DISPUTE RESOLUTION

Approaches to Dispute
Resolution

There are two approaches

to Dispute Resolution,
viz.,
Proactive, and
Reactive

Proactive Approach involves:

1. Proper Documentation
o For Proper Documentation, one
should ensure that:

Customized Exclusion clauses are

properly drawn up.
Reference of ADR mechanism
should be inserted as a prominent
clause.
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Remember, resolution of
disputes through Courts is
not only expensive but time
consuming also. In fact, in a
large number of cases,
parties ultimately agree to
make a compromise.
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2.

Insertion of Arbitration Clause

As per the Arbitration and

Conciliation Act, 1996, no separate
agreement is required; a clause to
the effect that in case of dispute,
matter shall be referred to
Arbitration is sufficient.

NOTE: As per Section 5 of the

Arbitration and Conciliation Act,
1996, provisions of the
Arbitration and Conciliation Act,
1996 are overriding.
In case of reference to
Arbitration in the contract, no
party is allowed to move the
Court. Matter must be referred
to Arbitrator(s).

Reactive Approach

Documentation/Contract does not stipulate

reference to Arbitration
Matter may be resolved through
Conciliation or Mediation
consent of both the parties shall be
required
However, Sec. 89 of the Arbitration and
Conciliation Act, 1996 permits the Court to
refer a dispute for conciliation even where
parties do not consent
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Settlement of Disputes through

Arbitration
Reference to be made to Arbitral
Tribunal
May be a sole Arbitrator or a panel of
arbitrators
As per Section 7, Arbitration
agreement must be in writing and
may be in the form of an arbitration
clause in a contract or in the form of
a separate agreement
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An arbitration agreement is in writing if it is

contained in

(a) a document signed by the parties;

(b) an exchange of letters, telex, telegrams 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
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denied by the other.

Arbitration where application is filed

in the Court

As per Section 8,
notwithstanding that an
application has been
made to a judicial
authority, and that the
issue is pending before it,
arbitration may be
commenced or continued

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Composition of Arbitral Tribunal (Section 10)

Number of Arbitrators:
Parties are free to determine
However, the number should not
be an even number.
Where the parties do not fix any
number, reference shall be to a sole
Arbitrator

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Appointment of Arbitrators
A person of any nationality may be an
arbitrator, unless otherwise agreed by
the parties.
In arbitration with three arbitrators,
each party shall appoint one arbitrator,
and the two appointed arbitrators, shall
appoint the third arbitrator who shall act
as the presiding arbitrator. Contd
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Where parties fail to appoint the

sole arbitrator or the two
arbitrators fail to appoint the
Presiding Arbitrator within a
period of 30 days, the
appointment shall be made upon
request of a party, by the chief
justice or any person or
institution designated by him.
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 In case of an international
commercial arbitration, the Chief
Justice of India or the person or
institution designated by him may
appoint an arbitrator of a
nationality other than the
nationalities of the parties where
the parties belong to different
nationalities
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International Commercial
Arbitration
In case of international commercial
arbitration, Arbitration may take place
in a country other than the countries
of the contracting parties.
To be executed by the authorities of
that Country as per its laws
In India, institutional Arbitration is
conducted by Indian Council of
Arbitrators, FICCI, ASSOCHAM, etc

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International Commercial
Arbitration..Contd
New York and Geneva
Conventions to which India was a
party were adopted by UN
Commission on International
Trade Law, 1985 and the same
has been codified in Arbitration
and Conciliation Act, 1996.

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Conduct of Arbitral Proceedings

The parties shall be, treated with equality and

each party shall be given a full opportunity to
present his case.
The Arbitral Tribunal shall NOT be bound by
the Code of Civil Procedure, 1908.
Instead Parties are free to agree on the
procedure to be followed.
In case the Parties fail to agree on the
procedure, Arbitral Tribunal may conduct the
proceedings in the manner it considers
appropriate.
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Place of Arbitration

Parties free to decide

If Parties Fail- To be determined by
the Arbitral Tribunal.
The Tribunal will have due regard:
oTo the circumstances of the
case, and
o The convenience of the parties.
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Language of the
Proceedings
Parties free to decide
If Parties Fail- To be
determined by the Arbitral
Tribunal

