Arbitrator in Indian Law

Meaning:

An Arbitrator is a neutral person chosen by disputing parties to settle disputes outside the court, under the Arbitration and Conciliation Act, 1996.
He/she performs a judicial function in a private capacity, ensuring fair hearing, evidence evaluation, and passing of an Arbitral Award that is binding on both parties.

Governing Law:

The Arbitration and Conciliation Act, 1996 (based on UNCITRAL Model Law)

Important Sections:

Role and Duties of an Arbitrator:

1. Conduct proceedings impartially
2. Hear both parties and consider evidence
3. Ensure confidentiality of proceedings
4. Apply contractual and legal principles
5. Deliver a reasoned award within prescribed time
6. Uphold natural justice and fairness

Landmark Judgments on Arbitrator in India

1. ONGC Ltd. v. Saw Pipes Ltd. (2003) 5 SCC 705

• Facts: Arbitrator awarded damages to contractor (Saw Pipes) despite contract prohibiting such payment.
• Principle: An arbitral award can be set aside if it is patently illegal or contrary to the terms of the contract or public policy.
• Significance: Expanded court’s power under Section 34 to review arbitral awards.

2. Bharat Aluminium Co. (BALCO) v. Kaiser Aluminium Technical Services Inc. (2012) 9 SCC 552

• Facts: Issue of whether Part I of the Arbitration Act applies to foreign-seated arbitrations.
• Principle: Part I of the Act does not apply to foreign-seated arbitrations.
• Significance: Clarified jurisdiction of Indian courts in international arbitration.

3. Perkins Eastman Architects DPC v. HSCC (India) Ltd. (2019) 9 SCC 377

• Facts: One party had the right to appoint a sole arbitrator (its own officer).
• Principle: A party interested in the dispute cannot unilaterally appoint the sole arbitrator.
• Significance: Reinforced the impartiality and independence of arbitrators.

4. TRF Ltd. v. Energo Engineering Projects Ltd. (2017) 8 SCC 377

• Facts: Managing Director of a company was named as the sole arbitrator.
• Principle: A person who is ineligible to be an arbitrator cannot nominate another arbitrator.
• Significance: Strengthened fairness in arbitration appointments.

5. Associate Builders v. DDA (2015) 3 SCC 49

• Facts: Dispute over the scope of interference by courts under Section 34.
• Principle: Courts can set aside an award only if it violates public policy, natural justice, or fundamental legal principles.
• Significance: Narrowed judicial interference; promoted autonomy of arbitral process.

Conclusion:

An Arbitrator acts as a private judge ensuring speedy, fair, and cost-effective justice outside the traditional court.
Indian courts have consistently balanced party autonomy with judicial oversight to maintain fairness and credibility in arbitration.

In Short Table: