Substitution of Arbitrator

INTRODUCTION:

Since the commencement of The Arbitration and Conciliation Act, 1996, (hereinafter referred as 'Act') the first issue in practice of the same was with regard to the time limit to conclude the arbitration proceeding and pass an award as The Arbitration and Conciliation Act, 1996 did not contain any provision which talked about time period to conclude the arbitration proceeding.

The insertion of section 29A by The Arbitration and Conciliation (Amendment) Act, 2015 (3 of 2016) (w.r.e.f. 23-10-2015), the Act has introduced new law dealing with its primary objective to prescribe time limit to conclude the arbitral proceeding and pass an award within a period of 12 months from the date the arbitral tribunal enters upon the reference. However, despite this there is a question of its feasibility in order to achieve expedite, fair and just disposal of the dispute referred under arbitration act.

INTERPRETATION:

The foremost purpose behind the incorporation of section 29A in the act is to set a timeline for adjudication of a dispute referred to an arbitral tribunal by the aggrieved party. Thus, section 29A plays a vital role in order to achieve the goal of timely disposal of the dispute and also ensures the pronouncement of award without delay.

The section 29A lays down following features:

Time Limit: The time period to make an award shall be 12 months from the date the arbitral tribunal enters upon the reference(1) & (2).

Extension of the said period: In exceptional circumstances the parties by mutual consent, are at liberty to extend the said period for further period not exceeding six months(3).

Mandate of Termination of Arbitral Proceedings: The arbitral tribunal is duty bound to terminate the arbitration proceeding if the award is not made despite the extension of the period unless the court has, either prior to or after the expiry of the period, extended the period(4) which would be subject to terms and conditions as may be imposed by the court while extending the period.

Substitution of Arbitrator in Special Circumstances: The court shall have ample power to substitute the arbitrator/s while extending the period, though the arbitral proceedings shall continue form the stage already reached and the arbitrator so appointed shall be deemed to have received the said evidence and material filed before the earlier arbitrator(5).

OBSTACLES IN PRACTICAL EXERCISE:

Bare reading of the section 29A may be catchy in first instance however, the same is having troubles in practical approach as the same suffers different and various obstacles achieving its very primary objective of disposing the dispute within prescribed timeframe of 12 months.

Bias of unilaterally appointed Arbitrator: Though, the act has taken care of all the elements yet in certain cases the appointment of the arbitrator is unilateral, which results into bias towards the appointing party and the second party suffers from it. The favourable attitude of the so appointed arbitrator goes contrary to the 'principle of natural justice' and the aggrieved party is thus compelled to seek intervention of the court by exercising the section 29A(6) of the act.

Nature of Disputes involved and Procedural Challenges: Arbitration is distinct from litigation primarily because the parties are at liberty to appoint the Arbitrator with mutual consent depending upon the nature of the dispute involved they are referring to. There are different sort of arbitrations eg: Domestic Arbitration, International Arbitration, Foreign Arbitration, Ad-hoc Arbitration, Institutional Arbitration, Specialised Arbitration etc. 

Though, the section 29A lays down a timeframe for streamlining the arbitration yet, delay occurs in adjudication of a dispute due to its nature and compatibility with the prescribed procedure. Nature of dispute involved plays a decisive role in its adjudication and meeting the primary objective i.e. concluding the proceedings within a period of 12 months.

Broadly, with exception to criminal cases and matrimonial matters, almost every dispute can be resolved through arbitration. And while having wide scope of various dispute’s resolution, accommodation of every kind of dispute to meet the utmost objective of timely adjudication is threatened due to its nature and procedural challenges as agreed by the parties in the arbitration agreement. 

Pros and Cons of Section 29A of the Act:

The amendment in the act has given rise to its advantage and disadvantages:

Advantages

Timely Disposal: As the act has introduced timeframe for adjudication, the tribunal has the responsibility to dispose off the dispute referred within the prescribed time limit and bring the matter to an end which plays a motivated and remarkable role and thus time limit is the beauty of the section.

Transparency: Since the inception of the new section, the arbitration has been more transparent and informal to the parties unlike court proceedings where the  litigants hardly understand the procedure and complicated laws.

Disadvantages 

Increased court interference: The basic objective of The Arbitration and Conciliation Act, 1996 is to minimise the supervisory role of the courts in the arbitral process however, the insertion of section 29A after amendment is violating the objective as the section so inserted seeks frequent intervention (4)(5)(6)(7) of the courts. 

Promotes multiplicity of Litigation: Frequent intervention of the court in arbitral process leads to multiplicity of litigation and so commenced litigation deceives the basic and foremost objective of the act i.e. to minimise the litigation. In Indian scenario the pendency of cases is one of the major challenging tasks and such pendency in courts always effects efficiency of the court working. One unreasonable decision results into another litigation and thus, a simple litigation transforms into a never ending bubble.

Cost effective: Multiplicity of litigation always adds to the cost of the client.

CONCLUSION:

Law is always dynamic, timely improvement is the key of progress. Addition of section 29(A) in the act has the variety of positive possibilities in terms of achieving fair and just results. Ensuring the faith of the litigants is enlightened up by having supervision of the court over the arbitral process and thus the Arbitral Tribunal is duty bound and liable to pronounce impartial judgment. Aggrieved party through the section is empowered to approach the court for  its intervention at any stage as and when required. Lastly, the section though gives rise to certain complications, enables the parities to reach the proper justice.