S-7.Arbitration agreement.

-
S-8.Power to refer parties to arbitration where there is an arbitration agreement:-
S-9.Interim measures etc. by Court.
COMPOSITION OF ARBITRAL TRIBUNAL
S-10.Number of arbitrators.-
S-11.Appointment of arbitrators:-
S-12. Grounds for challenge.-
13. Challenge procedure.-
14.Failure or impossibility to act.-
15.Termination of mandate and substitution of arbitrator.-
JURISDICTION OF ARBITRAL TRIBUNALS
S-16.Competence of arbitral tribunal to rule on its jurisdiction.-
S-17. Interim measures ordered by arbitral tribunal-

EXPECTED QUESTIONS OF UNIT
1. Q: - What do you mean by Arbitration? What are its advantages?
2. Q:- Discuss the concept of Arbitration and explain its essential features/ ingredient.
3. Q:- What are the powers of Court in granting interim orders u/s 9 of the Act.
4. Q: - Composition of Arbitral Tribunal/ Qualification for the appointment of Arbitrator.
What are the grounds on which appointment can be challenged and procedure for
challenge?
5. Q:- Jurisdiction of Arbitration Tribunal.
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1. Q:-What do you mean by Arbitration? What are its advantages?

Meaning of arbitration:-
The law of arbitration was very popular and prevalent in ancient India. The
awards were known as decisions of Panchayats, commonly known as Panchats. The decisions of
Panchayats were of binding nature those times. The head of the family, the chief of a community
or selected inhabitants of a village or town act as Panchas.
Definition of Arbitration:-
According to the Section 2(1)(a) of the Arbitration and conciliation Act, 1996
arbitration means any arbitration whether or not administered by permanent arbitral
institution.
The definition covers all types of arbitration conducted through any mode of
arbitration but does not through any light on the term arbitration itself. The Act has not given
any particular meaning to the term arbitration hence its generally understood meaning shall be
applied in its connotation.
In simple way arbitration means, the existence of a system as an alternative to
Court system whereby the disputes between the parties are settled by persons called arbitrators
who are appointed by the parties themselves. The Indian equivalent to the arbitration system is
our Panchayat system where disputes are settled by Panchas.
Some definitions are given below for the understanding the term arbitration:-
(i) As per Halsburys Law of England- The reference of a dispute of difference between not less
than two parties, for determination , after hearing both sides, in a judicial manner, by a
person or persons other than a Court of competent jurisdiction.
(ii) According to Encyclopaedia Britannica, arbitration is a means of settlement of disputes by
the decision not of the regular and ordinary courts of Law but of a person or persons who are
called arbitrators and who are appointed by the parties or with their consent.
Advantages of Arbitration:-
1. Less Formal: - Proceedings of the arbitration are less formal in nature on the other hand
procedure f the Court is based on legal process which is very much formal and technical in
nature. Due to absence to formalities, the arbitrators concentrate their full attention on real
justice which is the foremost aspect for the settlement of the dispute.
2. Less Expensive:- The process of arbitration is less expensive than the Court process. Where a
dispute is settled by the Court, the plaintiff has to pay court-fees besides paying the fees to
his advocate. The parties have to spend more for attending the court again and again and also
to pay the expenses of their witnesses for attendance in the Court. In this way a lot of money
and time is spent in the process of the Court. But in the arbitration disputes are settled at
much cheaper cost. Thus it saves unnecessary Court expenses and gives a cheap remedy.
3. More Flexible and Speedier:- The next important advantage of the arbitration process is that
this is more flexible and faster than judicial system. If the dispute needs urgent resolution, the
parties can choose an arbitral tribunal which will act promptly rather than awaiting for its
turn in a court of law. Neither the parties nor the arbitral tribunals are tied to the inflexible
rules of the court..
4. Privacy and Confidentiality:- There is privacy and confidentiality in the settlement of
dispute through arbitration. This is a big advantage of the settlement of dispute through
arbitration proceedings. While the proceedings of the Court whether they pertain to civil o to
criminal matters, take place in open Court, the proceedings under arbitration are undertaken
in closed doors. The proceedings of arbitration are strictly confidential and are limited to the
concerned parties only.
5. Easily understandable process:- As the proceedings of arbitration are made in accordance
with the consent of the parties, so parties understand those proceedings and take part in
them. On the other hand process of the court is very technical in nature. It is difficult for the
common man to understand them.
6. Convenient in terms of Time and Place:- In the arbitration, the time and place of arbitration is
decided keeping in view of convenience of parties, their willing and ease. But same is not
possible in case of proceedings of the court, as the place of the sitting of the court is already
fixed and court fixes the timings of its proceedings according to the provisions of the law.
There is no question of convenience of the parties in the court process.
7. Effective in resolve dispute of technical nature:- The foremost advantage of the arbitration
system is that where a dispute involved is of technical nature, the experts in that technical
field are appointed as arbitrators to settle the same. This is not possible through the court
process, as courts are concerned more on law than in the technical aspects of the dispute.
8. Prevent recourse of courts:- Another advantage of arbitration is that, it prevents the parties
from seeming recourse to the judicial system.
9. Reduction of burden of Courts:- By adoption of arbitration, the load of arrears of cases in the
Courts may be reduced.
10. International character:- The process of arbitration is prevalent world-wide. It has got place
in the legal systems of all nations. This is why the international commercial arbitration as well
as foreign arbitration awards, have found place in our Arbitration and Conciliation Act, 1996.
Due to this reason its utility has increased tremendously, which is one of the greatest
advantage of the arbitration.


