ARBITRATION NOTES

Section 2(1)( 1) of the Arbitration and conciliation Act, 1996 defines the term 'Arbitration'

In the terms of section 2(1)(a) 'arbitration' means 'any arbitration whether or not administered by permanent arbitral institution".

The Act does not provide definition of the word 'arbitration' but its literally recognized meaning is 'settlement' of differences or disputes by mutual understanding or agreement by the parties where the rights and liabilities of the parties are adjudicated which are binding on them, such settlement may be before the arbitral tribunal but not by the court of law.

An arbitration, therefore, means the submission by two or more parties of their dispute to the judgment of a third person, called the arbitrator and who is to decide the controversy in a judicial manner.

DEFINITION OF ARBITRATION BY ROMILL Y MR

Arbitration is defined by ROMILLY MR in the well-known case of Collins V. Collins. 28 LJ Ch 186 : (1858) 26 8eav 306.

"An Arbitration is a reference to the decision of one or more persons either with or without an umpire (presiding arbitrator by 1996 Act), of a particular matter in difference between the parties".

KINDS OF ARBITRATION

Generally, arbitration is of seven (7) kinds, which are as follows -

(i) Ad-hoc arbitration
(ii) Institutional arbitration
(i) Contractual arbitration
(ii) Statutory arbitration
(iii) Domestic arbitration
(iv) International Arbitration
(v) Foreign arbitration Arbitration - The use of an arbitrator to settle a dispute.

Arbitrator - An independent person or body officially appointed to settle a dispute.

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ARBITRATI'ON AGREEMENT

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 wl-jl!e defiring arbitration agreement, refers to Section 7 which may be read as a part thereof Section 7 is set out as follows :-

Section 7 (1) Arbitrati on Ag reement. Arbitration ag reeme nt 1"Y1ea ns an agreement by the parties to submit to arbitration all or certain disputes Nhch =ave arisen or which may arise between them in respect of a defined legal relancnstup. whether contractual or not.

Section 7 (2) Arbitration Agreement An arbitration agreement may be In the form of an arbitration clause in a contract or in the form of a separate aqreernent.

Section 7(3) Arbitration Agreement An arbitration agreement shall be In writing.

Section 7 (4) Arbitration Agreement An arbitration agreement is in Writing If it is contained in :-

(a) a document signed by the parties.

(b) an exchange of letter, telex, telegram or other means of

tel.ecommunication which provide a record of the agreement; or

(c) 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 containi.ng 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.

Thus, Arbitration Agreement is an important segment of the Act which requires careful consideration and comprehensive study, which is here under :-

1.. INFERENCE OF.ANAGH.E'EMENT. The term 'agreement' has been defined under the INDI.AN CONTRACT ACT, 1.872 as every promise or every set of promi.sesforming the consideration for each other is an agreement.

The consideration for an arbitration agreement is willingness of either side to abide by the decision (award) of the arbitrator. Thus an arbitration aqreernent is an instrument containing reciprocal promises between the parties with the object that in case of any dispute arising out of a contract, the same would be liable to be submitted for arbitration.

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INTRODUCTION. Arbitration is a method of statement of disputes by way if an alternative to the normal judicial method which activated by instituting legal proceedings. Hence, arbitration is a method of alternative dispute resolution (ADR) of all forms of other alternative dispute resolution mechanisms, like conciliation, mediation, nego iations etc, arbitration has become the most dominant form of ADR. The reason for Its phenomenal popularity is that it is the only real alterna ive to jud icial adjudication The Act of 1996 has converted arbitration into an adjudication by a quasr-judicral tribunal. Thus the role and interference of the courts In the process of arbitration has been minimised

MEANING Sec 2( 1 )(a) of the Arbi ration and conciliation Act 1996 defines the term "Arbitration". Thus, 'arbitration' means 'any arbitration whether or not administrated by permanent arbitral institution'.

The Act does not provide definition of the word 'arbitranon but its iterally recognised meaning is 'settlement' of differences of disputes by mutual understanding or agreement by the parties where the rights and liabilities of the parties are adjudicated which are binding on them, such settlement may be before the arbitral tribunal but not by the court of law.

An arbitration, therefore, means the submission by two or more parties of t er disputes to the judgmen of a third person, called the 'arb! rator' and who IS to doc.de the controversy in a judicial manner.

DEFINITION BY ROMILL Y MR Romilly MR defined the term 'Arbitra ion' is a well-known case of Collins V Collins (1858) as -

"An Arbitration is a reference to he decision of one or more persons either wi h or without of a particular matter in differences between the parties".

*(lllustration on arbitration)

ARBITRATION AGREEMENT. Sec 2 (1) (6) of the Arbitration and Conciliation Act 1996 defines 'Arbitration Agreement'. Thus' Arbitration Agreement' means an agreement referred to in Section 7 of the Act.

Therefore, Sec 2(1) (b) of the Act, 1996 provides that the word 'Arbitration Agreement' is to be interpreted and understood with reference to Chapter II, Section 7 of the Act, 1996.

SECTION 7. Sec 7 contains or put forward the definition/meaning of an 'Arbitration Agreement' which is set out as follows :-

Section 7 (1 ). '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.

Section 7 (2). An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.

Section 7 (3). An arbitration agreement shall be in writing.

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Section 7 (.11 An arbitration agreement IS In writing If it IS contained In -

(a) a document signed by the parties

(b) an exchange of letter telex telegram or other means of

telecommunication which provide a record of the agreement or

(c) 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

Section 7 (5) The reference In a contract to a document containing an arbitration clause constituting an arbitration agreement If the contract IS In wntlrg and the reference In such as to make that arbitration clause part of the contract

ESSENTIAL INGREDIENTS TO CONSTITU E ARBITRATION AGREEMENT I~ s

settled legal position that a valid agreement should constitute the follOWing -

(i) it must be in writing.

(ii) there must be an agreement between the parties;

(iii) the parties must be ad Idem, and parties to have their disputes or differences

referred and decided through arbitration Thus the parties, d sputes and finality Of the decision are three essentials of an arbitranon agreement. However the statutory essentials of an arbitration agreement may be listed as -

(a) An agreement,

(b) it must be In wnting ;

(c) it must be relating to either present or future differences or disputes

(d) whether an arbitration is named therein or not.

In Rukmanibai V. Collector, Jabalpur AIR 1981 SC 479, - The Supreme Court said that w at is required to be ascertained IS whether the parties rave agreed that if disputes arise between them in respec of the subject-matter of the agreement such dispute shall be referred to arbitration, then such agreemert would spell out an arbitration agreement. That means what IS required under Sec 7 (2) to (5) is the terms of an arbitration agreement which must be very clear and specific may be, in form of clause and expression used in an arbitration agreement such as 'arbitrator', 'arbitration', and 'arbitral' tribunal' should be defined The clause contained in an arbitration agreement is not to the clauses of a contract because the clauses of an arbitration agreement are enforce bl under this act.

2. Agreement to be in writing. Sec 7 (3) most emphatically prescribes that "an arbitration agreement shall be in writing". An oral agreement to submit a dispute to arbitration is not binding. If the agreement is in writing it will bind, even if some of ItS details are filled in by oral understanding (Banarsi 0 s Cane Commer AIT 1963 SC 1417). It is not necessary that the agreement should be on a formal document nor it is necessary that the agreement should be sign by both or either party. It is sufficient that the written agreement has been orally accepted by the parties or that one has signed and the other has accepted.

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3. Form of arbitration agreement. Arbitration agreement is not required to be in any particular form. What is required to be in any particular form. What is required to be ascertained is whether the parties have agreed that if disputes arise they would be referred to arbitration then such an arrangement would spell out an arbitration agreement.

4. An arbitration agreement is not necessarily to be signed by other the parties :According to Sec 7 (4) (a) of the Act a document, namely an arbitration agreement should be signed by the parties. However, a plain reading of Sec 7 (4) (b) to (c) clearly shows that it is not necessary that the arbitration agreement between the parties should in all cases be signed by both the parties.

Whether an arbitration agreement needs to be signed, the judgment of the Apex Court in Union of India V.A.L Rallia Ram AIR 1963 SC 1985, settles the controversy by holding that it is not a condition of a effective arbitration agreement that It must be incorporated in a formal agreement executed by both the parties there to nor is it required to be signed by the parties. A document signed by one and accepted by the other IS enough for the purpose.

