Arbitration And Conciliation Act, 1996 Question and Answers

Alternate Dispute Redressal (ADR)

ADR is a substitute for the more common judicial process. ADR includes methods like negotiation, conciliation, mediation and arbitration. It avoids the cost and time involved in the normal Court procedures.

Arbitration Agreement

It means an agreement between parties to refer present or future disputes arisen or arising between them to arbitration. Such disputes may arise out of contractual or other capacities.

Such an agreement can take two forms – it can be part of a contract, i.e. in the form of a clause in the main contract, or it can be a separate contract by itself. (Section 7)

Conciliation

It is an informal process in which both the disputing parties appoint a neutral conciliator or a third person to bring them to an agreement and to help end the dispute. This is done by sorting out any misinterpretations between the parties and removing the technical difficulties and working out possible solutions.

It is an alternative dispute resolution (ADR) process whereby the parties to a dispute using the help of a conciliator, resolve the issues bothering them.

Arbitration Award

The formalized outcome of arbitration; it outlines the final settlement between the parties.

Settlement Agreement

Sub-section (1) of Section 73 of the Arbitration and Conciliation Act, 1996 provides that when it appears to the conciliator that a settlement may be reached by the parties, he shall formulate the terms of a possible settlement and submit them to the parties for their observations.

After submission of the observations of the parties, the conciliator may reformulate the terms of a possible settlement in their light. Further sub-section (2) provides that if the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement agreement.

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The settlement can be drawn up by the conciliator or he may assist the parties in doing so. Sub-section (3) states that once the parties sign the settlement agreement it shall be final and binding on the parties and persons claiming under them.

The settlement agreement so reached shall be authenticated by the conciliator.

Foreign Awards Enforcement of Certain Foreign Arbitral Awards

Chapters I and II of Part II of the Arbitration and Conciliation Act, 1996 deal with the enforcement of certain foreign awards made under the New York Convention and the Geneva Convention, respectively.

Sections 44 and 53 of the Act define foreign awards as to mean arbitral awards issued on differences between persons arising out of legal relationship, whether contractual or not, considered commercial under the law then in force in India.

Section 46 states that any foreign award which would be enforceable under this Chapter shall be treated as binding for all purposes on the persons as between whom it was made.

Such an award rnay be relied upon by any of those persons in defence proceedings and cases relating to set off, and in any other legal proceedings in India.

CS Executive JIGL - Arbitration And Conciliation Act, 1996 Question and Answers

Lien on Arbitral Award

Lien on arbitral award and deposits as to costs Section 39(1) of the Arbitration and Conciliation Act, 1996 provides that the arbitral tribunal shall have a lien on the arbitral award for any unpaid costs of the arbitration.

Section 39 (2) states that if in any case an arbitral tribunal refuses to deliver its award except on payment of the costs demanded by it, the Court may order that the arbitral tribunal shall deliver the arbitral award to the applicant on payment into Court by the applicant of the due costs.

The Court may also order that out of the money so paid into Court there shall be paid to the arbitral tribunal by way of costs such sum as the Court may consider reasonable and that the balance of the money, if any, shall be refunded to the applicant.

International Commercial Arbitration

As per Section 2(1)(f) of the Arbitration and Conciliation Act, 1996, ‘international commercial arbitration’ means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India and where at least one of the parties is the following:

An individual who is a national of, or habitually resident in any country other than India.
A body corporate which is incorporated in any country other than India,
A company or an association or a body of individuals whose central management and control is exercised in any country other than India, (iv) The Government of a foreign country.

The Arbitration and Conciliation (Amendment) Act, 2019 was passed by the Parliament in order to facilitate the positioning of India as an arbitration hub, both domestic and international.

The salient features of the Arbitration and Conciliation (Amendment) Act, 2019, are as follows:-

Section 11 of the Act relating to “Appointment of Arbitrators” now has the appointment by arbitral institutions instead of directly by the * Supreme Court or High Court. Such “arbitral institutions” would be designated by the Supreme Court or High Court.
Amended section 23 now provides that the “Statement of claim and defence” shall be completed within a period of six months from the 24 date of the receipt of the notice of appointment by the arbitrator.
All acts done in good faith in the course of arbitration proceedings by the arbitrator or arbitrators shall be protected from any suit or other legal proceedings. Moreover, the arbitrator(s), the arbitral institutions and the parties shall maintain confidentiality regarding the information pertaining to the arbitral proceedings.
A new Part 1A was inserted to the Act; it provides for the establishment and incorporation of an independent body, the Arbitration Council of India. Its task shall be the grading of arbitral institutions and accreditation of arbitrators, amongst other works.
Only in situations when no graded arbitral institutions are available would the Chief Justice of the concerned High Court be allowed to maintain a panel of arbitrators for discharging the same functions and duties as those of arbitral institutions.

Legal Representative

The definition of “legal representative” given under Section 2(1)(g) of the Arbitration and Conciliation Act, 1996 has been taken from that given in Section 2(11) of the Code of Civil Procedure.

As per that definition, the following are the persons who shall be deemed to be legal representatives:

A person who in law represents the estate of a deceased person.
A person who inter meddles with the estate of the deceased. (c) A person on whom the estate of a deceased person devolves on the death of the party acting in a representative’s capacity.

Fast track procedure

Section 29B, added by the Arbitration and Conciliation (Amendment) Act, 2015 provides the parties to a dispute with an option to choose fast track procedure, even if they do not wish to subject their arbitration to any institutional rules.

The parties can agree to fast-track procedure at the time of entering into arbitration agreement or at any stage either before or at the time of the appointment of the arbitral tribunal.

It is also noteworthy that the enabling provision in Section 26 of the amendment Act provides for fast track arbitration to be applied to the existing disputes if the parties mutually agree to apply this procedure.

Appealable Orders

Section 37(1) provides an appeal shall lie from the following orders (and from no others), to the Court authorised by law to hear appeals from original decrees of the Court passing the order –

refusing to refer the parties to arbitration under section 8; granting or refusing to grant any measure under section 9; setting aside or refusing to set aside an arbitral award under section 34.

Further Section 37(2) provides that appeal shall also lie to a court from an order of the arbitral tribunal-

accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or
granting or refusing to grant an interim measure under section 17.

Section 37(3) states that no second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.

Confidentiality of information to

Section 42A provides that notwithstanding anything contained in any other law for the time being in force, the arbitrator, the arbitral institution and the parties to the arbitration agreement shall maintain confidentiality of all arbitral proceedings except award where its disclosure is necessary for the purpose of implementation and enforcement of award.

Protection of action taken in good faith

According to Section 42B of the Act, no suit or other legal proceedings shall lie against the arbitrator for anything which is in good faith done or intended to be done under this Act or the rules or regulations made thereunder.

Arbitration Council Of India (Aci)

Part IA as inserted in the Amendment Act, 2019 deals with Arbitration Council of India. Establishment and incorporation of Arbitration Council of India Section 43B empowers the Central Government to establish the Arbitration Council of India to perform the duties and discharge the functions under the Arbitration Conciliation Act, 1996.

The Council shall be a body corporate by the name aforesaid, having perpetual succession and a common seal, with power, subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable, and to enter into contract, and shall, by the said name, sue or be sued.

The head office of the Council shall be at Delhi. The Council may, with the prior approval of the Central Government, establish offices at other places in India.

