Can a third party challenge an arbitral award in India?
Asked by: Dorcas Weissnat | Last update: October 23, 2025Score: 4.6/5 (17 votes)
Singh held that only parties to an arbitration agreement can challenge the award under Section 34 of the
Can an arbitration award be challenged in India?
An arbitral award can be challenged if it deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration or it contains decisions on matters beyond the scope of the submissions to arbitration.
Can a third party be bound by an arbitration agreement?
Cox and Kings unanimously acknowledged the ability of Indian courts and tribunals to bind non-signatories to an arbitration agreement. The Supreme Court recognised that there are two paths to achieve this. First, the consent-based path where a non-signatory can indicate their consent to be a party in multiple ways.
Can you fight an arbitration award?
Under California law, arbitration decisions are generally not reviewable for errors of fact or law. There is, though, an exception to this general rule. Courts can vacate arbitration awards if the arbitrator exceeds its powers and the award cannot be corrected without affecting the merits of the decision.
How do you overturn an arbitration award?
The answer is yes, through a process called vacatur, i.e., having the award vacated or canceled. The vacatur process is set forth in two statutes: the Federal Arbitration Act and the applicable state arbitration act governing the dispute. Depending on the case, one or both statutes may be applicable.
How to challenge an arbitral award in an international arbitration within or outside India?
How do I dispute an arbitration award?
The Labour Relations Act (LRA) does not allow any party to appeal against an arbitration award. However, such awards can be overturned by other means. In fact, there are two ways of going about setting aside an arbitration award: by Labour Court review or by rescission application.
Can you override an arbitration agreement?
The Court opined that the Federal Arbitration Act (FAA) establishes liberal federal policy favoring arbitration agreements, and such agreements may only be overridden when there is a contrary Congressional command.
What voids an arbitration?
As a general rule, only strong evidence of duress or fraud are sufficient to invalidate an arbitration clause. It is worth noting that many state courts will to set aside arbitration agreements where the parties have vastly disparate bargaining power (such as between employers and employees).
Can you rescind an arbitration award?
Section 144 deals with the rescission of arbitration awards and rulings. Any award may be varied or rescinded by the commissioner who issued the award or by any other commissioner appointed by the Director to do so.
Can you challenge an arbitration?
There is no right to appeal in arbitration like there is in court. If the parties agree to use the AAA to handle the appeal, the AAA will treat the appeal like a new case filing and more fees would have to be paid. Under federal and state laws, there are only a few ways to challenge an arbitrator's award.
What happens if one party doesn't agree to arbitration?
Seeking a Court Order: In some cases, the party seeking arbitration may file a motion with the court, asking the court to compel the non-participating party to participate in the arbitration process.
Is arbitration legally binding in India?
In the case of Rukmanibai Gupta v. Collector, Jabalpur (1980) 4 SCC 556(AIR 1981 SC 479) (MANU / SC / 0002 / 1980) the Supreme Court held that as per the arbitration agreement the dispute will refer to the arbitration and the decision of the arbitrator would be final and binding.
Who is the third party in arbitration?
Arbitration—the out-of-court resolution of a dispute between parties to a contract, decided by an impartial third party (the arbitrator)—is faster and more cost effective than litigation. AAA cases are often settled prior to the arbitrator's decision—and nearly half of those cases incur no arbitrator compensation.
Can you appeal a arbitration decision in India?
The court may set aside or modify the arbitral award if it finds any of the grounds specified under Section 34 of the Act are satisfied. Appeal: If a party is dissatisfied with the decision of the court under Section 34, they may appeal to a higher court, usually the High Court.
What makes an arbitration agreement invalid in India?
An arbitration agreement, being a contract governed by the Indian Contract Act, 1872 (ICA), will be void and unenforceable if executed by a person who is not competent to contract, for example, a minor or a person of unsound mind.
How to enforce International Arbitration Award in India?
For enforcement of a foreign award, an application is required to be made to the Court under section 47 of the Act accompanied by the original copy of the award, the original arbitration agreement or its duly certified copy, and such evidence as may be necessary to prove that the award is a foreign award.
What are reasons that an arbitration award may be overturned?
Decisions indicate that a court may review an arbitrator's award if it appears that the arbitrator substituted his judgment for that of the parties, the award does not draw its essence from the contract, the award contains material error, and the award is against public law or policy.
Can you still sue after signing an arbitration agreement?
In some instances, you may be able to sue if you signed a valid arbitration agreement. While courts generally favor arbitration agreements, they will allow you to file a lawsuit if either you didn't understand your rights or your claims fall outside the arbitration provision's scope.
Can I appeal an arbitration award?
Once an arbitrator issues an award, either an agency or a union may appeal the arbitrator's award by filing an "exception" with the Authority within 30 days after the date on which the Arbitrator served the award on the parties.
How to bypass an arbitration agreement?
Some contracts give you the right to opt out of the forced arbitration clause within a certain period of time, often 30 to 60 days, after signing the agreement by notifying the company that you wish to opt out. Check your contract for the deadline and for specific instructions for opting out.
What matters are not allowed in arbitration?
1 of Act 49 of 1996.] A reference to arbitration shall not be permissible in respect of- (a) any matrimonial cause or any matter incidental to any such cause; or (b) any matter relating to status.
Can you sue an arbitrator?
Several jurisdictions have recorded a rise in lawsuits against international arbitrators and arbitral institutions in national courts (p. 13). These cases are occasionally unfounded and may be initiated by disgruntled parties who are dissatisfied with the outcome of an award.
What makes arbitration unenforceable?
This law provides that arbitration agreements are generally valid and enforceable. The major exception to this provision is that the arbitration agreement is not enforceable if it violates the general law of contracts – which applies to all contracts under the law of the state that governs the agreement.
How to stop arbitration proceedings?
(1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub-section (2). (c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.
Can you challenge an arbitration clause?
The FAA expressly permits a party to challenge the enforceability or validity of an arbitration clause.