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PREFACE
Trade and Commerce, either domestic or foreign, are generally
susceptible to litigation or dispute. Resolution ofdispute is an essential
element ofprosperity of trade and commerce. Litigation in Judicial
Dispute Resolution has become so time-consuming and expensive and
both the parties are incurring losses and getting inconvenience. ' This
necessiatedsearchingfor the Alternative Dispute Resolution and results
in finding arbitration and conciliation.
At international level, the UNCITRAL prepared the Model Law
of Arbitration, Arbitration Rules and Conciliation Rules. Basing on
them India .enacted the Arbitration and Conciliation Act, 1996. To bring
this Act uptodate, the Government ofIndia introduced the Arbitration
and Conciliation (Amendment) Bill, 2001.
This text contains the Alternative Dispute Resolution Systems such
as negotiation, conciliation, arbitration, Lok Adalats, Family Courts,
Lok Pal and Lokayukta, Tribunals etc. The Arbitration and Conciliation
Act, 1996 with the proposed amendments of Arbitration and
Conciliation Amendment Bill, 2001 has been presented in detail and
sectionwise. Recent case laws are presented wherever felt necessary.
At the end ofthe book, an appendix ofthe Part-I ofthe Arbitration and
Conciliation Act, 1996 is given for comparative reference.
The author expresses his gratitude to the great authors and
publishers ofReferences ofBibliography and the Asia Law House for
bringing out this book in an attractiveform.
Suggestions from the readers for improvement are welcome and
will be gratefully acknowledged.
Hyderabad
15th December, 2003 Dr. Myneni Srinivasa Rao.
v
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'I
..ARBITRATION, AND
ALTERNATIVE DISPUTE RESOLUTION .
- .-. - r: .
.CONTENTS
Chapters . Page No.
Unit-I
..- - .
JUDICIAL DISPUTE RESOLUTION ALTERNATIVE
- .' - DISPUTE RE'sbLUTION
, - Chapter-l .
". DISPUTI; RESOLUTlO1'4 (JUSTICE DELIVERY SYSTEM)
I.. Meaning ofJudicial Dispute Resolution a . 1
. . Characteristics of Judicial Dispute Resolution 1
.. '. (i) Courts of Inquiry 'l 2
(ii) CoUI1ofRecord :' ,.. 'l 2
(iii) .- Court not of Records. '! 2 'l
III. Operating Principles of Judicial Dispute Resolution 5 .
(i) Party' Participation and Control 5
Reasoned Decision 6
Trial .. .. .. :................. 7
(iv) Examination-in-Chief 7
(v) Cross-examination 7
." (vi) Re-examination , 8
(vii) Arguments'- Short focus on issues 8
(viii) Finality of Judgment 8
(ix) Adversary Process - Appeals 8
IV. Advantages ofJudicial Dispute Resolution 9
v. Disadvantages of Judicial Dispute Resolution 9
Chapter-2
ALTERNATIVE DISPUTE RESOL.UTION (ADR)
.,. . - I. Aitemate to formal adjudication 10
Meaning of Alternative Dispute Resolution 10
III. Alternative Dispute Resolution Techniques or Procedures 11
IV. Procedures or Techniques of ADR 11
(I) Negotiation or Assisted Negotiation 11
(2) Mediation ....................................................................... 11
(3) Conciliation , 11
(4), Partnering . 12
(5)' Evaluation 12
vii
viii Arbitration, Conciliation .& AlteJ:".napve 'Systems
Chapters Page No. >.- ...
(6) Dispute Review Board (Dispute Adjudication Board) 12
(7) Claims Appeals Committee .............................................. 12
. (8) Facilitation 12
(9) Arbitration........................... , 12
. fast-track or Speed-up Arbitration 12
v. Highbrid Alternative Dispute Resolutions ...r : : 12 '!
(1'1) Adjudication.i., .: .. 13
(12) Med-Arb (Mediation-Arbitration) 13
(13) . :Ooncilio-Arbifration:".. ... ., . '. ; 13
(14) (or Court Ordered Arbitration) 13
(15) Moderated Settlement Conference .. 13
(16) Court-Annexed Mediation (or Court-Ordered
Mediation) ; 13
(17) Michigan Mediation :. 13
(i 8) Neutral Listener Agreement or Early Neutral Evaluation 14
(19) Mediator Directed Negotiation 14
(20) MEDALOA (Mediation and Last-Offer Arbitration) 14
(21) Mini Trial (Supervised Settlement- Procedure) 14
(22) Rent-A-Judge (private Judging) oo 14
(23) Summary JUlY Trial 14
(24) Expert Determination or Appraisal 15
(25) High-Low Arbitration (High-Low Contract) 15
(26) Final Offer Arbitration (Best Offer Arbitration
or Pendulum Arbitration or Flip Flop Arbitration
or Baseball Arbitration) 15
(27) Ex aequo et bono 15 '!
(28) Amicable Composition 15
VI. Unilateral, Bilateral and Triadic (Third Party) Intervention : 15
(1) Unilateral Intervention :- 15
(2) Bilateral Intervention ..i..:.................... 16
(3) Triadic (Third Party) Intervention .. 16
-. Advantages of Alternative Disputes Resolution 17
,YIII. Limitations of Alternative Dispute Resolution : .:. .:.. .. 18
; :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: .:
. XII. Distinction Between Judicial Settlement and >",: 1.,::);-;...'. . ,
-:xi": .Distinction Between Arbitration, 2I
. Alternative 'DIspute' Resolation .. .. 23
: 'Cofuparative' Of
A
- .{J'_ ttion' (? ') . 26
rulua :?n , t:: , ........
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:ContenQ
.-, '.' I,xt
..
Chapters Unit-n
THE ARBITRATION AND CONCILIATION
... ACT, :. ,
Chapter-I ..

. WORK OF.UNCITRAL .'.
1. Importance of International Commercial Arbitration 27
II. Efforts of the United"Nations Commission on futCrnatiOnal
Trade Law ., 29
III. Work carried out by the tJNCITRAL. ............................ 29
A. International Sale oi : : 29
c. B. International Transport ofGoods , 30
c. International and 30
D. UNCITRP.L Model Law on Procurement ofGoods;
Construction and Services (1994) 30
E. Construction Contracts "! 30
F. International Payments , Q 30
G. Electronic Conunerce 30
UNCITRAL Model Law on International Commercial Arbitration .. 31
v. The Need of Model Law on International Conunercial Arbitration 32
(a) Inadequacy of Domestic Laws of Arbitration 32
(b) Disparity between National Laws ofArbitration 32
VI. Adoption of the Model Law on Intemational
J
CommercialArbitration ofUNCITRAL 33
VII. Salient features of the Model Law on International
Conunercial Arbitration 33
1. Scope of Application of the Model Law 33
2. Arbitration Agreement: 35
(i) Definition and form of arbitration agreement 36
(ii) Arbitration Agreement and the Courts 36 .
3. Composition of Arbitral Tribunal u 36
(i) No. of Arbitrators 36
(ii) Appointment of Arbitrators : 36
(iii) Ground of Challenge 37
(iv) Challenge 'Procedure : 38
(v) Failure or impossibility to act .......................................... 38
(vi) Appointment of substitute arbitrator 38
4. Jurisdiction of Arbitral Tribunal 38'
(i) Competence to rule on,own jurisdiction 38
(ii) Power to order interim measures 39
x .
Arbitration, & Alternative Di$pute Resolution Systems
Chapt(!rs Page No;
5. Conduct ofArbitral proceedings ; 39 .
.(a) Procedural rights of a party 39
(i) Equal treatment of'parties 39
(ii) Determination ofrules ofprocedure .: 39
. (iii) Place of arhitration : ; ;: 39
(b) Commencement 'of 'arbitral proceedings .; 40
(c) Language ! . ! : , 40
(d) Statements 0' claim and defence 40
(e) ..Hearing and Written Proceedings :..;.: 40
(I) Default of a party , : 41
(g) Expert appointed by arbitral tribunal , 41
6. Making ofAward and Termination of Proceedings 41
(i) Rules applicable to substance of dispute :.: 41
(ii) Decision-making by panel Of arbitrators 42
(iii) Settlement : 42
(iv) Form and Contents ofAward ; 42
(v) Termination of Proceedings 42
(vi) Correction and interpretation of award;
additional award .;-. : , : 43
7. Recourse against Award : 43
8. Recognition and Enforcement of Awards ., 44
(i) Procedural conditions of recognition and enforcement 44
(ii) Grounds for refusing recognition or enforcement 44
VIII . Arbitration Rules ofUNCITRAL, Adopted on
15th December, 1976
46
1. Introductory Rules 47
(i) Scope of Application (Art . 1) 47
(ii) Notice, Calculation ofPeriods of Time (Art . 2) 47
(iii) Notice ofArbitration (Article 3) : 47
(iv) Representation and Assistance (Article 4) 48 .
. 2. Composition of the Arbitral Tribunal 48
(i) Number of Arbitrators (Article 5) ,..: : 48
(ii) Appointment ofArbitrators (Arts . 6 to 8) : 48
(iii) Challenge of Arbitrators (Articles 9to 12) 49
(iv) Replacement ofan Arbitrator (Art icle 13) 49
(v) Repetition ofHearings in the event of the
Replacement of an Arbitrator (Article 14) 49
3. . Arbitral Proceedings 49
(i) General"Provislcns (Art .. .. 1 49
(ii) : Place of Arbitration (Afticle' 16) 50
'''.0 . . i .() . ., .;' : :.' 4 " , . ' . . .. "" ;
(111) umguage (Article 17) 50
(iv) : (Article '18) ....: 50
.
"Contents
Ciloptf!rs
. .
(v) Statement ofDefence (Article 19) ; :
\ ,
(vi) Amendment -to the claim or defence (Article SO ':..::'Z::::.
".
(vii) Plea as to' the jurisdiction ofthe Arbitral Tribunal ' .:
(Article 21) ; , 50
(viii) Further Written Statements (Article 22) ., 51
(ix) Period ofTime (ArtiCle 23) . 51
(x) Evidence and Hearings (A,tticles'24 and 25) ; 51 .
(xi) Interim Measures.of Protection (Article 26) 51
(xii) Experts 27) ; .:.., : v.: : 51
(xiii) Default (Article 28) :.; : 51
(xiv) Closure of Hearing(Article 29) 52
(xv) . Waiver of'Rules (Article 30) ;..; : 52
4. The Award (Artic!es 31 to 4 I) : ; ; : : :>2
(i) Decision : :..:..: : 52
(ii) Form and Effect of the (Article 32) 52
(iii) Applicable Law, Amiable Cornpositeur (Article 33) 52
(iv) Settlement or other Grounds for Termination 53
(v) Interpretation ofthe Award (Article 35) : 53
(vi) . Correction of the Award (Article 36) 53
(vii) Additional Award (Article 37) 53
(viii) Costs (Articles 38 to 40) 53
(ix) Deposit of Costs (Article 41) 54
IX. Code of Ethics for International Arbitrators 54
I . Fundamental Rule : 54

2. Acceptance of Appointment : 54
3: Elements of Bias 54
4. Duty of Discipline 55
5. Communications with Parties 56
6. Fees 57
7. Duty of Diligence : 57
8. . Involvement in Settlement Proposals 57
9. Confidentiality of the deliberations -r ; .., .. .. 57
Chapter-2
.JHSTORICAL BACKGROUND AND DEVELOPMENT OF THE LAW OF
ARBITRATION AND CONCILIATION IN INDIA
1. Under the Rule of East India Company 58
2. Under the Rule of British India 58
3. In Independent India , : 59
I. Recommendations of the Law Commission ofIndia
. for updating the Arbitration Act, 1940 in its 76th
Report in November 1978 : 61
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xli Arbitr.ation, & Dispute Resolution Systems

.... ... "-'.. . ...... , ...

Chap(ers
II. Objects ofand Reasons for the-enactmentofthe
Arbitration and Conciliation 'Act, 1996 66
or
III. Salient Features ofthe Arbitration and 'Conciliation Act, 1996 68
.'. Chapter-3 .

EFINJTIONS AND GENERAl PROVISIONS OF THE ARBITRATION

. AND CONCILIATION. AC.T, 1996 .
I. De.fmition of Arbitration : -; : ...................................... 7SJ
Kinds of Arbitration ................................ 71
(i) Domestic, Internationaland Foreign Arbitration : 71
1. Domestic Arbitration ..............................71
2. International Arbitration ........ 72
3. Foreign Arbitration :. : 72
(ii) Formal and Informal Arbitration ............................ 72
(iii) Ad hoc 'Arbitration and Institutional Arbitration 72
(a) Ad hoc Arbitration ; : 72
(b) Institutional Arbitration 73 u w ;0
(iv) Private Arbitration and Statutory Arbitration 73 H .'
(v) General and 'Specialised Arbitration 74
(vi) . Contractual Arbitration ;. 74
II. Definition of 'Arbitrator 74
III. Definition of ' Arbitration Agreement' , 75
IV. Definition of 'Arbitral Award) 76
v. Defmition of 'Arbitral Tribunal' , 77
VI. Definition of 'Court' ........................ "-, 78
VII. Definition of Judicial 'Authority' ...................................................... 79 j
VIII. Definition of 'Legal Representative' 80 'r
IX. Definition of 81
X. General Provisions 82
1. Scope and Applicability of Part I of the Arbitration
and Conciliation Act, 1996 82 1
2. Construction of references ofPart I of the Act 82
I
3. Receipt of Written Communications 83
4. Waiver of right to object
Extent of Judicial Intervention
6. Administrative Assistance
Chapter--4
'ARBITRARY .
1.. Form of Arbitration Agreement ..s. ...
2. Attributes of Arbitration Agreement " ,:... .. ....
84
8S
85
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... Jj .: 86
3....Powerto Refer Parties toArbitrationwhere.thereis ,...
A rbitrati A. 't''",. '. .: .... ; ... :,. .. .,.." '.1" ; 88
an 1. on.' .. .. ..
4. Parties In Pending Legal.Broceedings 89
5... Interim Measures, etc.,: by. Court ...... ..... 90
. '.. .0:.'
C1lapters '.
COMPOSITION, POWERS, DUTIES AND OF
. . ARBITRAL- TRIBUNAl . : :
. " .... . . - .'
I.. Composition of Arbitra! .' " ,J
1. . Number of Arbitrators :..: : i.., . . . . . . . . . . .. 92
2. Employees, etc. not be appointed as Arbitrators in
certain cases " 92
II. Appointment of Arbitrators'. 93
III. ;'powers of Arbitrators' or.Arbitral Tribunal.:.... :.: : 96
.. 1. When an Arbitrator is dot success 96
2. Resignation .........................;.. 97
3. Competence..of. to rule on it jurisdiction 97
4. Interim directions by arbitral tribunal and other 97
S. Hearing and Written Proceedings ................. ... 97
6. Powers of arbitral tribunal to enforce its orders ' 98
7. Default ofa Party 98
8. Expert appointment by Arbitral Tribunal 99
9. Arbitral Award : : Q9
10. Costs ! ': .._ 9:9
'IV. Duties and Responsibilities of Arbitrators or Arbitral Tribunal 99
1. Independence "..
2. Equal Treatment of Parties
3. Rules of Procedure :
4. Place of Arbitration
5. Language .
6. Statements of claim and defence
7. Hearings and Written Proceedings
8. Default of a Party
9. Expert appointment by arbitral tribunal
10. Court assistance in taking evidence
11. Making of Arbitral Award
99
:
:,:

:

99
w 99
100
100

100
100
100
101
101
101 ..
12. Speeding up ofproceedings and time limit-for
making award ,.................................................................... 101
13. Settlement ..' 101
14. .Form and contents of arbitral award 102
15. Filing of a copy of the award in the Court to record in
register of award ! 02
16. Termination of Proceedings 02
17. Correction and interpretation of award, additional..award 102
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xiv Arbitration, Conciliation. Alternative Dispute Resolution Systems
;' .
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Chaptel"$ Pqge:lVo.
'. TO J\.NARBITRATOR ,. ' .
. . . . . ..,: . ; . ' . . . :
I. .Grounds for toanArbitrat.Q[ ,., ..; 104
Il. Challenge Procedure ofApixdntment ofAtpitrator , 106
III. Termination of Mandate or an Arbitrator' !.: : : 107
IV. Termination ofmandate and substitution of arbitrator 108
Unit-III
ARBITR4.L .TRIB.UNALS AND
.' f
.ENFORCEMENT OF AWARDS
Chapter-l
JURISDlCTlOFti)fARBITRAL TRIBUNALS
1. Jurisdiction ofArbitral Tnbunals . ;;;.:.::..::: 109
II. Competence of arbitral-Tribunal torule on its jurisdiction 109
IlL Interim directions by arbitral Tribunal and other powers 1J 1
Chapter-2
CONDUCT bFARBITRAl PROCEEDINGS
I.
Equal treatment ofParties : I 13
. II. Determination of rules of procedure : 113
. III. Place of' Arbitration : :..; 115
IV. Commencement of arbitral proceedings : 115
r
V. Language 116 .
VI. Statement of claim and defence 117
VII. Hearing and Written Proceedings 117
VIII. PoweiS:oIilr!jitral tribunal to enforce its orders passed
under Sections "17; 23 and 24 : :.::.: 118
IX. Powersof'the'Court for enforcement of the peremptory
orders of the .arbitral tribunal : 119
x. Defaultofiaillarty;;;.;;; ;; ;;;;;:.;: , ;; : 120
XI. ExpertappQltmetttrt)y.Arbitral ..; ; 120
XII.
:...:.; 12 1
.. fN, , Chapte'r-3 , .
MAKING . llONOF 'PROCEEDING
:. : 1.
""pf dispute '...;.;.; :
-rr, Decisi "l.\rhitrators 124
III:

JtiIiie l
0"
imit lfor.making awards ; 125
IV:.
V. Fotrit \ ,.,."., 127
. vr.' Filiiig-; . . :' ,r.ecQrds. :
1":" II' ."f , ,


. .. , ; 128
Chapters
.VII. Termination ofProceedings , ; :.:.;.: ;
, VIII. Correction andinterpretation ofawaro. additional award
f
,
. AGAINST AWARD .. .
I. Application for setting aside arbitral aw.ai"p ,
' ) II. Additional grounds of chal lenge.m case .of certain awards
.
FINALITY AND ENFORCEMENT OF ARBITRAL' AWARDS
1. Finality of arbitral awards.:..: :
II. Stay of'operation ofawUdor.itS.eJtforcement
Chapter-6
.APPEALS .
I. Appealable orders : :.. ; :.;
II. Substantial prejudice to be shown for intervention . . .
under Sections 34 and 37 and time limitS ;...,..i
III. Power of High Court tc{MakeRules : : , :
tv. The Schemefor Appointment ofAroltratorS of ..,
Andhra Pradesh High Court .: :
1. Submission of Request :...:
2. . Authority to deal with'thl: request ..: ; :.:: : :
3. Seeking further Information :
4. Rej ection of Request :
5. Notice to affected person : :..' : : ;
.,'
6. Intimat ion of act ion taken onfrequest
I
7. Requests and communications to be sent to the .
authorised officer ,
8. Delivery and Receipt of Written Communications
9. Costs for Processing Requests ,
10. Interpretation ,...,
11. Power to Amend the Scheme.:
:Appendix-I : ! ,
-L..
v'AST TRACK ARBITRATION
1. Resolution of disputes through Fast Track Arbitration
II. Other provisions of the Act to apply subject to modifications
III. Proper Courts for filing subsequent applications
IV. High Court for purposes:of this Chapter
V. Procedure of the Fast Track APbitration (The Fourth Schedule)
1. Constitution ofFast Track Arbitral Tribunal ,
2. Procedure to apply from date ofconstitution of
Fast Track Arbitral Tribunal
PageNo:
130
131
133
: 135
, 137
137
139
139
141
142
142
143
, 144
144
144
144
144
145
145
145
146
146
147
:. 147
148
148
: 149
149
149
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xvi Arbitration, CondUatio" & Alternative Dispute Resolution Systems
Chapters

i.'
3. Procedure ; : _.!' .149
4. Representationby Counsel : , 150
5. Written notes of arguments or oral arguments 150
s, Conduct.of Proceedings 151
7-. Parties to'be binmd bythe Procedure 'and time schedule == 151
Consultation of-experts : :. 151
9. Procedure in cases'ofdefault by' parties : .. 151
10. Fast Track Award to be passed in six months -_ 152
11. ... FilSt1'rack: Award' to contain reasons ..: :.. 152
.
M'SCELLANE6US '.' .. : ..
. I. Deposits .............:...... 153 !'
II. Lien on arbitral award and deposits-as to costs 153
III. Arbitration agreement not to be discharged by death
of party thereto ., ,; 154
IV. Provisions in case of insolvency / 154
V. Proper Court for filing subsequent applications ;15"4
VI. Scheme for of Arbitrators ....i y .,., . . . . . . . . . . . . . ... . . . . . . 156
VII. Special provision relating to unregistered partnerships ..
under the Indian Partnership Act, 193:2as amended by the
.Maharashtra Amendment 156
VIII. Limitations : 157 <
Chapter:--9
CONVENTIONS FOR THE ENFORCEMENT OF FOREIGN .
. ARB,rRAL,AWARDS
1. The Geneva Protocol and Convention 159
2. The Second Schedule -- The Geneva Protocol
on Arbitration Clauses .. 160
3. The Third Schedule '-- Convention on the
Execution -ofForeign Arbitral Awards 161
4. United Nations Convention on the Recognition:and .
Enforcement of Foreign Arbitral Awards .. 165
-5.. York.Convention
ofForeign Arbitml 166 ..:
6. Comparisonof the. and., '.'::. <:, :.
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I . .,
enactment ... ,.. . , . . e 174
1. ..>.:_:. .: 174
. Contents
...... ., -...;'-'.
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t[I
:
t 2. Enforcement ofForeign Arbitral Awards after 1937 Act 174
.........,._-,':. : . ,
t
3. Foreign Award e . 174


,'. 4. Effects of Foreign Award """" ,; ............................... 175
:i
5. Enforcement of Foreign Awards., .; 175
:1
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6. Object of Enactments 176
1
II. Enforcement of Foreign Awards under the Arbitration .
and Conciliation Act, 1996 (Part ill .. 177
'J
.
NEW YORK CONVENTION AWARDS
1. Defmition of Foreign Award ..... ti 178
r
2. Power ofjudicial authority to refer parties to arbitration 180
1
3. WIlen foreign award binding ........................................................... 181
4. Evidence 181
5. Conditions for enforcement of foreign awards or
Refusal of enforcement of foreign awards ' 182
6. Enforcement of Foreign Award 183.
7. Appealable Orders .. 184 ,'J
8. Saving 185
9. Chapter II not to apply , 185
Cbapter-12
GENEVA CONVENTION AWARDS
I. Meaning of 'Foreign Award' 186
II. Power of Judicial Authority to refer parties to Arbitration 187
III. Foreign Awards when binding 188
IV. Evidence 188
V. Conditions for enforcement of foreign awards 189
VI. Conditions for refusal of enforcement of the foreign award 190
VII. Adjounnnent of enforcement of foreign award 190
VIII. Enforcement of foreign' award 190
IX. Appealable orders 191
X. 'Saving 191
Chapter-I3
SOME INDIAN COURT CASES OF ENFORCEMENT OF FOREIGN ARBITRATION
CLAUSES IN COMMERCIAL CONTRACTS
1. Matter considered as Commercial under the Law 192
2. International Commercial Agreement 193
3. Foreign Award 193
4. Finality of Award 195 .
xvili Arbitration, Conciliation & Alternative Dispute Resolution Systems
. Chapters Page No.
s. Title to immovable properties inside India 195
6. Enforcement o:t.Arbitration clause inc01porated in illegal contract. 196
7. Liquidated Damages in case ofBreach of Contract ...: 196 u
8. A Submission Made in Pursuance ofAgreement ............................ 197
9. Not yet become binding on parties 197
Chapter-l4
ROLE OF NONGOVERN"'ENTAl ORGANISATIONS (lV.G.OS) IN
RESOLUTION
I. Meaning of Organisations {NOGs) _. J99
I!. Role of Different International
Organisations of Alternative Dispute Resolution 199
1. The London Court (The LelA). 199
2. International Chamber of Commerce (ICC)
3. International Council for Commercial Arbitration (ICCA)
4. The American Arbitration Association "(TheAAA)
5. . International Centre for Settlement of
Investment'Disputes (The ICSID)
6. The Asian African Legal Consultative
Committee (The AALCC) _
7. The National Arbitration Bodies in Foreign Countries
III. Role of Different National Non-Governmental
Organisations of Alternative Dispute Resolution
1. The Internanonai Centre for Alternative
Dispute Resolution (IGADR)
2. The Indian Council of Arbitration in Dispute
199
200
200
200
200
200
201
201
Resolution (leA) : 201
3. List of some Indian and Foreign Arbitration Organisations .. 205
IV. Model Arbitration clauses recommended by some of
the Important Institutions 206
1. --The-UNCITRAL : 206
2. The Intemational Chamber of Commerce (ICC) 206
3. The Indian Council of (ICA) ; 207
"'i: .4...... of International Arbitration... . 207
,'; .5." .. 207
.. '.:'.,:." --"
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Contents
xix
CI,apters Unit - IV
ALTERNATIVE. MODELS OF
DISPUTE'RESOLUTION'
_
ROLE OF PANCHAYA"r AND GRAMASABHA
. PlIge.'N(f;
itr
I. Introduction 209
1. Role of Grama Sabha as an Alternative Dispute Resolution. 209
2. Role of Panehayat as an Alternative Dispute Resolution, 210

