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have jurisdiction to hear an application under the said article even if hearings has
been held in another county. In the case of Yograj Infrastructure Ltd. vs. Ssang Yong
Engineering and Construction Co. Ltd it held that courts have adopted a low
threshold for assuming that the parties to arbitration proceedings taking place
outside India have, at least implicitly, excluded the application of the Indian
Arbitration Act. However, if there was no stipulation nor determined by an arbitral
tribunal, it shall be with the courts at the effective place of arbitration, if it cannot
be determined it shall be at the last oral hearing.
Setting aside proceedings under article 34 are admissible against all types of
arbitral awards, irrespective of whether they completely terminate the proceedings
or are awards finally determining certain claims only. The mere fact that a party
consented to an award on agreed terms pursuant to article 30 does not prohibit it
from applying for the setting aside of the award under article 34. Thus, courts
considered that where the award on agreed terms was obtained by fraud, it may be
set aside. Moreover, a German Court has held that setting aside proceedings
against procedural orders of arbitral tribunals are inadmissible. Also, a court does
not have jurisdiction under article 34 to set aside a decision of an arbitral tribunal or
of any other dispute resolution body that does not constitute an arbitral award
within the meaning of the Model Law.
A decision of an arbitral tribunal declining jurisdiction could not be the subject to the
setting aside procedure under article 34. Under a Singapore court, it claims that
such is not within the meaning of the said article. However a German court held
that it is as long as the decision of the arbitral tribunal was rendered in the form of
an arbitral award.
Such issue has been resolved in the national law of some countries. Under the
Austrian law, it states that An arbitral award shall be set aside if: (1) a valid
arbitration agreement does not exists or the arbitral tribunal has denied its
jurisdiction despite the existence of a valid arbitration agreement (...). Thus, the
erroneous denial of jurisdiction constitutes an additional ground for setting aside an
award.
In a German court it held that, A third party intervener in the arbitration has been
allowed to bring an action for the setting aside of an arbitral award where the
parties and the arbitral tribunal have, at least tacitly, consented to the intervention
and where the intervener has a legal interest in the outcome of the arbitral
proceedings. In contrast, the New Zealand court held that, only parties to the
arbitration has a right to set aside an award because third parties lack the legal
standing to initiate setting aside proceeding.
The applicant has the burden of proving a ground on the basis of which the award
should be se aside. These grounds are enumerated under article 34 paragraph 2
which has two categories. These are;
review the existence of the arbitration clause at the stage of setting aside
proceedings.
A court ruled that an arbitration agreement contained in a contract was not
automatically binding in relation to a guarantor to the extent the guarantor
was not a party to the said agreement and its obligations were independent
from the principal agreement. By contrast, arbitration agreements contained
in framework agreements were extended to disputes arising out of related
contracts. Accordingly, the Hungarian Supreme Court refused to set aside an
award dealing with a dispute arising from a contract where the underlying
asset management contract contained a broadly worded arbitration clause.
Generally, the Model Law does not provide for any time limits for rendering
an award. However, the arbitration rules and laws sometimes provide for
such time limit. In some cases, courts have held that awards made beyond
the expiry of the time agreed by the parties could be set aside.
Decisions have found negative jurisdictional rulings to be reviewable on the
ground that they constitute awards subject to setting-aside proceedings
under article 34. Particularly noteworthy is a decision of the German Federal
Court of Justice in which the arbitral tribunal had denied jurisdiction on the
ground that the respondent had effectively withdrawn from the arbitration
agreement.
According to the court, article 34 does not allow courts to review the merits of
negative jurisdictional decisions; such decisions can only be set aside in one
of the specific circumstances explicitly mentioned in article 34. While a
Canadian court deemed the arbitral tribunals decision to be reviewable
pursuant to article 34, it noted that a review of the merits of that decision
was impermissible under article 34 since an arbitral decision is not invalid
because it wrongly decided a point of fact and law. In contrast to a decision
of the Court of Appeal of Singapore finding that negative jurisdictional rulings
do not constitute arbitral awards.
In a German court it held that if a party did not raise objections to the
existence of an arbitration agreement at the latest in the submission of the
statement of defense (article 16 (2)), such party was precluded from raising
that objection in an application under article 34. However, where the
respondent failed to submit a statement of defense due to the arbitral
tribunals failure to request the respondent to submit such a statement of
defense, it was found that the party would then not be precluded from raising
such objection under article 34.