Understanding the Limited Scope: Can an Arbitral Tribunal Review Its Decisions?

• Introduction

An arbitral tribunal refers to a group of one or more adjudicators or arbitrators who are assembled and preside over the resolution of a dispute through the process of arbitration. The concept of “review” pertains to situations in which there is a mistake in the verdict or order issued by a court. Consequently, the judiciary possesses the authority to examine the substantial aspects of the latter case.  For example, let’s consider a commercial dispute between two multinational companies regarding a breach of contract. Parties suggest settling such disputes through the arbitration process by appointing three arbiters who are experts in this field. At some stage during the proceedings, Mr. X has committed a serious mistake in applying the law. The decision rendered by the arbitrators, based on this flaw, is unjust. This is a situation in which “review” will ordinarily provide one with a swift means of recourse to a higher court, the locus of justice held in a balance that infallibly tips toward equity and whose steady hand spares no judgment irrespective of its finality.

• Overview of Arbitral Tribunal’s Power to Review its Own Order

In India, the arbitral tribunal’s own decision-making power is somewhat circumscribed because in many cases, a tribunal may not have the power to question their own judgment and alter as they please. This is not the same as the Review of the award by another Arbitrator who alone can consider it after its delivery in the manner provided herein. This Tribunal, in this instance may only exercise powers given to it and can’t take them by retracing its steps backward, where to be exact, the beginning of any adjudicative function is that it can only have review powers only when the Arbitrator has died, otherwise not.. The Arbitration and Conciliation Act, 1996^[1] is the governing legislation for arbitration in India. The present legislation delineates the authority and protocols governing arbitral tribunals within the jurisdiction. Arbitral tribunals receive their jurisdiction from the arbitration agreement and the law under the Act.

In the eyes of the law, the earlier mentioned piece of government legislation attaches significant importance to the notion that an arbitral judgment is one that should, in principle, be final. Aside from a few discrete and limited circumstances in which finality can be called into question or the judgment set aside entirely, once a tribunal hands down its Award, it is binding. For example, the limited grounds upon which an arbitral award may be challenged include fraud, breaches of due process, or a conflict with public policy.

Although the Act does not explicitly give arbitral tribunals the right to reconsider and correct their own decisions, it does provide for specific post-award processes. A party can, for example, ask the arbitrators (under Section 33 of the Act)^[2] to correct clerical or computational errors in the award. Additionally, parties may seek an elucidation of a particular point or word contained within the award.

Agreement Regarding Arbitration: In the event that the parties reach a consensus in their arbitration agreement to grant the arbitral tribunal explicit authorities to review or revise its rulings, including the ability to modify the award under specific circumstances, the tribunal is permitted to exercise these powers, provided they remain in compliance with legal regulations.

If a tribunal’s power is disputed, parties can use the law to challenge the decision. It can be judicially enforced that the tribunal’s jurisdiction is as per section 34 of the Arbitration Act and the courts may oversee if the tribunal goes beyond the terms of reference provided to them.

• Relevant cases

In a recent legal battle, AAI challenged the arbitral tribunal’s Modification Order in the Delhi High Court. This case, known as the Airports Authority Case, saw the court backing the tribunal’s right to issue the Modification Order. The ruling stressed the need to respect the tribunal’s authority and its ability to make needed changes to the arbitral award. The Delhi High Court pointed out that under the CPC, a court can change or cancel an order if a party asks for it. This can happen if the situation has changed or if the order has caused too much trouble for one side. The High Court explained that changes in circumstances and serious money problems could lead to ‘modifying’ an interim order, not ‘reviewing’ it. The High Court agreed with the Modification Order because TDI had shown good reasons to change the 2015 Order. This ruling helps to define how courts interpret and enforce the Arbitration and Conciliation Act. It aims to ensure that disputes in India are solved and well through arbitration. The Airports Authority Case serves as a significant precedent, highlighting the power of the Indian judicial system to review and validate arbitral decisions.

In Maharashtra State Electricity Board v. Data Switchgear Ltd., the Bombay High Court upheld that the Arbitral Tribunal can draw support from the Civil Procedure Code or Evidence Act, but it is not bound, as a Civil Court would be, to strictly follow the Code and evidence law. This shows arbitration in India can be flexible with a hands-on tribunal able to resolve more disputes. Also, it highlights the courts’ respect for arbitrator expertise, power and freedom to glance at different legal aspects for a fair judgment. In a counter-argument, some may say that the court does not understand the complicated arbitration issues which may cause them to interpret or apply the law wrongly. Otherwise, using the legal system will make the process lengthier and more costly for all.

• Conclusion

In a nutshell, the provisions outlined in the Arbitration and Conciliation Act frequently place restrictions on the scope of an arbitral tribunal’s ability to review and modify its own decisions within the jurisdiction of India. The tribunal’s jurisdiction is predominantly drawn from the mutual consent of the involved parties and the legal framework in place. Any requests for rectification, interpretation, or further awards shall be submitted in accordance with the processes delineated in the Act and should adhere to the norms of finality of arbitral rulings.

It is noteworthy that the notion of inherent authority is frequently observed within the realm of judicial proceedings, when judges possess inherent rights to undertake certain activities that are not clearly delineated in legislation or regulations. When parties enter into an arbitration agreement to settle their disputes, they define the scope and limits of the tribunal’s powers, which serves as the main source of the tribunal’s authority in the context of arbitration. When it becomes necessary to modify or evaluate an arbitral award, it frequently necessitates the use of specific procedures as outlined in the arbitration rules or the pertinent legislation.

References

1. Singh & Associates Advocates & Solicitors, ‘INDIAN LEGAL IMPETUS’, Manupatrafast.com (Manupatra), Vol. X (Issue X), pp. 1-5, (accessed 15 October 2023)
2. The Arbitration and Conciliation Act, 1996
3. Maharashtra State Electricity Transmission Co. Ltd v Datar Switchgear Ltd, 2022 (Supp) SCC 565.
4. Airports Authority of India v. TDI International Limited, 2022 (Supp) SCC 440.

^[1] The Arbitration and Conciliation Act, 1996

^[2]  Section 33 of the Arbitration and Conciliation Act,1996