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Statements of Claim and

Defence
To be submitted Within the period of
time agreed upon by the parties
If the claimant fails to communicate
his statement of claim within the
agreed time, the Arbitral Tribunal shall
terminate the proceedings.
Failure on the part of the respondent
shall not amount to the party having
agreed to allegations/claim.
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Appointment of an Expert by
Arbitral Tribunal
Unless otherwise agreed by the
parties, the arbitral tribunal may
Appoint one or more expert to report to it on
specific issues to be determined by the
arbitral tribunal, and
Require a party to give the Expert any
relevant information,
Ask the Expert to be present during oral
hearings to clarify matters.

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Settlement
With the agreement of the parties,
The Tribunal may use conciliation or
Mediation or other procedures to
encourage settlement.
In case, parties arrive at a
settlement, the Tribunal will
terminate the proceedings.

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Form and Contents of Arbitral Award

An arbitral award shall:
Be made in writing
Signed by all the members of the
arbitral tribunal or majority of them (with
reasons for omission of signatures).
Shall state the reasons upon which it is
based.
Shall state the date and place of
arbitration.
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Correction and Interpretation of

Award; Additional Award
Within 30 days of the Award, a party, with
a notice to the other party, may request
the Arbitral Tribunal to correct any clerical
or computational errors.
Likewise, if so agreed by the parties, a
party, with notice to the other party, may
request the arbitral tribunal to give an
interpretation of a specific point or part of
the award.
Again, a party with notice to the other
party may request, within thirty days from
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the receipt of the arbitral award, the

Additional AwardContd..
If considered justified, the Arbitral
Tribunal will make the additional
award within a period of 60 days.

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Setting Aside an Arbitral Award

Application to the Court , within a period
of 3 months,
only on the following grounds:
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid
under the law ; or
(iii)the party making the application was not
given proper notice of the appointment of
an arbitrator or of the arbitral proceedings or
was otherwise unable to present his case; or
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Setting Aside an Arbitral

AwardContd..
(iv) the arbitral award deals with a dispute not
contemplated by or not falling within the terms
of the submission to arbitration, or it contains
decisions on matters beyond the scope of the
submission to arbitration: Provided that, if the
decisions on matters submitted to arbitration can be
separated from those not so submitted, only that part
of the arbitral award which contains decisions on
matters not submitted to arbitration may be set
aside; or
(v) the composition of the arbitral tribunal or
the arbitral procedure was not in accordance
with the agreement of the parties.
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Setting Aside an Arbitral

AwardContd..
Again, the Court will set aside the
Award if the Court finds that
the subject-matter of the dispute is
not capable of settlement by
arbitration under the law for the time
being in force.
the arbitral award is in conflict with
the public policy of India.
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Which disputes can be referred to

Arbitration

All matters of civil nature whether

they relate to present or future
disputes may form the subject
matter of reference. Even
disputes such as infringement of
intellectual property rights shall
also be covered.
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Which disputes cannot be referred

to Arbitration
Insolvency proceedings.
- Lunacy proceedings.
- Proceedings for appointment of a
guardian to a minor.
- Question of genuineness or otherwise
of a will or matters relating to issue of a
probate.
- Matters of criminal nature.
- Matters concerning public charitable
trusts.
- Disputes arising from and founded on
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an illegal contract.

Finality of Arbitral Awards and its Enforcement:

Subject to the aforesaid, an arbitral

award shall be final and binding on
the parties and persons claiming
under them respectively.
Enforcement
As per Section 36, an Arbitral
award shall be enforceable in the
same manner as if it were a
decree of the Court.

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Conciliation and Mediation

Conciliation
Conciliation is a process prescribed under
Arbitration and Conciliation Act, 1996. Conciliation
can be resorted to where no arbitration
agreement/clause is provided for. Even the Court,
may on its own or on a representation by the
parties refer the matter to a conciliator/(s).
Provisions relating to conciliation are essentially
the same as discussed above regarding
Arbitration.
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Mediation
Mediation is negotiation carried out
with the assistance of a third party.
The mediator, in contrast to the
arbitrator or judge, has no power to
impose an outcome on disputing
parties.

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