Asked July 11, 2016

Unreasonable Award by Arbitrator

  • 1 Answer

I am a movie writer- director. I made one documentary film for one NGO. i signed an MOU. In the mou ngo has mentioned that they will appoint arbitrator and if any dispute occur, arbitrator's decision will be abide by all. Now, the ngo says they have not like the movie and ask for return of the full payment. Apart from it now the arbitrator has ruled that I have to pay five times more than the money paid. There is no such mention in the mou of such terms and conditions. The jurisdiction is the city of NGO. Pl guide me what to do?

Answer 1

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Ayushi Singhal

You need to identify whether the MoU you signed was legally binding or a mere expression of interest to enter into a contract. If it was the former, the arbitral award is not valid, since you did not consent to it and you can approach the court for setting aside the award as per Section 34 of the Indian Arbitration and Conciliation Act, 1996. The section provides for setting aside the award, when it has been passed in the absence of a binding arbitration agreement, i.e. when the arbitration agreement is not valid.


However, in case you did consent to arbitration freely (without any influence of the NGO), you could challenge the award of the arbitrator on the ground of the award being in violation of public policy of India, or it being patently illegal (Section 34 of the Indian Arbitration and Conciliation Act, 1996). You could make use of the case of ONGC v. Saw Pipes ((2003) 5 SCC 705), where it was held that an arbitral award can be set aside if it is against the terms of the contract.

Agree Comment 0 Agrees over 5 years ago

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