Validity of an Arbitration Agreement
Validity of an Arbitration Agreement
Section 16 of the Act empowers the arbitral tribunal to rule on its jurisdiction:
Under the Act, the arbitration tribunal can rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for this purpose:
- an arbitration clause which forms part of a contract will be treated as an agreement independent of the other terms of the contract; and
- a decision by the arbitral tribunal that the contract is null and void will not entail, ipso jure, the invalidity of the arbitration clause.
A plea that the arbitral tribunal does not have jurisdiction will, however, have to be raised not later than the submission of the statement of defense. However, a party shall not be precluded from raising such a plea merely because he has appointed, or participated in the appointment of an arbitrator.
A plea that the arbitral tribunal is exceeding the scope of its authority has to be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.
The arbitral tribunal may, in either of the cases referred to above, admit later a plea if it considers the delay justified.
The arbitral tribunal has to decide on a plea about lack of jurisdiction or about the tribunal exceeding the scope of its authority and where the arbitral tribunal takes a decision rejecting the plea, it shall continue with the arbitral proceedings and make the arbitral award.
A party aggrieved by such an arbitral award is free to make an application for setting aside the award under section 34 of the Act. Section 34(2)(a) inter alia permits a challenge to an award on the above grounds.