2. Q:- Discuss the concept of Arbitration/define Arbitration and explain essential features/
ingredient of an Arbitration agreement.
Answer:- Concept of arbitration:-
The law of arbitration was very popular and prevalent in ancient India. The
awards were known as decisions of Panchayats, commonly known as Panchats. The decisions of
Panchayats were of binding nature those times. The head of the family, the chief of a community
or selected inhabitants of a village or town act as Panchas.
Arbitration is a mode of dispute settlement which bears certain merit as compare
to a suit in regular court of law. Therefore, the parities to a commercial contract have more
tendencies to create an arbitration agreement in order to settle their commercial disputes.
What is an Arbitration agreement?
Many statutes defines arbitration agreement as an agreement by the parties to
submit to arbitration all or certain disputes which have arisen or which may arise between them
in respect of a defined legal relationship whether contractual or not.
Definition of Arbitration:-
According to the Section 2(1)(a) of the Arbitration and conciliation Act, 1996
arbitration means any arbitration whether or not administered by permanent arbitral
institution.
The Act has not given any particular meaning to the term arbitration hence its
generally understood meaning shall be applied in its connotation.
According to Encyclopaedia Britannica, arbitration is a means of settlement of
disputes by the decision not of the regular and ordinary courts of Law but of a person or persons
who are called arbitrators and who are appointed by the parties or with their consent.
In simple way arbitration means, the existence of a system as an alternative to
Court system whereby the disputes between the parties are settled by persons called arbitrators
who are appointed by the parties themselves. The Indian equivalent to the arbitration system is
our Panchayat system where disputes are settled by Panchas.

Definition of Arbitration Agreement:-
According to Section 2(1) (b) of the Arbitration and conciliation Act, 1996
"arbitration agreement" means an agreement referred to in section 7;
Arbitration agreement has been defined in Section 2(1) (b) by referring to Section 7.
According to Section 7:-

