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        Companies Law

        2002 (2) TMI 1242 - SC - Companies Law

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        Arbitral tribunal composition objections must be raised promptly or they are waived under the Arbitration and Conciliation Act. The Arbitration and Conciliation Act, 1996 was interpreted as an integrated scheme under which objections to the composition of the arbitral tribunal must ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                        Provisions expressly mentioned in the judgment/order text.

                            Arbitral tribunal composition objections must be raised promptly or they are waived under the Arbitration and Conciliation Act.

                            The Arbitration and Conciliation Act, 1996 was interpreted as an integrated scheme under which objections to the composition of the arbitral tribunal must be raised before the tribunal under section 16 and no later than the statement of defence. A party that proceeds without timely objection is taken to have waived the defect under section 4. Section 10, prohibiting an even number of arbitrators, was treated as derogable in this context, and section 34(2)(a)(v) did not permit an award challenge where the tribunal was constituted in accordance with the parties' agreement. The challenge to the award on the ground of tribunal composition was therefore not maintainable.




                            Issues: Whether the prohibition against an even number of arbitrators under section 10 of the Arbitration and Conciliation Act, 1996 is a mandatory non-derogable requirement, and whether a party who participates without timely objection waives the right to challenge the composition of the arbitral tribunal.

                            Analysis: The statutory scheme was read as an integrated code in which section 16 permits the arbitral tribunal to rule on objections to its own jurisdiction, including objections to its composition, and section 4 deems a waiver where a party knows of non-compliance yet proceeds without timely objection. The Court held that an objection to an even-number tribunal must be raised before the arbitral tribunal not later than the statement of defence, and that failure to do so attracts waiver. Section 34(2)(a)(v) was construed as not permitting a challenge where the tribunal's composition was in accordance with the parties' agreement, and the phrase concerning conflict with non-derogable provisions did not enlarge the ground of challenge in the manner suggested.

                            Conclusion: Section 10 was held to be a derogable provision in this context, and the respondents were deemed to have waived their objection by not raising it before the arbitral tribunal. The challenge to the award on that ground was therefore not maintainable.

                            Ratio Decidendi: An objection to the composition of an arbitral tribunal must be timely raised before the tribunal under section 16, failing which it is waived under section 4; section 10 is not to be treated as non-derogable merely because it prohibits an even number of arbitrators.


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                            ActsIncome Tax
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