Introduction
Jurisdiction refers to the authority of the arbitral tribunal to decide on disputes submitted to arbitration. Powers refer to what arbitrators are authorized to do while conducting the arbitration proceedings. Both are fundamental to the arbitration process and are governed primarily by Sections 16 to 19 of the Arbitration and Conciliation Act, 1996.
The modern arbitration law follows the principle of “kompetenz-kompetenz”, meaning the arbitral tribunal has the competence to decide its own jurisdiction.
Legal Framework
1. Section 16 – Competence of Arbitral Tribunal to Rule on its Jurisdiction
- The arbitral tribunal may rule on:
- Its own jurisdiction
- Any objections with respect to the existence or validity of the arbitration agreement
- Kompetenz-Kompetenz Doctrine is embedded here.
- An arbitration clause is treated as separate and independent from the main contract (doctrine of separability).
- Objections must be raised no later than the submission of the statement of defence.
If the tribunal rejects the plea of no jurisdiction, proceedings continue, and the aggrieved party may challenge it only after the final award under Section 34.
2. Section 17 – Interim Measures by Arbitral Tribunal
- The tribunal can grant interim measures:
- To preserve property
- To secure the amount in dispute
- To grant injunctions or other measures
- These orders are enforceable as if they were orders of a court (post-2015 amendment).
3. Section 18 – Equal Treatment of Parties
- Equal opportunity to present case.
- No party shall be treated unfairly or be denied a chance to defend or present evidence.
4. Section 19 – Determination of Rules of Procedure
- Tribunal not bound by Civil Procedure Code (CPC) or Indian Evidence Act.
- Parties are free to agree on the procedure.
- In the absence of agreement, tribunal has the power to determine its own procedure.
Inherent and Implied Powers of Arbitrators
Besides express powers, arbitrators possess several implied powers essential to ensure fair and efficient dispute resolution:
- Power to administer oaths
- Power to admit/reject evidence
- Power to fix timelines and deadlines
- Power to decide on costs of proceedings
- Power to award interest and damages
- Power to interpret and apply laws
Limits on Arbitrators’ Powers
- Cannot go beyond the terms of the arbitration agreement.
- Cannot decide issues not referred to arbitration (i.e., ultra vires).
- Must comply with principles of natural justice.
- Cannot compel third parties (no subpoena power unless backed by court).
Key Doctrines Explained
1. Kompetenz-Kompetenz Doctrine
Arbitrators can rule on their own jurisdiction, including any objections to the validity of the arbitration agreement.
2. Doctrine of Separability
The arbitration clause is treated as a separate agreement. Even if the main contract is void, the arbitration clause can still be valid.
Important Case Laws
- SBP & Co. v. Patel Engineering Ltd., (2005) 8 SCC 618
- Recognized arbitral tribunal’s power to rule on jurisdiction but retained judicial review at Section 11 stage.
- Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532
- Clarified that certain disputes (e.g., criminal, matrimonial, insolvency) are non-arbitrable.
- Sanshin Chemicals Industry v. Oriental Carbons & Chemicals Ltd., (2001) 3 SCC 341
- Upheld the principle that arbitrators cannot exceed the scope of their reference.
- Amazon.com NV Investment Holdings LLC v. Future Retail Ltd. (2021)
- Upheld enforceability of emergency arbitrator’s interim award in India.
Recent Developments
- 2015 Amendment: Made Section 17 orders enforceable like court orders.
- Growing reliance on institutional arbitration rules (e.g., SIAC, LCIA, MCIA) which expand arbitral powers, especially in international disputes.
- Judicial attitude now favors limited court intervention and empowered tribunals.
Mind Map (Text Format)
yamlCopyEdit Jurisdiction & Powers of Arbitrators
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Kompetenz Interim Powers Doctrines Limitations Sectional Guide
(Sec 16) (Sec 17) - Kompetenz - No ultra Sec 16-19 ACA
- Separability vires power + 2015 Amend.
- Follow natural
justice
Situation-Based Questions and Answers
Q1. Can an arbitral tribunal continue with arbitration if one party claims the agreement is void?
Answer: Yes. Under Section 16(1) and doctrine of separability, the tribunal can continue and decide on validity independently.
Q2. Can an arbitrator grant interim injunction stopping the sale of disputed goods?
Answer: Yes. Under Section 17, the arbitrator has the power to grant such interim relief, which is now enforceable.
Q3. A party challenges jurisdiction after submitting their defence. Is it valid?
Answer: No. Jurisdictional objections must be raised before or at the time of submission of the statement of defence, as per Section 16(2).
Frequently Asked Questions (FAQs)
Q1. Can arbitrators decide their own jurisdiction?
Yes. Under Section 16, they can rule on objections regarding jurisdiction and validity of the arbitration agreement.
Q2. What happens if the tribunal wrongly assumes jurisdiction?
Such a decision can be challenged after the award is passed under Section 34 of the Act.
Q3. Are arbitrators bound by CPC and Evidence Act?
No. As per Section 19, they are not bound and may decide their own procedural rules.
Q4. Can an arbitrator summon third parties or issue arrest warrants?
No. Arbitrators have no coercive powers like courts. They must seek court assistance for such actions.
Q5. Are emergency arbitrators recognized under Indian law?
Although not expressly provided in the Act, the Amazon-Future Retail case recognized emergency arbitrator awards under institutional rules (e.g., SIAC).
Q6. Can arbitrators award damages or interest?
Yes. Arbitrators can award interest, costs, damages, and specific relief based on law and contract terms.
References
- Arbitration and Conciliation Act, 1996 – https://legislative.gov.in
- Law Commission of India Report No. 246
- Key Cases on Indian Kanoon – https://indiankanoon.org
- Amazon v. Future Retail – Supreme Court of India Judgment (2021)
