There is no “inherent” jurisdiction in an arbitral tribunal. The arbitral tribunal takes its jurisdiction to decide a particular dispute from the agreement between the parties. An arbitral tribunal does not get its jurisdiction from any legislation. The scope of the tribunal’s jurisdiction will be determined by the scope of the arbitration agreement, subject only to any mandatory legislative enactments governing the arbitration agreement. Under the theory of party autonomy, if two parties have the legal right to settle a dispute between themselves, then they can give jurisdiction to a third party to settle it for them. A broadly drafted arbitration agreement gives an arbitral tribunal full power to decide matters not only sounding in contract, but also tort and equity, either using the law the parties have agreed to or, failing agreement, applying the rules of law appropriate to the circumstances. If appropriate, an arbitral tribunal has power to apply the Canadian Charter of Rights and Freedoms, and consider the validity of any issue in light of the Charter, including the power to declare any provision of a contract unconstitutional as between the parties. Any commercial remedy available at law, in equity, or capable of being granted by a court can be awarded by the tribunal if the agreement to arbitrate is broad enough.

Grounds for setting aside an arbitration award

An award approved in arbitration which takes place in India would be a “domestic award”. Additional, an award made in an international commercial arbitration held in a non-convention nation is also measured to be a “domestic award”.

The challenges to the arbitral awards are dealt with chapter VII under the head ‘Recourse against arbitral award’. Section 34 deals with setting aside the arbitral award. This section is based on Article 34 of the UNCITRAL Model with few deviations. The applicability of section 34 is limited to the awards made in India or domestic awards.

The arbitrator after making the award files the same in the court. The party desiring to have the award set aside must make an application to the court under which an award can be challenged on the grounds mentioned in section 34 of the Act. The Court can act only when such an application is made by a party. There is no special form prescribed to make the application. The section lists the grounds for setting aside which are exhaustive.

The remedy under this section is available only in case of domestic arbitration. Thus, an application filed under this section for setting aside an award made in connection with a contract relating to international commercial arbitration will have no applicability.

By Ms. Aradhana Jain, Legal Intern at S.Bhambri & Associates (Advocates), Delhi.

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