The allegedly “interventionist” role of Indian Courts in arbitration has been criticized in several fora; though there is something to be said for judicial intervention in arbitration. What is interesting is that a recent English decision highlights that even the Courts in that country are not entirely averse to interfering in arbitration proceedings. The English Arbitration Act in fact allows parties to appeal on a question of law decided by arbitral tribunals, unless otherwise agreed to by the parties. Section 69 reads:
“Unless otherwise agreed by the parties, a party to arbitral proceedings may (upon notice to the other parties and to the tribunal) appeal to the court on a question of law arising out of an award made in the proceedings…”
In this context, the interpretation of the words “unless otherwise agreed by the parties” assumes importance. Given the fact that the judicial role in arbitration is thought to be minimal, one would expect that Courts have given a broad interpretation to these words. Shell Egypt v. Dana Gas is an illustration to show that Court have instead been rather strict. The agreement between the parties stated that the arbitral award was “final, conclusive and binding”; yet the Court held that this did not mean that the right to appeal under Section 69 was excluded. It stated:
In relation to the meaning of the words “final and binding”, in the context of an arbitration agreement, I agree with the conclusion reached by Ramsey J, at paragraph 22 of his judgment in Essex County Council v Premier Recycling Ltd, supra, who, having reviewed certain of the Commonwealth authorities, said:
“However, in summary, I conclude that the use of the words ‘final and binding’, in terms of reference of the arbitration are of themselves insufficient to amount to an exclusion of appeal. Such a phrase is just as appropriate, in my judgment, to mean final and binding subject to the provisions of the Arbitration Act 1996.”
It was then held that the addition of the word “conclusive” could not change this position. Thus, effectively, it appears that in order to exclude the operation of Section 69 of the English Act, express language to that effect must be used.
It has been suggested on the Kluwer Arbitration Blog, “…whilst the outcome in Shell v Dana Gas may seem to overly constrain the autonomy of the arbitration process, the approach taken by the English court does serve to ensure that procedural safeguards are in place to protect those participating in arbitration…” There seems to be no reason to suppose why the same cannot be said of (at least some forms of) intervention by Indian Courts. Indeed, as noted in this post, leading practitioners have strongly defended judicial intervention in arbitration.