Section 7 of the Act, 1996 is on the pattern of Article 7 of the Model Law, which has been taken from Article II (1) of the New York convention 1958. The laws relating to arbitration agreement are stated/described or set out below .-

1. Deti n ilion of Arbitration Ag reement. Sect 7 (1) defines the term 'arbitration agreement' which means that an agreement/arbitration agreement is an instrument containing reciprocal promises between the parties with the object that in case of any dispute arising out of a contract, the same would be liable to be submitted for arbitration. The effect of the provisions is that for the formation of an arbitration agreement the requirements of the law of contract as to the making of an agreement and those of section 7 of this Act who have to be satisfied. In Union of India V.G.S Atwal & Co. (1996) 3 Sec 568, to constitute an arbitration agreement the parties must be ad idem.

5. Reference as to 'arbitration clause'. Sec 7 (5) explains that in a contract agreement if the reference is made as to 'arbitration clause' it will aims to an 'arbitration agreement'. Thus, an 'arbitration clause' can be a part of a contract provided it in writing. Now, it is clear that this sub-sec recognise the practice prevailing in such down of contract containing an arbitration clause.

In Vessel MV Baltic Confidence V. State Trading Corpn. of India AIR 2001 SC 3381, - the SC examined the factors for considering whether clause contained in a charter party agreement be incorporated by reference into a bill of lading court was of the view that if the reading of the clause into some other document would not create an absurdity, inconsistency or insensibility, the clause would apply to the bill of lading and the intention of the parties would be given effect to.

Thus, it is well settled legal principle that the mutuality is a sine qua non of the validity that the mutuality is a sine qua non of the validity of a contract, which is equally applicable to an arbitration agreement but the question is about mutuality. There are 2 views on this point.

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(i) The Arbitration clause must give bilateral of reference It means either party

may, in the event of dispute arising. refer to arbitration

(ii) 'Mutuality' is permissible to stipulate In the arbitration Clause Itself to one party to initiate arbitration in regard to disputes of his choice Such a cause would quality as an arbitration agreement (Union of India V Bharat Englreenng Corp LLR (1977).

6 Arbitration agreement relating to either present or future disputes 1'1 arbitrat on the existence of dispute is an essence Thus the dispute IS the pre necessary condition for the very existence of arbitration Therefore the arbitration and Cone.hat or Act 1996 makes provision that the arbitration agreement may contain present or future disputes Wherein the agreement relates to a present dispute It may amount to a reference but f It relates to future disputes it is an arbitration clause/agreement

7. 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 specific thereon. The present Act of 1996 does not suggest anywhere that number of arbitrators is a part of an arbitration agreement.

CONCLUSION. Thus, it can be concluded that an agreement to be an 'arbitration agreement' there must exist any disputes which the parties decided to sought through appointed arbitrators and the relationship that exist between the parties must be in respect of a defined legal relationship, whether contractual or not.

DIFFERENCE BETWeEN ARBITRATION AND ARBITRATION AGREEMENT

DICTIONARY MEANING

Arbitration is the settlement of dispute by an arbitrator, the reference of a dispute to an impartial person chosen by the parties to dispute who agree to abide by the arbitration agreement to be given after bearing of both the parties. Whereas

Arbitration Agreement means written agreement to submit present or future references to arbitration, whether an arbitrator is not therein or not.

MEANING UNDER THE PRESENT ACT 1996.

The Arbitration and Conciliation Act defines the term 'arbitration, and 'arbitration agreement'.

According to Sect 2 (1) (a) of the 'arbitration' means 'any arbitration whether or not administrated by permanent arbitral institution', Whereas

According to sec 7 (1) of the Act 'arbitration agreement' means 'an agreement between parties to submit to arbitration all or certain disputes which have arisen or which may arise between in respect of a defined legal relationship, whether contractual or not',

DISTINCTION BETWEEN ARBITRATION & ARBITRATION AGREEMENT. Following are the distinction between 'Arbitration' and 'Arbitration Agreement'.

ARBITRATION

1. Generally, arbitration means the submission by two or more parties of their disputes to the judgement of a third person called the arbitrator and who is to decide the controversy in a judicial manner.

2. Sec 2 (1) (a) of the Arbitration & Conciliation Act, 1996 defines the term 'arbitration' .

3. AJSec 2 (1) (a), 'arbitration' means

'any arbitration whether or not

administrated by permanent arbitral

institution.

4. There are generally 7 different kinds of arbitration like ad-hoc arbitration, institutional arbitration, contractual arbitration etc.

5. Arbitration in itself does not

describe contract a contract.

6. An arbitration is the reference of a dispute or difference between not less than two parties for determination, after bearing both the sides in a judicial manner, by person (s) other than a court of competent jurisdiction

7.

Arbitration is a genus.

8. Legally, the existence of disputes or differences is a pre-necessary condition for the arbitration.

9. It is 'sine quo non' of arbitration that

the dispute must arise.

10. The law of arbitration only aids implementation of an arbitration agreement.

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ARBITRATION AGREE

1. Generally, arbitration agreement means a written agreement to submit present or future differences to arbitration, whether an arbitrator IS named there or not.

2. Sect 2 (1) (b) of the Act provides that the word 'arbitration agreement' IS to be interpreted with references to Chapter II Sec 7 of the Act, 1996.

3. AJSec 7 (1) 'arbitration ag reement means 'an agreement by the parties to submit to arbitration all or certain dispute which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.

4. Whereas there are no such kinds 0'1

arbitration agreement.

5. Arbitration agreement in Itself a

contract.

6. An arbitration agreement is an instrument containing reciprocal promises between the parties with the object that in case of any dispute arising out of a contract, the same would be liable to be submitted for arbitration.

7.

Arbitration agreement is a species.

8. Whereas it is necessary that such disputes or differences must come in the scope of arbitration agreement.

9. It is 'sine quo non' of arbitration agreement that the dispute arose must refer to arbitration in writing.

10. The process and method to be followed in implementation is done by arbitration aqreement.

11. The usual features of an arbitration a e the existence of a dispute between the parties.

12. Simply, the existence of dispute to refer to arbitration is enough i.e. the scope of arbitration has to be confined to the disputes which were the subject matter of arbitration.

Q.

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11 Whereas their agreement to refer it to the decision of a third person with tbe intention that be such act Judicially IS an arbitration agreement.

12. The agreement to refer disputes & differences to arbitration must be expressly or impliedly spelt out from the cla.rse

(a)

Define Arbitrator, who appoint arbitrator and in what number?

2001 (b) Discuss the provisions for appointment, challenges, terrnmanon of mandate

and replacement of an arbitrator.

Q. (a) Discuss the powers of court to appoint and remove of arbitrators Give

2003 reference to leading cases?

Q.

Discuss the procedure for appointment of an arbitrator?

(a) 'b) 2005

What are the duties and power of an arbitrator?

(c)

"An arbitrator is not bound to give reasons"- Discuss?

Q. (a) What are the grounds on which the appointment of an arbitrator may be

2007 challenged? Discuss the procedure to challenge the appointment?

The lexical meaning of the terminology of 'Arbitrator' is 'a person appointed to settle a dispute; an arbiter; a disinterested person chosen by the parties for the purpose of settlement of a disputed question'.

The term 'arbitrator' has not been defined under the Arbitration and Conciliation Act, 1996. But it simply means that, if a dispute or disagreement arises between the parties bound by an arbitration agreement, the person or panel of persons appointed to decide the disputed question of controversy according to the agreed terms of the agreement not opposing to law or public policy is an arbitrator provided he must be an independent and impartial person(s) with desire or required qualification agreed by the parties in the arbitration agreement.

The Arbitral tribunal [Sec 2(1) (d) of 1996, defines 'Arbitral Tribunal' means a sole arbitrator or a panel of arbitrators] is the creature of an agreement. It is open to the parties to confer upon it such powers and prescribe such procedure for it to follow, as they think fit, so long as they are not opposed to the law. The Arbitral Tribunal must also act and make its award in accordance with the general law of the land and the agreement.

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PRO liS IONS FOR NUN BER, APPOINTMENT, REMOVAL OF ARBITRATOR (S)

The provisions rela ing to the constitution/composition of arbitrator(s), appointment, termination and replacement of the arbitrator (s) have been inserted from Sec 10 to Sec 15 of the Arbitration and Conciliation Act, 1996.

SECTION 10 : NUMBER OF ARBITRATORS

Sec 10 of the Act deals with the provision relating to the number of arbitrators. As a general rule arbitrators are appointed by the concerning parties to the arbitration agreement. But in certain cases he is appoint by the Chief Justice or any person or institution designated by him. Sec 10 consists of two (2) sub-sections

Sec 10 (1) is taken from Article 10 (1) of the Model Law, which provides freedom to the parties in respect of number of arbitrators, It IS an obligation given by the Act to the parties to determine the number of arbitrators provided that such number shall be an even number i.e. it must be an odd number

Sec 10 (2) of the Act, 1996 ensures that If the parties could not arrive into agreement in respect of number of arbitrators, It will not be the cause to vrtrate the arbitration proceedings rather the 'arbitral tribunal' shall consist of a sale arbitrator.

