Conduct of Arbitral Proceeding: Section 21 of Arbitration and Conciliation Act
📘 Conduct of Arbitral Proceedings: Section 21, Arbitration and Conciliation Act, 1996
🔹 Text of Section 21
Section 21 - Conduct of Arbitral Proceedings
(1) Subject to the provisions of this Act, the arbitral tribunal shall conduct the arbitration proceedings in such manner as it considers appropriate, provided that the parties shall be treated with equality and each party shall be given a full opportunity of presenting his case.
(2) The arbitral tribunal may, unless otherwise agreed by the parties, meet at any location it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties or for inspection of goods, other property or documents.
(3) The arbitral tribunal may hold oral hearings for the presentation of evidence or for oral argument if it considers it appropriate.
(4) The parties are free to agree on the languages to be used in the arbitral proceedings. Failing such agreement, the arbitral tribunal shall determine the language or languages to be used in the proceedings.
🔹 Explanation of Section 21
Section 21 of the Act empowers the arbitral tribunal with wide discretion to conduct the arbitration proceedings to ensure a fair and efficient process, subject to certain mandatory principles.
🔹 Key Points
Tribunal’s Discretion to Conduct Proceedings (Subsection 1)
The arbitral tribunal has the power to decide the procedure and mode of conducting arbitration, subject to the Act’s provisions. The tribunal can regulate the proceedings as it deems fit, ensuring flexibility and procedural autonomy.
Principle of Equality of Parties
The tribunal must treat the parties equally and give each party a full opportunity to present its case. This ensures natural justice and fairness in the arbitration process.
Venue of the Proceedings (Subsection 2)
The tribunal can meet at any location it finds appropriate unless parties agree otherwise. This includes meetings for consultations, hearings, witness examination, expert hearings, or inspections.
Oral Hearings (Subsection 3)
The tribunal may hold oral hearings for evidence presentation or arguments if it deems necessary, but it is not mandatory. This provides flexibility—proceedings can be document-based or oral.
Language of Proceedings (Subsection 4)
Parties can agree on the language(s) to be used. If no agreement, the tribunal decides the language. This is important in international arbitration where parties may come from different linguistic backgrounds.
🔹 Purpose and Significance
The section ensures procedural autonomy of the arbitral tribunal while protecting the fairness and equality principles.
It encourages the tribunal to manage the proceedings efficiently, avoiding unnecessary delays.
By allowing the tribunal to select venue, mode (oral or written), and language, the section accommodates flexibility essential for arbitration, especially international arbitration.
🔹 Illustrative Case Law
1. Chloro Controls India Pvt. Ltd. v. Severn Trent Water Purification Inc. [(2013) 1 SCC 641]
The Supreme Court emphasized the autonomy of the arbitral tribunal to conduct proceedings and held that the tribunal’s decision on procedure should be respected unless there is a violation of natural justice or the arbitration agreement.
2. M/s. Gas Authority of India Ltd. v. M/s. SGM Gas Ltd. [(2010) 4 SCC 556]
The Court held that the arbitral tribunal has wide powers to decide the procedure and the parties must be given equal opportunity to present their case.
🔹 Comparison with Other Provisions
Section 19: Deals with Statement of Claim and Defence, where parties present their case.
Section 22: Allows tribunal to appoint experts for assistance.
Section 24: Relates to default of a party (tribunal can continue the proceedings if a party does not participate).
Together, these provisions give the tribunal both the powers and responsibility to conduct arbitration in a fair, efficient, and autonomous manner.
🔹 Summary
| Aspect | Description |
|---|---|
| Procedural Autonomy | Tribunal conducts proceedings as it deems appropriate |
| Equality of Parties | Both parties treated equally, full opportunity to present case |
| Venue | Tribunal can choose venue for meetings and hearings |
| Oral Hearings | Optional; tribunal may hold if deemed appropriate |
| Language | Parties can agree, else tribunal decides |
✅ In a Nutshell
Section 21 of the Arbitration and Conciliation Act protects the tribunal’s discretion to manage arbitration proceedings flexibly and efficiently while ensuring fundamental fairness and equality to the parties involved.
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