Arbitration, Conciliation and Adr Systems

PALLAVI BHOGLE
ARBITRATION, CONCILIATION & ADR SYSTEMS
PALLAVI BHOGLE
INTRODUCTION
State the object and scope of Arbitration and Conciliation law in India. [16] May 08 Define Arbitration Agreement. Explain the nature, meaning and importance of Arbitration Agreement. [16] Dec 06, 05, 03, Dec 02, 02, Dec 01
Introduction: To internationalise the Arbitration Law in India, it was felt that the Arbitration Law, 1940 has become out dated in the present scenario of economic reforms world wide. The Law Commission of India as well as the domestic and international arbitration and conciliation bodies including several experts in the field of arbitration relating to trade and industry have proposed amendments, modifications to the Arbitration Act, 1940 to make the law more responsive and effective to suit most with the law dealing with the settlement of disputes in respect of domestic and international commercial matters. There was no law in India to provide the comprehensive enactment to meet the present requirements to settle domestic and international commercial disputes amicably by arbitration and conciliation machinery. At the international level it was also felt that the increasing arbitration and conciliation acceptance in trade and industry is the most important requirement of the present commercial activities, and as such the United Nations Commission on International Trade Law (UNCITRAL) have adopted the Model Law with focus on International Commercial Arbitration in the year 1985. Subsequently, the General Assembly of the United Nations affirmed and all member countries were directed to give recognition to the United Nations Commission on International Trade's Model Law, which was introduced with the object to make arbitration procedure and practice in the matter of international commercial activities uniform and simple. The United Nations Commission on International Trade also adopted a set of conciliation rules in the year 1980 which were recommended by the General Assembly of the United Nations to be followed by the member countries where the parties in international commercial disputes intended to settle their dispute amicably without taking recourse of strict legal system. Although, aforesaid Model Law and Conciliation Rules provided international commercial arbitration and conciliation, there was still a need to legislate law on domestic arbitration and conciliation on the pattern of the Model Law and Conciliation Rules. With this object and based on the UNCITRAL Model Law and New York Convention and Conciliation Rules the Arbitration and Conciliation Bill, 1995 was introduced in both the Houses of Parliament on 8th May, 1995. This Bill contained the reflection of the International Chamber of Commerce Arbitration Rules and in their 1993 ARBITRATION, CONCILIATION & ADR SYSTEMS 2
PALLAVI BHOGLE resolution - the Chief Ministers and Chief Justices emphasized the requirements of such settlement of dispute. The resolution was on the pattern of the United Nations Commission on International Trade's Model Law and New York Conventions and Conciliation Rules after the recommendation. The General Assembly of the United Nations in the matters relating to the International Commercial disputes, thus provided the harmonious settlement of the dispute by adopting procedure and practice of the arbitration and conciliation. India formulated and enacted the new law The Arbitration and Conciliation Law, 1996 with effect from 16th August; 1996. There are 86 Sections besides the Preamble and three Schedules in this Act. The Act has been divided in four parts, in which Part I provides, general provision on arbitration, Part II provides the enforcement of certain foreign awards, Part III deals with conciliation, and Part IV deals with supplementary provisions. The Preamble contains the object of this Act and three Schedules are modeled texts of the Geneva Convention on the execution of Foreign Arbitral Award, 1927 the Geneva protocol on Arbitration Clauses, 1923 and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Award, 1993 respectively. Salient Features of the Arbitration and, Conciliation Act, 1996 The Arbitration and Conciliation Act, 1996 contained the following salient features: 1. A Comprehensive Statute - The Arbitration and Conciliation Act, 1996, is fully related to the domestic, international and inter-state arbitrations and understanding point of view. This Act provides importance of enforcement of international arbitral awards and also conciliation matters as well. The Comprehensive nature of this Act is the result of the United Nations Commission on International Commercial Arbitration, 1985 because the Geneva Assembly of the United Nations had emphasized and also recommended uniform model law on arbitration among the countries. 2. An Explanatory Code - The old Act of 1940 had no scope for international arbitration whereas this Act of 1996 is an explanatory and a complete code in itself, rather an exhaustive Code. For the first time a procedure for Arbitral Tribunals is provided in this statute, it also gives status of tribunal to the Arbitrators or Board of Arbitrations or statutory Arbitrations. 3. Curtailment of the Courts Powers - The Act has limited the powers of court rather restricted the exercise of judicial power, in other words confined the extent of judicial intervention as provided under Section 5 of the Act Notwithstanding anything contained in any other law for the time being in force, in matters governed by this part; no judicial authority shall intervene except where so provided in this part. Finality of arbitral awards under Section 35 is subject to this part according to which an arbitral award shall be final and binding on the parties and persons claiming under them respectively. Thus, the Act itself
PALLAVI BHOGLE provides finality of arbitral awards and its enforcement (Section 36) without intervention of the Court. Procedure for Conduct of Arbitration and Awards in detail Chapter V of the Arbitration and Conciliation Act, 1996 from Section 18 to Section 27 provides detailed procedure, practice whether in hearings or statements of claim and defence. The Arbitral Tribunals are empowered to settle any objections raised in respect of jurisdiction or scope of authority of the arbitrators. Precised Powers of the Court - The Act of 1996 has prcised the powers of the court by taking assistance only in certain specific matters. The Court's assistance can be sought in taking evidence only with the prior approval of the arbitral tribunals, as under Section 27(1): The arbitral tribunal or a party with the approval of the arbitral tribunal, may apply to the court for assistance in taking evidence. In the matter of jurisdiction Section 42 of the Act of 1996 states that: Notwithstanding anything contained elsewhere in this part or in any other law for the time being in force, where with respect to an. arbitration agreement any application under this part has been made in a court, that court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that court and in no other court. Powers of the Arbitrators enhanced - In comparison with the old Act, the new Act has enhanced the powers of the arbitrators in respect of jurisdiction of Arbitral Tribunals and also improved the competency of the arbitrators to rule. Chapter IV, Section 16 and Section 17 of the Act 1996 provide these measures. A new form of Conciliation - Part III of the Act, 1996 deals with new internationalized conciliation approach and explains the application and scope of conciliation. The Act under Section 63 intends to prescribe number of conciliators and in case of more than one conciliator, it should be by the agreement of the parties. Section 63(2) States: Where there is more than one conciliator, they ought, as a general rule, to act jointly. Thus, the new Act contains object of conciliation' more wide, and much emphasis has been provided on mutual rather consented conciliation in every respect. International applicability - Under the old Act of 1940, there was no provision for applicability of any interim award made by the Foreign Arbitral Tribunal i.e., an Arbitral Tribunal Constituted by the ICC Court Arbitration at London. But, the new Act of 1996, has provisions for applicability of Foreign Arbitral Tribunal's awards.
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Scope of Arbitration Law in India In the present time the globalization of trade and commerce and economic liberalization created need for effective implementation of economic reforms. It was realized that the old Indian Arbitration Law, 1940 is not effective enough to meet the present day requirement. Since the multinational companies/enterprises are pouring into India in the field of banking, insurance, building, construction, electricity, telecommunication etc. and there is commercial interaction between India and foreign countries wherein such parties who agree or have agreed for arbitration in case of dispute arising out of such
PALLAVI BHOGLE commercial activities, it shall be determined and settled in accordance with the Arbitration and Conciliation Act, 1996 and the rules framed thereunder. However, it is to be noted that the expression commercial in the context of the Arbitration Law has been observed by the Apex Court in R.M. Investment and Trading Co. Pvt. Ltd. v. Boeing Company, as follows: While construing the expression "commercial" in section 2 of the Act, it has to be borne in mind that the Act is calculated and designed to subserve the cause of facilitating international trade and promotion thereof by providing speedy settlement of disputes arising in such trade through arbitration and any expression or phrase occurring therein should receive a.liberal construction". In the present case the Apex Court has held that consultancy rendered by R.M. Investment and Trading Co. Pvt. Ltd. to Boeing Company for the purpose of developing commercial activities of sale of Boeing aircrafts is purely "commercial" in nature, hence, relationship between two companies with each other is commercial.
In another case, the Apex Court has held that activities such as exchange of commodities for money or other commodities, carriage of persons and goods by road, rail, air or waterways, contract, postal and telegraph services, banking, insurance and transactions in stock exchange are considered to be commercial interaction within the ambit of Article 301 of the Constitution of India, 1950 which deals with freedom of trade, commerce and intercourse Subject to the other provisions of this part, trade, commerce and intercourse throughout the territory of India shall be free. Thus, all kinds of commercial activities may be arbitrable provided there is an agreement in this regard between the parties. But in Kamini Engineering Corporation v. Re Traction, the Apex Court has held that merely providing technical assistance in electrification of railways which did not involve assistance or consultancy into active business and therefore such an agreement cannot be interpreted to be commercial in nature as it is outside the scope of term commercial in the context of the Arbitration Act. Where there is an arbitration agreement within the meaning of Section 7 of the Arbitration and Conciliation Act, 1996 in case of dispute the conflicting parties can be referred for arbitration. S. 7(1) of the Arbitration and Conciliation Act, 1996 defines the term arbitration agreement as follows: Arbitration agreement means an agreement by the parties to submit to arbitration all or certain disputes which have may arise or which may arise between them in respect of defined legal relationship, whether contractual or not. S. 7(2) of the said Act provides that an arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement Although Section 7(3) makes it compulsory that an arbitration agreement shall be in writing. According to
PALLAVI BHOGLE S. 7(4) of the Arbitration and Conciliation Act, 1996 an arbitration agreement may contain the following: 1. a document signed by the parties; 2. an exchange of letter, telex, telegram, or other means of telecommunication which provides a record of the agreement; or 3. 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. Therefore, it can, be said to come within the scope of the Arbitration Act, there are three essentials: such an agreement must be in writing; there must have definite parties; parties must have intention to settle their disputes by way of arbitration. Conclusion
Explain the statement of objects and reasons stated in the BILL on the law of arbitration and conciliation. [16] May 08 Introduction: On 16th May, 1995 the Bill relating to law of arbitration and conciliation was introduced in the Rajya Sabha by the then Minister of Law and Justice. On 17th May, 1995 the Chairman, of Rajya Sabha referred the Bill to the Parliamentary Committee. On 28th November, 1995 the said Committee submitted its report to the Parliament. The then Central Government was compelled to promulgate an Ordinance on Arbitration and Conciliation Act as the Winter Session of the Parliament in December, 1995 expired without transacting any business. Only on 16th July, 1996 the Rajya Sabha passed the Arbitration and Conciliation Bill, 1995 and on 2nd August, 1996 the Lok Sabha also cleared the said Bill, thereafter it received the assent of the President of India on 16th August, 1996 and it became an Act i.e., the Arbitration and Conciliation Act, 1996 came into force on 25th January, 1996. Statement of Objects and Reasons The present Arbitration and Conciliation Act, 1996 is substantially based on the three statutes, namely: The Foreign Awards (Recognition and Enforcement} Act, 1961; The Arbitration (Protocol and Convention) Act, 1937; and The Arbitration Act, 1940.
PALLAVI BHOGLE It was realized from all quarters that the (Indian) Arbitration Act, 1940 has become outdated as it contained the general law relating to arbitration and with a view to provide more responsive arbitration law to contemporary requirements and also to provide effective law dealing with settlement of both domestic and international disputes regarding commercial intercourse such major reformative amendments in the (Indian) Arbitration Act, 1940 have been incorporated by the Indian Parliament. Undoubtedly the arbitration and conciliation in the commercial transactions are getting global recognition as a machinery for settlement of disputes. The Model Law on International Commercial Arbitration has been adopted by the United Nations Commission on International Trade, Law (UNCTIRAL) in 1985. The United Nation's General Assembly has recommended that all countries give due recognition to said Model Law, in view of the desirability of uniformity of the Law of arbitral procedures and specific needs of international commercial arbitration practice. Also, the United Nations Commission on International Trade Law (UNCTIRAL) has adopted a set of Conciliation Rules in 1980. It was intended by the General Assembly of the United Nations that these Conciliation Rules are to be used in case of disputes arising in the context of the international commercial relations and. conflicting parties can seek friendly settlement of their disputes by taking recourse to conciliation. It is important to note that the United Nations Commission on International Trade Law (UNCTIRAL), the Model Law and Rules aimed to harmonise the concept of arbitration and conciliation of different legal systems worldwide, therefore, these UNCITRAL Model Law have such provisions which are designed for universal application. It would be seen that the said UNCITRAL Model Law and Rules served as a model for legislation on domestic arbitration and conciliation. The Arbitration and Conciliation Bill, 1995 seeks to consolidate and amend the law relating to domestic arbitration, international commercial arbitration, enforcement of foreign arbitral awards and to define the law relating to conciliation, taking into account the United Nations Commission on International Trade Law (UNCITRAL), Model Law and Rules.
The Arbitration Act, 1940 has become outdated - Object of the Present Act In Objects and Reasons appended to the Arbitration and Conciliation Bill, 1995 it has been stated that the Arbitration Act, 1940 has become outdated and therefore, the present Bill sought to consolidate and amend the law relating to domestic arbitration and International commercial arbitration. Prior to the promulgation of the Arbitration and Conciliation Act, 1996 the law on arbitration in India was substantially contained in three enactments, namely the Arbitration Act, 1940, the Arbitration (Protocol and Convention) Act, 1937 and the Foreign Awards (Recognition and' Enforcement) Act, 1961. In the statement of Objects and Reasons appended to the Bill it was stated that the Arbitration Act 1940, which contained the general law on arbitration, had become outdated. The said objects and reasons stated that the United Nations Commission on International Trade Law 7
PALLAVI BHOGLE (UNCITRAL) adopted in 1985 the Model Law on International Commercial Arbitration. The General Assembly had recommended that all countries give due consideration to the said Model Law which along with the rules, was stated to have harmonized concepts on arbitration and conciliation of different legal systems of the world and thus contained provisions which were designed for universal application. The above said statement of objects and reasons in para 3 states that though the said UNCITRAL Model Law and Rules are intended to deal with international commercial arbitration and conciliation they could, with appropriate modifications serve as a model for legalization on domestic arbitration and conciliation. The present Bill seeks to consolidate and amend the law relating to domestic arbitration, international commercial arbitration, enforcement of foreign awards and to define the law relating to conciliation, taking into account the said UNCITRAL Model Law and Rules. The main objectives of the said Bill are as follows: 1. to comprehensively cover international commercial arbitration and conciliation as also domestic arbitration and conciliation; 2. to make provision for an arbitral procedure which is fair, efficient and capable of meeting the needs of the specific arbitration; 3. to provide that the arbitral tribunal gives reasons for its arbitral award; 4. to ensure that the arbitral tribunal remains within the limits of its jurisdiction; 5. to minimize the supervisory role of courts in the arbitral process; 6. to permit an arbitral tribunal to use mediation, conciliation or other procedures during the arbitral proceedings to encourage settlement of disputes; 7. to provide that every final arbitral award is enforced in the same manner as if it were a decree of the court; 8. to provide that a settlement agreement reached by the parties as a result of conciliation proceedings will have the same status and effect as an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal; and 9. to provide that for the purpose of enforcement of foreign awards, every arbitral award made in a country to which one of the two international conventions relating to foreign arbitral awards to which India is a party applies, will be treated as a foreign award. It is to be noted that in this context the International Conventions mean the New York Convention and the Geneva Convention relating to foreign arbitral awards, to which India is a party, and which will be considered as a foreign award. It would be relevant to be mentioned here that the expression arbitration has been included in Entry 13 of the Concurrent Lists of the 7th Schedule to the Constitution of India, 1950. Thus, State Legislature can enact legislation relating to arbitration only with obtaining the assent of the President of India. When the assent is obtained the enacted law can become effective in the State concerned. Conclusion
PALLAVI BHOGLE
ARBITRATION AGREEMENT
What is an arbitration agreement? Discuss the essential conditions of an arbitration agreement under the Arbitration and Conciliation Act, 1996. [16] May 05, 04, May 03, Dec 02, Dec 01 Define Arbitration Agreement & State its essentials [10] May 07, Dec 06, 05, Dec 05, May 04, 03, Dec 02, 02, Dec 01 Arbitration Agreement [10] May 09, May 08, Dec 06, Dec 03 Explain the important features of an arbitration agreement. What are the advantages of settling disputes through arbitration? [16] Dec 04
Introduction: Section 2(1)(b) of the Act of 1996 provides that the word Arbitration Agreement is to be interpreted and understood with reference to Chapter II, Section 7 of the Arbitration and Conciliation Act, 1996. Section 2(1)(b) of the Arbitration and Conciliation Act, 1996 while defining arbitration agreement, refers to Section 7 which may be read as a part thereof. Section 7 states: Arbitration agreement (1) In this Part, "arbitration agreement" means 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. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) An arbitration agreement shall be in writing. (4) An arbitration agreement is in writing if it is contained in a document signed by the parties; an exchange of letter, telex, telegram or other means of telecommunication which provide a record of the agreement; or 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. (5) 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.
PALLAVI BHOGLE
Inference of an Agreement The term agreement has been defined under the Indian Contract Act, 1872. The said Act defines that every promise and every set of promises forming the consideration for each other is an agreement. It is voluntary agreement, it is willingness of either side to abide by arbitral award of the arbitrator. Thus, agreement is a reciprocal promise from either side. Arbitration agreement gives right to parties to initiate arbitration proceedings when rights of the parties are violated or liabilities of the parties are not being discharged. The determination whether a particular clause amounts to a valid submission is whether both, parties are bound by the clause or not and whether a right has been expressly given to both the parties to initiate proceedings. Essential Ingredients of a Valid Arbitration Agreement It is settled legal position that a valid agreement should have the following: (1) it must be in writing; (2) there must be agreement between the parties; (3) the parties must be ad idem; and (4) there should be intention of the parties to have their disputes or differences referred and decided through arbitration. Thus, the parties, disputes and finality of the decision are three essentials of an arbitration agreement. However, the statutory essentials of an arbitration agreement may be listed as: an agreement; it must be in writing; it may be relating to either present or future differences or disputes; whether an arbitrator is named therein or not. Validity of an arbitration agreement does not depend on the number of arbitrators It is well settled legal position that the validity of an arbitration agreement does not depend on the number of arbitrators specified therein. The present Arbitration and Conciliation Act, 1996 does not suggest anywhere that a number of arbitrators is a part of an arbitration agreement. Factum of a contract - Submission to Arbitrator for decision The parties are free to submit by an agreement even the factum of a contract for the decision by the arbitrator. It is all a matter of interpretation of a contract from which th arbitrators derive their authority.
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PALLAVI BHOGLE Parties should intend to settle their disputes by arbitration It is one of the essential requirement of an arbitration agreement that the parties should intend to make a reference to arbitration in case of any dispute relating to the terms of the contract. There must be clear intention in this regard, because consent of the parties is necessary before making a reference to arbitration. Where, there is express intention in the agreement to resolve the disputes if it arises by way of arbitration and on arising of dispute a reference to arbitration may be made by one party without the consent of the other party. Bilateral Rights of Reference to the Parties Whether the arbitration agreement should show mutuality to confer the right to exercise to initiate arbitration proceeding. On the point there is conflicting opinions expressed by the High Courts. The Calcutta High Court in New India Assurance Co. Ltd. v. Central Bank of India, observed that - "where there is an arbitration agreement providing the option to the parties, to elect the dispute being referred to the arbitration, it amounts to a valid arbitration agreement and merely unilateral option as to refer the dispute to arbitration does not negative the very existence of the arbitration agreement, it only restricts the enforceability. The court opined though it lacks mutuality but it can not be treated as invalid. On the other hand the Delhi High Court in Union of India v. Bharat Engineering Corporation, was of the opinion that an arbitration agreement should show bilateral rights of reference to arbitration in a case of disputes or differences arising between the parties. Under the Act oral agreement cannot be recognized It is one of the essential requirement that an arbitration agreement must be in writing. Neither the Arbitration Act, 1940 nor the Arbitration and Conciliation Act, 1996 recognises oral agreement. It is a mandatory provision as provided under Section 7 of the new Act, 1996 which must be complied with to make a valid arbitration agreement. In Owal Chand, v. Madan Lal, the court has refused to recognize oral agreement, regarding arbitration of dispute and, it was held that oral submission / agreement may be the basis of a suit but it cannot be a basis of arbitration as it has no weight in the eyes of law. Signature of parties is necessary in arbitration agreement Even the Arbitration and Conciliation Act, 1996 nowhere says that an arbitration agreement should necessarily be signed by both the parties, though the Act makes it mandatory that an arbitration agreement must be in writing. The Apex Court in Jugal
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PALLAVI BHOGLE Kishore Rameswardas v. Mrs. Goelbai Hormusji, has held that it is not necessary that both the parties should sign the arbitration, agreement. Such agreement must be reduced into writing and may be signed by one party showing terms of arbitration agreement and the other party accepts the terms therein. It can be said that wherein one party signs a written agreement/arbitration agreement and other party accepts the same, it amounts to a legal arbitration agreement. The Utility of Arbitration 1. Quick and Cheap Compared to ordinary litigations, the arbitral proceedings are much cheaper and quick. 2. Acquaintance with the arbitrator - The parties themselves mutually agree to appoint the sole arbitrator or a panel of arbitrators. Generally such arbitrators are related with the same field and technical qualities. Therefore, the parties have personally acquaintance with such arbitrators. Before the arbitral tribunal, the parties can freely express their opinions, which cannot be expressed before the court of law. This helps the arbitral tribunal to come to a conclusion very easily and speedily. 3. Only one arbitral proceeding - Before the court of the law, there would be many cases pending. It is also not possible to a Judge to concentrate on all of them at one time and to dispose them speedily. Hence adjournments frequently take place. The result is that much time is taken in ordinary civil courts. There are examples in India, some cases have been prolonged for two or three decades or more. This prolongation and unnecessary adjournments do not occur in arbitral proceedings. Moreover, the arbitral tribunal generally has only one arbitral proceeding before it. Therefore, it can concentrate on it and can dispose it very easily and speedily. 4. Legal Practitioners - Legal Practitioners are also one of the causes for delaying legal proceedings. As there is no involvement of legal practitioners in the arbitral proceedings, and the parties themselves present before the arbitral tribunal, the dispute is solved speedily. 5. Language and Procedure - In the Courts, English is commonly used, which may not be known to several litigants. The legal procedures are also complicated in the courts. The litigants cannot know all the legal procedures and language. This is not the position before the arbitral tribunal. The parties can agree the terms regarding the language and procedure, which are acquainted to them. 6. William H. Gal in his The Law of Arbitration explains the concepts of arbitration and litigation as follows - 'One of the principal advantages of arbitration over litigation is commonly stated to be that, where the dispute concerns a technical matter such as a building contract, the person chosen to arbitrate will normally be an expert in the subject matter of the dispute, whereas a judge will seldom have any practical experience of the technicalities of the trade in question. 7. In Northern Health Authority vs. Derek Crouch Ltd., the Court of Appeal observed: The court does not have the power which the arbitrator had to open up and review the exercise of the architect a discretion since the court's jurisdiction was limited to determining and enforcing the contractual rights of the parties. The
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PALLAVI BHOGLE arbitrator, on the other hand, because the parties agreement expressly gave him such power, was entitled to modify the parties contractual rights by substituting his own discretion for that of the architect if he disagreed with the architects certificates and opinions. Accordingly, if the parties chose to litigate rather than arbitrate the court would not have the same power. 8. Complementary to C.P.C. - The Arbitration and Conciliation Act, 1996 is only complementary and not contradictory to the Civil Procedure Code, 1908. It means it works on the same principles, aims and objects of the Civil Procedure Code. An award passed by the arbitral tribunal is equal to a decree of a civil court. Even though the arbitral tribunal is exempted from the adjective law, it has to follow the principles of natural justice, which include the adjective laws inherently. Further the arbitral tribunal should follow the substantive laws strictly. Conclusion
Under what conditions judicial authority can refer parties to arbitration? When can the parties seek interim order from the court for arbitration? [16] Dec 06, May 01 Explain the powers of court to pass interim orders. [16] May 09, May 07, May 05, Dec 05, Dec 04, May 03, Dec 03 Explain the rules relating to interim measures, etc. by the courts with decided cases. [16] May 08
Introduction: S. 8 and 9 of the Arbitration and Conciliation Act, 1996 refer to the matters dealing with the provisions wherein the judicial authority can refer parties to arbitration and the interim reliefs that can be asked for respectively.
Power to refer parties to arbitration where there is an arbitration agreement [S. 8] Section 8 of the Act, 1996 is on the pattern of Article 8 of the Model Law. It states: (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.
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PALLAVI BHOGLE (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made. Section 8(1) provides discretionary power to the judicial authority, and the parties to an arbitration agreement make such request before a judicial authority but not later than submitting his first statement, the judicial authority should refer the parties to arbitration. It is necessary for application of this sub-section that a judicial authority can refer only the subject-matter of an arbitration agreement but not otherwise. Although, under Section 8(1) a court cannot adopt on its own motion to avail this provision; the parties have to apply with request, however while considering such request, the court cannot go into the merits of the dispute. Section 8(2) provides mandatory provision for application of Section 8(1) which specified that, "The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. Section 8(3) empowered the arbitral tribunal to start off arbitration and if already commenced can continue arbitration and also can make award, it is not the point that an application under Section 8(1) is pending before the court. Thus, the parties are not deprived to initiate arbitral proceeding even if proceeding before a judicial authority have already commenced. The main object of this sub-section is to discourage deserters instead push them to their agreement to arbitration. It is important to note that Section 8 of the 1996 Act postulates not only request by the party for staying legal proceedings but also contemplates for referring the parties to arbitration. Expression Party under Section 8 Although, Section 2(1)(h) of the Arbitration and Conciliation Act, 1996 defines the expression party, it means a party to an arbitration agreement. Thus, the party to an arbitration agreement, may be between two or more persons, it may also be between body of persons or incorporated bodies. But, certainly they are disputed parties who submit their dispute for settlement under the arbitration agreement. It is to be noted that the party referred to in Section 8(1) of the Arbitration and Conciliation Act, 1996 is a party who is entitled to maintain the application thereunder. The party to the arbitration agreement who has himself instituted the suit is clearly not the party envisaged. In Magma Leasing Ltd. v. NEPC Micon Ltd. wherein first defendant however, a party to the arbitration agreement who has elected to institute the ARBITRATION, CONCILIATION & ADR SYSTEMS 14
PALLAVI BHOGLE suit in question in enforcement of its rights and as such it cannot be said to be a party within the meaning of that section 8(1) of the Act. Judicial Authority under Obligation to Refer the Parties for Arbitration Under Section 8 of the new Act the judicial authority is under obligation not only to make an order for staying proceedings, but also under obligation to refer the parties for arbitration. The Delhi High Court in Gas Authority of India Ltd. v. Spie Capag observed that while considering application whether to grant stay of proceedings and refer the parties to arbitration, the judicial authority has to consider the following issues: 1. Dispute before the judicial authority is arbitrable. 2. There is a valid arbitration agreement between the parties. 3. One of the parties of the arbitration agreement has started legal proceedings. 4. The party has not submitted the first statement on the substance of dispute. Mere defect in the form of arbitration agreement would not be proper to deny the right of the parties to go into arbitration. No Appointment of an Arbitration through Court Under the new Arbitration and Conciliation Act 1996 there is no provision for appointment of' arbitrator by seeking intervention of the court, though contrary to the old Arbitration Act, 1940 namely S. 20 provided that a party could commence proceedings in court by moving an application under said section of the old Act for appointment of an arbitrator and simultaneously it could move an application for interim relief under the 2nd Schedule r/w S. 41(b) of the Arbitration Act, 1940. As said above the Arbitration and Conciliation Act, 1996 does not contain a provision similar to Section 20 of the Arbitration Act, 1940, nor is Section 9 or Section 17 similar to Section 41(c) and the Second Schedule to the Arbitration Act, 1940. It is to be specifically noted that Section 8 of the new Act, 1996 is not in the pari materia with Section 20 of the Arbitration Act, 1940. It is only if in an action which is pending before the court that a party applies that the matter is the subject of an arbitration agreement does the court get jurisdiction to refer the parties to arbitration. Arbitration Proceedings and Legal Proceedings to be continued Concurrently It is very special feature of the Arbitration and Conciliation Act, 1996 which makes provision particularly Section 8(3) that arbitration proceedings and legal proceedings may be continued concurrently. S. 8 nowhere prohibits starting or initiating or continuing arbitration proceedings when an application for stay of legal proceeding is pending before the judicial authority or the court. The Calcutta High Court in G.V.S Packing Co v. Vinod Textiles, observed that the provision of S. 8 is equally applicable in winding up proceedings of a company.
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PALLAVI BHOGLE
It is to be noted that an order made by the court / judicial authority while exercising power u/S 8 of the A&C Act, 1996 is not challengeable, thus such order is not appealable u/S 37 of the said Act. Non-existence of a valid arbitration agreement - High Court cannot pass a decree in terms of award In Tamil Nadu Electricity Board v. Sumathi, a writ petition was filed claiming compensation on account of death due to tortuous act. However, the High Court held and referred the matter to the arbitrator and made the award rule of the court and also passed a decree in terms of award. The Supreme Court while considering the above mentioned case observed that since disputed question of facts arose in the present appeals the High Court should not have entertained writ petitions, under Article 226 of the Constitution of India, 1950 and then referred the matter to arbitration in violation of the provisions of the Act, 1996. There was no arbitration agreement within the meaning of Section 7 of the Act, 1996 under the Arbitration and Conciliation Act, 1996. Award can be enforced as if it is a decree of account and yet the High Court passed a decree in terms of the award which is not warranted by the provisions of the new Act, 1996. Appellant also had raised plea of bar of limitation as in many cases if suits had been filed those would have been dismissed as having been filed beyond the period of limitation. The Supreme Court held that exercise of jurisdiction by the High Court in entertaining the writ petition was not proper and High Court in any case could not have proceeded to have the matter adjudicated by an arbitrator in violation of the provisions of the new Arbitration and Conciliation Act, 1996. Submission of first statement not a bar on the court referring the parties to arbitration The Supreme Court in P. Anand Gajapathi Raju v. P.V.G. Raju, while considering the power of the court to refer the dispute to arbitration under Section 8 of the new Act, 1996 where during the pendency of the dispute before the Supreme Court, parties entered into arbitration agreement and sought reference, it was held that the submission of first statement on substance of dispute was not a bar on the court referring the parties to arbitration provided other parties do not object. In the present case the court observed as follows: The conditions which are required to be satisfied under sub-sections (1) and (2) of Section 8 before the court can exercise its powers are: 1. There is an arbitration agreement. 2. A party to the agreement brings an action in the court against the other party. 3. Subject-matter of the action is same as the subject-matter of the arbitration agreement. 4. The other party moves the court for referring the parties to arbitration before it submits his first statement on the substance of dispute. The last provision creates a right in the person bringing the action to have the dispute adjudicated by court, once the other party has submitted his first statement of defence. ARBITRATION, CONCILIATION & ADR SYSTEMS 16
PALLAVI BHOGLE But, if the party, who wants the matter to be referred to arbitration applies to the court after submission of his statement and the party who has brought the action does not object, as is the case before the court, therefore, is no bar on the court referring the parties to arbitration. Grounds for which Stay of Legal Proceedings may be Refused There are certain circumstances when judicial authority may refuse the stay of legal proceeding, these are as under: 1. When it appears that the party has waived his right to seek stay of legal proceedings before submission of first statement on the substance of dispute. 2. When the Judicial authority or court is of the view that no adequate relief would be available to the party. 3. When the Court / Judicial authority is of the opinion that no contract has in fact been concluded between the parties. 4. When the contract itself is vitiated by bias or fraud. 5. When the main contract is void ab initio or illegal or non-existent. 6. Where the suits or claim has foundation on Hundies or on Negotiable Instruments. Interim Measures etc by Court [Section 9] Section 9 empowers the courts to grant interim measures at their discretion, thus it is the discretionary power of the court. The Court while considering an application made by a party would consider the various aspects of the matter such as whether prima facie case has been made out, whether the loss would be huge or beyond economic repair, if the suitable interim measures not being granted. But, such measures can be granted in aid of the arbitration proceedings and not to frustrate them. An application to the court to grant interim measures can be made on specified purposes under the Act, 1. for the appointment of a guardian for a minor or person of unsound mind for the arbitral proceeding; 2. to obtain custody, preservation and sale of any goods provided such goods is the subject-matter of an arbitration agreement; 3. to cause recovery of the amount as a result of an arbitral award; 4. to detain, preserve and inspect any property or thing which is subject-matter of an arbitration agreement, 5. to obtain interim injunction, 6. to appoint a receiver. The aforesaid purposes to grant interim measures contained in [clauses (a) to (e). Section 9 of the Act provide certain guidelines to a court and also provides the grounds to the parties in an arbitration agreement. To grant interim measures under Section 9, a court has discretionary power and this section does not specify all the interim measures. The court has to take account of every aspect of each case and also requirement of a case. This power of the courts to grant
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PALLAVI BHOGLE interim measures cannot be taken away by the parties by contest as it is the requirement of the Act. Interim Measures given by Court Wherein the parties may feel the need for safeguarding interim custody preservation, protection, storage, sale or disposal of the whole or part of the subject-matter of the dispute or for its inspection or for samples to be taken, such matters had to be referred to the court under Second Schedule to the old Indian Arbitration Act, 1940. The new Arbitration and Conciliation Act, 1996 Under Section 9 and under Section 17 enables the court and arbitrator respectively to take interim measures. Section 31(6) also empowers the arbitrator at any time during the arbitration proceedings to make an interim arbitral award on any matter with respect to which the arbitrator may make a final award. Thus, under the new Act, 1996 makes provision for exercising powers as to interim measures and relating to the matter to which the arbitrator's final award may be based. Granting of Interim Injunction / Interim Measure Whether to grant interim injunction/interim measure is a discretionary power of the court. It is to be noted that the powers conferred upon the court u/s 9 of the new Act, 1996 are wider in scope than those powers conferred upon the Arbitral Tribunal u/s 17 of the new Act. While considering the grant of interim measures, the court may see, amongst other things, as such: 1. whether the applicant has made out a prima facie case; 2. whether the balance of convenience is in his favour; and 3. whether he would suffer irreparable injury if such measures are not granted. It is a settled position that interim injunction / interim measure can be granted in aiding the arbitration proceedings and not to frustrate them. However, in guise of granting interim measures / interim injunction, the court cannot adjudicate the subject matter of the dispute, because that task belongs to the arbitral Tribunal and not to the court. Interim Order may be made even Before Commencement of Arbitration Proceedings The Apex Court in Ms. Sundaram Finance Ltd v. M/s N.E.P.C India Ltd., observed that Section 9 of the new Act, 1996 does not contemplate, unlike Section 20 of the Arbitration Act, 1940, a party applying to a court for appointing an arbitrator when no matter is pending before the court. Under the new Act appointment of arbitrator is made as per the provisions of Section 11 which does not require the court to pass a judicial order appointing arbitrator/arbitrators. The High Court was, therefore wrong in referring to these provisions of the Arbitration Act, 1940 while interpreting Section 9 of the new Act.
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PALLAVI BHOGLE Under the new Act, 1996 the court can pass interim orders when the request to refer the dispute is received by the respondent as per S. 21 of the Act. The material words occurring in Section 9 are before or during the arbitral proceedings. This clearly contemplates two stages when the court can pass interim orders i.e. during the arbitral proceedings or before the arbitral proceedings. There is no reason as to why S. 9 of the new Act should not be liberally construed.
Conclusion
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PALLAVI BHOGLE
COMPOSITION OF ARBITRAL TRIBUNAL

