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CS Professional · Arbitration, Mediation and Conciliation · Arbitration: Introduction, Agreements and its Institutions

In an institutional arbitration between two Indian companies seated in Pune, Rao Cables Ltd asks the tribunal to decide ex aequo et bono since the institution's rules permit 'fair and equitable' decisions. The parties never expressly authorised this in their agreement. What does Section 28 require?

The tribunal may decide ex aequo et bono only if the parties have expressly authorised it, which did not happen here. Section 28(2) imposes that condition, and section 28(3) requires the tribunal, in all cases, to take into account the contract terms and applicable trade usages.

  1. AThe tribunal may do so, as institutional rules always suffice
  2. BThe tribunal may do so if the Court consents
  3. CThe tribunal may do so only if the parties have expressly authorised it, and in all cases must take into account the contract terms and trade usagesCorrect
  4. DThe tribunal may do so, but must ignore trade usages

Explanation

Section 28(2) permits ex aequo et bono or amiable compositeur decisions only where the parties have expressly authorised it. Section 28(3) requires the tribunal in all cases to take into account the contract terms and applicable trade usages. Court consent plays no role.

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