S-7.Arbitration agreement.-
1) In this Part, "arbitration agreement" means an agreement by the parties to submit to
arbitration all or certain disputes which have arisen or which may arise between them in respect
of a defined legal relationship, whether contractual or not.
2) An arbitration agreement may be in the form of an arbitration clause in a contract or in
the form of a separate agreement.
3) An arbitration agreement shall be in writing.
4) An arbitration agreement is in writing if it is contained in-
a) a document signed by the parties;
b) an exchange of letters, telex, telegrams or other means of telecommunication which
provide a record of the agreement; or
c) an exchange of statements of claim and defence in which the existence of the
agreement is alleged by one party and not denied by the other.
5) The reference in a contract to a document containing an arbitration clause constitutes an
arbitration agreement if the contract is in writing and the reference is such as to make that
arbitration clause part of the contract.
Section 7 gives the comprehensive (broad, inclusive) statement of arbitration
agreement as to what constitute arbitration agreement, what are its ingredients or attributes.
Following are the essential ingredients of the arbitration agreement.

What are the essentials of a valid arbitration agreement?
The essentials of a valid and binding arbitration agreement as follows:
1. Agreement must be in writing:- Sub section (3) and (4) of section 7provide that an
arbitration agreement shall be in writing. However, no particular form has been
prescribed for an arbitration agreement not it is necessary that the words such as
arbitration, arbitrator etc. must appear in the text of the agreement. What the law requires
is that the intention of parties to make reference or submission to arbitration should be
clearly inferable from the agreement of arbitration. New Act of 1996, makes it mandatory
that all arbitration agreements must necessarily in writing, thus present Act does not
recognize so called oral arbitration agreement. However, sub section(4) recognizes
modern form of communication , like exchange of letters, e-mails, telex, telegrams or
other means of telecommunications, provided these communications provide a record of
the agreement.
2. Agreement must arise out of mutual consent:- The parties consent is the basic
requirement for the arbitration agreement. Their consent to submit the dispute to
arbitration must be free consent.
3. Arbitration agreement should be capable of being ascertained:- Terms in the arbitration
agreement must be definite and certain. The law requires that arbitration agreement must
not be uncertain and it should be capable of being ascertained. However, in case there is
any uncertainty in the agreement, it is curable and therefore, it does not render the
agreement void ipso facto. In other words there should be certainty in the arbitral
agreement regarding:-
a) Subject matter of the dispute, which must be legal.
b) Arbitral Tribunal & its composition;
c) Place of arbitration;
d) Acceptance of the arbitral award by both the parties.
4. Parties to the arbitration agreement must be competent to contract:-
5. The agreement should be to refer either a present or future dispute for arbitration.
Thus, existence of a dispute or difference is essential element of arbitration agreement.
6. Matter or the dispute to be referred to arbitration must not be immoral or illegal.

In Jayant N.Seth Vs Gyaneshwar Apartment Cooperative Housing Society Ltd
The court laid down the essential ingredients of an arbitration agreement as
defined in Clause 2(1) (b) read with Section 7 as given below:
(i) There should be a valid and binding agreement between the parties.
(ii) Such an agreement may be contained as a clause in a contract or in the form of a separate
agreement.
(iii) Such an agreement is deemed to be in writing if it is contained in a document signed by
the parties or in an exchange of letters, telex, telegrams or other means of telecommunication
which provide a record of the agreement or an exchange of statements of claim and defense in
which the existence of the agreement is alleged by one party and not denied by the other.
Reference in a contract to a document containing an arbitration clause also constitutes an
arbitration agreement, provided the contract is in writing and the reference is such as to make
that arbitration clause part of the contract.
(iv) Parties intend to refer present or future disputes to arbitration.
(v) The dispute to be referred to an arbitrator is in respect of a defined legal relationship,
whether contractual or not

S-8.Power to refer parties to arbitration where there is an arbitration agreement:-
1) A judicial authority before which an action is brought in a matter which is the subject of
an arbitration agreement shall refer the parties to arbitration, if a party so applies before
submitting his first statement on the substance of the dispute.
2) The application referred to in sub-section (1) shall not be entertained unless it is
accompanied by the original arbitration agreement or a duly certified copy thereof.
3) Notwithstanding that an application has been made under sub-section (1) and that the
issue is pending before the judicial authority, an arbitration may be commenced or continued
and an arbitral award made.


