.jpg)
Sukhman Kapoor,
UILS, Panjab University Chandigarh
Abstract
Arbitration in the recent years have emerged as a better second option for the dispute resolution in the field of law. The fruitful benefits provided by the arbitration have shifted the trend from “See you in Court” to “ Let’s sit and settle down”. There are various new methods and techniques which with the evolution of time have settled in our judicial system. The paper aims to critical examine and analyze those techniques and judicial intervention in Indian arbitration, focusing on how the balance between arbitral autonomy and judicial oversight has been struck. It will also explore the historical context related to our topic of discussion , legislative development in the subject, key judicial decisions passed in various related cases, and their implication for effectiveness and efficiency of arbitration as a evolving dispute resolution mechanism in India. The study delves into the statutory provisions of the Arbitration and Conciliation Act,1996, identifying sections which permits judicial intervention. By juxtaposing case that uphold arbitral autonomy with those demonstrating excessive judicial interference. The paper argues for a balanced approach that preserves the integrity and efficacy of arbitration while safeguarding against potential injustices. Recommendation for the balance are offered, contributing to the broader discourse on the evolution and future of arbitration in India.
Introduction
Arbitration has established itself as a cornerstone of alternative dispute resolution, offering streamlined and efficient means to resolve disputes without protracted timelines often associated with the traditional court litigation. If we talk about India here arbitration landscape has undergone significant transformation over a decades. The major transformation which could be seen in the arbitration came with The Arbitration and Conciliation Act, 1996 which was a landmark in the evolution of Alternative dispute resolution in our nation. This legislation marked a shift towards greater autonomy for parties involved in arbitration, minimizing judicial intervention to ensure a swift and cost effective resolution of disputes. However, the relationship between judiciary and arbitration has been complex and contentious, as court navigates the thin line between the oversight and undue interference.
When we taught about Judicial intervention in the arbitration it can serve as a double edged sword. As it is always said that there are two sides of the coin, same way there are two sides from which situation can be viewed. On one hand, it can act as a safeguard against the potential misuse of the arbitral process, ensuring that process remains fair and just mechanism. On the hand, this can prove out to undermine the autonomy of the arbitral tribunal, leading to delays and increasing cost of dispute resolution , thereby defeating the very purpose of the arbitration.
Therefore, we need to understand that Judicial intervention is crucial for maintaining the integrity of the arbitration but it is also very important to maintain the autonomy of the arbitration so that it can serve it’s purpose freely and fairly without any unnecessary interference. For that it is important to follow a balanced approach between both this balance requires a nuanced understanding of legal framework and judicial attitudes, and practical implication of intervention.
HISTORICAL EVOLUTION OF ARBITRATION IN INDIA
Arbitration has been deep rooted in India, with the traditional panchayat and community dispute resolution served in early form as a arbitration. This system operated with minimal external interference and greater autonomy. The enactment of the Arbitration Act,1940 marked and significant step however this act was criticized for allowing excessive judicial intervention. Followed up by the major milestone i.e. The Arbitration and conciliation Act, 1996 based on the UNCITRAL Model Law and the act has been amended twice once in 2015 and then 2019 to reduce the judicial intervention in arbitration.
LEGISLATIVE FRAMEWORK
The most recent and landmark legislative act in the field of arbitration is The Arbitration and conciliation Act, 1996. This an act which is made to combine all the related provision and amendment in the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and for matters connected therewith or incidental thereto[1].The act when through amendment in 2015 and then in 2019 . The amendment proposed with the intent to make act more autonomous and ensure that there is limited intervention of the judiciary.
While looking in the scope of judicial intervention it is must to go through the act of 1996 and amendments initiated in 2015 and 2019, aimed at lowering down the burden of courts along with more speedy resolution of the dispute because it is beneficial to developing economy to have quick solution to such kind of disputes and besiegement. Thus, with this two dimensional aim of lowering burden of courts and planned manner of speedy resolution of commercial disputes the Act of 1996 was enacted. Thus, legislators made sure to include provisions that could limit judicial interference which would be a time-consuming process that would inhibit the speedy disposition that Alternate Dispute Resolution offers.[2]
In the above mentioned act section 5 of the act provides a validation to the above cited lines.
Section 5 of the act states about the extent of the judicial intervention it states that judiciary is left with no authority to intervene in the matter of the arbitration accept provided in the act regarding required intervention.
This restricted interference is not set with the aim of completely denying judicial intervention, rather legislature had a intention here to have a limited scope of judicial interference which ensures that arbitration can perform better and efficiently which can lessen the burden of the judiciary.
