Conduct of Arbitral Proceeding: Section 23 of Arbitration and Conciliation Act
Section 23 - Conduct of Arbitral Proceedings
Text of Section 23 (Summary):
Section 23 empowers the arbitral tribunal to conduct the arbitration proceedings in the manner it considers appropriate, subject to the provisions of the Arbitration and Conciliation Act, the agreement of the parties, and the principles of natural justice.
Detailed Explanation:
1. Discretion to Arbitral Tribunal:
The tribunal has broad discretion to decide how to conduct the proceedings.
This flexibility allows the tribunal to tailor procedures according to the nature of the dispute and the needs of the parties.
The tribunal can decide the procedure for:
Submission of evidence
Hearings
Examination of witnesses
Any other procedural matter
2. Bound by Arbitration Agreement and Act:
The tribunal must act in accordance with:
The terms of the arbitration agreement between the parties.
The procedural rules stipulated in the Arbitration and Conciliation Act.
3. Principles of Natural Justice:
The tribunal must conduct the proceedings fairly and impartially.
Both parties must be given a reasonable opportunity to present their case and respond to the other party.
No party should be prejudiced by arbitrary or unfair procedures.
4. Objective:
The aim is to ensure fair, efficient, and just resolution of disputes.
Section 23 enables the tribunal to avoid rigid court-like procedures that could delay or complicate arbitration.
Illustration:
If parties have not agreed on detailed procedural rules, the tribunal may:
Decide whether the arbitration will be conducted orally or on the basis of documents.
Decide on the timing and place of hearings.
Allow or deny additional evidence based on relevance and procedural fairness.
Important Case Law:
Bharat Aluminium Co. v. Kaiser Aluminium Technical Service, Inc., (2012) 9 SCC 552
The Supreme Court held that an arbitral tribunal has wide discretion in conducting proceedings, including procedural matters.
The tribunal must ensure fairness and due opportunity.
The court will intervene only in cases of manifest unfairness or breach of natural justice.
S.B.P. & Co. v. Patel Engineering Ltd., AIR 2005 SC 2427
The Supreme Court emphasized that arbitral proceedings are not bound by the strict rules of evidence.
The tribunal should adopt a flexible and just approach to evidence and procedure.
Summary Table:
| Aspect | Explanation |
|---|---|
| Discretion | Tribunal has wide discretion on how to conduct proceedings |
| Bound by | Arbitration agreement, Arbitration Act, natural justice |
| Fairness | Must ensure equal opportunity to parties |
| Procedural Flexibility | Tribunal can choose modes of hearings, evidence, etc. |
| Court Intervention | Limited, only in cases of gross unfairness |
In short:
Section 23 empowers the arbitral tribunal to manage the arbitration process flexibly but mandates that it must be fair and impartial, respecting the parties' agreement and the law.
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