New Delhi, Aug 5 : The Supreme Court has held that that an arbitral tribunal is not a court of law.
A bench of Justice B.R. Gavai and Justice R.F. Nariman, in a judgement last week, held: "Its (arbitral tribunal) orders are not judicial orders. Its functions are not judicial functions. It cannot exercise its powers ex debito justitiae. It has been held that the jurisdiction of the arbitrator being confined to the four corners of the agreement, he can only pass such an order which may be the subject Âmatter of reference." The judgement came in the case of PSA Sical Terminals as appellants versus the board of trustees of V.O. Chidambranar Port Trust, Tuticorin.
"It has been held that the role of the Arbitrator is to arbitrate within the terms of the contract. He has no power apart from what the parties have given him under the contract. If he has travelled beyond the contract, he would be acting without jurisdiction," the court said.
Sical had filed an appeal as the High Court set aside the award dated February 14, 2014, passed by the Arbitral Tribunal and the order passed by the District Judge dated February 25, 2016, rejecting the application filed by the respondent No 1 herein under Section 34 of the Arbitration Act.
"In that view of the matter, we are of the considered view, that the impugned Award would come under the realm of 'patent illegality' and therefore, has been rightly set aside by the High Court," the apex court said.