The Arbitration and Conciliation Act, 1996 (“Arbitration Act”) is the law governing arbitration proceedings in India. It bestows great autonomy on the parties in all matters concerning the conduct of arbitration proceedings, including the procedure to be followed by the Arbitral Tribunal for recording evidence. It is settled law that an Arbitral Tribunal is a creature of the contract between the parties and is bound by the terms of the agreement constituting it. It is in this background that one must examine the provisions of the Arbitration Act pertaining to the powers of an Arbitral Tribunal to record evidence.
Applicability of the Code of Civil Procedure, 1908 (“CPC”) and Indian Evidence Act, 1872 (“Evidence Act”):
Section 19(1) of the Arbitration Act provides that the Arbitral Tribunal shall not be bound by the provisions of the CPC and the Evidence Act. Consequentially, Section 19(2) of the Arbitration Act provides that subject to the provisions of Part I of the Act, the parties are free to agree on the procedure to be followed by the Arbitral Tribunal in conducting its proceedings. In the absence of such agreement however, the Arbitral Tribunal is at liberty to conduct its proceedings in a manner it deems appropriate.[i]
Given the absolute liberty bestowed upon an Arbitral Tribunal, the question which arises for consideration is whether an Arbitral Tribunal conduct a proceeding in a manner entirely inconsistent with the CPC and the Evidence Act. It has been held that though the Arbitral Tribunal is not bound by the strict provisions of CPC and the Evidence Act, the Arbitral Tribunal is required to consider the basic principles thereof while determining its procedure[ii]. Therefore, while an Arbitral Tribunal is not bound by the strict rules of procedure and evidence prescribed by the CPC and the Evidence Act respectively, it cannot act in a manner entirely inconsistent with the provisions of the CPC and Evidence Act as well.
Manner in which evidence is to be recorded:
Unless the agreement between the parties provides otherwise, the Arbitral Tribunal has the power to decide whether any hearings will be held inter alia for presentation of evidence[iii]. If the Arbitral Tribunal does decide to hold such hearings, it has the power to determine the language to be used in these proceedings.[iv] The Arbitral Tribunal has the power to determine the admissibility, relevance, materiality and weight of any evidence produced by the parties.[v]
Power to enforce attendance of a person or compel production of documents:
An Arbitral Tribunal being an authority created by the consent of parties cannot by itself enforce its orders against a third party. Accordingly, while recording evidence, the Arbitral Tribunal may itself apply or permit a party to apply to the court for assistance in taking evidence.[vi]This assistance could be in the form of the court issuing summons to enforce the attendance of any person or compelling production of any document required by the Arbitral Tribunal in the course of recording evidence.
However, recourse to Section 27 is not required to enforce the attendance of a party before the Arbitral Tribunal or to compel a party to produce a document before the Arbitral Tribunal. In so far as production of documents by a party is concerned, it has been held that an Arbitral Tribunal independently has the power and jurisdiction to direct a party to produce documents that it thinks are relevant.[vii] The Delhi High Court has held that Section 27 of the Arbitration Act deals with production of documents by a third party and does not apply to parties before the Arbitral Tribunal. It was held that though there is no specific provision in the Arbitration Act governing such production of documents by a party, the Arbitral Tribunal possesses an inherent power to direct such production under Section 19(3) of the Arbitration Act.[viii]
In so far as enforcing the attendance of a person for the purpose of recording evidence is concerned, it has been held that Section 27 of the Arbitration Act applies to third-parties only and the Arbitral Tribunal need not invoke the same for compelling a party to remain present for this purpose.[ix]This is because under Section 25(c) of the Arbitration Act, if a party fails to appear at a hearing or produce documentary evidence, the Arbitral Tribunal is empowered to proceed and make an arbitral award on the evidence before it. It is submitted that even otherwise in the event that a party fails to produce evidence when so directed, the Arbitral Tribunal shall have the liberty of drawing an adverse inference against such a party.
Power to appoint an expert:
In the course of the arbitration proceedings, a situation may arise where an Arbitral Tribunal may require the opinion of an expert to be made available to it for deciding the dispute effectively. Section 26 of the Arbitration Act empowers an Arbitral Tribunal to appoint an expert to report to it on any issue, which is required to be decided by it. The Arbitral Tribunal may require either party to provide all relevant information to such expert(s). It may also require such expert(s) to participate in a hearing where the parties would be entitled to cross-examine the expert(s).
Conclusion:
From the above discussion, it can be seen that the parties have the first opportunity in determining what procedure is to be followed by an Arbitral Tribunal for recording evidence and consequentially, what powers the Tribunal exercises during such process. However, in the absence of any such agreement between the parties, the Arbitration Act confers great autonomy on an Arbitral Tribunal to determine its own procedure and vests adequate powers in it to conduct such proceedings, keeping the need for judicial intervention at a bare minimum.
REFERENCES:
[i] Section 27 of the Arbitration and Conciliation Act, 1996
[ii] Silor Associates SA v. Bharat Heavy Electrical Limited [(2014) 7 High Court Cases (Del) 426; 2014 SCC OnLine Del 3407]
[iii] Thyssen Krupp Werkstoffe GMBH v. Steel Authority of India [(2010) 2 Arb LR 397; 2010 SCC OnLine Del 479]
[iv] Delta Distilleries Limited v. United Spirits Limited and Anr. [(2014) 1 SCC 113]
[v] Section 24 of the Arbitration and Conciliation Act, 1996
[vi] Section 22 of the Arbitration and Conciliation Act, 1996
[vii] Sections 19(4) of the Arbitration and Conciliation Act, 1996
[viii] Section 19(3) of the Arbitration and Conciliation Act, 1996
[ix] Rashmi Housing Private Limited v. Pan India Infraprojects Private Limited [(2015) 2 Bom CR 697]; Sahyadri Earthmovers v. L and T Finance Ltd. and Anr. [2011 (4) Mh.L.J. 200]
