What is Section 13 of Arbitration and Conciliation Act

Section 13. Challenge procedure under Arbitration and Conciliation Act, 1996

(1) Subject to sub-section (4), the parties are free to agree on a procedure for challenging an arbitrator.

(2) Failing any agreement referred to in sub-section (1), a party who intends to challenge an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in sub-section (3) of section 12, send a written statement of the reasons for the challenge to the arbitral tribunal.

(3) Unless the arbitrator challenged under sub-section (2) withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.

(4) If a challenge under any procedure agreed upon by the parties or under the procedure under sub-section (2) is not successful, the arbitral tribunal shall continue the arbitral proceedings and make an arbitral award.

(5) Where an arbitral award is made under sub-section (4), the party challenging the arbitrator may make an application for setting aside such an arbitral award in accordance with section 34.

(6) Where an arbitral award is set aside on an application made under sub-section (5), the Court may decide as to whether the arbitrator who is challenged is entitled to any fees.

What is the Scope of Section 13 of Arbitration and Conciliation Act, 1996

Section 13 provides the procedure in this regard, subject to what is agreed between the parties. U/s 13(1), if a party intends to challenge the arbitrator, then he may send a written statement giving reasons for challenging the arbitral tribunal, within 15 days of becoming aware of the constitution of the tribunal. The tribunal is competent to look into the controversy however, Section 13 (4) clearly prescribes that the tribunal shall continue with the proceedings. Subsequently when the award is made, the party can challenge the award and it can be the said ground which he had taken at the initial stage.

The recourse for withdrawal to the challenged arbitrator himself under Section 13(3) is, truly speaking, little more than an empty formality. At best, it is a dignified way of showing the exit to an arbitrator who cares. But an arbitrator who does not care may refuse to withdraw and also, sitting on the challenge as the arbitral tribunal under Section 13(3), decide against the challenge thereby clearing the way for himself under Section 13(4) to continue and complete the arbitral proceeding and make the arbitral award leaving the challenging party high and dry.

What is the remedy if the Arbitrator is not working properly?

It os often said that an Arbitration is only as good as the Arbitrators appointed for the same. Efficiency of any arbitration process revolves around the Arbitrator choosen.  An Arbitrator shall always be independent, neutral and impartial.

As the Arbitration is a quasi-judicial process, it has to necessarily adhere to the laws of the State, chosen institution and principles of natural justice and fairplay.

The UNICITRAL Model Law, Arbitration and Conciliation Act, 1996 ensure that the entire Arbitral exercise is based on fair play and equity.