Arbitration is one form of dispute resolution outside the courts. It is cheaper, quicker, and flexible. The role that an arbitrator has to play before the pronouncement of a decision should be fair. Arbitrators have numerous powers and duties that guide them in the effective settlement of disputes. This article encompasses the meaning of an arbitrator, their powers and duties, and several significant legal provisions under the Arbitration and Conciliation Act, 1996.
Meaning of an Arbitrator
An arbitrator is a neutral person appointed by the parties in a dispute. Their role is to hear both sides and give a final decision called an arbitral award. The arbitrator acts like a judge but follows a more flexible process. Arbitrators are often chosen in commercial disputes, construction cases, and contract disagreements. The Arbitration and Conciliation Act, 1996, governs their powers and responsibilities in India.
Powers of an Arbitrator
Section 16 to Section 19 provides arbitrators with various powers to ensure smooth dispute resolution. Below are the key powers:
1. Power to Decide Jurisdiction (Section 16)
Jurisdiction is the capacity of the arbitrator to hear a case. In case a party questions whether the arbitrator has the authority, they must give their ruling on the jurisdiction prior.
2. Power to Determine Procedure (Section 19)
An arbitrator is not bound by strict court rules. They can decide their own procedure for conducting arbitration. They can also decide what evidence is relevant.
3. Power to Grant Interim Relief (Section 17)
Arbitrators can grant temporary relief before making the final award. This includes:
Stopping one party from selling assets.
Ordering a party to provide security for a claim.
Maintaining the status quo until the final decision.
4. Power to Summon Witnesses and Evidence (Section 27)
Arbitrators can summon witnesses and demand documents if need be. They can request court assistance if the party fails to comply with the order.
5. Power to Make the Final Decision (Sections 28 & 31)
An arbitrator must make his decision based on:
The law agreed upon by the parties
General principles of fairness if no law is specified
Industry customs and trade practices where applicable.
Once they give the final award, it is legally binding.
6. Power to Correct Mistakes in Award (Section 33)
In case of any calculation mistakes or typographical errors in an award, the arbitrator can correct them. This correction must be requested by a party within 30 days.
7. Power to Enforce the Award (Section 36)
The effect of an arbitral award is that of a court judgment. If a party declines to comply with the award, the other party can apply for enforcement through a court.
8. Power to Proceed Ex-Parte
When one party fails to attend arbitration hearings after receiving proper notice, an arbitrator can continue and make his decision in his absence.
Duties of an Arbitrator
An arbitrator has a duty to carry out his role fairly and responsibly. The two key duties are:
1. Duty to Act Impartially: An arbitrator has to act fairly to both parties. They should not have bias towards any of the parties. Bias or conflict of interest may result in setting aside the award under Section 12 & 13.
2. Duty to Follow the Agreed Procedure: Arbitration shall be conducted by the arbitrator in terms agreed to by the parties. Their decisions can be contested if they don’t adhere to agreed rules.
3. Duty to Conduct Proceedings Efficiently: It is the responsibility of an arbitrator not to postpone the process of arbitration. They need to conduct timely hearings, adjourn only when necessary, and deliver the award in the time frame prescribed by law.
4. Duty to Give a Reasoned Award (Section 31): An arbitrator must provide reasons for their decision unless the parties agree otherwise. A rational award provides consistency and equity.
5. Duty to Maintain Confidentiality (Section 42A): Arbitrator must keep all arbitration details confidential. They should not disclose any information unless required by law.
6. Duty to Avoid Unnecessary Costs: Arbitration should be cost-effective. The arbitrator must not prolong proceedings or allow excessive legal costs to burden the parties.
7. Duty to Assist in Settlement (Section 30): Arbitrator should promote amicable settlement of disputes. If the parties agree, the arbitrator may issue an award recording a settlement rather than a final decision.
8. Duty to Communicate Clearly: The arbitrator needs to communicate clearly with both sides about hearing dates, procedure rules, and deadlines.
In a nutshell,
Arbitrators are responsible for resolving disputes fairly and efficiently. Their powers include granting interim relief, summoning witnesses, and enforcing the awards. But they also must act impartially, follow the law and keep its deliberations confidential. By understanding the powers and duties of an arbitrator, parties can proceed with confidence in arbitration. It also enables transparency and quick resolution of conflicts
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Power of Arbitrator: FAQs
Q1. Can an arbitrator’s decision be challenged in court?
Yes, under Section 34, an arbitral award can be challenged on limited grounds, such as fraud, bias, or exceeding jurisdiction.
Q2. Is an arbitrator’s decision final?
Yes, unless challenged under Section 34. Otherwise, the award is binding on both parties.
Q3. Can an arbitrator grant interim relief?
Yes, under Section 17, arbitrators can grant temporary relief to protect parties before making the final decision.
Q4. What happens when one party fails to participate in arbitration?
The arbitrator may proceed ex-parte and determine the case by the available evidence.
Q5. Can an arbitrator revise its decision?
Under Section 33, an arbitrator can rectify minor mistakes but cannot vary the essential decision after making a final award.
