The arbitrators are not agents of the parties. They are bound to come together and act judicially as arbitrators, conforming to the principles of the natural justice. It is well settled and also mandatory by statutory provisions that the arbitrator is not bound by the technical rules of procedure which the courts normally observe. This statement could be backed by Section 19 of the Arbitration and Conciliation Act, 1996. In other words, the arbitral tribunal is not bound by the Civil Procedure Code, 1908 or the Indian Evidence Act, 1872. The admissibility, relevance and materiality of evidence are matters which are within the exclusive jurisdiction of the tribunal unless otherwise agreed by the parties. Where the parties have not agreed to any specific procedure, the arbitral tribunal has to follow the statutory procedure, it means it has to weigh the entire evidence on record properly and come to a just conclusion within the parameters of the dispute. The arbitral tribunal is bound to follow the procedure as contained under Sec. 19(4) of the act and have the duty to determine the admissibility and weight of evidence of the documents filed by both the parties.
This however does not allow the arbitrator to adopt procedure not agreeable by the parties to arbitration. An arbitrator though free from fetters of adjective law, must nevertheless observe the fundamental principles of natural justice. An arbitral tribunal is not bound by the technical and strict rules of evidence but, he must not disregard the rules of evidence which are founded on the fundamental principles of natural justice and public policy. A breach of the principles of natural justice would make the award liable to be declared invalid and inoperative in the eye of law. It would be contrary to the fundamental principles of natural justice, if a person is refused an opportunity to adduce evidence in support of his claim and, without any enquiry, a liability of a large sum is imposed upon him. While adjudicating upon the disputes it is duty of the arbitrators to give full opportunity to the parties to adduce their evidence and also allow them to be heard. The following are the instances where it was held that the arbitrator had acted against the principles of natural justice:
1. The arbitrators by accepting entries in the books of accounts, which were disputed by party and which the arbitrators examined in his absence, contravened the principles of natural justice and were guilty of legal misconduct. The award was liable to be set aside.
2. Hearing and receiving evidence from one of the parties, in the absence of the other, without giving the affected party an opportunity to answer or counter it.
3. The arbitrator had informed the parties that the case would be taken up on a different date which would be intimated o them in due course but the arbitrator proceeded to take an ex-parte award in the absence of the parties without affording them an opportunity of being heard.
4. No notice of hearing was given to the other party when the arbitrator decided to hear the opposite party in the residence or office of the respondent. In addition, the rejoinder or he evidence collected from one party was not communicated to the other party.
5. The power under the arbitration agreement which allows the arbitrator to decide the issue and make an award on the basis of his personal knowledge does not give him power, however, to hear one party in the absence of the other. An award made after hearing one of the parties in the absence of the other violates the principles of natural justice.
6. However, for the purposes of constituting a valid arbitration agreement, it is not necessary that the conditions as regards adduction of evidence by the parties, or rendering of an opportunity of hearing to them must specifically be mentioned therein.
7. Even though the Evidence Act is not applicable to arbitration proceedings the principles of natural justice embodied in Section 91 and 92 would still apply.  Under the proviso 4 of Sec. 92, the existence of any distinct and subsequent oral agreement to modify any contract or grant may be proved except when the contract or grant is required to be in writing by law, or registered according to the law in force relating to the registration of documents. The evidence placed before the arbitral tribunal should show or refer whether there has been subsequent agreement. if no such amendment is recorded in the charterparty, the arbitrators will be led to conclude, in view of the evidence available on record, that there is no such agreement. When the contract is reduced to writing, evidence of earlier or contemporaneous agreement is not admissible to contradict, vary or add to the written terms. If a party is contesting that there has been an amendment in the agreement then the burden of proof is upon that party to prove the same in the form of written evidence.
Now there could be three kinds of evidence that would have to be dealt with:
1. Extrinsic Evidence
It can be admitted by the court or the arbitral tribunal to determine the issue of excess of jurisdiction. This kind of evidence is admissible in such cases because the dispute is not something which arises under, or in relation to the contract, or dependent on the construction of the contract, or to be determined within the award by the court. The court can resolve ambiguity by admitting extrinsic evidence. The rationale of this rule is that the nature of the dispute is something which has to be determined outside and independent of what appears in the award. Such jurisdictional error needs to be proved by evidence extrinsic to the award.
2. Fresh Evidence
The test of reference to which fresh evidence may be introduced in the court of appeal as laid down in Ladd v Marshall:
“To justify the recipients of fresh evidence or a new trial, three conditions must be fulfilled: first, it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; secondly, the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; thirdly, the evidence must be such as is presumably to be believed, or in other words, it must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible.”
3. Expert Evidence
In order to establish whether an appointed expert has made a manifest error in determination, the arbitrator is permitted to look at further correspondence between the parties and the expert, the supporting documentation as well as the determination itself. The finality of the determination must not be challenged because another view could, in the light of further argument, properly be taken of the matters dealt with during the determination. If opportunity to rebut expert’s opinion, tendered by one party in evidence before the arbitrator, is not given to the opposite party it would amount to violation of the principles of natural justice.