3. Q:- What are the powers of Court in granting interim orders u/s 9 of the Act.

S-9.Interim measures etc. by Court.-
A party may, before, or during arbitral proceedings or at any time after the making of the
arbitral award but before it is enforced in accordance with section 36, apply to a court-
(i) for the appointment of a guardian for a minor or person of unsound mind for the purposes
of arbitral proceedings; or
(ii) for an interim measure or protection in respect of any of the following matters, namely:-
(a) the preservation, interim custody or sale of any goods which are the subject-matter of
the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is the subject-
matter of the dispute in arbitration, or as to which any question may arise therein and
authorizing for any of the aforesaid purposes any person to enter upon any land or
building in the possession of any party or authorizing any samples to be taken or any
observation to be made, or experiment to be tried, which may be necessary or expedient for
the purpose of obtaining full information or evidence;
(d) interim injunction or the appointment of a receiver;
(e) such other interim measure of protection as may appear to the Court to be just and
convenient, and the Court shall have the same power for making orders as it has for the
purpose of, and in relation to, any proceedings before it.

COMMENTS
Section 9 empowers the Courts to utilize its power in the shape of :
1. Interim orders,
2. Injunctions.

Section 9 provides that an application in respect of interim measure can be made by a
party to a court before or during the arbitral proceedings or at any time after the making of the
arbitral award but before it is enforced.
An application to the court to grant interim measure can be made on specified purposes
under the Act,
(i) for the appointment of a guardian for a minor or person of unsound mind for the purposes
of arbitral proceedings.
(ii) To obtain custody, preservation or sale of any goods which are the subject-matter of the
arbitration agreement.
(iii) To cause the recovery of an amount as a result of an arbitral award.
(iv) To detain, preserve and inspect any property or thing which is the subject matter of an
arbitral agreement.
(v) To obtain interim injunction or the appointment of receiver.

To grant interim measures under Section 9, a court has discretionary power and this
section does not specify all interim measures. The court has to take account of every aspect of
each case and also requirement of a case. This power of the courts to grant interim measures
cant be taken away by the parties by consent as it is the requirement of the Act.
Composition of arbitral tribunal
S-10.Number of arbitrators.-
(1) The parties are free to determine the number of arbitrators, provided that such number
shall not be an even number.
(2) Failing the determination referred to in sub-section (1), the arbitral tribunal shall
consist of a sole arbitrator.
Comments
The new Act of 1996, provides full freedom to the parties to appoint arbitrators according
to their choice, and this choice also extends to the number of arbitrators also, with a restriction
that it should not be in even number. This is so because in case when views are divided, a result
may be obtained by getting a majority decision.
In case of there are three arbitrator in a standard procedure, each party would nominate
one and these two nominate the third one with in 30days of their appointment. Sole arbitrator
can be appointed with the mutual concent of parties where the dispute is of general and simple
nature.
In case, the parties have agreed to appoint even number of arbitrator contrary to
provision of section 10(1), the view of S.C. in case of MMTC Lts. Vs Sterlite industries (India) Ltd.
is that it will not render the award invalid. Because ideal situation can be ignored on the face of
free will of the parties.