SECTION 11 : APPOINTMENT OF ARBITRATORS

The interpretation of Sect 11 as observed by the Supreme Court is as follows:-

That the UNCITRAL Model Law was only taken into account in the draftmg of the Arbitration and Conciliation Act, 1996 is patent from the statements of objects and reasons of the Act. The Act and the Model Law are not Identically drafted. Under Sec 11, the appointment of an arbitrator, in the event of a party to the arbitrators agreement failing to carry out his obligation to appoint an arbitrator, is to be made by the 'Chief Justice or any person or institution designated by him', under clause 11 of the Model Law it is to be made by a court.

Sec 11 of the Act, 1996 is the lengthiest section of the Act. It consists of 12 sub sections.

SECTION '11 (1 ). Section 11 (1) speaks that with the agreement of the parties, an

arbitrator may be of any nationality.

SECTION 11 (2). Section 11 (2) prescribes a procedure of appointing the arbitrators and the parties have been given the freedom to lay down procedure under this subsection (2) although this sub-section (2) is to be read with sub section (b) of the Act, which is a mandatory provision.

SECTION 11 (3). Sec 11 (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 arbitrators s ha II a ppo i nt the th i rd arbitrator wh 0 shall be the pres id i ng arbitrator 0 n th e arb itrati on.

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SECTION 11 (4). Sec 11 (4) consist of 2 SUb-sections which deals with the circumstances when a party fails to appoint an arbitrator within prescribed period of 30 days or when the two appointed arbitrators fail to agree on the third arbitrator within 30 days from the date of their appointment, then the appointment shall be made by the Chief Justice or any person or institution designated by him on request of a party

SECTION 11 (5). Sec 11 (5) speaks about failing of any agreement referred to In subsections (2), there would be a sole arbitrator. If the parties fall to appoint arbitrators within 30 days, then appointment shall be made by the Chief Justice or any person or Instituted designated by him.

SECTION 11 (6). Sec 11 (6) consists of a mandatory provision and It comes Il1tO play when the parties had agreed on an appointment procedure l.e., when the parties or the two appointed arbitrators failed to appoint a third arbitrator, a person including ao institution has failed to perform a function entrusted to him under that agreed procedure which means that when there is complete failure on all squares, this sub section wou d operated to eliminate obstacles.

SECTION 11 (7). Sec 11 (7) states that the decision of the Chief Justice, or any person or institution designated by him as entrusted under sub section (4) and (5) are final and there is no provision for appeal.

SECTION 11 (8). Sec 11 (8) provides guidelines in the matter of appointment of an arbitrator by the Chief Justice or the person or institution designated by him The functionaries mentioned in the sub sec shall have due regard to these guidelines.

(a) any qualifications required of the arbitrator by the agreement of the parties &

(b) other considerations as are likely to secure the appointment of an

independent and impartial arbitrator.

SECTION 11 (9). Sec 11 (9) foretells that in an international arbitration agreement, the appointment of an arbitrator shall be made by the Chief Justice of India or person or institution designated by him and in that case the arbitrator may belong to any nationality other that those of the parties.

SECTION 11 (10). Sec 11 (10) provides power to the Chief Justice to make an appropriate scheme in respect of the matters entrusted to him by sub sec (4), (5) or (6).

SECTION 11 (11). Sec 11 (11) provides for solution to the problem when different parties approach different Chief Justice or their designates, under sub sec (4), (5) or (6). The Chief Justice or his designate to whom the request has been first made and accepted under the relevant sub sect shall alone be competent to decide on the request.

SECTION 11 (12.). Sec 11 (12) explains that under 11 (12) (a) & (b) 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 HC within whose local limit the principal court in clause (e) of sub section1 (1) of Section 2 is situates and where the HC itself is the court referred to in that clause, then the Chief Justice of the He can close.

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CASE LAWS RELATING TO SECT:ION 11

1. In MIs Universal Construction and Trading Company, Lucknow Vs Garhwal Mandai Vikas Nigam Ltd, Dehradun and others AIR 2004 All 1153 wherein the agreement only contained provision prescribe appointment of a sole arbitrator However the applicant specifically requested the opposite parties for reference of dispute to arbitrator, but the opposite party removing silent. It was held that the applicant can may request to the Chief Justice under Sec 11 (6) of the Act, 1996 for appointment of an arbitrator Hence the plea by opposite party that only arbitrator named in arbitration clause can act as arbitrator IS misconceived.

2. In S.B.P Co. Vs Patel Engineering Ltd and another, 2005 (8) sec 618, the SC has held that the power concerning appointment of arbitrator, exercised by the Chief Justice of the HC or the Chief Justice of India under Sec 11 (6) of the Act is not an adrninlstratrve power but a judicial power. Therefore, an appeal will lie against that order only under Article 136 of the Conciliation of India to the SC. But there can be no appeal aqarnst arorder of the Chief Justice of India or a judge of the SC designated by him While entertaining an application under Sec 11 (6) of the Act.

3. In C.M.C Ltd Vs Unit Trust of India another, AIR 2007 SC 1557, the SC ruled that an arbitration agreement is a matter of contract. As long as arbitration agreemenUcontract does not militate provisions of the Arbi ration and Conciliation Act, 1996, nothing prevents arbitration agreemenUcontract being given full effect.

SECTION 12 : GROUNDS FOR CHALLENGE

Sec 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 paly, impartiality and independency must be followed by an arbitrator.

Sec 12 of the Act, 1996 consists of 4 sub-sections dealing with grounds for challenge.

SECTION 12 (1 ). Sec 12 (1) contains an expectation of an honest wilful disclosure from a prospective arbitrator to make in writing such disclosures which is likely to cause doubt as to his independent or impartiality as an arbitrator. Thus, object of Sect 12 (1) is that a prospective arbitrator is duty bound to disclose his antecedent which is likely to affect his role as an arbitrator.

SECTION 12 (2). Sec 12 (2) lays down duty to an arbitrator since he has been appointed as an arbitrator and throughout the arbitral proceedings if any circumstances mentioned in Sec 12 (1) arise, to be discloses in writing to the parties, unless the parties have already been informed by an arbitrator.

SECTION 1,2.(3).. Sec 12 (3) provides ground for challenging the arbitrator, when

(i) the circumstances present cause justifiable doubts to his independence or

impartiality; or

([i) found not qualified as per the agreement between the parties.

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Thus, Sec 12 (3) averts the flimsy ground to challenge by providing good reasonable grounds to challenge the arbitrator

In Jiwan Kumar Lohia Vs Durga Dutt Lohia, AIR 1992 SC 188, 189, - The SC 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). Sec 12 (4) provides estoppel against a party to challenge who had knowledge of any ground mentioned In Sec 12 (3) before the appointment of an arbitrator, if this is not so, a party may challenge an arbitrator appointed by him and t does not matter if he has participated in appointment but he could know only after the appo ntment

In Narayan Prasad Lohia Vs Nikunj Kumar Lohia and others, 2000 (2) Supreme 69 the Apex Court has held that when the composition or the procedure of Arbitral Tribunal or the procedure not in accordance with agreement of the parties, it is challengeable In such situation the parties get a right to challenge the award but it can only be challenged 'f the agreement of the parties is in conflict with a provision of Part I which the parties cannot derogate.

SECTION 13: CHALLENGE PROCEDURE

Sec 13 of the new Act, 1996 is analogous to Sec 30 and Sec 34 of the Arbitration Act, 1940. This Sec 13 is based on Article 13 of the Model Law,

Sec 13 (1) lays down challenge procedure and provides freedom to the parties to agree on a procedure for challenging the arbitrator.

Sec 13 (2) states 'Failing. any agreement referred to in sub-section (1)'. A party who has intention to challenge an arbitrator after such failure on agreement of challenging procedure, within 15 days from the day he became aware of the constitution of the arbitral tribunal or any circumstances contained in sec 12 (3), a party has to send a written statement containing reasons for such challenge to the arbitral tribunal, then the arbitral tribunal would decide the matter.

Under Sec 13 (3) it is mandatory to decide upon the challenge by the arbitral tribunal, whether there is a sole arbitrator or more arbitrator in the arbitral tribunal. This sub-sec (3) provides that 'unless the arbitrator challenged under Sec 12 (3) withdrawn from his office or the party agrees to challenge' Sec 12 (3) cannot be invoked.

Under Sec 13 (4), though the arbitral tribunal turned down the challenge yet its decision is not final and the arbitral tribunal may continue the proceedings and ma e an award.

