Composition of the Arbitral Tribunal

In one line

Section 10 lets the parties fix the number of arbitrators, forbids an even number, and supplies a sole arbitrator where they fix none, but the prohibition is derogable, so a two-arbitrator clause survives if nobody objects in time.

Section 10

10(1): the parties are FREE TO DETERMINE the number of arbitrators, PROVIDED that such number SHALL NOT BE AN EVEN NUMBER.

10(2): failing that determination, the arbitral tribunal SHALL CONSIST OF A SOLE ARBITRATOR.

Note the contrast with the Model Law. Article 10(2) of the Model Law supplies THREE arbitrators in default; section 10(2) supplies ONE. India chose the cheaper default deliberately, and the choice matters, because a party who drafts no number gets a sole arbitrator whether it wanted one or not.

And the tribunal is defined in section 2(1)(d) as a SOLE ARBITRATOR OR A PANEL of arbitrators, so a one-member tribunal is a tribunal in every sense.

Why an even number is forbidden

An even-numbered tribunal can deadlock, and a deadlocked tribunal produces no award. Section 29(1) decides by a MAJORITY of all the members, which presupposes that a majority is arithmetically possible.

The historical answer is different and worth a line. Under the 1940 Act a reference to two arbitrators was the standard commercial form, with an umpire appointed to decide if they differed. The 1996 Act abolished the umpire and required an odd number instead.

But a two-arbitrator clause is valid

The case. Narayan Prasad Lohia v. Nikunj Kumar Lohia, (2002) 3 SCC 572.

Facts. A family dispute was referred, by the parties' own agreement, to two arbitrators, who made an award. The losing party then applied to set the award aside on the ground that a tribunal of two contravened section 10(1).

Held. The Supreme Court held that section 10 is a DEROGABLE provision. An objection to the composition of the tribunal must be raised under section 16(2), not later than the submission of the statement of defence, and a party who does not raise it is DEEMED TO HAVE WAIVED his right to object under section 4. The award stood. The Court reasoned that if a party could keep such an objection in reserve, it could arbitrate to an award and then destroy it, which the Act's scheme of section 16 read with section 4 is designed to prevent.

The case. M.M.T.C. Ltd. v. Sterlite Industries (India) Ltd., (1996) 6 SCC 716.

Facts. An arbitration clause providing for two arbitrators was challenged as invalid under the newly enacted section 10, in a petition about the constitution of the tribunal.

Held. The Court held that an agreement providing for an even number of arbitrators is not by itself invalid, and does not make the arbitration agreement void; the requirement of an odd number is not one that renders the agreement unenforceable. The decision is the earlier authority and Narayan Prasad Lohia supplies the reasoning.