Case Note & Summary
The dispute arose between family members regarding their businesses and properties, leading to an agreement to resolve their differences through arbitration. The parties initially appointed Mr. Pramod Kumar Khaitan and Mr. Sardul Singh Jain as arbitrators, resulting in an award on October 6, 1996. Subsequently, the first and second respondents filed applications in the Calcutta High Court to set aside the award, arguing that the arbitration was invalid due to the appointment of two arbitrators, which contravened the Arbitration and Conciliation Act, 1996. The High Court agreed and set aside the award, leading to this appeal. The Supreme Court examined whether the mandatory provision regarding the number of arbitrators could be waived. The court noted that while Section 10 prohibits an even number of arbitrators, it is a derogable provision. The court emphasized that parties must raise objections regarding the composition of the tribunal before the arbitral tribunal itself, as per Section 16. Since the respondents did not object in time, they were deemed to have waived their right to challenge the award. The court ultimately set aside the High Court's judgments and upheld the arbitration award, directing the matter to be placed before a two-judge bench for further consideration of other aspects.
Headnote
A) Arbitration Law - Composition of Arbitral Tribunal - Validity of Even Number of Arbitrators - Arbitration and Conciliation Act, 1996, Sections 10, 16 - The court held that Section 10, which prohibits an even number of arbitrators, is a derogable provision. The respondents failed to raise an objection to the composition of the tribunal within the stipulated time, thus waiving their right to object (Paras 8-10).
Issue of Consideration
Whether a mandatory provision of the Arbitration and Conciliation Act, 1996 can be waived by the parties.
Final Decision
The Supreme Court set aside the judgments of the Calcutta High Court, upheld the arbitration award, and referred the matter for further consideration by a two-judge bench.
Law Points
- Arbitration
- Waiver
- Composition of Arbitral Tribunal
- Judicial Intervention
- Grounds for Setting Aside Award
