The concept of Waiver of Right to Object can be defined with respect to a party that proceeds with the arbitration without raising an objection, even after knowing that a requirement under the agreement has not been complied with. Section 4 of the Arbitration and Conciliation Act, 1996 provides for circumstances under which a party knowingly fails to comply with Part I or any other requirement under the arbitration agreement. If the party does not raise any objection against the non-complying party, in the specified time, without undue delay, even after knowing that the agreement has failed to comply with Part I or any other requirement under the arbitration agreement, such a party is said to have waived its right to object. This concept has come about in good faith to protect the arbitral proceedings, and this provision is based on the principle of “estoppel” or “venire contra factum proprium“.
The court, in several of its judgements, has made it clear that the parties to an arbitral proceeding cannot raise an objection as and when they please, and if they do so, must provide a reasonable justification for the same. In Satish Kumar v. Union of India, it was held that a party that does not object a certain fact before the tribunal is estopped from doing so at a later stage. The silence of the party in not raising an objection even after knowing about its non-compliance is said to be an inconsistent behaviour leading to a waiver of the party’s right to object. For the purposes of the waiver, the time period must be reasonable, and the nature and the circumstances of the case must be taken into consideration.
After an arbitration tribunal rules that the party has waives his right to object, the party also loses its right to object the non-compliance in subsequent proceedings in domestic courts. Only objections against violation of non-mandatory provisions of applicable arbitration law can be waived. However, there are exceptions to this, and objections against violation of mandatory provisions of arbitration law can also be waived. Section 16(2) and 16(3) of the Act are the exceptions, and the former provides that a plea saying that the Arbitral Tribunal does not have jurisdiction cannot be raised later than the submission of the statement of defence. Section 16(3) provides that an objection can be raised for an arbitral tribunal exceeding its scope shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.
In the recent case of Quippo, the Supreme Court held that a party that does not dispute a legitimate fact before the arbitral tribunal would lose its right to object with respect to all those matters. The main objective of this is to protect arbitral proceedings and is based on the principle of estoppel, which precludes a person from asserting something contrary to a previous action or statement of that person.
The prohibition on contradicting one’s own behavior, conceived in the expression venire contra factum proprium, or estoppel in common law countries, constitutes one of the concepts from Roman Law that is renowned for protecting a commitment to loyalty. The core of the prohibition of contradicting one’s own behavior, therefore, lies in avoiding behaviors that conflict with previous manifestations of will., Martijn. W. Hesselink, The Concept of Good Faith in TOWARDS A EUROPEAN CIVIL CODE 619-620 (3rd ed., Arthur S. Hartkamp, Ewoud H. Hondius & Martinjn W. Hesselink eds, 2004) available at http://ssrn.com/abstract =1098856; HANS-BERND SCHÄFER & CLAUS OTT, THE ECONOMIC ANALYSIS OF CIVIL LAW 384 (Matthew Braham trans., 2004).
“Estoppel” means that party is prevented by his own acts from claiming a right to detriment of other party who was entitled to rely on such conduct and has acted accordingly., Black, Henry Campell, Black’s Law Dictionary, 6th ed., St. Paul 1990.
Karnataka State Road Transport Corporation vs. M. Keshava Raju, MANU/KA/0732/2003 : A.I.R 2004 Kant 109.
Narayan Prasad Lohia vs Nikunj Kumar Lohia & Ors., A.I.R 2002 S.C. 1139.
Satish Kumar v. Union of India & Ors. 152 (2008) DLT 475.
Indian Arbitration and Conciliation Act, (1996), art. 16, cl. 2 & 3.
Quippo Construction Equipment ltd vs. Janardan Nirman Pvt. Ltd., SLP (C) NO.11011 of 2019.