S-11.Appointment of arbitrators:-
(1) A person of any nationality may be an arbitrator, unless otherwise agreed by the
parties. (This provision gives the parties free hand in choosing the arbitrator of any nationality, but where
the arbitration is of international, the nationality of arbitrator must be different from that of parties.)
(2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing
the arbitrator or arbitrators. {Freedom of parties is limited to the mandatory provisions of sub-section
(6)}
(3) Provides that if the parties fail to appoint arbitrator(s) by mutual consent referred to in
sub-section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator,
and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding
arbitrator.
(4) If the appointment procedure in sub-section (3) applies and-
a. a party fails to appoint an arbitrator within thirty days from the receipt of a request to
do so from the other party; or
b. the two appointed arbitrators fail to agree on the third arbitrator within thirty days
from the date of their appointment,
-the appointment shall be made, upon request of a party, by the Chief Justice or any
person or institution designated by him.
(5) Provides that failing any agreement referred to in sub-section (2), in an arbitration with
a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a
request by one party from the other party, the appointment shall be made, upon request of a
party, by the Chief Justice or any person or institution designated by him.
(6) Where, under an appointment procedure agreed upon by the parties,-
a. a party fails to act as required under that procedure; or
b. the parties, or the two appointed arbitrators, fail to reach an agreement expected of
them under that procedure; or
c. a person, including an institution, fails to perform any function entrusted to him or it
under that procedure,
-a party may request the Chief Justice or any person or institution designated by him to
take the necessary measure (i.e. to make the appointment of arbitrator), unless the agreement on the
appointment procedure provides other means for securing the appointment.
(7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6)
to the Chief Justice or the person or institution designated by him is final.
(8) The Chief Justice or the person or institution designated by him, in appointing an
arbitrator, shall have due regard to-
a. Any qualifications required of the arbitrator by the agreement of the parties and
b. Other considerations as are likely to secure the appointment of an independent and
impartial arbitrator.
(This sub-section provides the guidelines for the decision of Chief Justice or the person or
institution designated by him in the matter of appointment of an arbitrator.)
(9) In the case of appointment of sole or third arbitrator in an international commercial
arbitration, the Chief Justice of India or the person or institution designated by him may appoint
an arbitrator of a nationality other than the nationalities of the parties where the parties belong to
different nationalities.
(10) The Chief Justice may make such scheme as he may deem appropriate for dealing
with matters entrusted by sub-section (4) or sub-section (5) or sub-section (6) to him.
------
(11) Where more than one request has been made under sub-section (4) or sub-section (5)
or sub-section (6) to the Chief Justices of different High Courts or their designates, the Chief
Justice or his designate to whom the request has been first made under the relevant sub-section
shall alone be competent to decide on the request.
(12) (a) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in
an international commercial arbitration the reference to "Chief Justice" in those sub-sections shall
be construed as a reference to the "Chief Justice of India".
(b) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in any
other arbitration, the reference to "Chief Justice" in those sub-section shall be construed as a
reference to, the Chief Justice of the High Court within whose local limits the principal Civil
Court referred to in clause (e) of sub-section (1) of section 2 is situate and, where the High Court
itself is the "Court referred to in that clause, to the Chief Justice of that High Court.
Comment
After having a look of section 11 the arbitrators appointing authority may be
(i) The parties themselves
(ii) The Chief Justice of a High Court, where parties fails to do so or appointed arbitrators
fails to appoint third one,
(iii) Any person so designated by the Chief Justice of a High Court or Chief Justice of India
where the arbitration is of International character.
(iv) Any institution so designated by the Chief Justice of a High Court in case of domestic
arbitration or Chief Justice of India where the arbitration is of International character.

S-12. Grounds for challenge.-
In this section grounds on which (before and after the appointment of the arbitrator/s) appointment
of an arbitrator can be challenged by a party have been mentioned.
(1) This sub-section provides that when a person is approached in connection with his
possible appointment as an arbitrator, he shall disclose in writing any circumstances which may
likely to give rise to justifiable doubts as to his independence or impartiality.
(2) An arbitrator, from the time of his appointment and throughout the arbitral
proceedings, shall, without delay, disclose to the parties in writing, any circumstances explained
in sub-section (1), unless they have already been informed of them by him.
(3) This sub-section provides the grounds for challenging arbitrator. It provides that an
arbitrator may be challenged only if-
a. Circumstances exist that give rise to justifiable doubts as to his independence or
impartiality, or
b. he does not possess the qualifications which have been determined by the parties.
(4) A party may challenge an arbitrator appointed by him, or in whose appointment he
has participated, only for reasons of which he becomes aware after the appointment has been
made. (The party challenging the appointment should have become aware of the defects aforesaid of the
arbitrator after his appointment. These circumstance should not be in his knowledge before such
appointment, because in such a case the party will be estopped by the acquiescence from the challenging the
appointment.)