Under Sec 13 (5), where an arbitral award is made under sec 12 (4), the party who had challenged the arbitrator is permitted to make an application for setting aside such award, as provided under Sec 34 of the Act 1996.

Sec 13 (6) lays down that where an arbitral ward is set aside on a application made under Sec 13 (5), the court may decide as to whether the arbitrator who is challenged is entitled to any fees.

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SECTION 14: FAILURE OR IMPOSSIBILITY TO ACT

Sec 14 is modelled on Article 14 of the Model Law which provides the circumstances in which the mandate of an arbitrator fails or becomes impossible to act. In such situation mandate of an arbitrator shall be terminated or simple this section deals with removal of arbitration.

In Kalicharan Sharma Vs State of UP AIR 1985 Del 389, the Court said that, 'if an arbitrator fails to use all reasonable dispatch' in the conduct of the arbitral proceedings, his mandate is liable to be terminated.

Sec 14 (1) lays down that the mandate of an arbitrator shall also be terminated, If he fails to act, without undue delay. This section contains 2 clause :-

(a) when he becomes de jure or de facto unable to act or unable to act without

undue delay, &

(b) when he withdraws from his office or the parties agree to the termination of

his mandate.

Thus, the authority of an arbitrator shall also be terminated, if he himself withdraws from the office or the parties agree to do so.

Sec 14 (2) enumerates if some controversy comes into existence relating to the grounds provided in Sec 14 (1) (a) mandate of the arbitrator shall be terminated, however, a party may apply to the Court for determination of the controversy and the Court shall decide upon the consensual character of arbitration.

Sec 14 (3) seeks to resolve the controversy and departure of an arbitrator respectively, sub sec (3) states that, if the arbitrator withdraws as aforesaid from his office or a party agrees to such termination of the arbitrator's mandate or authority it shall not imply acceptance of the validity of any ground mentioned in Sec 12 (3) & Sec 14 (1).

Illustration. In Mis VK Construction Vs Army Welfare Organisation (1995) 1 Arb LR 184, wherein after entering upon the reference and after giving notice to Mis VK Construction (claimant/applicant) arbitrator resigned. Consequently, the Army Welfare Organisation (respondent) duly appointed another person to act as an arbitrator, however, this appointment if arbitrator was challenged b the applicants. It was held that the appointment of arbitrator by the respondent on account of vacancy created by resignation of the previous arbitrator was as per the provision laid down in Sec 14 of the present Act, 1996. Hence, the appointment/substitution of arbitrator is justified and there is no illegality on the part of respondents in appointing a new arbitrator when previously appointed arbitrator has already resigned.

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SECTION 15 : TERMINATION OF MANDATE & SUBSTITUTION OF

Sec 15 is modelled on Article 15 of the Model Law

Sec 15 (1) provides two more additional grounds for terminated of arbitrator's authority. These grounds are :-

(a) that the arbitrator has withdrawn himself from office for any reasor or

(b) that the parties have consented to each other to terminate arbitrator s

authority

Sec 15 (2) 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.

Sec 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.

Sec 15 (4) provides that despite change In composition of the arbitra' r'bunal proceedings held prior to appointment of another arbitrator shall not be Invalided solely on the ground that the composition of arbitral tribunal has been changed Although, freedom given 0 the parties under sub sec (4) that they may agree that the arbitral tribunal may again commence proceedings from initial stage.

Illustration. In Punjab Stage Vs Pritam Singh AIR 1999 P&H 347, - the Court held that here reference of dispute was made to Superintending Engineer In Public Works Department as sole arbitrator as per arbitration agreement. After his retirement proceedings were taken up by the parties. It is was held that the subsequent order by Court on application under Sec 27 made by the party directing opposite party to produce evidence before original arbitrator and directing original arbi rator to continue With the proceedings, inspite of the fact that he has ceased to act as an arbitrator IS not sustainable.

Thus, it can be concluded that the arbitrator is an independent and impartial person appointed by the disputed parties under arbitration agreement to settle their dispute through an arbitrative to the normal judicial method which is activated by institution of legal proceeding. Therefore, Sec 10 to 15 of the Arbitration and Conciliation Act, 1996 deals with various provisions for appointment, removal, replacement of an arbitrator.

2001 Q. Discuss the scope of judicial intervention under the Arbitration & conciliation Act,

03, 1996.

04,

05,

06,

08

15

INTRODUCTION

The main scope behind the establishment of the Arbitration and Conciliation Act, 1996 is to settle the disputes arising between parties by way of an alternative to the normal judicial method which is activated by instituting legal proceedings in courts therefore and this Act is basically based on the method of alternative dispute resolution the Act of 1996 has converted arbitration into an adjudication by a quasi-judicial tribunal. Thus the role and interference of the courts in the process of arbitration has been minimised.

The Act of 1996 has limited the power of court rather restricted the exercise of judicial power of court rather restricted the exercise of judicial power, In other words It has confined the extent of judicial intervention as under Sec 5 of the Act - "Notwithstanding anything contained in any other law for the time being in force, in matters governed by thrs part, no judicial authority shall intervene except, where so provided in this part" Thus thrs Act has precised 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 Sec 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".

SCOPE OF JUDICIAL INT.ERVENTION

Sec 5 of the Arbitration and conciliation Act, 1996 deals with the provision of 'Extent of judicial intervention'. This Section intends to minimize the judicial interference In the arbitral proceedings. This provision shows the intenti.on of the Legislature that settlement of disputes or differences between the parties should be done in amicable atrnospbere and in speedier and economical manner.

Sec 5 of the Act, 1996 is in pattern of Article 5 of the Model Law. It deals with the role of the courtsin the context of arbitration law provided in Part I. This section would be applied to the matters governed either expressly or impliedly by Part I of the Act. It will not be applied to the matters outside the ambit of Part I. Thus, the judicial authorities are not permitted to exercise their powers except as specified by Part-I, thus the embarrassment to the parties is eliminated and they know what functions are assigned to the judicial authorities.

This section bars the jurisdiction of courts to interfere or to intervene in arbitration proceedings except to the extent provided in Part-I. This part provides for intervention of courts in the following cases :-

1. Section 8
2. Section 9
3. Section 11
4. Section 14(2)-
5. Section 27 making reference in a pending suit.

passing interim orders.

appointment of arbitrators.

terminating mandate of arbitrator.

Court assistance in taking evidence.

16

6.

Section 34

Setting aside an award

7.

Section 37

entertaining appeals aqamst certain orders

8

Section 39(2)-

directing delivery of award

Some of the cases where courts exercised junsdrctron under the repeated Arbitration Act, 1940, and in which the jurisdiction is barred under the present Act 1996 were .-

1. Section 11
2. Section 14
3. Section 15
4. Section 16
5. Section 17
6. Section 19
7. Section 20
order of removal of an arbitrator or umpire.

filing of an award in Court.

modification of award by Court.

power of court to remit an award for reconslderatron

pronouncing judgment in terms of an award

superseding an agreement.

filing of arbitration agreement in court & seeking a'1

reference.

8.

Section 28

enlarging time for making an award.

Thus the object of Sec 5 is to restrict the scope of judicial intervention in the arbitration. Although, it does not over ride the jurisdiction vested in the superior courts constituted under the provision of the constitution of India. The revisional jurisdiction of the High Court under the CPC, 1906 or under any other statute cannot be said to have been superseded under the Arbitration Act, 1940 (Shyam Sundere Agrawal & Co. V Union of India, AIR 1996 SC 1321).

MEANING. The expression 'Judicial authority' in Sec 5 of the Act, 1996 not only means a court but also includes all authorities on whom the judicial power of the state IS conferred. Whereas the expression 'intervene' as occurring in Sec 5 of the Act, covers assistance and control or supervision. Thus 'judicial intervention' means the assistance of the court or all authorities on whom judicial power of the state is conferred when sought for.'

Thus, by incorporation of provisions as to 'extent of judicial intervention' under sec 5 of the new Act, 1996 the judicial intervention in arbitral process is only restricted. The revisional jurisdiction of the High Court has not been taken away because other provisions in Part I provide for court's intervention namely, Sec 8, 9, 14, 27, 34, 37,41 & 43 of the Arbitration & conciliation Act, 1996, although these provision seek to restrict the scope of judicia! intervention in arbitral process. To get rid of the prevail.ing tendency of taking recourse to the court of law as a delaying tactic the new Act 1996 is to be particularly welcomed.

