Arbitration of company law issues, among others, in India is still in its developing stage with the judiciary constantly adding confusing precedents. The views submitted by different courts on this subject are inconsistent with one another and hence, give rise to the need of a settled law. The question of the power of an arbitrator to lift the corporate veil is also muddled in India. The arbitral tribunal under the Arbitration and Conciliation Act, 1996 (as amended) has been provided with the freedom to try and decide all arbitrable disputes, to which the parties have consented freely, by signing a contract having a valid arbitration agreement binding on the parties. However, the Act does not clearly define the power of the arbitral tribunal with regard to lifting of the corporate veil.
The Arbitration and Conciliation Act, 1996 is based on the UNCITRAL Model Law. The UNCITRAL Model Law has enabled arbitrators to pierce the corporate facade. The Act does not have sufficient provisions to govern and acknowledge the idea of lifting the corporate veil by an arbitral tribunal. Consequently, the legislature must take an initiative to clarify the powers of the arbitrators to adjudicate issues relating to company law till the threshold that they do not set foot in the scope of issues specifically adjudicated by the judiciary.
* Associate, Miglani Varma and Co., New Delhi (India).
** Student, B.B.A. LL.B. (Hons.), 3rd Year, New Law College, Bharati Vidyapeeth (Deemed to be University), Pune, Maharashtra, India.