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Intervention by Court only in few circumstances like fraud or bias by the Arbitrators or violation of natural justice

The Supreme Court once again in Sri Chittaranjan Maity Vs. Union of India reiterated that intervention of the Court is envisaged only in few circumstances like fraud or bias by the Arbitrators, violation of natural justice. The Court cannot correct the errors of the Arbitrators.

The court was hearing an appeal against the judgment of the Division bench of the Calcutta High Court which had in its judgment considered and ordered against the  the arbitrability of the disputes for the first time, particularly, when the Respondent has not urged the issue relating to 'No Claims Certificate' before the Chief Justice, Arbitral Tribunal or before the learned Single Judge.

The Supreme Court said that this Court, in Mcdermott International Inc. v. Burn Standard Co. Ltd. and Ors., has held that, the party questioning the jurisdiction of the Arbitrator has an obligation to raise the said question before the Arbitrator. It has been held that, after the 1996 Act came into force, under Section 16 of the 1996 Act the party questioning the jurisdiction of the arbitrator has an obligation to raise the said question before the arbitrator. Such a question of jurisdiction could be raised if it is beyond the scope of his authority. It was required to be raised during arbitration proceedings or soon after initiation thereof. The jurisdictional question is required to be determined as a preliminary ground. A decision taken thereupon by the arbitrator would be the subject-matter of challenge under Section 34 of 1996 Act. In the event the arbitrator opined that he had no jurisdiction in relation thereto an appeal there against was provided for under Section 37 of 1996 Act. 

Note: What is interesting about this matter is how the same issue is being repeatedly rehashed and introducing contradictory opinions.

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