Define an Arbitrator. Explain the provisions relating to appointment of arbitrators under the Act. What are the grounds on which the appointment can be challenged? [16] May 08, Dec 01 Explain the provisions relating to appointment and removal of arbitrators. [16] May 07, Dec 06, May 04, May 03, Dec 03, May 01 On what grounds the appointment of an arbitrator can be challenged in court? Discuss. [16] Dec 06, 06
Introduction: An Arbitrator may be defined as a private, neutral person chosen to arbitrate a disagreement, as opposed to a court of law. An arbitrator could be used to settle any non-criminal dispute, and many business contracts make provisions for an arbitrator in the event of a disagreement. Generally, resolving a disagreement through an arbitrator is substantially less expensive than resolving it through a court of law. The legal definition of an arbitrator is the submission of a dispute to an unbiased third person designated by the parties to the controversy, who agree in advance to comply with the awarda decision to be issued after a hearing at which both parties have an opportunity to be heard.
Appointment of Arbitrators [S. 11] Section 11 of the Act, 1996 is the lengthiest section. There are 12 clauses under this section which elaborate on the matter. Section 11(1) - After internationalization of present Act, nationality of an arbitrator is immaterial and so this Section 11(1) of the Act provides freedom to the parties to appoint a person of any nationality as an arbitrator, however, the parties may restrict themselves to certain nationalities of the states to be appointed as an arbitrator. There is no discrimination in respect of nationality of an arbitrator. Therefore, a foreign national may be appointed as an arbitrator. Section 11(2) - This sub-section prescribes a procedure appointing the arbitrators and the parties have been given the freedom to lay-down procedure under this sub-section (2) ARBITRATION, CONCILIATION & ADR SYSTEMS 20
PALLAVI BHOGLE although this sub-section (2) is to be read with sub-section (6) and sub-section (8) and the freedom of the parties provided in this sub-section is subject to certain restriction as to follow mandatory provisions laid-down in sub-section (6). Section 11(3) - This sub-section (3) would come into operation when the parties fail to reach agreement on an appointment procedure. An arbitration agreement with three arbitrators if failed, each party is given authority to appoint one arbitrator and these two appointed arbitrators shall appoint the third arbitrator who shall be the presiding arbitrator in the arbitration. Section 11(4) - Further, this sub-section (4) deals with the circumstances when a party fails to appoint an arbitrator within prescribed time limit i.e., 30 days, even after the receipt of request relating to appointment of an arbitrator from the other party or according to sub-section (4)(b). The two appointed arbitrators fail to agree on the appointment of the third arbitrator within prescribed time limit i.e.. 30 days, from the date of their appointment, in such situation this sub-section (4) provides that the Chief Justice of India or the Chief Justice of a High Court is authorized to make an appointment upon request of a party. Although, any institution designated by the Chief Justice of India or Chief Justice of a High Court may appoint an arbitrator. It is expected that these functionaries would act upon request of the parties expeditiously and these functionaries are not required to consult the parties or the arbitrators while making such appointment. Section 11(5) - Under sub-section (5) failing any agreement referred to in sub-section (2), there would be a sole arbitrator. Where the parties could not arrive to an agreeable position on arbitrator within 30 days time from the date of the receipt of a request by one party from the other party to do so, in such circumstances the Chief Justice or any person or institution designated by the Chief Justice should make an appointment under the provision of sub-section (5) of Section 11 of the Act . Failure to appoint arbitrator on new method empowers other party to seek remedy from court for appointment of arbitrator. Section 11(6) - Sub-section (6) contains a mandatory provision and it comes into play when the parties had agreed on an appointment procedure i.e., when the parties or the two appointed arbitrators failed to appoint a third arbitrators, a person including an institution has failed to perform a function entrusted to him under that agreed procedure. That means that when there is a complete failure on an agreed appointment procedure, this subsection would be operated to eliminate obstacles. Section 11(7) - Sub-section (7) states that there is no appeal and a decision is final, on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) to the Chief Justice or the person or an institution designated by the Chief Justice. Section 11(8) - Sub-section (8) provides guidelines in the matter of appointment of an arbitrator by the Chief Justice or the person or institution designated by him. It is provided under this sub-section (8) that gives guidelines while making the appointment of
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PALLAVI BHOGLE an arbitrator. The functionaries mentioned in the sub-section, shall have due regard to these guidelines: (a) any qualifications required of the arbitrator by the agreement of the parties, and (b) other considerations as are likely to secure the appointment of an independent and impartial arbitrator. Though, this sub-section (8) does not prescribe the qualification of an arbitrator but specifies more particularly that an arbitrator should be an independent and impartial person. Section 11(9) - Sub-section (9) also provides guidelines to functionaries i.e., the Chief Justice of India or the person or institution designated by him, in the matter of appointment of sole arbitrator or third arbitrator in an international commercial arbitration, that these functionaries should appoint an arbitrator of a nationality other than the nationalities of the parties, in case the parties belong to different nationalities. Thus, sub-section (9) aimed to eliminate scope of partiality by nationality of different countries between the parties and arbitrator / arbitrators. Section 11(10) - Sub-section (10) provides power to the Chief Justice to make an appropriate scheme in respect of the matters entrusted to him, by sub-section (4) or subsection (5) or sub-section (6). The powers vested under this sub-section (10) is of administrative nature therefore the scheme made by the Chief Justice would be of administrative character which is essential for enforcement of the Act effectively. Section 11(11) - Sub-section (11) provides solution to the problem when different parties approach to different Chief Justices or their designates, under sub-section (4), or subsection (5) or sub-section (6). The Chief Justice or his designate to whom the request has been first made under the relevant sub-section shall alone be competent to decide on the request. That means the Chief Justice or his designate who first receives and accepts the request shall have power to decide on the entrusted matter. Section 11(12) - Sub-section (12) explains that in case of international commercial arbitration reference is to be made to the Chief Justice of India and. in case of domestic commercial arbitration reference is to be made to the Chief Justice of High Court within whose local limit the principal court in clause (e) of sub-section 1(1) of Section 2 is situate and where the High Court itself is the Court referred to in that clause, then the Chief Justice of that High Court.
Grounds for Challenge [S. 12] Section 12, is on the pattern of Article 12 of the Model Law which provides grounds for challenge to an arbitrator and to enforce that justice, fair play, impartiality and independency must be followed by an arbitrator.
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PALLAVI BHOGLE Section 12(1) contains an expectation of an honest, willful, disclosure from a prospective arbitrator to make in writing such disclosures which is likely to cause question mark as to his independence or impartiality as an arbitrator. As per the subject of this Section 12(1) a prospective arbitrator is duty bound to disclose his antecedent which is likely to affect his role as an arbitrator. Section 12(2) lays down duty of an arbitrator since he has been appointed as an arbitrator and throughout the arbitral proceeding if any circumstances mentioned in Section 12(1) arise, to be disclosed in writing to the parties, unless the parties have already been informed by an arbitrator. An arbitrator shall also be proceeded without delay in this regards. Section 12(3) provides ground for challenging the arbitrator, when: i. the circumstances present to cause justifiable doubts to his independence or impartiality, or ii. found not qualified as per the agreement between the parties. Thus, sub-section (3) averts the flimsy ground to challenge by providing good, reasonable grounds to challenge the arbitrator. In Jiwan Kumar Lohia v. Durga Dutt Lohia, the Supreme Court of India said, that Reasonable apprehension of bias in the mind of a reasonable man, can be a good ground for the termination of the mandate of an arbitrator. Section 12(4) provides estoppel against a party to challenge who had knowledge of any ground mentioned in sub-section (3) before the appointment of an arbitrator, if this is not so, a party may challenge an arbitrator appointed by him and it does not matter if he has participated in appointment but he could know only after the appointment. Duty to disclose is cast on the prospective arbitrator Sub-sections (1) and (2) of Section 12 of the Arbitration and Conciliation Act, 1996 make it mandatory for the prospective arbitrator i.e., before the appointment as an arbitrator to disclose to the parties in dispute in writing any circumstances likely to give rise to justifiable doubts as to his impartiality or independence. Undoubtedly, the use of expression shall connotes that these provisions are imperative. An arbitrator has to discharge this duty without delay i.e., before he takes over as an arbitrator. It is the mandate of Section 12(1) and 12(2), of the Act, 1996. It is submitted that an arbitrator has to follow the principle of natural justice and fair play while conducting arbitration.
Conclusion
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PALLAVI BHOGLE State the powers of court to appoint an arbitrator. [10] Dec 05, Dec 04 Powers of the Chief Justice of High Court to appoint Arbitrators [10] Dec 02 Under what circumstances can court remove the arbitrators? Illustrate. [16] May 09, May 06, Dec 05, Dec 05, Dec 05, Dec 03
Introduction: The expressions without delay as occurring in Section 12(2) of the Arbitration and Conciliation Act, 1996 means there should not be undue or unreasonable delay on the part of arbitrator's duty to disclose when such person is first approached in connection with his possible appointment as an arbitrator. Section 12(2) provides that this duty of the arbitrator has to be discharged from the time person is appointed as an arbitrator and maintain it throughout the arbitral proceedings. Hence, an arbitrator has to discharge this duty without delay. This provision is intended to commence speedy arbitration and its adjudication. The Delhi High Court in Union of India v. Somnath Chadha observed that the main object of referring a dispute to an arbitrator for adjudication is the speedy end of the strife. This object in the court's view stands frustrated on account of unreasonable neglect on the part of the appellant / claimant to promote the conduct of arbitration proceedings. It was held that delay or negligence in appointment of arbitrator or commencement of arbitration proceedings would defect the very purpose of the arbitration itself. It is to be reiterated that the scope of arbitration is to avoid the prolong litigation in the courts. It is an aid to speedy decision. In these circumstances the court may intervene and appoint an arbitrator. In Ved Prakash Mittal v. Union of India, the Full Bench of the Delhi High Court held that an opportunity is given by the court to designated officer to exercise his power of appointment of arbitrator within a stipulated period failing which the court would appoint the arbitrator itself. Where the office of the designated officer is abolished the court can appoint an arbitrator under Section 8 of the Arbitration Act, 1940. Similarly, in Sankar and Sankar v. State of West Bengal, it was held that if a person permitted to appoint arbitrator under Arbitration clause neither appoints an arbitrator nor enters on the reference himself and there is silence for more than one year it would be a clear case of failure and neglect. In that event the court can appoint an arbitrator itself.
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PALLAVI BHOGLE Appointed arbitrator must possess qualifications agreed to by the parties In Anuptech Equipment Pvt. Ltd. v. Ganpati Cooperative Housing Society Ltd., the Bombay High Court has held that if the appointed arbitrator does not possess the qualifications agreed to by the parties in the arbitration agreement, his very appointment being void ab initio, the arbitration proceedings would be totally null and void and any order passed by him, e.g., terminating arbitration proceedings for default of a party in filing claim statement, would be a nullity. Termination of mandate and Substitution of Arbitrator [S. 15] Only S. 15(1) and (d) is modeled on Article 15 of the Model Law. Section 15 (1) provides two more additional grounds for termination of arbitrators authority. These grounds are: (a) that the arbitrator has withdrawn himself from office for any reason; (b) that the parties have consented each other to terminate arbitrators authority. Under sub-section (1) the parties have freedom to remove an incompetent arbitrator who is not able to perform by reasons whatsoever, by their consent. Thus, sub-section (1) too recognizes the freedom of the parties to agree and prescribe conduct of their arbitration. Section 15(2) provides answer to question that how a substitute arbitrator should be appointed. This sub-section (2) would come into operation when the mandate of an arbitrator has been terminated on whatsoever ground. The parties may abandon the arbitral proceedings when a sole arbitrator, offers departure of originally appointed arbitrator. Although a substitute arbitrator shall be appointed as per the rules applicable to the case and any party not permitted to stop appointment of a substitute arbitrator, thus, the consent of the parties is necessary in this regard. Section 15(3) provides discretionary power to the substituted arbitrator who may begin with the proceedings from the initial stage or from the stage where the former arbitrator stopped the proceedings. Section 15(4) provides despite change in composition of the arbitral tribunal the proceedings held prior to appointment of another arbitrator shall not be invalid solely on the ground that the composition of arbitral tribunal has been changed. Although, freedom given to the parties under sub-section (4) that they may agree that the arbitral tribunal may again commence proceedings from initial stage. Termination of mandate of arbitrator Wherein an appointed arbitrator on his withdrawal from the office ceases to be an arbitrator his mandate terminates. As regards the termination of the mandate of the arbitrator appointed in Government contract, situation may arise where the appointed arbitrator, being a Government officer retires from his service. In such an event, it has
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PALLAVI BHOGLE been held that the mandate of the appointed Arbitrator on retirement/resignation from employment itself terminates. It is noteworthy that Section 15 is a complimentary Section to Sections 13 and 14 as regards to the arbitrator withdrawing from his office which is also contemplated by Section 13(3) which has been enunciated in Section 15(1)(a). Section 15(1)(b) makes provision of withdrawing from office if the agreement between the parties have been made to cancel appointment of arbitrator, who have appointed him as an arbitrator. In other words The arbitrator withdrawing from office in accordance with the agreement of the parties as the parties who appointed him by consent can cancel the appointment. Substitution of arbitrator Section 15(2) of the Act provides that where the mandate of an arbitrator terminates a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced. However, according to Section 15(3) unless otherwise agreed by the parties, where an arbitrator is replaced under Section 15(2), any hearing previously held may be repeated at the discretion of the arbitral tribunal. Sections 15(1)(a) and (4) deal with procedural aspects regarding the action on the appointment of the substitute arbitrator. It is settled law of arbitration if in the mid of arbitration proceedings the arbitrator withdraws or retires and if any mandate made, it would stand terminated. In Punjab State v. Pritam Singh, wherein reference of dispute was made to Superintending Engineer in Public Works Department as sole arbitrator as per arbitration agreement. After his retirement, proceedings were being taken up by his successor, which was never objected to, by the parties. It was held that the subsequent order by court on application under Section 27 made by the party directing opposite party to produce evidence before original arbitrator and directing original arbitrator to continue with the proceedings, in spite of the fact that he has ceased to act as an arbitrator is not sustainable.
Conclusion
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PALLAVI BHOGLE State under what circumstances a sole arbitrator can be appointed [8] May 07, Dec 04, Dec 03
Introduction: S. 10 of the A&C Act, 1996 makes a provision for the number of arbitrators that will be appointed, saying: The parties are free to determine the number of arbitrators, provided that such number shall not be an even number. Sole Arbitrator If the parties want more than one arbitrator, they will have to expressly provide in the agreement, otherwise the reference is to be to a sole arbitrator appointed with the consent of the parties. Where the opposite party declined to give consent even after second notice, the court would get the power on the application of the other party to appoint an arbitrator. Under the Arbitration and Conciliation Act, 1996, the matter has to be referred to the Chief Justice. No need to mention specific dispute A mere assertion of the claim covered by the arbitration clause to the notice of the other party was held sufficient to invoke arbitration. There is no need for raising any specific dispute. A tripartite agreement involved an international commercial arbitration. One party (the applicant) was opposed by the other two. The application was under Section 11(5) before the Supreme Court. The respondents contended that no specific dispute was raised by the applicant and, therefore, the arbitration clause could not be involved. It was held that the existence of a dispute could be inferred from the facts and circumstance of the case. The contract was a commercial document. An arbitration clause imports in itself all disputes. It must be interpreted so as to give effect to the contract rather to invalidate it. A narrow technical approach is not proper. The objectives of the 196 Act are to provide less expensive and more efficacious remedy to the parties to settle their disputes. On the partie's failure to determine the number of arbitrators the Supreme Court can exercise the power under Section 10(2) to appoint a sole arbitrator. Appointing three arbitrators would have been burdensome to the parties and therefore against the objectives of the Act. Case Laws In Subhash Projects & Marketing Ltd. v. South Eastern Coal Fields Ltd., it was held that recourse to court by one party for appointment of arbitrator under S. 8 of the Arbitration and Conciliation Act, 1996 will not preclude the other party to appoint sole arbitrator when procedure for appointment is stipulated in the arbitration agreement. In another case it has been held that when procedure for appointment of arbitrator is provided in arbitration agreement between the parties by the contractor which stipulates that the Chief Engineer can appoint anyone as an arbitrator from the list of three
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PALLAVI BHOGLE candidates submitted by the contractor, is not availed of by the Chief Engineer, it would amount to an implied consent given by the Chief Engineer for appointment of sole arbitrator by contractor. Although, in certain circumstance, the substitution of sole arbitrator may be justified and he is considered competent to arbitrate on the matter. In State of Andhra Pradesh v. I. Chandrasekhara Reddy, wherein sole arbitrator provided in the contract between the parties, was directly concerned with the contract work in dispute, the court ordered substitution of arbitrator, and that the plea that award passed by substituted arbitrator was nullity for want of reference is not tenable, since order of substitution itself gave jurisdiction of arbitrator to enter upon reference, which order had become final. Conclusion
Explain what grounds amount to misconduct of arbitrators. State the remedy available for the parties under such circumstances. [16] May 06
Introduction: Removal of arbitrators is discussed under Ss 12 & 13 of the Act. One of the grounds for removal is that of Misconduct. Misconduct The Allahabad High Court held that where an arbitrator demanded his fee from one party only and refused to proceed further until he was paid and allowed the statutory period to expire without his doing anything, that was not considered misconduct so as to justify his removal provided that the fee demanded by him was reasonable and not exorbitant In the case of Pratt v. Swanmore Builders Ltd and Baker, the arbitrator was nominated by the President of the Institute of Arbitrators. The dispute was about a building contract. The challenge was on the ground of delay and misconduct. The facts raised were that the arbitrator took no steps to ascertain what the scope of the arbitration agreement between the parties was; he demanded 3000 from the builders as security for the final award, which they were unable to pay; he then made further orders for payment by both parties, 500 as security for the arbitrator's fee and expenses, and 500 as security for the costs of reference; that he made various mistakes in sending to Miss Pratt a copy of an important letter which he had received from the builders and which contained incorrect and incomprehensible expressions and lastly, that he ordered the arbitration to proceed without any security unmindful of the fact that it would make the proceedings a wasted effort as the builders had already indicated to Miss Pratt that they would go into liquidation if she won the award.
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PALLAVI BHOGLE She applied for removal of the arbitrator. The court had to consider whether the arbitrator had misconducted himself or the proceedings. The court pointed out that the word "misconduct" in this context did not have any moral significance but was used in a technical sense as denoting irregularity. It is distinct from error which is not only normal in human affairs but also a occupational hazard. The court thought that the right test to apply was that indicated by Cozens Hardy in Enoch and Zaretzky, Block & Co, Re, namely, whether having regard to the arbitrators conduct, it would be fair to leave the arbitration in his hands, or, in other words, by looking at the arbitrators mistakes, whether, by reason of them, the proceedings have been reduced to such confusion that there was no reasonable prospect of justice being done, if he were permitted to continue. The court noted how unfair the arbitrator was towards Miss Pratt in going ahead with the arbitration without any security, and decided that the arbitrator should be removed on grounds of misconduct. The court also ordered that the arbitration agreement should cease to have effect with respect to the dispute referred.
Personal knowledge not to be used for ousting competent evidence Though one of the principal advantages of arbitration is that it can be conducted by a person who is an expert on the subject-matter of dispute, it would not permit him to use his personal knowledge to supersede other competent evidence. That may amount to misconduct justifying his removal. Conclusion
Explain the powers and functions / duties of Arbitral Tribunal under the Act. [16] May 08, 06, Dec 03, 02 State the powers of an arbitrator [6] May 09, May 05, Dec 05, May 03 Introduction: There are several provisions incorporating in the Arbitration and Conciliation Act, 1996 explaining the provisions about the powers, duties and functions of the arbitrator. Section 2(1)(d) defines Arbitral Tribunal: Arbitral Tribunal means a sole arbitrator or a panel of arbitrators. According to the provisions of the arbitration clause/agreement or by the order of the Court, there may be a sole arbitrator or a panel of arbitrators. When there are more than one arbitrator, the Arbitration Act, 1940 termed the title Umpire to the head of the
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PALLAVI BHOGLE panel. The Arbitration and Conciliation Act, 1996 has given the title President to the head of the panel, who shall preside over the functions. Whether there is only one arbitrator or a panel of arbitrators, it is called the Arbitral Tribunal. Therefore, the powers, duties and functions explained in the statute for Arbitral Tribunal are also the powers, duties and functions of the Arbitrator. The Powers of the Arbitrator/Arbitral Tribunal 1. No interference by judicial authority - Arbitration is one of the important means to settle the disputes outside the court, that too with the consent of the parties. The arbitrator/arbitral tribunal enjoys its extreme jurisdiction to entertain the arbitral proceedings. The Courts have no authority or power to interfere with such arbitral proceedings or the powers of the arbitral tribunal, except where so provided in the Act. 2. Administrative Assistance To conduct the arbitral proceedings, the arbitral tribunal requires assistants. S. 6 empowers the arbitral tribunals to appoint such number of administrative assistants for conducting the arbitral proceedings. 3. Jurisdiction S. 16 explains the provisions about competence of arbitral tribunal to rule on its jurisdiction. 4. Interim measures ordered by the arbitral tribunal - Section 9 of the 1996 Act empowers the Court to pass interim measures. Section 17 empowers the arbitral tribunal to pass interim measures under certain circumstances. If the arbitral tribunal passes an order for the preservation or protection or custody of certain property, which is the subject-matter of the arbitral proceedings, to a person, the tribunal may ask such person to provide appropriate security for that property. 5. Determination of rules of procedure - The Civil Procedure Code, 1908 and the Indian Evidence Act, 1872 do not apply to the arbitral proceedings. Section 19 of 1996 Act gives the power to the arbitrator/arbitral tribunal to determine the rules of procedure itself. 6. Place of arbitration - Section 20 gives the opportunity to the parties to the arbitration agreement to determine the place of arbitration. If there is no such provision or agreement in the arbitration clause or agreement, the arbitrator/arbitral tribunal is empowered to determine the place of arbitration. 7. Language - The parties may determine the language to be used in the arbitration proceedings according to their convenient and usage in the trade, and incorporate such a clause in the arbitration agreement. However, if the parties do not provide such a clause, and do not come to an understanding, the tribunal has power to determine which language is to be used in the arbitral proceedings. This is explained in Section 22 of the 1996 Act. 8. Statements of claim and defence - The arbitral tribunal receives the statement of claim from the party, who initiated the arbitral proceedings, and the statement of defence from the opposite party. The arbitral tribunal is also empowered to receive the evidence and record accordingly. Section 23 contains this provision. 9. Hearing and Written Proceedings If the parties agree to conduct the arbitral proceedings orally, the arbitral tribunal conducts the proceedings orally. If there is
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PALLAVI BHOGLE no such clause or agreement between the parties, the tribunal is empowered to determine whether to hold the proceedings orally or written. S. 24 contains this provision. 10. Default of a party - It is the duty of the parties to submit the necessary documents and statements to the arbitral tribunal as and when necessary and directed by the tribunal. If any one of the parties fails to submit the statement and evidence, the tribunal is empowered to proceed with the arbitral proceedings, after giving sufficient opportunity to such party. S. 25 contains this provision. 11. Expert appointment by arbitral tribunal - If the arbitral tribunal opines it necessary to obtain the expert opinion, it is empowered to appoint one or more experts in the concerned subject. Section 26 empowers the arbitrar/arbitral tribunal to do so. 12. Court assistance in taking evidence - According to Section 27, if necessary, the arbitral tribunal may seek the assistance of the Court in taking evidence. 13. Award - After completing the arbitral proceedings, the arbitrator/arbitral tribunal is empowered to pass an award. The arbitrator, if there is a sole arbitrator, or the arbitrator, if there is a panel of arbitrators, should sign and date on the arbitral award. This award is equal a Decree of a Court. 14. Settlement While the arbitral proceedings are pending before him or it, the arbitrator of arbitral tribunal may encourage the parties to settle the dispute. S. 30 contains this provision. 15. Termination of proceedings - The arbitral tribunal is empowered to terminate the proceedings under the circumstances narrated in Section 32. 16. Suspension of the proceedings - The arbitral tribunal has the power to suspend the arbitral proceedings, in the following circumstances: a. if the parties claiming or counter-claiming do not deposit the necessary expenses before the arbitral tribunal; b. if both the parties do not come forward with clean hands; c. if both the parties do not co-operate with the arbitral proceedings; etc. 17. Correction and interpretation of the award; additional award - Under Section 33, the arbitral tribunal is empowered to correct, interpret the award issued by it. It is also empowered to pass an additional award. 18. Interest - The arbitral tribunal may order for interest on the sum awarded. 19. Deposits - The arbitral tribunal is empowered to fix the amount of the deposit or supplementary deposit, as the case may be under Section 38. 20. Remuneration: The arbitrator or the panel of arbitrators are entitled to receive remuneration as per the terms of the arbitration agreement or as fixed by the court. 21. Lien on arbitral award and deposits as to costs - According to S. 39, the arbitral tribunal can exercise lien on arbitral award and deposits as to costs. Duties of the Arbitrator/Arbitral Tribunal 1. Equal treatment of parties - The arbitrator/arbitral tribunal should conduct the arbitration proceedings without any partiality to any person or party. The tribunal
31
PALLAVI BHOGLE must treat both the parties equally. It must provide full opportunities to both the parties to present their case. Section 1 further explains this provision. 2. Concerned with the dispute only - The arbitral tribunal must concentrate its arbitral proceedings on the dispute. It should not exceed and go beyond the dispute. An arbitral award may be set aside by the court, if 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 or matters beyond the scope of the submission to arbitration. 3. Duty to follow the provisions of the 1996 act - The arbitrator or arbitral tribunal should follow the provisions of the Arbitration and Conciliation Act, 1996 and other concerned statutes in force. The Court may set aside an arbitral award, if 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. 4. Public policy - The arbitral tribunal should follow the public policy. If its proceedings or award is against the public policy, the Court may set aside the award. 5. Time limitation - The arbitral tribunal should complete the arbitral proceedings within the time limits prescribed by the court, in case if the arbitral tribunal is appointed by the Court. 6. Remuneration - The arbitrator is entitled to receive remuneration as per the arbitration agreement or as fixed by the Court or as per the agreement reached by the parties. When once his fee or remuneration is fixed, he should not demand more than that fixed remuneration or fee. It is against the principles of natural justice and legal provisions, if he demands more than agreed. 7. Reasoned Award It is the duty of the arbitral tribunal to give reasons for its coming to the conclusions of such award. 8. Principles of Natural Justice The arbitral tribunal should follow the principles of natural justice i.e. audi alterum partem, notice, one cannot judge his own case, etc. 9. Withdrawal from the arbitral proceedings If the arbitrator has any personal interest, either economic interest or a personal relationship with any of the parties, he must not accept the arbitratorship. If he has noticed such interest during the arbitral proceedings, he must express it to the parties concerned and withdraw from the arbitratorship. 10. Notices to legal representatives - There are no provisions in the Arbitration and Conciliation Act, 1996, regarding the notices to be sent or information to be given or to implead the legal representatives on the record if one of the parties dies during the pendency of the proceedings. Even though there are no such provisions in the Act, it is the duty of the arbitral tribunal to send the notices or information to the legal representatives to the deceased party, when it receives the information about the death of such party. Until the legal representatives are impleaded on the record, the arbitral tribunal must adjourn the proceedings. 11. Finality and reasonableness in the award - It is the duty of the arbitral tribunal to see that the award must be complete and final, as well as reasonable. If there is
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PALLAVI BHOGLE any defect or gaps, certain award will not be considered valid. In the case of Dresser v. Finnis, a dispute was referred to the arbitrators regarding the merchantable quality of sleepers supplied by the respondent to the appellant. The arbitrator gave the award stating that some of the sleepers were merchantable and some not. The arbitrator also directed the buyer/appellant to sell all the sleepers at the market rate, and selling broker to determine the difference of amount between the merchantable sleepers and not merchantable sleepers. Aggrieved with the award, the appellant approached the Court. The Court set aside the award opining that there was no finality and reasonableness in the award. 12. Legal and possible It is the duty of the arbitral tribunal to see that the award must be legal and possible to implement it. Section 14 of the 1996 Act states that the award must be set aside if it is impossible to implement the award. 13. Duty to render accounts - Where the party or parties deposit the amount before the arbitral tribunal towards the costs and expenses of the arbitral proceedings, it is the duty of the arbitral tribunal to render the account, and return the balance amount to the concerned parties. [S. 38] 14. Ex aequo et bono - This Latin phrase means according to what is just and good. It is the duty of the arbitral tribunal to decide the dispute ex aequo et bono (according to what is just and good). If the parties in the dispute authorize him, he may act friendly with both the parties to bring them together and settle the matter in an amicable way. This is explained by Section 28(2). 15. Usages In all cases, the arbitral tribunal shall decide in accordance with the terms of the contract and shall take into account the usages of the trade applicable to the transaction. 16. Settlement - It is also one of the duties of the arbitral tribunal to encourage settlement between the parties. Conclusion
Arbitral Tribunal 10] Dec 01
Introduction: Under S. 2(1)(d) of the Arbitration and Conciliation Act, 1996 the term arbitral tribunal means a sole arbitrator or a panel of arbitrators. It is also to be noted that composition of arbitral tribunal has been provided in Chapter II namely, in Section 10 of the said Act, wherein the parties are free to determine the number of arbitrators, provided that such number shall not be even number. Failing the determination referred to in Section 10(1) of the Act, arbitral tribunal shall consist of a sole arbitrator. A sole arbitrator or a panel of arbitrators can be appointed by third designated party provided there is an agreement in this regard. Abolition of the umpire system under the new Act
33
PALLAVI BHOGLE Where the number of arbitrators agreed upon is three and in, absence of procedure regarding appointment of the umpire or Presiding Arbitrator, each party shall appoint one arbitrator and the two arbitrators so appointed, shall appoint a third arbitrator as Presiding Arbitrator. Under the old Arbitration Act, 1940 such Presiding Officer was referred to as umpire, however the umpire system has been abolished under the new Arbitration and Conciliation Act, 1996. Arbitrators to have requisite qualifications agreed to by the parties The old Arbitration Act, 1940 was silent on the subject of qualification of arbitrators. Now the new Act emphasizes on appointment of arbitrator / arbitrators who have specialization in the respective field relating to arbitrable dispute in hand. It has been seen that most of the disputes are technical in nature requiring special knowledge of technology, commerce, industries etc. and such disputes can be, adjudicated upon only by persons having expertise in these fields. Thus, on the ground of non possessing of requisite qualifications, the appointment of an arbitrator can be challenged. Arbitrator to rule its own jurisdiction Under the Arbitration Act, 1940 there was no provision on the issue and where the authority of the arbitrator was disputed the parties were required to refer the dispute to the court for proper adjudicati6n. But, the new Arbitration and Conciliation Act, 1996 has conferred on the arbitrator / arbitral tribunal the power to rule upon its own jurisdiction regarding the validity or existence of te arbitration agreement. Arbitral tribunal is not a court An arbitral tribunal though discharges the functions of quasi-judicial nature on principle of natural justice and fair play, but an arbitral tribunal is not a court of law. The Apex Court in Engineering Mazdoor Sabha v. Hind Cycles Ltd., has held that the arbitral tribunal does not constitute a court in technical sense. Arbitration proceedings to proceed expeditiously Wherein the arbitrators are unable to perform expeditiously and fail to proceed expeditiously, in such a case an aggrieved party can seek court's intervention. The Apex Court in Government of Andhra Pradesh v. K.M. Rao, permitted the appointment of person ex-officio to perform as' arbitrator in place of originally appointed Government Engineers. In the present case three arbitrators were appointed who were Government officers and Engineers and consequently the arbitration proceedings could not be undertaken expeditiously. Therefore, the court was justified in directing the appointment of persons ex- officio. It is submitted that the very purpose of arbitration proceedings will be defeated if the proceedings are not being held expeditiously.
34
PALLAVI BHOGLE Impartiality in arbitration proceedings must be maintained The mandate of the new Arbitration law makes mandatory provision that arbitrators are required to disclose expressly any situations and circumstances which are likely to give rise to reasonable doubt regarding their independence or impartiality in the proceedings. Thus, the arbitrators are under a legal obligation to intimate the parties expressly i.e., in writing about their interest, if any in the dispute. Establishment of statutory arbitral tribunal Several State Governments in India have established arbitral tribunals by incorporating Special Act, these tribunals are given jurisdiction to deal with the disputes of differences regarding claims exceeding certain value. Ordinarily, these statutory tribunals deal with the arbitration wherein the Government is one of the arties. Members of such statutory arbitral tribunals are appointed by the Government and these tribunals have their own procedure. Undoubtedly statutory arbitral tribunals are not to be treated as arbitral institutions, because statutory arbitral tribunals directly arbitrate being 'ex-officio' arbitrators whereas arbitral institutions provide the list of arbitrators for the parties, to make option regarding appointment of the arbitrator. It was held that such arbitral tribunal exercises judicial power of State.
Conclusion
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PALLAVI BHOGLE
JURISDICTION OF ARBITRAL TRIBUNALS

