some Remarks on the Award in ICC Arbitration n° 10’623
The Arbitral Tribunal which has rendered the above award1(all of its members being highly reputed and experienced international arbitrators) had to address and overcome a number of problems and issues recurrent in international arbitration: e.g. the possibility to convene hearings at venues outside the place of arbitration, interference by the courts of the country of origin of a party, necessity or absence of necessity to stay the proceedings in case of anti-arbitration injunctions issued by the courts at the place of arbitration, and the interpretation of potentially conflicting arbitration clauses. The arbitrators, in their findings, recall a number of rules which can be considered as ‘general principles of international arbitration’ and will no doubt attract proper practitioners’ attention. The present note is limited to briefly revisiting some issues relating to the place of arbitration, which, unfortunately, seem to continue to haunt international arbitrations.


According to the Arbitration and Conciliation Act, 1996 ;

“Section 32 : Termination of proceedings.”

The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub-section (2).
The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where; the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognises a legitimate interest on his part in, obtaining a final settlement of the dispute, the parties agree on the termination of the proceedings, or
the arbitral tribunal finds that the continuation of the proceedings has for any other mason become unnecessary or impossible.
Subject to section 33 and sub-section (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings.


In India, arbitration proceedings are regulated as per the Arbitration and Conciliation Act of 1996 (as amended in the year 2015). The Act provides that when the time for making an application to set aside the arbitral award has expired, or when such application has been made and rejected, the award would be enforced under the Code of Civil Procedure, 1908 as if it were a decree of the civil court. The Act also declares that all arbitral awards shall be final and binding on the parties and those claiming under them.
The important point to be noted is that the award becomes enforceable under the Act only if the time for making an application to the court to set aside the award has expired, or if such application has been made and rejected by the court. Therefore, it is
important to examine the provision regarding application to set aside the award i.e. Section 34 of the Act.
Section 34 provides that no application can be made after the expiry of 3 months from the date of receipt of award by the party, subject to a 30-day relief period that may be granted by the court at its discretion. The Act also provides that the application may be made by a party only if he furnishes proof of the grounds specified in Section 34(2)(a) of the Act or if the court finds that the subject-matter of the dispute is not arbitrable or if the award was against the public policy of India.
At this juncture, it is crucial to examine how courts have interpreted the provision and the powers it has granted them, in order to see if the courts of India have taken a pro- arbitration stance or have engaged in unnecessary interference which renders the enforcement of such awards difficult.
Perhaps the most controversial decision on this aspect would be the Supreme Court’s decision in ONGC v. Saw Pipes Ltd. (Saw Pipes judgment), where the Court held that in addition to the grounds mentioned in Section 34, an award could also be challenged if it

contravenes the provisions of the Arbitration Act, or “any other substantive law governing the parties”. It also expanded the scope of “public policy” to state that an award could be set aside if it was “patently illegal”.
Firstly, the Court held that an arbitration agreement could not be avoided on the ground that the substantial contract was not concluded. Simply put, the Court held that the arbitration clause in a contract is severable from the underlying contract and held that the arbitration agreement and the substantive agreement formed two separate contracts, and that the invalidity of one would not affect the other. The Court held that the distinction between the two could be found in the Arbitration Act itself, making it clear that as long as there was a clear intention to arbitrate by both parties, arbitration proceedings could not be avoided on such grounds. In fact, whether the substantive contract was concluded or not in itself would have to be determined by the Arbitral Tribunal as per the Court.
Secondly, the Court held that when an arbitration agreement is seemingly unworkable, the courts must adopt a pragmatic, reasonable business person’s approach and seek to overcome the lacunae by constructing the agreement in such a manner that arbitration becomes workable. The Court held that it must play a supportive role in encouraging arbitration and not allow the proceedings to come to a halt. In case there existed an omission in the agreement that would be obvious to the bystander, the Court has the power to make good the omission to give force to the agreement.
Finally, the Court also relied upon its judgment in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services, Inc. and applied the “closest connection test” to decide on the seat of arbitration. In the case, even though the venue was decided as London, the Court held that since the law governing the arbitration agreement was agreed to be Indian law, the law governing the substantive contract and the conduct of the arbitration was also Indian, the Court held that the applicable law would be Indian law and hence, seat of arbitration would be India.
The authors feel that the approach taken by the Supreme Court in the instant case has been extremely pragmatic and is appreciable. The Court has clearly expressed the viewpoint that the court’s role must be one of minimal interference and support to arbitration so that the awards of Arbitral Tribunals may be enforced without any undue delay.
Though the Enercon judgment positions India as arbitration friendly, the authors feel that there is more to be done in emerging areas such as two-tier arbitrations and multiparty arbitrations and would discuss this in the coming chapters of this paper.

Further, it is pertinent to note the limitation period within which an arbitral award can be enforced:
Domestic awards.— Since arbitral awards are deemed as decrees for the purposes of enforcement and the Limitation Act, 1963 applies to arbitrations, the limitation period for enforcement of such an award is twelve years.
Foreign awards.— Various High Courts have given varying interpretations on the limitation period within which a party may enforce an award. However, the Supreme Court in Fuerst Day Lawson Ltd. v. Jindal Exports Ltd. , held that under the Act a foreign award is already stamped as the decree. It observed that,
“In one proceeding there may be different stages. In the first stage the court may have to decide about the enforceability of the award having regard to the requirement of the said provisions. Once the court decides that the foreign award is enforceable, it can proceed to take further effective steps for execution of the same. There arises no question of making foreign award a rule of court/decree again.”
Hence, the party having a foreign award has got twelve years time like that of a decree- holder.


Purushottam S/o Tulsiram Badwaik v. Anil & Ors. Civil Appeal No.4664 of 2018 :

The Bench of Justice Arun Mishra and Justice UU Lalit of the Supreme Court observed that even if an arbitration agreement entered into after the 1996 Act had come into force were to make a reference to the applicable provisions of those under Indian Arbitration Act or 1940 Act, such stipulation would be of no consequence and the matter must be governed under the provisions of 1996 Act. Further, the Court held that an incorrect reference or recital regarding the applicability of the 1940 Act would not render the entire arbitration agreement invalid.
Mother Boon Foods Pvt Ltd v. Mindscape One Marketing Pvt Ltd O.M.P. (COMM) 136/2017
The Court held that an arbitration agreement, as per the 1996 Act, has to be in writing. Since the arbitration clause -which is a part of the contract – was in writing, the same could not have been superseded by any oral demand or agreement.

M/S Emaar MGF Land Limited & Anr. v. Aftab Singh, 2018 SCC Online SC 2771

The Supreme Court upheld the NCDRC’s decision whereby it ruled that an Arbitration Clause in a Buyer’s Agreement cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act.


The decision of the Arbitral tribunal rejecting a plea regarding its jurisdiction is not appealable but its decision regarding acceptance of plea about having no jurisdiction is appealable. And the invalidity of the main contract no longer affects the arbitration clause which is considered from the main contract. And when the Chief Justice has already looked into the question of jurisdiction the Arbitral Tribunal cannot look into its jurisdiction once again.

Mr. Tathastu Parashar
Mr. Tathastu Parashar

Winner in the 1st edition of the article writing competition, “लेख-SHASTRA”.

Posted in: Uncategorised

Leave a Reply

Your email address will not be published.