LOKPAL - LOKAYUKTA
I. Ombudsman 213
1. The main characteristics ofOmbudsman are 213
II. Lokpal: The Watchdog Against Corruption: 213
1. Need ofLokpal : - : , 21,3
2. History of the Lokpal Bill : 214
3. Salient Features of the LokpaI Bill 214
III. Lokayukta 215
Chapter-3
LOK ADALATS
1. Organization ofLok Adalats, (Sec. 19) .- 218
2. Cognizance ofcases by Lok Adalat (Sec. 20) , 219
3. Award ofLok Adalat (Sec. 21) _ 220
4. Powers of Lok Adalat or Permanent Lok Adalat (Sec. 22) 220
5. Permanent Lok Adalats for Pre-litigation Conciliation
and Settlement 221
6. Cognizance of cases by Permanent Lok Adalat 222
7. Procedure of Permanent Lok Adalat 224
8. Miscellaneous provisions 224
9. Lok Adalats in Andhra Pradesh 225
10. Procedure for organising Lok Adalat (Regulation 29-31) 225
11. Composition ofLok Adalat {Regulation 32-34) 226
12. At the High Court Level 226
13. At District Level 227
14. At Taluk level 227
15. Summoningof the Records and the Responsibility for its
Safe Custody 228
16. Functioning of Lok Adalat 228
17. Holding ofLok Adalat 228
18. Procedure for effecting compromise or settlement at L.ok Adalat 229
19. Award to be categorical and lucid 229
20. Compilation of results' .'229
xx Arbitration, CODcUiadoD & Dispute Resolution Systems
Chapters Page No.
21. Maintenance QfLok Adalat Judges 229
22. Remuneration to the Judges and Members of the Lok Adalat 229
\ 23. Procedure for maintaining records ofcases referred
under Section 20 ofthe Legal Services
Act, 1987 orotherwise 230
24. Budget 230 .
25. Maintenance ofthe Accounts .,.. 230
26. Funding '! . . 231
.Chapter-4
FAMILV COURT'- COUNSELLING CEAiiRES
I. Family Courts-Establishment..Appolntment 232
) Establishment of Family Courts (Sec 3) 232
2. Appointment of Judges (Sec 4) 232
3. ft..ssociation ofSocial Welfare Agencies etc., (Sec 5) 233
4. Counsellors, Officers and other employees of
Family Cou.rts(Sec 6) 234
II. JUrisdiction of Family Courts ................................... 234
1. Jurisdiction (Sec 7) 234
2. Exclusion ofj urisdicti on and Pending Proceedings (Sec 235
3. Duty of the Family Court 236
III.: Procedure of the Family Court , 236
1. Procedure generally (Sec 10) 236
2. Procedure to be held in camera (Sec. 11) .. 236
3. Assistance of medical and welfare experts (Sec 12) 237
4. Right to legal representation (Sec 13) 237
5. Application orThe Indian Evidence Act, 1872 (Art 14) 237
6. Record of oral evidence (Sec 15) 237
7. Evidence offonnal character on affidavit (Sec l( 237
8. Judgement (Sec 17) 237
9. Execution of decrees and orders (Sec 18) :. 237
10. Appeal (Sec 19) .. t ......... 238
Chapter-S ..' :. ".:
CONSUMER PROTECTION C.OUN.CllS: '. :.'. .;., .:
1. Objects of the Consumer Protection Act, .. 239
."2. Definitions .. ! : 240
3. Consumer Protection Councils .: ...., 246
4.. Central Consumer Protection Council . ;i.<).IJ!J.;j.. .. ...246
5_ Procedure meeting of'the:Gen4a1 }.; 'reil
Consumer Protection ..ol1nn:fi.t; L247 ..
6. Objects of the. Central Consumer. 247
.r
Contents
xxi
Chapters No.
7. The State Consumer Protection Councils ,; 248
Disputes Redressal Agencies 248
9. District Forum : 248
I. Composition of the District Forum .; :.. 249
II. Jurisdiction ofthe District Forum ........................... 249
III. Manner ofmaking complaint 249
IV. Procedure on Receipt of complaint 250
V. Findings of the District Forum 251
VI. Appeal 252
VII. Dismissal of frivolous or vexatious comp!aints ..i .: 253
VIII. Enforcement of Orders .. .. 253
10. State Commission 253
I. Composition of the State Commission 253
II. Benches 254
III. Jurisdiction 254
IV. Procedure Applicable to State Commission 255
V. Appeals 255
VI. Enforcement of orders 255
11. National Commission 255
I. Composition of the National Commission 256
II. Jurisdiction of National Commission 256
III. Benches ,,_ 257
IV. Appeal 257
12. Powers of the National Commission 257
13. Procedure Applicable tothe National Commission 258
14. Procedure in Hearing an Appeal : 260
15. Findings of the National Commission 262
16. Finality of Orders ............................................................................. 262
17. Limitation Period 262
18. Administrative Control 262
19. Dismissal of Frivolous or vexatious Complaints 263
20. Enforcement 263
Chapter-6
TRIBUNALS
1. Meaning and Nature of Administrative Tribunals 264
2. Characteristics of Administrative Tribunals ., 264
3. Need for the Establishment of Administrative Tribunals 265
4. Administrative Tribunals in India 267
5. Establishment ofAdministrative Tribunals and Benches 270
6. National Industrial Tribunal 272
7. Income Tax Appellate Tribunal 273
.xxii Arbitration, Conciliation & Alternative Dispute Resolution Systems
Chapters
Unit-V
PlIgeNo.
CONCILIATION
Chapter-t
THE UNCITRAL CONCILIATION RULES
I. Application e,ftheRules 275
. II. Commencement of ConeiIiation Proceedings e 275
III. Number of Conciliators .: 275
IV. Appointment : :- :.276
V. Representation and Assistance ,. 276
VI. Role of Conciliator 276
VII. Communication between Conciliator and Parties 277
VIII. Disclosure of fufonnation 277
IX. Cooperation ofparties with Conciliator 277
X. Suggestions by Parties for settlement of dispute '.. 277
XI. Settlement Agreement 278
XII. Confidentiality ! 278
XIII. Termination of Conciliation Proceedings 278
XIV. Resort.to Arbitral or Judicial Proceedings 278
xv. Costs 279
XVI. Deposits 279
XVII- Role of Conciliator in other proceedings 279
XVIII. Admissibility of Bvtdence in other proceedings 279
XIX. Model Conciliation Clause 280
I
. Chapter - 2 .
PART III OF THE ARBITRATION AND CDNC'L'ATICJN ACT, .1996
I. Conciliation 281 ,
1. Meaning of Conciliation 281
. II. Appointment of Conciliators 282 tf
III. Powers and Functions (Role) of Coneiliator 283
(i) Role of Conciliator 283
(ii) Role ofConciliator in other proceedings 283
(iii) Functions 284
N . . proceedings 284
V. Stages of Conciliation Procedure 285
(i) Submission of statements to conciliation ,.. 285
(ii) Conciliation not bound by certain enactments 285
(iii) Conduct oftOilCiiiaiion : : ., 285
(iv) .... : '.. .. 286
(v). Conciliatb/and :...!.... 286
(vi) DisclCiSui'e"'of .:.:::: !,,;.: 286
(vii) with .. .. 286
I
11
xxiii
Chapters .
(viii) Role-efthe Parties
'(ix) Confidentiality : 286
(x) Termination of Conciliation Proceedings ............................
(xi) Not to initiate albitral or judicial proceedings
during conciliation proceedings : : 287
(xii) Deposits ........................................... 287
VI. Settlement Agreement (or Conciliation Agreement) 287
(i) Status-and effect ofsettlement agreement 288
(ii) Confidentiality of settlement agreement .. 288
(iii) Enforceability .; 288
THE ARBITRATION AND CONCILIATION
ACT, 1996
Sections

1. Short title, extent and commencement 289
Part I - Arbitration
Chapter I - General Provisions
2. Definitions .............................................................................. 289
3. Receipt of written communications 291
4. Waiver of right to object .291
5. Extent of judicial intervention 292
6. Administrative assistance 292
Chapter II - Arbitration Agreement
7. Arbitration agreement 292
8. Power to refer parties to .arbitration where there is an
arbitration agreement 292
9. Interim measures, etc. by Court 293
Chapter cID- Composition of Tribunal .
10. Number of arbitrators 293
11. Appointment of arbitrators 294
12. Grounds for challenge .................................................................... 295
13. Challenge procedure 296
14. Failure or impossibility to act 196
15. Termination of mandate and substitution of arbitrator 297
Chapter IV - Jurisdiction of Arbitral Tribunals
16. Competence of arbitral tribunal to rule on its jurisdiction 297
17. Interim measures ordered by arbitral tribunal 298
f!!!.4$-" .:..... _i r --.
xxiv Arbitration, Conciliation & Alternative Dispute Resolution
. .
Sections. PageNo.
Chapter V - Conduct of Arbitral Proceedings
\ '. .
18. Equal treatment of parties 298
19. Determination of rules of procedure 298
20. Place of arbitration ...................... ....... 299
21. Commencement of arbitral proceedings 299
22. Language 299
23. Statements of claim and defence 299
24. Hearings and written proceedings 300
25. Default of a party 300
.26. Expert appointment by arbitral tribunal 301
27. Court assistance in taking evidence .; 301
Chapter VI - Making of Award and
.termination Preeeedlngs . _ .
28. RUles applicable to substance of.dispute.. 302
29. Decision making by panel of arbitrators 302
30. Settlement 303
31. Form and contents of arbitral award 303
32. Termination of proceedings'. 304
33. Correction and interpretation of award ; additional award 305
Chapter vn - Recourse Against Arbitral Award
34. Application for setting aside arbitral award 305
Chapter VIII - Finality and Enforcement of
Arbitral Awards
35. Finality of arbitral awards 307
36. Enforcement : 307
Chapter IX - Appeals
37. Appealable Orders 307
Chapter X - Miscellaneous
38. Deposits 308
39. Lien on arbitral award .and deposits as to costs 308
,40. Arbitration agreement not to be discharged by death
of party thereto .:..' , 309
41. Provisions in case of insolvency 309
42. Jurisdiction ;... .. . 309
43. Limitations : .. .. . 310
BIBLIOGRAPIIY................ ......:.. .. an-aiz .
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.JUDICIAL DISPUTE RESOLUTION AND
ALTEllNATlVE.DISPUTE RESOLUTION
.Chapter-l
. JUDICIAL DISPUTE RESOLUTION (JUSTICE DELIVERY SYSTEM)
I. Meaning of Judicial 'Dispute
During the British period .the modem justice delivery system was
developed in India. Before 1726, the Courts derived their power not from the.
..British Crown but from the East India Company. The Charter of.1661 had
already prescribed the English Law . .
In i 726, the Crown issued the Charter of 1726, and the Mayor' s Courts
.'. were established in the Presidency towns of Bombay, .Calcutta and Madras
(now, Mumbai, Kolkata and Chennai). They were the Royal Courts. They
followed the procedure based on English Law. The Mayor's Court has no
jurisdiction in criminal cases. Thecriminal jurisdiction was conferred on the
.' .
The Regulating Act, 1773 empowered the British Crown to establish cI: ' .:
Supreme 'Court at Calcutta (Kolkata) by. issuing a Charter. Accordingly a .
Supreme Court at Calcutta (Kolkata) was established by issuing the Charter
of 1774. A Supreme Court in Madras (Chennai) was established in 1801 and
in Bombay (Mumbai) in
The Indian High Courts Act, 1861 empowered the Government to
establish High Courts in Presidency Towns. After establislunent of the High
Courts, the Civil Courts were organised at different towns. The Criminal Courts
were organised by the Criminal Procedure Code of 1898.
The Courts in different parts of British India were empowered to settle
the disputes and the settlement ofdisputes through Courts is called the 'Judicial
.Dispute Resolution' . .
. II. Characteristics of JUdicial Dispute Resolution
)0 _
(1) The Judicial Dispute Resolution adjudicates the litigations.
Litigation is alaw suit, a judicial contest, or a contest in Court.ofLaw.
.means dispute and..riot 10 a
Litigation IS a mediad offesolvmg disputes m a Court of Law. DIsputes ay'
. arise in .8 variety of situations. They may reTateto personal disputes, property
. disputes .like .between landlords add tenants, family disputes regarding
r-:
t


2
Judicial Dispute.ReSolution and ADR
[Unit-I, Ch-l
marriage..divorce, adoption; succession. Thete rilay be disputes,
there may be. disputes involving 'questions.of public law or statutory and
administrative law or fiscal law. Intradethere may be'disputes ofbreach of
contract. Among them, there are some disputes which can only be settled in
the Courts ofLaw. . "
. (2) The Judicial Dispute is the
established courts. Court eplace where legal cases are heard by those
persons authorised to administer justice, Court is .an authority. of law
.established under the Constitution ;of a. State and vested with the power of
. rendering judgments, issuing writs, Or hearing and deciding appeals..An
essential condition of being a Court is that Court should have the power
to give a decision or a definite Judgment which has finality and
. which are essential pronoUncement. Courts
'derive powers from are exercising the judicial power.ofthe.State.
Court is entrusted withjudi.cial functionS includtg that ofdeciding litigating
questions according to' law, that is' to say, according to certain rules and
procedure which would 'ensure that the person 'cailed upon to. decide. the acts
with fairness and impartiality. Courts are also called as 'Law Courts', 'Courts
of Justice.', or 'Courts ofLaw.'. 'Every Court contains a Court hall 'where the
1.udges adjudicate the disputes. .
There are three kinds of Courts.
Theyare:
. (i).'Courts ofInquiry: A Court which makes preliminary investigations
'of charges'. In 'military or navy, these 'Courts deal with cases of
',.. indiscipline etc.
(ii) Court of Record': A Court whose proceedings are recorded
. ,permanentlyand which has the power ofpunisliing for contempt of
'. Court. . ,;' .., .'" ", .' < ,
: . . :; i ' . :. _ _.
(iii) Court not ofRecords: A Court oflimited and mferiorjurisdicrion,
. :. , .. ";- ...... 1... ,. . . ;
'(3)']udicial"Dispute' Resolution is administered by Judges in Courts.
A Judge may be' called a Justice 'or Magistrate in 'the lower Cburts'; in the
. ',':. . :.. '. ,;' ...
. - .:. "There-is no' other office in the'State of f1(Jh(;. Judge.
other
. Th.ecitizen slife.and .Iiberty; I
and domestic happiness are all subject to the wisdom of the Judges and hang
on their decision. A strong and capable judiciary is the greate,st need of a
State. '. . .
\.
. ..
.
Ch-1J . Dispute Resolutfoill(Justfe:e ... " ..
. ,
Judges are chosen in various ways. WhIle selecting the pei"89iis ...: ..'
. :offolJowing characteristics should-be selected:. . . . . ., r ,
, .. . .. .... .
(i) He must discharge his duties without fear or favour, affe,ctioD:.:or .
ill-will. ..'. :.... '. F
. .. ' :.:. .: ' .;. r
(ii) He must not allow himselfto be subjected to any influence .. :.
than the influence oflaw and justice of the cause. .
(iii) 'Hemust be impartial and must do everything.for.justice,
... r
(iv) He should calm temper andpatience and
':.;' '(v) .:..
.::. ..' The Judges and Magistratesare together consideredas 'Judiciary' .' .:'..:
("., .. ':" .' . (4) Advocates assist judges in delivering in Judicial Dispi1t\:' , .
: ' :-..:: Resolution. In Courts, an advocate or lawyer is an Officer ofJustice and friend .
' : bfthe Court, The person in legal profession is called an advocate or lawyer.
;:.",,<. . In legal profession the advocate should possess fair and holiest character and '.
. '.' ..conduct. He .has to accept a brief for any man who comes before the Courts
.: . do what one' can do honourablyonbehalf ofhis client. He has to collect
. ..legal material relating to the case ofhis client and argue inthe Courts to help.
:'. " .:.o;:the Judges to deliver judgments.
': . '..: f\..dvocates are the only recognised class of'persons entitled to practice
, .--..... law; subject to, the provisions of the Advocates Act and any rules made
thereunder there shall, as from the appointed day, be only one class ofpersons
.. entitled to practise the profession of law; namely, advocates (Sec. 29 of the
.Advocates Act, 1961):
(5) Judicial Dispute Resolution is based on la'w. Law is related to the
. body of all rules enforced in any community through Courts or administrative
, .: agencies, or through official acts within the authority granted to it. Law'
'. contains rules for the well governing of civil society, to give every man that
:', which both belong to him and rules of action to which men .are obliged to
: . . 0. make. their -e, moral conduct conformable. The law of the State or of any
. : j.. ; 'organised body of men is composed of the rules which the Courts, that is,
..': the judicial organ of the body lays down for the determination of legal rights.
. ;and duties. The law may be of two forms - civil law and criminal law. . '.
.' There is distinction between civil law and 'criminal law. When society
considers an act to be a wrong committed against society, the commission of
: .. thatact is a crime. In the criminal case the State preceeds against that person
.: ': '. who committed crime. . , .. '..
. . , '. A wrong that is notcoJisiilered by society to be an offence against '.' :..:: .
.' entity to a degree that would seriously' damage, it is placed in tfie .
I. "':'. :. ... .
4
. - "_.._.. _
.. ; ..
-.--'" _ _. - _._._....,_._._-_.---:;:-.,........,.....o-;! ---- ...
, < ;: ADR
Cb-l
.civil1aw rather than .An injury done.as a private wrong to a
person is considered a tort, a civil nuury, and are to be redressed in a civil
action. \ '.
A party seeking a remedy for a wrong, once-it is that the
requirements for entry are present, can then use the Court system for the
attempt to settle the dispute. ..' .
(6) In Justice Delivery System the hierarchy of Courts is required .to
protect the'interests and rights ofcitizens, 1"1 India, in the hierarchy ofCourts
there exists the Supreme Court ofIndia as the apex court of the country, the
High Courts, the highest Courts in each ofthe Stateand District Judiciary at
Lite level ofthe District. .'
. The subordinate jUdiciary plays vital part in dispensation !Jfjustice. Its
decisions are subject 'to,appealor revision to the High Court which 'exercises
control "and supervision over the proceedings and decisions "of subordinate
Courts, 'tribunels. . .
- , As per Article 124 ofthe Constitution ofIndia, there: shall- be a Supreme
Court ofIndia 'consisting ofa CniefJustice of India and, until Parliament by
jawprescribe a lager number, ofnot more than seven other Judges (Now twenty
five vide Act 22 qf 1986). Every Judge ofthe Supreme Court shall beappointed
by the President. Supreme Court is a Court of record (Art. 129). The
provisions relating to the Union Judiciary are presented in Articles 124 to 151
of the Indian Constitution. .
There shall be a High Court for each State (Art. 214). Every High Court
shall be a Court of record (Art. 215). Every High Court shall consist of a
Chief Justice and such other Judges as the President,may from time to time
deem it necessary to appoint (Art. 216). The provisions relating to High Courts
are incozporated in Articles from 214 to 231 of the Constitution of India,
The provisions relating to District Courts and 'Courts subordinate thereto
are included in Articles from 233 to 237 of the Constitution' of IndIa.
The whole. Judiciary System functions as per down-in
the Constitution.ofIndia. . __" : .:,"1 :.: ."
" . '. . .. -'-::"" .
O)InJUBtic.e Delivery System the Courts shouldha.vejiiNsdiction and
. .Thejurisdiction of Court is related t() oyer and over
parties, -The jurisdiction ofCivil Courts is of urisdiction
criminal is of -: Courts
depends on-the value ofthe subject-matter. _
. . Q.o,prt, where
-thtr Court.
-- '
, Chat] Resolution . 5. :
..: Thej urisdiction, thus, refers to authority.ofpower ofa Court.to' !and
venue is.a matter ofphysical location. . '. . :
(8) mJudicial Resolution, is scope for in'
decisions' through appeals. .ifthe lower Court fails to take into consideration
anyfeot or-issues, the appellate Court may consider the 'lapse'arid the'
verdict.."The appellate authority's judgment will be executed provide justice. .
The' provision ofappeal is one ofthe maincharacteristics o(:Judicial Dispute" .
'. ' . 'Resolution. '. '. .
.... An appealshall lie to the Supreme Court from any judgement, decree or .
ora'High Court and an appeal shall lie to the High Court from any .
of'the 'District Court whether in a civil, criminal or other proceedings. .
(9) In Judicial Dispute Resolution, the Courts ofrecord havepower to
issue to any person or authority directions; orders or writs, including the.Writs .
. in' the nature of habeas corpus, mandamus, prohibition, quo warranto and
certiorari or any of them. ":
III.. .Operating Prlnciples ofJudicial.l;)ispute Reselution
. The Judicial Dispute Resolution isdone on the basis of rules and
regulations laid down in enactments, The Civil Courts should follow the
provisions ofthe Civil Procedure Code and. the Criminal Courts should follow
the Criminal Procedure Code. While dealing' with the disputes, the Courts have
to act according to the provisions of the Evidence Act, The practice of
procedure of operation of the Judicial Dispute Resolution is as follows:
(i) Party Participation and Control:- One party feelswronged by
another, whether this arises under a contract or through a tort or other actions,
and recourse to the Court of Law appears to be the only remedy available to
thatperson called the plaintiff The plaintiffmust now select the proper Court
to hear his case and initiate a civil action by filing a complaint called 'a plaint'
in that Court.
The statement of plaint regarding his claim is taken as, a plaint. '01e
plaintiff presents his' case along with cause of action etc. through the plaint.
plaint is also called the written statement. Every pleading rs required to
contain a statement in a concise fonn of the material facts on which the party
filing the plaint relies for his. claim or defence, Suit is commenced by .'
presentation of the plaint.
" .. ,
. The Court.after registering the suit, sends the summons, a statement of
the.Court calling the defendant. to appearib the proceeding along with a copy: :
of th.C?:complaint. This presentation' ofthe summons of the Court is known as' .
service upon the defendant. .
6
. and ADR. . (UDlt-I, Ch.l
60 ... ..
..I1bJ,'Cb-l) Judicial Disptite:ResolotioD (Justice' System) , ,7 '.
'( Discovery mechanisms. of various kinds provide 'further pretrial
infotriuttioD to-improve Depositions,'oral
oath bywitnessesin the case,may be-taken if'suchwitnesses'are likely ,\ .
to 'be unavailable for thefrial. Theseare 'sometimes confused With written ,
'interrogatories, Which are questions framed tothe opposing party that must ,
be"answered before the trial. Similar requestsmay.. be made for admissions":
'the opposing party is asked to state' whether a particular matter Of -
IStrue. Docunients ofother tangiblematerials that may bepertinent' '
, in the' controversymay be"produced under a motion for the production ofteal' '
- The physical or mental condition ofa party may also be determined' .
a motion. to require a physical or mental examination ifthose _factors
, be part ofthe matter, ,
(iii) Trlal:- The ease isnow ready to go on trial and is placed on the
Court calendar to be tried' on a set of date.' 'The trial' itself begins when
advocates for both sides make their .opening statements during which time
they may outline their case and what they intend to provide the trial.
. (iv) Exainination-in-Chief:- The first witness for the plaintiffis called
by" the plaintiff's advocate who' questions him in what "is called direct
examination. In' the similar' way the defendant's advocate questions the
witnesses of the 'defendant. The direct examination is also called as
Examination-in-Chief. Examination'..in-Chief is thus, the 'way 'in Which
advocates present almost all of the evidence through witnesses, whether as
. counsel for plaintiff or defendant. Examination of expert witnesses and the
admission of expert opinions are also vital part of advocacy for which special
skill is to be achieved accordingto the expert evidence.
. (v) Cross-examinatlons-,- The examination of.a witness by the adverse
party shall be called his cross-examination, Witnesses shall be first examined
in-chief and then later-re-examined. The witness may be
cross-examined to test the witnes!es' credibility' and to show their bias or
pre-JUdice,' and' also to show an interest in the outcome of the case." Cross
examination should be carefully done and to the extent whenthere is a
reasonable chance that it will advance" their client's theory of the case; .or .,
undermine some elements of the opponents' case or defence". Good. crOSS- I
examination is an art and it islearnt from experience and from observing
senior advocates while -cross-examining witnesses. Cross-examination ef
witness is a procedural matter; It should be done according to the provisions, .
of the Indian Evidence Act, Civil Procedure Code, Criminal Procedure Code
and other provisions of Law. Cross-examination-must relate to the-relevant !
facts. The opponent advocate should not interrupt the cross..examining :
r:
advocate.
I