Arbitrator must be unbiased and disinterested:-
Russell, the renowned authority on Arbitration and conciliation has observed that, in the
view of all the jurists of all the countries, judicial tribunal should be honest, impartial and
disinterested. This rule applies in full force to arbitral tribunal.
In the nut shell grounds for challenge of appointments of arbitrators may be:-
(i) The relationship of the arbitrator to one of the parties was unknown to the other party.
(ii) The arbitrator is in the fraudulent collusion with the opposite party.
(iii) The arbitrator was indebted to one of the parties.
(iv) The arbitrator lacks of requisite qualification.
(v) The arbitrator has not used or misused authority accorded to him.
(vi) Other matters hitting the independence, impartiality, expertise and sincerity of the
arbitrators.
13. Challenge procedure.-
(1) Subject to sub-section (4), the parties are free to agree on a procedure for challenging
an arbitrator.
(2) Failing any agreement referred to in sub-section (1), a party who intends to challenge
an arbitrator shall, within fifteen days becoming aware of the constitution of the arbitral tribunal
or after becoming aware of any circumstances referred to in sub-section (3) of section 12
(challenge grounds), send a written statement of the reasons for the challenge to the arbitral
tribunal.
(3) Unless the arbitrator challenged under sub-section (2) withdraws from his office or the
other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.
(4) If a challenge made under any procedure agreed upon by the parties or under the
procedure under sub-section (2) is not successful, the arbitral tribunal shall continue the arbitral
proceedings and make an arbitral award.
(5) Where an arbitral award is made under sub-section (4) (after rejecting the challenge), the
party challenging the arbitrator may make an application for setting aside such an arbitral award
in accordance with section 34. (On the ground that rejection of challenge was wrong and that it
invalidated the award)
(6) Where an arbitral award is set aside on an application made under sub-section (5), the
Court may decide as to whether the arbitrator who is challenged is entitled to any fees.

14. Failure or impossibility to act.-
(1) The mandate of an arbitrator shall terminate if--- (a) he becomes de jure or de facto
unable to perform his functions or for other reasons fails to act without undue delay; and (b) he
withdraws from his office or the parties agree to the termination of his mandate.
(2) If a controversy remains concerning any of the grounds referred to in clause (a) of sub-
section (1), a party may, unless otherwise agreed by the parties, apply to the Court to decide on
the termination of the mandate.
(3) If, under this section or sub-section (3) of section 13, an arbitrator withdraws from his
office or a party agrees to the termination of the mandate of an arbitrator, it shall not imply
acceptance of the validity of any ground referred to in this section or sub-section (3) of section 12.
15. Termination of mandate and substitution of arbitrator.-
(1) In addition to the circumstances referred to in section 13 or section 14, the mandate of
an arbitrator shall terminate---- (a) where he withdraws from office for any reason; or (b) by or
pursuant to agreement of the parties.
(2) Where the mandate of an arbitrator terminates, a substitute arbitrator shall be
appointed according to the rules that were applicable to the appointment of the arbitrator being
replaced.
(3) Unless otherwise agreed by the parties, where an arbitrator is replaced under sub-
section (2) , any hearings previously held may be repeated at the discretion of the arbitral
tribunal.
(4) Unless otherwise agreed by the parties, an order or ruling of the arbitral tribunal made
prior to the replacement of an arbitrator under this section shall not b invalid solely because
there has been a change in the composition of the arbitral tribunal.
JURISDICTION OF ARBITRAL TRIBUNALS
Introduction:
Section 16 of the Act empowers the Arbitral Tribunal to decide the question of its
jurisdiction itself together with the question of existence of or the validity of the arbitral
agreement. The arbitral agreement may contain arbitral clause which form the main source of
jurisdiction of the Arbitral Tribunal. The complaint regarding the jurisdiction may be for non-
jurisdiction of the Arbitral Tribunal on an issue or for beyond jurisdiction of the arbitral
Tribunal when it touches issues which are not referred to it for disposal b the parties. Provision
regarding jurisdiction of Arbitral Tribunal is given under following section.

