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Kerala High Court Rules Arbitrators Cannot Appoint Advocate Commissioners Under Arbitration And Conciliation Act 1996
In a significant ruling for arbitration practitioners, the has clarified the limits of an ’s power regarding the collection of evidence. Justice Easwaran S. held that an arbitrator cannot appoint an under the guise of to bypass the specific statutory framework governing evidence and expert assistance.
A Dispute Over Land Rights
The matter arose from an arbitration between and apartment buyers, Aditya Deo and Arathi Aditya Deo . The homebuyers initiated proceedings alleging that the company failed to convey the full extent of the undivided share of land promised under their purchase agreements.
During the arbitration, the claimants filed an application to appoint an to inspect and measure the entire 24.63-acre project. The arbitrator allowed the application, a decision later affirmed by the . The petitioner, , challenged these orders before the High Court, arguing that an arbitrator lacks the jurisdiction to commission such an investigation.
Limits of Arbitral Authority
The legal debate centered on whether an arbitrator’s power to grant "" under Section 17 of the , empowers them to appoint a commissioner for evidence collection.
The High Court observed that the Act provides a specific mechanism for evidence: Section 26 permits the appointment of experts, and Section 27 allows the tribunal to request court assistance for evidence collection. Justice Easwaran S. ruled that these sections define the boundaries of the tribunal's authority, which cannot be circumvented by invoking Section 17.
Key Observations
The High Court emphasized that the arbitrator’s role is to adjudicate based on provided evidence, not to facilitate a "."
"Merely because Section 17 provides power to the arbitrator to grant interim relief, he cannot bypass the prohibition under Section 26 and grant such relief in exercise of the power under Section 17."
The Court further noted:
"The arbitrator thus overstepped his jurisdiction in not following a binding principle laid down by this court. As such his order qualifies as one rendered ."
Regarding the nature of the request, the judgment stated:
"In the nature of the contentions raised by the parties in the present case, it is evident that the attempt made by the claimants is not to solicit expert opinion but, in fact, to conduct a and to collect evidence for the purpose of adjudicating their claim, which is impermissible."
The Verdict and Its Impact
Rejecting the contention that such an order was immune to challenge, the High Court held that while Section 37 of the Act limits second appeals, it does not strip the High Court of its under .
The High Court set aside the order of the arbitrator and the judgment of the Commercial Court-III , effectively dismissing the request for an . By ruling that the core dispute regarding land conveyance can be resolved through the interpretation of existing contractual documents, the Court has reinforced a stricter, more document-centric approach to arbitration, limiting the scope for procedural interventions that seek to expand the arbitrator’s fact-finding role.