Discuss whether the arbitral tribunal is competent to rule on its own jurisdiction. Explain the powers of arbitral tribunal in passing interim orders. [16] Dec 02, May 01 Jurisdiction of Arbitral Tribunal [10] May 02 What do you mean by interim reliefs and when the arbitrators can pass the interim award? [16] May 06 Explain under what circumstances an arbitrator can pass an interim order and state the other powers of an arbitrator. [16] Dec 06
Introduction: Chapter IV of the Arbitration and Conciliation Act, 1996 discusses provisions that fall under the heading of Jurisdiction of Arbitral Tribunal As explained in the case of Ispat Engg & Foundry Works v. SAIL, An arbitrator has no authority or jurisdiction beyond that defined by the terms of the contract or what the parties desire under the contract. He has no authority to abdicate the terms of the contract. Competence of Arbitral Tribunal [S. 16] Section 16 of the Act, 1996 is a key section of the Act and sub-sections (1) to (4) of Section 16 are modeled on Article 16 [paragraphs (1) and (2)] of the Model Law. Section 16 is analogous to Section 13 of the Arbitration Act, 1940. S. 16(1), empowers the arbitral tribunal to make rules on its own jurisdiction; including any objections, in respect to the existence or validity of the arbitration agreement, however over such matters ultimate control exercised by the courts as provided under Section 34 of the Act, 1996. This is an important element in modem arbitration law, referred to as competence de law competence meaning law is competent to rule in its own sphere. Sub-section (1) contained principle of autonomy and distinguishes the arbitration clause from other clauses in the agreement. Thus, an arbitration clause is independent of the ARBITRATION, CONCILIATION & ADR SYSTEMS 36
PALLAVI BHOGLE other terms of contract and the arbitral tribunal cannot invalidate an arbitration clause while invalidating the other clauses of an agreement. Section 16(1) contained the expression The Arbitral Tribunal may rule. That means it is the discretionary powers of an arbitral tribunal which it may exercise on its own motion or at the request of a party. An arbitrator cannot be compelled to exercise those powers. Section 16(2) provides plea to raise objections to jurisdiction but no time limit is prescribed. The arbitral tribunal itself may move motion relating to the question of jurisdiction, however the parties have also vested rights to raise objections to jurisdiction but not later than the submission of the statement of defence. A party shall not be deprived of such right to raise objections to jurisdiction merely on the ground that he has appointed or participated in the appointment of an arbitrator. Thus, an aggrieved party has an opportunity to raise a jurisdictional plea before an arbitral tribunal even after appointment of an arbitrator. Section 16(3) states that as soon as an arbitral tribunal goes beyond the scope of his authority objections to be raised while the arbitral proceedings are in progress and in this context Section 16(4) waived off the time limit provided such delay is justified and reasonable. Section 16(5) and (6) are not modeled on the basis of the Model Law, although, these two sub-sections are to be read together. Sub-section (5) states The arbitral tribunal shall decide on a plea referred to in Section 16(2) and (3), and where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral proceedings and make an arbitral award. That means a plea of objections to jurisdiction made by a party before an arbitral tribunal and an arbitral tribunal proceeds by rejecting such plea and also makes an arbitral award, in such cases, an aggrieved party may approach to the court for setting aside such an arbitral award according to Section 34 of the Act as this provision is available to an aggrieved party under sub-section (6) of Section 16 of the Act. To eradicate abuse of the constitutional remedy through Writ expressly not provided in Section 16(6) of the Act. Thus, the writ jurisdiction of the High Court under Article 226 of the Constitution may not be available in the face of Section 34 of the Act, with object to prevent unscrupulous methods, no provision in respect of instant court control is available, if it is not so, it would discourage the arbitral proceedings. Therefore, the arbitral tribunal to commence or continue the arbitral proceedings and also empowered to rule the jurisdiction while the objection to jurisdiction issue of an arbitral tribunal is pending before the Court, such are not stayed under Section 16 of the Act, 1996. However, before referring the matter for arbitration, arbitration agreement must be in existence. Without there being any arbitration agreement in existence, the Court would have no jurisdiction to refer the matter for arbitration prima facie. It is required to be considered whether arbitration clause exists or not, in the view of fresh contract between the parties.
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PALLAVI BHOGLE When objections to jurisdiction have to be raised Section 16(2) of the Act deals with the question as to when objections to jurisdiction have to be raised. No time limit as such has been prescribed within which the arbitral tribunal itself can raise such objection suo motu. However, if the either party raising objections as to jurisdiction, it must be raised not later than the submission of the statement of defence to the claim or counter claim, as the case may be. However, for construction of term defence, the Section 2(9) of the Act, 1996 can be referred. In case arbitral tribunal enters upon the consideration of a matter when it has no jurisdiction to do under the arbitration clause or submission between the parties, then it cannot derive jurisdiction by a mere appearance of a party under protest. It was held that in such circumstances, a party is not estopped from challenging the eventual award of the tribunal under Section 34(2)(iv) or (v) as the case may be. In Prasun Roy v. Calcutta Metropolitan Development Authority, the Apex Court has held that where a party is aware from the very commencement that by reason of some disability the matter is legally incapable of being submitted to arbitration, even though took parts in arbitration proceedings without protest and fully avails of the entire arbitration proceedings, but when he sees that the arbitral award has gone against him comes forward to challenge the entire arbitration proceeding on the ground that it lacks jurisdiction to arbitrate the disputed matter, if cannot be allowed to challenge as it is known disability. This principle would be applied before or after making of the arbitral award. It is well settled legal principle that a party will not be allowed to blow hot and cold at the same time. In other words, it can be said that long participation in the arbitration proceedings and acquiescence in the proceedings preclude such a party who has taken part in the entire proceedings but raised the objection as to want of jurisdiction only when the arbitral award goes against him, such a party is estopped from challenging the jurisdiction of the arbitral award. Therefore, it cannot be allowed to be challenged on such ground of known disability. Where there is no arbitration agreement as defined under Section 2(a) of the Arbitration Act, 1940, there is an initial want or jurisdiction which cannot be cured by acquiescence. The Apex Court in Waverly Jute Mills Co. Ltd. v. Rayman & Co. (India) Pvt. Ltd/ held that if a contract containing the arbitration clause is not legal and m fact void, the arbitration clause which is one of the terms thereof must also perish along with it and the dispute relating to the validity of a contract is, in such cases, for the court and not for the arbitrator to decide. The court further held that a dispute as to the validity of a contract could be subject-matter of an agreement of arbitration in the same manner as a dispute relating to a claim made under the contract but such an agreement would be effective and operative only when it is separate from the dependence of the contract which is impugned as illegal. It is settled position that an agreement for arbitration is the very foundation on which the jurisdiction of the arbitrator to act rests and where that is not in existence at the time when he enters on his duties, such arbitration proceedings must be held to be entirely without jurisdiction or absence of jurisdiction, mere consent of the parties cannot confer jurisdiction. However, mere denial of existence of the arbitration agreement by one of the parties does not denude the arbitrators of their jurisdiction.
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PALLAVI BHOGLE
It is submitted that though the arbitral tribunal is competent to decide and determine its jurisdiction under Section 16 of the new Act, 1996 but the tribunal has to work out within the parameters laid down in the arbitration clause. While the arbitrator can decide the question regarding the existence of a valid contract including the arbitration clause therein. In case the Arbitral tribunal decides its jurisdiction wrongly the aggrieved party can seek remedy before the court of law, because arbitral tribunal is not final authority and cannot overlap the authority rather jurisdiction of the court of law, specifically where question of law is involved. It is settled principle of jurisdiction. Section 16 does not take away jurisdiction of the Chief Justice to decide the question of existence of arbitration agreement The Apex Court in Wellington Association Ltd v Kirit Mehta, has held that S. 16 of the new Act, 1996 does not takeaway the jurisdiction of the Chief Justice of India or his designate, if need be, to decide the question of the existence of the arbitration agreement. The court observed that Section 16 does not declare that except the arbitral tribunal, none else can determine such a question. Merely because the new Act, 1996 permits the Arbitrator to decide this question, it does not necessarily follow that at the stage of Section 11 the Chief Justice of India or his designate cannot decide a question as to the existence of the arbitration clause. The interpretation put on section 16 by the petitioner is that only the arbitral tribunal can decide about the existence of the arbitration clause is not acceptable for other reasons also apart from the result flowing from the use of the word may in Section 16 of the new Act, 1996. Interim Measures ordered by Arbitral Tribunal [S. 17] Section 17 deals with the power of arbitrators to make an interim award. It is based on Article 17 of the Model Law. Section 17 of the Act, 1996 is analogous to Section 27 of the Arbitration Act, 1940. Section 17 provides power to arbitrators to take such interim measures, which is necessary and also reasonable at the request of a. party. An arbitral tribunal cannot order interim measures as such on its own motion. Under Section 17(1), such interim measures as an order may be issued by an arbitral tribunal at the request of a party on the ground of protection as is necessary regarding the subject-matter of the dispute, such order given to a party has to follow these interim measures. Ordinarily an interim award is intended to be effective during the pendency of the arbitration, till the final award is given. Section 17(2) provides that the arbitral tribunal may require a party to provide proper security relating to the measures ordered by the arbitral tribunal. The arbitral tribunal empowered to order interim measures of protection reflects modern trend in new arbitration law.
39
PALLAVI BHOGLE
Thus, the arbitral tribunal is competent to order interim measures to the parties which originates from an agreement i.e., between the parties, but the arbitral tribunal not competent to order interim measures to affect right of a party who is not a party to such agreement. An interim award / measures must determine some part of the dispute referred to arbitration. It cannot deal with another matter. The Allahabad High Court, held that an award of stay or an injunction pending determination of dispute is foreign to concept of interim award. The Co-operative Societies Act, 1912 does come within the purview of the Arbitration Act. Scope of Section 17 It can be seen that Section 17 of the Arbitration and Conciliation Act, 1996 deals with the interim measures/relief etc. in respect of the subject-matter of dispute. When the request is made by either party and tribunal considers it necessary for protection of subject-matter of dispute referred, may order interim measures. Thus, the arbitral tribunal cannot order as to interim measures suo motu The expression appropriate security referred to in Section 17 of the Act, 1996 may include preservation, protection and safe custody of subject-matter of dispute. It is lo be noted that the arbitral tribunal is competent only to order a party take interim measures within the ambit of the arbitration agreement, therefore, tribunal cannot order interim measures which are capable to affect the right of the third parties. Under Section 17 of the Act the extent and scope of interim measures may include the preservation, custody or sale of goods which are the subject-matter of the dispute. It also includes recording of evidence which may not be available at a later stage 'of the arbitral proceedings, protection of trade secrets and proprietary information; stabilization of the relationship of the parties in a long term project which might include the use or maintenance of machines or works on the continuation of a certain phase of a construction if necessary to prevent irreparable harm. Under Section 17 the interim measures ordered by the arbitral tribunal subject to the rules stated therein to the arbitration agreement of the parties. However, Section 17 does not confer power on the arbitral tribunal to enforce its orders. However, Section 37(2) of the Act makes provision that an order of tribunal whether granting or refusing to grant interim measures is appealable to a court, thus interim measures are subject to judicial consideration. There is also no bar to seek judicial enforcement of the interim measures under Section 9 of the Arbitration & Conciliation Act, 1996. It is submitted that the scope of interim measures under S. 9 of the A&C Act, 1996. It is submitted that the scope of interim measures which can be granted under Section 17 are very limited in comparison with the interim measures which may be granted by the court. Conclusion
40
PALLAVI BHOGLE
CONDUCT OF ARBITRAL PROCEEDINGS

