Conduct of Arbitral Proceeding: Section 20 of Arbitration and Conciliation Act | Law Optional Notes for UPSC PDF Download

Conduct of Arbitral Proceeding: Section 20 of Arbitration and Conciliation Act

• The Arbitration and Conciliation Act contains provisions regarding the conduct of arbitral proceedings.
• Section 20 of the Arbitration and Conciliation Act specifically deals with the conduct of arbitral proceedings.

Key Points

• Appointment of Arbitrator: The Act outlines the procedure for appointing an arbitrator, who plays a crucial role in resolving disputes outside the court.
• Arbitral Tribunal: Once the arbitrator is appointed, they, along with the parties involved, form the arbitral tribunal to oversee the arbitration process.
• Place of Arbitration: The Act specifies the importance of determining the place where the arbitration proceedings will take place.
• Language of Arbitration: It is essential to establish the language in which the arbitration proceedings will be conducted for clear communication and understanding.

Additional Details

• Arbitration Agreement: Before proceeding with arbitration, parties must have a valid arbitration agreement in place, outlining the terms and conditions of the process.
• Procedural Rules: The Act provides guidelines on the procedural rules that govern the conduct of arbitral proceedings, ensuring a fair and efficient process.

Place of Arbitration

• The parties involved in the arbitration process have the freedom to mutually decide on the location where the arbitration proceedings will take place.
• If there is no prior agreement on the arbitration location, the arbitral tribunal will select the place of arbitration by considering various factors such as the circumstances of the case and the convenience of the parties.
• Even in the absence of a specific agreement or tribunal decision, the arbitral tribunal has the authority to convene at any suitable location for discussions among its members, witness hearings, expert consultations, or document inspections.

Explanation

• When parties enter into an arbitration agreement, they can specify the place where the arbitration will occur. For instance, they may choose a neutral location convenient for both parties to resolve their disputes.
• If there is no prior agreement on the arbitration venue, the arbitral tribunal, comprising the arbitrators, will decide on a suitable location. This decision will be based on factors such as fairness, practicality, and the comfort of all involved parties.
• Additionally, the arbitral tribunal has the flexibility to conduct its proceedings in various locations as necessary. For example, they may choose to hold hearings in different cities based on where witnesses or evidence are located.

Convenient Venue

• Arbitrators cannot unilaterally choose the arbitration venue without considering the parties' convenience.
• When the arbitration agreement does not specify the venue selection power of the arbitrator, the chosen venue should take into account various factors like party and witness locations, subject matter, and convenience.
• If an arbitral tribunal is formed without a designated seat, the tribunal itself can choose the seat.

Parties' Choice for Venue

• The section grants the involved parties the authority to select the venue of their preference, a privilege not extended to the arbitral tribunal.
• In cases where consensus on the venue is not reached by the parties, the matter is referred to the arbitral tribunal for determination.
• The arbitral tribunal, when deciding on the location for arbitration meetings, considers various factors, including the convenience of the parties and the circumstances of the case.
• Even if there is an initial agreement on the venue between the parties, the arbitral tribunal possesses broad discretion in determining the timing and location of different parts of the proceedings.
• This discretion allows the tribunal to decide on meeting locations for discussions, witness hearings, expert testimonies, or document inspections, provided there is a written agreement between the parties.
• The arbitral tribunal's flexibility is subject to the condition that they are not restricted from convening at a location other than the one initially designated.

Interim Award for Venue

Arbitration Venue Agreement

• When parties can’t agree on the arbitration venue, they can delegate this decision to a person or an institution as per Section 2 (6) and 20. 
• Example: If two parties can’t decide on the arbitration location, they may authorize a committee to make the decision for them.

Role of the Joint Committee

• The Joint Committee, acting as an institution, can determine the venue of arbitration in place of the parties.
• Example: In the case of Sunshine Chemicals Industry vs. Oriental Carbons and Chemicals Ltd. (2001), the committee's decision on the arbitration venue was not considered an award but a procedural choice.

Legal Character of Committee Decision

• The Supreme Court clarified that the Committee's decision on the venue does not involve adjudication of legal rights but is a procedural mechanism.
• Example: The Committee's role is limited to deciding the venue and does not extend to resolving legal disputes between the parties.

Nature of Committee Decision

• The decision made by the Committee regarding the arbitration venue is not classified as an arbitration award or an interim award. 
• Example: Such decisions are specific to determining the logistics of the arbitration process and do not hold the same weight as formal legal judgments.

Venue According to Legal Provisions

• Arbitration laws, such as the Arbitration Act of 1996, designate the venue of arbitration as central to the entire arbitration process. The courts in the jurisdiction where arbitration occurs are responsible for overseeing and regulating the arbitration proceedings.
• In a scenario where arbitration is conducted in a city like Delhi, even if neither party is based in Delhi, and the arbitration tribunal in Delhi issues an interim order under section 17 of the Act, any appeals regarding such orders would be heard by the courts in Delhi.