17

It is to be specifically mentioned that Sec 5 of the new Act, 1996 does not, however, affect the jurisdiction including revisional jurtsdic ion of the High Court vested in the High Courts or in the Superior Courts by the constitution of India, 1950

JUDICIAL I TERVENTION IN ARBITRATION PROCEEDINGS EXTENT OF

The Apex court In P.Anand Gajapathr Raju V.P V G Raju AIR 2000 SC "886 - observed that the main function of Sec 5 of the Act, 1996 is to reveal the object of the said Act, 1996 and encourage expeditious and less expensive settlement of resolutron of dispute with minimum interference of the Court.

Sec 5 which is contained in Part-I of the Arbitration & Conciliation Act 1996 defines the extent of judicial intervention in arbitral proceedings It says that notwithstanding anything contained in any other law for the time being in force In ma+ers governed by Part-I no judicial for authority shall intervene except where so provided r tha' part. Sec 5 brings out clearly the object of the new Act, namely that of encourag ng resolution of disputes expeditiously and less expensively & when there IS an arbitration agreement, the court's interventional should be minimal. Keeping the legislative intention in mind, Sec 8 of the new Act, 1996 may be construed. Once the other party "as submitted his statement in defence, his right to bring action will continue but If the party who wants the matter to be referred to arbitration applies to the court after submlss 011 of his statement and no objection is raised, the court may refer the dispute to the arbitratror

Where a party sought a declaration that no dispute existed and therefore, the invocation of the arbitration agreement should be res rained, the court said that intervention of the judicial authority was not available for this purpose. There was nothing in sections 14,34 or 37 to help him. The remedy under Sec 34 of the specific Relief Act 1963 was also not available because the parties had agreed to the alternative procedu-e of settlement by arbitration (United India Insurance Co. Ltd V. Kumar Texturisers AIr 1999 Bam 118).

When arbitration proceedings have commenced, they cannot be stayed by an order of a civil court in a civil suit. There is a total lack of jurisdiction on the part of civil courts with regard to arbitration matters. (Steel Authority of India Ltd V. Ramkrishna ulwantrai AIR 1999 Cal 295) (SBP & Co. V. Patel Engg Ltd (2005) 8 SCC 618).

MINIMISATION OF SUPERVISORY ROLE OF COURTS

The Supreme Court said that the legislative intent is to minimise the supervisory role of the court in the arbitral process and quick nomination or appointment of arbitrator, leaving all contentions issues to be decided in arbitration (Food Corp. of India V. Indian Council of Arbitration (2003) 6 sec 564, AIR 2003 SC 3011) One of the aims is to ettle all the disputes between the parties and to avoid further litigation (Shyama Charan Agarwal & Sons V Union of India, AIR 2002 SC 2659). The provision of the Act ma e it clear that arbitration proceedings are to be conducted by the arbitrator with reasonable dispatch. It follows that after passing of the award the court should also dispose of proceedings expeditiously so that the party, in whose favour the award has been passed, actually gets the benefit of the arbitration clause as cited in Paradeep Anand V. ITC Ltd, AIR 2002 SC 2799.

18

CONCLUSION. In fuerst Day Lawson Ltd V Jindal Exports Ltd, AIR 2001 SC 2293, the Sup erne Court observed that the object of the Act is to provide speedy and alternative solution to the dispute and avoid protraction of litigation. The provisions of the Act have to be interpreted accordingly

Thus one of the main objectives of the Arbitration and conciliation Act, 1996 is 'to minimise the supervisory role of courts in the arbitral process" This objective bas found expression is Sec 5 of the Act which prescribes the extent of the Judicial mterventron s no uncertain terms as stated in Union of India V Popular Construction Co (2001) 8 SCC 470.

LA S RELATI G TO ARBITRATION AGREE~ E T The laws relating to arbitration agreement can be well-apprehended/understood by the following chart penned down below or drawn below :-

ARBITRATION AGREEMENT

means an agreement by the parties to
submit to arbitration all or certain dispute
in respect of a defined legal relationship
Sec 7

I I I
An arbitration Any party has A party may
agreement the power to apply to a court
shall be in refer parties for the
writing to arbitration appointment of
Sec 7 where there a guardian for I
is an a minor or for
arbitration an interim
Sec 8 measure of
protection
Sec9 I 1. AGREEMENT IN WRITING. The first law relating to arbitration agreement IS that it shall be in written form/format. Sec 7 (3) most emphatically prescribes that 'an arbitration agreement shall be in writing'. An oral agreement to submit a ispute to arbitration is not binding. If the agreement is in writing it will bind, even if some of its details are filled in by oral understanding as cited in Banarsi Das V. Cane Commr., AIR 1963 SC1417. It is not necessary that the agreement should be on a formal document, nor it is necessary that the agreement should be signed by both or either party. It is sufficient that the written agreement has been orally accepted by the parties or that one has signed and the other has accepted (Union of India V. Rallia Ram, AIR 1963 SC 1685)_

19

An agreement that the parties may go in for arbitration is not an arbitration agreement.

2. POWER TO REFER TO ARBITRATION WHERE HERE IS AN ARBITRATION AGREEMENT. The Calcutta High Court in Fiat India Pvt Ltd V Rahul Udyog Viruoq Ltd & another, AIR 2004 NOC 99, (Calcutta). Said that the language of Sec 8 beinq preemptory, it is obligatory for the court to refer the parties to arbrtration In terms of their arbitration agreement and nothing to be decided in the original action or the appea arising there form.

The Arbitration & conciliation Act, 1996 is intended to help the parties to settle their differences privately by conciliation or by arbitration & there by to spare themse ves of wasteful and vexations litigation.

Sec 8(1) of the Act, 1996 provides that if any party to an arbitratron Agreement brings before a judicial authority the matter covered by the agreement, the other party may applied for stay of the suit & for order of reference to arbitration Sec 8 IS In mandatory form. The question whether the dispute in question is arbitrable or not has to be decided by the court. It has also to decide whether the dispute brought before possessive it IS the subject matter of the arbitration agreement in satisfying itself whether the dispute IS arbitral or not the court has to go into the aspect of validity existence etc of the agreement. Under the earlier Act of 1940, the application for stay had to be made before filing the wntten statement or before taking any other step in the proceeding Under the new Act of 1996 the application for stay has to be made before submitting the 1 st statement on the substance of the dispute. If the application is not so made the suit will remain Intact

The Supreme Court P.Anand Gajapathi Rajiu V. P V.G. Raju, (2004) 4 SCC 539 - Stated 4 conditions which are required to be satisfied under sub-sections (1) & (2) of Sec 8 of the Act, 1996 before the court can exercise its powers, are :-

(i) there is an arbitration agreement.

(i) a party to the agreement brings an action in the court against the other party.

(iii) subject-matter of the action is the same as the subject-matter of the

arbitration agreement.

(iv) The other party moves the court for referring the parties to arbitration before

it submits its first statement on the substance of the dispute.

The SC has emphasised that if during the pendency of the proceedings in the court, the parties have entered into an arbitration agreement, then they have to proceed with the matter in accordance with the provisions of the 1996 Act.

3. INTERIM MEASURES ETC GIVEN BY THE COURT. Sec 9 of the Act, 1996 empowers discretionary power to the courts to grant interim measures. Thus a party may before or during arbitral proceeding or at any time after the making of the arbitral award but before it is enforced in accordance with Sec 36 apply to a court :-

20

(i) for the appointment of a 9'uardian for a minor or person of unsound mind for

the arbit al proceedinqs.

(ii) to obtain custody, preservation and sale of any 9'oods provided such goods

is the subject-matter of an arbitration aqreernent.

(ii) to cause recovery of the amount as a result of an arbitral award

(iv) to detain, preserve and inspect any property or thing which IS subject-matter

of an arbitration a9'f ement.

(v) to obtain interim injunction.

(i) to appoint a reveiver.

In B.C. Dagara V.M.K.D. Mineral & Export (P) Ltd, AIR 2007 (NOC) 525 /Or), - Where the contract for purchase of iron are between the appellant and the respondent; whereas respondent alleged to have committed breach of contract and the appellant calling upon the respondent to clear dues. Interim order passed by the court below restraining the appellant from terminating the contract & selling ron are from mines to third party. It was held that If the respondent IS not protected ,t shall bring irreparable loss to it At the same time, allowing interim order to continue will bring loss to the appellant who was admittedly owner of mines As appellant had agreed not to sell any iron are to an other party, impugned interim order is not proper.

Dictionary meaning = Le ical meaning

2001

2003 Q. What do your mean by 'Alternative

advantages and efficacy of ADR system. 15+5=20

Dispute Resolution" (ADR)? Discuss the (6+10==16,

2002 Q. What do you mean by 'Dispute Resolution Mechanism'? What does it constitute?

2006 Explain briefly each one of such mechanism'.

Dispute Resolution Mechanism consists of

(a) resolution through Courts (Litigation) &

(b) resolution alternative to courts (ADR).

