CS Professional · Arbitration, Mediation and Conciliation · Commercial Transactions

Under a supply agreement between Bharat Spices Ltd and Gomti Traders, the arbitration clause says nothing about the tribunal deciding as amiable compositeur. After hearing, the three-member tribunal wishes to decide the dispute on what it feels is just and fair, setting aside the agreed price clause. Is this permissible?

It is not permissible. A tribunal may decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it. Since the clause is silent, the tribunal must decide by law and the contract terms, not by its own sense of fairness.

1. AYes, because a tribunal always has inherent power to decide on fairness
2. BYes, if the presiding arbitrator alone considers it fair
3. CNo, because it may decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised itCorrect
4. DNo, because a tribunal can never consider fairness in any circumstance