Section 10 of Arbitration and Conciliation Act, 1996

Section 10 of Arbitration and Conciliation Act, 1996 

Number of arbitrators: 

1. Freedom to Choose Arbitrators:

   Section 10(1) allows parties to decide the number of arbitrators, provided the number is not even. This provision ensures flexibility in arbitration while preventing potential deadlocks caused by an even number of arbitrators who may divide equally in their opinions.

2. Default Rule:

   If parties cannot agree on the number of arbitrators, Section 10(2) specifies that the arbitral tribunal will consist of a sole arbitrator. This default arrangement highlights the legislature’s intent to simplify and speed up the dispute resolution process.

Overview of Section 10:

Section 10 addresses the composition of an arbitral tribunal under the Arbitration and Conciliation Act, 1996 and outlines the rules governing the number of arbitrators. Under Section 10(1) of the Act, the parties are free to determine the number of arbitrators. The legislative intent behind this freedom is to uphold the principle of party autonomy, allowing parties to decide how they wish their arbitration to be conducted. However, it is expressly stated that the chosen number cannot be an even number.  The rationale for avoiding an even number of arbitrators is to prevent deadlocks, which could stall the proceedings if the arbitrators are equally divided in their opinions. 

If the parties fail to agree on the number of arbitrators, the default provision applies, Section 10(2) stipulates that the arbitral tribunal will consist of a sole arbitrator. This default rule underscores the legislature’s inclination towards simpler, swifter dispute resolution mechanisms. 

In the landmark case Narayan Prasad Lohia v. Nikunj Kumar Lohia & Ors. (2002) 3 SCC 572, the Supreme Court addressed whether Section 10 is a mandatory provision. The Court clarified that:

• Failure to comply with the odd-number requirement does not invalidate proceedings if no timely objection is raised.
• Parties waive their right to object under Section 4 if they do not raise concerns within the prescribed time.
  This ruling reinforced minimal judicial interference, ensuring that minor procedural lapses do not derail arbitration proceedings.

Thus, Section 10 of the Arbitration and Conciliation Act, 1996, balances party autonomy and procedural safeguards. It requires an odd number of arbitrators or defaults to a sole arbitrator if none is specified. This approach ensures efficiency, prevents deadlocks, and promotes finality in arbitral awards.

 

Disclaimer: This blog is for informational purposes only and does not constitute any legal advice. Readers should seek expert legal counsel before taking any action based on the content.