Composition of Council

According to Section 43C of the Act, the Council shall consist of the following Members, namely:-
a person, who has been, a Judge of the Supreme Court or, Chief Justice of a High Court or, a Judge of a High Court or an eminent person, having special knowledge and experience in the conduct or administration of arbitration, to be appointed by the Central Government in consultation with the Chief Justice of India-Chairperson;
An eminent arbitration practitioner having substantial knowledge and experience in institutional arbitration, both domestic and international, to be nominated by the Central Government-Member;
an eminent academician having experience in research and teaching in the field of arbitration and alternative dispute resolution laws, to be appointed by the Central Government in consultation with the Chairperson-Member;
Secretary to the Government of India in the Department of Legal Affairs, Ministry of Law and Justice or his representative not below the rank of Joint Secretary-Member, ex office
Secretary to the Government of India in the Department of Expenditure, Ministry of Finance or his representative not below the rank of Joint Secretary- Member, ex officio;
one representative of a recognised body of commerce and industry, chosen on rotational basis by the Central Government-Part-time Member; and
Chief Executive Officer-Member-Secretary, ex officio.

The Chairperson and Members of the Council, other than ex officio Members, shall hold office as such, for a term of three years from the date on which they enter upon their office.

Chairperson or appears to appears not to be working out, a switch is made to arbitration.

The conciliation process is handled by an impartial individual known as a conciliator, who meets with the parties involved and works with the parties involved to arrive at a settlement or resolution.

Arbitration is much like a mini court in which the parties need to present their case to a panel of arbitrators, along with supporting evidence.hetaget vlags side of under attach nevig is ‘no enolalo sioitu

The “conciliator” is an impartial person that assists the parties by driving their negotiations and directing them towards a satisfactory agreement. It is unlike arbitration in that conciliation is a much less adversarial proceeding; it seeks to identify a right that has been violated and searches to find the optimal solution.

Arbitration is one step ahead; it seeks to come to a settlement acceptable to both the parties. In this the arbitrator has a greater say.

Conciliation is used almost preventively, as soon as a dispute or misunderstanding surfaces: a conciliator pushes to stop a substantial conflict from developing. Arbitration tries to intervene in a substantial dispute that has already occurred that is difficult to resolve without external assistance.

Descriptive Questions

Question 1: Comment the following: Making of additional award by arbitral tribunal.
Answer:

Making of additional award by arbitral tribunal

Additional award is the award that is given by the arbitral tribunal at the instance of either party. It allows for claims that were originally included in the arbitral proceedings but omitted from the award.

The request for such an additional claim can be submitted within thirty days of the original award being received. The tribunal will intimate its decision within a period of sixty days, which period can be extended upon need.

This is under Section 33, which is for Correction and interpretation of award and additional award. This Section says that – Within thirty days from the receipt of the arbitral award, unless another period of time has been agreed upon by the parties, a party, with notice to the other party, may request the arbitral tribunal to correct any computational, clerical or typographical errors or any other errors of a similar nature.

If so agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to give an interpretation of a specific point or part of the award.

Within thirty days of receiving the award, either party can request the arbitral tribunal to make an additional arbitral award as to claims presented in the arbitral proceedings but omitted from the arbitral award.

The arbitral tribunal shall make the additional arbitral award within sixty days from the receipt of such request.

Question 2: State the various alternative dispute resolution mechanisms.
Answer:

The various alternative dispute resolution mechanisms

Alternate Dispute Redressal or ADR is a fine substitute for the more common judicial process. ADR includes methods like negotiation, conciliation, mediation and arbitration. All these modes have some common features, which make ADR a very viable and preferable mode in dealing with disputes.

Most commonly, these have a shorter time duration as compared to the Court route. The cost is considerably less than the Court and legal fees.

Privacy, neutrality of the proceedings and of the decision and possibilities of customizing the procedures are some more attractive features.

Section 2 (1)(a) of the Arbitration and Conciliation Act, 1996, defines “Arbitration means any arbitration whether or not administered by permanent arbitral institution.”
ARBITRATION can be defined as a method by which parties to a dispute get the dispute settled through the intervention of a third independent person.

Parties can also settle their disputes through a permanent arbitral Institutions like, Indian Council of Arbitration, Chamber of Commerce, etc. Arbitration, a form of alternative dispute resolution (ADR), is a legal technique for the resolution of disputes outside the Courts, thus saving time and money.

In this, the parties to a dispute refer it to one or more persons (the “arbitrators” or “arbitral tribunal”), by whose decision (known as the “arbitral award”) they agree to be bound.

Conciliation: It is an informal process in which both the disputing parties appoint a neutral conciliator or a third person to bring them to an agreement and to help end the dispute.

This is done by sorting out any misinterpretations between the parties and removing the technical difficulties ard working out possible solutions. It is an alternative dispute resolution (ADR) process whereby the parties to a dispute using the help of a conciliator, resolve the issues bothering them. The conciliator meets with the parties separately in an attempt to resolve their differences.

They help by lowering tensions, improving communications, interpreting issues, providing technical assistance, exploring potential solutions and bringing about a negotiated, mutually acceptable settlement.

Negotiation is when the two parties to the dispute choose to settle the matter by themselves, by discussing and compromising.

Mediation is when the two parties appoint a mediator or a person who interacts with both parties, clarifying the views of one party to the other and vice versa. The mediator clarifies the matter and brings about an agreement by bringing greater understanding to it.

Question 3:Enumerate the grounds on which an arbitral award may be challenged before the Court.headl
Answer:

An arbitral award may be challenged in the following ways:

Under Section 33 of the Arbitration and Conciliation Act, 1996. It has been provided under this section that an arbitral award may be corrected or interpreted on application by someone who has been a party to the proceedings.

This application has to be given to the arbitral tribunal, with due notice to the other party, within thirty days of the receipt of the award. The reason for such correction might be existence of clerical, typographical or computational errors in the award.

Similarly, for interpretation of the award also, an application may be sent to the tribunal within 30 days of the receipt of the award. In both these cases, the tribunal may extend the time by a further period of thirty days. The tribunal can also correct an award suo moto within thirty days of passing that award.

As per Section 34(2), an arbitral award can be set aside on the following grounds

Incapacity of parties
Arbitration agreement is not valid under the law the parties to it have

subjected it to – the applicant was not given proper notice or was not able to properly

present his case – dispute or matters or decision not within the scope of submission to

arbitration-

the composition of the arbitral tribunal not in accordance with agreement
the subject matter is not a subject of arbitration
It is against the public policy to India.

Question 4: Define ‘international commercial arbitration’.
Answer:

‘International commercial arbitration’

International Commercial Arbitration refers to arbitration proceedings in which one party is Indian and the other belongs to a foreign country. Such proceedings relate to disputes pertaining to matters strictly commercial thereby leaving out large category of cases related to a personal, domestic or non-commercial matters.

In such a situation, since the disputing parties belong to two different countries it is standard procedure to have the arbitrator from a neutral third country.

In the case of international commercial arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court.

“International commercial arbitration as per the Arbitration and Conciliation Act means “an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under law in force in India and where at least one of the parties is:

an individual who is a national of, or habitual resident in, any country other than India; or
a body corporate which is incorporated in any country other than India; or
a company or an association or a body of individuals whose central management and control is exercised in any country other than India; or
the Government of a foreign country.” [Section 2(1)(f)]

Question 5: What is ad hoc arbitration? How has the ‘Court’ been defined under the Arbitration and Conciliation Act, 1996?
Answer:

Ad hoc arbitration:

Arbitration is an effective form of alternative dispute resolution (ADR), which allows disagreements between two parties to be resolved outside of the traditional Court system, by agreeing upon an arbitrator or arbitrators to determine the matter.

