Conducting the Arbitration: Equal Treatment, Procedure, Place, Commencement and Language

In one line

The tribunal must treat the parties equally and hear them both; beyond that it is free of the Code of Civil Procedure and the Evidence Act and can run the case as it thinks fit.

In exam wording: section 18 requires the parties to be treated with equality and each to be given a full opportunity to present his case; section 19 frees the tribunal from the Code of Civil Procedure 1908 and the Indian Evidence Act 1872; and sections 20 to 22 govern the place of arbitration, the commencement of proceedings and the language.

Section 18: the one rule that cannot be bent

The parties shall be treated with equality and each party shall be given a full opportunity to present his case.

One sentence, and it is the most important in Chapter V.

Everything else in the conduct of an arbitration is flexible. This is not. Section 18 is the arbitral expression of natural justice, and it is what stops "freedom from procedure" becoming "freedom from fairness". Note the two limbs, because they are different duties:

Equality of treatment. Whatever is allowed to one side must be allowed to the other. If one party gets three weeks to file evidence, so does the other.

A full opportunity to present his case. Not a token one. Enough notice, enough time, and a real chance to answer the other side's material.

Section 18 has no "unless otherwise agreed by the parties". Almost every other section in this chapter does. That absence is the strongest signal in the Act that the provision is mandatory: the parties cannot contract out of it, and section 4's waiver rule does not reach it, because it is not a provision from which the parties may derogate.

Where it bites. Section 34(2)(a)(iii) makes it a ground for setting aside an award that a party was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case. Chapter 400 works that through. In practice this is the commonest real complaint about an arbitration.

Section 19: free of the Code and the Evidence Act

Section 19(1): the arbitral tribunal shall not be bound by the Code of Civil Procedure 1908 or the Indian Evidence Act 1872.

Section 19(2): subject to this Part, the parties are free to agree on the procedure to be followed.

Section 19(3): failing agreement, the tribunal may, subject to this Part, conduct the proceedings in the manner it considers appropriate.

Section 19(4): that power includes the power to determine the admissibility, relevance, materiality and weight of any evidence.

This is where arbitration's speed comes from. There is no framing of issues, no rule against hearsay, no requirement that a document be proved through a witness who made it. The tribunal decides what to look at and what it is worth.