.. .......... .......,:>==-
.. . '. -_._.. . ,:. .
r:
.Unit-I, Cb-l] Judicial Resolution (Justice Delivery System)
9
. , . 8
I: . " ._
.,Indicial
-
ADR [Unit-I, Ch-l
" . . . , . .
IV. Advantages 'o(Judltial ",
./1 (vi) The examination of a witness subsequent to
..'
I
the cross-examination by the party' who.calledhimis called re-examination,
. The following are the advantage of Dispute,
" -' : ....."".. i
The main Qbject is to arising out of the
(1) The .JudiCial Officer will ' be' a highly qualified with
cross-examination, The re-examination is -required to be directed to. the
experience, expertise and objectivity; . . '. . .. - .: ' . .'
.explanation of the matter referred toin .cross-examination. . In the re . " . . . . . . " .
examination 'an attempt is to be made to restore the credit of the witness (2) Established rules and procedures result in cases being presented' to
attacked during thecross-examination. In re-examination leading questions .
the best advantage, including detailed enquiry into the facts; .
should no'! be asked. Ifnew matter is, by permission of the Court, introduced
(3) Principles applied by the Courts ..
in re-examination, the adverse party has the right to cross-examine upon that
reasonable; . . .. . .
matter.
(4) have dignity, 8.uthorifyand attiaCtpuhlic . .
(vii) Argumenta- Sliort focus OD.issues:- In arguing a case strongest
points should be emphasised and the weak points should not be raised as far (5) Court.proceedings
. .
..,as possible. Arguments on each issue should be Mitten out. The names of
(6) Legal aid is available.
witnesses and the documents support ofthe issue should clearly noted.
V. Disadvantages of Judicia! Dispute Resolution
. An advocate should study the record ofthe case with theobject to discover
The following are the disadvantages ofJudicial Dispute Resolution.
the weak points and also the strong points in the opponent's case. An advocate
should prepare the argument in such a way as to meet them and prove them as
(I) Where the dispute is between individuals regarding matters on which
insignificant. Ifthe advocate' fmds that a point ofthe opponent is very strong
they do not want an acrimony before the public eye the Judicial
and cannot be met, then it is better to concede it. The weak points in the
Dispute Resolutionis not desirable as it is open to public viewingor
opponent case should be.emphasized much so as to prove that the weakness is
public reporting; ' .
of such anature that inspite of everything else cannot be sustained.
(2) Differences are highlighted and parties sometimes take extreme
(viii) Finality of Judgment:- After completion of the arguments, the
position in the adversarial atmosphere;
Judge studies the whole case basing on the record he has in his hand and after
referring the documents, evidences,. precedents and enactments, if needed (3) In many cases of Judicial Dispute Resolution, litigation causes
commentaries ofenactment, prepares the judgment and pronounces his judgment
concern, anxiety and stress;
in Court-hall. If the verdict is for the' plaintiffand the wrong is to be righted,
(4) Litigations usually end in a winning ofa party andlosing ofanother
the end result is an award for damages 'and/or suffering, both usually expressed
party and compromisesare rare in Judicial Dispute Resolution;
in monetary terms. Ifthe defendant prevails he is exonerated and the be
dismissed with costs or without costs and aD,fCtion for the same act can never
(5) The delays are endemic and taking into account the. appeal
be brought to the.Court. The delivered judgment is fmal and executed if the
procedures, no litigant can .expect finality within a reasonable time
. ' . - . . ...---....... ... .... ., ..,.
aggrieved party prefers not to appeal. .
.'_''"' " , 'M '.' (6) The. litigation in Judicial Dispute Resolutioninvolves high costs;
. .
(IX) Advel."sary Process - Appeals:- The aggrieved party may appeal
(7) Overcrowding of dockets, mounting arrears of cases awaiting '
to the appellate Court. Arguing of appeals in a Court of Law is ' also of
disposal; the burgeoning backlog and the sheer magnitude of the
considerable importance. In the previous judgement in lower Court, the Judge'
or Magistrate would have overlooked some reasonable ground. ..A careful
litigation explosion had eroded the public confidence in the Judicial .
study Qf the case and judgment is required to find the points which were not
Dispute Resolution. ' Public perception of delayed justice being :
. .
noticed-by the Court below. The advocate, ifhe brings the.sameto.the .notice
)
'denial' of justice.-had.flifsed question marks on Some of the basic : .
of the appellate Court, the verdict win be in favour of his .oli.elIt, "/fhen the assumptions of the Justice Delivery System. .. . .. .
. judgement-given by the Appellate Court is -final. . : .: ;:I ::i,1 C,C. : ii. ..
... .


--


2
,..
ALTERNATIVE' DISPUTE. RESOL'U.TION (ADR)
I
I
:- .:: . . . -., .. 4 .':
I. Alternate te.formal !
.. ..
The existing justice'system is not able to cope \vitli
burden 6f civil litigation. Not many in India can-afford-litigation. 'Except
Iitigants who stand to 'gain by delaying the pl-ocess'ofjustice, others do not
enjoy taking-recourse to litigation that consumes innumerable number ofyears
and considerableamounra by way ofexpenses.: This .stste of affair makes
people cynical about the judicial process, This phenomenon is not only related
to 'India and ahnostal] the countries have been facing similar situation.
". .
The USA took the.lead inrefining the -byevolying new
procedures for speedy settlement ofdisputes. These newprocedures practised
in the U.S.A. and several other countries have come -to be known as
'Alternative Dispute Resolution' or simply 'ADR'. " These well-structured
procedures have been devised to afford easy access to justice without undue
delay and ata lesser cost by 'which'the parties can participate in resolution of
their disputes. The ADR. procedures ;have, thus, emerged as distinct
alternatives to Court system. In real sense ADR is not an alternative to Court
system but only meant to supplement the same aiming on less lawyering.
. - . . . . -
The ADRis in use over the last 30 years or so, in the USA, Australia,
Canada, Germany, Holland, Hong Kong, New Zealand, South Africa,
Switzerland and the U.K. as the ADR encouraged the disputants to arrive at
a negotiated understanding with' a minimum ofoutside help.
The primary object ofADR'movement is avoidance ofvexation. expense
and delay and promotion ofthe ideal of 'access to justice' for all. The ADR
system seeks to provide cheap, simple, quick and accessible justice.
II. Meaning'of Alternative Dispute Resoiution
The term Dispute Resolution' mcludes, in narrow sense.
only those processes in which the decision finaI1y arrived at is 'With tlie consent
of the parties; namely, negotiation, -mediation and conciliati(jiJ. in the .
parties -'retain . to decide the I Qutpome , f th .Rr.t.dis mtes.. -1fhe
conciliator or mediator does not Imself decide thedispute. He its
resolution and helps the parties in identifying has
so far eluded the parties. In wider sense, ADR along
with negotiation, mediation and-conciliation'
an alternative to litigation.'
- decision, ,As it is
considered as ADR, -as it patties tQ
" '

, . . 11

. .
problems.-establishingfacts; clarifyiug issues" developing the'opdon 'of
.settlement and.ultimately snlvingthe disputes tbrOugk' award which iSitiindirig :
\ ... , - , .'
ontheparties.' '. . . . : .. ' .
. ' . " . ..... ,
ID. Diipute Resolution Techniques
'\. The .well-known and oldest .a\D;R techniques 'are .. and
Other ADRtechniques,. though-widely practised :in' .
the USA and other countries-for over 20.years, are almost unknown in India.
.<' IV. -Procedures of ADa. -' :
......
(1) Negotiation or The, most
of dispute resolution is negotiation. Negotiation j'sa non-binding procedure
in whichdiseussfons between the parties are 'initiated without the
of third' party with object of at it negotiated settlement of the"
dispute. in this procedure a: party directly the otherwiththe offer
of a negotiated settlementbased on an objective assessment of each other's
position. Objectivity and willingness to arrive ata negotiated settlement on
the part of'boththe.parties are essential characteristicsof'negotiations. Thus'
voluntary, non-binding, non-structured common search for a' solution through
negotiation is better for the participants than other:' .
(2) Mediation::....-..'Mediation is non-binding procedure in which an.
. impartial and neutral third party, the.mediator" assists tile parties to a dispute
. in reaching a mutually satisfactory and agreed settlement ofthe dispute. The
parties having submitted their concise position papers beforehand make brief
oral presentation to the mediator. The mediator then holds private sessions
with each party separately andgoes back and forth between them summarising
progress in joint sessions from time to time until agreement is reached or the
negotiations breakdown or are suspended. The mediation process is informal
and an assisted negotiation of a dispute settlement. Co-mediation is a type
ofmediation by two or more mediators who may befrom the same or different
disciplines and who may work in tandem, or share different tasks within the
.mediation or both.
(3) Conciliation:- Conciliation, sometimes; used interchangeably with .
mediation, Frequently it is more structured than mediation without caucuses.. :.
It is sometimes rights-based than.interest .based..
, I.
Conciliation is a non-binding procedure in which an impartial third party,
the conciliator assists the parties to a dispute in' reaching amutually
satisfactory and agreed settlement ofsthe dispute. The neutralpersen'should:"
be chosen by agreement of the parties. The conciliator may. the
parties .individually, but any information or allegations .made by'
such an interview should be disclosed to the otherparty for
the need-for-coitserlt frorn-the-disc-]osing-partY. - " .
12 . Resolution (AJ)Jl) ; 13 .JUdicia). aDd ADR (Uilit-:-I, Ch-2
.The.difference between inediation"and conciliation is that in mediation,
a mediator would endeavour to help the, disputing parties to reach a mutually
agreeable 'solution whereas. in tConciliati..gn, .the. conciliator would settle the
disputehimself In-an informal and friendly manner With the agreement of
both the parties, .' "
" (4) Partnering is .acollaborative, non-binding process that"
focusses on cooperative - solving of problems that participants have .in
common, It yields reconciliation (win-win) as 'opposed to either compromise '
(lose-lose) or concession (win-lose), 'Itis based on periodical meetings during'
implementation ofproject; oftenin presenceofa'neutral facilitator;' discussion
ofproblem"areas in presence:ofsenior management; .'.
. (5) Evaluation isa non-binding assessment ofthe dispute,
the viability ofproposed settlement terms, or to any other aspect ofa dispute.
It 'provides the study ofroot-cause of the disputes and then suggests possible
solution for the removal of'problems which cause the. dispute, . '.
(6), Dispute .Revlew (Dispute Adjudica(ion This
process is followed ,in the USA in the construction industry.. A Board is set
up at the commencement"of a contract to consider and to deal with disputes
as they arise, through" informal meetings and discussions, and perhaps also
by interim This process is a regular method to solve problems
thatarise continuously during project implementation. .' .
(7) Claims Appeals Committee:--"':' In this process, in any' undertaking,
a dispute which was not resolved at lower level,' will be resolved by a
Committee or Board of senior executives who normaJly are not directly
involved in the matter of dispute.
(8) Facilitation:- Facilitation is the assistance provided to the parties
to a dispute by a third party, usually neutral, to help them to deal constructively
with the issues between them. .
(9) Arbitratioli:-:- Arbitration is a binding dispute settlement
in which the dispute is submitted to an arbitral tribunal consisting ofa sole
or an odd number of arbitrators which makes a decision in the form of an
award onthe dispute that bindingon settles
the dispute. .. ".' " .
(10) Fast-track Arbitration or Speed-up: Fast-track
arbitration is a form of.arbitration in which an
.. is rendered in' a short-time and ;:,:: I.

'hi.. hloi.' "1': ,.. '1-'-;.>' . f
rg one ii"'U..I.JX. -eeeause I.IU-Y'" cue mixe WIlli more man' one ..eC.llluque 0
dispute 111ie .
u/f:: !:.J.:::::,.:;h :;'(1 "l(H ::
pt, .
14" Resolution and ADR . .runit-I, b:.2
(18) Neutral'Listener Agreement or Early Neutral Evatuation:- It
is a -process developed in the Northern District of California for a neutral
evaluator to -meet parties at an .early stage of a 'case in order to make -a
. confidential assessment of dispute. ipartly to help them to narrow and define
the issuesand partly to promote efforts to arriveata settlement.
In this process, the parties to the dispute, discuss' their respective best .
. settlement offer in: confidence with the neutral third.party who after his ..
evaluation, suggests settlements to assist the parties to attempt a negotiated
settlement.
. (i9) Mediator Directed Negotlation:--': In mediator directed negotiation
'the mediator conducts discussions between, partieS'; 'l ess forinal than mediation;
lessmediation briefs and more high-level management involvement than' in
mediation. It isa' process 'of Via'mediabetween negotiation and mediation.
. ' . . ' : . , : " .
(20) MEDALOA; (Mediation and Last-Offer Arbitration):
MEDALOA is a binding dispute settlement procedure where on the failure of
the parties-in reacting a settlement through mediation, a neutral person, who
maybe theoriginal mediator or an arbitrator who had induced the parties to
mediation, considers' the final offers madeby the parties during mediation and
gives his binding decision on the basis ofthe offer which considers to be just
and fair such decisionis binding on the parties.
. " " , . . ,. .' , " ..
(21)Mini Tri3l ,(Supervised Settlement Procedure):- Mini-trial is a
. non-binding dispute settlement procedure where the disputing parties present
with summaries of their cases beforetheir executives who are competent l u
take decisions and who are assisted by a neutral third party. The executives
assess the strengths, weaknesses and prospects of their case and then they
negotiate a settlement with the assistance o( a neutral advisor and, thus the
dispute is settled amicably with the mutual acceptance ofboth the parties, Thus,
the mini-'tfial process consists of an' abbreviated adjudication like presentation
of evidence and arguments and it is followed by negotiation arid it is called a
summaryjury trial . '
, (:t2) !'- process
introduced by law into certain jurisdictions in which the parties
mutually approach the Court and request to appoint a retired Judge as a referee
for whom they pay the fee, before whom they,present their case Inan informal
proceedings. The referee-Judge,gives his decision which is -enforceable by the
Court. This procedure is -in vogue'in the US1\. . . , .... .. ! . : ., ' . '
.. - .. . . . '... ' . j . ' . ' . .
(23) Summary Jury process, is mini-
trial in which 'cases are' presented 'to mock juries >-r.h<;; 'bake which
indicate to the parties the Iikely reaction'ofateal jtiry to'tbe'issuesI and which
help them to engage realistically in settlement negotiations.
' 15
; ! Cb:-2) " Alte.... .
". \.
. , . . (24) Expert Determination or Appraisal:- This process is. followed
hta dispute. of atechnical nature and the dispute is resolvedby an
' nominated or identifiable, whose decision is to be .final and .bm4ing on the
In this' process, the expert need not, follow rules of arbitration .or
litigation. '
, (25) High-LoW This process is
used in the USA to refer to a procedure in.which parties agree to
.'but Iirnit the parameters ofthe final award, ' . .. ., . '; :. .
. ' . _. ' .. 0'. '
. ' .(2!j) Final Offer ,Arbitration (Best Offer Arbitration or Pendulum
or Flip Flop Arbitration or The Final
:Oirel' Arbitration process has,been 'evolved in the USAwhere:.each party
submits its monetary claim. before a pariel render thei{.decision by awarding
one and rejecting the other claimafter tfiotouihIy exSriifuing:thejustification
, of claims. " , , ,
fj ' ' . ; ' . . .
(27) Ex aequo et bono:- In this process, decision is taken on a case by
:t a'se basis without recourse to rules oflaw.. , ,
, .
,., .
'.
. (28) Amicable In this process-first a decision is taken
applying the application of law, then correction is taken ifneed arises. This
process is in vogue in France. .
The above Alternative Dispute Resolution techniques are extra-judicial
in 'character. They can be used in almost all contentious matters which are
capable of being resolved under law, by agreement between the parties. They
have given good-results in disputes relating to civil, commercial, industrial and
family disputes.
The ADR techniques have been successfully used in business disputes
such as banking, contract performance; construction contracts; intellectual
property rights; 'insurance coverage; joint ventures; artnershipdifferences;
personal injury; product liability; professional liability; real estate; and
securities, The ADR techniques offer the best solution iit respect ofcommercial
disputes ofan international character and the implementation ofthe awards:
VI. Unilateral, .Bi lat er a l and, Triadic (Third
Whenever a dispute arises there will be two parties.or disputants. The
interests of two parties are different. However, they haveto resolve their
dispute. Disputes are being solved by three methods of interventions:
'. , (1) Unilateral Intervention:,!' among the disputants, one -party is
of dominantposl ti.Q!l .aDd theotl'ier party isin dependent position, the dominant
party dictates the terms of'the settlement and the other PartY has to
there is no other go as he is dependant on that party. TIJis method of dictating
"

--------------_.-.._._--- - -- - -
. 16
. Dispn.te and ADR [Unit-I, Ch-2
1111!
the settlement terms in disputes-by-oneparty is called 'unilateral intervention'.

:
This method was in vogue during the early period oftrade development. At
r
.. present this unllateralIntervenrion is in rare of rare occasions; '. With the
. intervention ofstiitUfellthis crude method ofintervention was thrown away.
(2) Bilaterallntervention::.- When both theparties intervene in.the
settlement of dispute, it is .caned 'bilateral intervention'. In negotiation both
the parties settle their dispute with mutual understanding, In bilateral
intervention both -t he patties have equal position' in discussions, ' By
' unders4lrtding' each other and ' with 'give and take process' they solvetheir
problem without-the-interference of'thirdparty, This methodhas no statutory
recognition and it is a-practica] method in vogue,
(3) Trladic if the parties cannot settle
. . ' . . " . . j , . . . . .
the dispute themselves and decide to bring iri a third party, they cede some
control over the process but not necessarily over the solution. There are 'two
types ofthird-party processes: in one, the neutral has the power to adjudicate
or solution i.e. arbitration; iII the other, the neutral can only mediate
or help disputants'achieve their own solution i.e. mediation or conciliation.
. - .
In the mediation or. conciliation, each party meets with a neutral,
experienced mediator or conciliator. The session begins with each side _
,.
describing the problem and the resolution they desire. Once each side's
positions are revealed, the conciliator or mediator then separates them, into
pr ivate rooms, beginning a process of 'shuttle diplomacy'. The mediator or
conciliator has no power other than the sheer force of his presence and
personality. The end product is the agreement of both sides and satisfaction
to all.
In arbitration, both the parties submit the written statements along with
evidential documents, Both the parties agree on a time ' table, who the
be, rules of evidence, flow of witnesses; procedural and
many, other ingredients. ' They-even agree about venue
of hearing. the retain .. , arbitrator
;piirties are' binding, ' s'tlbJect 'to on limited
grounds.. given basing on the reason, 'opmion or natural
opinion. : "" . i /
," " . :d r ".: , ' : ; C1. :;1 ' j ' I',!" . ..t; ,. ;. :
Ot'tne PlinY .mediation
be ..ca .' .. ... ..-lffl ' ,!l<fj ' . .'..... ...... " .. 'Q . .parties , ,, .8 iU .use.. ....$M..... . . ' . . ..
. . . t or
. '.' ..}.,..'..,Ho' ('
, .. :.,."". .-','.. :.
Ch-2] Alteroative Dispute ResC;)lution (ADR) 17
.
..
.'
' . .
'_: . Mediation first and then arbitration, are far better ways than the Court
r
room to resolve disputes. .
'VII. Advantages of Alternatlve"Disputes Resoludon
,. According to P.C. Rao, Secretary-General of the International Centre
for Alternative Disputes Resolution, the following are the advantages of the
Altern.ative Disputes Resolution.
(1) It can be used at any time, even when a case is pending before a
Court of Law, though recourse to ..... .DR as soon asthe dispute arises may
.eonfer maximum advantages on the parties; it can be used to reduce the
number of contentious issues between.the parties; and, it (except in the case
of binding arbitration) can be terminated' at any stage by anyone of the
disputing parties.
(2) It can provide a better solution to disputes more expeditiously and
at less cost t han litigation. It helps in keeping the dispute a private matter .
and promotes creative 'and realistic business solutions, since the parties are '
in control of the ADR proceedings. ADR procedures take only a day or a
few days to arrive at a settlement.
(3) ADR programmes are flexible and not afflicted with rigours of rules
of procedure.
(4) The freedom of the parties to litigation is. not affected by ADR
proceedings. Even a failed ADR proceeding is never a waste either in terms
of money or time spent on it, since it helps the parties to appreciate each
other's case better.
(5) ADR can be used with or without a lawyer. A lawyer, however,
plays a very useful role in identification ofthe contentious issues, exposition
ofthe strong and weak points in a case, rendering advice during rJegotiations
and over-all presentation of his client's case.
(6) ADR procedures help in the reduction ofthe work-load ofthe Courts
and thereby help them to focus on the cases which ought to be
decided by Courts.
(7) ADR procedure permits parties to choose neutrals who are specialists
in the subject-matter of the disputes. This does not mean that there will be a
diminished role for lawyers'. They will continue to playa central role in ADR
processes; however, they will have to adapt their role to ADR requireJDents.
. .
(8) Alternative Dispute Resolution, through amicable settlement, enables
the parties to resolve the dispute and bury the past; preserve present
18 !udicial Dispute ResoJution (Unit-I, Ch..:Z

.'relationship; andpavesa better future without unnecessary eonfrcntation and
1,1
" conflict and acrimony.
,
'1 ..
(9) Alternative Dispute Resolution enables the parties to overcome from
wasting time detailed preparation of evidence and attendance at hearings
the antagonism and criticism Inherent in adversarial proceedings against
'witnesses.
(10) ADR 'procedure protects the parties from the Ioss atmosphere of
business reputations, goodwill, and ongoing relations in litigations. .
0. I
(ll) The, time and place of hearing can be chosenby parties according
to the convenience in APR.. ' .
(12) Iri ADR, the parties can 'choose their own rules or procedure for
dispute settlement.
VIII. Limitations ofAlternative Dispute Resolution
The amicable settlement through ADR is not favoured in the following
circumstances, '
./ (a) One party may 'be owed money and simply be Jooking for the final
and enforceable decision which can he obtained by resorting directly to
.arbitration or" litigation.
(6) A party may owe money and seek to use amicable settlement as a
.delayand discovery mechanism - the other party may, therefore, be concerned
about the delay, incurring extra costs and being disadvantaged in subsequent
arbitration or litigation.
(c) Adjudicative methods may be most appropriate for resolving some
sjtuations.: such as frivolous claims, outrageous claims, claims which
compromise a particular principle, cases which involve bodily injury or alleged
, criminality, claims to which there is an adequate legal defence. :.
IX. Negotiattons
-The most common-form ofdispute resolution is negotiation, Negotiation
is .a non-binding procedure in which discussions between the parties are
initiated without the intervention ofany third party with the object of arriving
at 'negotiated settlement of the dispute. . ' , ". .
In negotiation parties voluntarily participateto disputes. There
are no statutory provisions.fbr like the.: ;of arbitration
and want, their
o.wn t1;J;ey 'want, from their
----.: ... r ;
Unit-I, Ch-2) Alternative Dispute Resolution (ADR) 19
opponents. Each party should.identify all other party's interestS,'motivations
and perceptions. '
, . , ....
Essentials of Negotlatlon:- Shri P.M. Balcshi lists out the
following essentials ofGood Negotiation, .'.
The four characteristics ofa good negotiated settlement are: (i) fairness;
(ti) efficiency; (iii) wisdom; and (iv) stability. It ismore important an
agreement be perceived as far by the parties involved, than by an independent
jurist who applies an abstract rule oflegal decision-making. Perceived fairness
depends on participation.
Each party needs to explain its own interests, and listen carefully to and:
. seek to understand' and sympathise with the interest of the other party. A
. conscious effort is needed to avoid premature judgment, while multiple options
for settlement are quietly explored. Tnis not only requires patience, self- ,
.contraI and courtesy, but also a commitment to and trust in the negotiation'
"" .process,
" As the negotiation takes place without the intervention of third party, if
.either party. feels that the 'other party has no real or meaningful authority to
settle the matter in dispute, then the negotiation process may be distrusted as
being primarily for discovery or delay.
Negotiation without neutral. person may bog down into settlement
.repetitiveness, inter-personal relations between particular 'negotiators may
interfere adversely, and misunderstanding can grow from faulty signals and
inadequate interpretations.
The negotiation is a successful process for settlement when the parties
have mutual respect and trust. When they have no antagonistic disbelief-of
each other, they themselves sit together, discuss and convince each other to
compromise and come to settlement. Sometimes intervention of third party
complicates the issue and the parties may develop enmity among them. The
process of negotiation saves time-and money.r-Itdevelops cordial future
relations and keep the friendly relations among the parties as the of
dispute settled with mutual understanding..
, X. Conciliation
Conciliation. is the .ect of. bringing into harmony; harmonising,
reconcilement. It is the adjustment and settlement of a dispute in a friendly
unarnagonistic manner. It is-a voluntary non-binding technique utilising' an
impartial third party to assist in settling disputes between partieswhich may,
byagreement, become binding on the parties. :;';,
21
.... . __.. ..._- ....
r-"-'-"
II.
20
"
JUC;fidal Dispute Resolution and ADR runit-I,
. ,'
. r : "
In India, conciliation received statutory recognition in the Code ofCivil
Procedure, 1908, the Industrial Disputes Act, 1947 (Section 12) and the Hindu
Marriage Act, 1955 (Section 23). \ Due to the absence of weB-structured
I .: backed by .statutory sanctions, concjJiation could not get the
popularity. .