In an arbitration case the parties to a dispute will refer it to the ‘arbitrators’ or an ‘arbitral tribunal’ – by whose decision or award they agree to be bound. Arbitration is often used to resolve commercial disputes, particularly in the context of international commercial transactions, as it saves time and legal cost.

An ad hoc arbitration is one which is not administered by an arbitral institution such as the ICC, LCIA, DIAC or DIFC. The parties, in such a case, have to settle upon the mandate or the terms of reference upon which the arbitration is to take place.

This includes the time, place and methodology to be used. If the parties approach the arbitration with open minds and a spirit of co-operation, ad hocproceedings have the potential to be more flexible, faster and cheaper than institutional proceedings.

There can be substantial cost and time savings as compared to institutional arbitration. Alternatively, the two can be combined, leading to a better structured process that benefits all involved.
Advantages of ad hoc arbitration is inatuomall

Beneficial for smaller claims and for parties who cannot bear the financial rigours of institutional arbitration.
More flexible process.
Quicker as there are no set or regulated time lines.

Section 2 (1) (e) in The Arbitration And Conciliation Act, 1996 defines “Court” as the principal Civil Court of original jurisdiction in a district and includes the High Court in exercise of its ordinar original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes.

The definition comes into use when arbitration fails and the matter comes up before a Court for settlement. With the help of this definition, the relevant Court can then be selected for proceeding on the matter that could not be resolved by arbitration.

Question 6: Define ‘legal representative’ under the Arbitration and Conciliation Act, 1996.
Answer:

‘legal representative’ under the Arbitration and Conciliation Act, 1996

The definition of “legal representative” given under Section 2(1)(g) of the Arbitration and Conciliation Act, 1996 has been taken from that given in Section 2(11) of the Code of Civil Procedure.

As per that definition, the following are the persons who shall be deemed to be legal representatives: ONG

A person who in law represents the estate of a deceased person.
A person who inter meddles with the estate of the deceased.
A person on whom the estate of a deceased person devolves on the death of the party acting in a representative’s capacity.

The following persons are also generally included in the list of legal representatives as mentioned above:

Executors and administrators duly appointed.
Person who has taken on himself duties and responsibilities which belong to the executor or administrator though only in respect of a part of the estate.
Heirs-at-law gaining rights either by succession or by survivorship.
Revisioners at law, when the action has been brought by or against the widow representing her husband’s estate.
Universal legatee, i.e. a person who has been named in a legacy as the beneficiary of all the effects of the testator.

Question 7: What is an ‘arbitral award’ under the Arbitration and Conciliation Act, 1996? Explain.
Answer:

‘Arbitral award’ under the Arbitration and Conciliation Act, 1996

The formalized outcome of arbitration; it outlines the final settlement between the parties. Section 2(1)(c) of the Arbitration and Conciliation Act, 1996 contains the definition of an arbitral award, which includes an interim award.

The essential ingredients of an arbitral award, however, are contained in Section 31 of the Act, which contains the details regarding the form and contents of such an award. It can be a ‘speaking award’ or a simple one, just giving the decision.

In case it is a speaking award, it will be more detailed, giving the reasons and justifications for the award. It will contain also the date and place of passing the award (Section 20). The prescribed form requires that the award be in writing and signed by the members of the tribunal.

Moreover, if th award includes decision regarding monetary payments, it has to contain details of payment, interest to be paid alongwith and the specifications regarding the period to which therse sums pertain. It will also speak of the allocation of the cost of arbitration, i.e. in what ratio are the parties to bear it, who should bear it etc.

Question 8: What is meant by ‘arbitration agreement’ under the Arbitration and Conciliation Act, 1996? Should the arbitration agreement be in writing and whether jurisdiction of civil court is barred?
Answer:

Arbitration agreement

“Arbitration agreement” means an agreement covered under section 7 of the Arbitration and Conciliation Act, 1996 [Section 2(1)(b)]. It has been defined to mean an agreement by parties to submit to arbitration disputes which have arisen or which may arise between them in respect of a defined legal relationship.

The legal relationship may arise out of a contract, although it is not essential that it be so. Sub-section (2) says that an arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.

Sub-section (3) specifically states that an arbitration agreement shall be in writing.

Sub-section (4) spells out that an arbitration agreement can be deemed to be in writing if it is:

created as a document signed by the parties; or
an exchange of communication by any means which provides a record of the agreement and its terms;
an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.

Sub-section (5) provides another alternative to the above mentioned condition, it states that even if there is a clause in contract referring to another contract in which an arbitration clause exists, that shall also be deemed to be an arbitration agreement.

Question 9: What are the grounds for setting aside an arbitral award under the Arbitration and Conciliation Act, 1996?
Answer:

Application for Setting Aside Arbitral Award

Section 34(1) provides that recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and subsection (3).

Section 34 (2) states that an arbitral award may be set aside by the Court only if,

the party making the application establishes on the basis of the record of the arbitral tribunal that-,

a party was under some incapacity, or
the arbitration agreement is not valid under the law to which the parties have subjected it or the law for the time being in force; or
the party making the application was not given proper notice of the has appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(RGA)
the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration. However, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part; or

the Court finds that,

the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
the arbitral award is in conflict with the public policy of India. Explanation 1 to the Sub-section provides that –

An award is in conflict with the public policy of India, only if,

the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or
it is in contravention with the fundamental policy of Indian law; or
it is in conflict with the most basic ( notions of morality or justice.

Explanation 2 provides that –

For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.

As per Section 34(2A) an arbitral award arising out of arbitrations, other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:

However, an award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence.

Section 34 (3) provides that an application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal.

Although if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.

Under Section 34(4) on receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.app

As per Section 34(5) an application under this section shall be filed by a party only after.issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement.

Under Section 34(6) an application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party.

Question 10: What is meant by alternative dispute resolution (ADR)? Which are the areas in which ADR works?
Answer:

Alternative dispute resolution

Alternate Dispute Redressal or ADR is a fine substitute for the more common judicial processes. ADR includes methods like negotiation, conciliation, mediation and arbitration. All these modes have some common features, which make ADR a very viable and preferable mode in dealing with disputes.

Most commonly, these have a shorter time duration as compared to the Court route. The cost is considerably less than the Court and legal fees. Privacy, neutrality of the proceedings and of the decision and possibilities of customizing the procedures are some more attractive features.

Section 2 (1)(a) of the Arbitration and Conciliation Act, 1996, defines “Arbitration means any arbitration whether or not administered by permanent arbitral institution.” ARBITRATION can be defined as a method by which parties to a dispute get the dispute settled through the intervention of a third independent person.

Parties can also settle their disputes through a permanent arbitral Institutions like, Indian Council of Arbitration, Chamber of Commerce, etc.

Arbitration, a from of alternative dispute resolution (ADR), is a legal technique for the resolution of disputes outside the Courts/Tribunal, thus saving time and money. In this, the parties to a dispute refer it to one or more persons (the “arbitrators” or “arbitral tribunal”), by whose decision (known as the “arbitral award”) they agree to be bound. Areas in which ADR operates: 100

ADR can be used in almost all types of disputes, including commercial, civil, labour and family disputes, in respect of which the parties are entitled to reach to a settlement. It is especially beneficial in the commercial and business environment, especially in respect of disputes involving joint ventures, construction projects, partnership differences, intellectual property, personal injury, product liability, professional liability, real estate, securities, contract interpretation and performance and in insurance claims.

