In arbitration, Composition of arbitral tribunal such as number of arbitrator, appointment, challenging appointment, arbitrator procedure and of the termination of Arbitration, Section 10 to 15 of Arbitration and conciliation act.
Number of arbitrator section 10 arbitration and conciliation act, Composition of arbitral tribunal
- (1) The parties are free to determine the number of arbitrators, provided that such number shall not be an even number,
- (2) Failing the determination referred to in sub-section (1), the arbitral tribunal shall consist of a sole arbitrator.
Appointment of arbitrators 11 arbitration and conciliation act, Composition of arbitral tribunal
Appointment according to agreed procedure, where the procedure for appointment has been agreed upon between the parties.
The court function is only to implement the agreed procedure, the court can not appoint independent arbitrator at the first instance.
- 1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties,
- 2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators.
Presiding arbitrator, Composition of arbitral tribunal
- 3) Failing any agreement referred to in sub-section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator.
BSNL v. Subash chand kanchan 2006, appointment of arbitrator
In this case BSNL v. Subash chand kanchan the Supreme Court similar view has been made in the decision of MP High Court, subash project & market ltd v. South eastern coal field ltd 1998, MP High Court, it held that where agreement lays down a procedure for appointment of arbitrator under section 11(2).
The CJ has merely to take necessary majors for enforcing the procedure laid down in the agreement under section 6, the CJ or his designate has not to make any appointment but to enforce, open the party to make the appointment in according to agreed procedure.
R.P sauza v. PWD (mumbai), appointment of arbitrator
In this case R.P sauza v. PWD(mumbai) the court held that the court has to appoint that independent arbitrator where the opposite party has failed to appoint the arbitrator.
Arbitrator Appointment by Chief Justice, Composition of arbitral tribunal
Konkan railway corp. v. Mehul construction, Arbitrator Appointment by Chief Justice
In this case Konkan railway corp. v. Mehul construction ,the expression CJ is used to insure that the appointment is made by a person occupying a high Judicial office.
And through would naturally act with due care and contain, it is also to make certain that competent independent and impartial arbitrator is appointed.
The court may intervene in appointment of arbitrator, Composition of arbitral tribunal
- (4) If the appointment procedure in sub-section (3) applies and-
- (a) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or
- (b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment,
- the appointment shall be made, upon request of a party, by the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court.
Parties fail to agree sole arbitrator, Composition of arbitral tribunal
- (5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party.
- To so agree the appointment shall be made, upon request of a party, by the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court.
- Provided that if the parties fail to agree as to appointment of sole arbitrator then upon the request of party the appointment is to be made by CJ.
Institution designated by court, appointing an arbitrator
(8) The Supreme Court or, as the case may be, the High Court or the person or institution designated
by such Court, before appointing an arbitrator, shall seek a disclosure in writing from the prospective arbitrator in terms of sub-section (1) of section 12.
Qualifications required for arbitrator
- a) Any qualifications required for the arbitrator by the agreement of the parties.
- (b) The contents of the disclosure and other considerations as are likely to secure the appointment of an independent and impartial arbitrator.
International commercial arbitration, arbitrator Appointment
(9) In the case of appointment of sole or third arbitrator in an international commercial arbitration, the Supreme Court,
The person or institution designated by that Court may appoint an arbitrator of a nationality other than the nationalities of the parties where the parties belong to different nationalities.
Different High Courts or their designates, competent to Appointment arbitrator more than one request
(11) Where more than one request has been made under sub-section (4) or sub-section (5) or sub-section (6) to the Chief Justices of different High Courts or their designates.
4 different High Courts or their designates, the High Court or its designate to whom the request has been first made under the relevant sub-section shall alone be competent to decide on the request.
Application dispose by court, appointment of an arbitrator
(13) An application made under this section for appointment of an arbitrator or arbitrators shall be disposed of by the Supreme Court or the High Court or the person or institution designated by such Court.
As the case may be, as expeditiously as possible and an endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party.
Fees of the arbitral tribunal and the manner of its payment to the arbitral tribunal
(14) For the purpose of determination of the fees of the arbitral tribunal and the manner of its payment to the arbitral tribunal, the High Court may frame such rules as may be necessary, after taking into consideration the rates specified in the Fourth Schedule.
Fourth Schedule arbitration and conciliation act
| Sum in dispute | Model fee |
| Up to Rs. 5,00,000 | Rs. 45,000 |
| Above Rs. 5,00,000 and up to Rs. 20,00,000 | Rs. 45,000 plus 3.5 per cent. of the claim amount over and above Rs. 5,00,000 |
| Above Rs. 20,00,000 and up to Rs. 1,00,00,000 | Rs. 97,500 plus 3 per cent. of the claim amount over and above Rs. 20,00,000 |
| Above Rs. 1,00,00,000 and up to Rs. 10,00,00,000 | Rs. 3,37,500 plus 1 per cent. of the claim amount and above Rs. 1,00,00,000 |
| Above Rs. 10,00,00,000 and up to Rs. 20,00,00,000 | Rs. 12,37,500 plus 0.75 per cent. of the claim amount over and above Rs. 1,00,00,000 |
Above Rs. 20,00,00,000 | Rs. 19,87,500 plus 0. 5 per cent. of the claim amount over and above Rs. 20,00,00,000 with a ceiling of Rs. 30,00,000 |
Note:- In the event, the arbitral tribunal is a sole arbitrator, he shall be entitled to an additional amount of twenty-five percent on the fee payable as per the table set out above.