In 1984, the Himachal Pradesh High Court evolved a project for disposal
of pending cases by conciliation. The success of the Himachal Pradesh
experiment was widely welcome.
I
The second fillip came from the statutory recognition accorded
conciliation in the Arbitration and Conciliation Act, 1996 based on
UNCITRAL Conciliation Rules. Conciliation is advantageously used for"
settlement of domestic disputes as well .as international commercial disputes.'
. .
The conciliation procedure is described as 'mediation' in the USA
playing more positive role to be played by the neutral in assisting the parties:
to.arrive at ail agreed settlement. .
Any dispute which"nas arisen or may arise between the parties in respect
of the defined legal relationship, whether contractual or not, call be settled
by conciliation where the parties agree to seek an amicable settlement of that
dispute by conciliation, except where a particular mode of settlement is
prescribed by or under the law.
Conciliation is a procedure mutually agreed by parties and recourse to
this procedure can be had by entering into an agreement for seeking an
amicable settlement ofdispute by conciliation and ifa party sends an invitation
to conciliate and the other party accepts it. A!1y party competent to contract
can seek for 'conciliation. The parties may belong to the same or different
nationalities.
Normally, there will be one conciliator but the parties have freedom to
agree that there should be two or three conciliators. The parties may appoint
Ire helpofsuitableinstitution or person.
The conciliator assists the'jJarties in an indep'endent and impartial manner
in their attempt to reach an amicable settlement of their dispute. He calls
upon the parties to present a written summary oftheir respective cases together
with ,any relevant documents. There is no set formula 'for conducting
conciliation. The should adopt a flexible approach to the
procedure. He holds privafemeetingsWith each party separately. There may
be several rounds of such separate meeting to bring tliefpat-ties closer toan
agreement. There may be joint sessions to address

.;
.
t} il '
'tJ.J,Ch-2] Alternative Dispute Resolution (ADR)
.. .
n;.The conciIiator and the parties keep confidential all matters relating to
:ciliation proceedings. He should take positive action to help the parties
,neUe their interests and concerns and try to find an acceptable
If the conciliation succeeds, can draw award' .
\Jh(J:i[needed report to the Court or the arbitral tnbunal as the case m.aybe, .
of Conciliation
i'- 8hri Sarvesh Chandra lists out the advantages ofconciliation as follows:
:':ftt' (i) It offers a more flexible alternative, for a wide variety of-disputes,
small as wen as
It obviates the parties from seeking recourse to the Court system;
;1
It reserves the freedom of the parties to withdraw from conciliation
without prejudice to their legal position inter se at any stage of the
. proceedings;
(iv) . It is committed to maintenance of confidentiality throughout the
proceedings and thereafter, of the dispute, the information
. exchanged, the offers and counter offers of solutions made and the
settlement arrived at;

(v) It is cost-effective and produces quicker resolution of dispute;
(vi) It facilitates the maintenance of continued relationship between the
parties even after the settlement or at least during the period the
settlement is attempted at;
(vii) There is no scope for corruption or bias
.
(viii) Conciliation has its significance to the parties who are required to
continue their relationship despite the dispute.
XI. Distinction Between Arbitration, Conciliation and Negotiation
(I) Arbitration-is-a-binding processwhere the dispute is submitted for
adjudication according to the agreement by an arbitral tribunal which makes
a decision by awards. .
. Conciliation is a non-binding procedure in which an impartial third party,
, the conciliator, assists the parties to a dispute in reaching a mutually .
satisfactory and agreed settlement of the dispute.
Negotiation is a non-binding procedure in which discussions between
the parties are initiated without the intervention of any third party with the
object of arriving at a negotiated settlement of the dispute.
"
,( .. -.. ..
22
Judicial Dispute Resolution ,and ADR
Ch-2
r"
i ;
(2) In case of arbitration a prior "agreement-in writing" in the contract
or separate agreement in writing to submit to disputes which have .
arisen or arise in future is necessary and both the parties are.bound
by the agreement, '
conciliation may be initiated without any prior agreement and
relates generally to disputes which have already arisen. In conciliation one
party may invite in writing and the other party may or may not accept the
same. In nego.pation there is no need ofwritten agreement. It"can be started
after the dispute arises. '
(3) In arbitration, the arbitrator does not merely assist in resolution ofa.
. dispute but he also arbitrates and resolves the dispute by making an award.
laut, in conciliation. the conciliator, generally, assists parties in their
attempt to reach an amicable settlement oftheir.dispute. In negotiation there
will be no negotiator, a third party and the parties t!uimselves.resolve the
dispute.
(
4)
In arbitration the parties"have to submit the written .statements and,
other evidential documents and the information given by a party is 'subject to
scrutiny by the other party. But in conciliation, the factual information shall
be kept confidential and shall not disclose such information. In negotiation,
as both the parties sit together to negotiate they can openly discuss the issues
and convince each other as there is no third party to intervene.
(5) In arbitration, an award is made and signed by the arbitrator and it
is not merely a settlement agreement but it is an authentication ofsettlement
and the award should be implemented as a judgment.
In conciIiat1Oftr .a .'settlement agreement' may be .made by the parties
themselves with the assistance of conciliator and the conciliator shall
authenticate the "settlement agreement' and it is implemented like the
implementation ofaward. . .
". In negotiation,-the parties settletlIe issues themselves and there may be
written or oral agreement and they are implemented by the parties
by themselves. ,
. . proceedings canintt. be unilaterally but, the
conciiiation" proceedings may be unjJaterally ten1:Jlnited .by e written
declaration by a party to the other: party and the "In negotiation
proceedings also the.prooeedings may be tennrnil:tedbf'.-apatty'pennanently
ortemp'oradly., ,-, , :. ';, .:. , /:,: ': ' ., ... , 'l.t, ,,:::,' " .' ",
, .: \ ! -.' 16! .. ::'\ '_:1L f$ j 'r :
'"
.....:;.
.I?
's.
Un:tt-J'; Cb-2.J Altern.tlve'Dispute R_olutfOD (ADR) .23'
(7) .In-arbitration, neither the arbitrator nor the parties to the
are subject to disabilities in C9Dciliation," .the
conciliator shall not-act as-an arbitrator, or as a representative, or as a.counsel'
or a party in 811Y arbitration or judicial proceedings in .respect of
is subject of the conciliation proceedings. _, Nor can the parties present the
conciliator as a witness in any arbitral or judicial proceedings.
In negotiation, as there is no such negotiator present in the proceedings,,
the parties can seek the judicial proceedings for the settlement of dispute.
(8) The arbitration proceedings or awards may be used as evidence in
any judicial proceedings, but the conciliation proceedings carliiot be used as .
evidence in any arbitral or judicial proceedings. ' .
(9) In arbitration, an arbitrator has to decide according to natural justice .
and law, but a conciliator can conciliate irrespect ,of law. In negotiation, as '
there is no third party to intervene, the parties themselves settle the matter
by 'give and take' 'method. .
(10) An arbitrator is expected to give a hearing to the parties,. but a
conciliator does not engage in any formal hearing, though be may informally
consult the parties separately or together. In negotiation theparties themselves
meet together and talk together and come to settlement with mutua!
understanding.
(11) In arbitration, disputes .again 'arise in the implementation of the
award and one party may feel that the party was deprived of something. In
conciliation and negotiation" at the end ofthe proceedings, emotional harmony
between the parties may not suffer much, as the settlement was made with
mutual consent.
Unlike arbitration, conciliation and negotiation are compromise
procedures.' We do not see many 'home runs' or 'dead bodies' i.e. .dissatis
factions or depressions in mediated-or-negotiated agreements.:
XII. Distinction Between Judicial Settlement and Alternative
Dispute Resolution
In its philosophical perception, Alternative Dispute Resolution (ADR)
process is qualitatively distinct. from the judicial process. Judicial process is
set in motion by action of an aggrieved party. Each party's case is presented
before the Court by advocates. The! Judge perceives the dispute in the
backdrop oflcnownlegal concepts, sifts evidence to arrive at the truth, hears
! arguments to determine as to how, logically.the parties stand in terms of the
--
-'.
24 JudicialUispute Resolution and ADR [Unit-It Ch-2'
applicable legal concepts and pronounces his verdict after hearing and taking
evidence into consideration. 'The parties are bound by the verdict.
Represented by lawyers, the parties are kept at a distance not only from the
Judge but also from each other. TIle end result is a win-lose situation.
The ADR is a process where disputes are settled with the assistance of
a neutral third person generally of parties' own choice; where the neutral is
generally faniiliar with the nature of the dispute and the context in which such
disputes normally arise; where the proceedings are informal, devoid of
procedural technicalities and are conducted by and large, in the manner agreed
by the parties; where the dispute is' resolved expeditiously .and with less
'expenses; where the confidentiality of the subject-matter of the dispute is
maintained to a great extent. Here the dispute is solved with the consent of
both parties,the end result is a win-win situation.
In judicial process, the adversarial procedure of Courts does not aim at
' resolution ' of competing claims of the members of the society. It aims at
upholding the Qne and rejecting the other, leaving the conflict between the
parties resolved. Recourse to justice through Court system is time-consuming.
The winning party may win the case in Court but at the cost of losing whole
property. There is a proverb that 'the losing party weeps in Court while
winning party weeps at home'.
In substance the ADR aims at substantial justice, keeping in view the
interests involved and the contextual realities. The ADR process aims at
rendering justice in the form and context which not only resolves thedispute
but tends to resolve the conflict in the relationship of the parties which has
given rise to that dispute.
In judicial process the dispute is settled by a Judge who is appointed by
the State Power. He has to follow the procedurelaid down in statutes. He
has to depend upon the evidence and the hearing, whereas in i\DR the neutral
person who is agreedupon by both the parties proceed to settle the dispute '
and he need not follow, any procedure laid down in statutes but follow the
natural justice.
2S
9.
7.
' 8.
_ , i
:




,)
':ViJit-i
t
Ch-2J Alternative Dispute Resolution (ADR)
To sum up.. the judiciai resolution differs.from ADR follows:
Resolution ' Dispute Resolution
. ' .
l' 1. ' Judge appointed by the State Power 1. Neutral third party appointed by
..:.., deals with the dispute the parties deals with the dispute
.' in mediation
Gives the judgement 2. Provides agreements in mediation
or awards in arbitration
3. LOoks to future
Looks to past
4. Focus on relationships
Focuson facts
5. Seeks to restructure relationship
, Seeks to establish liability or fault
6. ResultSin accommodative
Results in winner and loser
resolution '
7. Results in custom-made'solution
Results in general rule
8. Role for disputants only, lawyers
Dominated by 'Lawyers
may help
9. Much compromise
No or little compromise
communication
10. Lawyer: to judge communication
11. Broadened relevance to include
.;c 11. Narrow relevance essentially
focus on interests, values, goals,
limited to issues defined by lawyers
"f; ".
" '1" .:. aspirations, as weli as

relationships
'l

12.Cultural factors are important.
12. Cultural factors tend to

receive deminimis attention
<:
I
'f:
' COMPARATIVE MERITSIDEMERITS
/ '
,,:
, & CONCILIATION
, J IidiCilil' .
-.,"ArbitrationConcWatlon
Adjudication
' Much time
Less time ' Leasi tlme
consuming consuming
consuming
Vel)' costly
Less costly
Least costly
Highly legal
. Less legal Least legal
Highly , Quite
Most
inconvenience
, J ; , '
convenient
convenient
, SpoItsgoodwill
Maintains Promotes
. and confidence
It also creates'
goodwill
more or less
goodwill
and confidence
bitterness
among parties
Not final till the
last appeal and
Final at the
earliest stage
No finality
and most
most urntertain
and more or uncertain
less certain
Partial freedom
Full freedom
Full freedom
within the-framed without
without
rules
restriction
restriction
Legally
Enforceable
Not at all
enforceable
with some
enforceable
limitations. by order.
26
t:
Unit::U
, l' ' :.
THE ARBITRATlON ANp'
CONCILIATION ACT, 1996
Cliapter.:I
INTERNATIOIiIAL 'BACKGflOUND OF ARBfTRAflON
AND THE WORK OF UNCITRAL
H.
'l; ,Importance Commercial Arbitnitlon
In 'international trade, and commerce, every commercialactivity is
, ordinarily preceded by a contract to avoid legal disputes. But in the world of
trade'and cOI11Jllerce, d' utes' are One partymay understand his
rig and obligations differently from no ma* how C:irefuIlv a,
contract is writtjm. This may leadto the breach ofcontract by seller or buyer.
Wtlen dIfferences arise out ofday-to-day commercial affairs, parties often prefer
to settle them privately and informally through Conciliation. When they fail to
.conciliate, they may be forced to seek other means. ' " '
::.I : :'
, ' ".. '.' Internationaltrade iiivolvestraoers belonging to countries whose
.legal systems may differ in material' respects,presenting complicatedand'
, conflicting features. The Courts 'of country.have jurisdiction only within
the territorial boundary on the country concerned the'national Courts of a
country are 'not empowered to lay their hands on persons and organisations
domiciled in other States. Therefore, no international'jurisdiction is available
far as litigation in national Courts is' concerned. Even if the Courts of a
, country agree to issue summons against the domicile ofa foreign country, they
not be able to proceed legally against him unless that person or organisation
vQluntarily submits to its jurisdiction. Moreover, the decree,of the Court '
passed in such a case against a foreign domicile will be jntblCbJOllS as it ClUW>t
b-eexecuted against him in thefureign Courts under the existing:situation in
futemational law. '
; The trade: are reluctant to seek settlement for
disputes in CoUrts of Law, which is quite understandable.. because judicial ,
process in anYCOllntry is complicated, ti!!1e consuming and The I
rrasonable trader might prefer to cut his losses rather than to engage in costly, J
and protracted litigation. If the subject matter in.. issull is too valuable to ac.c.,S>t
.,.fue loss, the breach may be challenged. They prefer the most cQD.Y,?D1c nt,
speedjest and cheapest machineryto'seffle the 'dispute and to settle it it)$uch ,
a: manner as to leave no string to pais business relationsbetw en
ames after the settlement 0 e ispute, ' ' ,;.i ,
27
;,l

1. Speed
2. Economy ,
3. Technicality
4. Convenience
5. Goodwill
6. Finality and
certainty
7. Freedom to
choose venue
8. Enforceability
I'
"
30 . '. . The Arbitration'and eoneiUation Aet, 1996 ' . [tTnit-II,:C,b-l ' .1lnit. n ,' Ch-l ] International Background of ,_, 31
.
(3) UNCITRAL.:Legal Guide on International Counter .Tr ade .. UN.CI TRAL Model. Law- 00: InteroatloDar Commcrcial
Transactions (1992)
" ';w;' } Arbitration <' . . ,

. "p
B. Trabsport Goods. 1 - .., .,.. ;:;::1'"
. The UNCITRAL commenced its efforts on theInternational COmmercial
(1) United Nations Convention on the Carriage ofGoods by Sea (1978) <? i, ;bitration with a solicited report submitted by the Secretary Generalof the
... ... .. _...__ . _" . -,.:>F:." The Report, first made a comparative anaI}'Sis ofcertaU:t intematioi"l!L
. (2) QfOperators.oiTransport.
. ;,.jitstroments in the field; second, brought out similarities or otherwise of the
'. : . . .. Terininals.m.IntcmatioDalTmde (+991)"':"-'- 00 ' _ ' _ .:..._ " instru ments; third, reviewed the relationships between''nilti dnal law
commercial arbitration; and fourth, 'suggested Ways to.promote
0
'Q)bdIfaDon" '.--- .,- ..
unification in the field. the internationaljnstniments that
(1) UNCI'TRAL Arbitration Rules (1'976) , _- .. ..
. , "the Report reviewed were: (a) international agreements and oilier instruments
(i) UNCtI'RAL Conciliation Ruies (1:980)
;'; jn' force; (b) international agreements not yet in-force, draft international
. (3) UNCITRAL Law 'on Arbitration
(, 'i{greements and other draft instruments; and (c) rules. .
(1985)" . ' .
': . With the above Report as a paper the drew up' .
(4) Case Law on UNCITRAL Texts (CLOUT) Model LaW- on ..
. for consideration: .
International Commercial
"
.(I JSteps that might be taken with a view to promoting the harmonisation
(5) UN:CITRAL Notes onOrganizing Arbit:qll F'roceedings(1996)
and unification of law in the field; and specifically (2) promoting wider
. . (6) Convention on the Recognition and Enforcement ofForeign Arbitral . ofthe of 1958 on Recognition arid
. Awards (New York. 1958)
6rFcreign Arbitration Awards. In second session, -most representatives
D. UNCITRAL Model Law on Procurement of Goods, conliidered that the Commission should not embark upon the drafting a new
conveniion. The Commission was called upon to concentrate upon giving
Construction and Sen-ices (1994)
better publicity to the existing instruments. Some suggested the appointment .
.E. Construction Co"tracts
ofa sub-committee or a special rapporteur to undertake a study of the
. UNCITRAL Legal Guide on Drawing up International Contracts for the
problems relating to the application and interpretation of the existing
construction ofIndustrial Works (19S8) .
_instruments 'and other related problems, AB this suggestion was the most
F: International Payments acceptable, Jon Nestor ofRomania was appointed as Special Rapporteur and
he submitted a preliminary report to the third session of UNCITRAL.
(1) United Nations Convention on International Bills of Exchange and
. Introducing his report, he pointed.out that the chief purpose ofthe report was
International Promissory Notes (Ne'Y York, 1988)
.. to provide a general outline of the firial report which, when completed, would
(2) UNCITRAL Legal Guide on Electronic Funds Transfers (1987)
provide the 'basis for' further measures by the Commission to promote the
(3) UNCITRAL Model Law on International Transfers (1992)
-harmonization and unification oflaw the sphere ofinternational commercial
(4) United Nations Convention on-Independent Guarantees and Stand- arbitration. Part I of the fmal report, he indicated, would be devoted to general"
. by Letters ofCredit (New York, i995) .
account of activities and results of the work on the subjecfin the periods 1'920.
G-.Electronic Commerce 1945 and Part II would be devoted to problems conceming the
application and interpretation of existing multilateral Internationalconventions.
(IY Recommendation on the Legal Value'of'Compnter Records (I .
on international commercial arbitration and would take the form ofdescnptiop ;"
. (2) UNCltRAL art Commerce,
. " , . . ",. " . :> . . analysis of judicial practice in which were parties .
You can see all these through the w<:;ri'RAL Home' Page
conventions. Part III would deal with possible measures for
on the Internet (htlp:llwWW;uNCi'tRP!t.:ORG) . /.:' ."
effectiveness of international commercial arbitration. -. ;: ' .'),; : 1' (. ., . biu.
. . . :. .

32 . The Arbitration and . [Unlt-D, Ch-l
!(
11 y... Law on Commercial' ,
i
',ArbitratiOn .
. The' UNCITRAL Model Law on-International Commercial Arbitration
is needed as the domestic laws are often inappropriate for international cases
and that considerable. disparity exists between them. The explanatory dote by
- tne UNCITRAL on the Model Law on International Commercial
- Arbitration gives reasons for Model Law, .
..(a) Demesne Laws ofArbitration:- (1) A global survey
,of National lawson arbitration revealed considerable disparities not only as
regards and solutions- but also in terms of development
and refinement. Sefne"laws may :be regarded as outdated; sometimes going
backto century-andoften equatingthe arbitral process withCowt
litigation. Other 'may, be said to be fragmentary in that they do nut address
ali relevant most of those laws which appear to be up-to-date
and comprehensive-were drafted with domestic arbitration primarily, if not
exclusively, in approach is understandable, in view of the
fact that even today-the bulk of cases governed by a .general,arbitration law
would be of a purdy nature, the unfortunate consequence is that
tradinenel-locat on international cases and the needs of
. modem practice are often not :-- ,.--- --_
(2) The expectations of the parties as expressed in a chosen set of
arbitration rules or a 'one-off' arbitration agreement may be frustrated,
especially by a mandatory provision of the applicable law.. Unexpected and
undesired restrictions found in national laws relate, for example, to the parties'
ability effectively to submit future disputes to arbitration. to their power to
select the arbitrator freely, or to their interest in having, me arbitral proceedings
conducted according. to the agreed rules ofprocedure and with no more Court
involvement that is, appropriate. Frustrations .:may also ensue fr-Qrn non
mandatory provisions which may impose undesired requirements on unwary
parties who did not provide otherwise. Even the absence of non-mandatory
provisions may cause difficulties by not providing answers to the many
-e procedural in. an arbitration and not always settled in the
arbitration agreement!
, . Laws Arbitration:- (I)-Problems
and consequences, whether emanating from mandatory or non
:or a' of pertinent provisions,' are aggravated
by the fabt 'that.Hati'6hiil 'on' .arbitral procedure differ widely. The
differences'are frequ'ent's'd1:b:-ce of'concern inintematlona! arbitration where
at Ieast.oneof'the confronted with foreign
and unfamiliar procedures. :For' such it party it may be
....'-_.

-- ...
P GUY
.. .:\
. ..n; Ch-lJ' International BaelqlrouDd. orArbitr.Uon:'.-._ 33
impossible.to obtain a full and precise account-of
'-the law applicable to the arbitration. . .,::' .
. ': .: (2) Uncertainty aboutthelocal biw with thC inhereni"risk of
adverselyaffect not only the functio$g arbiffalproces.but ..
the selection of the' 'place of arbitration. A party maywell for reasons
hesitate orrefuseto agree to a place which otheiwise, for practical reasons,
. would be appropriate in the case at hand. The choice of places ofarbitration
wouldthus-bewidened and the smooth functioning ofthe arbitral proceedings
if States were to adopt the ModelLaw which is easily
, 'meets the specific needs ofintemational commercial arbitration'
and providesan international standardwith solutions.acceptableto parties from
and legal systems.' . '
VI. Adoption of the Model Law on Intern.tional Commercial
"r.' . Arbitration ofuNCITRAL' "
. ,The Model Law constitutes a sound and promising basis for the desired
improvement of'national laws .. It covers all stages of the
.j-bitral process from the arbitration. to the recognition and
enforcement of the arbitral award and reflects a worldwide consensus on the
principal and important issues of international arbitration 'practice. Itis
acceptable to States ofall regions and the different legal or economic systems
ofthe world. ",

The Model Law on International Commercial Arbitration
was adopted by the UNCITRAL on 21st June 1985, at the close of the
Commission'8 18th annual session. The General Assembly, in its resolution
46/72 of 11th December, 1985, recommended thatvall States give due
consideration to the Model Law on International Commercial Arbitration, in
view of the desirability of uniformity of the law of arbitral procedures and
the specific needs or international commercial arbitration practice".
Salient features of the Model Law on International
, ., L,. Commerclal Arbitration . .
:1. Scope ofApplication of the Model Law
.. The Model Lawapplies to internationalcommercial arbitration, subject
" to any agreement in force between this State and any other State .or States '
(Art. 1(1.
. Here the term "commercial" should be-given a wide interpretation so
. to cover niatters arising from all felationships ofa commercial nature,
. 'whether contractual or not. Relationships of a commercial nature include", ,
, -but are not limited to, the following transactions: any trade,trade transactit)D_