State the composition of the Arbitral Tribunal and explain the rules relating to conduct of arbitral proceedings as provided under the Act. [16] May 08, Dec 02 Discuss the procedure for conduct of proceedings before the arbitral tribunals and state under what circumstances an expert can be appointed? [16] May 04, May 01 Introduction: There is a certain code of conduct to be followed in arbitral proceedings. S. 18 of the Act, 1996, deals with this matter. It contains mandatory provision that the parties to an arbitration must be meted out equal treatment and also equal opportunity to present his case before the arbitral tribunal. Equal Treatment of Parties [S. 18] In other words, Section 18 provides principle of natural justice, that an arbitral tribunal should treat the parties with equality and provide equal opportunities for presentation, prosecution, defence and interim application in' respect of the case. Under this Section principle of justice and fair play must be applicable during entire process of arbitration. On a number of occasions, the Supreme Court of India embodied the aforesaid principle and said that the arbitral tribunal should create confidence, not only by doing justice between the parties, but also by creating a feeling that Justice appears to have been done. It is well estabtished, universally recognised principle not only under the arbitration law but also is the essence of any other laws. Expression equal treatment of parties The expression equal treatment of parties denotes that arbitral tribunal is required to follow the principle of natural justice and fair play while conducting arbitration proceedings. It is necessary that the parties must be given full and equal opportunity to put up their contentions. According to Russell once the arbitrators enter into a reference they virtually become judges in the cause to act impartially - They must observe in their proceedings the ordinary rules of administration of justice. The Apex Court is of the view that once the arbitrator enters in arbitration, he must not be guilty of any act which can be construed as an indicative of partiality or unfairness. Arbitrators to render equal opportunity to the parties In the absence of fairness and equal opportunity to the arbitrating parties and making of arbitral award, it will not only defeat the very substratum of the arbitration but also make ARBITRATION, CONCILIATION & ADR SYSTEMS 41
PALLAVI BHOGLE such arbitral award unsustainable in the eyes of law. Arbitrator occupies the position as a Judge and he is bound to follow the principle of natural jurisprudence. During the course of arbitration proceedings, the arbitrator must provide equal opportunity to both the parties to present their cause. No ex parte arbitration proceeding is desirable. A party should not be examined in the absence of another In the context of law of arbitration ordinarily, it is not permissible to examine one party in the absence of another. Thus, there is no ex parte arbitration as such. It is the fundamental principle of natural justice that no order should be passed without hearing both the parties in arbitration. No one should be condemned unheard rather unilaterally. Where it is found that the arbitration proceedings were arbitrary, unfair and were not based on the principles of natural justice, the arbitral award is liable to be set aside. Even, the arbitrator is expected to permit the parties to take the help of an advocate, if the parties sought such expertise in legal assistance. Determination of Rules of Procedure [S. 19] Section 19 of the Act, 1996 is on the pattern of Article 19 of the Model Law except subsection (1) of Section 19. Section 19 provides for procedure to be adopted by the arbitral tribunal. Section 19(1) states that the arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 or by the Indian Evidence Act, 1872. The principle existing in subsection (1) is to reduce wide scope of litigation by narrowing application of various statutes. Thus, the procedure laid-down in these enactments mayor may not be adopted by the arbitral tribunal. Section 19(2) is the most liberal part in the context of modern arbitration law, which provides freedom to the parties to determine the procedure to be followed by the arbitration tribunal while conducting its proceedings, such procedure is to be prescribed as per the agreement between the parties. Thus, sub-section (2) gives convenience to the parties to adopt consented or mutually agreed procedure to be followed by the arbitral tribunal in its proceedings, but subject to provisions of Part I of the Act. The freedom provided in sub-section (2) is of continuing one, therefore, it is desirable to consult the arbitral tribunal if the parties wish to make any changes in procedure after constitution of an arbitral tribunal. Section 19(3) provides measure in the event of the parties not reaching an agreement to prescribe the rule of procedure to conduct arbitral proceedings, in such a case the arbitral tribunal itself may conduct the proceedings in the manner it considers appropriate as provided in sub-section (3). In other words; if the parties fail to prescribe mutually any procedure, in such a case the arbitral tribunal shall be free to prescribe a procedure as it thinks just and proper.
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PALLAVI BHOGLE
Section 19(4) provides specified powers to the arbitral tribunal to determine the admissibility, relevancy, materiality and weight of any evidence produced before it. Thus, the arbitral tribunal may not adopt procedure contained in the Indian Evidence Act, 1872 but may adopt the principles of equity, justice and fair play. It is settled law of procedure that the civil courts have to follow the procedure laid down in the Code of Civil Procedure, 1908 and in regard to evidence they have to follow the provisions laid down in the Evidence Act, 1872 which is being a procedural law, applicable to the Civil Courts and also to Criminal Courts. However, statutory Tribunals may have their procedure laid-down by their governing statutes. In the context of an arbitrator, private tribunal has its private procedure and for this purpose the arbitration agreement may contain the rules of procedure prescribed by the parties. It is to be noted that in the absence of rules of procedure in the arbitration agreement, under Section 19 of the new Act, 1996, an arbitrator is at liberty to prescribe the procedure himself but such a self governing procedure must be in conformity with the principle of natural justice and fair play. It is for the arbitrator to ensure the compliance with the principle of natural justice even if the arbitration agreement contained the rules of procedure, for arbitration, an arbitrator cannot ignore the principle of natural justice. Arbitration proceedings should be governed by the principle of natural justice The Delhi High Court in Modi Industries Ltd. v. Union of India observed that an arbitrator is not necessarily to be a person familiar with the laws of procedure, however, he occupies the position as a Judge appointed by the parties in whose sense of justice they have faith. Therefore, his procedure should be such as a reasonable man should follow in deciding the disputes impartially. Where there is no special procedure agreed or consented to by the parties or justified by the peculiar circumstances of the case, as and when the arbitrntor is appointed on account of his skill and knowledge of the subject, his procedure should be governed by the principles of natural justice. Concrete principles of natural justice must prevail Though some of the High Courts are of opinion that in no way the principle of natural justice can be overlooked in making of the rules of procedure regarding arbitration. For instance, in Kesholal Ram Dayal v. LaxmanRao Ram Krishna the court observed that the procedure adopted by the arbitrator should not be against the principle of natural justice. It is clear that the arbitrator may not be strictly bound by the rules and procedure observed in a court but it does not mean that his procedure should be opposed to natural justice. The court would be reluctant to interfere unless there is something radically wrong and vicious in the proceedings. There are two opinions in respect of complying with the principles of natural justice. While one view is that the arbitrator has to regard the principle of natural justice, the ARBITRATION, CONCILIATION & ADR SYSTEMS 43
PALLAVI BHOGLE other view is that the parties can prescribe their private procedure which may disregard the principle of natural justice, while adopting the reasoning and concrete principle of natural justice. Expert Appointed by Arbitral Tribunal [S. 26] Section 26 of the Act, 1996 is modeled on Article 26 of the Model Law, except subsection (3) of Section 26. Section 26 lays down provision about appointment of expert by the arbitral tribunal for the purpose to obtain expert evidence on the matters, mostly such practices prevail in civilized countries. Section 26(1) empowered the arbitral tribunal to appoint one or more experts to take their reports on specific issues relating to the matter before it, however, report of experts do decide the disputes, the reports are merely advisory in nature. Thus, the arbitral tribunal has to decide the dispute, not the experts. The experts provide assistance to the arbitral tribunal in which matters their reports to be sought to be determined by the arbitral tribunal. Under sub-section (1), clause (b) the arbitral tribunal is vested with power to order a party to give any, relevant information, to produce any documents or to provide access to such documents, goods or other property for inspection/instruction of the expert. S. 26(1), [Clauses (a) and (b)] are intended to provide facilities to the experts whose expert reports become necessary on specified issue as to arrive at a decision by the arbitral tribunal. Section 26(2) states that the expert may participate in an oral hearing when either party makes such request or the arbitral tribunal considers it necessary. However, such participation of expert can be allowed only after the expert has submitted his, written report. Such participation of expert is permitted under sub - section (2) to give opportunities to the parties to interrogate and testify expert witnesses on specified issues. However, the parties may agree mutually not to have such participation of expert. The provisions contained in Section 26(2) is an affirmative to principle embodied in Section 18 of the Act. Section 26(3) provides that, at a party's request, expert shall permit examination of any documents, goods or other property, on which the expert report is relied. It is intended that the expert will not prepare his report on material facts which are not disclosed to the parties. However, the parties may agree mutually, not to have such examination of documents, goods or other property by the expert.
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PALLAVI BHOGLE Relevancy of Opinions of Expert According to S. 45 of the Indian Evidence Act, 1872: When the court has to form an opinion upon a point of foreign law or of science or, or as to identify the handwriting or finger impression, the opinion, upon that point, of persons specially skilled in such foreign law, science or art, or in question as to identity of handwriting or finger impressions, are relevant facts Such persons are called experts . The courts have been accustomed to act on the opinion of experts. The purpose is very clear. There are many matters which require professional or specialized knowledge which the court may not possess. For example, when the court has to determine the cause of a ship-wreck or an air crash, there may be many technical causes behind it and therefore, the court will need the assistance of technicians, as they are better acquainted with such cases. The appointment of an expert by the tribunal is common and recognized in civilized countries. It is to be noted that the arbitral tribunal is only empowered and not obliged to appoint experts. Only with the prior consent of the parties may the arbitral tribunal seek assistance of an expert. Whether expert opinion is relevant, is to be determined by the tribunal. An expert can testify as a witness There is no prohibition to testify the expert as a witness, provided the arbitral tribunal considers it necessary or if a party so requests. The expert can take part in an oral hearing but only after he has delivered his written or oral report so that the parties can cross examine him.
Arbitral tribunal can seek assistance of legal expert Under Section 26(1) of the new Act, 1996 if the arbitral tribunal considers it necessary or on prior consent made by the party, it may seek assistance of a legal expert during the arbitration proceedings. This section specifically empowers the arbitral tribunal to appoint one or more experts i.e., legal experts, technical or financial experts and to report to the arbitral tribunal on specific issues to be determined by the tribunal. The arbitral tribunal may require a party to give the expert any relevant information to produce relevant documents. It is clear from the above provision that the arbitral tribunal is not empowered to seek the assistance of expert including legal expert or to appoint the expert without first securing the consent of the parties. Conclusion
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PALLAVI BHOGLE Explain the procedure for conduct of arbitral proceedings with reference to taking of evidence and hearing of the case by the arbitral tribunal. [16] May 09, Dec 05, May 01 Court assistance in taking evidence [16] Dec 02
Introduction: There is a certain code of conduct to be followed in arbitral proceedings. This code of conduct extends to taking of evidence and hearing of the case by the court. Hearing and Written Proceedings [S. 24] Section 24 of the Act, 1996 is on the pattern of Article 24 of the Model Law. Section 24 deals with healings and written proceedings before the arbitral tribunal. Section 24(1) provides that if the parties could not have an agreement relating to mode of arbitral proceedings, in such cases, the arbitral tribunal may itself determine whether it would conduct the proceedings on oral hearing of the parties or allow oral arguments or conduct the proceedings in writing relying upon the statement and documents or other materials. The oral hearings are not held if the parties have not agreed to it. The parties are permitted to change their agreement a any stage of the proceedings relating to oral or other hearings. It is the discretionary power of the arbitral tribunal to administer oath to the parties or witnesses or not. The Punjab and Haryana High Court in Balwant Singh v. Chief Secretary to Gavernment of Punjab, said that if the arbitral tribunal does not administer oath, it does not affect the admissibility of the statements of the witnesses. Section 24(2) states that the parties shall be given sufficient advance notice of any hearing and also of any meeting of the arbitral tribunal for the purposes of inspection of documents, goods or other property. However Section 24(2) does not state who shall give such notice but it is the arbitral tribunals accountability to serve and also confirm that sufficient notice is given to the parties, regarding hearings and written proceedings. The requirements of Section 18 in which the principles of equity and fairness are contained are to be followed under this Section 24(2) of the Act. It is an essential requirement of the Act; No one is permitted to derogate. Section 24(3) provides measure relating to the parties to have equal and fair access to written proceedings. It states that all statements, documents and application made to the arbitral tribunal by one party shall be communicated to the other party, including any expert report as such received by the arbitral tribunal or other evidentiary document on which the arbitral tribunal is likely to rely while making its decision, these are to be
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PALLAVI BHOGLE communicated to all parties. Thus, whatever written proceedings are submitted by one party, have to be communicated to the other party. Admissibility of the statement of the witnesses without administering oath It is a discretionary power of the arbitral tribunal whether or not to administer the oath to the parties or witnesses. In Balwant Singh v. Chief Secretary to Government of Punjab, it was held that if the arbitral tribunal / does not administer the oath, it does not affect the admissibility of the statements of witnesses. Both parties have full and equal access to written proceedings It is well settled that whatever written proceedings are submitted by one party will have to be communicated to the other party. Since, it is not specified as to the authority who will communicate the written proceedings of one party to the other party, it seems that the arbitral tribunal which is an administering institution is to ensure that such written proceedings have been communicated to the other party. Thus, documents which are evidentiary in nature are required to be communicated.
Courts Assistance in Taking Evidence [S. 27] Section 27 provides significant approach in nature of arbitration where an arbitral tribunal may take a court's assistance to get evidences as such through that court, according to court's process. Section 27(1) provides that the arbitral tribunal or a party, with the permission of the arbitral tribunal, may seek court's assistance, by an application, for taking evidence. Under sub-section (1) the arbitral tribunal seeks a court's assistance to make arbitration proceedings effective and efficient. However, under sub-section (1) it is clearly stated that the party may only seek court's assistance with the approval of the arbitral tribunal, this is to prevent abuse of process. Section 27(2) provides requirements as such application, the names and addresses of the parties, nature of the claim, relief sought and required evidence sought through court. Section 27(3) states that under obligation as such the court may execute the request of the arbitral tribunal in taking evidence according to rules and competence of the court and such evidence is to be provided to the arbitral tribunal. Such evidence is to be provided directly to the arbitral tribunal. Section 27(4) provides that while making order, the court may issue the same processes to witnesses as it may issue in suits tried before it. Section 27(5) provides for disadvantages, penalties, and punishment to persons, who do not comply according to the issued process. The courts have to adopt same procedure as the Civil Courts.
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PALLAVI BHOGLE
Section 27(6) explains 'processes' which includes summonses and commissions examination of witnesses and summonses to produce documents. Award would be rendered invalid on non-consideration of material evidence
for
Under Section 27 of the Arbitration and Conciliation Act, 1996 the arbitral tribunal can seek the courts assistance in taking evidence by applying suo moto or on request by a party. The arbitral tribunal has no power to issue summons to persons except the disputing parties in arbitration. The Apex Court in K.P. Poulose v. State of Kerala, held that once it is decided that the consideration of material evidence by the arbitral tribunal and making of arbitral award amounts to unfair arbitration proceeding, the arbitral award would be rendered invalid and liable to be set aside. Award liable to be set aside if there is refusal to issue summons to the witness The Delhi High Court in Lalit Mohan v. Building Committee has held that once the arbitrator had permitted the witness to be examined, it is not proper on the part of the arbitrator to decline to issue summons to the sole witness i.e., the building adviser and instead ask the party to bring the sole witness before the arbitral tribunal, at its own responsibility. In the present case the court observed that the arbitrator ought to have, issued summon to the witness who is to be examined. The arbitral award was, therefore liable to be set aside. It is submitted that the provision to seek the court's assistance in taking evidence of a witness is necessary because the arbitral tribunal has not been conferred power to summon witness or to issue process as such.
Conclusion
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PALLAVI BHOGLE
ARBITRAL AWARD AND TERMINATION OF PROCEEDINGS