JUDICIALINTERVENTION : SCOPE AND LIMITS
Usage of term "judicial authority" in section 5 of the Act of 1996 implies that legislature intended minimal intervention on limited grounds. Scope of said word "judicial authority" is much wider than word "court" as same would include authorities/agencies conferred with the judicial powers of the Government. The intervention of the judiciary is limited to the provided direction and proper prescription by the stated law in the act[3]. There are only several matter in the act under which judicial intervention can be initiated[4].
There are specific terms for the same used in two sections 5 and 8 i.e. "Judicial authority" instead of "court", so scope of said term is utmost important to be understood. In order to understand the term " Judicial authority" the term "judicial" must be pondered first. In Regina john M'Evoy v Dublin corporation[5]it was observed that "the term "judicial does not necessarily means acts of a judge or legal tribunal sitting for the determination of matters of law.
In the judgement of Bharat Aluminium Co. v. Kaiser Technical Services[6] the role of the judiciary and it’s intervention was limited by the court in the matter related to arbitration and judicial applicability was to limited which is clearly mentioned in the Part I of the Indian Arbitration and conciliation Act, 1996.[7]
COURT INTERVENTION, WHEN AN ARBITRATION AGREEMENT EXISTS
It is generally observed that judiciary and courts does not intervene in the matter of the arbitration , arbitral award and other related issues. As the parties had expressed their consent to the process so it is accepted to maintain the privacy of the party to mediation and ensure that Judiciary should not be infringing over their right to privacy and commercial disputes for resolution in the arbitration should be solved without any other interference.
Their can be a scope of the intervention but that to only when the ends are not meet in the process of arbitration. The arbitrator can even be appointed on the request by the Supreme Court or High Court. Interim Measures (Section 9 and Section 17): Before or during arbitration proceedings, parties can seek interim measures from the courts (Section 9). [8]The interim measures can even be granted by the arbitral tribunal under section 17 of the act. Challenge to Arbitrator (Section 13 and Section 14).Courts can set aside an arbitral award on specific grounds such as incapacity of a party, invalidity of the arbitration agreement and many more issues which had arisen up due all the respective reasons and any act which is in conflict with public policy. Enforcement of Awards (Section 36).[9]
The following sections of the Arbitration and conciliation act, 1996 are the sign of the legislative actions even allowing only a limited scope of Judicial intervention in the arbitration which ensures both the maintains of the autonomy of the arbitration and also allows judiciary to keep a check on the power and functions of the arbitral tribunal and ensures a fair and efficient solution.
In the infamous case of Vidya Drolia and others v. Durga Trading Corporation[10] the doubt of the legal ratio expressed in Himangi Enterprises v. Kamaljeet Singh[11] that disputes governed by the provision of the TPA, 1882 are not arbitrable. The question was also raised regarding the ambit of jurisdiction of court at the referral stage when an objection of non- arbitrability is raised to an application under section 8 and 11 of the act. It was held in the case that under section 8 and 11 court has to refer a matter to arbitration , as the case may be, unless a party has established a prima facie case of non- existence of a valid arbitration agreement.
CHALLENGES AND CRITICISMS
The judicial intervention in the arbitration can undermines the benefits of arbitration, such as speed, cost effectiveness and finality. For example in the case Hall Street Associates, L.L.C. v. Mattel, Inc.[12] (2008) The U.S. Supreme Court ruled that the grounds for judicial review of arbitration awards are limited to those specified in the Federal Arbitration Act. However, judicial intervention still occurs, leading to increased litigation and delays.[13]
Courts may sometimes overreach in their intervention, undermining the principles of arbitration. This overreach can discourage parties from choosing arbitration as a dispute resolution mechanism.
Sutter v. Oxford Health Plans LLC [14](2013) - The U.S. Supreme Court upheld an arbitrator’s decision to allow class arbitration based on the arbitration agreement. Critics argue that judicial review of the arbitrator’s decision was too intrusive, potentially discouraging the use of arbitration.
Judicial intervention in arbitration can lead to increased costs, delays, and uncertainty, eroding the benefits of arbitration such as efficiency, cost-effectiveness, and finality. While some level of judicial oversight is necessary to ensure fairness and adherence to legal standards, excessive intervention can undermine the autonomy and advantages that arbitration offers.
RECOMMENDATION
Judges and arbitrators should undergo continuous training on the evolving principles of arbitration law to ensure informed and effective judicial intervention Establishing clearer guidelines for when judicial intervention is appropriate can help reduce unnecessary interference and provide more predictability for parties involved in arbitration. Encouraging the use of institutional arbitration, which offers structured processes and oversight, can further reduce the need for judicial intervention and enhance the overall effectiveness of arbitration in India. All these steps and initiatives if bought in our system can prove out to be a most effective way solving the number issues in our judicial system and it can change popular saying of “Justice delayed is denied” to “Justice neither delayed nor denied”.