Question 11: Explain briefly the terms ‘conciliation’ and ‘mediation’.
Answer:

‘Conciliation’ and ‘mediation’

Alternate Dispute Redressal or ADR is a fine substitute for the more common judicial process. ADR includes methods like negotiation, conciliation, mediation and arbitration.

Conciliation: It is an informal process in which both the disputing parties appoint a neutral conciliator or a third person to bring them to an agreement and to help end the dispute.

This is done by sorting out any misinterpretations between the parties and removing the technical difficulties and working out possible solutions. It is an alternative dispute resolution (ADR) process whereby the parties to a dispute using the help of a conciliator, resolve the issues bothering them.

Mediation: When the two parties appoint a mediator or a person who interacts with both parties, clarifying the views of one party to the other and vice versa. The mediator clarifies the matter and brings about an agreement by bringing greater understanding to it.

Question 12: Does the Alternate Dispute Resolution (ADR) processes provide procedural flexibility of a conventional trial? Explain.
Answer:

Most commonly, these have a shorter time duration as compared to the Court/Tribunal route. The cost is considerably less than the Court/Tribunal and legal fees. Privacy, neutrality of the proceedings and of the decision and possibilities of customizing the procedures are some more attractive features.

Question 13: Discuss the provisions regarding the appointment of arbitrators under the Arbitration and Conciliation Act, 1996.
Answer:

The appointment of arbitrators under the Arbitration and Conciliation Act, 1996

Section 11 in The Arbitration And Conciliation Act, 1996, as amended by the 2019 amendment Act, provides the following for the appointment of arbitrators. –

The arbitrator can be a person of any nationality. The parties, may, however, decide otherwise.
Other than in cases covered under sub-section (6), the parties may agree on any procedure for appointment of the arbitrator(s).
If the parties are not able to come to a mutually acceptable decision under sub-section (2), and in an arbitration with three arbitrators, each party shall then appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator for that matter.
In case the appointment has been made under sub-section (3) and in case-
- a party fails to appoint an arbitrator within thirty days of receiving a request for the same from the other party; or 20s
- the two appointed arbitrators are unable to agree on the third Pomoble arbitrator within thirty days from the date of their own appointments, he/she will be appointed by the Chief Justice or any person or ebiatuo institution designated by him, upon a request for the same by the party/parties.
If the parties fail to come to an agreement as per sub-section (2) and in case of an arbitration with a sole arbitrator, if the parties fail to agree upon the name of the arbitrator within thirty days from receipt of a request by one party from the other party, the appointment shall be made by the Chief Justice or any person or institution designated by him.
This shall be done upon request of a party. If even after an appointment procedure agreed upon by the parties,-
- a party fails to act as required under that procedure; or
- the parties, or the two appointed arbitrators, fail to reach an agreement under that procedure; or
- a person, including an institution, fails to perform any function entrusted to him or it under that procedure, then a party may request themin the Chief Justice or any person or institution designated by him to to take the necessary steps. If, however, the agreement on the (aham appointment procedure provides other means for securing the appointment, that can have precedence.
In relation to a decision on a matter under sub-section (4), (5) or (6), ane decision of the Chief Justice or the person or institution designated by end him is final.
The Chief Justice or the person or institution designated by him, in arst appointing an arbitrator, shall give credence to
- any qualifications required of the arbitrator according to the agreement between the parties; and
- other considerations essential to ensure that the arbitrator appointed is independent and impartial.goo
In the case of appointment of sole or third arbitrator in an international commercial arbitration, the Chief Justice of India or the person or te institution designated by him may appoint an arbitrator of a nationality other than the nationalities of the parties where the parties belong to different nationalities, in case (s)he believes that it will serve better the de purposes of his/her appointment.
The Chief Justice may make any provisions/scheme for matters sub-section (4), (5) or (6) as (s)he deems essential or expedient.
Where multiple requests have been made under sub-section (4), (5) or (6) to the Chief Justices of different High Courts or their designates, the Chief Justice or his designate to whom the request was first made under the relevant sub-section shall have sole competency to decide upon the matter.
- Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in an international commercial arbitration, the reference to “Chief Justice” in those sub-sections shall be construed as a reference to the “Chief Justice of India”. NO
- Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in any other arbitration, the reference to “Chief Justice” in those sub-sections shall be construed as a reference to sine the Chief Justice of the High Court within whose local limits the principal Civil Court referred to in clause (e) of sub-section (1) of section 2 is situate and, where the High Court itself is the Court toale referred to in that clause, to the Chief Justice of that High Court.

Question 14 : Explain the provisions regarding the appointment of Conciliator under Arbitration and Conciliation Act, 1996. State the role of the Conciliator to settle the dispute. wote se nominion
Answer:

The appointment of Conciliator under Arbitration and Conciliation Act, 1996

It is an alternative dispute resolution (ADR) process whereby the parties to a dispute using the help of a conciliator, resolve the issues bothering them. As per Sub-section (1) of section 64-b bnegebni ai

Appointment of conciliator

in conciliation proceedings with one conciliator, the parties may agree on the sole conciliator;
in conciliation proceedings with two conciliators, each party may appoint one conciliator;
in conciliation proceedings with three conciliators, each party may appoint one conciliator each and the parties may agree on the name of the third conciliator who will be the presiding conciliator.
As per Sub-section (2) of section 64, parties may take the help of a suitable institution or person in connection with the appointment of conciliators, and choose the conciliator on their recommendation, or may choose that the institution or person select the conciliator. In both these cases, the institution or person shall keep in mind that an independent and impartial conciliator be appointed.

Role of conciliator

The conciliator meets with the parties separately in an attempt to resolve their differences.
They help by lowering tensions, improving communications, interpreting issues, providing technical assistance, exploring potential solutions and bringing about a negotiated, mutually acceptable settlement.
As per Sub-section (1) of section 67, the conciliator is to maintain independence and impartiality.
Further Sub-section (2) of section 67 says that provides that the conciliator is to be objective, fair and just. He should be considerate of the rights and obligations of both the parties equally, the trade usages, kany business practices used and the circumstances pertaining to the dispute.
As per sub-section (3) the conciliator should conduct the proceedings as per the circumstances of the case, the wishes of the parties, any special requests by either party for oral statements, or the expediency.
As per Sub-section (4), the conciliator may, as he thinks fit, make proposals for a settlement of the dispute at any stage of the conciliation proceedings. It is not essential for such proposals to be in writing and accompanied by a statement of the reasons for the proposal.

Question 15: What is Conciliation? Bring out some differences between Arbitration and Conciliation.
Answer:

Conciliation

Conciliation is one of the non-binding procedures where an impartial third party, known as the conciliator, assist the parties to a dispute in reaching a mutually agreed settlement of the dispute.

As per the Halsbury Laws of England, conciliation is a process of persuading parties to each an agreement. Because of its non-judicial character, conciliation is considered to be fundamentally different from that of litigation.

The simplest meaning of conciliation is the settlement of the disputes outside the court .It is a process by which the discussion between the parties are kept going through the participation of a conciliator.

Conciliation is one of the non-binding procedures where an impartial third party, known as the conciliator, assist the parties to a dispute in reaching a mutually agreed settlement of the dispute.