How do you distinguish between the two mechanism? Discu s the ad antages & disadvantages of both the mechanisms.

MEANING. Dispute Means 'a conflict or controversy; Resolution stands for the act of resolving and Mechanism speaks about 'the way in which something works or is brought about'.

Therefore summary meaning of the terminology "Dispute Resolution Mechanism" is 'the way in which a conflict or controversy is resolved'.

21

Human conflicts are inevitable and therefore Disputes are also equally inevitable. It is therefore difficult to imagine a human society without conflicts of interests Therefore, to resolve the conflict of interests two methods have been adopted as dispute resolution mechanisms -

(i) resolution through court (litigation).

(ii) resolution alternative to courts (ADR)

For resolution of disputes there are mainly two alternatives/mechanisms one IS through court and one being alternative to courts. Therefore for resolution of disputes there is a legal system is every human society. Every injured person is supposed to go to courts to seek 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 hands. And as such courts. Have become overcrowded with litigants and as a result the litigants have to face so much loss of time & money That at long last when a relief is obtained, it may not be worth the cost.

Hence, thereafter began the search/hunt for alternatives to the conventional court system. A large number of quasi-Judicial and administrative tribunals have been created for quicker relief's & all these tribunals & forums are in a wayan alternative method of dispute redressal.

Mechanism - the way in which something works or is brought above.

(A) RESOLUTION THROUGH COURTS

In every human society there exist a legal system to resolve any disputes that might arise between parties. Generally, 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 hands. In simple language it can state that when the parties got remedies seeking through the path of courts of law can be called as Resolution through courts i.e. litigation. Thus the expression 'litigation means a legal action including all proceedings therein, initiated in a court of law with the purpose of enforcing a right of seeking a remedy. In the case of resolution through court parties shall have or bound to follow all the procedure as mentioned under the law for the time being in force. Different countries have different laws and as such every dwellers of a particular country has to follow the basis law of the land of that particular country of which he is an inhabitant. As a general norm if any person is aggrieved or his rights have been violated/infringed he as a rule will seek redressal through courts of law. And as a result courts have become over crowed with litigation. According to an official report of the year 2000, there is a pendency of over two crore case in our District Courts. Normally, 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 as cited in Vishnu Nagnath Deshmukh's case in 1986, - in this case V.N. Deshmukh was then an employee at the Tehsildar's office in Solapur, was charged under Anti-Corruption Act for accepting bribe. The trial court sentenced him six months in prison. 14 yrs after the incident, Deshmukh was let off by the Supreme Court but not before he had served four months in jail.

22

This case provides an insight into the functioning of the criminal justice system. It IS now official that the country's subordinate courts are gasping. for breath under a 2.4 crore case backlog Thus the factors for accumu atron of cases are :-

(i) Archaic laws.

(ii) lack of facilities in lower courts.

(iii) insufficient number of courts & judges

(iv) delay in police investigations

(v) unnecessary arrests & lack of coordination between the prosecutions

(vi) investigating agencies &

(vii) the courts

And, therefore existing all these anarchy In the legal system, injured persons a~e switching on to alternative method of redressal. Hence the search for alternatives to the conventional court system has already began. Resolution through court caused delay a"d hardship to litigant and therefore now the most convincing method solving their prob em s seeking the path of ADR as the legal system did not give any response to t1-]8 'lew atmosphere & problems of the commercial world.

ADR - another possibility for resolving conflict.

Alternative - available as another possibility.

ADR - The act of resolving a conflict in another a valuable possibility.

(8) ALTERNATIME D'ISPUTE RESOLUTION (ADR)

Alternative Dispute Resolution is a modern concept which has been developed to settle dispute amicably and speedily speofically relating to commercial transaction I contract. 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 is not worthy that due to various reasons the regular litigation has become

--

on account of lethargic, inadequately equipped judicial system. However, reasons that,

why ADR is needed could be summarized as follows :-

(i) Amicable settlementofdisputes. ADR provides a friendly settlement of disputes. The main object behind the establishment of ADR is amicable setflement of disputes. Thus ADR also stands for 'Appropriate Dispute Resolution' or 'Amicable Dispute Resolution

23

(ii) Speedy disposal of dispute. ADR provides speedy disposal of dispute as there is no much scope of adjournment, stay or lengthy session of arguments etc.

(iii) Economical settlement of dispute. In order to avoid expenses & court

fees ADR delivers economical settlement of dispute.

(iv) A time saving management. ADR is a time saving device wherein dispute is being settled without following the regular process of court the cumbersome procedure of ordinary litigation.

(v) Legal recogn.ition. ADR system has got recognition in the India Statutes.

(vi) Globalisation of commercial activities. Dispute ansmq out of international commercial transactions needed to be settled by negotiation, conciliation & mediation etc. in which ADR plays the vital role.

(vii) Advent of multinational corporation. With the advent of multinational corporations, the disputes arising should be solved amicably and speedily which can be best done by ADR.

(viii) Industrialisation. No doubt that in recent past we have witnessed a great magnitude of industralisation 'across the globe and India is not an exception to it. Thus, the reasons for adoption of ADR cannot be postponed indefinitely.

However, in a broad perspective ADR is not only confined to settlement of commercial dispute, even civil and criminal matter are settled by instrument of Lok Adalat, Nyaya Panchayats and Panchayats in India.

METHODS OF ADR

Alternative Dispute Resolution (ADR) has several methods. However, the principle of natural justice is required to be followed while adopting any method under ADR. A negotiator or mediator may follow more than one method depending upon nature of dispute & strategies. Although, the method, of ADR are as under :-

(I) Arb itration.
(ii) Negotiation.
(iii) Mediation.
(iv) Conciliation.
(v) Mini trial.
(vi) Expert Appraisal.
(vii) Neutral evaluation.
(viii) Hybrid arbitration. 24

(i) ARBITRATION. An arbitration means the submission by two or more parties of their dispute to the judgment of a third person, called the 'arbitrator' and who is to decide the controversy in a judicial manner.

(ii) NEGOTIATION. Negotiation is a process of submission and consideration of offers until acceptable offer is made & accepted. Thus, it is a method of settlement of dispute with or without the assistance of a third person.

(iii) MEDIATION. Itis a method to achieve a conciliated solution of dispute

(iv) CONCILIATION. The settlement or attempt to settle a dispute by the proposal of measures acceptable to the disputants is known as conciliation. It is a process recognized under the law which is to be achieved by a conciliator.

(v) MINI TRIAL. It is a method when conflicting parties approach the senior

executives to adjudicate the dispute.

(vi) EXPERT APPiRAISAL. Under this method an expert of relevant field IS

appointed to investigate & furnish non-binding opinion.

(vii) NEUTRAL EVALUATION. It is a non-binding evaluation carried out In a

reasoned manner.

(viii) HYBRID ARBITRATION. This method IS an appropriate combination of conciliation & mediation.

Thus, from the above mentioned methods, it is made clear that goal and nature of dispute decides the type of process to be followed. It means that the disputing parties have first to admit their requirements and thereafter choose the appropriate Alternative Dispute Resolution method.

CONSTITUTIONAL BACKGROUND OF ADR

"It is settled law that free legal aid to the indigent persons who cannot defend themselves in a court of law is a constitutional mandate under Article 39-A & 21 of the Indian Constitution. The right to life is guaranteed by Art 21". The law has to help the poor who do not have means i.e .. economic means, to fight their causes.

W.ith the dawn of industrialization, man walking into society, State & Nation, dependence on law for orderly conduct gained momentum and then came on the horizon the social dispute resolution mechanism. Withlndi.an Courts piling up with millennium cases, the quick and cheap system came into existence in the form of alternative dispute system/resolution.

The constitutional mandate rescue operation began with Justice V.R Krishna lyer & Justice P.N. Bhagawati's committees report weaker section thus became enabled to approach law courts, right from Munsif Court to the SC CILAS (Comm. For the implementation of Legal Aid Services) also came on to the scene & initiated methods of solving civil disputes in non-legal for a & non-formal for a and based on this, state adopted

25

(through State Legal Aid & Advice Board) lok Adalats & legal Aid camps, Family Courts, Village Courts, Mediation Centre, Commercial Arbitration, Women Centres, Consumer Protection Forum etc. Which are but various facets of effective ADR system.

The soul of good Govt, is justice to people. OUf constitution, therefore, highlights triple aspects of Economic Justice, Political Justice and Social Justice This requires the creation of an ultra-modern disseminating infrastructure & manpower, sympathetic & planned; need for new judicare technology & models; and remedy oriented jurisprudence.