Define Award. Discuss the essential conditions of valid award [10] May 05, Dec 03 Define award and state the effects of award. [6] Dec 04
Introduction: Under Section 2(1)(c) the word Arbitral Award' is not really defined, but it does state that the Arbitral award includes an interim award. Although Section 31(6) submits explanation in this regard as under: The Arbitral Tribunal may, at any time during the arbitral proceedings, make an interim arbitral award on any matter with respect to which it may make a final arbitral award. Thus, an interim award may be the Arbitral Award. So, an interim award may be a final award. According to H. Lexicon - It is an instrument which embodies a decision of an arbitrator or arbitrators as regards matters referred to him or them. Although; according to Russell An award in order to be valid, must be final, certain, consistent and possible and must decide matters to be submitted and no more than the matters submitted. An arbitral award is not a contract but the decision determined out of the contract An award, whether it is arbitral or an interim award is a decision of the Arbitrator or Arbitrators which is determined after contentions of the parties are considered and an arbitrator or the arbitrators put his or their opinion in the form of decision. The consent of the parties may not be present in a decision. An arbitral award decided by the Arbitral Institution judicially will have binding effect in respect of the parties in dispute. The contents of an arbitral award must be in writing, not oral. An arbitral award is like a decree which comes into effect from the date on which it has been signed and right of the related parties come into effect from that date onward. Any agent on behalf of the parties to dispute if authorized by the parties may refer to arbitration for settlement of matter. In Kishan Lal v. Ram Swaroop the Allahabad High Court held that the Vakalatnama submitted by the parties differ in respect of their contents. The Vakalatnama submitted by the plaintiff authorized the counsel to compromise the suit or proceeding; in another ARBITRATION, CONCILIATION & ADR SYSTEMS 49
PALLAVI BHOGLE aspect the Vakalatnama on record, authorizes the counsel to refer the matter to arbitration which includes power to compromise in arbitration. Therefore, if an agent is authorized to compromise the dispute it is deemed that he has power to refer the matter for arbitration. It is expected that the arbitrator has accepted all claims and counter-claims and considered fully in quasi-judicial manner before it could arrive at the final award. An arbitral award should have the following ingredients: 1. It must be written. 2. The parties to arbitration must be competent. 3. The Arbitration Agreement must be fit to assign dispute before any domestic tribunals. 4. A decision of the domestic tribunal must be written. 5. The contents of an award must be subject-matter of the arbitration. 6. An award must be determined on principles of mutual justice. 7. The arbitrator must sign while giving award and also mention date therein.
Arbitral award operates as res judicata In Shashi Sekhareswar v. Lali Mohan, the Privy Council, inter alia observed that a decree passed on the foundation of arbitral award would have the same effect as an ordinary judgment of a court and on the question which has already been decided by the, arbitrators it operates as res judicata. But, where a claim in question has not been included as a subject-matter of reference to arbitration, it was held that principle of res judicata will not be applied in respect of the claim. In the view of the Apex Court, an arbitral award is to be treated as a decree passed by the Civil Court, and it is binding on the parties. It is submitted that an arbitral award is not a contract but a decision given on the basis of terms of a contract. An arbitral award must be in writing because it is like a decree of the Civil Court Such award comes into operation from the date it has been signed, rights and liabilities of the parties concerned come into force from the date onwards. Essentials of Arbitral Award It is well settled legal position that a valid, proper and enforceable arbitral award must have the following essential ingredients: 1. An arbitral award must be in writing and signed. 2. The parties must be competent to initiate arbitration proceedings. 3. A sustainable arbitral award must be reasoned one - Section 31(3) of the Arbitration and Conciliation Act, 1996. 4. There must be arbitration clause to assign disputes or differences before arbitral tribunal.
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PALLAVI BHOGLE 5. The content of an arbitral award must be connected with the subject-matter of the dispute arbitrated; 6. An arbitral award must be founded on the principle of mutuality. Where the arbitral award is based on mutual settlement of the dispute by the parties, no reason need be given. Arbitral award may be Final or Interim An arbitral award may be a final award or an interim award unless there is an agreement to the contrary between the parties and depending upon the, nature of the dispute, the arbitrator could make an interim award. An interim award has the same sanctity as final award. However, if it is not complied with, it cannot be enforced through the court by the same procedure as in the case of final award. Time limit for making the arbitral award The Arbitration and Conciliation Act, 1996 does not provide any time limit as such for completing the arbitration. However, an arbitrator can be terminated if he fails to act without undue delay. Arbitral award by consent The Arbitration and Conciliation Act, 1996 recognizes the liberty of the parties to come to a settlement. The arbitrator, if satisfied about the genuineness and validity of the settlement has to give an award in terms of the settlement. The Act further envisages that the arbitrator may encourage efforts at settlement. It is to be noted that the Arbitration Act, 1940 was silent on this point. Contents of arbitral award The requirements of the contents and form of arbitral award are as under: 1. An arbitral award shall be made in writing and shall be signed by the member of the arbitral tribunal. 2. For the purpose of Section 31(1), in arbitral proceedings with more than one arbitrator, the signatures of the majority of all the members of the arbitral tribunal shall be sufficient so long as the reason for any omitted' signature is stated. 3. The arbitral award shall state its date and the place of arbitration as determined in accordance with Section 20 and the award shall be deemed to have been made at that place. Arbitral award shall be final and binding on the parties As provided under Section 35 of the Arbitration and Conciliation Act, 1996 an arbitral award shall be final and binding on the parties and persons claiming under them. Where the time for making the application to set aside an arbitral award has expired or where
51
PALLAVI BHOGLE such application has been refused by the court, the award shall be enforced as if it were the decree of the court. An arbitral award treated as a decree of a court The Apex court in Satish Kumar v. Surendra Kumar, has held that an arbitral award is treated as a decree of a court and it does not matter whether it has passed into decree or not hence it is binding upon the parties. Conclusion
What do you mean by Domestic Award? Discuss the provisions relating to form and contents of an Arbitral Award? [16] May 08, May 07, May 05, May 03, Dec 03 Explain the contents of an arbitral award. When can an additional award be made? [16] Dec 02, Dec 01
Introduction: Under Section 2(1)(c) the word Arbitral Award' is not really defined, but it does state that the Arbitral award includes an interim award. Although Section 31(6) submits explanation in this regard as under: The Arbitral Tribunal may, at any time during the arbitral proceedings, make an interim arbitral award on any matter with respect to which it may make a final arbitral award. Thus, an interim award may be the Arbitral Award. So, an interim award may be a final award. According to H. Lexicon - It is an instrument which embodies a decision of an arbitrator or arbitrators as regards matters referred to him or them. Although; according to Russell An award in order to be valid, must be final, certain, consistent and possible and must decide matters to be submitted and no more than the matters submitted. An arbitral award is not a contract but the decision determined out of the contract
Form and Content of Arbitral Award [S. 31] Section 31 prescribes form and contents of interim award, interest to be paid and costs of the parties borne as to the arbitral proceedings.
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PALLAVI BHOGLE
Section 31(1) states that an arbitral award shall be made in writing and shall be signed by the members of the arbitral tribunal. The Supreme Court of India, in Hindustan Construction Co. v. Union of India ,explained that the word signing means writing one's name on the award. However, no oral award is permitted under this sub-section 31(1) of the Act as observed by The Allahabad High Court in Satyapal v. Ved Prakash. If, an, arbitral award is signed by the majority of the members of arbitration, it fulfills the requirement of the Act. Section 31(2) lays down that if there is a multi-members arbitration system the signature of the majority of members will be sufficient to fulfill the requirements of the section. Although the reasons should be mentioned in the award as to why the signatures of the remaining members are not there. Thus, the members dissenting from an arbitral award cannot stop the award. Section 31(3) provides that if the arbitral award is in terms of the settlement of the parties or if the parties have agreed that no reason need be given by the arbitrators then it is not necessary to give the basis of an arbitral award; otherwise it is the requirement of this section that the arbitrators have a statutory obligation to give in writing the facts on which the arbitral award is based. This provides transparency and fairness in decision making by an arbitral tribunal. The arbitral tribunal is not required to give as detailed a judgment as Judges do. It simply has to give the trend of its thought process. Section 31(4) states that the arbitral award should bear its date and place of arbitration, as determined in accordance with Section 20 of the Act. In an arbitral award, date and place of arbitration must be mentioned mainly for two purposes: If case of the possibility of an appeal against the arbitral award, or For enforcement of the arbitral award. Section 31(5) directs that a signed copy of the award is to be delivered to each party and receipt of signed copy of the award is the requirement of the Act. Section 31(6) provides that the arbitral tribunal may make an interim arbitral award at any stage of the arbitration proceedings before it makes the final arbitral award. Thus, under Section 31(6) interim arbitral award and final arbitral award are not the same. Therefore, an interim arbitral award would not terminate the arbitral proceedings. Section 31(7) provides for interest, payable to the other party, at such rate as it deems reasonable on the whole or any part of the money. Interest shall be included in the sum awarded in the arbitral award. If, no rate of interest is mentioned then it shall be at the rate of 18% per annum. It shall also be mentioned in the award as to whether the interest shall be payable for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.
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PALLAVI BHOGLE
Section 31(8) lays down provision about the costs to be awarded by the arbitral tribunal. The arbitral tribunal has to specify the followings: which party is entitled to costs; which party shall pay the costs the amount of costs; and by which method the costs is determined. An award shall be made in writing and signed by members of tribunal Section 31(1) of the Arbitration and Conciliation.Act, 1996 states that an arbitral award shall be made in writing and shall be signed by the members of the arbitral tribunal. It seems that the legislative intended to give the award a definite nature by providing a mandatory condition that the award must be reduced into writing and also signed by the arbitrators, so that in case of difference in opinions the same can be found out prima facie. Further sub-section (2) of Section 31 provides that wherein the arbitral proceedings are conducted by more than one arbitrator, the signature of all the members of the arbitral tribunal is not necessary so long as reason for any omitted signature is stated. In other words if there is omission of signature of any of arbitrators in the award, the reason for doing so should be stated. The Apex Court in Dwarka Das v. India Engineering observed that an arbitral award must not merely be in writing but it should also be duly signed by the arbitrators.
Arbitral award should state the reasons upon which it is based The Apex Court in Tamil Nadu Electricity Board v. M/s Bridge Tunnel Constructions and others observed that law on the arbitral award, as governed by the new Arbitration and Conciliation Act, 1996, mandates that the award should state the reason upon which it is based. In other words, unless: the parties have agreed that no reasons are to be given, or the award is an arbitral award on agreed terms under Section 30 of the new Act, 1996. The arbitral award should state the reasons, in support of determination of the liability or non-liability. Wherein not mandatory to give reasons for the arbitral award Although, an arbitrator being a judicial authority a substitute for the civil court, must give reasons for his decision. Specifically, when the parties in the arbitration agreement stipulate that the arbitrator must give reasons, he is bound by the agreement to which he owes his existence. It is settled legal principle that when an arbitrator accepts the appointment, he accepts all the terms of the agreement. But, where the arbitration agreement under which the appointment of arbitrator is made, it does not stipulate categorically that the arbitral award must contain reason upon which it is based, in such ARBITRATION, CONCILIATION & ADR SYSTEMS 54
PALLAVI BHOGLE situations it is not a mandatory requirement that the arbitrator must give reasons for the award. While clarifying the position the Supreme Court in Raipur Development Authority v. Chokhamol Contractors, has held that though it was not a mandatory requirement that the arbitrator must give reasons for the arbitral award, he was bound to give reasons if the arbitration agreement so stipulated or if the parties so require. Conclusion
Define arbitral award. Discuss the provisions relating to correction, interpretation and additional award. [16] May 09, Dec 05, May 02, Dec 01 Define Award. State the circumstances under which an award can be modified and cancelled. [16] May 07, May 06, May 04, Dec 04
Introduction: Under Section 2(1)(c) the word Arbitral Award' is not really defined, but it does state that the Arbitral award includes an interim award. Although Section 31(6) submits explanation in this regard as under: The Arbitral Tribunal may, at any time during the arbitral proceedings, make an interim arbitral award on any matter with respect to which it may make a final arbitral award. Thus, an interim award may be the Arbitral Award. So, an interim award may be a final award. According to H. Lexicon - It is an instrument which embodies a decision of an arbitrator or arbitrators as regards matters referred to him or them. Although; according to Russell An award in order to be valid, must be final, certain, consistent and possible and must decide matters to be submitted and no more than the matters submitted. An arbitral award is not a contract but the decision determined out of the contract Correction and Interpretation of Award; Additional Award [S. 33] Section 33 is modelled on Article 33 of the Model Law. It provides as to correction and interpretation of award and additional award. Section 33 of the Act, 1996 entrusts three functions mainly to an arbitral tribunal, when, the mandate of the arbitral tribunal is terminated under section 32 of the Act. Chiefly, these functions are: corrections in the award, if any
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PALLAVI BHOGLE interpretations of specific points of the award it may make an additional award.
Both sub-sections (1) and (3) of Section 33 are relating to corrections and interpretation of an award. Clause (a) of Section 33(1), provides that a party with notice to other party may apply for correction and computation of errors, it may be any clerical or typographical errors or any other errors of a similar nature which have occurred in the award. Thus, a party with notice to the other party may seek explanation of specified point or decision in the arbitral tribunal. Under sub-section (3) the arbitral tribunal is empowered to correct its own decision rather can remove errors as such within 30 days prescribed period i.e., from the date of the arbitral award. Under clause (b) of Section 33(1) if a party has agreed with other party, then with notice to other party, may request to the arbitral tribunal to give an interpretation of a specific point, so as to remove ambiguities in the award. However, there is no provision to seek re-examination of the award. Section 33(2) provides that on justifiable ground if a request is made to the arbitral tribunal, may correct the mistake or give interpretation of the award within 30 days from the receipt of the request. Such a request is made under sub-section (1). Sub-section (4) of Section 33 provides that if something remained undecided or left in the arbitral award, the aggrieved party with notice to the other party may request the arbitral tribunal an additional award on claims submitted in the arbitral proceedings, but not decided, however, such a request can only be made within 30 days from receipt of the award. Thus, an additiorial award can be requested, when the claims presented before the arbitral tribunal, but a part of claim incidentally omitted. Sub-section (5) of Section 33 provides that an additional award can be made only on justifiable request made to the arbitral tribunal by an aggrieved party. Section 33(6) under an extraordinary circumstances to meet the end of fairness and justice, the arbitral tribunal is empowered to extend the time-limit i.e., 30 days as prescribed under sub-sections (2) and (5) of Section 33, for making correction or giving interpretation of the arbitral award. Section 33(7) follows the provision of the preceding sub-sections. It makes Section 31 of the Act i.e., form and contents of arbitral award or to an additional award applicable to such correction or interpretation of the arbitral award or make additional arbitral award as the case may be. After the arbitrator has made the award, he becomes functus officio, that is to say he ceases to function thereafter with reference to the arbitration. However, if there is no agreement to the contrary, he may correct that in an award, at any time after the award has been made, any clerical mistake or error arising therein by an accidental slip or omission.
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PALLAVI BHOGLE
Arbitral award should be construed liberally It is settled rule of interpretation that any arbitral award should be construed liberally and wholly, but not in isolation, thus, to give effect to the real intention of the arbitral tribunal. Thus wherein the arbitral award is silent and does not express clearly in respect of some claims it should be presumed that the claim was not upheld. However, the Delhi High Court in R. Murlidhar v. NPCC wherein an arbitral tribunal made an arbitral award on the subject matter referred to it, the court would draw presumption in favour of the validity of the arbitral award that the arbitrator has taken into consideration all the subject matter of disputes referred to him. The court would also presume that the arbitral award is final and complete. Arbitral award can be modified It can be said that the arbitral award can be modified wherein either of the party brings into the notice of the arbitral tribunal that the certain issues have not been taken up, in fact these were referred for arbitration or there is apparent error in the award or there is omission or accidental slip in the award, the arbitral tribunal will consider these issues and if it is justified the arbitral tribunal under its discretion would modify the award.
Conclusion
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PALLAVI BHOGLE
RECOURSE AGAINST ARBITRAL AWARD

State the grounds and circumstances on which the court can set-aside the arbitral award. [16] May 08, Dec 06, May 05, Dec 05, Dec 04, May 03, Dec 03, May 02, May 01 Explain the powers of the court in setting aside award. [16] Dec 03 State the exceptions to the rule that no judicial authority shall intervene in arbitration proceedings. [16] Dec 02
Introduction: Section 34 of the Act is one of the most important sections of the present Act, and deals with the issue of setting aside an arbitral award. Section.34 provides for the ground and circumstances when an arbitral award may beset aside. It empowers the courts to review the whole arbitration process followed in a presented case and also to examine constitutionality of the arbitration process and the parties are not permitted to lessen the dignity of it. No prescribed form of an application for setting aside an award is necessary. Though the High Court may prescribe form of such application. Section 34(1) provides that an application for setting aside the arbitral award may be made to a Court, in accordance with sub-section (2) and sub-section (3). On a number of occasions, the Supreme Court had said that as a general rule, the Court should approach the award with a desire to support it, if that is reasonably possible, rather than to destroy it, by calling illegal. The court is not empowered to set-aside the award suo moto. Section 34(2) provides the list as ground for setting aside an arbitral award by the court and the party who is seeking setting aside an arbitral award, makes. an application and furnishes proof of the followings: 1. a party was under some incapacity, or 2. the arbitration agreement is not valid under the law to which the parties have subjected to or, failing any indication thereon, under the law for the time being in force, or 3. 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.
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PALLAVI BHOGLE 4. The arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decision on matters beyond the scope of the submission to arbitration. Sub-section (2)(a)(iv) is relied on the principle that the arbitral tribunal, being a creature of the arbitration agreement, is not competent to go beyond the scope of the submission to arbitration. Thus, an arbitral tribunal being a creature of the agreement between the parties it does not have its own jurisdiction as such, thereby it is not a judicial body to exercise judicial power of the State. However, the reasonableness of the reasons, given by the arbitral tribunal cannot be challenged. The proviso to sub-section is based on the principle of severability, thus if the reasonably good and reasonably bad parts of an arbitral award can be separated the whole of the award should not be set aside. Therefore, if the unreasonable bad part of an arbitral award is severable, only the bad portion may be set aside. Section 34(2)(a)(v) provides that composition of the arbitral tribunal and the arbitral procedure are not as per the agreement of the parties and also an arbitral award, in such cases the parties are permitted to put an application to the court for setting aside the arbitral award, it is necessary to apply this provision by the parties that the agreement of the parties was not in conflict with the provision of Part I. Part I provides autonomy to the parties. Section 34(2)(b) (i) and (ii) provides the power to a court to set aside an arbitral award, when an application by a party is presented before it. However, either condition should exist-with proof: The subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or if the subject-matter is not arbitrable under the prevailing law of the State, such an arbitral award if made on such unarbitrable matter, would be set aside. an arbitral award is in conflict with the public policy of India. That means, if the procedure adopted to make an arbitral award and an arbitral award itself is opposed to public policy of India, it would be capable of being set-aside by the court, on an application made to the Court by a party. For application of this provision it is necessary that it must involve the public policy of India and not any international public policy. The New York Convention (UNCITRAL), and many international treaties also regarded and used the term public policy and it has been covered as fundamental principles of law and justice which includes substantive and procedural aspects. The explanation added to Section 34(2)(b)(ii) which states that an arbitral award given by violation of Section 75 or Section 81 in Part III of the Act, 1996 or an arbitral award induced and obtained by fraud or by unfair means or by corruption would be regarded as against public policy of India. The Supreme Court of India had also upheld the importance and application of the "Doctrine of Public Policy" in several. rulings.
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PALLAVI BHOGLE Section 34(3) prescribes the time-limit within which an application for setting aside an arbitral-award should be presented before a competent court. However, for the purpose of calculation, the prescribed period of three months as provided under sub-section (3) is the period that commences from the date on which the applicant receives the award and expires three months thereafter. It is a mandatory provision. In a case, if a request has been made under Section 33, the time limit shall be calculated from the date on which that request had been disposed of by the arbitral tribunal. It is also provided under sub-section (3) that when the court is satisfied and is in opinion that the party has been prevented from filing an application due to sufficient cause within the statutory period of three months, in such cases the Court may entertain the application within a further period of thirty days, but not thereafter. Section 34(4) provides that on receipt of application under sub-section (1), the Court may consider, it appropriate and if it is so requested by a party, adjourn the proceedings for a fixed period of time with an object to give sufficient opportunity to the arbitral tribunal to re-begin the proceedings after a pause or to take any other initiative for removal of the ground for setting aside the arbitral award. This provision is included in the Act of 1996 which was not available in the Arbitration Act, 1940. Thus new form of the remission procedure with better concept was introduced, it intends that the court should mark first the remediable defects in the arbitral award and refer the same to the arbitral tribunal, so that the arbitral tribunal can resume the proceeding. It is obvious that the object behind this remission procedure is to encourage and give reasonable opportunity to the arbitral tribunal to escalate rectified arbitration proceedings. The Allahabad High Court in State v. Reshma Devi, ruled that the subsection (4) of Section 34, does not contemplate that the court could confirm part of the award and remit the rest to the arbitral tribunal. The Court may direct the arbitral tribunal to resume the proceedings or to take certain measures which is necessary for removal of the grounds for setting aside the arbitral award.
Limitation of Power of the Court to Intervene It is to be noted that Section 34 of the new Act, 1996 restricts grounds for setting aside the arbitral award. In other words this section specify the ground on which the court may order for setting aside of arbitral award. The implication of Section 34 has been considered by the courts which are taken up by the Bombay High Court in United India Insurance Co. Ltd. v. Kumar Texturiser. The court observed that the present Act, 1996 contains three Sections, namely Sections 34, 37(2) and 14(2) which inherently empowers the court to intervene in the matter. However, Section 34 of the Act, 1996 is the main section. The present case is for a declaration that there is no arbitral dispute. It was held that considering the express language of Section 5 of the Act, 1996 i.e., extent of judicial
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PALLAVI BHOGLE intervention and the absence of present case falling under Section 14(2) or Section 34 or Section 37(2), this court will have no jurisdiction to entertain petition. It has been seen that Section 5 of the Act, 1996 specifically states that no judicial authority shall intervene except where so provided in Part I i.e., general provisions, arbitration agreement composition and jurisdiction of arbitral tribunal, conduct of arbitration proceedings, making of arbitral award, termination of proceedings, recourse against arbitral award and finality and enforcement of arbitral award etc. of the Act, 1996. In Union of India v. East Coast Boat Builders Engineers Ltd., the Delhi High Court observed that on perusal of the provisions of Part I of the Act it is apparent that nowhere it is provided that a court may intervene and entertain a petition challenging the order passed by arbitral tribunal under Section 16(5) taking a decision that the arbitral tribunal has jurisdiction to proceed with the arbitration case. Scope of challenge to jurisdiction of arbitrator considered by the Rajasthan High Court in Union of India v. Rattan Singh Gehlot, where it was held that in an unreasoned award unless it is found by seeing at the arbitral award that an error has been committed by the arbitrator, no interference can be made. The court observed that this is different from saying that when a challenge is made to the arbitration award by saying that the arbitrator has acted beyond his jurisdiction. It has to be determined that there is a distinction between disputes as to the adjudication of the arbitrator and the dispute as to in what way the jurisdiction should be exercised. In the later cases the court has no role to play but in the former cases where there is a challenge to the jurisdiction of the arbitrator the courts have reasons to interfere. The court further observed that this is within the domain of the court to see whether the arbitrator has acted within its jurisdiction or out side jurisdiction. To that extent the court is required to adjudicate. It is well settled legal principle that the question regarding jurisdiction is to be raised at the first instance, it cannot be allowed to be raised at a later point of time even under Section 34 of the Act, 1996. Hence, it is a meagre ground for setting aside of arbitral award. The scheme of the Act, 1996 shows that the legislature did not provide appeal against the order under Section 16(5) where arbitral tribunal takes a decision by rejecting the plea that the arbitral tribunal has no jurisdiction. In such cases, the arbitral tribunal shall go ahead with the arbitral proceedings and make an arbitral award without delay and without being interfered in the arbitral process at that stage by any court in their supervisory role. Which Court is Empowered to Set Aside an Arbitral Award It is settled legal principle that the place wherein the parties entered into the arbitration agreement, that court is competent to entertain the application under Section 34 of the Act, 1996. In case wherein the disputed properties situated within the jurisdiction of two courts located at different places, either of the court would have jurisdiction to entertain
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PALLAVI BHOGLE application for setting aside of the arbitral award, however the court which first entertains such application no such application can be entertained by any other court. In case of an international commercial arbitration it will be governed by Article 3 of the Geneva Convention or Article V, Para 1(a) of the New York Convention. These provisions of the Convention provide that the country in which or under the law of which the arbitral award was made, the court of that country only would have jurisdiction to set aside the arbitral award. Award found Not Unreasonable Cannot be Interfered by the Court In T.P. George v. State of Kerala, the Supreme Court considered the reasonableness of the award and the question whether the arbitrator can award interest for pre-reference period. In this case the High Court has held that the interest could not be granted by the arbitrator but the reasoning given by the High Court held to be not sustainable on appeal the question arose before the Supreme Court that whether the High Court was right in setting aside the award of interest from the date of the award. The Supreme Court observed that the High Court has not at all considered the letter dated 6th October, 1983 and 24th November, 1983 nor dealt with the question as to whether or not the supplemental Agreement was not executed. The High Court has not even considered the effect of the Supplemental Agreement having been executed without prejudice to the claims which had already been made. Even if the High Court had considered these aspects it could not have been substituted its views for those of the arbitrator as it could not be said that the view taken by the arbitrator is unreasonable or one which cannot be arrived at by a reasonable person. The impugned judgment of the High Court is not sustainable.
Effect of an Arbitral Award being Set Aside Once the arbitral award is set aside by the court while exercising the power under Section 34, the effect of an award being set aside is that it becomes unenforceable by law. The parties have to be reverted to their former position in respect of the subject-matter of dispute. It is settled legal position that as soon as the arbitral award is made, an arbitral tribunal is functus officio, thus it ceases to function, on the authority of the court's order as provided under Section 34(4) the arbitral tribunal may resume its power and may conduct fresh arbitration proceedings, when the matter has been remitted back to the tribunal. While clarifying this point, the Apex Court in Narain Das v. Narsingh Das, observed that the court is empowered to order the tribunal to correct or modify an arbitral award where it is imperfect in form, but the court cannot substitute its own order for the arbitrator's award.
Conclusion
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PALLAVI BHOGLE
FINALITY AND ENFORCEMENT OF ARBITRAL AWARDS

