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

Under the arbitration agreement between Vikram Steels Ltd and Anand Traders, the parties authorise a named arbitral institution to decide the number of arbitrators, a point on which Part I leaves them free to decide. Anand Traders objects that only the parties themselves may decide it. Which statement is correct?

The objection fails. Under section 2(6), where Part I leaves the parties free to decide an issue, that freedom includes authorising any person, including an institution, to decide it. Delegating the number of arbitrators to the institution is therefore valid without any court approval.

  1. AThe objection is valid, because freedom of parties cannot be delegated
  2. BThe objection fails, because the freedom includes the right to authorise any person, including an institution, to determine the issueCorrect
  3. CThe objection is valid unless the High Court approves the delegation
  4. DThe objection fails only if the institution is located abroad

Explanation

Section 2(6) says that where Part I, except section 28, leaves parties free to determine an issue, that freedom includes authorising any person including an institution to determine it. The number of arbitrators is such an issue, so the delegation is valid without court approval.

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