Section 13(4) of the Indian Arbitration and Conciliation Act, 1996 Principles of Natural Justice v. the Legislative Intent Vis-a-Vis the Judiciary Interpretations
Posted: 23 Mar 2009
Date Written: March 21, 2009
This article attempts to challenge the constitutional validity of Section 13(4) and Section 13(5) of the Arbitration and Conciliation Act, 1996, relying on the principle, 'nemo debet esse judex in propria causa', meaning, no one should be a judge in his own cause, which is one of the fundamental principles of natural justice. Under the present Act, when a party to the arbitration proceeding challenges and the appointment of an arbitrator, unless the arbitrator himself withdraws or the other party also joins in, such arbitral tribunal shall decide on the challenge made against it. The problem arises when such tribunal consists of sole arbitrator and his appointment is challenged, unless he himself withdraws or the other party joins in, such sole arbitrator shall be competent to decide upon such challenge made against him. Under this situation such arbitrator himself decides his own case. There is no provision in the Act, for a judicial review of the matter, in case the opposing party is dissatisfied by the decision of the arbitral tribunal. The only remedy available is that the award made by such a tribunal can be challenged before a court of law.
In a host of decisions the Honorable Supreme Court and the High Courts have denied that such a provision in the statute would amount to violation of principles of natural justice. They even went to the extent of saying that this provision is made in order to avoid unnecessary delays in an arbitration proceeding. But merely by such declarations and decisions, the Courts and also the legislature cannot undermine the fundamental principles of natural justice under the veil of expedited proceeding, if rule of law is to be accorded the highest respect.
This article asserts that such a statutory provision being violative of the principles of natural justice should be struck down as being unconstitutional and bad in law. The procedure has to be modified by providing an option for referring the matter to a Court of law or other institutional arbitration bodies consisting of unbiased judges and arbitrators respectively.
Keywords: Indian Arbitration and Conciliation Act, 1996, Princiles of Natural justice, Judicial interpretation
JEL Classification: K40
Suggested Citation: Suggested Citation