Is arbitrator bound by terms of contract for liquidation damages

the arbitrator is bound by the terms of the contract that provide for liquidated damages.

Answers (3)

arbitrator has to decide the matter within the parameters of agreement between the parties. if there are specific provisions in the agreement relating to liquidated damages, yes, the arbitrator is bond by the terms of the agreement

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In Arbitration Proceedings, an Arbitrator is bound by the terms of contract between the parties. An Arbitration cannot decide any question or award any relief which is outside the purview of the Agreement between the parties.

However, if the arbitration agreement authorizes the Arbitrator to decide the matter on the principal of "ex aequo et bono" i.e. on equitable grounds, then arbitration can decide the matter on the principal of equity and may not be restricted by terms of agreement.

However, over all agreement has to be reviewed to decide the jurisdiction of the Arbitrator

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The Arbitrator is a judicial authority like the Court. The arbitrator will examine the terms of the contract and specially the terms of liquidated damages. Firstly, he will see whether the party is entitled for it or not. Secondly, he will quantify the damages as per seriousness and loss to the party. He may not strictly give the same as laid in the contract as he will decided as per his finding only.

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