Can the Tribunal’s Decision (Arbitration Award) be Appealed?

When two parties or entities get into a conflict, the usual approach generally dictates them to go through the litigation process to look for a legal remedy. However, there are several other alternatives available that may be chosen to avoid the tedious litigation proceedings, some of which are arbitration, conciliation, mediation, etc.

Arbitration proves to be one of the most sought-after alternative dispute resolution mechanisms, which provides parties with a legally enforceable decision without having to deal with the complications of the litigation process.

What is Arbitration?

Arbitration is an alternative dispute resolution mechanism, where a dispute is submitted to one or more arbitrators with the mutual agreement of the disputing parties to request for an arbitral award that shall be binding in nature. This can be considered a private dispute resolution procedure that proves to be an excellent alternative to going to Courts for the same.

Can an Arbitral Award be Appealed?

There are no provisions mentioned under the Arbitration and Conciliation Act, 1996 (hereafter referred to as ‘Act’) that provide the norms for appealing the Award passed by the Tribunal. As mentioned before, the Award is final and binding in nature for all the parties involved in the dispute. The Act, however, states that the party unsatisfied with the Award passed by the Tribunal may choose to challenge it and get it set aside on specific grounds.

Aggrieved parties may choose to challenge an arbitral award under Section 34 of the Act.

Note: The scope of Section 34 is quite limited and narrow.

When can you Challenge Awards under Section 34?

• The Arbitrator is appointed unilaterally.
• The Arbitrator surpasses the scope of the Arbitration Agreement.
• The Agreement is void.
• The Award clashes with some public policy.
• Patent illegality is involved.

Petition under Section 34

Once passed, a copy of the Award must be sent to all parties to the arbitration by the Tribunal.
To challenge the Award, petitions under Section 34 must be submitted within a 90-day period from receipt of a signed copy of the Award.

Note: This period may be extended by up to 30 days if the Petitioner can show an apt reason behind the delay in challenging the Award.

• Post expiration of the above-mentioned period, Courts shall not entertain any petition under Section 34.
• It is established that a reasonable Arbitral Award shall not be interfered with by the Courts in accordance with the provisions of Section 34.
• If the challenged Award is set aside, Courts may choose to send the case back to the Tribunal to adjudicate the issues.
• Disputing parties may choose to replace the Arbitrator before the case is referred to the Tribunal to arbitrate the claims.

Appealing under Section 37 of the Act

As defined under Section 37 of the Act, an appeal under the Act may be preferred against some specific order passed by the Tribunal. This provides that the following orders can be appealed to Courts:

• Denying referring entities to resolve their dispute via arbitration under Section 8 of the Act.
• Giving or denying any temporary relief under Section 9 of the Act.
• Setting aside or refusing to set aside any arbitral award under Section 34 of the Act.
• The Arbitral Tribunal grants the plea of a party that claims it not to have any jurisdiction in the matter.
• Granting a party’s plea that the Tribunal is surpassing the ambit of its authority.
• The Tribunal grants or refuses to grant temporary relief under Section 17 of the Act.

No second appeal shall lie against an Order passed in appeal under Section 37 of the Act. However, it has been clarified that with respect to an order passed in appeal under Section 37 of the Act, nothing shall influence or remove the right to go on a special leave to appeal before the Supreme Court under Article 136 of the Constitution of India.

Conclusion

Legal provisions provide that although they cannot be appealed, arbitral award can be challenged. Any aggrieved party may choose to challenge the Award passed by a Tribunal and get it set aside based on specific grounds.