Report No. 176
2.12.5 The question then is as to whether sec.16 is to be amended in view of reliance on the above opinion of leading authors and hardship referred to.
After serious deliberation, the Commission has taken the view that if an immediate appeal is provided in section 37(2) as under the Model law against orders of the arbitral tribunal under section 16, rejecting an objection as to the tribunal's jurisdiction, the provision is likely to be abused and even if it is said that pending an appeal before the court, the arbitral proceedings may go on, it is more likely that the arbitral tribunal may suspend its proceedings during that period.
In view of the possibility of the abuse, if a right of appeal is provided against interlocutory orders, the Commission has decided not to give importance to the weighty arguments in favour of a right of appeal set out above. The remedy is only to make an application for setting aside the award after the award as provided under section 16(6). It is, therefore, felt not proper to provide for any appeal against an order refusing a plea of want of jurisdiction. Sections 16 and 37(2) will remain unamended.
2.12.6 But in section 34, it is to be clarified by way of an explanation that the applicant, while seeking to set aside the award, can attack the interlocutory order of the arbitral tribunal rejecting a plea of want of jurisdiction, as permitted by section 16(6). The proposed 'Explanation II' in section 34 is by way of clarification of what is provided in section 16(6). We have already referred to this Explanation in our discussion under section 13 in para 2.10.1. 2.13.1 Section 17: Interim measures and powers of arbitral tribunal to be further amplified.
Section 17(1) states that unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order a party to take any interim measures of "protection" as the arbitral tribunal may consider necessary in respect of the subject matter of the dispute. Sub-section (2) states that the arbitral tribunal may require a party to provide "appropriate security" in connection with a measure ordered under sub section (1). It will be seen that section 17(1) permits interim measures for 'protection of the subject matter of the dispute and sec.17(2) deals with 'appropriate security', to be directed.
It has been suggested that an arbitral tribunal shall be vested with all the powers of a Civil Court and that any infraction of its orders must be allowed to be treated as 'contempt' of the arbitral tribunal liable to be punished straightway. It was suggested that powers to require a witness to attend and powers of injunction or appointment of receiver or attachment of third party's property should be also granted with a condition that the tribunal could impose various penalties for violation of its directions. This request appears to be clearly not permissible in law. As stated by Redfern and Hunter (1999) in para 1.40:
"power to require the attendance of witnesses under penalty of fine or imprisonment or to enforce awards by attachment of bank accounts or the sequestration of assets, are powers which form part of the prerogative of the state. They are not powers that any state is likely to delegate to a private arbitral tribunal, however eminent or well-intentioned that arbitral tribunal may be. In practice, if it becomes necessary for an arbitral tribunal to take coercive action in order to deal properly with the case before it, such action must usually be taken indirectly, through the machinery of the local courts, rather than directly, as a judge himself can do." The authors further elaborate (see para 5.07):
"The powers conferred upon an arbitral tribunal by the parties, whether directly or indirectly, fall short of the powers which may be exercised by a national court. A Court, which derives its authority from the state, has formidable coercive powers at its disposal to ensure obedience to its orders. An arbitral tribunal does not possess such powers. The parties cannot confer upon a private tribunal the coercive powers over property and persons that are conferred by the state upon a national court. In recognition of this fact, many systems of law supplement the powers of the arbitral tribunals".
Hence, powers to impose punishment etc. cannot be conferred on arbitral tribunal. Section 38 of the English Act, 1996 confers powers on the arbitral tribunal to (i) direct security for costs, (ii) issue directions with regard to subject matter of dispute in possession or under ownership of parties, (iii) as also for inspection, photographing, preservation, custody or detention of property- by the tribunal or by an expert or by a party (iv) ordering samples to be taken or observations be made of or experiment conducted on the property (v) direct party or witness to be examined on oath or affirmation and to administer the same (vi) issue directives to a party for preservation for purposes of any evidence in his custody or control.
There can be no difficulty in enlarging sec.17 by adopting the various clauses of sec.38 of the English Act. It may, however, be noted that under sec.9, the parties can approach the 'Court', even while the arbitration proceedings are going on, for necessary interim orders. So far as Court assistance is concerned, sec. 27 of the Act states that the arbitral tribunal or a party with the previous approval of the tribunal, may apply for assistance in taking evidence. Sec.27(5) permits penalties and punishments to be imposed by the court.
2.13.2 A suggestion has been made that the heading of this section may be changed, in as much as on a comparison with section 9, contentions are being raised before the arbitral tribunals that it has all the powers to grant 'interim measures' which the court can grant under section 9. It has also been suggested that the powers of the arbitral tribunal to grant interim orders may be listed out in section 17. These suggestions are accepted and section 17 is enlarged by adding certain extra powers similar to those listed in section 38 of the English Arbitration Act, 1996. The heading to the section is also altered.