The matter of jurisdiction of arbitral tribunal corresponds to Art.16 of the UNCITRAL Model Law and also to Art.21 of the UNCITRAL Arbitration Rules. Under the English Arbitration Act, 1996 there are similar provisions to those of s.16 of the Arbitration and Conciliation Act, 1996.
Scope and Effect Of Jurisdiction Of Arbitral Tribunal
This is a new authority conferred on the arbitral tribunal to decide its own jurisdiction by itself. Though by the provisions of this section the autonomy or separability of the arbitration clause has been statutorily recognized, yet there ought to have been some limits on the power of the arbitral tribunal to rule on its own jurisdiction, such as “competence/competence”.
In Olympus Superstructures Pvt.Ltd v. Meena Vijay Khetan, it has been held that under the Arbitration and Conciliation Act, 1996, the arbitral tribunal is vested with power under s.16(1) to rule on its own jurisdiction including ruling on any objection with respect to the existence or validity of arbitration agreement.
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Competence of arbitral tribunal to decide its own jurisdiction
The arbitral tribunal may rule on its own jurisdiction like a court. It can also decide any objection with regard to the existence or validity of the arbitration agreement. In deciding these questions, the arbitral tribunal shall take into account the following factors:
a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and
b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.
The plea of lack of jurisdiction of the arbitral tribunal shall be raised not later than the submission of the statement of defense. A party may, however, raise such a plea even if he has appointed or participated in the appointment of an arbitrator. Similarly, a plea may be raised that the arbitral tribunal is exceeding the scope of its authority during the course of arbitral proceedings. The arbitral tribunal may raise any such plea even at a later stage if sufficient cause of the delay is shown to be justified. Where the arbitral tribunal takes a decision rejecting the plea, the arbitral tribunal shall continue with the arbitral proceedings and make an arbitral award. A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with s.34.
Court’s power to remove the impasse
It was held that when an arbitration for any reason becomes abortive, the Indian court has the power to take upon itself any burden which was placed by the arbitration agreement on the arbitrators in order to help the parties out of tier impasse.
Section 5 and 16(5) of the Arbitration and Conciliation Act, 1996
Section 5 of the Arbitration and Conciliation Act, 1996 categorically provides that no judicial authority shall intervene except where it is so provided in Part I of the Act. On perusal of the provisions of Part I of this Act it is apparent that nowhere it is provided that a court may intervene and entertain a petition challenging the order passed by the arbitral tribunal under s. 16(5) of this Act taking a decision that the arbitral tribunal has jurisdiction to proceed with the arbitration case.
The validity of s. 16(5) of the Act
The fact that the appropriate court can challenge the jurisdiction of the arbitrator only after passing an award by the arbitrator and not at any penultimate stage by the appropriate court is not a ground for contending that such an order under s.16(5) of the Act is not subject to judicial scrutiny.
Interim measures ordered by an arbitral tribunal
In the absence of any agreement to the contrary the tribunal may, at the request of a party, order a party to take any interim measure of protection in respect of the subject-matter of the dispute. It may also order a party to provide appropriate security in connection with a measure ordered as above.
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Arbitral tribunals just like the courts have their own jurisdiction in India that is statutorily recognized. In fact, as mentioned earlier, they have the power to decide their own jurisdiction. However, the power of the High Courts and the Supreme Court of India are more expansive than an arbitral tribunal.
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