34 The Arbitration and Conciliation Act, 1996 [Unit-II, Ch-1
for the supply or exchange of goods ot services; distribution agreement;
commercial representation or agency; factoring; leasing; construction works;
consulting; engineering; licensing; investment; financing; insurance;
exploitation agreement or concession; joint venture ana other forms of
industrial of business operation; carriage of goods or passengers by air; sea,
rail or road. (Footnotes to Art. 1). , . , .
The Model Law defines an arbitration as international if:
" (a) the parties to an arbitration agreement have, at the time of the
conclusion of that agreement, their places of business in
States; or
(b) one-ofthe following places is situated outside the State in which the
. parti es have their places ofbusiness:
(i) the place of arbitration if determined in, or pursuant to, the
arbitration agreement; " .
' (ii) any place where a substantial part of the obligations of the
commercial relationship is ' to be' performed or the place .with
which the subject-matter ofthe dispute is most closely connected;
or
(c) the parties have expressly agreed that the subject-matter of the
arbitration agreement relates to more than one country. (Art. 1(3 . .
' Another aspect of applicability is the territorial scope of application.
According to Arti cle 1(2), the Model Law as enacted in a given State would
apply only if the place of arbitration in the territory of that State. However,
there is an important and reasonable exception of Articles 8, 9, 35 and 36.
Articles 8(1) and 9 which deal with recognition of arbitration agreements,
including their capability with interim measures of protection, and Articles 35
and 36 on recognition and enforcement of arbitral awards are given a global
scope i.e. they apply irrespective of whether the place of arbitration is in that
.State or in another State and, as regards Articles 8 and 9, even if the place 'of .
.arbitration is not yet determined. ".._ ... .. . ,__ . .
This Law shall not affect any other law of this State by virtue of which
,certa in disputes may not be submitted to arbitration or may be submitted to
arbitration only according to provisions other than those ofthis law.
, .
The strict territorial criterion, governing the bulk of the provisions of
the Model Law, was aliqpted for the sake of certainty and in view of the
following facts, ' The is .used as the exclusive criterion by
great majority of national, laws and, where national laws allow parties to
a State otherthan that where the arbitration takes
International Background Arbitration ._ . ' 35
ynitoII; Ch-1]
place;,experiences show that parties in practice rarely make tJSe'orihat facility.
The'Model Law, by its liberal contents, further reduces the need forsuch
ehoice ofa 'foreign' law in lieu ofthe (Model) Lawofthe place ofarbitnttiQJi,
not the least because it grants parties wide freedom in shaping the roles of
lhe arbitral proceedings. This includes the 'possibility of incorporating into'
the arbitration agreement procedural provisions of a 'foreign' law, provided '
there is no conflict with the few mandatory provisions of the Model Law. .
Furthef!Il
ore,
the strict territorial criterion is of considerable practical benefit
in of Articles 11, 13, 14, 16,27 and 34, which entrust the of
the respective State with functions of arbitration assistance and supervision.
According to Article 3, Unless and otherwise agreed by the parties, any'
.written communication is deemed to have been received if it is delivered to
the addressee personally or if it is delivered at his place ofbusiness, habitual
residence 'or mailing address; if none of these can be found aftermaking 'a
reasonable inquiry, a written communication is deemed to have been received
ifitis sent to the addressee's last-known place ofbusiness, habitual residence
or mailing address by registered letter or any other means which provides a
record of the attempt to deliver it. This provision does not apply to
communications in court proceedings.
The Model Law envisages Court involvement in the following instances:
A first group comprises appointment, challenge and termination of the
mandate of an arbitrator (Art icles 11, 13 and 14), jurisdiction of the arbitral
tribunal (Article 16) and setting aside of the arbitral award (Article 34). These
instances are listed in Article 6 as functions which should be entrusted, for
the sake of centralization, specialization and acceleration, to aspecially
designated Court or, as regards Articles 11, 13 and 14, possibly to another
authority (e.g. arbitral institution, Chamber of Commerce). A second group
comprises Court assistance in taking evidence (Article 27), recognition ofthe
.arbitration agreement, including its compatibility with Court ordered interim
measures of protection (Articles-S and 9), and recognition and enforcement
of arbitral awards (Articles 35 and 36) .
Beyond the instances in the above two groups. i'no Court shallintervene, ' __ ,
in matters governed by this Law as per Article 5 of the Model Law. '
2. Arbitration
Chapter II of the Model Law deals with the arbitration agreement,
including its recognition by Courts. The provisions of the arbitration
agreement follow closely Article II of the Convention on the Recognition an
,
Enforcement of Foreign Arbitration Awards (New York, 1958) [i.e. 1958 New
York Convention] with a number of clarifications added.
I
i
36
The Arbitration and Act; 1996
[Unftn, Ch-l "
(i) Definition and form 'of arbitration agreement:- According to
Article 7(1) of the Model Law, "Arbitration Agreement" is an agreement by
thepartres to submit to arbitration all or certain disputes which have arisen
or which may arise between them in respect of a defined 'Iegal relationship;
whether contractual or not. An arbitration may be in the form of
an 'arbitration clause in a contract or ofa separate. agreement. '
The Model Law insists that the arbitration agreement shall be in Writing
though 'some national laws recognized in practice the' oral arbitration
agreements. An agreement is in writing ifit is contained in a document signed
by the pal-ties or in an exchange of hitters, telex, telegrams or other means of
tele-communication which provide a record of the agreement, Of inan
exchange of statements ,of claim and .defence in which the existence of an
agreement is alleged by one party and not denied by another. The reference
in a contract to a document containing an arbitration clause constitutes an
arbit:mtionagfeement provided that the contract is in writing and the reference
is such as to make that clause. part ofthe contract (Art: 7(2. _
(ii) Arbitration Agreement and the Courts:- Article' 8(1) of the
Model Law Obliges any Court to refer the parties to arbitraticin ifseized with
a claim on the same subject-matter unless it finds that .the arbitration .
agreement is null andvoid, inoperative or incapable ofbeing perfonned.
. According to Article 8(2), where an action referred above has 'been
brought, arbitral proceedings may nevertheless be commenced or continued,
and an award may be made, wl:tiJethe issue is pending before the Court.
Articfe 9 -of the Model Law expresses that it is not incompatible with
an arbitration agreement for a party to request, before or during arbitral
proceedings, from a Court an interim -rneasure of protection and for a Court
to grant such measure.
3. of' Arbitral Tribunal:
(i)No. of Arbitrators:- According to Article IO,ofthe Model Law,
the parties are free to determine the number of arbitrators. Failing such
detennination, the number ofarbitrators shall be three, ",
.. .:
(D) Appointment of Arbitrators:- As per Article I I of the Model
Law, no person shall be prevented by reason ofnationality from acting as an'
arbitrator, unless and otherwise agreed by the parties. are free to
agree on a procedure ofappointing the arbitrator 'Orarbitrators; subject to some
provisions of this, Article. "; :,i:: * ..r: , .. ':. :.:: 1 ' ; : "
....: " ,
(a) in an splllI appoint one
and the two'afbitra'tbiS thus' shall appoint the
.,. "'':'1-- .,f
.j,--p:""-:'.
Ch-lJ Intern8tio'nal Backeround"ofArbitration 'r/
third arbitrator; ifa party fails, to appoint the arbitrator Within.thirty
days' of.receipt of a request to do so from the other party, 'or,if.thc
two arbitrators failto agree on thethird arbitrator within thirty OOys
of their appointment, the appointment shall' be made, upon request.
ofa party, by the Court or other. authority specified in Article 6; ".:
(b) 'in an. arbitration With a sole arbitrator, if the parties are unable to,
. agree on the arbitrator, he shall.be upon request ofaP8!tY,
, by the' Court or other authority. . . . . '. " ':
. :.
an appointment procedure agreed b:r the
(a) a party fails to act as required under such procedure; or .
(b) 'the parties, or two arbitrators, are unable' to reach on an agreement
expected ofthem WIder or '.. "
(0) a third party, including an institution, falls to perform any function
entrusted to it under such procedure;
any party mayrequest the Court or other authority specified in Article 6
to take the necessary measure, unless the agreement on the appointment
procedure provides other means for securing the appointment,
,A decision on the above appointment procedure agreed upon or not agreed
upon by the Court or other authority shall be subject to no appeal. The Court
or other authority, in'appointing an arbitrator, shall have due regard. to any
qualifications required for the arbitrator by the agreementof theparties and
tosuch considerations as are likely tosecure theappointment ofan independent
and' impartial arbitrator "and, in the case ofa sole or third arbitrator, shall take
into account as well as the advisability of appointing an arbitrator of a
nationality other than those of the parties.
(iii) Ground of-Challenge:- Under Article 12(1)-ofthe Model Law,
whena person is approached inconnection with his possible appointment as
an arbitrator, he shall.disclose any circumstances Ilkely to give rise .to
justifiable doubts as to his impartiality or independence. An arbitrator-from
the time of his appointment and throughout the arbitral" proceedings, shall
without delay disclose any such circumstances to the parties unless they have
already been informed of them by him. '
Article 12(2) of the Model Law states that an arbitrator may be
challenged only if circumstances exist that give rise to justifiable doubts. as
to his impartiality or independence, Of, if he does not possess
agreed to by the parties, A party may challenge.an arbitrator
him, or in whose appointment he has participated, only. for
he becomes aware after the appointment has been made. ' ':

38 The Arbitration and Conciliation Act, 1996' . [U'ilft-n, Ch-l
(iv) ChallelJge Procedure:- According to Article 13 ofthe Model Law,
the parties are freeto agree on a procedure for cnatleilging an arbitrator. Failing
such agreement,a party who mtends to challenge an arbitrator within
fifteen days after .becoming aware of the constitution of the-arbitral tribunal
or after -becommg aware ofany circumstances ofjustifiabledoubts as to his
impartiality or independence, send a written statement of the reasons for the
challenge to the arbitral tribunal. Unless the challenged arbitrator withdraws
from his' office or the other party agrees to the challenge, the arbitral tribunal
shall decide cn thechallenge, .
. If a challenge under any procedure agreed upon by the parties or under
the procedure is not successful, the challenging party may request, within thirty
days after having received notice of the decision rejecting'the challenge, the
Court or other authority to decide on the challenge, which decision shall be
subjectto no appeal; while such a request is pending, the arbitral tribunal,
including the challenged arbitrator, may continue the arbitral proceedings and
make an award. " .
(v) Failure or impossibility to act:-:- Article 14 ofthe Model Law states
thatifan arbitrator becomes dejure or de facto unable to perform his functions
or for other reasons fails to act without undue delay his mandate terminates if
he withdraws from his office or if the parties. agree on the termination.
Otherwise, ifa controversy rema ins concerning any ofthese grounds, any party
may request the Court or other authority to decide on the termination of the
mandate, which decision shall be subject to no appeal. If an arbitrator
withdraws from his office or a party agrees to the termination ofthe mandate
ofan arbitrator, this does not imply acceptance ofthe validity.
(vi) Appointment of substitute arbitrator:- As per Article "15 ofthe
Model Law, where the mandate of an arbitrator terminates or because of his
withdrawal from office for any other reason.or because of the revocation of
his mandate by agreement of the parties or in any other case of termination
of his mandate, a substitute arbitrator shall be appointed according to the rules
that where applicable t() the appointment of being replaced.
4. Jurisdiction of Arbitral Tribunal: .
(i) Competence to rule on own Article 16 ofthe Model
Law adopts that the arbitral tribunal may rule on its own jurisdiction, including
any objections with respect to the existence or validity of the arbitration
agreement. For that purpose; an arbitration clause which forms part of a
contract shall betreated as anagreement independent ofthe other terms ofthe
contract.. A decision 'by thearbitral tribunal that the contract is null and void
shall not entail ipsojurethe invalidity ofthe arbitration clause. .
IJ:llit-II,Ch-:l] International Background of Arbitration 39
A plea that the arbitral tribunal does not have jurisdiction shall be raised
not later than the submission of the statement of defence.. A party is not
precluded from raising such a plea by the fact that he or
participated in the appointment of, an arbitrator. A plea that me arbitral
tribunal is exceeding the scope of its authority shall be raised as soon as the
matter alleged to be beyond the scope of its. authority is raised _during die
arbitral proceedings. The arbitral tribunal may, in either case, admit a later
plea if it considers the delay justified,
The arbitral tribunal may rule on the plea that the arbitral tribunal is,
exceeding' the scope of its authority either as a preliminary question or iiian
award on the merits. If the arbitral tribunal rules as a preliminarY question .
that it has jurisdiction, any party may request, within thirty days after having
received notice of that ruling, the Court specified in Article to decide the
matter, which,decision shall be subject to no appeal; while such a request is '
pending, the arbitral tribunal may continue the arbitral proceedings and make
an award. . .
. (Ii) Power to order interim 'measur es: Unlike some national laws,
the Model Law empowers the arbitral tribunal, unless' otherwise agreed by
the parties, to order any party to take an interim measure of protection in
respect of the subject-matter of the dispute, if so requested by a party. The
arbitral tribunal may require any party to provide appropriate security in
connection with such measure (Article 17). It may be noted that the Article
does not deal with enforcement 'of such measures; any' State adopting the
Model Law would be free to provide Court assistance in this regard.
5. Conduct of Arbitral proceedings
(a) Fundamental Procedural rights of a party
, . (i) Equal treatment of parties:- The parties shall be treated with
equality and each party shall be given a full opportunity of presenting his
case (Art. 18). .
(ii) Determination of rules of procedure:- The parties are free, subject
to the provisions of this law, to agree on the procedure to be follow.edbythe , "
arbitral tribunal in conducting the proceedings. Failing such agreement, the
arbitral tribunal may, subject to the provisions of this Law; conduct the
: arbitration in such manner as it considers appropriate. The power conferred
: upon the arbitral tribunal includes the power to determine the admissibility, .
, relevance, materiality and weight ofany evidence (Art. 19). .
.', :":Oii).Place of arbitratioll:-:- The parties are free to agree jjf
Failing such agreement, the place of shal]
determined by the arbitral tribunal having regard to the
.'
5
'"
{
"
; '
40 , The Arbitration and Conciliation Act, 1996
. (Unft-D, .Ch-l
case, including the conveniences.of the parties. The arbitral tribunal may,
unless otherwise agreed by the parties, meet at anyylaee it considers
apPropriate for consultation among its members; for he8riilg"'WitUesSes, experts
or the parties, or for inspection of goods, other property or documents (Art.
20). ..
QJ) Commencement of arbitral proceedlags
Unless otherwise agreed by the parties, the arbit@l proceedings in respect
ofa particular dispute commence on the date on which a request for that dispute
to be referred to arbitration is received by the respondent (Art. 21).
(c) Language
The parties are free to agree on the language or languages to be used in
the arbitral proceedings. .failing such agreement, the arbitral tribunal shall
determine the language or languages to be used in the proceedings. This
agreement or determination, unless otherwise specifiedtherein, shall apply to
any written statement by a party, and hearing and any award, decision or other
communication by the arbitral tribunal. . The arbitraltribunal may order that
any documentary evidence shall be accompanied by a translation into the
language or languages agreed upon,by the parties or determined by the arbitral
tribunal (Art. 22).
(d) Statements of claim and defence
Within the period of time agreed by the parties or determined by the
. arbitral tribunal, the claimant shall state the facts supporting his claim, the
points at issue and the relief or remedy sought, and the respondent shall state
his defence in respect of these particulars, unless the parties have otherwise
.agreed as to the required elements ofsuch $ltements. The parties may submit
with their statements, all documents they consider to be relevant or may add a
reference to the document-for other evidence they will submit. Unless otherwise
agreed by the parties, either party may amend or supplement his claim or
defence during the course of the arbitral proceedings, unless the arbitral
tribunal considers it .appropriate to allow such amendment nliVirigregard;to
the delay in making it (Art. 23). .
(e) Hearing andWriften Proceedings
. . . ': , ' - .. : . : " -, ' :. ' . ; ; ' : " .
r . .' ..7.4(1) of -that...unless the parties have
of evidence or for
oral argument be hold such an
stage of the if59,requested by a party. It should be
bra party to oral
'number of suC?h as
0 hearings: ' , .J ,." . . " . r r ,
Unit-Oj Ch-l)
International Baekgroand:QfArbitration __
41
, . The parties shall be given sufficient. advance notice ofany hearingand
any meeting ofthe arbitral tribunal for the pwposes ofinspection
otl)er.pTQperty or documents (Art. 24(2. .'
All statements, or other information supplied,to the arbitral
tribunal by one party shall be communicatedto the other party. Also an expert
report or evidentiary on which:the arbitraltribunal may rely in
its decision shall be communicatedto the parties (Art. .24(3.
. ", : . ' "..; .'
.(1) Default oh party . .: .. .
Only ifdue notice was -given, may the arbitral proceedings becontinued
iI;t'the absence ofa party. This applies, in particular, .10the failure ofa party
.to appear at a hearing or to produce documentary evidence without 'showing
sufficient cause for the. failure, The arbitral tribunal may also. continue the
proceedings where the respondent fails to communicate hisstatement ofdefence,
while there is no need for continuing the proceedings ifthe fails to
submit hisstatement ofclaim (Art. 25). . .
. . .
(g) by arbitraltribunaJ
Under Article 26 of the Model Law, the arbitral tribunel may appoint
one or more experts:to report to it on specific issues to be determined by the
arbitral tribunal; ,andmay also require a party to give the expert any relevant
, information or to produce, 'orto provide access to, any relevant documents,
goods or other property forhis inspection.
Ifa party so requires or if the arbitral tribunal considers it necessary, the
expert shall, after delivery ofhis written or oral report, participate in a hearing
where the parties have the opportunity to putquestions to him and to present
expert witnesses-in order to testify on the points at issue.
The arbitral tribunal or a party with the approval ofthe arbitral tribunal
may request from a competent Court of this State assistance in taking
evidence. The Court may execute the request within its competence and
according to its rules on taking evidence (Art. 26) . .
Provisions which empower the arbitral tribunal to carry out its task even
if one of the parties does not participate are -of considerable practical
importance since, as experience shows, it is not uncommon that one of the
parties has little interest in cooperating and ib-expediting matters, They would,
thus, give international commercial arbitration its necessary effectiveness,
within the limits offundamental requirements of procedural justice (Al:t.
. . , .! ; . 1", ' , .
6. Making of Award and Termination ofProceedings . .
. . " ,. r . . . I ;.
(i) Rules applicable to substance dispate:-
shall decide the dispute in accordance with such rules oflaw as ate'

42 , The aDd Conciliation Act; 1996 ' Ch-l
by the parties as' applicable to the substance ofthe dispute. Any designation
ofthe law or legal systemofa given State shall be construed, unless otherwise
expressed, as directly referringto the substantive law ofthat State and not to
its conflict of law rules.'
(2) Faihngany designation by the parties, the arbitraltdbunal shalI'apply
the lawdetermined by the conflict oflaws rules which it considers applicable,
(3) The arbitral tribunal shall ex aequo et bono work as amiable
compositeur only ifthe. parties have expressly authorised it to do so.. ' '
(4) In all cases the arbitral tribunal shall decide in accordance the
terms of the contract and shall take into account the usages of the trade
applicable to the transaction (Art. 28).
(U)Decision-ma!dng by pane! or arbitrators:- In arbitral proceedings
withmore than one arbitrator, any decision of the arbitral tribunal shall be
made, unless otherwise agreed by the parties" by a majority of all its members,
However, questions ofprocedure may be decided by a presiding arbitrator, if ,
so authorised by the parties or all members ofthe arbitral tribunal (Art. 29). '
- (iii) Settlement:- It during arbitral proceedings, the parties settle the
dispute, the arbitral tribunal shall terminate the proceedings and, ifrequested
by the parties and not objected to by the arbitral tribunal, record the settlement
in the fohn ofan arbitral award on agreed terms. An award on agreed terms
shall be made in accordance with the provisions of Article 31 and that shall
be an award.. Such an award has the same status and effect as may other on
the merits of the case (Art. 30). ,
(Iv) Form and Contents of Award:- (I) The award shall be made in
writing and shall be signed by the' arbitrator or arbitrators. In arbitral
proceedings with more than one arbitrator, the signatures <?jthe majority of
all members of.the arbitral tribunal shall suffice, provided that the reason for
any omitted signature is stated.
(2) The 8yvardshall upon which it)s. based.unless the
parties have agreed that no reasorisare to lJe given or the award is an award
on terms under Section 30. ,
(3)The award shall state its date and the place ofarbitration. The award
shall be deemedtohavebeen made at the place. ' " '
, (4) After the award is made, a copy signed by .the arbitrators shall be
delivered 'to'each party (Art. 31)." . ... ,
. . ': :' ..-',"; .,: .... ....,.;.: ,..... . " ,.. . .. "
(v) Terinination of Proceedings:---- {I} The 'arbitral proceedings are
terminatedby the final award-or by an order .
Unit-II, cs-i J International Background . 4j
(2) The arbitral tribunal shall issue an 'order for the termination of the
.' arbitral proceedings when
(a) the claimant withdraws his claim, 'unless the respondent objects
, thereto and the arbitral tribunal recognizes a legitimate interest on
his' part in obtaining a final settlement of the dispute; .
(b) the parties agree on the termination ofthe proceedings;
(c) the arbitral tribunal finds that the continuation ofthe proceedings has
for any other reason become unnecessary or impossible,
(3) The mandate ofthe arbitral tribunal terminates with the termination
ofthe arbitral proceedings (Art. 32).
(vi) Correction and interpretation of award; additional A
. party with notice to the other party, may request the arbitral tribunal to correct
in' the award any error 'in computation, any clerical or typographical error or
any errors of similar nature and may request the arbitral tribunal to give an
interpretation ofspecific point or part ofthe award within thirtydays. ofreceipt
of the award. If the arbitral tribunalconsiders the request to be justified, it
, shall make the correct or give the interpretation within thirty days ofreceipt
oftherequest, .
A party, with notice to the other party, may request, within thirty days
ofthe award, the arbitral tribunal to make an additional award. If the arbitral
tribunal considers the request to be justified, it shall make the additional award
within sixty days (Art. 33).
7. Recourse against Award
Recourse to a CO!JI1 against an arbitral award may be made only by an
application for setting aside. An application for setting aside under Section
34 must be made within three months of receipt of the award. It should be
noted that 'recourse' means actively "attacking" the award. Furthermore
'recourse' means resorts to a Court i.e. an organ of the judicial system of a
State; a party is not precluded from resorting to-an-arbitral tribunal of second
instance ifsuch a possibility has been agreed upon 'by the parties.
The Model Law contains an exclusive list of limited grounds on which
an award may be set aside:
(i) lack ofcapacity ofparties to conclude arbitration agreement or lack
of valid arbitration agreement;
(ii) lack of notice of appointment of an arbitrator' or. of the .arbitral
proceedings or inability ofa party to present his:case; !
(iii) award deals with matters not by.submissionto arbitration;
44
.-.---,---.,..... .
- - .._ ---_. - .. :"'.--- ---. -- _..- ..
The.Arbltration and ConciUation Act,.199' [Unit-II,.Ch-1
(iv) composition of arbitral tribunal or conduct of arbitral proceedings
contrary to effective agreement of parties or, failing agreement, to
the Model
(v) non-arbitrary of subject-matter ofdispute and violation of public
policy, which would include serious departures from fundamental
ofprocedural .
The Court, when asked to set aside an award, may, where appropriate
and so requested by a party, suspend the setting aside proceedings for a period
oftime.determined byit in order to give the arbitral tribunal an opportunity to
resumethe arbitral proceedings or to take such other action as in the arbitral
tribunel's opinion will eliminate the grounds for setting aside (Art. 34).
. 8. Recognltiqn.and of Awards.
(i) Procedural conditions of recognition and enforcemenn-s- Under
Article. 35(1) of'the Model Law; any arbitral award, irrespective ofthe country
in which it was made, shall be recognized as binding and.enforceable, subject..
.to the provisions ofArticle 35(2) and Article.Jti, .
. .
The Model Law does not lay down procedural details ofrecognition and.
enforcement since there is no practical need.for unifying them, and since they
form as intrinsic part of the national procedural law and practice. The Model
Law merely sets certain conditions {ot obtaining enforcement; application in
writing, accompanied by the award and the arbitration agreement (Art. 35(2)).
(ii) Grounds for refusing recognition or enforcement:- (1) Recognition
or enforcement of an arbitral award, irrespective of the country in which it
was made, may be refused only: . .
(a) at the request of the party against whom it is invoked, if the party
furnishes to the competent court where recognition or enforcement
. is sound proofthat:
(i) a party ofthe arbitration agreement was under some incapacity;
or the said agreement to which the
parties have subjected or, thereon, under
the Jaw of the country award.. made;
(ii) the party against whom the award is invoked-was not given
notice..ofthe appointment ofan arbitrator or ofthe arbitral
'. .or was otherwise to present his case; or
. .(iii): .. with a dispute contemplated by or not
. falling terms of the submission to arbitration, or it
., ....,. J., .I < -v , i ., "- . '.
contains decision on matters beyond the scope o.r the SUbmission
to .tttbi'tration,' provided that, If the .decisions on matters
Unit-II, .Ch:'ll BaekgrouDd- of __. 4.5
.submitted to .arbitration can. be separatedfrom those notto be
.submitted, that part of the award, which contains decisioDS on'
matters submitted to arbitration may' be.. recognized. and
enforced;or .
(iv) the composition ofthe arbitral tribunalor thearbitral procedure
was not in accordance with-the agreement of the parties or,
failing such agreement, was not"in accordance with the law'of
the country Wherethe or. .
(v) the award has not yet become binding on the parties or hasbeen
. . set aside or suspended bya Court of the country .in which,.0'
. . under thelawofwhich, that award was made; or
(b) ifthe Court finds that:
(i) the; subject-matter of the dispute is not capable of settlement
by arbitration under the 'law ofthis State; or .
(ii) the recognition or enforcement ofthe award would be contrary .
to the publicpolicy of'this State.
(2) Ifan application for setting-aside or suspension ofan award has been
made to a Court, the Court whererecognition or enforcement is sought may,
if it considers it proper, adjourn its decision and may also, on the application
of the party claiming recognition or enforcement ofthe award, order the party
to provide appropriate security. .
To sum up, the salient features of the Model Law, according to S.C.
Nirwani, Secretary, Indian Council ofArbitration, are:
(1) There are elaborate provisions for the appointment ofarbitrators and
for their challenge on appointment. The scope for subsequent removal by
the Court is remote. In the absence of agreement to the contrary the tribunal
consists of three arbitrators, rather. than one (Articles 10 to IS).
(2) The Model __ Law.'empowers the tribunal to grant "interim measures
ofprotection" and to provide security in connection with such measures. The
right of
.
the Court to grant such measures is preserved (Articles 9 and 1"7).
. .:
(3) The arbitrators are empowered to make a binding award on their own
jurisdiction, even where the objection puts in issue the existence or. validity
of the underlying substantive contract. The ruling may be contained-in a
preliminaryaward or in the award on.the merits. There is a tight of appeal
to a Court offirst instance (but no onward right ofappeal) in those. cases.where
R
the tribunal rules that it does have jurisdiction (Article 16).. ..; :;:.:11
:: .- .
46
.. . " ! . . . , . -t....':
The Arbitration and ConciUation Act; 1996 [Unit-II, a..1"
(4) 'The parties are-free to agree on the procedure to be followed by thi:l
tribunal. In the absence ofagreement thetribunal may conduct the
in such a manner-as it considers appropriate (Articles 19,20,22 and 24). The
Model Law probably, contemplates as express agreement 'as to procedure
subject to the qualifications: , ,
(a) The tribunal is always obliged to treat the parties with equality and
to give each party a full opportunity ofpresenting its case (Art. 18).
(b) Each party is obliged tosubmit a statement ofits case (Art : 23). '
(5) There is provision for automatic discovery of documents, although
no doubt the arbitrators may order discoveryunder Article 19, unless the
parties have otherwise agreed. The arbitrators are empowered to appoint an
expert (Article 26) but there is no provision conferring any particular status
on his report, ,
, ,
(6) Art icle 25 confers very modest default powers. There is no power
to dismiss for want ofprosecution.
(7) The parties may empower the tribunal, to decide ex aequo et bono
or as amiablecompositeur (Art. 29(3.
, ,
(8) The Model Law is silent about the power to make an interim award.
(9) The award must contain reasons, unless otherwise agreed (Art . 36{2.
(IO) The Court has no power at call to intervene, by injunction or
otherwise, whilst the arbitration is in progress.
(11) Article 34(2) contains an exclusive list of the grounds upon which
an award may be set aside. Iri this, where the scope of the Court's discretion
to set aside an award is very much wider, whether the list confines the
jurisdiction of the Court in a manner which leaves it powerless to deal with
serious procedural injunction depends upon the meaning of "public policy" in
Article 34(2)(b)(ii).
(12) a powerto remitan award to the arbitrators (Article
34(4.
VIII. Arbitration Rules of UNCITRAL, Adopted on
15th December, 1976
. .
After consultationwith,arbitral institutions and centres of international
commercial arbitration, the United!Nations Commission on International Trade
Law (UNCITR:AL) adopted-the -fol lowing rules of arbitration and
recommended the use of in the settlement of disputes arising in
the context of international commercial relations. The Rules are framed in 4
sections - (i) introductory rul,es (Arts. 1-4); (ii) composition of the Arbitral