ADVANTAGES/MERITS & EFFICACY OF ADR

(i) ADR process can be initiated at any time, whenever disputing party takes

recourse to ADR.

(i) It can provide more expeditious & less expensive settlement of dispute

(ii) It promotes conducive & amicable mechanism.

(iii) ADR programmes are not rigid.

(v) No lawyer's assistance is mandatory, it doews not meant that role of lawyer is diminished.

(ii) ADR concept reduces the work load of the regular courts of law.

(iii) ADR helps in confining dispute as a private matter.

(viii) ADR can be used to reduce the gravity of contentions issues between the parties.

(iv) Speedy disposal of cases.

DEMERITS OF ADR

Every system consists of merits and demerits and ADR system is not an exception to this rule. In other words particular ADR method may not suit the requirement of the parties. In over all ADR has the following demerits :-

(i) Unfamiliarity of process is a factor causing obstruction in ADR.

(ii) In case of unequal position of the parties, the weaker party may not be willing to submit in ADR process, may prefer court's protection.

(iii) Investment of time & energy in ADR.

(iv) lack of binding effect of solution arrived after exercise of ADR process.

(v) Disputes relating to right of parties & title could not be decided by means of ADR because in such matter the decision arrived after ADR process lacks enforcement.

26

(vi) Practically ADR process is slow as before initiation of said process consent

of the party concerned is to be obtained.

(Interior's India V. MIS Balmer Lawrie & Co Ltd & another AIR 2007 Del 16)

DIFFERENCE BETWEEN ADJUDICATION & ADR PROCESS

ADJUDICATION

1. Adjudication means an act of judgment; authoritative decision.

2. While adjudication looks to past r.e.

factual aspect of dispute.

3. Rel.ationship between parties not

focused.

4. It seeks up to set up liability or fault.

5. It results in laying down general rule.

6. Important role assigned to advocate

appearing on behalf of the party.

ADR PROCESS

1. ADR process is an alternative to the process of adjudication.

2. Whereas this process looks to future

3. ADR process focuses on

relationships between the parties.

4. It seeks to reform the relationship

5.

Where it results in custom based

solution.

6. Whereas in ADR process clients play the role.

ADDITIONAL ADVANTAGE OF THE ALTERNATIVE MEANS OF DISPUTE REDRESSAL

Besides all the efficiencies mentioned above there are a few additional advantage of the Alternative means of Dispute Redressal which are described below :-

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 & speedily. Disputes can be maintained as the personal subject-matter. Sometimes disputes are resolved within one or two days time because the procedure adopted by the mediator is controlled & consented by the parties. Thus, real solution of the dispute can be arrived at by the system of alternative means of dispute redressal.

3. This system can be followed without seeking legal assistance from the

advocates-I awyers.

4. This system effectively reduces the workload of the court.

5. Finally, this system provides flexible procedure as strict procedure of law is

not applicable to alternative means of dispute resolution.

27

ARBITRATION

Sec 1

- Short, title, extent & commencement.

Part - I

- Arbitration

Sec 2

- 6 - General Provisions

Sec7

- 9 - Arbitration Agreement

Sec 10

- 15 - Composition of Arbitration Tribunal

Sec 16

- 17 - Jurisdiction of Arbitration

Sec 18

- 27 - Conduct of Arbitration proceeding

Sec 28

- 33 - Making of arbitration award & termination of proceedings

Sec 34

- Recourse against Arbitration Award

Sec 35-36

- Finality & Enforcement

Sec 37

- Appeal

Sec 38-43

- Miscellaneous

Administration of Criminal Justice

Administration of justice, which includes administration of criminal justice,is a necessary ingredient of any civilised govt. The question what is the end of criminal justice leads one to the question what is the purpose of punishment. A number of theories have been propounded to answer the question out of which the following five have been given

more prominence :.-
1. Retributive Theory.
2. Expletory Theory.
3. Deterrent Theory.
4. Preventive Theory.
5 Reformative - Theory. Article 47 - Duty of the state to raise the level of nutrition & the standard of living and to improve public health.

Probation. The release of an offender from prison, subject to a period of good behaviour under supervision.

28

Q. Write in detail the powers & constitution of various Boards, Institution & other

Authorities for Juveniles.

2005 Q.

Elucidate the powers of Board to pass order regarding Juveniles after an

inquiry.

2007 Q. The probation of offender's Act is an welfare measure to reduce criminality Discuss the impact of probation law in that respect.

Q. Explain in detail the provision of the Juvenile Justice Act (as amerded) Can

you give your opinion on the working of Juvenile home & Boards?

(10+10=20)

Q. Explain the social and legal status of a child as protected under the Juvenile

Justice Act (amended up-to-date).

Article 15(3). Nothing in this article shall prevent the state from making any special

(Right to Equality) provision for women and children.

Article 39(e). That the health and strength of workers men & women & the tender age of children are not abused & that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength.

Article 39(f). That children are given opportunities & facilities to develop in a healthy manner & in conditions of freedom & dignity & the childhood & youth are protected against exploitation & against moral & material abandonment.

Article 45. Provisions for early childhood care & education to children below the age of 6 years - The state shall endeavour to provide early children care & education for all children until they complete the age of 6 years.

Pa role. The temporary or permanent release of a prisoner before the end of a

sentence, on the promise of good behaviour.

JUVENILE JUSTICE ACT &. PROBATION OF OFFENDERS ACT

O. Explain in detail the nature, scope and utility of Juvenile Justice Act

20010. Elaborately discuss the origin, development and implications of probation of

offender is Act.

Q.

(a)

What do you mean by probation of offenders.

(b) Enumerate & illustrate the provisions of Cr.P.C. in relation to probation of

offenders.

2002 Q. Write in detail the powers and procedure of competent authority & institutions for juveniles under Juvenile Justice Act, 1960.

29

Q. Analyse, how far probation of offender's Act wou'ld help in reformation of criminals

& expedition disposal of cases.

2006 Q. Discuss in detail s and principles decided In - Md Ahmad Khan V. Shah Bano

Begum AIR 1985 S.C. 945 ..

2003 Q. Write in detail the powers of vanous courts dealing with proceedings against

del.inquent Juveniles.

2005 Q.

Case law - Raj Kapoor V. State of Delhi AIR 1980 SC 255.

2005 Q. Analyse the historical development, object & purpose of Juvenile Justice in India

with reference to existing Juvenile Justice Act.

2004 Q. What is probation? What are the objects and reasons for enactment of probation

laws? Write down the difference between probation & pa role.

2007 Q.

Case law: 'People Union for Human Right V.U.O.I (1992) 2GLR 1.

Q. Discuss as to how young women offenders are to be treated at the time of arrest, in

custody & detention.

SHORT NOTES ON C.P.C

1. Constructive Res-Judicata

2. Interlocutory Orders

3. Umpire

4. Pauper suit

5. Foreign Judgment

6. Public nuisance

7. Affidavits

8. Guardian ad-litem

9. Mesne profit

10. Remittance of award

11. Appointment of receive

12. Admissions

30

13. Injunction
14. Reference and Review
15. Admissions and confession
16. Injunction and attachment
17. Preemption suits
18. Representative suit
19. Factoprobanda & Facta probantia
20. Remittance of award Distinction

1. Injunction and attachment

2. Reference and review

3. Preliminary decree and final decree

4. Misjoinder and non joinder

5. Review and Revision

6. Set-off and counter-claim

7. Res-judicata and res-subjudice

8. Pauper suit and interpleader suit

9. Next friend and guardian-ad-litem

1 O. Appeal and Revision

11. Second Appeal and Revision

12. Error of law and facts

13. Decree and order

14. Res judicata and estoppel

2001 Q. What is arbitration? What constitutes an arbitration agreement? Discuss the law

-- relating to arbitration agreement.

(4+4+8=16)

W02 Q.

2005 Q.

~006

Q.

!008

007 Q.

~005

31

Define arbitration agreement. Define the law relating to arbitration agreement.

Distinguish between an Arbitration & Arbitration Agreement (10)

What is arbitration? What constitutes an arbitration agreement? (10)

(a) (b)

Define an Arbitration Agreement. What are its characteristics?

How does an arbitration clause differ from the other clauses In the contract? (10+10)

2002 Q. Discuss the grounds for setting aside an arbitral award Are procedural Infirmity or

irregularity in the award relevant in setting aside an arbitral award? Refer the relevant provision of law.

2004 Q. What are the grounds for setting aside an arbitral award? Discuss bnefly the

procedural infirmity or irregularity in the Award.

(10+10::::20)

2005 Q.

TO

(a) What are the previsions of Judicial intervention under the Arbitration &

Concln Act, 1996?