Finality and Enforcement of Arbitral Awards [10] May 03
Introduction: Provisions relating to the finality and enforcement of Arbitral Awards are dealt with under Ss 35 ad 36 of the Act Finality of Arbitral Awards [S. 35] Section 35 states that the final arbitral award is binding upon the parties and any other persons claiming under them. To achieve finality, the arbitral award should not be challenged within the period of time provided under Section 34(3). Such an arbitral award has not only achieved finality, but also becomes a binding force on the parties, not required to make the rules of the court. This is a reformative provision in the Act of 1996. After the finality of an arbitral award, rights and liabilities of the parties relating to the said claims etc. are to be decided in accordance with the said arbitral award. As stated in the case of Satish Kumar v. Surinder Kumar, an arbitral award may, in effect, declare, distinguish, limit, title or interest, whether it is present or future, whether vested or contingent, and if the value of the moveable property is one hundred rupees and more to be mandatorily registered under the Registration Act, 1908 under Section 17(1)(b). Thus, the finality of arbitral award should have some legal effects to the parties under the claim. In Kedar Nath v. Ambika Prasad before the Allahabad High Court it was contended that the award was not a mere waste of paper, but gives rise to some legal effect. Rights and liabilities of the parties to be determined only on basis of award It is well settled rule that when the arbitral award becomes final, the rights and liabilities of the parties are to be determined only on the basis of the said award. All claims which are the subject-matter of a reference to arbitration are merged in a valid award. Subsequently, no action can be commenced on the original claim which had been the subject-matter of the arbitral proceedings. Award is capable of being executed in its own right The requirement under the old Arbitration Act, 1940 was that unless the arbitral award becomes the rule of the court, it is not capable to be executed or enforced. Now, under the
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PALLAVI BHOGLE new Act, an arbitral award is capable of being executed in its own right. It is to be treated like a decree under the CPC. However, before incorporation of the new Act, 1996 the question of enforceability of the arbitral award was considered by the Apex Court in Hanskumar Kishan Chand v. Union of India. The Court observed that the award of an arbitrator is unenforceable by its own right, unless it has the imprimatur of the court stamped on it. When the court passes orders in respect of the award saying that it can be filed and decree issued in terms thereof, then only does the award becomes enforceable. Now the award no longer requires filing in the court of law and obtaining a decree in terms thereof. Under the new Act, 1996 namely, under Section 35 which declares that an arbitral award shall be final and binding on the parties and persons claiming under them respectively. Thus, the award shall be enforced under the Civil Procedure Code, 1908 in the same manner as if it were a decree of the court. When the award is compulsorily registrable Wherein the value of the arbitral award is one hundred rupees and upwards or relating to immovable property, it is compulsorily registrable under Section 17 (1)(b) of the Indian Registration Act, 1908. Where the award declares, assigns, limits or extinguishes, whether in the future or the present, any title, right or interest vested or contingent and its value in terms of money is one hundred rupees or more or is immovable property, in the view of said section of Registration Act, 1908, it is required to be registered. Further, Section 49 of the Registration Act, 1908 provides that the arbitral award which is required to registered, if unregistered, will be considered inadmissible as evidence.
Enforcement [S. 36] Section 36 provides condition for enforcement of an arbitral award and its procedure as to how the award will be enforced. There ate two conditions to be fulfilled to become an award enforceable. It is the mandatory provision. The conditions are: 1. under Section 34, time limit for making an application for setting aside an arbitral award has expired, or 2. such an application has been made but it has been refused; If either condition is fulfilled the award shall be enforced under the Code of Civil Procedure, 1908 in the same mariner as if it were a decree of the Court. In fact an arbitral award is not a decree of the court but, mutatis mutandis shall apply to the enforcement of an arbitral award. Section 36 contains the words in the same manner as if it were a decree of the court thus, an arbitral award must include essential ingredients of a decree of the court, to become capable of being enforced. An arbitral award made on oral submission is not enforceable.
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PALLAVI BHOGLE Under the new Act, 1996 the requirement as to stamping of the arbitral award and making of the rule of the court and issuing of a decree in terms thereof have been taken away. Now the arbitral award itself is executable without these formalities which were necessary under the old Act, 1940. Enforcement of award Khaleel Ahmed Dakhami v. Hatti Gold Mines Ltd., the fact of the present case is as follows: Award allowed some of the claim of the appellant. The respondent filed an application under Section 34 for setting aside the award. Earlier caveat had been filed by the appellant along with application under S.9 i.e., interim measures etc. by court, the appellant also filed an application under Section 36 for execution of the award without mentioning pendency of application under Section 34, i.e., for setting aside of arbitral award. It was held that the application under Section 36 for enforcement of award could not be entertained.
Conclusion
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PALLAVI BHOGLE
APPEALS
Which orders are not appealable under the Act? [16] May 06 Discuss on what grounds appeal can be filed against an award passed by the arbitrator. [16] Dec 06 Discuss the orders which are appealable and orders which are not appealable under the Act. [16] May 09, May 05, Dec 04, May 03 Discuss the appealable orders under the Act. Does second appeal lie from an order passed in appeal? [16] May 04, May 01 Against which orders appeal lies? Discuss to which court appeal lies against orders. [16] Dec 01]
Introduction: Section 16(2) explains that a plea that the arbitral tribunal does not have jurisdiction which shall be raised not later than the submission of the statement of defence; however, a party shall not be precluded from raising such a plea merely because he has appointed, or participated in the appointment of an arbitrate. Sub section (3) of Section 16 explains that a plea that the arbitral tribunal is exceeding scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of authority is raised during the arbitral proceedings. Objection relating to jurisdiction of the arbitral tribunal may be raised by anyone of the parties to the proceedings as laid down in sub-section (2) or (3) of Section 16within the time limit prescribed in those sub-sections before the arbitral tribunal. The arbitral tribunal decides the objection. The aggrieved party may appeal on those orders.
Appealable Orders [S. 37] Section 37(1) provides for appeals against orders of court in two ways: To pass any interim measures under Section 9, or To set aside or refuse to set aside an arbitral award under Section 34.
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PALLAVI BHOGLE Further, this sub-section (1) provides that an appeal shall lie to the court authorised by law to hear appeals from original decrees of the court passing the order. Thus, this subsection (1) provides for an appeal from court orders. Section 37(2) provides that an appeal shall lie to a court from an order of the arbitral tribunal, when either of the following conditions are fulfilled: under Section 16(2) or SeCtion 16(3) referred application has been accepted or, under Section 17, to grant interim measure or refusing to grant interim measure. The orders of arbitral tribunal have been made apealable, this is a new stage of development seen in the A&C Act, 1996. Now, the arbitral tribunal has freedom to act in a judicial way. Section 37(3) prohibits second appeals, from an order passed in appeal under this section, but further states that any right to appeal to the Supreme Court is in no way prohibited. Thus, second appeals can be made to the Supreme Court under the Constitution of India, and also as provided in the SC Rules. It was held by the Allahabad High Court that the jurisdiction conferred on the Supreme Court by the Constitution of India cannot be taken away or abridged by any statute. Section 37 of Act, 1996 barred a second appeal from an appellate order. A revisional application against an appellate order under Section 37 is not maintainable, even before the High Court.
Interim measures ordered by the arbitral tribunal Section 17 empowers the arbitral tribunal to grant interim measures. Sub-section (1) of Section 17 says that 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. S. 17(2) explains that the arbitral tribunal may require a party to provide appropriate security in connection with a measure ordered under sub-section (1). The party aggrieved by the interim orders granted by the arbitral tribunal has a right to appeal against that order under clause (b) of sub-section (2) of Section 37.
Second Appeal S. 37 (1) & (2) contain the provisions regarding appealable orders. The Appeal Court decides the matters appealed before it. The orders of the Appeal Court are final. No further appeal shall lie from the orders of the Appellate Court. However, the right to appeal to the Supreme Court is still exists to the aggrieved party.
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PALLAVI BHOGLE Section 37(3) explains 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. Powers of the Appellate Court The Appellate Court has to exercise the following rights and powers: 1. First of all, it must verify whether there has been a reference to arbitration. 2. Next to it, it has to see whether there is any award. 3. The next important thing to observe is that whether the ground sought by the appellant flows from any of the four grounds named in Section 37. 4. The Appellate Court has no authority to take fresh evidence or to pursue new documents and scrutinize them. 5. If the Appellate Court confirms the award given by the arbitral tribunal, it need not give reasons for its decision for affirming it. However, if the Appellate Court reverses the award given by the arbitral tribunal, then it should give reasons for its decision. 6. The Appellate Court should not consider the appeals, which are time barred or come within the purview of res judicata.
Conclusion
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PALLAVI BHOGLE
MISCELLANEOUS
An arbitration agreement is not discharged by death of any party. Discuss. [16] Dec 06, Dec 05, 04, Dec 03
Introduction: Chapter X of the A&C Act gives us the miscellaneous provisions under the Act. Arbitration Agreement not to be discharged by death of party thereto [S. 40] Section 40 deals with the event of the death of any party in an arbitration agreement. Section 40(1) provides that any party shall not be discharged by the death in an arbitral agreement and in such cases an arbitral agreement shall be enforced against the legal representative of the deceased. The expression legal representative is defined in Section 2(1) of the Act, 1996. In a Partnership agreement which contained an arbitration which contained an arbitration clause due to the death of the partner, the partnership automatically dissolved, but under the arbitration act, the right of legal representative would come into effect so to make an application in this regard is provided in the arbitration clause. It is clear that under Section 40(1) the death of any party will not discharge him in the arbitration agreement; the arbitration agreement shall be enforceable by the deceased's legal representative or against the legal representative of a deceased. However, if there is an arbitration. agreement as such that the right of a party shall be extinguished on death of that party, in this instance the arbitration agreement is not enforceable by the legal representative of the deceased other party Whether a legal representative is bound by such an agreement or not, would depend upon the contents of the subject-matter of agreement. Whether the rights given are purely personal or as survivor in respect of the legal representative. When the hearing has concluded and one of the parties dies, all his legal representatives are brought on the record and made parties to the reference. This can be done by giving notice to them where the reference is not through court and where a proceeding for substitution of legal representative is not necessary. Section 40(2) provides that the death of any party, who has appointed an arbitrator, the authority of that arbitrator shall not be revoked, due to death of the party who has
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PALLAVI BHOGLE appointed him. Thus, once an arbitrator is appointed, he becomes an independent authority in any respect, even, on the death of the party who appointed him. Section 40(3) provides that this sub-section (3) does not affect the operation of the provisions contained in sub-sections (1) and (2) where the right of action to be extinguished by the death of a person in an arbitration agreement. Some examples where the right of action is extinguished by the death of a person are as follows: 1. Right of pre-emption 2. Right of office 3. Suit of damages for breach of betrothal 4. Right of damages for defamation 5. Suit for injunction 6. Right of damages for malicious prosecution 7. Suit of damages for malicious search 8. Suit of damages for wrongful arrest. Reference would continue on the death of party As provided under Section 40 of the Act, 1996, on the death of party arbitration proceedings will survive according to the terms of the agreement. This provision is equally applicable to all the parties in arbitration. In fact, their legal representatives will be brought on record and arbitration proceedings will be continued as per the terms contained in the arbitration agreement. In Tirath Lal Day v. Smt Bhuwan Moyee Dasi, the then Federal Court observed that on the death of party, the arbitrator is under obligation to serve notice upon the legal representative of the deceased party to appear in the arbitration proceedings and reference will continue. If there is no service of notice upon such legal representative, the arbitral award will not be binding on such legal representative. Wherein during the course of arbitral proceedings the death of a party takes place, all the legal representatives who are bound by the arbitral award will be entitled to be given opportunity to put up their case. Failure to serve such notice will not bind them by the award. It is submitted that on the death of party the serving of notice upon the legal representative is a mandatory requirement and in case of non-compliance of the same, award will not be binding on the legal representatives.
Conclusion
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PALLAVI BHOGLE Insolvency of party in arbitral proceedings [10] May 01
Introduction: Chapter X of the A&C Act gives us the miscellaneous provisions under the Act. Provision in case of insolvency [S. 41] Section 41 has been enacted with the object to fix standard law for the arbitration agreement and proceeding on insolvency. Thus, to take standard law in this regard this section has no application to statutory arbitration under any other law. Presently this section has no operation. Section 41(1) deals with such an arbitration agreement which is executed by an insolvent, it is immaterial for the purpose of this sub-section (1) that he became an insolvent before or after the insolvency proceedings, but he must have become an insolvent before declaration of it. If, any disputes arise during the contract or in order to make the contract, it shall be submitted to arbitration on agreed terms. If the receiver adopts the contract which includes the official assignee, it will be enforceable by or against him so far as it relates to any such dispute. Section 41(2) provides that where in the matters sub-section (1) is not to be applied, subsection (2) shall be applied. However to apply sub-section (2), the following conditions may be present for consideration: 1. The matter does not come under Section 41(1). 2. An arbitration agreement should be in existence before the commencement of the insolvency proceedings. 3. Any matter as such to be determined by the arbitration. 4. The Court should be of opinion after consideration of each and every aspect of the matter that it should be determined by the arbitration. 5. A written request by the party or by the receiver should be made before the Insolvency Court that the matter may be referred to the arbitration. 6. The matter, relating to an agreement which is to be determined in the context of the insolvency proceedings. Section 43(3) provides the expression receiver, shall include official assignee. Thus, an official assignee is treated as a receiver in the view of sub-section (3) of section 41 of the new Act, 1996.
Scope of Section 41
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PALLAVI BHOGLE The mandate of Section 41 shows that with the insolvency of a party the arbitration agreement does not itself become invalid, but it will be determined on the basis whether the receiver adopts the arbitration agreement or not. In case receiver adopts the arbitration agreement and seeks recourse from the Insolvency Court to refer the matter to the arbitral tribunal, the Insolvency Court will decide whether the matter is to be referred to the arbitral tribunal or not or whether the matter is to be tried by the Insolvency Court itself. Although, in case the party becomes insolvent after the commencement of the arbitral proceedings, the arbitral tribunal is under obligation to serve a notice on the receiver to put up the case on behalf of the insolvent party as it is required in the event of death of the party, notice to be served upon the legal representative of the deceased party. Thus, it is discretionary power of the judicial authority i.e., Insolvency Court to refer such matters to the Arbitral Tribunal or to decide the matter itself.
Conclusion
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PALLAVI BHOGLE
NEW YORK CONVENTION AWARDS

What is meant by foreign awards? Explain the conditions for their enforcement under New York Convention Awards. [16] Dec 06, May 02, Dec 01 What do you mean by International Commercial Arbitration? Discuss the difference between arbitration and conciliation? [16] Dec 06, May 01 Define International Commercial Arbitration. Explain the legal provisions relating to New York Convention Award. [16] May 05, May 03, Dec 01 International Commercial Arbitration [10] May 04 New York Convention Award [10] May 09, May 08, May 07, Dec 06, May 04, Dec 03
Introduction: The essence of the theory of transnational arbitration is that the institution of international commercial arbitration is an autonomous juristic entity which is independent of all national courts and all national systems of law. One of the primary purposes of transnationalist movement is to break the links between the arbitral process and the courts of the country in which the arbitration takes place. The Arbitration and Conciliation Act, 1996 provides for certain aspects of international commercial arbitration. Definitions International Commercial Arbitration The term international commercial arbitration has been defined in Section (2)(1)(f) of the Arbitration and Conciliation Act, 1996 as follows: 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: i. an individual who is a national of, or habitually resident in, any country other than India; or ii. a body corporate which is incorporated in any country other than India; or ARBITRATION, CONCILIATION & ADR SYSTEMS 73
PALLAVI BHOGLE a company or an association or a body of individuals whose central management and control is exercised in any country other than India; or iv. the Government of a foreign country, or an arbitration to be considered as international arbitration within the meaning of this definition it is necessary that; (a) the dispute must arise out of a legal relationship which is commercial, irrespective of the fact whether such relationship is contractual or not; and (b) at least one of the parties to the dispute is a foreign national or a company registered in a foreign country or a company, management and control of which is exercised from a foreign country or the Government of a foreign country. According to a quotation by the Supreme Court in R.M Investments Trading Co. Pvt. Ltd v. Boeing Co, the term commercial refers to any relationship which is of commercial nature, not necessarily confined only to transactions. This is because the expression commercial relationship is capable of including a large number of transactions, and as such, making it difficult to be enumerated for the purpose of S. 44 of the A&C Act, 96. Foreign Award Section 44 of the A&C Act, 1996 is on the pattern of Article I of the New York Convention and similar to Section 2 of the 1961 Act which defines a Foreign Award under Chapter I, Part II. The Supreme Court said in the case of Ramji Dayawala & Sons v. Invest Import that this Chapter would not be applied where the awards are made in foreign countries which are not parties to the New York Convention. According to S. 44 of the Act, 1996 the term foreign award means an arbitral award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on or after the 11th day of October, 1960 The term foreign award means the award made as a result of foreign arbitration which It becomes necessary to understand the term foreign arbitration. The Calcutta High Court in the case of Serajuddin v. Micheal Golodetz laid down the necessary conditions relating to the term foreign arbitration: a. arbitration should have been held in foreign lands, by foreign arbitrator; b. arbitration by applying foreign laws; c. as a party foreign national is involved. These are essential elements of a foreign arbitration resulting in a foreign award. To explain the term foreign award the Apex Court in N.T.P.C v. Singer Company, observed that where in London an Interim award, was made which arose out of an arbitration agreement governed by the Indian Laws. It was held that such an arbitral award cannot be treated as a foreign award and it is purely a domestic award which was governed by the laws of India in respect of the agreement and arbitration. iii.
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PALLAVI BHOGLE Power of judicial authority to refer parties to arbitration [S. 45] Section 45 has been enacted in line with Article II (3) of the New York Convention. The object of this section is to give an overriding effect, if any, to the provisions of Part I and the provisions of the Code of Civil Procedure which are opposed to the provision contained in the present Act. It is the requirement of this section that the judicial authority make sure that the arbitration agreement is valid, operative and capable of being performed before referring the parties to arbitration in respect of disputes for which there is an arbitration agreement in writing between the parties. Although, with the use of the word shall, it becomes a discretionary power of the judicial authority, so unless specified conditions are not fulfilled, this section cannot be invoked. Further, the expression that a judicial authority when seized of an action in a matter in respect of which the parties have made an agreement referred to in S. 44, means that the judicial authority refers the parties to arbitration can compel a party who is not willing to go to arbitration for unobvious reasons known best to that party. Section 45 states that the judicial authority may refer the parties to arbitration at the request of one of the parties or any person claiming through or under him. Thus, it is necessary that any party should make a request before the judicial authority, when seeking relief under an arbitration agreement. The judicial authority has to find out that the arbitration agreement through which party is seeking reference of dispute to an arbitration is not null and void, inoperative or incapable of being performed. It is necessary under this section that the judicial authority has to record its findings whatsoever its directions may be. When foreign award is binding [S. 46] Section 46 has been incorporated with a liberal object to recognize all the Foreign Awards under this Chapter which is enforceable in India, even for the purpose of defence, set-off or in any legal proceedings in India. Thus, any foreign award under this Chapter becomes enforceable and shall have binding force upon the parties between whom it was made. These parties may rely on such a foreign award by way of claim, defence, set-off and in any legal proceedings initiated in India.
Conditions for enforcement of foreign award [S. 48] Section 48 has been enacted on the basis of Article V of the New York Convention and Section 7 of the 1961 Act. Section 48 provides the conditions for enforcement of foreign awards. In which there are three sub-sections.
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PALLAVI BHOGLE Sub-section (1) Under sub-section (1) there are clauses (a) to (e): Clause (a) According to sub-section (1), enforcement of a foreign award may be refused provided that the party makes such a request against whom it is applied. But that party is required to submit certain proof regarding his revocation. Clause (a) provides that if the parties made an arbitration agreement under Section 44 in compliance of law applied to the parties, but due to some incapacity or when the arbitration agreement becomes invalid under the law or contrary to law of the country, in such cases the court may refuse to enforce a foreign award by order. The Scope of this clause (a) was specifically explained by the Delhi High Court, in Gas Authority of India Ltd. v. SPIE CAPAG SA saying that an arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made. Further, when, an arbitration agreement is made, but it is induced by way of fraud, undue influence or misrepresentation and contrary to law, by which the arbitration agreement is to be governed, as a result of such an arbitration agreement a foreign award shall not be enforceable provided the parties against whom it is invoked make an application with the request before the court.
Clause (b) Clause (b) of sub-section (1) of Section 48 provides the condition where the principle of natural justice is not followed. When the party who has been aggrieved and against whom the award is made, has not been given proper notice of the appointment of the arbitrator or the arbitral proceedings or not been given proper opportunity for presentation of his case in the arbitration, if he applies against the enforcement of such a foreign award and the court is of opinion that in fact the principle of natural justice has not been adopted during the arbitration proceedings to make such an award, may refuse to enforce such award. Accordingly, a foreign award made in violation of this principle cannot be enforced. Clause (c) Clause (c) provides the principle that to ensure a valid award it must deal only with questions actually submitted to the arbitral tribunal by the parties. In other words if the award has contemplated differences not referred to the arbitral tribunal it cannot be enforced and is liable to be refused. Thus, an arbitral tribunal must confine its jurisdiction to the terms of submission.
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PALLAVI BHOGLE Clause (d) Clause (d) provides that the arbitral authority or the arbitral procedure is inconsistent with the agreement of the parties and if the award is made, it cannot be enforced. Clause (d), clearly states the grounds, when, enforcement of a foreign award is not to be acted upon. These are: 1. When, the composition of the arbitral authority is not in compliance with the agreement of the parties. 2. When, the arbitral procedure adopted, is contrary to the provisions in the agreement of the parties. 3. When, the arbitration agreement itself is contrary to the law of the country, where the arbitration took place. Clause (e) Clause (e) provides that, when the award has been set aside or suspended by a competent authority of the concerned country or it has not become binding on the parties, it shall not be enforced. Thus, the jurisdiction and competence to set aside the award is vested with the courts of the country in which or under the law of which the award is made. The Supreme Court of India said that the award can be said to have become binding on the parties only when it has become enforceable and the enforceability must be determined as per the law applicable to the award. Sub-section (2) Sub-section (2) of Section 48 provides additional grounds in turn vested powers to the court to refuse enforcement of an arbitral award. Under this sub-section (2), the Court may refuse to enforce a foreign award if it finds that: the subject-matter of the difference between the parties is not capable of settlement by arbitration under the law of India, or if the enforcement of such a foreign award is opposed to the public policy of India. In such cases, the court may refuse the enforcement of such a foreign award. The expression public policy is subject to interpretation from time to time as also to currently prevailing circumstances, the present Act having not defined it. The Supreme Court of India held that the enforcement of a foreign award would be refused on the ground that it is contrary to public policy if such enforcement would be contrary to 1. fundamental policy of Indian law, or 2. the interests of India, or 3. Justice or morality.
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PALLAVI BHOGLE Sub-section (3) Sub-section (3) of Section 48 provides that when, the party makes an application before the court with the request to set-aside or suspend the enforcement of a foreign award, the court is empowered to adjourn its decision on enforcement and may also order the other party to give suitable security.
Enforcement of Foreign Awards [S. 49] Section 49 has been incorporated on the basis of Article III of the New York Convention, however, conditions for enforcement of a foreign award have been provided in Section 47 and Section 48 of the Act. Section 49 provides that when the Court is not only of opinion but also satisfied that a foreign award can be enforced by the Court, the award shall be deemed to be a decree of the court. In this context, the Supreme Court of India had held that The award must be executed as it is and there is no scope for addition to, or substraction from, the award. Thus, enforcement of a foreign award is to be carried out in accordance with its contents without any change in this respect.
Conclusion
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GENEVA CONVENTION AWARDS