;';'
- l1nit-n" ,Ch':1J International Background of.Arbitration'MM 47
, Tribunal (Arts. 5-14); (iii) Arbitrary Proceedings . .l5-30) and (iv) The ,
,award (Arts. 31-41). . ' . ,
' I . Jntroductory Rules"- "
(1) Scopeof Application (Art. 1):- (I) Wnerethe parties to contract
have agreed in writing that disputes in relation to that contract-shall be referred
to arbitration under the UNCITRAL Arbitration Rules, then such disputes shaJI
be settled in accordance with these Rules subject to such modifications as the
parties may agree in Writing.
(2) These rules shall govern the arbitration except that where any ofthese
Rules is in 'confli ct with a provision of the law applicable to the ,arbitration
from which the parties cannot derogate that provision shall prevail.
(Ii) Notice, Calculation of Periods of Time (ArL 2):- (I) For the
purposes of these Rules, any notice, including a notification, communication
or proposal, is deemed to have been received ifitis physically delivered to the
addressee or if it is delivered at his habitual residence, place of business or
mailing address, or, if none of these can be found after making reasonable
inquiry, then at the addressee's last known residence or place of business.
Notice shall be deemed to have been received on the day it is so delivered.
(2) For the purposes of calculating a period of time under these Rules,
such period shall begin to run on the day following the day when a notice,
notification. communication or proposal is received, if the last day of such
period is an official holiday on non-business day at the residence or place of
business of the addressee, the period is extended until the first business day
which follows. Official holidays or non-business days occurring during the
running ofthe period oftime are included in calculating the period.
(iii) Notice of Arbitration (Article 3):-(1) The party initiating recourse
to arbitration (claimant) shall give to the other party (respondent) a notice of
arbitration.
(2) Arbitration proceedings shall be deemed to commence on the date on
which the notice of arbitration is received by the respondent.
(3) The notice ofarb\tration shall include the following :
(a) A demand that the dispute be referred to arbitration;
(b) The names and addresses of the parties; ,
(c) A reference to the arbitration clause orthe separate arbitration '
, agreement thaJ is invoked; ,
(d) A the contract out of or in relation to which
arises; -, . ; ' ..
48 The Ch-l
(e) The general nature of the claim and 'an indication of'the amount
involved, ifany;
, .
(f)\ The relief or remedy sought;
(g) A.' proposal as tothe number of arbitrators (i,e, one or ' three), if
, ,parties. have notpreviously agreedthereon.
(4) The notice ofarbitration may also include
, ' .
(a) The proposals for the appointment of a sole arbitrator and an
appointing authority referred to, in Article 6; Paragraph 1.
:(6) ,The .notification of the appointment of an referred to in
Article 7.. ' .' ' .
The referred to in Article 18.
(iv) Representation and (Article 4):-.The parties may be '
represented-or assisted by persons oftheir choice.' The names and addresses
of such persons must be communicated in writing to the other party; such,
communication must specify whether the appointment is being made for
purposes ofrepresentation or assistance. '
2. Composition of the Tribunal
(i) Number of Arbitrators (Article 5):- If the parties have not
previously agreed on the number 9 arbitrators (i.e. one or three), and if within
fifteen days after the receipt by the respondent ofthe notice ofarbitration'the
parties have not agreed that there shall be only arbitrator, threearbitrators
shall be appointed.
(h) Appointment of Arbitrators (Arts. 6 to 8):- Article 6 deals with
the appointment .procedure of sole arbitrator. If a sole arbitrator is to be
appointed, either party may propose to the other. Ifthe parties have not reached
agreement" on the choice of a 'sole arbitrator,' the sole arbitrator shall be
appointed by the appointing authority agreed upon by the parties. If no
appointing authority has been agreed upon by the parties, either party may
request the 'Secretary-General of the Permanent Court of Arbitration at The
Hague to designate an appointing authority. The appointing authority, then,
shall, at the request"ofone ofthe, parties, appoint the sole arbitrator by follovving
the procedure ofArticle 6(3).
Article 7 states that if three, arbitrators are to be appointed, each 'party
shall appoint one.. arbitrator. ,TIre two; arbitrators thus appointed shall choose
the thirdarbitrator, who will-act asthe presiding arbitrator.of the tribunal. If
the two .. arbitrators not agreed on the, choice of the presiding arbitrator,
the presiding arbitrator shall be appointed the appointing authority.
:::/'r-'
tJnjt-II, Ch-l) Internationa. o(
'. .. According to Article 8, where the names, one ,or ate
Rt.:ap.osed. for appointment as their full names, addresses and
.shall be indicated; togetherwith.a description
When"he authorityis to
arbitrator, the party.shall send a copy of the notice ()f arbitration,.,a of. .
the contract. and a CQPYof the agreement, if it is not contained in
"the contract, . _
." . (Pi) .ChaD,enge,()f (Adieles 9 12):- Article 9,states that
arbitrator shall disclose to those who approach him in ccnnection
, with.his possibleappointment any circumstances to give' ri..se
doubts as to JUs independence, An arbitrator, once
orchosen, .shall disclose such to the parties unless
,ey-have already.been informed by himofthese
-.'" . . ..
Article M) states that any arbitrator may' be challenged if circumstances
exist that give rise to justifiable doubts as to the arbitrator's impartiality-or
A party may challenge the arbitrator appointed by him only
for reasons of which.he becomes aware after the appointrrient has been made.,
,J.: ,. , ", '. "
" As per Article.Ll, a-party who intends to challenge' an arbitrator shall
send notice ofhis challenge in writing by stating the reasons for the challenge
within fifteen days after the appointment of the challenged arbitrator, When
an' arbitrator has been challenged by one party, ,the other party may agree to
tiic challenge, ' '. -." ;'
According to Article 12, if the other party does not agree to the challenge
and the challenged' arbitrator does not withdraw, the decision on the challenge
will be made by the appointing authority. Ifthe appointing authority sustains
challenge, a-substitute arbitrator shall be appointed chosen following
the same procedure 'applicable to the appointment of an arbitrator.
, " (iv) Replacement of an Arbitrator (Article 13):- In the event of the
death or resignation of an arbitrator' a substitute arbitrator shall be appointed
and in the event that an arbitrator failsto act or in the event of the dejure or
d.e facto impossibility ofhis performing his functions, he shall be replaced.
. (v) Repetition of Hearings in. tbe event of the Replacement of an
Arbitrator (Article 14):- Ifthe sole or presiding arbitrator is replaced, any
hearings held previously shall be repeated; if any other arbitrator is replaced,
such prior hearings may be repeated-at the discretion of the arbitral tribunal.
Arbitral Proceedings.(Articles 15-30)
. {i) General Provisions (Art. 15):-;- The arbitral tribunal may conduct
the arbitration in such manner as it considers appropriate, provided that JthQ,
parties, are.treated with equality and that at any stage of the proceedingaeaea ,
party is given a fuJI opportunity ofpresenting his case.
I
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.50 The Arbitration [Unit-fi, Ch-l

.<:
If either party so requests at any stage of the proceedings, the arbitral
tribunal shall hold hearings for .the presentation of evidence by Witnesses,
,." including expert witnesses, or for oral argument. In the absence of such a
request the arbitrator shall decide whether to hold such hearings or whether
proceedings shall-be conducted on the basis ofdocuments and other.material.
. All documents or information supplied by a party shall be communicated to
the other party.
(ii) Place of Arbitration (Article 16}:";"'" Unless the parties have agreed
upon the place where the arbitration is to be held, such place shall- be
determined by the arbitral tribunal, having regard to the circumstances ofthe
arbitration. ' The arbitral tribunal may determine the locale of the arbitration '
within the country agreed upon by the parties. The arbitral tribunal may meet
at any place for the inspection ofgoods, other property or documents by giving
sufficient notices .to the parties. The award shall be made 85 place of
arbitration. , .
(iii) Language (Article i7):- .Subject to an agreement by the parties,
the arbitral tribunal shall determine the language(s) to be used in the
proceedings; :The documents of original language shallbe accompanied by a
translation into the language(s) agreed upon hy the parties. ' .
(Iv)' Statement of Claim (Article 18):- The claimant shall communicate
his statement ofclaim in writing to the respondent and to eachofthe arbitrators.
It shall contain the names and addresses ofthe parties; a statement ofthe facts
supporting the claim; the point at issue and the relief or remedy sought. A
copy of the contract with arbitration agreement shall be annexed thereto.
(v) Statement of Defence (Article 19):- The respondent shall
communicate his statement of defence in writing to the claimant and to each
ofthe arbitrator within the period of time determined by the arbitral Tribunal.
He may annex the documents if any. The respondent may make a counter
claim arising out of the same contract.
..
(vi) Amendment to tbe claim or defence (Article 20):- During the
" course of arbitral proceedings either may amend or supplement his claim or
defence unless the arbitral tribunal considers it inappropriate to allow such
amendment.
'
(vii) Plea as ,to the jurisdiction of the Arbitral Tribunal
21):- The arbitral tribunal .shallhave the power to rule on objection that it
has no jurisdiction, including any objections with respect to the existence or
validity of the arbltratioaiclause.' It shall have the power to determine the
existence or the'validity of.the contract of which an arbitration clause-forms
a part . A decision by the -arbitral tribunal that the contract is nub and void
Internaonal ofArJJitration ,":"
tJn't:-I1,:Ch-lJ
shall not entail ipso jure the -invalidity of the arbitration clause; A plea that
the .-arbitral, tribunal does not .have jurisdiction shall be .raised not later.than
'the, of defence. In general, the arbitral,tribunal should rule on
.t
plea .. jurisdiction as apreliminary However, the
arbiiiai .tribunal may proceed with the arbitration and rule' 'on such' plea in .
their final award. ,, ' .' . ,. . . ' .
. ' , '. I
,(viii) Fnrther Written Statements (Article 22):- The arbitraltribunal
decide which further written statements shall be required from the parties
dT may'be ,presented .by them and 'shall' fix the' periods' of time for
such . ' . " ,.
.; cix) Period of Time The fixed by the
arbitral tribunal for the communication of'written statements should not exceed
days. However the arbitral tribunal may extend the time limits if
it concludes thaten extension is justified. . .'.
(x) Evidence and Hearings (Articles 24 and 2S}::"""'" Article 24 states
that eachparty shall have the burden ofproving the facts relief on to,support
,his claim or defence. The arbitral tribunal may require the parties to produce
documents, exhibits or other evidence within prescribed,time. ,
-Article 25 statesthatthe arbitral tribunal shall give the parties adequate
advance notice of the date, time and place thereof in the event of an oral
hearing. Hearings shall be held 'in camera' unless the parties agree otherwise.
The arbitral tribunal .shall make arrangements for the translation of oral
statements if either is deemed necessary by the tribunal. Evidence of witnesses
may also be presented in the form of written statements signed bythem. The
arbitral tribunal ShillI determine the admissibility; relevance, materiality and
weight ofevidence offered.
(xi) Interim Measures of Protection (Article 26):- At the request of
either party, the arbitral tribunal may take any interim measures it deems
necessary in respect of the subject-matter of dispute. Such interim measures
may be established in the form ofan interim award.
: ' (xii) Experts (Article 27}:-- Thearbitral tribunal may appoint one or
more experts to report to it, in writing,' on specific issues to be determined
by the tribunal and that report shall be communicated to the parties.
(xiii) Default (Article 28):- The arbitral tribunal shall issue an order
for termination of the arbitral proceedings, if the claimant has failed to
communicate his claim within the fixedtime without showing sufficient time.
If one of the parties fails to appear at a hearing, without showing
for such failure, the arbitral tribunal may proceed withthe
arbitration. If one of the parties fails to produce the invited docufuentaiy

The and ..' .
evidence within the fixed time, without showing: sufficient cause for such
failure, the arbitral tribunal may make the award on theevidencebefore it ..
. of Hearing 29):- The arbitraltribunal may
inquire 'of the' parties ifthey have any furtherproofs to offer orwitnesses ,to
be heard or submissions to inake and, ifthere are none, it may declare the
hearing closed. However, the arbitraltribunal may, if considers necessary,
reopen the hearings at any time before the award is made. ' ." ;. ':' .. '.
(xv) Waiver (Article)O):7" A. party who'knows'tiiat any
provision of these Rules has not beencomplied withand yet proceedswith
the arbitration without promptly stating his obiection to such non-compliance,'
shall be deemed to have waived his right to' object. . .
: .
4. . TheAwar4 (Articles to 41) ..
(i) Decisipn:- When there are three arbitrators, any award or other
. decision ofthe arbitral tribunal shan be made by a majority, ofthe arbitrators.
(Ii) Formand Effect ofthe Award (j\nicle addition to making
a final award, the "arbitral tribuna1 shall be entitled' to make interim,
interlocutory, orpartial awards. The award must be: made in' writing and shall
be final and binding on the parties. The parties to carry out the
award without delay.
The arbitral tribunal shall state the reasons upon which the award is' based;
unless the parties have agreed that no reasons are to be given. award shall
be signed by the arbitrators and it 'shall contain the date on which and the place
where the award was made. Where there are three arbitrators and one of them
fails to sign, 'the award shall.state the reason for the absence of the signature.
The award may be made public only with the consent of both parties. Copies
of the, award signed by the arbitrators shan be communicated to the parties by
the arbitral tribunal. If the" arbitration law of the country where the award is
made requires that the award.be filed or registered, the tribunal shall comply
with this requirement within the period of time required by law.
-. (iiirjtppJicab-le .Law, Amiable Compositeur The
arbitral tribunal shall apply. the law-designated by the parties as applicable to
the substance of the dispute. Failing such designation. by' the parties, the
arbitral tribunal shall the Iaw determined by the conflict of laws rules
which Jt considers " ',' <;>,
" .' '. . -', .
. " The arbitral. tribunal-shall decide -as amiable compositeur or ex aequo
et. bono pn1r the expressly arbitral tribunal to
do SQ and if the the .arbitral procedure permits such
arbitration. , '.. 0
. . ,. ..: .
ce-iJ InternatloD.at of _ 53
. .(Iv) or o.her. Grounds for before the
award is made, the parties agree on a settlement of the the arbitral
Jrihunal shall issue an order' for .,the' terminationof the arbitral proceedings,
If, before the awardis made, the arbitral tribunal feels that the arbitral
becomesunnecessary or impossible for any reasons, it can
parties of its intention to issue an.. order for the termination of the
proceedings, . ,. '
. !.. " The arbitral tribunal shall communicate the orders of termmation of the .
proceedings.
(v) Interpretation' ofth Award (Article3S):- Within thirty daysafter
the receipt ofthe award, eitherparty with notice to theother party, mayrequest
that the 'arbitral tribuna! give -.n interptctetion ofaward. The interpretation .
shaH be given-inwriting Within.fOtty..five daysafter the receipt.of the request.
interpretation fonn pVt, ef'the award,
(vi) Correction of the Award (Article 36):- Within thirty days after
the receipt ofthe award, either party, with notice to the other party, may request.
the arbitral tribunal to correct in the anyerror in computation, any
clerical or typographice] gr error of similar nature... The arbitral
tribunal days after the communication of the award make
such corrections QW1\ iidtiative. Such corrections shall be in' writing
and fC!TW part of award and binding on parties.
. . . .
(vU) Award (Article Within thirty days after. the
receipt of the award, either party" with notice, to the other party, may request
the arbitraltribunalto makean additional award as to claims presented in the
arbitral proceedings but omitted from the' award. If the arbitral tribunal
considers request for an additional award to be justified, it shall complete
its-award within sixty daysafter receipt ofthe request. The additional award
\8 considered as an award and becomes a part ofawardand binding on parties.
(viii) Costs (Articles 38 to 40):- As per Art. 38, the arbitral tribunal
.shallfixthe costs of arbitration.in its award. The costs consist of fees ofthe
arbitrators, travel expenses, costs of expert advice, and costs for legal
representation..
Article 39 states that the fees of the arbitral tribunal shan be reasonable
in amount. If there is schedule of fees for arbitrators, the arbitral tribunal .
shall take that schedule in fixing the costs.
Article 40 states that the. arbitral,tribunal may apportion each of such
costs between the parties though the general principle is.. that the
be borne by the unsuccessful party. No additional fees may be
.:;
an arbitral tribunal for interpretationor correction or completion :::i:
S4
The Act, 1996 ' [Unit-II, Ch-l
(ix) Deposit 'bf Costs (Arficle 41):- 'The arbitral tribunal/on its'
establishment, 'may -request.-eaeh party to deposit an equal amount as an
advance for the costs. During the course ofthe arbitral proceedings the arbitral
tribunal may request supplementary deposits from the parties. Ifthe required
deposits are not paidin "fulIwithin thirty days after the receipt ofthe-request,
tire arbitral-tribunal shall so inform the parties, about the suspension or
termination of the arbitral proceedings if such payment is not made. After
the award has been made, the arbitral tribunal shan render an accounting to
the' parties of the deposits received and return an unexpended balance to the
parties.
IX.. Code of Ethics for International Arbitrators
The following are the: Rules of Ethics for International Arbitrators
prepared by theIntemational Bar Association Section on Business Law. '
J. Fundamental Rule:- Arbitrators shall proceed diligently and
-efficiently to provide the parties with a just and effective resolution of their
disputes, and shall be and shaH remain free from bias (Art. 'I).
2. Acceptance of Appofntmenn-c- (1) A prospectivearbitrator shall
"accept an appointment only ifhe is fully satisfied that he is able to discharge
his duties without bias. ..
(2) "Aprospective arbitrator should accept an appointment only if he is
fully satisfied that he is competent to determine the issue in dispute and has
an adequate knowledge of the language of the arbitration.
(3) A prospective arbitrator should accept an appointment only if he is
able to give to the arbitration the time and attention, which the parties are
reasonablyentitled to expect.
(4) It is 'inappropriate to contact parties in order to solicit appointment
as arbitrator (Art, 2).
3.. Elements of Bias:- (1) The criteria for assessing question relating
to biasareimpartialityand independence, Partiality arises where an arbitrator
favours one of the parties, or where he is prejudiced in relation to the subject
matter of the dispute. Dependence arises from relationship between an
arbitrator and one of the parties or with someone closely connected with one
of the 'parties,
, (2)' which might lead a reasonable person, not knowing the
arbitrator's true state of mind, to .consider that he is dependent on a party,
create an appearance .of'bias.: .THe'same is true if an arbitrator has a material
.interest'in thb outcome' of the" dispute, or already taken a position in
relation to' it. The'appearance' of bias: is best overcome'by full disclosure as
described in Article 4 below. .
.1'
Vnlt-II, Ch.-l J .international. of
.
(3) Any current direct, or indirect business relationship between ali
and a with a person who is known to bea potennally
, important witness, will normally give rise to justifiable doubts as 'to 8 .
prospective arbitrator's' 'impartiality or independence. He should decline to
. ,.accept an appointment in such circumstances unless the parties.agree in Writing
., .! ': that he may proceed. Examples of indirect relationships are. where a member
of the prospective.arbitrator's family, his finn, or any business partner has a
business relationship with one of the parties.
'(4) Past relationships will not operate as an absolute bar to
"acceptanceofappointment, unless they are ofsuch magnitude or natureas to
be likely to affect prospective arbitrator's judgment.
(5) Continuous and substantial social or professional relationships'between '
a prospective arbitrator and a party, or with a person who is known to be a
potentially important witness in the arbitration will normally give rise to
...justifiable doubts as. to the impartiality' or independence of-a prospective
arbitrator (Art: 3). ..
. 4.Du'ty (1) A prospective arbitrator should disclose ail
facts or circumstances that may give "to justifiable doubt as to his
impartiality or independence, Failure to make such disclosure' creates an
.appearance of bias, and may by itself be a.ground for disqualification even
though the non-disclosed facts or circumstances would not ofthemselves justify
disqualification. ' '
(2) A prospective arbitrator should disclose-:
(a) any past or present business relationship, whether direct or indirect
as illustrated in Article 3(3), including prior appointment as arbitrator,
with any party to the dispute, or any representative of a party, or
apy person known to be a potentially important witness in the
arbitration, With regard to present relationships, the' duty of
disclosure applies irrespective of their magnitude but with regard
to past relationships only if they were of more than a trivial nature
in relation tothe arbitrator's professional 'or business affairs. Non
disclosure of an indirect, relationship unknown to a prospective
arbitrator will not be a ground for disqualification unless it could
havebeen ascertained by making reasonable enquiries;
(b) thenature and duration of any substantial social relationships. with
any party or any person known to be likely to be an important witness
in the ,arbitration;' , ":!"
. .. ." ..., .
(c) the nature of any previous.relationship with any fellow arbitrator
(including prior Joint service as an arbitrator); .. .. '....,) j
r'
....- .....,
56. The Arbitration and, 1996 (Unlt-H, Ch-l
(e) the extent of any prior knowledge hemay have ofthe dispute;
. . . . "
(d) the extent ofanyeommitmerits whichmay affecthis availability to
perform his duties as arbitrator as may be reasonably anticipated,
'. ' . . .
(3) The duty of disclosure continues throughout the arbitral proceedings
115, regards fa,cts or circumstances, .. ,
(4) Disclosure should be made in writing IU'!d communicated to al1 parties
and arbitrators. When an arbitrator-has been appointed; any previous
disclosure made to the parties should be communicated 'to the other arbitrators
(Art. 4).
5. Commnaications (1) When with a view
to appointment, a prospective arbitrator should 'make sQfflcient enquiries in
order to InfOtTo himselfwhether may' beany justifiable doubts regarding
his impartiality or independence; he is competent' to determine the
issues in dispute; and whether he is m the arbitration the time and
attention required. He may also respond to e.nqu.;ries from those approaching
.him, provided that such enquiries are designed 4J his suitability
and availability for the appointment and provided thai the 'case ,
are not discussed" In tQ,eevent that a prospective sole arb,itf<l4>r 'Qr presiding
arbitrator is approached -by one party alone, or be one ' arbitrator chosen
unilaterally by a party or (a 'party-nominated' arbitrator), he should ascertain
that the other party or parties, or the other arbitrator, has consented to the
manner in which he has been approached. In such circumstances he should,
in writing or orally, inform the other party or parties, or: the other arbitrator,
of the substance ofthe initial conversation.
(2) If a party-nominated arbitrator, is required to partj.pjpate in the
selection of a third or presiding arbitrator, it is acceptable for him (although
he is not so required) to obtain the views of the party who nominated him ?S
to the acceptability ofcandidates being considered.
- .. . . .
(3) Throughout thearbitral proceedings; an arbitrator should avoid any
unilateral communications regarding the case with a}lY party, or its
, reIireseritati'ves:' ' If such communication should' occur, the arbitrator should
inform the,other party cir parties and arbitrators ofits substance,
" 'arbitrator aware that 'has been in
imp.ropercomrriuriicafion'Witn a' he may. ,rtiTainiJigarbitrators
and they together determine what action sbourd betaken. Normally,
the' appropriate initial :cCllii'sihjf,acfi'oIf'js- 'f()Fithelioffendfttg',arbitrator to be
requested or refrain frcifii Jriakingfuiy fi.ittner o'orriinimications with
Unit:-", Ch-l]
,Jntem ation:d of ArbftratioQ. _. 57 ,
"Ii
./ '. ,
i
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I;
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i '
Chapter-2
HIS'TORICAL BACKGROUND AND DEVELOPMENTOF THE LAW OF
ARBITRATION AND CflNCILIATION IN.INDIA. ..
:.....
'- 1. Under the Rule ofEast India In India; during the early
and medieval periods, -laws were D9t codified and were.governed by social
sanctions. At the advent QfBntishers, the EastIndia Company started taking
over administrative control. The Presidency Governments in Bengal, Madras
and Bombay. enacted as laws.
In the:Bengal Regulation of 1772 a provision was made to submit all
cases 'of disputed accounts and other matters to arbitrator for decision and the
awards of'the'arbi1ration were implemented as decreesor the Courts. Toe
Bengal Regulations, 1781,.1782 developed the' rules for arbitration between'
the parties in suits.. The Bengal Regulation' of 1787 empowered the Court to
refer certain suits to. arbitration.
The BeDgm.ReguIation XVI of 1793 authorised the Courts to recommend
to parties to suit to refer matters _.of accounts, partnership, debts, non
performance of'contracts etc., to arbitration. In this Regulation, the procedure
of conductingan arbitration .proceeding was: alsoprovided, The Bengal
Regulation. xv of i 795: the Bengal Regulation VI of I g13 and the Bengal
Regulation )LXXVlI of"1814 and Bengal Regulation of i 822 modified the rules
ofarbitration. Inthe similar way, Bombay Regulation vn of 1827 and Madras
Regulations V and VII of 1816 empowered the arbitrators to settle disputes.
These Regulations remained in force-till the enactment ofthe Civil Procedure
'Code, 1859.
2. Under the Rule of British India;- Act 7 of 1870 and Act 10 of
1861 replaced the Regulations which govern the arbitration in the Presidencies
ofBengal, Madras and Bombay. ..
The procedure of Courts of Civil Judicature in the form of the Civil
Procedure Code, 1859 was codified by Act vm of 1859 after the coming into
existence of the Legislative'Council of India' in 1834. The law relating to
arbitration wasincorpcrated in Chapter VI ofthat Code(Sections 312 to32 ,
Section 312 of that Act enabled -the parties to a suit to apply to the Court, if
they so desired" that an order be passed that the matters in dispute be referred
to arbitration-. Procedure for arbitration, mekingand filing ofawards was also
laid down in subsequent sections. I
Provision was .also .made for, .reference to arbitration without the
intervention of. Courts, 'Thi$ .Act was repealed by Act X 6f 1877 which
consolidated the Law .ofCivil.Procedure which was further replaced by Act
58
._. and _. ..
XIV of 18'82;,; The Act of 1882 provided the .provisiontor filing and
enforcement of made by Without the OfCoUits.
The Civil Procedure Code, theIndian Contract Act, 1872 arid, the
Special t"87? mandated that contract to refer thepresent or future
differences to arbitration could be specifically enforced. . .
. ,
The Code ofCivil. Procedure, 18'82 was replaced by the present.Code.of
Civil Procedure, 1908. The Second Schedule of the Code of Civil Procedure, .
1908 comprised the law regarding arbitration,
.. .. ..
In India, the Indian Arbitration Act, '1899 was the first statutory enactment
on arbitration. It was based the 'English Arbitration Act, It was in
the Indian Arbitration Act, _'8.99 that provision was made for arbitration 9(
disputes arise infuture. . . . . . .
Thus matters relatingto arbitration "continued concurrently in the
Arbitration Act, 1899 and in the Civil Procedure Code; 1908.
.... . . '
At-last, in 1940, the comprehensive-Arbitration Act was enacted on the
pattern of the English Arbitration Act, The Arbitration Act, 1940
repealedSection 89, clauses Ia) to (f) of sub-section (1) of Section 104'and
'the Second Schedule to. the Code of Civil Procedure, 1908. The Indian
Arbitration Act, 194Q provided for domestic ,(national) arbitration only and
remained in force until it was repealed in-1996. .
The Arbitration (Protocol & Convention) Act, 1937 was enacted for
enforcement of tforeign awards' made under the 'Geneva Convention, 1927.
3. In Independent India:- The Constitution ofIndia, Article 51, clauses
(c) and (d), provide that the State shall endeavour to (c) foster respect for
international law and treaty obligations in dealings of organised peoples with
one another; and (d) encourage settlement of international disputes by
arbitration.
The Indian Arbitration Act, 1940 and the. Arbitration (Protocol &
Convention) Act, 1937 have been--'in force in India even -getting--'"
independence. The Government of India enacted the Foreign Awards
(Regulation & Enforcement) Act, 1961, for the enforcement of 'foreign awards'
under the New York Convention, 1958. . '
The Government of India decided to review the Arbitration Act, 1940
and for this purpose, referred the matter, in 1977, to the Law Commission for
its examination. The Law Commissioq of'India, in its76th Report in November
1978 recommended for updating the Arbitration Act of 1940 to meet new
challenges of the modern developing economy ofthe country.
Arbitration Act, 1940 continued upto 1996. ,,:h/\.
;,;j

