Parties to contract relying upon their own set of agreed rules to their advantage are estopped from pleading to the contrary that the rules are inapplicable for any other purpose when such rules are themselves self-contained code.
The Delhi High Court while dealing with issue pertaining to binding effect of institutional arbitration prescribing its set of rules vis-à-vis Arbitration and Conciliation Act, 1996 opined that parties to contract relying upon their own set of agreed rules to their advantage are estopped from pleading to the contrary that the rules are inapplicable for any other purpose when such rules are themselves self-contained code. Arbitration agreement is the fountain head of the Arbitral Tribunal’s power and authority and parties and tribunal are controlled by the terms of the said agreement unless and otherwise parties agree to the contrary, the terms of agreement must operate in full In reference to applicability of Sections 14 and 15 of the Arbitration and Conciliation Act, 1996 (Act), the Court further opined that the mandate of arbitrator can be terminated on such situation as are prescribed under Section 14 (1) and Section 15 (1) of the Act either by way of: • Mutual agreement between the parties; or • If parties agreeing to the otherwise by way of any other mode of termination or by way of the court if the controversy still persist. • Right to approach the court if the controversy remains is further subject to the agreement which the parties may otherwise enter prescribing any other mode of termination of the mandate than by approaching the court. In the instant case Parties to the dispute agreed to submit themselves to a particular set of rules for resolution of all their disputes arising out of executed contract amongst them. It was held that the provisions of Section 14 and 15 of the Act would have no applicability in the instant case, as since the Parties have once submitted themselves for applicability of a particular institutional rule (IATA Rules) in the instant case, the terms of the same will have to be abided by. Transair & Ors. vs. M/s. Kuwait Airways & Ors. [Delhi HC, 21.10.2013]