Define foreign award and state the provisions regarding Geneva Convention Award. [16] May 07, Dec 03 Under what conditions the foreign award can be enforced under Geneva Convention Award? Discuss. [16] May 06, Dec 04, Dec 03, Dec 02, May 01 Discuss the powers of judicial authority to refer parties to arbitration under the Geneva Convention and point out the defects in the Geneva Convention. [16] May 02 Geneva Convention Award [10] Dec 05
Introduction: The essence of the theory of transnational arbitration is that the institution of international commercial arbitration is an autonomous juristic entity which is independent of all national courts and all national systems of law. One of the primary purposes of transnationalist movement is to break the links between the arbitral process and the courts of the country in which the arbitration takes place. The Arbitration and Conciliation Act, 1996 provides for certain aspects of international commercial arbitration. Interpretation [S. 53] Section 53 has been enacted on the basis of Article 1 of the Geneva Protocol and Article 1(1) of the Geneva Convention and also Section 2 of the 1937 Act. Section 53 provides meaning of Foreign Award, it means an arbitral award on differences in respect of the matter which has been arbitrated as commercial matter under the law in force presently in India after the 28th of July, 1924. In this context, expression differences contains disputes vice-versa. Section 53 has limited application because it applies to the jurisdiction of different parties to the Geneva Convention. The Central Government by notification in official Gazette has to declare the territories to which the Geneva Convention would be applied. Thus, if ARBITRATION, CONCILIATION & ADR SYSTEMS 79
PALLAVI BHOGLE the award is made in such territories which is not a party to the Geneva Convention Chapter II does not apply. It is important to note that the Central Government under Section 2 of the Arbitration (Protocol and Convention) Act, 1937 may make declaration by notification in the official Gazette, list of parties to the Geneva Convention and the territories to which the Geneva Convention applies, such a declaration is to be made by the Central Government only when the Central Government is satisfied that reciprocal provisions have been made. Further, Section 53 provides that finality of a foreign award will not be recognized, if there is any pending proceedings in respect of validity of such a foreign award under consideration as such in the country in which it is made.
Power of judicial authority to refer parties to arbitration [S. 54] Section 54 is enacted on the basis of Article 4 of the Geneva Protocol. Section 54 provides that any provisions given in Part I or in the Code of Civil Procedure, 1908 shall not be applied if it is contrary to the provisions contained in Chapter II of the present Act. It provides power to the judicial authority to refer the parties to the decision of the arbitrators, if the following requirements of conditions are fulfilled: 1. there should be dispute regarding a contract made between persons to whom Section 53 applies, and 2. the contract must include an arbitration agreement, in this respect it is immaterial whether referring to present or future differences, 3. a party to the arbitration agreement must initiate legal proceedings opposed to another party in such arbitration agreement, 4. the judicial authority must be of opinion that the agreement or the arbitration can proceed and it is operative, 5. the judicial authority has to be satisfied that the arbitration is valid under Section 53 of the Act and capable of being carried into effect. No time limit has been prescribed under Section 54 of the Act; however, it may be determined in light of circumstances by the judicial authority. Foreign awards when binding [S. 55.] Section 55 is enacted on the basis of Article 1(1) of the Geneva Convention and Section 4(2) of the 1937 Act. Section 55 provides that a foreign award which has enforceability under this Chapter II, the Geneva Convention Award, will be acted as binding force upon the parties against whom it was made and such a foreign award will become the basis to seek defence, setoff or otherwise any. legal proceedings in India, by the parties. Thus, under this Chapter, enforcement of such a foreign award with be explained with references trusted in that award.
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PALLAVI BHOGLE Conditions for enforcement of foreign award [S. 57] Section 57 is enacted on the basis of Article 1 and Article 2 of the Geneva Convention and also Section 7 of the 1937 Act. Section 57 provides the conditions essential for enforcement of foreign awards. Section 57(1) and Section 57(2) lays down specified conditions which are to be fulfilled before the foreign award is enforced in India. The onus to produce these evidences lie on the party who is seeking enforcement of the award. Section 57(1) provides that a foreign award may be enforceable under this Chapter. Subsection (1), clauses (a) to (e) deal with the enforcement of foreign awards. Clause (a) It states one of the conditions for enforcement of a foreign award is that the award has been made in pursuance of a submission to arbitration which is valid under the law applicable thereto. Thus, if the terms submitted to arbitration are illegal or contrary to law in force, the award given by the arbitral tribunal in pursuance of terms of arbitration clause will not be enforceable. The Madras High Court said that if the contract is illegal, the award given by the arbitral tribunal in pursuance of arbitration clause in the contract will not be enforceable. Clause (b) The subject-matter of the award is capable of settlement by arbitration under the law of India. Thus, it is intended that the disputes should be arbitrable under the law of India. Clause (b) is similar to clause (a) of Section 48(2) of the Act. .
Clause (c) It is one of the pre-conditions before enforcement of a foreign award that the award made by the arbitral tribunal which has been constituted as per the agreed terms between the parties and also in accordance with law governing the arbitration proceedings; Clause (d) Finality of the award is to be proved by the party who is seeking enforcement of the award. The award has become final in the country in which it has been made, however finality of the award can be opposed or appealed on the ground, if for the purpose of contesting the validity of the award, if it is proved that in respect of validity of the award any proceedings are pending. However, where the time for setting aside of the award by proceedings in a foreign court had long expired; the foreign award must be held to be final.
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PALLAVI BHOGLE Clause (e) It is also a necessary condition that the enforcement of a foreign award should not be contrary to public policy of India. Thus, if any agreement between a foreign party and an Indian party is contrary to the law of India, it will not be enforced. Similarly, if it is opposed to the interest of public at large in India, a foreign award cannot be enforced. However, where a contract provided for payment of liquidated damages for breach of contract and the arbitrators awarded maximum amount named in the contract, the foreign award is not had on the face of it nor can it be said to be against the law of India as contained in Section 73 and Section 74 of the Contract Act. Section 57(2) It provides that despite the conditions contained in sub-section (1) being fulfilled, the Court may refuse the enforcement of a foreign award if any of the following conditions existed: (a) the award has been annulled in the country in which it was made, (b) the party against whom the award is sought to be used, was not given notice of the arbitration proceedings in sufficient time to enable him to present his case, or that, being under a legal incapacity, he was not properly represented. (c) the award does not deal with differences contemplated by or falling within the terms of the submission to arbitration, as it contains decisions on matters beyond the scope of the submission to arbitration. However, under this Section 57(2) the Court is empowered to postpone the enforcement of a foreign award or may order to provide guarantee in this regard if such a foreign award is not the result of all the differences submitted to the arbitral tribunal. Section 57(3) It provides extra grounds to oppose the enforcement of a foreign award by the party against whom the award is made. These grounds are in addition to the grounds provided under clauses (a) and (c) of sub-section (1) of Section 57 and clauses (b) and (c) of subsection (2) of the same section. It is the right given to the party to oppose enforcement of a foreign award based on said grounds, thus, the party can question the validity of the award before the Court. But, the court is empowered to refuse enforcement of the award or adjourn enforcement of the award after giving reasonable opportunity to the party within reasonable time, against whom the award is made. Enforcement of foreign award [S. 58] Section 58 is enacted on the basis of Article 1(1) of the Geneva Convention. The provisions contained in Section 58 are similar to the provisions of Section 49 of the present Act. Conclusion ARBITRATION, CONCILIATION & ADR SYSTEMS 82
PALLAVI BHOGLE Explain Protocol on Arbitration Clauses. [16] Dec 01
Introduction: Under Section 53, the Second Schedule of the Arbitration and Conciliation Act, 1996 contains the Protocol on Arbitration Clauses. On it all the Contracting States, including India, signed, it is binding on all the Contracting States. The undersigned, being duly authorized, declared that they accept, on behalf of the countries which they represent, the following provisions: 1. Each of the Contracting States recognizes the validity of an agreement whether relating to existing or future differences between parties subject respectively to the jurisdiction of different Contracting States by which the parties to a contract agree to submit to arbitration all or differences that may arise in connection with such contract relating to commercial matters any other matter capable of settlement by arbitration, whether or not the arbitration is to take place in a country to whose jurisdiction none of the parties is subject. Each Contracting State reserves the right to limit the obligation mentioned above to contacts which are considered, as commercial under its national law. Any Contracting State which avails itself of this right will notify the Secretary-General of the League of Nations in order that the other Contracting States may be so informed. 2. The arbitral procedure, including the constitution of the Arbitral Tribunal, shall be governed by the will of the parties and by the law of the country in whose territory the arbitration place. The Contracting States agree to facilitate all steps in the procedure which require to be taken in their own territories, in accordance with the provisions of their law governing arbitral procedure applicable to existing differences. 3. Each Contracting State undertakes to ensure the execution by its authorities and in accordance with the provisions of its national laws of arbitral awards made in its own territory under the preceding articles. 4. The Tribunals of the Contracting Parties on being seized or a dispute regarding a con made between persons to whom Article 1 applies and including an Arbitration Agreement with referring to present or future differences which is valid in virtue of the said article and capable of being carried into effect, shall refer the parties on the application of either of them to the decision of the Arbitrators. Such reference shall not prejudice the competence of the judicial tribunals in case the agreement or the arbitration cannot proceed or becomes inoperative. 5. The present Protocol, which shall remain open for signature by all States, shall be ratified. The ratification shall be deposited as soon as possible with the SecretaryGeneral of the League of Nations, who shall notify such deposit to all the Signatory States. 6. The present Protocol will come into force as soon as two ratifications have been deposited. Thereafter it will take effect, in the case of each Contracting State, one ARBITRATION, CONCILIATION & ADR SYSTEMS 83
PALLAVI BHOGLE month after the notification by the Secretary-General of the deposit of its ratification. 7. The present Protocol may be denounced by any Contracting State on giving one years notice. Denunciation shall be effected by a notification addressed to the Secretary-General of the League, who will immediately transmit copies of such notification to all the other Signatory States and inform them of the date on which it was received. The denunciation shall take e one year after the date on which it was notified to the Secretary-General, and shall operate only in respect of the notifying State. 8. The Contracting States may declare that their acceptance of the present Protocol does include any or all of the under-mentioned territories; that is to say, their colonies, overseas possessions or territories, protectorates or the territories over which they exercise a mandate. The said States subsequently adhere separately on behalf of any territory thus excluded. The Secretary General of the League of Nations shall be informed as soon as possible of such adhesions. He shall notify such adhesions to all Signatory States. They will take effect one month after the notification by the Secretary General to all Signatory States. The Contracting States may also denounce the Protocol separately on behalf of any of the territories referred to above. Article 7 applies to such denunciation.
Conclusion
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PALLAVI BHOGLE
CONCILIATION
What is meant by conciliation? Discuss the provisions relating to appointment, functions and removal of conciliators under the Act. [16] May 09, May 03, Dec 02, 02, Dec 01 State the circumstances under which a conciliator is appointed. Explain the powers and duties of a conciliator. [16] May 07, May 05, May 04, Dec 04 Explain the procedure to be followed in appointing conciliator. When can the conciliation proceedings be terminated? [16] May 08, Dec 06, Dec 05, May 02, Dec 02, Dec 02, Dec 01 Conciliation [10] May 06
Introduction: Part III of the Arbitration and Conciliation Act, 1996 deals with conciliation. Conciliation means the settling of disputes without litigation Conciliation is a process by which discussion between parties is kept going through the participation of a conciliator. The main difference between arbitration and conciliation is that in arbitration proceedings the award is the decision of the Arbitral Tribunal while in the case of conciliation the decision is that of the parties arrived at with the assistance of the conciliator. The terms arbitration and conciliation have been distinguished in Halsburys Laws of England as follows: The term arbitration is used in several senses. It may refer either to a judicial process or to a non-judicial process. A judicial process is concerned with the ascertainment, declaration and enforcement of rights and liabilities as they exist, in accordance with some recognized system of law. An industrial arbitration may well have for its function to ascertain and declare, but not to enforce, what in the arbitrator's opinion ought to be the respective rights and liabilities of the parties, and such a function is nonjudicial. Conciliation is a process of persuading parties to reach agreement, and is plainly not arbitration; nor is the chairman of conciliation boards an arbitrator. The law relating to conciliation has been codified for the first time in India on the pattern of UNCITRAL Conciliation Rules. Commencement of Conciliation Proceedings [S. 62] Section 62 is enacted on the basis of Article 2 of the UNCITRAL Conciliation Rules.
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PALLAVI BHOGLE Section 62 provides that any party to dispute may commence conciliation without the term claimant or plaintiff and such terms are not to be used in conciliation. Section 62 provides that any party to dispute wishing to initiate conciliation has to fulfill the following conditions: 1. The party initiating conciliation should send a written invitation to the other party. Such a written invitation should mention the subject of dispute. 2. The party initiating conciliation should state that the invitation is under Part III. 3. The invitation must briefly identify the subject of the dispute.
Appointment of Conciliators [S. 64] Section 64 is enacted on the basis of Article 4 of the UNCITRAL Conciliation Rules. S. 64 provides the procedure for appointment of conciliators, there may be one conciliator or two or three conciliators. Section 64(1) provides that the parties have to decide one name of a sole conciliator, where by on agreement one conciliator is appointed to conduct conciliation proceedings [clause (a)]. However, according to clause (b) where two conciliators are appointed by the parties to conduct conciliation proceedings, each party is authorized to appoint one conciliator. But, under clause (c) of sub-section (1), where three conciliators are appointed to conciliate each party is authorized to appoint one conciliator and the third conciliator by name and by the agreement between the parties he will be appointed to act as the presiding conciliator in conciliation proceedings. Under the Act, the presiding conciliator is nt authorized to take a binding decision, in case od differences of opinion between the conciliators. However, the parties by an agreement may confer such power to the presiding conciliator. The obvious purpose behind this is to have speedy and smooth conciliation. Although, these above-mentioned provisions are subject to the provisions contained in sub-section (2) of Section 64. Section 64(2) provides freedom to the parties to make an approach with request to any institution which has its known reputation for rendering conciliation services or any eminent person in the field of conciliation to recommend suitable, individuals to conduct conciliation. Under this sub-section (2), clause (b) the parties are permitted by an agreement in this respect to to appoint one or more conciliators directly by such an institution a person who is providing expertise services in the area of conciliation. It is provided that each party may appoint a conciliator independently without taking the opinion of the other party. It is a direct appointment by the party or the parties who jointly agree that an institution or a person appoints conciliators [two or more], directly.
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PALLAVI BHOGLE Proviso to sub-section (2) of Section 64 provides guidelines to the institution or person, who is requested by the parties to recommend or appoint conciliators. Such institution or person is required to give due regards to consideration while recommending or appointing conciliators in respect af their independent and impartial conciliation. Also, while appointing a sole or third conciliator in connection with international commercial conciliation it is advisable to take into account the nationality of a conciliator, vis--vis the nationalities of the parties. No time is laid down for appointment of conciliators under S. 64, however it is expected that the parties to dispute would take the earliest initiative to settle their disputes by way of taking services of the professional conciliators.
Submission of statements to conciliator [S. 65] Section 65 is enacted on the basis of Article 5 of the UNCITRAL Conciliation Rules. Section 65 deals with the conduct of conciliation upon appointment of conciliator or conciliators. Section 65(1) provides that when the conciliator has been appointed, he will make a request to each party asking him to submit a written statement summarily describing the nature of dispute and specified points of issue. Under sub-section (1) each party will send a copy of such submission of statement to the other party. The parties are not required to submit their statement of pleadings as such in details as required in the arbitral proceedings under Section 23 of the Act, 1996. Such submission of statement by the parties to the conciliator is intended to provide him information about the general nature of dispute. Section 65(2) provides that it is at the discretion of the conciliator to call upon any parties to submit a further written statement to clarify his position and support his grounds of the facts, which may be supplemented by any other documents or evidences, if the party thinks appropriate. It is required under this sub-section (2) that anything submitted by the party to the conciliator, a copy of the same documents must be sent to the other party. Section 65(3) provides that the conciliator is further enabled to request for additional information by the parties at any stage of the conciliation proceedings, if, the conciliator is of opinion that it is necessary for the purpose to expedite the conciliation proceedings. Administrative Assistance [S. 68] Section 68 is enacted on the basis of Article 8 of the UNCITRAL Conciliation Rules; Although, this section contained provision similar to those given in Section 6 of the Act in respect of the arbitration. Section 68 deals with provisions relating to administrative assistance to facilitate the conduct of the conciliation proceedings. Such administrative assistance may be procured
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PALLAVI BHOGLE from a suitable institution or person, however such administrative assistance will be taken only after mutual consent of the parties or the conciliator with the consent of the parties has taken place in this matter. Mainly, the nature of such administrative assistance is to provide lists of conciliator arrange meeting for conciliators, and to provide two way commcations services, including translation and interpretation services.
Communication between Conciliator and Parties [S. 69] Section 69 is enacted on the basis of Article 9 of the UNCITRAL Conciliation Rules. Section 69 deals with procedural communication powers of the conciliator, which is to take place between the conciliator and the parties all together or separately, with each party in the conduct of the conciliation proceedings. Section 69(1) provides power to communicate to the conciliator, thus the conciliator may 1. invite the parties to meet him, or 2. communicate with them orally or in writing. 3. meet or communicate with the parties together, or 4. meet or communicate with each of them separately. So, it is required under sub-section (1) of Section 69 that the conciliator should provide reversible communication or meeting to the parties jointly or each party separately but he should not refuse meeting with the one party and meet or communicate with the other party; He must be impartial in such communication or meeting. Section 69(2) provides freedom to the parties to determine the place for meeting with conciliator by mutual agreement, if there is no such agreement between the parties, the conciliator is empowered to determine the place for such meeting only after the parties have been consulted and given their consents. Sub-section (2) is intended to provide common convenient place with consideration in respect of time of travel, costs of travel to such places, however, this matter becomes important especially in case of international conciliation.
Disclosure of Information [S. 70] Section 70 is enacted on the basis of Article 10 of the UNCITRAL Conciliation Rules. Section 70 provides privilege to the conciliator whether to disclose information made known to him by one party to the other party. However the conciliator is not expected to disclose such information except the substance of the factual information in connection with the dispute, received from one party to the other party. It is to be noted that in conciliation the conciliator is a person who should win the confidence of the parties by keeping their confidences. However, the conciliator may make disclosure of such factual information to the other party in order that the other party ARBITRATION, CONCILIATION & ADR SYSTEMS 88
PALLAVI BHOGLE may have the opportunity to present any explanation, which the conciliator considers appropriate. Proviso to Section 70 of the Act, states that if the party gives any information to the conciliator subject to a specific condition that it be kept confidential, in such cases the conciliator is not allowed to disclose such information given on a specified condition to the other party. It is to be further noted that Section 65(1) and Section 65(2) are not attracted by proviso to Section 70. the
Termination of Conciliation Proceedings [S. 76] Section 76 is enacted on the basis of Article 15 of the UNCITRAL Conciliation Rules. This section is analogous to Section 32, Part I of the Act, 1996, however with one contradiction that A conciliation is wholly a voluntary process therefore it can come to an end as and when desired to do so. S. 76 lays down 4 situations when the conciliation proceedings can be terminated. Although other than these prescribed grounds, there are other grounds to terminate proceedings as well, such as death of the party or conciliator. Under S. 76, the following are the ways to terminate conciliation proceedings: 1. Clause (a) - by the signing of the settlement agreement by the parties, on the date of the agreement, or 2. Clause (b) - by a written declaration of the conciliator, after consultation with the parties, to the effect that further efforts of conciliation are no longer justified, on the date of the declaration, or 3. Clause (c) - by a written declaration of the parties addressed to the conciliator to the effect that the conciliation proceedings are terminated, on the date of the declaration, or 4. Clause (d) - by a written declaration of a party to the other party and the conciliator, if appointed, to the effect that the conciliation proceedings are terminated, on the date of the declaration. No time limit as such is provided u/s 76, that within what period the conciliation proceedings can be terminated. Although, the date of such declaration is counted. Because of a voluntary nature of the conciliation the parties are not required to state the reasons for termination of the conciliation proceedings.
Conclusion
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PALLAVI BHOGLE State under what circumstances a sole arbitrator can be appointed. [8] Dec 04
Introduction: Part III of the Arbitration and Conciliation Act, 1996 deals with conciliation. Conciliation means the settling of disputes without litigation Conciliation is a process by which discussion between parties is kept going through the participation of a conciliator. The main difference between arbitration and conciliation is that in arbitration proceedings the award is the decision of the Arbitral Tribunal while in the case of conciliation the decision is that of the parties arrived at with the assistance of the conciliator. The terms arbitration and conciliation have been distinguished in Halsburys Laws of England as follows: The term arbitration is used in several senses. It may refer either to a judicial process or to a non-judicial process. A judicial process is concerned with the ascertainment, declaration and enforcement of rights and liabilities as they exist, in accordance with some recognized system of law. An industrial arbitration may well have for its function to ascertain and declare, but not to enforce, what in the arbitrator's opinion ought to be the respective rights and liabilities of the parties, and such a function is nonjudicial. Conciliation is a process of persuading parties to reach agreement, and is plainly not arbitration; nor is the chairman of conciliation boards an arbitrator. The law relating to conciliation has been codified for the first time in India on the pattern of UNCITRAL Conciliation Rules.
Commencement of Conciliation Proceedings [S. 62] Section 62 is enacted on the basis of Article 2 of the UNCITRAL Conciliation Rules. Section 62 provides that any party to dispute may commence conciliation without the term claimant or plaintiff and such terms are not to be used in conciliation. Section 62 provides that any party to dispute wishing to initiate conciliation has to fulfill the following conditions: 1. The party initiating conciliation should send a written invitation to the other party. Such a written invitation should mention the subject of dispute. 2. The party initiating conciliation should state that the invitation is under Part III. 3. The invitation must briefly identify the subject of the dispute.
Number of Conciliators [S. 63] Section 63 is based on Article 3 of the UNCITRAL Conciliation Rules. Section 63 deals with numbers of conciliators.
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PALLAVI BHOGLE Section 63(1) states that there shall be one conciliator unless the parties agree that there shall be two or three conciliators. This sub-section (1) clearly indicates its preference for a sole conciliator but also provides freedom to the parties in dispute to appoint 2 or more conciliators, by mutual agreement. Sole Conciliator Under Section 63(1) a sole conciliator is preferred for the following reasons: 1. A sole conciliator will be more likely to win the faith of the parties. 2. Scope of conflicting opinions between the conciliators is reduced by appointment of a sole conciliator. 3. Appointment of a sole conciliator will be less expensive comparatively. 4. A sole conciliator would provide speedy conciliation, because meeting of conciliators within short intervals is likely to cause delay. Section 63(2) states that where there is more than one conciliator, they ought, as a general rule, to act jointly. That means, sub-section (2) emphasizes on panel decision making where there is more than one conciliator, as a general rule, all conciliators have to conciliate jointly and should have their own strategic understanding, as to how, they have to settle disputes. Conclusion
What is conciliation? Who is a conciliator? Explain the role of conciliator in conciliation proceedings. [16] Dec 06, May 05, May 02, Dec 02, May 01, Dec 01
Introduction: Part III of the Arbitration and Conciliation Act, 1996 deals with conciliation. Conciliation means the settling of disputes without litigation Conciliation is a process by which discussion between parties is kept going through the participation of a conciliator. The main difference between arbitration and conciliation is that in arbitration proceedings the award is the decision of the Arbitral Tribunal while in the case of conciliation the decision is that of the parties arrived at with the assistance of the conciliator. The terms arbitration and conciliation have been distinguished in Halsburys Laws of England as follows: The term arbitration is used in several senses. It may refer either to a judicial process or to a non-judicial process. A judicial process is concerned with the ascertainment, declaration and enforcement of rights and liabilities as they exist, in accordance with some recognized system of law. An industrial arbitration may well have for its function to ascertain and declare, but not to enforce, what in the arbitrator's opinion ARBITRATION, CONCILIATION & ADR SYSTEMS 91
PALLAVI BHOGLE ought to be the respective rights and liabilities of the parties, and such a function is nonjudicial. Conciliation is a process of persuading parties to reach agreement, and is plainly not arbitration; nor is the chairman of conciliation boards an arbitrator. The law relating to conciliation has been codified for the first time in India on the pattern of UNCITRAL Conciliation Rules.
Number of Conciliators [S. 63] Section 63 is based on Article 3 of the UNCITRAL Conciliation Rules. Section 63 deals with numbers of conciliators. Section 63(1) states that there shall be one conciliator unless the parties agree that there shall be two or three conciliators. This sub-section (1) clearly indicates its preference for a sole conciliator but also provides freedom to the parties in dispute to appoint 2 or more conciliators, by mutual agreement.
Role of Conciliator [S. 67] Section 67 is enacted on the basis of Article 7 of the UNCITRAL Conciliation Rules, which prescribe role of the conciliator. Section 67(1), provides basic role of the conciliator, he has to render assistance in an independent and impartial manner to the parties who are putting their own efforts to settle the disputes in very friendly process of conciliation. Thus, it becomes the duty of the conciliator to exercise his skill of conciliation. Section 67(2) provides fundamental principles of natural justice to the conciliator with object of fairness and justice besides considerations for the rights and obligations of the
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PALLAVI BHOGLE parties. The conciliator also has to take into account of the present circumstances of the given dispute by assessing other things like the usage of trade concerned and previous business practice between the parties, if it so exists. The conciliator while making settlement of the dispute is required to assess every such thing which relates to the dispute. Although the conciliator is not bound by the Code of Civil Procedure, 1908 and the Indian Evidence Act, 1872 u/s 66, but he cannot act arbitrarily in the conduct of conciliation proceedings. S. 67(3) provides discretionary method, which is appropriate in the view of conciliator, may be adopted by him to conduct conciliation proceedings, however, the parties to conciliation can express their wishes freely to the conciliator not only in respect of conduct of conciliation proceedings but can also make a request to the conciliator to record oral statement to speedup conciliation and early settlement of dispute. If a party makes a request to the conciliator to hear witnesses, the expenses incurred on calling such a witness would be borne by the party wh made such request and it is necessary in respect of calling witnesses to be heard by the conciliator the other party should have expressly agreed on this issue. Section 67(4) provides that the conciliator is authorised at his discretion to make proposals for a settlement of the dispute, at any stage of the conciliation proceedings and such proposals are not required to be made in writing and the conciliator is not bound to state reasons for such proposals. In the interest of justice, fair play and speedy settlement of the disputes, such freedom is provided to the conciliator under sub-section (4) of Section 67. Conclusion
What is the effect of settlement agreement in conciliation proceedings? How to enforce the settlement agreement? Explain. [16] May 01, Dec 01 Settlement [10] Dec 01
Introduction: Part III of the Arbitration and Conciliation Act, 1996 deals with conciliation. Conciliation means the settling of disputes without litigation Conciliation is a process by which discussion between parties is kept going through the participation of a conciliator. The main difference between arbitration and conciliation is that in arbitration proceedings the award is the decision of the Arbitral Tribunal while in the case
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PALLAVI BHOGLE of conciliation the decision is that of the parties arrived at with the assistance of the conciliator. The terms arbitration and conciliation have been distinguished in Halsburys Laws of England as follows: The term arbitration is used in several senses. It may refer either to a judicial process or to a non-judicial process. A judicial process is concerned with the ascertainment, declaration and enforcement of rights and liabilities as they exist, in accordance with some recognized system of law. An industrial arbitration may well have for its function to ascertain and declare, but not to enforce, what in the arbitrator's opinion ought to be the respective rights and liabilities of the parties, and such a function is nonjudicial. Conciliation is a process of persuading parties to reach agreement, and is plainly not arbitration; nor is the chairman of conciliation boards an arbitrator. The law relating to conciliation has been codified for the first time in India on the pattern of UNCITRAL Conciliation Rules.
Suggestions by parties for settlement of dispute [S. 72] Section 72 is enacted on the basis of Article 12 of the UNCITRAL Conciliation Rules. Section 72 provides freedom to each party in respect of the conciliation to submit his own suggestions to the conciliator for the settlement of the dispute. However, the parties are not bound to submit, it is only an expectation from the parties to submit their suggestions in the interest of settlement of dispute.
Settlement of Agreement [S. 73] Section 73 is enacted on the basis of Article 13 of the UNCITRAL Conciliation Rules.
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PALLAVI BHOGLE S. 73 prescribes procedure for successful end of conciliation proceedings. Section 73(1) provides that when the conciliator is able to formulate and is of the opinion that acceptable elements of settlement to the parties exist, then the conciliator will prepare the terms of possible settlement which shall be subjected to observation by the parties. The conciliator on receipt of formula which has undergone observations process by the parties, the conciliator may reformulate the terms of a possible settlement, with keeping view on such observations. Section 73(2) provides that in situation, the parties could come to a stage to accept the settlement proposed by the conciliator, the parties may draw up and sign a written settlement agreement. It is at the discretion of the parties to make such agreement in writing or not, however, the parties may request the conciliator to draw up or assist in drawing up the settlement agreement. In this context, it is advisable to draw up such a settlement agreement in writing, so that the contents are clear and relevant as to the settlement terms, although there is no requirement as such that the settlement agreement must state reasons on which it has been settled under sub-section (2). Section 73(3) provides that at the moment the parties sign the settlement agreement, it, attains finality and would be binding on the parties and persons claiming under them respectively. Section 73(4) provides that the conciliator is required to authenticate the settlement and would furnish a copy to each of the parties. If, there is more than one conciliator, all conciliators are required to authenticate the settlement agreement. Status and Effect of Settlement Agreement [S. 74] There is no provision in the UNCITRAL Conciliation Rules as contained in Section 74 which provides status and effect of settlement agreement similar to an arbitral award given by an arbitral tribunal under Section 30. Thus, under Section 74, the settlement agreement shall have the same status and effect as if it is an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal under Section 30. As settlement agreement has been given similar status as to an arbitral award on agreed terms on the substance of dispute and also same effects, although a settlement agreement is the result of the parties choice by self determination, a party to such an agreement may be estopped from invoking the grounds for setting aside under Section 34,Chapter VII, however Section 61(2) read with Section 34(2)(b)(i) of the Act, which provides that the court is not barred from setting aside the agreement if it finds that the subject-matter of the dispute is not capable of settlement by conciliation or if the settlement agreement is opposed to public policy of India.
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PALLAVI BHOGLE A settlement agreement is treated like a decree of the court, but the executing court may refuse to grant prayer if it is of opinion that the settlement agreement has been made in contravention of Section 34(2)(b) and hence without jurisdiction. Conclusion
Explain the confidentiality in conciliation proceedings [8] May 07, Dec 04, Dec 03, May 02
Introduction: Part III of the Arbitration and Conciliation Act, 1996 deals with conciliation. Conciliation means the settling of disputes without litigation Conciliation is a process by which discussion between parties is kept going through the participation of a conciliator. The main difference between arbitration and conciliation is that in arbitration proceedings the award is the decision of the Arbitral Tribunal while in the case of conciliation the decision is that of the parties arrived at with the assistance of the conciliator. The terms arbitration and conciliation have been distinguished in Halsburys Laws of England as follows: The term arbitration is used in several senses. It may refer either to a judicial process or to a non-judicial process. A judicial process is concerned with the ascertainment, declaration and enforcement of rights and liabilities as they exist, in accordance with some recognized system of law. An industrial arbitration may well have for its function to ascertain and declare, but not to enforce, what in the arbitrator's opinion ought to be the respective rights and liabilities of the parties, and such a function is nonjudicial. Conciliation is a process of persuading parties to reach agreement, and is plainly not arbitration; nor is the chairman of conciliation boards an arbitrator. The law relating to conciliation has been codified for the first time in India on the pattern of UNCITRAL Conciliation Rules.
Commencement of Conciliation Proceedings [S. 62] Section 62 is enacted on the basis of Article 2 of the UNCITRAL Conciliation Rules. Section 62 provides that any party to dispute may commence conciliation without the term claimant or plaintiff and such terms are not to be used in conciliation. Section 62 provides that any party to dispute wishing to initiate conciliation has to fulfill the following conditions: 1. The party initiating conciliation should send a written invitation to the other party. Such a written invitation should mention the subject of dispute. ARBITRATION, CONCILIATION & ADR SYSTEMS 96
PALLAVI BHOGLE 2. The party initiating conciliation should state that the invitation is under Part III. 3. The invitation must briefly identify the subject of the dispute.
Disclosure of Information [S. 70] Section 70 is enacted on the basis of Article 10 of the UNCITRAL Conciliation Rules. Section 70 provides privilege to the conciliator whether to disclose information made known to him by one party to the other party. However the conciliator is not expected to disclose such information except the substance of the factual information in connection with the dispute, received from one party to the other party. It is to be noted that in conciliation the conciliator is a person who should win the confidence of the parties by keeping their confidences. However, the conciliator may make disclosure of such factual information to the other party in order that the other party may have the opportunity to present any explanation, which the conciliator considers appropriate. Proviso to Section 70 of the Act, states that if the party gives any information to the conciliator subject to a specific condition that it be kept confidential, in such cases the conciliator is not allowed to disclose such information given on a specified condition to the other party. It is to be further noted that Section 65(1) and Section 65(2) are not attracted by proviso to Section 70. the
Confidentiality [S. 75] Section 75 is enacted on the basis of Article 14 of the UNCITRAL Conciliation Rules. S. 75 provides that the principle of confidentiality and on the basis of it the conciliator and the parties are required to keep all matters relating to the conciliation proceedings close to their chest. Section75 forbids disclosure to strangers on any matters relating to the conciliation proceedings. However, such confidentiality is not restricted to matters relating to the proceeding which also extends to the settlement agreement except where its disclosure is necessary for purposes of implementation and enforcement. It is obvious Section 75 has been designed to gain confidence between the parties and the conciliator and in their commercial interests. The nature and character of the conciliation proceedings have also been taken into consideration.
Conclusion
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ALTERNATIVE DISPUTES REDRESSAL