T
The Arbitration and ConciUatlon Act, 199(i (Unlt-lli .Cb-2
60
. The Arbitration and Conciliation Bill was introduced in Rajya Sabha on
.16th May 1995, I The Chairman Rajya Sa!?1YJ referred .the Bill to the
Parliamentary Committeeron 17th May 1995.. The Committee submitted its
report to the Parliament on 28th November 1995. : Since Winter session of
the'Parliament ended in December 1995 without transacting 'any business,' an
Ordinance on Arbitration & Conciliation Law was promulgated on 16th January
1996 which came into force'on.25th January 1996. '
. The ' ofIndia bonsolidated the law or arbitration inthe
Arbitration and Conciliation Ordinance, 1996 and published in the Gazette of
India (extraordinary) Part n ,Section 1 dated 16.1.1996. The following reasons
for enacting this Ordinance are given in the Preamble. '
(1) The United Commission Law has
adopted the UNCITRAL Model Law on International Commercial Arbitration
: in 1985.
. . ,
(2) The UNCITRAL has 'adopted the UNCITRAL Conciliation Rules in
1980. ' . .
(3) Getieral Assembly ofthe United recommended the
use of the said Rules in cases where a dispute arises in the context of
International commercial relations and the parties seek an amicable settlement
ofthat dispute by recourse to conciliation: . .
(4) The said Model Law and Rules make significant contribution to the
establishment of a unified legal framework for the fair and efficient settlement
ofdisputes arising in international commercial relations. ..
(5) It is expedient to make law respecting arbitration and conciliation
taking into account the aforesaidModel Law and Rules. .
(6) A Bill to consolidate and amend the law relating to domestic
arbitration, international commercial arbitration and enforcement of foreign
arbitral awards as also to defme the law relating to conciliation and for matters
connected therewith or incidental thereto had been introduced in Parliament
btlt had been passed..
(7L:rhe Parliament was not in session and the President was sajisfied
that circumstances exist which rendered it necessary for him to take immediate
action.
. J "
. , (8) Therefore in exercise ofthe powers conferredby clauae (1) ofArticle
123 oftbe Constitution, Jhe:Pre$idlmtwas pleased to
Since the Parliament could not pass the Arbitration and Conciliation Bill,
1995 the Ordinance had to be promulgated twice until it was finally passed as
the Arbitration and Conciliation Act, 1996. The' Act received the assent of
Unn-ll, Cb-2)
mitorlcal and Developmenr ..._
6t
" .the President of India on 16th ofAugust, 1996. The Actpas comemto.effect
from 22nd August, 1996.. , (Vide G.S.R.375 (E), dated 22nd!Augustj'1996), :
But the provisions ofthe Act were in force from 25thJlUluary,-l996, the'day',
the relevant Ordinance had come into force.
. " . . " . . 1. '
.

.
.
The Arbitration and Conciliation Act, 1996'hasrepealed the Arbitration
Act, 1940; the Arbitration (Protected and Convention) Act, i937 and the
Foreign A,wards(Recognition and Enforcement)Apt, 1961.. .
, I . '.
I. . Recommendations of the. Law Commission of India for
updating the Arbitration ' 1940"iil Its Report ill
November 1978 "
The Law Commission ofIndia received areference D:O.No.F 8(15)/76
. L.C. dated 27th July, 1977 from the Government of India requesting it to .
undertake. the revision ofthe 1940; .
".The.Law Commission found that though the scheme ofthe Act, 1940 is
sound, someprovisionshave in actualworking caused difficulties and have
resulted in delay and needless expense and .felt that there is need to improve
certain provisions of the Ac.t. The following
recommendations in its 76th. Report in November 1978 on Arbitration Act
1940'.' .
(1).To be clear about the oral agreement of arbitration it is necessary to
save the operation of'the award to a limited extent ' and recommended the
insertion ofa suitabiiiproviso to' Section 47 to deal with the matter.
(2) To remove a certain amount of conflict on the definition of arbitration
agreement, the Commission recommended the.insertion ot-Explanations below
Section 2(a) to be fairly dear as follows:
"Explanation 1:-Where the membersofany'associationagree in writing
to abide by the rules or by-laws of the association, and those rules or by-laws
contain a provision whereunder present or future differences .between the
__ __members inter se or between a member and the association are required to be .
submitted to arbitration, they shall be -deemedto have entered .into a written
agreement with each other within the meaning ofthis clause.
, : ;..,'.
Explanation 2:- Where an arbitration agreement provides for the
submission of future difference to arbitration and a difference subsequently
arises which it is proposed to refer to arbitration thereunder it shall not be
necessary that fresh consent ofboth the parties or all the parties, as the case
may be, to the reference should be obtained at the time ofreferring the dispute
to such arbitration." . . .'
t:
-,
:
.. . . .. _---
62 and ConciJjation Act, 1996 [Unit-n, Cb-2
."
.'
(3) To rectify the grammatical inaccuracy in Section 6 ofthe Act relating
to erbitration agreement 'not to be discharged by death ofparty. thereto the
following recommendations are made: ' .
(i) in sub-section (1) revising the present phrase of "either as.respects "
the deceased or any other party' as "either as respectsthedeceased
or' as respects any .
(ii) the sub-sectiontz) sho{lld ' be' revised as "The authority of'an '
arbitrator sha!hlOtbe.term.ibated by the.deathof.any party to the
;agreement" in place of authority.of an arbitrator shall not be
revoked by the death ofany party by whom he was appointed".
. . (4) .The Commission recommended to inserta .new Section $A, as
follovvs; . . .:. . . .
, .
"Neglect by or death ofarbitrator or umpire appointed by CoUrt::.:.... . .
Where the Court has .a -power to appoint an arbitrator 'or umpire under
any provision of this Actorof anyarbitratioriagreemertt, and the arbitrator
or umpire so' appointed by the Court neglects or refuses to act, or is incapable
of acting or dies,the-Court-may supply the Vacancy".
This madeas is provision in'the Act lor
the appointment ofanother arbitrator by the Court ifthe arbitrator dies.
(5) Tne Commissfon recommended to revise the Section 12(1) relating
to p.ower of Court where arbitrator is removed or his authority revoked as
under: .
. "Where the Court removes an umpire who has not entered on the
reference of'one or more arbitrators (riot being a sole arbitrator and not being
all the arbitrat-ors), the Court 'may, on the application of any party to the
arbitration agreement, appoint persons to fill the vacancy.... .
This recommendation is to bring symmetry between the two sub
sections (1) and (2) as far as possible. . "
(6) To make the Actconl'pl;,e.hensive, the Commissi0Iffecoiiili{erided"the
insertion in Section 13 relating to powers of arbitrator of a new clause as
follows:
."Section 13(aa)
. . Proceed parte who, without sufficientcause and after
due notice, faits to attend or through agent". .
. .' (7) The' a 13A deal
with the power ofthe arbitrator or umpire to award interest as recommended.
Unlt-H, Ch-2) .Histori cal Background and Development :.. . 63,
. (8) In Section 14, two new - sub-sections i.e. Sections 14(2A):and 14(2B)
are recommended to cover cases of death' of the arbitrator after making the
award but before filing it andsimiIar situations. . . . '.'
(9) In Section 16(1) relating power to remit award, anew clause (d) is ..
.recommendedto add as follows:
"(d) where for any other reason the Court considers that in the interests .
ofjustice it should, instead ofsetting aside the award, order such remission".
-. (10) The Commission recommended that sub-section (2) of Section 20 .
relating to application to file in Court arbitration agreement should be revised
as follows
"(2) The application shall be in 'Writing and shan be numbered and
registered - ".'-;. ' .:. .... . .
(a) if the application has been presented by all the parties, as a SU!t
between one or more of the parties interested or claiming to be
interested as plaintiff or plaintiffs and the rest ofthem as defendant
or defendants; or
(b) ifthe application has not been presented by all the parties, as a suit
between the applicant as plaintiff and the ' other parties as ..
.defendants."
(11) The Commission recommended to change the heading of the
Chapter IV as "Arbitration .in Suits or Appeals" and to add "or appeal"
. . wherever the word "suit" occurs in Sections 21 and 24.
(12) The Commission recommended that Section 21 should be revised
as under:
"21. Where in any suit or appeal pending in any Court, all the parties
interested agree that any matter in difference .between them in the suit or
appeal shall be referred to arbitration, they may, at any time before judgment
is pronounced, apply in writing to that Court for an order ofreference."
(13) "The Commission recommended to revise the Section
addition of the words "or appeal" wherever the word suit' occurs.
(14) The Commission recommended to insert the following proviso
, below Section 28 relating power to Court only to enlarge time for making
award:
"Provided that no extension shall be granted so as to allow the making
of the award more than one year after entering on the reference, unless the
Court, for special and adequate reasons to be recorded in writing, is satisfied,
that such extension is necessary." . ' J; <;. . !If! .
65
:
-.": .
fr
5'/"
ro;.
J'lf
;
/'
64 .
The'ArbitratioD? and 1.996
Ch-2,
. (15) To put the matter of Section 30 beyond any pale of'uncertainty,
the Commission suggested the insertion otan explanation. to Section 30
relating to grounds for setting aside award as follows: ..:. '.
'''Explanation:- The expression 'or is .otherwise invalid' mcludes the
./ .ground that there was no valid arbitration agreement or no valid reference to
arbitration." '
(16) The Commission,recommended to insert a New Section 30A, to
, provide that no' arbitrator or umpire can be compelled to give evidence as to
,the reasons for . ,": . ,'.' .. '.'... ;
.. . . . . . , .
(17) The Commission recommended that Section 32 should 'be re
numbered as sub-section (1) and thereafter sub-sections (2) and (3) should be
inserted to provide that an award shall'not be pleaded in defence except ill
certain specific cases as follows: . ,
not be pleaded fu defence to any suit, on the ground
that the award has determined any matter in issue in the suit; but nothing in
this sub-section shall - ' :.' ..,' " . .. .
(a) any decree passed WIder.Section 17;
-(b) prejudice any right ofa person-to apply for a stay of the suit on the
ground that there has been made an award which determines the
matter in issue and that he proposes to obtain. a judgment under
Section 17 in terms ofthe award.
(3) Nothing in sub-section (2) shall preclude any person from pleading
any award in defence
(a) where the award has been accepted by the parties, so as to constitute
an agreement; or
(b) where the award has been acted upon, so as to constitute estoppel."
(18) In Section 33 relating to .arbitration agreement or award to be
contested by applicant, the Commission recommended the words 'includingone
alleged to bea party' should be added after the words 'any party'. ' '
(19). The Commission recommended to delete the words "or taking other
steps in the from the Section 34 relatingto power to stay legal
proceedings 'where there is an arbitration agreement. The result will be that
an application can be made by the defendant under the section before filing
the written statement. r, ,t,-,.-... '
. . .... .1.':' t . .' .
(20) To make the of Section 34 applicable.to suits brought
under Order 37 of the .Code ef Civil Procedure. 1908 (summary procedure),
the Commission recommended that the words "or in a suit instituted 'under
unlt-"; Cb-2) , Historical Backgroundaod
Order XXXVII of the First Schedule to f:be Code of Civil Procedure, 1908
,before filing an application' for leave to defend under sub-rule (5) ofRule, 3
of that Order" should be substituted in the place 'of the words to be deleted
"or taking other steps in the proceedings",
: (21) in sub-sections (1), (2) and (5). of Section 37, the Commission
. 'recommended to substitute the words and figures "The Limitation Act, .1963''
, for words figures "The Indian Limitation Act,
',' . (22) The Commission recommended to insert sub-sections. (6) and (7)
after sub-section (5) oi Section 37 relating to limitations. '
(23) The Commission recommended to insert new sub-sections (4), (5),
(6), (7) and (8) to Section 38 relating to disputes as to arbitrator's
,recommendation or costs so as' to prevent disputes aboutthe .amount of fees
of arbitrator and a's to the time ofpayment. .' . .
, \. (24) The Commission recommended that in Section 42(a),. the words
I "in the case of a Government, local authority or Corporation, to a person duly
empowered 'to accept service on its behalf or" shouldbe added at the end to
. provide for the delivery of notice to duly empowered agent, in certain
" situations. I
(25) The Commission recommended to substitute the following.proviso
for the present proviso to Section 47:
"Provided that where an award otherwise obtained has been agreed to
by the parties concerned, nothing in this section shall construed' as
preventing any party from relying upon it in a suit or other legal proceeding
(whether instituted by him or not) as an agreement or as compromise or
adjustment of the dispute."
(26) The Commission recommended to add a new paragraph 2A in the
First Schedule to deal with the powers of arbitrators or umpire to act on
evidence recorded by their predecessors) and also to provide that proceedings
held beforearbitrators shall be deemedto be proceedings before the umpire.
(27) The Commission recommended to extend the period to six months
in. the First Schedule, paragraph 3 and to add an explanation defming .the
expression "entering 'on reference". . ' ,
(28) The Commission recommended to make an amendment in the First .
Sc?edule, 5 defining expression on
, to Increase the penod to four months. ' . . .' ..
(29). l:he Commission recommended to recast in, the First
paragraph 6 to simplify the structure without change, ofsubstance. " ,

66 , The Arbitration andConcilbltion Act, 1996 [Unit-II, cb4
. (30) The Commission recommended to add an explanation in the First
Schedule, paragraph '7 to' deal With cases where rules of an association
provided for appealsas follows: ' 0-,,","" '
"Expianation;- Where either the arbitration agreement, or bye-laws
ofany association which are expressly or impliedly adopted by the arbitration
agreement, provide for an appeal from the award of an .arbitrator to
person or body, the award made by such appellate authority shall, ifthe
be filed in accordance with the agreement or bye-laws; be the award for
purposes of this paragraph." . ,
The Commission has reviewed the entire Arbitration Act, I 940 in th,e
seventy sixth report. The Commission stated that though the Act, 1940 hac;t .
been criticised in one. or two judicial pronouncements, the Act does not
from any radical defect. Hence, on that score of criticism, it should not
thrown out lock, stock and barrel.
The Commission incorporated in the report their recommendations
each and suggested nearly 30 major changes in the Arbitration Act'
1940, , '
After submission of the recommendations of the Law Commission 01: '
, India, the Arbitration and Conciliat ion Act, 1996 has been enacted with the
following objects by repealing the Arbitration Act, 1940 and other Arbitration
Acts of 1937 and 1961. '
II. Objects of and Reasons for the enactment of the Arbitration
and Conciliation ACt, 1996
The statement of objects and reasons appended to the bill proceeded as
follows : '
The law on arb itration in India was at the time of the adoption of the
new Act substantially contained in three enactments,namely, the Arbitration
Act, 1940, the Arbitration (Protocol and Convention) Act, 1937 and the
Foreign Awards (Recognition and Enactment) Act, 1961. Itwas widely felt
that the 1940 Act, which contained the general law ofarbitration, had become
outdated. The Law Commission of India, several representative bod ies of
,trade and industry and experts in the field of arbitration had proposed
amendments to this Act to make it more responsive to contemporary
requirements. It was also .recogniaedrhat our economic reforms might not
' become fully effective if.the law, dealing with settlement of both domestic;
' and international commere'ial disputes remained out of tune with such reforms. '
Like arbitration, conciliation is also getting increasing worldwide recognition
as an instrument for settlement of'disputes. There was, however, no general
law on the subject in India. '
..

, Historical Backgr.ound nil DevelQP...eot .. 61.
(latHI; Cb-2}
, : ., , The 'Unit ed Nations on International Trade Law
(UNC:rrRAL) adopted in 1985 theModel Law on International
,Arbitrati on. ' The General Assembly of the U.N. recommended that all
. ii()iu1trics should give due. consideration tothe said Mode! Law, in view of
..' the d:esirabilfty of uniformity of the law of arbitral procedures andthe specific
.needs of inte1national commercial arbitration practice. The UNCITRAL also ,
adopted in 1980 a set 'of Conciliation Rules. The General ASsembly of the
United Nations recommended jheuse of these Rules-in cases where the
'disputes arose in the context of international commercial relations' and the
parties seekamicable settlement oftheir disputes by recourse to conciliation. '
:JI. .n important feature ,of the UNCITRAL Model Law and Rules is that they
, have harmonised concepts on arbitration and conciliation of different legal
Systems of the world and thus contain provisions which are designed for
universal application. ' '
Though the said UNCITRAL Model Law and Rules were intended to
deal with International Conunercial Arbitration and Conciliation, they could,
'with appropriate'modifications, serve as a model for legislation on domestic
arbitration and conciliation. :The present Act seeks .to consolidate and amend
the law relating to domestic arbitration, international commercial arbitration,
enforcemeht of foreign arbitral awards and to define the law relating to
cOnciliation,' taking into account the UNCITRAL Model Law and Rules.
The main objects of the Act are:-:
(i) , to comprehensively cover international commercial arbitration and
'conciliation as also domestic arbitration and conciliation;
(ii) to make provision for an arbitral procedure which is fair, efficient
and capable ofmeeting the needs of the 's.pecific arbitration;
(iii) to provide that the Arbitral Tribunal gives reasons for its arbitral
award;
(iv) to ensure that the Arbitral Tribunal remains within the limits of its
jurisdiction;
(v) to minimise the supervisory role of Courts in the arbitral process;
(vi)' to permit an Arbitral Tribunal to use mediation, conciliation or other
procedures during the arbitral proceedings.to encourage settlement
of disputes;
(vii) to provide that every final arbitral award is enforced in the same'
manner as 'if it were a decree' of the Court; , . ,' ." :)
(viii) to provide that a settlement agreement reached by as a
result of conciliation proceedings will have the same status and effect
;:
:'!
c
68
69
The and Conc:iliatlonAct, 1996
(Unit-n, Ch..2
as an arbitral award on agreed terms on thesubstance ofthe dispute'
rendered by the Arbitral Tribunal; and
(ix) to provide that, for purposes awards, every
. arbitral award made in a one ofthe two Intemational
Conventions relating to foreign arbitral awards to which India is a
party applies, wm be treated' as a foreign aWard. .
The objects and reasons aid in finding out what really persuades the
legislature to enact a particular provision though they cannot be the ultimate
guide in interpretation of statutes. The objects and reasons of an Act should
be taken into consideration in interpreting the provisions ofthe statute in case
ofdoubt and the language of a provision is not clear.
UI. Salient Features ofthe Arbitration and Conciliation Act, 1996
(1) In addition to arbitration, conciliation has also been recognised as a
means ofsettling commercial disputes.
(2) The arbitration award and the settlement arrived at during conciliating
proceedings have been treated at par with the decree ofthe Court.
(3) Powers of the Court have been considerably curtailed.
(
4)
The Act contains a salutary provision making it mandatory for the
arbitrator to give reasons for the award,
(5) The Act no longer requires the parties to make an application to the
Court to make the award and this provision helps in saving considerable time
of the litigants in execution of arbitral award.
(6) The Act contains the provision relating to the interim measures which
empower' the arbitrator or arbitral tribunal to pass interim orders in respect of
the subject-matter ofthe dispute at the request of the party.
(7) The Act is more exhaustive and it deals with arbitration, conciliation,
enforcement offoreign Arbitral awards basing on.the Model LawofArbitration
and Rules of Conciliation of the UNCITRAL and deals both Geneva
. Convention awards and New York Convention Awards.
(8) The Act specifically defines the term 'international commercial
arbitration ' as an arbitration relating to disputes arising out of legal relationship
whether contractual or not, considered as commercial under the law in force
in India and where at least one of the parties whether an individual, body
.corporate or a company is having business or residing abroad and in case of
Government, the Government is ofa foreign country. ' .
(9) The Act basabolished the Umpire system.
Unit-II, Ch-2) Historical BackgroUDd aad Development ....
. . (1O) The Act insists filn the qualification whoare.really
comPetent and well versed in such matters. " . ' .
(11) The Act contains a provision that an mitral award which isfu
conflict with the public policy in India shall not be valid in law being null and
void.
.' . (12) The Act provides.forenforcement of certain foreif! awards made
under the Newyork Convention and Convention re..o;pectively. .
: . . ' . . . ' ' .
(13) a standard arbitratioil clause in the Act whichis more useful
for the parties-entering into international commercial transactions. .
(14) The Act is a comprehensive legislation on domestic as well as
international or inter-State Arbitrations. . '
. .
(IS) The Act provides detailed procedure for conduct ofArbitrations. and
awards.
(16) Arbitrators have been given more powers and the arbitral tribunals
have been assigned better competence to rule on their jurisdiction.
(I7) As the Act has provisions for applicability of Foreign Arbitral
Tribunal 's awards.Jt hasinternational applicability.
,
(18) The role ofinstitutions in promoting and organizing arbitration hils
been recognized. .
.(19) The power to nominate arbitrators has beengiven (failing,agreement
between the parties) to the ChiefJustice or to an institution or person designated
by-him, i
(20) The time limit for making awards has been deleted. The Act after
. amendment provides Fast Arbitration for quick disposal ofdisputes.:
(21) The provisions relating to arbitration through intervention ofCourt
when there is no suit pending or by order of the Court where there is a suit
pending, have been removed.
(22) The importance of transnational commercial arbitration has been
recognized and it has beenspeeifically provided that even where the arbitration
is held in Iridia, the patties to the contract would be free to designate the law
applicable to the substance ofthe dispute.
The existing law of Arbitration and Conciliation has been modified by
Amendment Act removing several bottlenecks and it is considered to be a great
leap forward by following the.UNCITRhL Model Law in commercial dispute
settlement. . ". ' ,. . E; ...:'
._._.--.. . .. ' " ..- ""
Unit-II; Ch-3) Def"mitlons and Gener
r .'
1f
Chapter-3. .
DEFINITlilN's AND GENERAL PROVISIONS 'OFTHEARBITRATION
_.ANDCONCILIATION 1996 - ' I '
" . " -.I,; .'
Definitions
: :'"rHrl}
I. Defmition' of Arbitration
Arbitration, in ordinary language, means the settlement of disputes by
the decision ofone or more persons, Arbitration is the decisiori; by a'pri vate
person, of a controversy submitted to him by di.s'putants \yho1$ve agreed to
accept this decision as a final determination oftheir claims. Itti.6.a;;;ivii action
ofdisnute settlement by a tribunal oftheir choice instead in a COurt.
. . The Arbitration andConciliation Act, 1996 states'that 'arbitration' means
any arbitration whether or not administered by permanent arbitral institution
[Sec,2(l)(a}]. . ' .
The Act does not provide dtlfiriitwn. gf the word "Arbitration' but its
recognised meaning is that .settlement of. or disputes by mutual
understanding or agreement by the parties when-It! the.rightS and liabilities of
the parties determined in judicial point ofViewwhich are binding on them.
An arbitration is the reference of a dispute or between not less
than two parties for determination after hearing bothsides in.Itjudicial manner,
by a person or persons other than aCourt of competent jurisdiction.
III Collins v. Collins case, Romilly M.R. defined arbitratien by stating
"An arbitration is a reference to the decision of one or morepersons, either
with or without an umpire of a particular matter in difference between the
parties".
According to John Parris, arbitration is "a gf a dispute by an
arbiter who has absolute control and who is chosen tM fpdecide a
dispute". ' ' .
Britannica defines "arbitration' as "a mean!! Qt'
of disputes of decision notofthe regular andordirnuy (;PUTts
of law but of a person or persons' who are called arbitrators and are appointed
by the parties or with their actual or constructive consent. .
Russel states that "the essence arbitration is that is referred
by parties for settlement to a tribunal of their own choosing, domestic forum
as the tribunal is generally ca.Hed". ;; : oj:
. . .... . '..... s, ,. . . : ; ' .. : ;" .
. Arbitration, thus, is the judging of a quarrel dispute between people
or groups of people by someone not involved in tli"e dispute whose, decision
70

