Tuesday, 23 August 2011

Arbitral tribunals must confine itself to terms of reference


The Supreme Court has reiterated that arbitral tribunals should not travel beyond the issues referred to them. They should not decide issues which are not in the terms of reference and should not enlarge the scope of the reference. If the tribunal goes beyond the reference a court can intervene to correct it, the Supreme Court stated in the case, MSK Projects (JV) Ltd vs State of Rajashtan. In this case, the PWD undertook a construction on the Bharatpur-Mathura road and the offer of MSK was accepted and the work was completed. When the company started collecting toll, there was an agitation which led to prohibition of entry of vehicles to Bharatpur, affecting the income of the company. It invoked arbitration and won the award against the government. The district judge set it aside. The Rajasthan also ruled against the company. The Supreme Court asked the tribunal to reconsider the specific issues formulated by it. 

No comments:

Post a Comment