Explanation- For the removal of doubts, it is hereby clarified that this sub-section shall not apply to international commercial arbitration and in arbitrations (other than international commercial arbitration) in case where parties have agreed for determination of fees as per the rules of an arbitral institution.
Section 11A Power of Central Government to amend Fourth Schedule, arbitration and conciliation act
1) If the Central Government Government is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, amend the Fourth Schedule and there upon the Fourth Schedule shall be deemed to have been amended accordingly.
Notification proposed Houses of Parliament, to Amendment 4th schedule, arbitration and conciliation act
(2) A copy of every notification proposed to be issued under sub-section (1), shall be laid in draft before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions.
And if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in disapproving the issue of the notification.
Or both Houses agree in making any modification in the notification, the notification shall not be issued or, as the case may be, shall be issued only in such modified form as may be agreed upon by the both Houses of Parliament.
Grounds for challenge Section 12 arbitration and conciliation act
(1) When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances:-
- (a) such as the existence either direct or indirect, of any past or present relationship with or
- interest in any of the parties or in relation to the subject-matter in dispute, whether financial, business, professional or other kind, which is likely to give rise to justifiable doubts as to his independence or impartiality.
- (b) which are likely to affect his ability to devote sufficient time to the arbitration and in particular his ability to complete the entire arbitration within a period of twelve months.
Explanation 1:- The grounds stated in the Fifth Schedule shall guide in determining whether circumstances exist which give rise to justifiable doubts as to the independence or impartiality of an arbitrator.
Explanation 2.—The disclosure shall be made by such person in the form specified in the Sixth Schedule.
An arbitrator may be challenged, arbitration and conciliation act
- Section 12(3) (a) circumstances exist that give rise to justifiable doubts as to his independence or impartiality, or
- (b) he does not possess the qualifications agreed to by the parties.
- Section 12(4) A party may challenge an arbitrator appointed by him, only for reasons of which he becomes aware after the appointment has been made.
Seventh Schedule shall be ineligible to be appointed as an arbitrator
- (5) Notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the Seventh Schedule of arbitration and conciliation act shall be ineligible to be appointed as an arbitrator.
- Provided that parties may, subsequent to disputes having arisen between them, waive the applicability of this sub-section by an express agreement in writing.
Challenge procedure Section 13 arbitration and conciliation act
- 1) Subject to sub-section (4), the parties are free to agree on a procedure for challenging an arbitrator.
Time Period to challenge an arbitrator procedure, arbitration and conciliation act
- 2) Failing any agreement referred to in sub-section (1), a party who intends to challenge an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in sub-section (3) of section 12, send a written statement of the reasons for the challenge to the arbitral tribunal.
Arbitral tribunal shall decide on the challenge of arbitrator procedure
- (3) Unless the arbitrator challenged under sub-section (2) withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.
- (4) If a challenge under any procedure agreed upon by the parties or under the procedure under sub-section (2) is not successful, the arbitral tribunal shall continue the arbitral proceedings and make an arbitral award.
Setting aside an arbitral award
- (5) Where an arbitral award is made under sub-section (4), the party challenging the arbitrator may make an application for setting aside such an arbitral award in accordance with section 34.
- (6) Where an arbitral award is set aside on an application made under sub-section (5), the Court may decide as to whether the arbitrator who is challenged is entitled to any fees.
Failure or impossibility to act Section 14 arbitration and conciliation act
(1) The mandate of an arbitrator shall terminate and he shall be substituted by another arbitrator, if-
- (a) he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay and,
- (b) he withdraws from his office or the parties agree to the termination of his mandate.
Court to decide on the termination
- (2) If a controversy remains concerning any of the grounds referred to in clause (a) of sub-section (1), a party may, unless otherwise agreed by the parties, apply to the Court to decide on the termination of the mandate.
Arbitrator withdraws
- (3) If, under this section or sub-section (3) of section 13, an arbitrator withdraws from his office or a party agrees to the termination of the mandate of an arbitrator, it shall not imply acceptance of the validity of any ground referred to in this section or sub-section (3) of section 12.
Termination of mandate and substitution of arbitration Section 15 arbitration and conciliation act
1) In addition to the circumstances
referred to in section 13 or section 14, the mandate of an arbitrator shall terminate-
- a) where he withdraws from office for any reason or
- (b) by or pursuant to agreement of the parties.
Substitute arbitrator, terminates
(2) Where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced.
(3) Unless otherwise agreed by the parties, where an arbitrator is replaced under sub-section (2), any hearings previously held may be repeated at the discretion of the arbitral tribunal.
Agreed by the parties, termination
(4) Unless otherwise agreed by the parties, an order or ruling of the arbitral tribunal made prior to the replacement of an arbitrator under this section shall not be invalid solely because there has been a change in the composition of the arbitral tribunal.