All India Bar Examination (AIBE) 2-II Previous Year Question Papers with Answers

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6.

A and B enter into a valid arbitration agreement in relation to a share purchase agreement. As per the agreement, any dispute in relation to the share purchase between A and B must be referred to a sole arbitrator. Thereafter, A and B have a dispute in relation to the share purchase. A and B refer the matter to a sole arbitrator. The sole arbitrator passes an award in favor of A. B is aggrieved by the award he believes that the as arbitrator misinterpreted a provision of the agreement relating to the "delivery of shares". B wants to appeal on this ground.

Principle: There is no right to challenge an arbitral award, if the composition of the arbitral tribunal or arbitration procedure is in accordance with the agreement of the parties, even though such composition or procedure is contrary to Part I of the Arbitration and Conciliation Act, 1996. It is not open to challenge the arbitral award on the ground that the arbitrator has drawn her own conclusions or has not appreciated the facts.
A: B can appeal the arbitral award before any court of competent jurisdiction.
B: B can appeal the award before the relevant High Court.
C: B can appeal the award before the Supreme Court.
D: B can appeal the award before the Arbitration Appellate Tribunal.
E: B cannot appeal the award.

The answer is: E

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Explanation

E: B cannot appeal the award.

Explanation:

The principle provided states that if the composition of the arbitral tribunal or arbitration procedure is in accordance with the agreement of the parties, even if it is contrary to Part I of the Arbitration and Conciliation Act, 1996, there is no right to challenge the arbitral award on those grounds. Additionally, it mentions that an award cannot be challenged on the ground that the arbitrator has drawn her own conclusions or has not appreciated the facts.

In this case, A and B had a valid arbitration agreement that specified a sole arbitrator for resolving disputes related to the share purchase agreement. Since the arbitration procedure was in accordance with their agreement, B cannot challenge the arbitral award on the ground that the arbitrator misinterpreted a provision of the agreement relating to the "delivery of shares." Therefore, option E is the correct choice. B cannot appeal the award on this ground.