The difference between arbitration and conciliation can be drawn clearly on the following grounds:

Arbitration refers to a method of resolving industrial disputes, wherein the management and the labour present their respective positions to the rie neutral third party, who takes a decision and imposes it.

Conciliation is a method of resolving the dispute, wherein an independent person, who not meet the parties jointly and severally and helps them to arrive at 32 negotiated settlement or resolve their differences.

The decision made by the arbitrator is acceptable to the parties concerned. On the other hand, the conciliator does not have the right to enforce his decision. [(S)St .nottoe2]

Arbitration requires a prior agreement between parties known as had arbitration agreement, which must be in writing. As against this, the process of conciliation doesn’t require any prior agreement.

Arbitration is available for the current and future disputes whereas the conciliation can be adopted for existing disputes only.

Arbitration is like a courtroom proceeding, wherein witnesses, evidence, cross-examination, transcripts and legal counsel are used. On the contrary, Conciliation is an informal way of resolving disputes between add the management and labor.

Question 16: Discuss in detail, the grounds for setting aside arbitral award with special reference to public policy doctrine under the Arbitration and Conciliation Act, 1996 Inamese notarsiche
Answer:

The grounds for setting aside arbitral award with special reference to public policy doctrine under the Arbitration and Conciliation Act, 1996 Inamese notarsiche

Section 34(2) of Arbitration and Conciliation Act, 199 states that an arbitral award may be set aside by the Court only if –

The party making the application furnishes proof that –

Party was under some incapacity, or
the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under wolle the law for the time being in force; or
the party making the application was not given proper notice of the
entas tappointment of an arbitrator or of the arbitral proceeding or was otherwise unable to present his case; or 8-10
the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it tadighid contains decisions on matters beyond the scope of the submitted Vnackbird to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of Part I from which the parties cannot derogate, or, failing such agreement, was not in accordance with Part I: or

the Court finds that,

the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
the arbitral award is in conflict with the public policy of India.

Question 17: Discuss briefly the grounds for opposing the ‘foreign award’ made under the Arbitration and Conciliation Act, 1996.
Answer:

The grounds for opposing the ‘foreign award’ made under the Arbitration and Conciliation Act, 1996

The grounds for opposing the enforcement of a foreign award are given in Section 48 of the Arbitration and Conciliation Act, 1996. The section provides that the party against whom the award is invoked can use the

following grounds for opposing its enforcement:

The parties to the agreement were under some incapacity.
The agreement itself is not valid.
Proper notice period was not observed while sending a notice to the party against whom the award is now invoked, resulting in his inability to present his case properly.
The subject matter is related to something that does not fall within the list of matters that can be submitted for arbitration.
The decisions under the award are inclusive of beyond the scope of arbitration. If the decisions are severable, the part that can be allowed under arbitration can be enforced.
The composition of the arbitral tribunal is faulty or the procedure is subject to question, because it is not as per the agreement or as per the law of the country where the procedure is taking place.
The award has yet to become binding on the parties involved.
It has been set aside by some competent authority or under some law of the country in which it has been passed.
The subject matter is such that it cannot be referred to arbitration.
The enforcement of such an award would be against the public policy of doIndia.

Question 18:Explain in brief the ‘International Commercial Arbitration’ under the Arbitration and Conciliation Act, 1996.
Answer:

‘International Commercial Arbitration’ under the Arbitration and Conciliation Act, 1996

International Commercial Arbitration: As per Section 2(1)(f) of the Arbitration and Conciliation Act, 1996, international commercial arbitration’ means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India and where at least one of the parties is the following:

An individual who is a national of, or habitually resident in any country other than India.
A body corporate which is incorporated in any country other than India,
A company or an association or a body of individuals whose central management and control is exercised in any country other than India,
The Government of a foreign country.

Question 19: Discuss in brief the provisions for challenging the arbitrator under the Arbitration and Conciliation Act, 1996.
Answer.

Grounds for challenge of an arbitrator – Section 12

This section provides that an arbitrator is to inform in writing any of the following facts, if they exist when he is approached by any party or parties regarding his appointment as an arbitrator in their matter:

Direct or Indirect past or present relationship or interest in the parties or the subject matter, which puts his independence in doubt.
His doubts regarding his ability to devote the required time for resolution of the matter under arbitration. [Section 12(1)]

Such information should be given at the time of appointment by the arbitrator if it already exists, or else, if it arises later, he should convey it to the parties as and when it arises. [Section 12(2)]

The third sub-section specifies that these are the only grounds for challenging an arbitrator, other than insufficiency of qualifications in the part of the arbitrator. Such a challenge can be affected by a party even against an arbitrator he himself has appointed, or in whose appointment, he has aided.

This can be done for reasons that he became privy to after the appointment of the arbitrator. [Section 12(4)] spet ons alghane noiterimaxe-alba.

Section 12(5) provides that if there exists any relationship with the parties as per the Seventh Schedule of the Act, the arbitrator’s appointment can be challenged.

Question 20: Explain the provisions for obtaining interim relief from Court, when there exists arbitration agreement among parties.
Answer:

Interim Measures Ordered by Arbitral Tribuna lo.

Section 17(1), as per the Arbitration and Conciliation (Amendment) Act, 2019, provides that a party may, during the arbitral proceedings apply to the arbitral tribunal for the following – appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings;

or if take an interim measure of protection in respect of any of the following matters, namely:-

the preservation, interim custody or sale of any goods which are the subject matter of the arbitration agreement, especially those of a wasting nature; om atuais any aleeb biswis isdichs ertt (w)
securing the amount in dispute in the arbitration;
the detention, preservation or inspection of any property or thing that to be is the subject-matter of the dispute in arbitration, or as to which any anekem question may arise. For this purpose, the court may authorise any person to enter upon any land or building in the possession of any cons peparty, or allow samples to be taken, or any observation to be made, (extion or for an experiment to be conducted, that they may deem expedient for the purpose of obtaining full information or evidence; and
interim injunction or the appointment of a receiver;
such other interim measure of protection as may appear to the arbitral tribunal to be just and convenient.omelle erif al printienice

To this end, the arbitral tribunal shall have the same power for making orders as the court has for these purposes. Also, as per Sub-section (2), subject to any orders passed in an appeal under section 37 of the Act.

any order issued by the arbitral tribunal under this section shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure, 1908, in the same manner as if it were an order of the Courtalo erit yolabam roilagelle

Question 21 : Explain the basic features of Arbitral Award under the Arbitration and Conciliation Act, 1996.be ett to
Answer:

The basic features of Arbitral Award under the Arbitration and Conciliation Act, 1996 be ett to

As per Section 2(1) (c) of the Arbitration and Conciliation Act, 1996, “arbitral award” includes an interim award. The definition does not give much detail of the ingredients of an arbitral award. However, taking into account other provisions of the Act, the following features are noticed:

The arbitral award is required to be made on stamp paper of prescribed value (as applicable at the place of making the award) and in writing.
The award is to be signed by the members of the arbitral tribunal.
The making of an award is a rational process which is accentuated by recording the reasons. The award should contain reasons.
The award should be dated i.e. the date of making of the award should be mentioned in the award.
Place of arbitration is important for the determination of rules applicable to substance of dispute, and recourse against the award. Place of arbitration refers to the jurisdiction of the Court of a particular city or State.
The arbitral tribunal may include in the sum for which award is made, interest upto the date of award and also a direction regarding future interest.
The award may also include decisions and directions of the arbitrator regarding the cost of the arbitration.
After the award is made. a signed copy should be delivered to each party for appropriate action like implementation or recourse against arbitral award.

