Second Bite at the Arbitration Apple: Analysing the Applicability and the Utility of the Internal Appeal Mechanisms in Commercial Arbitrations in India
Aashesh Singh & Swarna Sengupta*
Volume 11 Issue 4 (2018)
Legal jurisdictions across the world promote the finality of arbitral awards by prohibiting any kind of substantive review of awards. Barring exceptional and enumerated circumstances, parties in arbitration get only one shot at arbitrating their disputes, the idiomatic ‘single bite at the apple’. However, such conceptions of arbitral finality have come under attack, as the tolerance for error in arbitration has decreased with increasing complexity and monetary stakes of the disputes involved. To this end, there has been a fervent advocacy for the usage of internal appeal mechanisms for ensuring substantive integrity of arbitral awards. Recognising the growing demand, multiple international jurisdictions and leading arbitration institutions have already begun offering sophisticated appeal procedures. The Supreme Court of India in its 2016 Centrotrade judgement paved the way for appellate procedures in Indian arbitration by upholding the legal validity of such arrangements. Noting the dearth of literature on the issue in the Indian context, through this paper, we present a comprehensive discussion on internal appeal mechanisms and their application in Indian arbitration. Whilst addressing both the normative and the practical criticisms that that have come to be associated with such procedures, we principally argue that internal appellate procedures will not only make the entire process of arbitration fairer, but also more autonomous. We also highlight and offer suggestions for amendments to deal with certain lacunae in the governing statute that may potentially complicate the application of appellate procedures in Indian arbitration. In addition, the paper also doubles up as a practice guide on internal appeal mechanisms as multiple sections offer detailed recommendations for drafting agreements on internal appeal procedures that are cost and time efficient, while simultaneously, are also capable of being tailored according to the specific needs of the parties.