CONCLUSION
The evaluation and effectiveness of the Judicial intervention in Indian arbitration reveal a nuanced balance between maintaining party autonomy and ensuring adequate oversight. While arbitration is intended to swift, cost effective, and autonomous process, judicial intervention plays a crucial role in the safeguarding fairness, legality and public policy interests. It has evolved to strike a balance between ensuring the integrity of the arbitration process and respecting the party autonomy as well. We do understand that the role of judiciary is indispensable in addressing issues of justice, fairness and legality but it is also very important to maintain a balance between the judicial intervention in the various other matters such as one related to the arbitration process. To preserve the benefits and the core motivate behind the adoption of the arbitration as a technique of the alternative dispute resolution which if not provided with freedom and autonomy will not be able to function effectively. Here one point to make a mark of is that we have give a due consideration to the necessity of the judicial oversight to ensure the adherence to legal standards but on other side this can not be even ignored that excessive intervention of judiciary can undermine the autonomy and advantages that arbitration offers.
The ongoing efforts to refine and improve the arbitration framework in India are promising steps towards a more efficient and trustworthy arbitration system, ultimately fostering a favorable environment for dispute resolution. With the number amendment in the arbitration it is also ensured that judiciary unnecessary intervention can not be allowed anymore. Therefore, the scope of arbitration is widened and more opportunity for the citizens in India to settle their dispute can be availed which solves the economic discrimination prevailed in society since ages. Now, justice is accessible at minimum cost as well and within short span of time. The Arbitration with all these steps have evolved and developed and gained the trust of public.
REFERENCES:
[1] India Code https://www.indiacode.nic.in [ Last accessed on July 2,2024]
[2] Sneha Mahawar, Scope of Judicial Interpretation in Arbitration, I pleaders blog,[ Last accessed on July 3, 2024] https://blog.ipleaders.in
[3] Niharika Chauhan, Judicial intervention in arbitration, Manupatra [ Last accessed on July 3, 2024] https://articles.manupatra.com
[4] Jain Sankalp, Judicial Intervention in Arbitration, SSRN: [ Last accessed on July 3, 2024] https://ssrn.com/
[5] Regina john M'Evoy v Dublin corporation, 8 CLR 330 (E) (1909)
[6] Bharat Aluminium Co. v. Kaiser Technical Services 2010 1 SCC 72
[7] Poorvi Bhatti, Judicial Intervention in Arbitral process in the light of BALCO judgement [ Last accessed on July 3, 2024] https://viamediationcentre.org
[8] Vidhya Drolia and ors. v. Durga Trading Corporation 2019 SCC Online SC 358
[9] Himangi Enterprises v. Kamaljeet Singh(2017) 10 SCC 706
[10] Hall Street Associates, LL.C v. Mattel, Inc. ,552 U.S. 576 (2008)
[11] Sutter v. Oxford Health Plans LLC 569 U.S. 564 (2013)
[12] Law4u https://law4u.in [Last accessed on July 4, 2024]
[1] India Code https://www.indiacode.nic.in [ Last accessed on July 2,2024]
[2] Sneha Mahawar, Scope of Judicial Interpretation in Arbitration, I pleaders blog, https://blog.ipleaders.in /scope-judicial-interpretation-arbitration/ [ Last accessed on June 22, 2024]
[3] Judicial intervention in arbitration: https://articles.manupatra.com [ Last accessed on July 2,2024]
[4] Jain Sankalp, Judicial Intervention in Arbitration, SSRN: https://ssrn.com/ abstract=2801454 or http://dx.doi.org/ 10.2139/ssrn.280145 [ Last accessed on July 2, 2024]
[5] Regina john M'Evoy v Dublin corporation, 8 CLR 330 (E) (1909).
[6] Bharat Aluminium Co. v. Kaiser Technical Services 2010 1 SCC 72
[7] Judicial Intervention in Arbitral process https://viamediationcentre.org [Last accessed on July 3,2024]
[8] What is scope of Judicial intervention in arbitration available at : https://law4u.in [Last accessed on July 4, 2022]
[9] Supra
[10] Vidhya Drolia and ors. v. Durga Trading Corporation 2019 SCC Online SC 358
[11] Himangi Enterprises v. Kamaljeet Singh(2017) 10 SCC 706
[12] Hall Street Associates, LL.C v. Mattel, Inc. ,552 U.S. 576 (2008)
[13] Sneha Mahawar, Scope of Judicial Interpretation in Arbitration, I pleaders blog, https://blog.ipleaders.in /scope-judicial-interpretation-arbitration [Last accessed on July 4,2024]
[14] Sutter v. Oxford Health Plans LLC 569 U.S. 564 (2013)
Comments