The ADR is not an alternative to the formal judicial system but only a supplement to it. Comment. [16] May 08 Explain the role and importance of Alternate Dispute Resolution system in modern times. [16] Dec 06 Introduction: The Supreme Court made the following observation in Guru Nanak Foundation v Rattan Singh & Sons: Interminable, time consuming, complex and expensive court procedures impelled jurists to search for an alternative forum, less formal, more effective and speedy for resolution of disputes avoiding procedural claptrap and this led them to the Arbitration Act, 1940. However, the way in which the proceedings under the Act are conducted and without exception challenged in Courts, has made lawyers laugh and legal philosophers weep. Experience shows and law reports bear ample testimony that the proceedings under the Act have become highly technical, accompanied by unending prolixity, at every stage providing a legal trap to the unwary. Informal forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the courts, been clothed with legalese of unforeseeable complexity. The movement towards ADR was endorsed by a resolution at a meeting of Chief Ministers and Chief Justices. The meeting noted that the courts were not in a position to undertake the entire burden of administration of justice and that a number of disputes were capable of being disposed of by alternative methods such as arbitration, conciliation, mediation and negotiations. The meeting emphasized that litigants should be encouraged to adopt other methods because they provided procedural flexibility, saved valuable time, and involved less expenditure and strain as compared with conventional trials in civil courts. Concept of ADR ADR or Alternative Dispute Resolution is an attempt to devise machinery which should be capable of providing an alternative to the conventional methods of resolving disputes. An alternative means the privilege of choosing one of two things or courses offered at one's choice. It does not mean the choice of an alternative court but something which is an alternative to court procedures or something which can operate as court annexed procedure. Human conflicts are inevitable. Disputes are equally inevitable. It is difficult to imagine a human society without conflict of interests. Disputes must be resolved at minimum
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PALLAVI BHOGLE possible cost both in terms of money and time, so that more time and more resources are spared for constructive pursuits. For resolution of disputes there is a legal system in every human society. Every injured person is supposed to go to courts for his redressal. All the legal systems are trying to attain the legal ideal that wherever there is a wrong there must be a remedy so that nobody shall have to take law into his own hand. Courts have become overcrowded with litigants. Naturally, litigants have to face so much loss of time and money that at long last when a relief is obtained; it may not be worth the cost. Hence, began the search for alternatives to the conventional court system. A large number of quasi-judicial and administrative tribunals have been created for quicker reliefs. All these tribunals and forums are an alternative method of dispute redressal. But even such tribunals and forums have become overcrowded with the result that they are not able to provide relief within good time. Many tribunals in service matters have been able to provide relief only when the aggrieved employee has already retired from his position. There thus remains the need of an alternative remedy which will not be bogged down by costs and delays. Perhaps the search will culminate in a remedy in which there is the minimum most role of official authorities and there is the maximum play of a wholly private mechanism. As and when such a method of dispute resolution is discovered or devised, or if it has already been discovered or devised, it will be entitled to be given the name of ADR, Alternative Dispute Resolution. Definition and Scope of ADR Alternative Dispute Resolution (ADR) is supposed to provide an alternative not only to civil litigation by adjudicatory procedures but includes also arbitration itself. The institution of arbitration came into being as a very useful alternative to litigation. But it is now being viewed as closer to litigation because it has to be in accordance with statutory provisions and becomes virtually an adjudicatory process with all the formalities of the functioning of a court. A method of dispute resolution would be considered as a real alternative only if it can dispense with the adjudicatory process, even if it is not wholly a consensual process. It may be worked by a neutral third person who may bridge the gap between the parties by bringing them together through a process of conciliation, mediation or negotiations. Nevertheless, arbitration has also been considered as an alternative to litigation and is generally included in the study of all other alternative. This is so because arbitration has been the mother source of other alternatives, not only in substance but also in the procedural working of the alternative methods. The principles and procedure of arbitration have influenced the growth of many of the ancillary and hybrid processes used in the alternative methods of dispute resolution.
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PALLAVI BHOGLE ADR can be defined as a technique of dispute resolution through the intervention of a third party whose decision is not legally binding on the parties. It can also be described as mediation though mediation is only one of the modes of ADR. The method is neither that of litigation nor that of arbitration. ADR flourishes because it avoids rigidity and inflexibility which is inevitable in the litigation process apart from high lawyer and court fee and long delays. ADR aims to provide the parties with cheap, speedy and less formalistic remedy to the aggrieved party. It aims at providing a remedy which is most appropriate in the circumstances of the case. This makes ADR a viable substitution for arbitration or litigation. Advantage of Alternative means of Dispute Redressal The advantages are as follows: 1. The alternative means of dispute redressal can be invoked at any time, even if the matter is pending in the Court of Law. Similarly it can be terminated at any time except in case of compulsory arbitration. 2. The disputes can be resolved comparatively more economically and speedily. Disputes can be maintained as the personal subject-matter. Sometime disputes are resolved within one or two days, time because the procedure adopted by the mediator is controlled and consented by the parties. Thus, real solution of the dispute can be arrived at by the system of alternative means of dispute redressal. 3. The system of alternative means of dispute redressal can be followed without seeking legal assistance from the advocates / lawyer. 4. This system effectively reduces the work-load of the court. 5. Finally, this system provides flexible procedure; strict procedure of law is not applicable to alternative means of dispute redressal.
Conclusion
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PALLAVI BHOGLE What is meant by Alternative Dispute Resolution system? What are the alternative dispute resolution systems presently available in settling disputes? [16] May 05, May 03 Introduction: The Supreme Court made the following observation in Guru Nanak Foundation v Rattan Singh & Sons: Interminable, time consuming, complex and expensive court procedures impelled jurists to search for an alternative forum, less formal, more effective and speedy for resolution of disputes avoiding procedural claptrap and this led them to the Arbitration Act, 1940. However, the way in which the proceedings under the Act are conducted and without exception challenged in Courts, has made lawyers laugh and legal philosophers weep. Experience shows and law reports bear ample testimony that the proceedings under the Act have become highly technical, accompanied by unending prolixity, at every stage providing a legal trap to the unwary. Informal forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the courts, been clothed with legalese of unforeseeable complexity. The movement towards ADR was endorsed by a resolution at a meeting of Chief Ministers and Chief Justices. The meeting noted that the courts were not in a position to undertake the entire burden of administration of justice and that a number of disputes were capable of being disposed of by alternative methods such as arbitration, conciliation, mediation and negotiations. The meeting emphasized that litigants should be encouraged to adopt other methods because they provided procedural flexibility, saved valuable time, and involved less expenditure and strain as compared with conventional trials in civil courts. Definition and Scope of ADR Alternative Dispute Resolution (ADR) is supposed to provide an alternative not only to civil litigation by adjudicatory procedures but includes also arbitration itself. The institution of arbitration came into being as a very useful alternative to litigation. But it is now being viewed as closer to litigation because it has to be in accordance with statutory provisions and becomes virtually an adjudicatory process with all the formalities of the functioning of a court. A method of dispute resolution would be considered as a real alternative only if it can dispense with the adjudicatory process, even if it is not wholly a consensual process. It may be worked by a neutral third person who may bridge the gap between the parties by bringing them together through a process of conciliation, mediation or negotiations. Nevertheless, arbitration has also been considered as an alternative to litigation and is generally included in the study of all other alternative. This is so because arbitration has been the mother source of other alternatives, not only in substance but also in the procedural working of the alternative methods. The principles and procedure of arbitration have influenced the growth of many of the ancillary and hybrid processes used in the alternative methods of dispute resolution.
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ADR can be defined as a technique of dispute resolution through the intervention of a third party whose decision is not legally binding on the parties. It can also be described as mediation though mediation is only one of the modes of ADR. The method is neither that of litigation nor that of arbitration. ADR flourishes because it avoids rigidity and inflexibility which is inevitable in the litigation process apart from high lawyer and court fee and long delays. ADR aims to provide the parties with cheap, speedy and less formalistic remedy to the aggrieved party. It aims at providing a remedy which is most appropriate in the circumstances of the case. This makes ADR a viable substitution for arbitration or litigation. Alternative Dispute Resolution Systems In the field of alternative means of dispute redressal, the important alternative means are as follows: Negotiation It is the simplest means for redressal of disputes. In this mode the parties begin their talk without interference of any third person. The aim of negotiation is the settlement of disputes by exchange of views and issues concerning the parties. There is an ample opportunity for presentation of case in this mode of redressal. If there is understanding and element of patience between the parties this mode of redressal of dispute is the simplest and most economical. Conciliation and Mediation Where the parties fail to arrive at any settlement of their dispute by negotiation, in such circumstances the parties may take the assistance of some third person who is independent in respect of the subject-matter of dispute. Such person induces the parties to come to an amicable settlement of their dispute by means of conciliation and mediation. In course of conciliation and mediation that independent person may use his goodwill and impression in resolving disputes. He also induces the parties to exchange their disputed points relating to the subject-matter of dispute. Med-Arbitration This mode is a link between the settlement and arbitration. In this mode the conflicting parties may authorize the third independent person to adjudicate upon the subject-matter of dispute. Wherein the settlement by negotiation is failed, the mode of med-arbitration can be followed. This mode is not controlled by the Arbitration and Conciliation Act, 1996 or the Arbitration Act, 1940.
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PALLAVI BHOGLE Medola This process begins when the parties fail to reach at any settlement of dispute by mediation. In this mode that person who was doing mediation occupies the place of arbitrator. This person impartially picks up the disputed points from the proposals taken up between the parties during the negotiation. Disputed points so picked up by that third person are binding upon the parties. That person keeps the agreed points aside and the disputed points are taken up so as to settle the dispute by taking to a middle course to the satisfaction of the parties in dispute. Mini trial It is different from a formal case trial. In this mode the parties have the freedom to select an impartial and honest person of undisputed integrity and the parties can present their case in a summarized form. That person on the basis of submission of the parties considers the positive and negative points concerning the parties and thereafter he renders advice to the parties and consequently the parties negotiate on such advice. In fact that person acts as a catalyst in such mini trial. Arbitration According to Byrne's Law Dictionary, Arbitration means the determination of disputes by the decision of one or more persons called arbitrators. Practically, every question, which might be determined by a civil action, may be referred to arbitration. Under Section 1 of the Encyclopedia of the Laws of England, the term arbitration means a settlement of a dispute by the decision of not a regular and ordinary court of law but of one or more persons who are called arbitrators. The essence of arbitration is that some dispute is referred to by the parties for settlement to a tribunal of their own choice instead of to a court. In the context of India arbitration is a reference to the decision of one or more persons, either with or without an umpire, of some matter or matter in difference between the parties. In popular parlance arbitration may be defined as a private process set up by the parties as a substitute for court litigation to obtain a decision on their dispute. Fast Track Arbitration It is a kind of arbitration in which arbitration proceedings are conducted in a less expensive manner. In this mode a decision can be arrived at within one or two days time. Ordinarily, this process is adopted for settlement of commercial or business disputes. Conclusion
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PALLAVI BHOGLE In what way Lok-Adalat is an effective system in Alternative Dispute Resolution system? Discuss. [16] May 09, May 06, Dec 2006, May 2004 Lok Adalat [10] Dec 04, May 03 State the concept/meaning of Alternative Resolution system. Lok Adalat is an effective alternative dispute resolving method. Discuss. [16] May 07, Dec 05, May 04
Introduction: The Supreme Court made the following observation in Guru Nanak Foundation v Rattan Singh & Sons: Interminable, time consuming, complex and expensive court procedures impelled jurists to search for an alternative forum, less formal, more effective and speedy for resolution of disputes avoiding procedural claptrap and this led them to the Arbitration Act, 1940. However, the way in which the proceedings under the Act are conducted and without exception challenged in Courts, has made lawyers laugh and legal philosophers weep. Experience shows and law reports bear ample testimony that the proceedings under the Act have become highly technical, accompanied by unending prolixity, at every stage providing a legal trap to the unwary. Informal forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the courts, been clothed with legalese of unforeseeable complexity. The movement towards ADR was endorsed by a resolution at a meeting of Chief Ministers and Chief Justices. The meeting noted that the courts were not in a position to undertake the entire burden of administration of justice and that a number of disputes were capable of being disposed of by alternative methods such as arbitration, conciliation, mediation and negotiations. The meeting emphasized that litigants should be encouraged to adopt other methods because they provided procedural flexibility, saved valuable time, and involved less expenditure and strain as compared with conventional trials in civil courts. Concept of ADR ADR or Alternative Dispute Resolution is an attempt to devise machinery which should be capable of providing an alternative to the conventional methods of resolving disputes. An alternative means the privilege of choosing one of two things or courses offered at one's choice. It does not mean the choice of an alternative court but something which is an alternative to court procedures or something which can operate as court annexed procedure. Human conflicts are inevitable. Disputes are equally inevitable. It is difficult to imagine a human society without conflict of interests. Disputes must be resolved at minimum
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PALLAVI BHOGLE possible cost both in terms of money and time, so that more time and more resources are spared for constructive pursuits. For resolution of disputes there is a legal system in every human society. Every injured person is supposed to go to courts for his redressal. All the legal systems are trying to attain the legal ideal that wherever there is a wrong there must be a remedy so that nobody shall have to take law into his own hand. Courts have become overcrowded with litigants. Naturally, litigants have to face so much loss of time and money that at long last when a relief is obtained; it may not be worth the cost. Hence, began the search for alternatives to the conventional court system. A large number of quasi-judicial and administrative tribunals have been created for quicker reliefs. All these tribunals and forums are an alternative method of dispute redressal. But even such tribunals and forums have become overcrowded with the result that they are not able to provide relief within good time. Many tribunals in service matters have been able to provide relief only when the aggrieved employee has already retired from his position. There thus remains the need of an alternative remedy which will not be bogged down by costs and delays. Perhaps the search will culminate in a remedy in which there is the minimum most role of official authorities and there is the maximum play of a wholly private mechanism. As and when such a method of dispute resolution is discovered or devised, or if it has already been discovered or devised, it will be entitled to be given the name of ADR, Alternative Dispute Resolution. Lok Adalat The establishment of Lok Adalats under the Legal Services Authority Act, 1987 is one of the alternative means of dispute resolution or redressal. The preamble of the said Act shows that the Lok Adalats constituted to provide expeditious, economical and competent legal services to the weaker sections of the society to perform the constitutional obligations on behalf of the State. Even the commercial disputes may be adjudicated by the Lok Adalats. Establishment of Lok Adalats S. 19 of the LSA Act, 1987, provides that every State Authority or District Authority or the Supreme Court Legal Services Committee or every High Court Legal Services Committee, or, as the case may be, Taluk Legal Services Committee may organize Lok Adalat at such intervals and places and for exercising such jurisdiction and for such areas as it thinks fit. Every Lok Adalat organized for an area shall consist of such number of: a) serving or retired Judicial Officer, and b) other persons,
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PALLAVI BHOGLE of the area as may be specified by the State Authority or the Supreme Court Legal Services Committee, or the High Court Legal Services Committee or, as the case may be, the Taluk Legal Services Committee, organizing such Lok Adalat. Rule 13 of National Legal Services Authority Rules holds that a person shall not be qualified to be included in the Lok Adalat unless he is: 1. a member of Legal profession; or 2. a person of repute who is especially interested in the implementation of the Legal Services Schemes and Programmes, or 3. an eminent social worker who is engaged in the upliftment of the weaker section of the people, including the Scheduled Castes, Scheduled Tribes, women, children, rural and urban labour. Section 19 of the Legal Services Authority Act, 1987 further provides the experience and qualifications of other persons as mentioned earlier for Lok Adalats other than those who are to be prescribed by the Central Government in consultation with the Chief Justice of the Supreme Court, shall be such as may be prescribed by the State Government in consultation with the Chief Justice of the High Court.
Jurisdiction of Lok Adalat In accordance with S. 19 of the Legal Services Authority Act, 1987 a Lok Adalat shall have jurisdiction to determine and to arrive at a compromise or settlement between the parties to a dispute in respect of: any case pending before, or any matter which is falling within the jurisdiction of, and is not brought before, any court for which the Lok Adalat is organized. Provided that the Lok Adalat shall have no jurisdiction in respect of any case or matter relating to an offence not compoundable under any law. Cognizance of cases by Lok Adalats S. 20(1) holds that where in any case pending before any court for which the Lok Adalat is organized: i. (a) the parties thereof agree; or (b) one of the parties thereof makes an application to the court, for referring the case to the Lok Adalat for settlement and if such court is prima facie satisfied that there are chances of such settlement; or ii. the court is satisfied that the matter is an appropriate one to be taken cognizance of the Lok Adalat, the Court shall refer the case to the Lok Adalat, provided that no case shall be referred to the Lok Adalat under sub-clause (i)(b) or (ii) by such court except after giving a reasonable opportunity of being heard to the parties.
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PALLAVI BHOGLE Every Lok Adalat while determining any reference before it under the Act, act with utmost expedition to arrive at a compromise or settlement between the parties and shall be guided by the principles of justice, equity, fair play and other legal principles. Where no award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at between the parties, the record of the case shall be returned by it to the court, from which the reference has been received under sub-section (1) for disposal in accordance with law. Where no award is made by the Lok Adalat on the ground that no compromise or settlement could be arrived at between the parties in a matter referred to in sub-section (2) that Lok Adalat shall advise the parties to seek remedy in a court. Where the record of the case is returned under sub-section (5) to the court, such court shall proceed to deal with such case from the stage which was reached before the reference under sub-section (1). Award of the Lok Adalat Section 21 of the Legal Services Authorities Act provides that every award of the Lok Adalat shall be deemed to be a decree of a civil court or, as the case may be, an order of any other court and where a compromise or settlement has been arrived at, by a Lok Adalat in a case referred to it under sub-section (1) of S. 20, the court fee paid in such case shall be refunded in the manner provided under the Court Fees Act, 1870. Every award made by a Lok Adalat shall be final and binding on all the parties to the dispute, and no appeal shall lie to any court against the award. Powers of the Lok Adalat S. 22 makes provisions in relation to the powers of the Lok Adalat and it provides that the Lok Adalat shall, for the purposes of holding any determination under this Act, have the same powers as are vested in a civil court under the Code of Civil Procedure,1908 while trying a suit in respect of the following matters namely: a) the summoning and enforcing the attendance of any witness and examining him on oath; b) the discovery and production of any document; c) the reception of evidence on affidavits; d) the requisitioning of any public record or document or copy of such record or document from any court or office; and e) such other matters as may be prescribed. Without prejudice to the generality of the powers mentioned above every Lok Adalat shall have the requisite powers to specify its own procedure for the determination of any dispute coming before it. Conclusion: Thus, the Lok Adalat is an alternative means of dispute redressal system, under which flexible, less expensive and expeditious settlement of dispute is sought. Lok ARBITRATION, CONCILIATION & ADR SYSTEMS 107
PALLAVI BHOGLE Adalat is a non-judicial forum which is organized by the judicial authorities. It can be said that the nature of procedure adopted by the Lok Adalats are similar to arbitration, conciliation and mediation procedure. Lok Adalats and National Legal Services are required to adjudicate the subject-matter of disputes by adopting the technique of mutual understanding and to induce exchange of view between the parties, so that the decision can be determined by mutuality. Therefore, the alternative means of dispute redressal emphasizes the conciliation and settlement in their procedure.
Constitution and Functions of National Legal Services Authority [10] May 09 State Legal Services Authority [10] Dec 06 Legal Services Authority [10] May 05, May 04
Introduction: Section 3(1) of Legal Services Authorities Act provides that the Central Government shall constitute a body known as the National Legal Services Authority to exercise the powers and perform the functions conferred on, or assigned to the Central Authority under this Act. Central Authority according to Section 2(o)(a) of this Act means the National Legal Services Authority constituted under Section 3: S. 3(2) of this Act further provides that the Central Authority shall consist of: a) The Chief Justice of India who shall be Patron-in-Chief. b) A serving or retired Judge of the Supreme Court to be nominated by the President, in consultation with the Chief Justice of India, who shall be the Executive Chairman. c) Such number of other members, possessing such experience and qualification, as may be prescribed by the Central Government, to be nominated by that Government in consultation with the Chief Justice of India. According to Rule 3 of the National LSA Rules the Central Authority shall consist of not more than 12 members and further it provides that the following shall be ex-officio members of the Central Authority: i. Secretary, Department of Legal Affairs, Ministry of Law, Justice and Company Affairs, Government of India or any of his nominee; ii. Secretary, Department of Expenditure in the Ministry of Finance, Government of India or any of his nominee;
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PALLAVI BHOGLE iii. Two Chairman of the State Legal Services Authority as may be nominated by the Central Government in consultation with the Chief Justice of India
A person shall not be qualified for nomination as a member of the Central Authority unless he is: an eminent person in the field of law, or a person of repute who is especially interested in the implementation of the legal services scheme, or an eminent social worker who is engaged in the upliftment of the weaker sections of the people which includes the scheduled castes, scheduled tribes, women, children, rural and urban labours. The terms of office and other conditions related to the members and the MemberSecretary of the Central Authority shall be such as may be prescribed by the Central Government after consulting with the Chief Justice of India. Powers and Functions Rule 6 also states the powers and functions of the Member-Secretary of the National Legal Services Authority. According to the rules, the following shall be the powers and functions of the Member Secretary: 1. to work out modalities of the legal services, schemes and programmes approved by the Central Authority and ensure their effective monitoring and implementation throughout the country; 2. to exercise the powers related to administrative, finance and budget matters as that of the Head of the Department in a Central Government; 3. to manage the funds, records and properties of the Central Authority; 4. to maintain true and proper accounts of the Central Authority including checking and auditing in respect thereof periodically; 5. to draft and prepare Annual Income and Expenditure Accounts and balance-sheet of the Central Authority; 6. to liaise with the social action groups and the State Legal Services Authority; 7. to prepare and maintain up to date and complete statistical information, including process made in the implementation of various legal services programmes from time to time; 8. to process project proposal for financial assistance and issue utilisation certificates thereof; 9. to convene meetings/seminars and workshops connected with legal services programmes and preparation of reports and follow up action thereon, 10. to produce video and documentary films and publish material, literature and publications to inform general public about the various aspect of the legal services programme, and 11. to perform such other functions as may be required for effective functioning of the Central Authority.
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PALLAVI BHOGLE These rules further state the term of office and conditions related to the members and Member-Secretary of the Central Authority. According to Rule 7, the members of the Central Authority nominated by the Central Government under Rule 3, shall hold office for a term of two years and a retiring member shall be eligible for re-nomination for not more than one term. Any member appointed by the Central Government under Rule 3 may be removed by the Central Government if in the opinion of the Central Government it is not desirable to continue him as a member.
Function of the Central Authority Section 4 of the Legal Services Authorities Act, 1987 makes provisions related to functions of the Central Authority. The Central Authority according to S. 4 shall perform all or any of the functions as under: 1. it can formulate policies and principles to make legal services available under the provisions of this Act; 2. it can frame the most effective and economical schemes for the purpose of making legal services available under this Act; 3. it can utilise the funds at its disposal and make appropriate allocation of funds to the State Authorities and District Authorities; 4. it can take steps required with regard to consumer protection, environmental protection or any other matter of special concern to the weaker sections of the society by way of social justice litigation and for this purpose, give training to social workers in legal skills; 5. it can organise legal aid camps, especially in rural areas, slums or labour colonies with the dual purpose of educating the weaker sections of the society as to their rights as well as encouraging the settlement of disputes through Lok Adalats; 6. it can encourage the settlement of disputes by way of negotiations, arbitration and conciliation; 7. it can undertake and promote research in the field of legal services with special reference to the need for such services among the poor; 8. it can do all necessary things for the purpose of ensuring commitment to the fundamental duties of the citizens under Part IV-A of the Constitution; 9. it can provide grants-in-aid for specific schemes, to various voluntary social service institution and the State and District Authorities, from out of the amounts placed at its disposal of the implementation of legal services schemes under the provisions of this Act; 10. it can develop, in consultation with the Bar Council of India, programmes for clinical legal education and promote guidance and supervise the establishment and working. of legal services clinics in Universities, law colleges and other institutions; 11. it can monitor and evaluate the implementation of the legal aid programmes at periodic intervals and provide for independent evaluation of programmes and schemes implemented in whole or in parts by funds provided under this Act; 12. it can take appropriate measures for spreading legal literacy and legal awareness amongst the people and, in particular, to educate weaker sections of the society
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PALLAVI BHOGLE about the rights, benefits and privileges guaranteed by social weHare legislations and other enactments as well as administrative programmes and measures; 13. it can make special efforts to enlist the support of voluntary social welfare institutions working at the grass-root level particularly among the Schedule Castes and Scheduled Tribes, women, children, rural and urban labour; and 14. it can co-ordinate and monitor the functioning of State Authorities, District Authorities, Supreme Court Legal Services Committee, High Court Legal Services Committee, Taluk Legal Services Committee, and voluntary social service institutions and other legal services organisations and give general directions for the proper implementation of the legal services programmes. Thus these are the functions that the Central Authority can perform. Section 5 of this Act provides that in the discharge of its functions under this Act, the Central Authority shall, whenever appropriate, act in co-ordination with other governmental and nongovernmental agencies, universities and other engaged in the work of promoting the cause of legal services to the poor. Conclusion: Thus, the Lok Adalat and National Legal Services Authority are the alternative means of dispute redressal system, under which flexible, less expensive and expeditious settlement of dispute is sought. Lok Adalats and National Legal Services are required to adjudicate the subject-matter of disputes by adopting the technique of mutual understanding and to induce exchange of view between the parties, so that the decision can be determined by mutuality. Therefore, the alternative means of dispute redressal emphasizes the conciliation and settlement in their procedure.
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PALLAVI BHOGLE

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

COMPOSITION OF ARBITRAL TRIBUNAL

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

Arbitral Tribunal 10] Dec 01

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

JURISDICTION OF ARBITRAL TRIBUNALS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

CONDUCT OF ARBITRAL PROCEEDINGS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRAL AWARD AND TERMINATION OF PROCEEDINGS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

RECOURSE AGAINST ARBITRAL AWARD

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS

FINALITY AND ENFORCEMENT OF ARBITRAL AWARDS

ARBITRATION, CONCILIATION & ADR SYSTEMS

ARBITRATION, CONCILIATION & ADR SYSTEMS