(a) State the grounds for setting aside an award.

THE DIRECTOR OF HEALTH SERVICES, ASSAM

For the post of QURVEILLANCE WORKER (S.W)

DepartmenVoffice Joint Director of Health Service (Technical, SHTO)

1.

AKHTARA SULTANA AHMED.

2.

H/NO. - 14, JURI-PATH, CHRISTIAN BASTI, GUWAHATI-5, DISPUR, KAMRUP, ASSAM

MEHER ALI AHMED, DO

3.

4.

GUWAHAT1, DISPUR, KAMRUP YES.

5.

6.

HS (SWADESHI ACADEMY), B.Sc. (B.BAROOAH COLLEGE), B.Borooah Road.

32

7. Computer
8. A. ISLAMIC
B.
9. 1/11109 23 years
10. No.
11. No.
12. o.
13. No.
14. No.
15. No.
16. No.
1 Guwahati. Multi purposes workers (Male)

Moot Court

1. Plantiff

Memorial

2. Opposite Plaint

Counter memorial

CrPC. Plaintiff

Clamant

Defendant

Accused

Decree.

related with right.

Judgment. Summary of all the points.

Appeal. Can be done when the court permits it which is then follow by review if

appeal. is not been permitted then it will be followed by revision.

Adjourn

to put of to other date.

Adjudicatates -

to determine judicially.

2009

1980

33

01

01

02

10

-------------------~-------------------

10

21

28

----------------------~----------------

- A conflict or controversy

_ Declaration, the resolving of a problem or a dispute,. a firm de,cision, a

formal expression of opinion or intention by a law making body.

Mechanism - the way in which something work or brought about.

Dispute

Resolution

Dispute

Resolution

Mecha

LABOUR LAWS

1. Minimum wages Act, 1948

Fixation of Minimum wages. Part I or Part II or the Schedule

1. a minimum rate of wages for time work.

2. a minimum rate of wages for piece work

3. a minimum rate of remuneration on time or place

4. a minimum rate to apply in respect of overtime works done by employees.

Minimum rate of wages.

Procedure for fixing & revising minimum wage. Advisory Board.

Central Advisory Board. Composition of committees.

Corrections of error clerical & arithmetical Wages in kind.

Payment of min rate of wages

Fixing hours of normal working day etc Overtime.

Wages of worker who works less than normal working day

Sec 3 :

Sec 4:

Sec 5 :

Sec 7 :

Sec 8 :

Sec 9:

Sec 10 :

Sec 11 :

Sec 12 :

Sec 13 :

Sec 14:

Sec 15 :

Sec 16 :

Sec 17 :

Sec 18:

Sec 19 :

Sec 20 :

Sec 21 :

Sec 22:

34

Wages for two or more classes of worker. Minimum time-rate wages of _~ __ Maintenance of Registers & records. Inspectors - Power of inspect

Claims

Single application in respect of a no of employees. Penalties - imprisonment for 6 months fine Rs 500 or both.

Theories Wages

1. Deduction theory

2. Subsistence Theory

3. Cost of production theory

4. The wage fund doctrine

5. Theory of Marginal Productivity

6. Determinants theory

Wages - 2(h)

Workmen's Compensation Act, 1923

Dependant

Partial Disablement - Total Disablement -

2(1 )(d) 2(1 )(g) 2(1 )(c)

Sec 3.:

Employer's liability for compensation.

Employer's liability in case of occupational disease (Schedule III) Part A, B & C.

Sec 4. Amount of compensation

1. Injury resulting in death

2. Injury resulting in permanent total disease

3. Injury resulting in permanent partial disease

4. Injury resulting in temporary partial disease

% of monthly in X _

1.

40% Rs 20,000 50% Rs 50,000 Rs 80,000

1984 1995 2000

35

Second column of Schedule IV.

2.

50% Rs 24,000 60% Rs 60,000 Rs 90,000

1984 1995 2000

3. art II of Schedule I

% of the loss of earning capacity caused by that Injury

4. Half monthly payment of the sum equivalent to 20% of monthly wages of the

workman in accordance with the provisions of Sub 12 of Sec 4

Sec 4 A.

Compensation to be paid when due and penalty for default.

Sec 5.

Method of calculating wages.

Sec 6.

Review,

Sec 8.

Distribution of compensation.

Sec 10.

Notice and claims of the accident.

Sec 19.

Reference to Commissioner.

Industrial Disputes Act 1947

Sec 2 (OO). Retrenchment means termination by the employer of the service of the workman for any reason whatsoever otherwise as a punishment inflicted by way of disciplinary action.

Retrench

cutting down or off.

Authorities of Industries Disputes Act

Main object :-

investigation and settlement of industrial disputes.

Various Mode of Disputes

.: co.nciliation ~ Adjudication

Arbitration 1. 2. 3.

Works Committee Conciliation Officer Boards of Conciliation

Conciliation

Adjudicating Authorities

1. 2. 3.

Labour Court Industrial Tribunal National Tribunal

36

Sec 10~A. of the Act makes provision for voluntary reference of disputes to arbitration.

Sec 3 : Works Committee

Sec 4 : Conciliation Officer (Mediation).

Sec 12. Duties of Conciliation Officer, Procedures and Powers of Conciliation Officer.

Sec 5. Boards of conciliation (Judicial capacity)

Duties - Sec B.

Sec 6.

Courts of Inquiry.

Sec 7.

Labour Court Consist of 1 person - Presiding Officer

Sec 7 A.

Industrial Tribunal.

Sec 7 B.

National Tribunal.

Penalties for Illegal Strikes and Lockouts (Sec 26-29)

26 (1) Strikes 1 month 26 (2) Lockouts 1 month Rs 1000.

Rs 50.

Sec 27.

Instigating :6 months - Rs 1000.

Sec 28.

Penalty for giving financial aid to illegal stike & lockouts

6 months Rs 1000.

Sec 29.

Penalty for breach of settlement or award 6 months or Rs 2000 for everyday.

Definitions

Sec 2 (j) : Industry

Industry means any business trade, undertaking. manufacture or calling of employer and includes calling, service, employment, handicraft, industrial occupation and avocation of workmen.

Amended Definition

Industry means on systematic activity carried on workmen for the production, supply and distribution of goods or services with a view to satisfy human wants.

37

Sec 2 (K) : Industrial Dispute

Sec 2 (KKK) layout

Putting aside workmen temporarily

Sec 2 (il : Lock-out

Means closing of a place of employment or suspension of work or the refusal by an employer to continue to employ any number of persons employed by him.

Sec 2 (n) Public Utility Service

Sec 2 (9) : Strike

~General Strike

Strike ~ Stay in Strike

GO-Slow

Trade Dispute: Sec 2 (g) Trade Union Sec2(h)

Any combination whether temporary or permanent, should have been formed for the purpose of.

Dependant Sec 2 (i) (d)

Partial Disablement Sec 2 (i) (g)

Total Disablement Sec 2 (i) (I)

Minimum Wages Act

Cost of living index number (2 (d)

2 (e) employer 2 (i) employee

2 (h) Wages

Factories Act, 1948

2 (m) Factory

Stages

Investigation by Police

Enquiry by Magistrate

Trial by Criminal Court

38

Henry VII( Clause

1. Power to legislate on matters of principle.

2. Power to amend Acts of Parliament.

3. Power giving such a wide discretion that it is almost impossible to know It limits.

4. Power to make rules which can't be challenged in a Court of law

Ultra Vires - unauthorised or beyond the scope of power allowed or granted by law.

When a subordinate legislation gies beyond what the delegated has authorised to enact and if it crosses the permissible limit is called Ultra Vires

If a dispute arises between parties bound by arbitration agreement, the person or persons (who being) appointed to (in dependent and impartial) decide the disputed question according to law agreed by the parties is an arbitrator provided he must be an independent and impartial person with required qualification by the parties in the arbitration sys.

1. to check obuse of adm power.

2. to ensure the citizens an impartial determination of their disputes by officials.

3. to protect them from unauthorised encroachment of their rights and interest.

4. to make those who exercise public power accountable to the people.

Adm law is the bye-product of the growing socio-economic functions of the state and the increased powers of Govt.

1834-1939,

~

1939-1947

~

Public safety Public Health Public Morality Transport Labour

Economic Regulation

Fundamental Rules of procedure for adm Hegdry

Socialisation of law

Socio-economic philosophy of the court Socio-economic logistic

Socialistic pattern of _

Fundamental Right

Nemo judex in causa suh Audi Alteram Partem

Speaking orders or Reasoned Decision

~,

.t. -

-:,"'. -

l.'~ ,L

.

... 1:·

.. "C' '>. I

• I

, I .