Question 22: Describe “Arbitration Agreement” specified under Section 7 of the Arbitration and Conciliation Act, 1996.
Answer:

Arbitration Agreement

According to Section 2(1) (b) of the Arbitration and Conciliation Act, 1996, arbitration agreement means an agreement referred to in Section 7 of the Act.

Under Section 7, the Arbitration agreement has been defined to mean an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.

An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.
An arbitration agreement shall be in writing.
An arbitration agreement is in writing if it is contained in:
- a document signed by the parties;
- an exchange of letters, telex, telegrams or other means of telecommunication including communication through electronic means which provide a record of the agreement; or
- an exchange of statements of claim and defence in which the Texistence of the agreement is alleged by one party and not denied loved by the other.
The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.

Question 23: Under the circumstances and arbitral award may be set aside by the Court under the provisions of Arbitration and Conciliation Act, Explain any four.

Answer:

Under the circumstances and arbitral award may be set aside by the Court under the provisions of Arbitration and Conciliation Act,

According to Section 34(2) of the Arbitration and Conciliation Act, 1996, an arbitral award may be set aside by the Court only if the party making the application furnishes
proof that-

a party was under some incapacity, or

the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the no time being in force; or

the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or

Further, the Court finds that the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or the Court finds that the arbitral award is in conflict with the public policy of India.

Question 24: State the provisions of Section 25 in Arbitration and Conciliation Act, 1996 regarding default of a party.

Answer:

As per Section 25 of the Arbitration and Conciliation Act, 1996, the following would count as defaults, unless the parties have agreed to something in the alternate:

If the claimant fails to communicate his statement of claim as per Section 23(1). In this situation, the arbitral tribunal shall terminate the proceedings;

If the respondent does not communicate his statement of defence as per Section 23(1). In this case, the tribunal shall continue the proceedings. The failure to communicate shall not be taken as an admission of the allegation made by the claimant.

If a party fails to appear a an oral hearing or to submit documentary evidence when asked to do so, the tribunal may continue the proceedings if they think fit. In this case, they shall make the arbitral award on the basis of the evidence already before them.

Question 25: Elaborate the provisions of Section 32 of Arbitration and Conciliation Act, 1996 regarding the termination of arbitral proceedings.
Answer:

As per Section 32 (1) of the Arbitration Act, 1996, the arbitral proceedings shall be terminated by –

the final arbitral award or og lenoit sal brows ne
the order of the arbitral tribunal under section 32 (2).

The arbitral tribunal shall issue an order for the termination of the arbitral proceedings in cases where –

the claim stands withdrawn by the claimant, unless the respondent objects to the order. For this decision to be taken, the tribunal has to decide that a legitimate interest exists, in obtaining a final settlement of the dispute.
the parties agree on the termination of the proceedings.
the arbitral tribunal finds that the continuation of the proceedings has for become unnecessary or impossible, due to any reason whatsoever.

Section 32(3) decrees that the mandate of the arbitral tribunal comes to an end with the termination of the arbitral proceedings. This is subject to the provisions of Sections 33 and 34(4) of the Act, which may cause it to continue to a future point.

Question 26: Explain the interim measures of protection for which a party during the arbitral proceedings may apply to the arbitral tribunal under section 17(1) of Arbitration and Conciliation Act, 1996.
Answer:

Interim measures for protection of a party during arbitration:

Substitution of functionaries (Section 17) Section 17 of the Act as amended by the 2015 Amendment Act has specified the types of reliefs which a party could seek, which are as under:

appointment of a guardian,
securing the amount of dispute in the arbitration,
preservation, interim custody or sale of any goods or property which are the subject matter of the arbitration agreement.

This was done to equip the tribunal with the same powers as enjoyed by a civil court Under Section 9 of the Act, in context of grant of interim measures. The High Court at Madras declared that the power to pass interim measures creates a discretionary power in favour of the tribunal.

This power works as per the same principles governing the grant of such reliefs by the civil court. Moreover, the 2015 Amendment Act provides that an order passed by the arbitral tribunal under this Section would have the same importance as is accorded to a Court order.

Also, the same could be enforced under the Code of Civil Procedure, 1908. Such an order, although, can be passed even after the tribunal has made the award but necessarily before the enforcement of the order as per the provisions of Section 36.

The logic behind this is that as soon as the order is passed, the arbitral tribunal, by requirement, becomes functus officio, and thus, is not eligible for passing an interim order.

The following interim measures may be ordered by arbitral tribunal.:

“Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order a party to take any interim measure of protection as the arbitral tribunal may consider necessary in respect of the subject-matter of the dispute.

The arbitral tribunal may require a party to provide appropriate security in connection with a measure ordered under sub-section (1).

Question 27: What are the ways in which arbitral proceeding is terminated under the Arbitration and Conciliation Act, 1996? Explain.
Answer:

Termination of Proceedings

Section 32 of the Arbitration and Conciliation Act, 1996, provides for the termination of proceedings. As per the Section, the proceedings may be terminated by:

the final arbitral award or
by an order of the arbitral tribunal under sub-section (2).

Sub-section (2) gives the arbitral tribunal the authority to issue an order for the termination of the arbitral proceedings if –

the claimant withdraws his claim, unless it is objected to by the respondent objects and in addition, the tribunal gives credence to a legitimate interest on the part of the respondent who intends to obtain a final settlement of the dispute,
the parties agree on the termination of the proceedings, or
the tribunal believes that the continuation of the proceedings has now become unnecessary or impossible, montelle minemi

Section 32(3)provides that the mandate of the tribunal shall end with the termination of the arbitral proceedings, unless situations subject to the provisions of Sections 33 and 34(4) of the Act provide otherwise.

Question 28: “Alternative Dispute Resolution is not an alternative to the court system but only meant to supplement the same aiming on less lawyering”. Comment.

Answer:

“Alternative Dispute Resolution is not an alternative to the court system but only meant to supplement the same aiming on less lawyering”.

The Alternative Dispute Resolution (ADR) processes provide procedural flexibility, save valuable time and money and avoid the stress of a conventional trial.

ADR can help in reducing the workload of regular courts and in long run can pave way in solving the problem of judicial arrears before the Courts of law.

ADR is not meant to supplant the court system because the conclusions arrived through these mechanisms are recognised by the Courts and there are provisions in law that allow for appeal against the ADR outcome in regular courts.

Arbitration, mediation and conciliation are three of the most popular means of ADR. Arbitration is the means by which parties to a dispute get the same settled through the intervention of a third person (or more persons) but without recourse to a Court of Law.

The parties repose confidence in the judgement of the arbitrator and show their willingness to abide by his decision.

Major Amendments as per October 2015 Ordinance Act

Part I of the Act has been made applicable on International Commercial Arbitration taking place outside India. This has the following effects

Seeking interim relief from courts [Section 9] edenennu
Seeking the assistance of the court in taking evidence [Section 27]
Appealing against the order of a court where the court refuses to refer the parties to arbitration. [Section 37(1) (a)]
Restricting the right to second appeal and preserving the right of parties to approach the Supreme Court in appeal. [Section 37 (3)]

Fast-track Arbitration red but abmudnimidis

Time limit for making award

Award within 12 months

The arbitral tribunal is statutorily obligated to deliver an award within 12 months from the date when arbitral tribunal enters into reference., which is the date on which the arbitrator(s) have received notice of their appointment.

