Setting aside of arbitral award

Questions asked.
1. Discuss the various grounds of setting aside of arbitral award.
2. Discuss the various ground of setting aside of arbitral award.
3. Define arbitration award. Explain the ground of setting aside an
arbitration award.

Synopsis
Definition of arbitral award.
Grounds for setting aside the arbitration award.
*Ground of setting aside to be proved by the parties
Party’s incapacity
Arbitration agreement not being valid under the law.
No proper notice given to the party this notice includes.
a. Appointment of arbitrator
b. Notice of arbitral proceedings
c. Unable to present case.
Decision of the arbitrator beyond his jurisdiction mentioned in the
arbitration agreement.
Composition of arbitration tribunal or proceeding not according to the
terms of the arbitration agreement.
*Ground of setting aside to be determined by the court
1. dispute incapable to be resolved by arbitration
2. arbitral award against the public policy
a. fraud, corruption section 75 or 81
3. arbitral award vitiate destroy patent illegality
Procedure of initiation setting aside arbitral award
 Parties’ incapacity
An application for setting aside an arbitral award can be passed if a
party to the arbitration is incapable in taking care of their interest and
they are not represented by a person who can safeguard their rights.
The award can be set aside by the court if it finds that a party to a
contract is a minor or of an unsound person who is not being
represented by a Guardian for protecting his interest. Section 9 of the
Arbitration and Conciliation Act,1996 provides that the provision of
appointment of a guardian for a minor of unsound mind for his/her
matter’s arbitral proceedings.
1. A party is incapable on two points insanity and minor.
2. Both of them must be represent by a guardian sec 9 of arbitration
act talks about appointment of guardian.
3. Reason cannot protect his own interest.

Arbitration agreement not being valid under the law. / Unlawful

agreement.
1. All the essential elements of a contract have to accomplish in order for it to become
enforceable. These includes free consent, lawful subject, lawful consideration.
2. the validity of an arbitration agreement can be challenged in the same
way on the same grounds on which the validity of a contract is
challenged.
3. In cases where the agreement Clause is added in a contract by the
parties to it, the arbitration will be considered invalid if the contract is
invalid. Arbitration clause added to a contract invalid then the
arbitration clause also invalid hence the award passed on basis of this
clause is also invalid.

No proper notice given to the party this notice includes.

1. Notice is given is subject matter related to appointment of arbitrator
and subject mentioned below even if one notice is not given then it
becomes a ground for challenge of the award. Reasoning behind this
is that a notice is proof of proper unbiased proceedings and no notice
could mean exclusion of the parti=y and injustice in the act. A prior
notice must be sent to the other party regarding the commencement of the proceedings
or of invocation of the arbitral clause of the agreement.
2. Section 23(1) of Arbitration and Conciliation Act,1966 provides that the
arbitral Tribunal has to determine the time within which the statement
must be filed. This must be timely communicated to the parties by a
proper notice
3.  section 24(2) provides that an advance notice shall be given to the
parties regarding any hearing or meeting of the Tribunal for any
purpose of inspection of documents, goods or other property etc. 
4. Example - appointment of an arbitrator at the request of the appellant
of the dispute without sending a notice to the respondent and an ex-
prate decree given by the arbitration Tribunal will be held illegal and
liable for setting aside.

Decision of the arbitrator beyond his jurisdiction mentioned in the

arbitration agreement.
1. Every deciding authority is subject to jurisdiction such as a court
is limited to Territorial Jurisdiction, Subject Matter Jurisdiction
Pecuniary Jurisdiction whereas a tribunal it is subjected to the
jurisdiction mentioned in the act governing it whereas in
arbitration the arbitral tribunals jurisdiction is specifically
limited to the subject matter mentioned in the agreement.
2. While formulating an agreement, the parties describe as to what all can be enclosed
in the subject matter and what are the disputes that are enclosed under the
arbitration agreement. Consequently, only those subject matters can be referred to
an arbitral tribunal to resolve the dispute, not any other. If the tribunal acts ultra
vires to the agreement, the party affected may file an application in the court and
challenge such award. An arbitrator cannot act in contradiction to the terms of the
contract.

Composition of arbitration tribunal or proceeding not according to

the terms of the arbitration agreement.
1. Here the aspect which must happen as per the conditions mentioned in
the agreement are the appoint of the arbitration tribunal i.e., the
number of arbitrators appointed the exclusivity of appoint the
arbitrator. Beside this there is process in which the proceeding will
follow as the venue of arbitration the timing within which the award
must be given ETC all this is very subjective to the parties and varies
from agreements to agreements, but the basic gist is to follow the term
in the agreement.
2. Its also covers that the processing appointment must be in accordance
with any substantive law as well as the regulations mentioned in the
arbitration and conciliation act 1966.
3. If it’s not followed, then it became a ground for setting aside as well
as it may amount to misconduct on the side of arbitrator which is
decided based on the violation committed.
 Ground of setting aside to be determined by the court.
The ground mentioned above are to be proven by the aggrieved party to
set aside the award, but the reasons mentioned below are investigated and
decided by the court based on the fact in issue.

dispute incapable to be resolved by arbitration.

1. There is certain limitation with respect to the application of arbitration

in certain matters like arbitration cannot be used to decide criminal
matters hence any award doing the same could be challenged by the
aggrieved party and on the findings of the court be set aside.
2. Criminal offences. Matrimonial disputes. Guardianship matters.
Insolvency petitions. These are the matters excluded from the ambit of
arbitration.

arbitral award against the public policy

1.  provides that an application for setting aside an arbitral award can be
made if such award is in violation of the public policy of India. The
concept of public policy implies matters which concerns public good
and Public Interest.
2. fraud or by corruption, the award which is required by suppressing the
actual facts of the case either by misleading or tricking the arbitrator
or by bribing the arbitrator or by using force on the arbitrator etc
3. against the principle of natural justices and equity conflict with the most
basic notions of morality or justice.
4. Court finds that the award is vitiated by patent illegality 

Procedure of initiation setting aside arbitral award

1. Setting aside of the arbitration is award is based on the application made
by the aggrieved party THE COURT CANNOT TAKE SOU MOTTO
ACTION OF SETTING ASIDE.
2. Application must be filed within 3 months i.e., 90 days from passing of
the arbitral award if the application is done after this it will be rejected
thus putting a limitation period on appeal but there is exception to it if
there is a valid satisfying reason of delay the court may grant an
additional period of 30 days for the application.
3. After application is been received by the court on request of the party or
where it finds appropriate may adjourn the proceeding and giving the
tribunal a chance to pass a award with the elimination of the ground of
challenges
4.

Prior notice of appeal to set

aside awaard to the other
party

Application for setting aside

in court

Applicant to satisfy the

court about the ground of
setting aside

court will issue notice to

other file its reply

rejoinder by the applicant

(reply to the Counter Filed
by the Opposite party )

oral arguments from both

the oarties

passing final order of setting

aside the award or refusing
to set aside the award