S-16.Competence of arbitral tribunal to rule on its jurisdiction.-
(1) This sub-section empowers the Arbitral Tribunal to decide the question as to its own
jurisdiction, including the objections as to the existence or validity of the arbitration agreement,
and for this purpose:
a. an arbitration clause which forms part of a contract shall be treated as an arbitration
agreement independent of the other terms of the contract; and
b. if in its decision the arbitral tribunal holds that the contract is null and void it will not
make ipso jure (automatically), the arbitration clause invalid.

Sub-section (2) to (4) provides the time limit for raising the plea of non-
jurisdiction and over jurisdiction.
(2) Sub-section provides that, a plea/objection that the arbitral tribunal does not have
jurisdiction (non-jurisdiction) shall be raised not later than the time of submission of the
statement of defence; however, a party shall not be debarred from raising such a plea merely on
the ground that he has appointed, or participated in the appointment of, an arbitrator.
(3) Sub-section provides that a plea/objection that the arbitral tribunal is exceeding the
scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its
authority is raised during the arbitral proceedings.
(4) Sub-section 4 empowers the arbitral tribunal to entertain the objections (referred to in
sub-section (2) or sub-section (3)) regarding lack or excess of jurisdiction, even after the time for
raising them has expired, if it considers the delay justified.
(5) The arbitral tribunal shall decide on a plea/objections referred to in sub-section (2) or
sub-section (3) and, where it takes a decision of rejecting the plea/objection, it shall continue
with the arbitral proceedings and make an arbitral award.
(6) When an award has been made after rejection of the objections, the party aggrieved by
such an arbitral award may make an application for setting aside such an arbitral award in
accordance with section 34.
Case laws:-
The arbitral clause has been accorded an independent status in Section 16(1)(a) and its
existence has been secured even when the arbitral agreement which contains it, is adjudged null
and void.
In M/s Reva Electric Car Co. Pvt. Ltd. V. M/s Green Mobil, AIR 2012 SC 739, it was held
by the S.C. that where arbitration agreement is contained in MoU and MoU is terminated, the
agreement continues to exist even after termination of Memorandum of Understanding (MoU).
Under section 16(1) the dispute was liable to be sent for arbitration even after termination of
contractual agreement within which Arbitral agreement exists.
Again in Shree Subh Laxmi Fabrics (P) Ltd. v/s Chandmal Barodia and others, AIR 2005
SC 2261, where arbitral proceeding had been restrained by the HC on the plea of non existence
of arbitral agreement, the Supreme Court held that the proper forum of the adjudication of
such a matter was the arbitral Tribunal itself and the High Court erred in granting an injunction
and so S.C. vacated the injunction and allowed the arbitral Tribunal to proceed in the matter as
per Section 16(1) of the Act, of 1996.
S-17. Interim measures ordered by arbitral tribunal-
(1) Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a
party, order a party to take any interim measure of protection as the arbitral tribunal may
consider necessary in respect of the subject matter of the dispute.
(2) The arbitral tribunal may require a party to provide appropriate security in connection
with a measure ordered under sub-section (1).
General purpose of this section is to prevent or minimize any disadvantage to a party,
which may arise on account of duration of the arbitral proceedings, until the final settlement of
the dispute. The range of interim measure covered under section 17 may include the
preservation, custody or sale of goods which are the subject matter of the dispute.