Answer ... (a) Procedure, including evidence?
Insofar as the procedure pertaining to the recording of evidence is concerned, as per Section 19 of the Arbitration Act, the tribunal is not bound by the rules of the Indian Evidence Act, 1872 and the Code of Civil Procedure, 1908, and the parties are free to agree on the procedure, failing which the tribunal is empowered to determine the procedure. Further, Section 19(4) provides that the power of the tribunal includes the power to determine the admissibility, relevance, materiality and weight of evidence. This does not prohibit the tribunal from drawing sustenance from the fundamental principles underlying the Code of Civil Procedure or the Indian Evidence Act, but frees the tribunal from being bound, as would a civil court. However, it is settled law that the broad principles of the Indian Evidence Act and the Code of Civil Procedure, will be applicable in arbitration. Further, the tribunal may seek assistance from the court in obtaining evidence under Section 27 of the Arbitration Act. Under Section 27(5) of the Arbitration Act, the tribunal can also refer to the court to penalise or put to such disadvantage anyone who fails to attend or refuse to give evidence or makes any other default or is guilty of any contempt to the tribunal during the conduct of arbitration proceedings.
(b) Interim relief?
Under the amended Section 17 of the Arbitration Act, the tribunal has powers to grant interim measures which are similar to those of a court. An order passed by the tribunal under Section 17 is deemed to be an order of a court for all purposes and is enforceable under the Code of Civil Procedure, 1908 in the same manner as if it were an order of a court. The tribunal has the power to grant the following interim measures under Section 17:
- appoint a guardian for a minor or a person of unsound mind for the purpose of the arbitration;
- grant interim measures for the preservation, interim custody or sale of any goods which are the subject matter of the arbitration agreement;
- grant interim measures to secure the amount in dispute in the arbitration;
- grant interim measures to detain, preserve or inspect any property or thing which is the subject matter of the dispute in arbitration;
- grant interim injunctions or appoint a receiver; and
- grant such other interim measures as may appear to be just and convenient.
(c) Parties which do not comply with its orders?
Orders of a tribunal are enforceable under Section 17(2) of the Arbitration Act as if they were an order of a court under the Code of Civil Procedure, 1908. In Alka Chandewar v Shamshul Ishrar Khan (Civil Appeal 8720/2017), the court held that the tribunal in an arbitration is empowered to make a representation to the appropriate court for any action of the parties amounting to contempt, to be tried under the Contempt of Courts Act, 1971, if the parties violate its orders, including any interim orders passed during the course of the proceedings under Section 27(5) of the Arbitration and Conciliation Act, 1996.
In Jindal ITF Limited v NTPC Limited (OMP [ENF][COMM] 55 of 2018), the Delhi High Court for the first time enforced an interim order passed by a tribunal under Section 17 and accordingly directed the other party to pay the sum ordered by the tribunal as interim relief.
However, a tribunal does not have the power to enforce its own orders or any other powers similar to those of a court under Order 39, Rule 2A of the Code of Civil Procedure in case of disobedience.
(d) Issuing partial final awards?
The Arbitration Act uses the phrase ‘interim award’ rather than ‘partial award’; however, in practice, it has the same meaning. Section 2(1)(c) provides that an ‘award’ includes an interim award. Further, under Section 31(6), the tribunal has the power to make an interim award at any time during the proceedings regarding any subject matter for which it is competent to make a final arbitral award.
Further, in Mcdormett International Inc v Burn Standard Co Ltd ((2006) 2 Arb 498) the Supreme Court of India held that the Arbitration Act uses the terms ‘interim award’ and ‘final award’ rather than ‘partial award’. An interim award is not one in respect of which a final award can be made; although it may be a final award on the matters covered therein, but made at an interim stage.
(e) The remedies it can grant in a final award?
The tribunal may grant such relief as is not in the exclusive domain of a public forum such as a court. For instance, it may award compensation or a buy-out or sell-out in a shareholder dispute, but cannot order the winding up of the company or appoint independent directors to the board. The tribunal can order:
- specific performance and damages;
- costs; and
Section 31(7)(a) of the Arbitration Act provides that, unless otherwise agreed by the parties, the tribunal may provide in an arbitral award for the payment of interest at such rate it deems reasonable, on the whole or any part of the moneys awarded, for the whole or any part of the period from the date on which the cause of action arose until the date of the award. Further, as per Section 31(7)(b), unless the tribunal directs otherwise, any sums directed to be paid by the tribunal shall carry interest at a rate that is 2% higher than the current rate prevailing as on the date of the award, from the date of award until payment. In Union of India v M/s Ambica Constructions (Special Leave Petitions (C) 11114 and 17219/2009) the Supreme Court of India held that if a contract expressly bars the award of interest pendente lite, the same cannot be awarded by the arbitrator.