Maximum delay of 6 months

The award can be delayed by a maximum period of 6 months only under the special circumstances where all parties give their consent to such extension of time.

Additional Fees for faster disposal

Where the Arbitral Tribunal delivers the award within a period of 6 months the arbitral tribunal shall be entitled to additional fees. The quantum of such additional fees shall be determined by the parties.

Fast-Track Procedure

The award in a fast track arbitration is to be made out within six
months. The salient features of the fast track arbitration are:

Dispute are to be decided based on written pleadings only; no oral pleadings, unless specifically requested by all parties involved or if deemed necessary by the Tribunal.
Arbitral Tribunal shall have the power to call for clarifications in addition to the written pleadings where it deems necessary.

Appointment of Arbitrators

Appointment within 60 days

A menenship dros erit tevos Whenever an application for appointment of Arbitrator(s) is moved before a court such application shall be disposed of as expeditiously as possible and an endeavor shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party.

Oral arguments to be held on a day-to-day basis

Oral arguments as far as possible shall be heard by the arbitral tribunal on a day to day basis and no adjournments shall be granted without sufficient cause. Provision for imposition of exemplary cost on the party seeking adjournment without sufficient cause has also been made, so as to make the procedure more current.

Interim Reliefs by courts

Arbitration to commence within 90 days of interim relief and no Interim relief by courts after commencement of arbitration.

Powers of Arbitral Tribunal

Interim Relief

The tribunal has now been granted the powers of a court while making interim awards in the proceedings before it.

Arbitral tribunal not bound to rule in accordance with terms of the contract

The arbitral tribunal is free to deviate from the terms of the agreement if the circumstances so warrant.

Independence, Impartiality and Accountability of Arbitrators

Fixed fees for arbitrators

The High Courts have been assigned the responsibility of framing the rules for determination of the fees and the manner of its payment. However it is clarified that such fees shall not be applicable in International Commercial Arbitration and in cases where parties have agreed for determination of fees as per the rules of an arbitral institution.

A fixed fee structure ensures the independence of the arbitral tribunal and also provides a reasonable cost estimate to the parties entering into arbitration.

Obligations of arbitrators at the time of appointment

Disclose conflict of Interest

An arbitrator who is approached for appointment is obligated to disclose the existence either direct or indirect, of any past or present relationship with or interest in any of the parties or in relation to the subject matter in dispute, whether financial, business, professional or other kind, which is likely to give rise to justifiable doubts as to his independence or impartiality.

A fifth schedule has been added to the Act to enumerate instances which would be taken into consideration for determining any conflict of interest.

Disclose time constraints

An arbitrator shall disclose all circumstances which may affect his ability to deliver an award within 12 months.

Form of disclosure

A specific form of disclosure has been prescribed in the sixth schedule of the act and all disclosures are required to be made in the said format for the sake of removing any ambiguity and maintaining uniformity.

Disqualification from appointment

The specific circumstances which shall act as a bar against any person from being appointed as an arbitrator in a dispute, have been enumerated in the seventh schedule. However, the parties to the dispute have been given the opportunity to waive the applicability of the seventh schedule, if they so deem fit.

Arbitrations already commenced under the principal act of 1996

It has been clarified that nothing contained in the amended act shall be applicable on the arbitral proceedings that are under way under the principal act.

All arbitrations that commenced before 23rd October, 2015 will continue to be determined by the provisions of the previous Act and those after 23rd October, 2015 will be governed by the amended act.

The parties to the proceedings initiated under the principal act have also been given an option to adopt the procedure prescribed under the amended act, but only through mutual consent.

Section 17(1) gives either party the right to apply to the arbitral tribunal, even during the arbitral proceedings, for the following purposes related to the arbitral proceedings –

Appointment of a guardian for a minor or person of unsound mind;
Interim measure of protection in respect of any of the following matters, namely:-

Preservation, interim custody or sale of any goods which are the subject matter of the arbitration agreement;

To secure any amounts that are deemed to be the subject matter of dispute in the arbitration;

For detention, preservation or inspection of any property or thing deemed to be the subject-matter of the dispute.

For these purposes, any person can be permitted by the authorities to enter upon any land or building in the possession of any party, or any samples taken, or any observation made, or experiment tried, which may be essential to obtain full information or evidence;

Interim injunction or the appointment of a receiver;

Such other interim measures of protection as may be deemed essential by the arbitral tribunal. For such purposes, the arbitral tribunal shall have the same power for making orders as the court has for the same purposes.

Section 17 (2) states that an order issued by the arbitral tribunal under this section shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure, 1908, in the same manner as if it were an order of the Court.

Statements of Claim and Defence

Section 23(1) enjoins that the claimant is to state the facts supporting his claim, the points at issue and the relief or remedy sought, and the respondent has to state his defence in respect of these particulars within the period of time agreed upon by the parties or determined by the arbitral tribunal, unless the parties have otherwise agreed.

Sub-section (2) states that the parties may submit all documents they consider to be relevant with their initial statements. Alternatively, they may add a reference to the documents or other evidence they will submit later on.

Sub-section (3) states that unless otherwise agreed by the parties, both parties have the freedom to amend or supplement their claim or defence at any time during the course of the arbitral proceedings.

However, if the arbitral tribunal considers it inappropriate or as an unnecessary delaying tactic, it will not be allowed.

Section 23 (4) gives both the parties a period of six months from the date the arbitrator or all the arbitrators, as the case may be, received notice, in writing, of their appointment, to submit their statements of claim and defence.

Time Limit for Arbitral Award

Section 29A(1) gives the arbitral tribunal a maximum time of twelve months from the date of completion of pleadings under section 23(4), to announce the award. However, this time restriction does not apply to international commercial arbitrations.

In the matter of international commercial arbitration, awards may be made as expeditiously as possible and an attempt is to be made to dispose of the matter within a period of twelve months from the date of completion of pleadings as per section 23(4).

Section 29A (2) provides for receipt of additional fees by the arbitral tribunal if the award is made within a period of six months from the date the arbitral tribunal enters upon the reference. This amount of additional fees shall be agreed upon by the parties.

Under Section 29A(3), however, the parties have the right to extend the period specified in sub-section (1) for making of the award by the tribunal, by mutual consent. This can only be done for a further period not exceeding six months.

Section 29A(4) states that if the award is not made within the period as per Section 29A(1) or the extended period specified under Section 29A(3), the mandate of the arbitrator(s) shall terminate.

However, the Court may, either prior to or after the expiry of the period so specified, extend the period. While doing so, if the Court finds that the proceedings have been delayed for reasons attributable to the arbitral tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding five per cent for each month of such delay.

The arbitrator shall be given an opportunity of being heard before the fees is reduced. Also, where an application under Section 29A(5) is pending, the mandate of the arbitrator shall continue till the disposal of the said application.

As per Section 29A(5) the extension of period may be on the application of any of the parties and may be granted only for sufficient cause. The Court may impose additional conditions for giving effect to this extension.

Section 29A (6) provides that while extending the period referred to in sub-section (4), the Court may substitute one or all of the arbitrators. In such a situation, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record. The new appointees shall be deemed to have received the said evidence and material.

Section 29A (7) provides that the reconstituted tribunal shall be deemed to be in all effects, a continuation of the previously appointed arbitral tribunal.