An award made by an arbitral tribunal without considering the evidence on record is liable to be set aside. A complete absence of evidence, or arbitrator’s failure to take into consideration a very material document on record, or admission of the parties in arriving at the finding, are good grounds for challenging the proceeding. The case of insufficiency of evidence before the arbitrator must be distinguished from where there is no evidence. In the absence of the primary documents which were the foundation of the disputes, the awards given by the arbitrator would be one with no evidence at all or at best can be said to be based on speculation and therefore, prima facie illegal and improperly procured. The court can set aside an award if a document within the control of the parties and forming the foundation of their rights and liabilities was not submitted before the arbitrator and the award was passed without perusing such document.
Often the award of the arbitrator is challenged on the ground that there has been violation of the principles of natural justice, either because the arbitrator omitted to consider the relevant evidence while making the award, or arriving at his conclusions, or that the award passed is based on no evidence at all. The finding of facts by the arbitrator must be based either on evidence or on admission. They cannot be found to exist form a mere contention from one side especially when they are denied by the other. An award based on no evidence is liable to be set aside. Even an ex-parte award must be substantiated by evidence.
The arbitral tribunal or a party with the approval of the arbitral tribunal may apply to the court for assistance in taking evidence. The application seeking court’s assistance must specify:
1. The names and addresses of the parties and arbitrators
2. The general nature of the claim and relief sought
3. The evidence to be obtained; stating:
o The name and address of the witness or expert witness required to be summoned.
o Statement of the subject-matter of the testimony required.
o The description of any document to be produced or property to be inspected.
On such an application being made, the court may direct that the evidence of such witness be directly recorded before the arbitral tribunal. The court when dealing with the requests would apply the provisions contained in the Code of Civil Procedure and Evidence Act. No provision under the Act requires the court to give hearing to a witness, or a party against whom the court wants to issue directions to produce record, or to issue summons to witness.
Arbitration award should not be set aside on the ground that there was insufficient evidence, or that it was unsubstantial and the like, as amongst many reasons, one of the main reasons for going to arbitration is that technical rules of evidence do not apply to it. The objection that the award is liable to be set aside on the ground that the evidences and submissions of the parties were not considered, would be untenable if the arbitrator has specifically recorded the award that he had considered the claims and counter-claims, evidences adduced by the parties, submissions and documents filed by the parties and the arguments advanced by the parties. Also, the award cannot be set aside merely on the ground that the arbitrator has not specifically referred to any evidence of a witness. Appraisal of evidence by the arbitrators is ordinarily never a matter which the court questions and considers.
 Soceite Aninmina Lucchesse Oil v Gorakhram Gokalchand AIR 1964 Mad 532
 Hindustan Shipyard Ltd v Essar Oil Limited (2005) 1 ALT 264
 State of Madhya Pradesh v Satyapaul Wasson AIR 1979 MP 118
 Prem Nath v Om Prakash AIR 1956 Punj 186
 Lakshmi Ice Factory v Union of India AIR 1963 J&K 3
 Chinoy Chalani & Co. v Anjiab AIR 1958 AP 384
 Vinayak Vishnu Sahasrabhudhe v B.G. Gadre and others AIR 1959 Bom 39
 Savarla Venkatasubbiah v Kumara Ramiah AIR 1935 Mad 184. See also Payyavula Vengamma v Payyavula Kesanna AIR 1953 SC 21
 Prem Nath v Om Prakash AIR 1956 Punjab 187
 Sulaikha Clay Mines v Alpha Clays (2005) 1 Arb LR 237 (Kerala)
 Bakhtawar Lal v Ram Kumar AIR 1986 All 160
 Mallikarjun v Gulbarga University 2003 (3) ARBLR 579 SC
 As per Section 91 and 92 of the Evidence Act, 1872, no evidence dehors the terms of the agreement, whether documentary or oral, can be led by the parties to get out of the express terms thereof.
 Bengal Jute Mill Co. v Lalchand AIR 1963 Cal 405
 Scrutton on Charterparty, 20th Edn, p 4.
 Jivarajbhai Ujamshi Sheth v Chintamanrao Balaj AIR 1965 SC 214
 (1954) 1 WLR 1489
 Under Sec. 26 of the Arbitration and Conciliation Act, 1996
 Invensys Plc v Automotive Sealing Systems Ltd (2002) 1 All ER (Comm) 222
 Girdhari Lal v Kameshwar Prasad AIR 1989 All 210. It was stated by the court that even though the provisions of Sec. 45 of the Evidence Act may not be applicable in the literal sense in an arbitral proceeding but the pith and substance of the principles contained therein about obtaining the opinion of the persons especially skilled in science or art are the relevant factors. Normally the expert has to give his opinion before the arbitrator or the court and he must be examined and cross-examined by the respective parties.
 West Bengal Industrial Infra-Strictire Development Corporation v Star Engineering AIR 1987 Cal 126
 Union of India v M/s Ajit Mehta and Associates AIR 1990 Bom 45
 Poulose v State of Kerala AIR 1975 SC 1259
 Delhi Jal Board v Esskay Kohli (2007) 3 Arb LR 314 (Del)
 Basheshar Nath & Co v Union of India (1978) Rajdhani LR 65
 Union of India v M/s Pampassar Distillery Bellary and Other AIR 1981 Del 399
 Under Sec. 27 of the Arbitration and Conciliation, 1996
 Rasiklal Ratilal v Fancy Corporation Ltd (2007) 4 Arb LR 173 (Bom)