Section 29A (8) provides that it shall be open to the Court to impose actual or exemplary costs upon any of the parties under this section.

As per Section 29A (9) an application for extension of time under sub-section (5) shall be disposed of by the Court as expeditiously as possible and an attempt shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party, as per this Act.

Establishment and incorporation of Arbitration Council of India Arbitration Council of India (ACI)

The Amendment Act, 2019 deals with Arbitration Council of India.

A new section, Part IA has been inserted in the Act. Section 43A of Act contains definitions of terms used in Part IA such as Chairperson, Council and Member Section 43B empowers the Central Government to establish the Arbitration Council of India to perform the duties and discharge the functions under the Arbitration Conciliation Act, 1996.

The head office of the Council shall be at Delhi. The Council may, with the prior approval of the Central Government, establish offices at other places in India.

Composition of Council

According to Section 43C of the Act, the Council shall consist of the following Members, namely:-

a person, who has been, a Judge of the Supreme Court or, Chief Justice of a High Court or, a Judge of a High Court or an eminent person, having special knowledge and experience in the conduct or administration of arbitration, to be appointed by the Central Government in consultation with the Chief Justice of India-Chairperson;
An eminent arbitration practitioner having substantial knowledge and experience in institutional arbitration, both domestic and international, to be nominated by the Central Government-Member;
an eminent academician having experience in research and teaching in the field of arbitration and alternative dispute resolution laws, to be appointed by the Central Government in consultation with the Chairperson-Member;
Secretary to the Government of India in the Department of Legal Affairs, Ministry of Law and Justice or his representative not below the rank of Joint Secretary-Member, ex office
Secretary to the Government of India in the Department of Expenditure, Ministry of Finance or his representative not below the
rank of Joint Secretary- Member, ex officio;
one representative of a recognised body of commerce and industry, chosen on rotational basis by the Central Government-Part-time Member; and
Chief Executive Officer-Member-Secretary, ex officio.

The Chairperson and Members of the Council shall hold office for a term of three years from the date on which they enter upon their office. The maximum age for them on reaching which they shall cease to hold office shall be seventy years in the case of Chairperson and sixty-seven years in the case of Member.

Both these rules do not apply to the ex-officio
members. The salaries, allowances and other terms and conditions of the Chairperson and Members as may be prescribed by the Central Government.

Duties and functions of Council

As per the newly inserted Section 43D, it shall be the duty of the Council to take all such measures as may be necessary to promote and encourage arbitration, mediation, conciliation or other alternative dispute resolution mechanism and for that purpose to frame policy and guidelines for the establishment, operation and maintenance of uniform professional standards in respect of all matters relating to arbitration.

For the above-mentioned purposes, the Council may-

frame policies governing the grading of arbitral institutions;
recognise professional institutes providing accreditation of arbitrators;
review the grading of arbitral institutions and arbitrators;
hold training, workshops and courses in the area of arbitration in collaboration of law firms, law universities and arbitral institutes;
frame, review and update norms to ensure satisfactory level of arbitration and conciliation;
act as a forum for exchange of views and techniques to be adopted for creating a platform to make India a robust centre for domestic and international arbitration and conciliation;
make recommendations to the Central Government on various measures to be adopted to make provision for easy resolution of commercial disputes;
promote institutional arbitration by strengthening arbitral institutions;
conduct examination and training on various subjects relating to arbitration and conciliation and award certificates thereof;
establish and maintain depository of arbitral awards made in India;
make recommendations regarding personnel, training and infrastructure of arbitral institutions; and
Such other functions as may be decided by the Central Government.

General norms for grading of arbitral institutions

Section 43-1 gives the Arbitral Council the right to grade arbitral institutions on the basis of criteria relating to infrastructure, quality and calibre of arbitrators, performance and compliance of time limits for disposal of domestic or international commercial arbitrations. In doing some they shall follow the regulations as specified hereunder.

Norms for accreditation

Section 43J provides for the qualifications, experience and norms for accreditation of arbitrators. They are specified in the Eighth Schedule to the Act.

As per the Eighth Schedule, a company secretary within the meaning of the Company Secretaries Act, 1980 and who has ten years of practice experience as a company secretary can act as an arbitrator under the Act.

According to the ‘Eighth Schedule of the Act, a person shall not be qualified to be an arbitrator unless he-

is an advocate within the meaning of the Advocates Act, 1961 having ten years of practice experience as an advocate; or
is a chartered accountant within the meaning of the Chartered Accountants Act, 1949 having ten years of practice experience as a chartered accountant; or
is a cost accountant within the meaning of the Cost and Works Accountants Act, 1959 having ten years of practice experience as a cost accountant; or
is a company secretary within the meaning of the Company Secretaries Act, 1980 having ten years of practice experience as a company secretary; or
Has been an officer of the Indian Legal Service; or
has been an officer with law degree having ten years of experience in the legal matters in the Government, Autonomous Body, Public Sector Undertaking or at a senior level managerial position in private sector; or
has been an officer with engineering degree having ten years of experience as an engineer in the Government, Autonomous Body, Public Sector Undertaking or at a senior level managerial position in private sector or self-employed; or
has been an officer having senior level experience of administration in the Central Government or State Government or having experience of senior level management of a Public Sector Undertaking or a Government company or a private company of repute;
is a person, in any other case, having educational qualification at degree level with ten years of experience in scientific or technical stream in the fields of telecom, information technology, Intellectual Property Rights or other specialised areas in the Government, Autonomous Body, Public Sector Undertaking or a senior level managerial position in a private sector, as the case may be.

Moreover, after the provisions of the Arbitration and Conciliation (Amendment) Ordinance, 2020 were adopted in the principal Act by virtue of the Arbitration and Conciliation (Amendment) Act, 2021, the qualifications for appointment as arbitrators, which were earlier prescribed in the principal Act, will now be through Regulations

General norms applicable to Arbitrator- As per the Amendment, the arbitrator shall be

a person of general reputation of fairness, integrity
capable of applying objectivity in arriving at settlement of disputes;
impartial and neutral and avoid entering into any financial business or other relationship that is likely to affect impartiality or might reasonably create an appearance of partiality or bias amongst the parties;
not involved in any legal proceeding and avoid any potential conflict connected with any dispute to be arbitrated by him;
not convicted of an offence involving moral turpitude or economic offence;
conversant with the Constitution of India, principles of natural justice, equity, common and customary laws, commercial laws, labour laws, eno law of torts, making and enforcing the arbitral awards;
in possession of robust understanding of the domestic and international legal system on arbitration and international best enth practices in regard thereto;
able to understand key elements of contractual obligations in civil and commercial disputes and be able to apply legal principles to a situation under dispute and also to apply judicial decisions on a given matter relating to arbitration; and
capable of suggesting, recommending or writing a reasoned and nom enforceable arbitral award in any dispute which comes before him not for adjudication hit or abeen eto villlaslonom

Depository of awards

As per the newly added Section 43K, the Arbitral Council shall maintain an electronic depository of arbitral awards made in India and such other records related thereto in such manner as may be specified by the regulations.

Power to make regulations by Council

As per Section 43L of the Amendment Act, the Council may, in consultation with the Central Government, make regulations, consistent with the provisions of this Act and the rules made thereunder, for the discharge of its functions and perform its duties under the Act.

Descriptive Questions

Major Amendments as per October 2015 Ordinance Act

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