I
both :parties agree to accept. Arbitration isa particular-method for the
settlement of disputes. . '
" " ' . . \ - .
. The Supreme Court:of India held that arbitration is judging ofa dispute
.between parties of groups of people by someone not involved in the dispute
and whose decision both'parties' agree to accept. . ' .
Arbitration requires a dispute. The term dispute has -not been defined.
by the Act. Dispute means contention'. It is the matter or question in dispute.
The dispute may relate to an act ofcommission or omission. Dispute is merely
'default' which isdirectlyactionable. The' arbitration deals with the
commercial or disputes,.. The disputes includes shipping,
. salecpurchase, banking, insurance. building construction, engineering,
technical assistance, know-how, Patents. trade marks, geographical indications,
management 'consultancy; commercial agency or labour etc. Generally all
disputes which can decided by a Civil Court; Involving.privaterightsean
be referred to arbitratian, . ' .
One pri.no.iplll advantages of arbitration over litigation is that where
the dispyie.QOOCXlrna atechnica! matter such as a building contract, the person
. chosen to. will normally be an expert in the subject-matter of the
whe.rells. a Judge will seldom have any practical experience of the
of the trade in question. . . .
Kinds of Arbitration:.
(i) Domestic, International and Foreign Arbitration
Arbitration:':-" The Arbitration and Concil iation
(Amendment) Bill 2001"proposed the definitions of 'Domestic Arbitration'
and 'International Arbitration' as under:
According Section 2(1)(ea) of the Arbitration and Conciliation Act,
1 \Domestic Arbitration,' means an arbitration relating to disputes arising
out of legal relationship, whether contractual or not, where none of the parties

(i) an individual who -Is a national-ofi-or habitually resident in,any
country .other than 'India; or .
(ii) a body 'corporate which is incorporated in any country other than
India; or
(iii) an association or a body of individuals whose central management
and control is exercised in any country other than India; or .
. .
(iv) . the Govemmeritofa'foreign country .
and shall be deemed to include international arbitration and intematiengb
commercial arbitration where the place of arbitration is in India. . t - __ ;,
:;
I
73
... . ":" -_0 "_'----00:0---:-- .-..

72 The Arbitration and Conclliation- Act, 199(i lUdIf.;u, Cb.a
2. International Arbitration:- to Section.2(1)(eb) ofthe
Arbitration and Conciliation Act, 1996, "International Arbitration" meansan
arbitration relating to disputes artsingout'cf Iegal.relationships,
contractual or not, and where at least one ofthe parties is: '
(i) an individual who is a national of or habitually resident in, any
country other than India; or _
(ii) a 'body corporate which is incorporated in any country other than
India; or
(iii) an association or a body of individua-ls whose' central management
and control-is exercised in any country other than India;'or
. .
(iv) the Govemment ofa foreign country.
According to Section 2(1)(f) of the Arbitration and Conciliation Act,
1996, 'International Commercial Arbitration' means international arbitration
considered as commercial under the law in force in India.
Thus, the term 'Domestic Arbitration' denotes arbitration which takes
place in India, when the subject matter ofthe contract, the merits ofthe dispute
and the procedure for arbitration are all governed by Indian law or when the
cause of action for the dispute has arisen wholly in India or where the parties
are otherwise subject to Indian jurisdiction.
Arbitration becomes "mternational" when at least one of the parties
involved in resident ordomiciled, outside India; or the subject matter of the
dispute is located abroad; or if one of the parties has business-located abroad;
or the agreement has to be performed abroad.
3. Foreign Arbitration:- 'Foreign Arbitration' is an arbitration
conducted in a place outside India, where the resulting award is sought to be
enforced as a 'foreign award'.
(ii) Formal and Informal
If the provisions of the Arbitration Act have been availed it is a
and ifnot.availed it Is informal arbitration,
Arbitration without an agreement in writing is by.no means bad.
_(iii) Ad hoc Arbltratlon and "Institutionsl Arbltranon:
(a) Ad hoc Arbitration:- 'Ad hoc Arbitration' is arbitration agreed to
and arranged_ by the parties themselves without recourse to an institution. Ad
hoc arbitration rna)' be soughtas andwhen a dispute arose between the parties
to a business transaction, which could not be settled throughmecliation or
conciliation. The proceedings ate conducted by the'"arbitrator(s) as per the
agreement between the parties or with concurrence of the parties. It can be
domestic; international or foreign arbitration.

ill
Unit-ll, Ob-3] Definitions and General,ProvisioDs ......
(b) Institutional Arbitration:- 'Institutional Arbitration' is arbitration
conducted under the Rules laid down by an organization. .
When the parties agree in advance that in the event of future disputes. or
differences arising between them in course of their business or commercial
transactions, they winrefer the matter to besettled by arbitration by the named' .
of which one or more ofthemare members. Such"institutions have
their own published roles and they are meant to supplement provisions ofthe
Arbitration and Conciliation Act in matters ofprocedure and other matters the
Act permits, :
As per Section 6 (if the Arbitration and Conciliation Act, in order to
facilitate the conduct of the arbitral proceedings, the parties mayarrange for
administrative assistance by a suitable institution or person. Further the
Section 2 states that agreement shall include any arbitration 7'..41es referred to
in that agreement and thus expressly facilitates the' adoption of institutional
rules.
'.
Among arbitration institutions in India, Indian Council of Arbitration
is the apex body and 01lS handled the maximum number of national and
international arbitration cases in India. The arbitration institutions have their
own published rules and they appoint arbitrators for the parties from among
the panelofexperts ofthe concernedprofession with. the consent ofthe parties.
The roles may provide for domestic or international arbitration or for both and
the disputes may be either general in character or' specific,
(iv) Prfvate Arbitration a-nd Statutory Arbitration:
. Statutory arbitration is in consequence ofstatutory requirement whereas
private arbitration is by virtue of a private agreement between two parties.
Private arbitration is also described as 'consensual arbitration' because it is
by mutual consent and not by force of law.
'Statutory Arbitrations"are arbitrationsconductedin accordance with the
provisions ofcertain specific Acts which provide for arbitration in respect of
disputes arising- on matters covered by those Acts, ManyActsiit India provide
for arbitration in respect ofdisputes covered by)f1oseActs. .:"
According to Section 2(4) ofthe Arbitration and Conciliation Act, 1996,
the provisions of the Act shall apply to every arbitration under any other
enactment for the time being in force, as if the arbitration werepursuanttoan
arbitration agreement and as if that other enactnient were an arbitration
agreement, except in so far as the provisions ofthis Act are
that other enactment or with any madethereunder, ..... ; : -
. . As Section Arbitration and.
In so far as IS otherwise provided by law for the time being In force, .
.,. -,", -=.. e.
... . _ ----_.
' I'
74 The Arbitration.and ConcUiatJoD A.ct,> 1996 [Uriit-n, Cb-3
any agreement in force between India' and any other country or countries, the
provisions of the Arbitration and, Conciliation Act, 1996 shall apply to all
arbitriitioll; ana to ldl proceedings relating thereto. . .
, (v) ' Geiierai and Specl:du.ed Arbitrntion:
"
(1) Where the partiesagree to submit to arbitration "all orany"
differences which have arisen or which may arise, the agreement is general
and not in respect of any, specific dispute. These agreements .are like
contingent contracts dependent ,on the contingency of a dispute.arising in
future, which mayor may not arise. A general agreement may relate to a
series of transactions Udder thesame contract, and the disputes mayarise from
time 'to time, each to be individually referred, to same or diffeterit 'arbitrat orS
or through same arbitral institution.
. ' : '
" (2) 'Specialised-arbitration' isarbitration conducted under' the auspices
of arbitral institutions which might have framed special rules to meet the '
specific requirements for the conduct of arbitration in respect of disputes of
particular types such as; disputes as to commodities, construction 'or specific '
areas oftechnology. , , . 1 ' . ' " .
(vi) Contractual
In order to seek early settlement of disputes without approaching the
Court, the parties usually chose to insert an arbitration' clause as an integral
part of the contract to refer their existing or future disputes to a named arbitrator
or arbitrators to be appointed by adesignated authority. This is called as
contractual in-built arbitration. In this the parties agree to submission to
arbitration . An . 'arbitration clause' of agreement or contract is a clause '
contained in and forming part of the main contract for the reference to
arbitration of differences between theparties. .
, In India, the Arbitration and Conciliation Act, 1996 recognises
institiitional arbitration, and also permits ad 'hoc arbitration; specified.
arbitrations and statutory arbitrations. ' .
II. of
The 'term ' arbitrator ' has not been defined by. the Arbitration and
Act, 1996. However.an arbitrator may be defined as a person to
whom the.matters in dispute are submitted by the parties and whose
are more or less judicial i.e..todecide the law and faots involved in the matter
referred to him and settle .theflispute or difference thus dispensing equal justioe
to all the parties. Arbitrato,r:.nYbe,in the form ofArbitral Tribunal. Sectien
2(d) ofthe Arbitrilt:ion and Conciliation Act, J99(i states that arbitration tnbunal
means asOle'arbi!fator or The ArbItral Tribl,l1lal ,is the
. ; .. , .. . . .
.;?
......
,Vnit-U, Definitions ilild ,Gener al Pr:o\'fsloDS .' 75
.....
+
creature of an agreement. It is -open to the parties.to eoitfer 'upon.itsuch:
powers and prescribe such procedure for it to follow, as they fit, so long
JJS they lII'e not opposed-to law: l
l
he Arbitral Tribunal must also,act arid make
Itsaward in with the general Jaw.of' fhe Iand and the agreernents. .
Russell defines an .'arbitrator" as a "private Judge' of a 'private Court"
(clllleGlUl arbitral tribunal) who gives a private judgment (called an award).
An arbitrator: '
. (i) ischosen and paid by the disputant;
(ii) 'does not sitin public;
(iii) acts in accordance withprivatelynhosen procedure So far as that IS
not repugnanttopublic policy;
<(iv) is set up to the exclusion ofthe state Courts so far as the law permits;
(v)
,
acts on he is given by disputan
.
ts'
(vi) derives powers from the private law of contract.
Any one ofthe following modes may be adopted'for the appointment
of arbitrator.
" (I) an arbitrator may be named in the arbitration agreement;
(2) he may be a person ' who would hold, at the relevant time, a
certa in office or appointment (i.e. by designation);
(3) the parties may agree that the reference for appointment of as
arbitrator shall bemade to a person designed in the agreement;
(4) the parties may agree for an institutional arbitration tinder which
arbitrators are appointed by a permanent institution.
. . . .
In Satyendra Kumar v. Hind Construction Ltd., (AIR. 1952 Born , 227),
the Court held that where the parties to dispute refer the matter to a person
' and such person holds a judicial inquiry in deciding that dispute andcomes '
to a judicial decision, such person is called an arbitrator.
III. Definition of 'Arbitration Agreement'
Section 2(1)(b) of the Arbitration and Conciliation Act, '1996 provides
that the word 'Arbitration Agreement ' is to be interpreted and understood with
reference to Section 7 of the Act. . ,
According to Section 7 of the Act, arbitration agreement' means an
agreement Py the parties to submit to. all or
,
have arisen or which may arise between them in respect of a defirled' ltigld
g
relationship, Whether contractual or DOt. . ., " .' : L-l i !.i .

'.

. I
76
77
o ,..
. ...-r.... _.... ..
The Arbitration" C'h-3
Arbitration Agreement mandatorily requires appointment-o.atbitrator.
It may be in the form of the arbitration clause in 11 contract Qf in tlre-fomrof
a separate be in writing andsigned by the parties.
Agreement'that parties 'may' :go to suit or ,may also go to irbitration is not
an arbitration agreement (see Chapter of 'ArbitfiltiQA for
details). ." . '. . .
IV.. Definition of 'Arbitral Award'
General1y speaking, an arbitral award is a judgment pronounced by an
arbitral tribunal on disputes or.differences referred to it for arbitration,
According to Russel, '.'An award order to be valid, must be final,
certain, consistent and possible and must decide matters to ,be submitted and
no more than the matters submitted". .,
. . .. -.
As per H. Lexicon, Han arbitrationaward is an instrument whichembodies
a decision of an arbitrator or arbitrators as regards matters referred to him Of
them".
. Under Section 2(1)(c) the word 'Arbitral Award' is not definedbut it states
that the 'Arbitral Award' includes an interim award! It-would also include
'additional arbitral award' made under Section 33(4) and an award recorded
on the basis of "Settlement Agreement' reached under Section 30(2) during
'arbitral proceedings' but not a 'settlement agreement' reached under Section
73 in concil iation proceedings under Part III of the Act.
An award stands at 'the same footing as a decree of a Court whether it
has passed into a decree or: not and therefore it is binding upon the parties.
[Satish Kumar v. Surendra Kumar'o.AIJ{ 1970 SC 833]. Section 35 of the
Arbitration and Conciliation Act, 1996 also provides that an arbitral award
shall be final and binding on the parties and persons claiming under them. An
arbitral award islikea decree which comes intoeffect from the 'date 011'which
it hasbeen signed and right of the related parties comes into effect from that
date onwards.
An arbitral contract but the decision determined out of
the contract. It is a decision 'ofan arbitrator or arbitrators which is determined
after contentions of the parties considered andan arbitrator or the arbitrators
put his or their opinion in.the form of decision, The consent of the parties
may riot bepresentin a decision. An arbitralaward decided judicially has a
binding effect on the parties in dispute. . '.
An' a It may
also be a 'domestic award' or 'foreign lOAn. arbitralaward must be 'in
writing and must be duly' the ,. " .'.
Unit-H,' Ch..3] Definitions Blid General Provisions . 0
: The Arbitration and Conciliation Act, 1996 requires that:an arbitral
award must state the reasons upon which it is based: However .the parties
may agree that no reasons for the-award-need be given. Again, .wheFe the
award is based on mutual settlement ofthe dispute by the parties, r:easoDs
need be given. . .
. . An arbitration award should have the following ingredients:
(1) It must be in the written form.
(2) .It-must be a decision on the dispute. .
(3) It must be objective arbitrability of'the"subject matter ofa dispute,
(4) The parties to arbitration must be competent.
'(5) It must be determined on principles ofmutual justice.
(6) The arbitrator must sign while giving and also mentiondate therein.
On appeal, where the Court fmds 'that the award is patently against public
policy, it may suo motu without the necessity of any proof having to be
furnished,' set aside the award, whatever is injurious or hermful to publicinterest
may be deemed to be against public policy.
V. Definition of 'Arbitral Tribunal'
Under Section 2(1)(d) of the Arbitration and Conciliation Act, 1996,.
tribunal' means a sole arbitrator. or a panel of arbitrators. In fact,
composition of arbitral tribunal provided in Chapter ill under Section 10 of
the Act, 1996, where the parties are .free"to determine the number ofarbitrators,
provided that such number shall not be an' even number. Failing the
determination referred to in Section 10(1), the arbitral tribunal shall consist of
a sole arbftrator, The arbitral tribunal does not constitute a Court in the
technical sense. An arbitral tribunal discharges the function of quasi-judicial
nature on principle ofnatural-justice and fair-play but it is not a Court ofLaw
otherwise.
-In the term 'arbitral tribunal', the qualifying word 'arbitral' is used to
suggest -. "whether or not appointed-by parties' directly" - or to include
arbitrators appointed by 'permanent arbitral institutions' through which the
arbitration is to be administered. The word 'tribunal' is used to undermine,
the individuality. It refers to a even if'comprising a sole arbitrator.
'Arbitral Tribunal' should be distinguished from 'arbitral institution'.
'Arbitral tribunal' arbitrates and decides. ' Arbitral' institution' provides
administrative assistance. ;
.
'Arbitral tribunals are cteated by private agreement esforum
The Arbitral- tribunals donot act in exercise o'-jpdicial
19
78
The Arbitration and CODcUfatiOD Act, 1996 (Unlt-U;Cb-3
though both 'a Court' and 'an arbitral tribunal' constitute dispute settlement
organs. Arbitral tribunals are not invested -with the State's judicial .powers,
. 00'= '-.. . nor do.they constitute a: part ofthe judicial hierarchy oftile State.
". . . .
Arb'itraltriburtals are. 'domestic' or ,' private' tribunals createdbytwo
particular parties for resolution of differences or disputes specifically agreed
" ':upon between them to be referred for decision of the particular 'arbitral
tribunal'. .
'Arbitral tribunal' according to-the definitions, may .comprise a 'sale
arbitrator' or a 'panel of arbitrators' . ' .
. Section 11(9) ofthe Arbitration and Conciliation'Act, 1996 provides that
in'case' ofarbitrator which involves international commercial.transaction, an
arbitrator or arbitrators ofa nationality other than the nationality ofthe parties,
. where the person belongs:to different nationalities shall be appointed. .

. ,
The award of the arbitral tribunal i.e. the arbitrator is itself executable
. because the necessity of filing of the award in a Court for obtaining a decree
forits enforcement is dispensed-with under the Arbitration' and Conciiiation
Act, 1996. Now the award of the arbitrator has the same force as the decree
of the Court. ' It is final and binding upon the parties.
VI. Definition of 'Court'
Under Section '2(1)(e), 'Court' means the principal Civil Court of'original
, j uri sdiction in a district, the Court of principal Judge of the City Civil Court
! of original jurisdiction in a city, and includes the High Court in exercise of
its ordinary original civil jurisdiction having jurisdiction to decide the
questions forming the subject-matter of the arbitration 'if the same-had been
the subject-matter of a suit, but does not.include any Civil Court of a grade
inferior to such principal Civil Court, or to such Court ofthe Principal Judge;
City Civil Court, or any Court of small causes. According to the' proposed
Arbitration and Conciliation (Amendment) Hill, 2001 the ' Court of the
Principal Judge.of the City Civil Court of original jurisdiction is included as
.City Civil Courts are of District Courts as distinguished from subordinate
Courts. .
Under the Act; the expression "Civil Court" does not include a revenue
Court because the subject-matter before a revenue court differs from the matter
which before a Civil .Court. 'in order to determine the jurisdiction of
the Court' Goes not mean necessarily that whole subject-matter should be
.raised in its jurisdiction. The 'jurisdiction of the Court' would fall under the
. .circumstances where the contestants reside, or disputed property situated in
local limit bfthat Court. ' " . ' , '
' . 1
Unit-n, Ch-3) . and GeJlerai ProvISions .... .
'. According to expression 'Court' under Section Z(l)(e)i It High Court
which is exercising original civil jurisdiction would be the Court for the


pUrpose-()fthe Act. \ .
to Section 2(4) of the 'Code.of Chtil Procedure, 1908, '"die
. .
.' Principal Civil Court of original jurisdiction in adistrict is the District Court".

I
: Thus .every Civil Court cannot be the Principal Civil Court of original
" jurisdiction. ' ' : ' .
,.It that the Principal Civil Court oforiginal jurisdiction is a part .
of ordinary hierarchy ofCourts whichis distingUished from a subordinate Court.
-..;t '
"'";: The last'part ofSection 2(l)(e) also provides distinction that "any'Civil Court
-v
.'';'1
of a grade inferior to such Principal Civil Court, or to such Court of the
Principal Judge, CitYCivil Court,'or any Court of.SmaIl causes." '. J , .
' . '
.'.g: .The definition of Court, thus, Jays down the principles to determine
jurisdiction ofCourts ofLaw. ,
The clause 2{l)(e) ofthe Arbitration and Conciliation Act, 1996'defines
; which is the proper Court for purpOses ofvarious sections, for example:
;: :.
.(a) it must be the Principal Civil Court oforiginal jurisdiction in a district .
and the Court of the Principal -Judge, City Civil Court in a city to
, cover complete pecuniaryjurisdiction; and
. .
(b) . it must be the Court having subject-matter jurisdiction or.jurisdiction
in personam in the same way as determined in any suit.
This definition of 'Court', it was held in NatrajStudio v. Navrang Studio.
(AIR 1981 SC 537) would.not come in the way of the Court of SmaIl Causes
exercising jurisdiction under Section 8 ofthe Arbitration and Conciliation Act,
1996.
VII. Definition of Judicial'Authority'
Under Section 2(1)(fa) of the Arbitration and Conciliation Act, 1996,
'judicial authority' includes any quasi-judicial statutory authority. This sub
section has been proposed by the Arbitration and Conciliation (Amendment)
Bill,2001.
Judicial authority is the sovereign Court . According to Section 8(3) of
the Arbitration and Conciliation Act, 1996, the judicial authority will proceed
to deal with the application of the defendant for reference of the matter to
arbitration and to decide whethet the subject-matter is referable to arbitration,
whereas the arbitral tribunal may continae to hear and decide upon the dispute.
.. .. . . ... ; :
Forums created under the Consumer Protection Act, 1986arejJ.lditri. 'I
authorities and proceedings before them are legal .
... j
. 1
...... d

80 The Arbitration and Condllation Act, 1996 (Unft-n, Ch-3"
of arbitration clause in an agreement is no bar to the entertainment of a
complaint by a Redressal Agency under the Consumer Protection-Act, 1.986
under this Act are in addition to the provisions of any other
law. The Redressal A,gencies under the.Act are quasi-judicial bodies. They
are judicial

under the Arbitration and Act, 1996.
. . . . .
Thus, 'judicial authority' means that it may-not necessarily be a Court,
in other words, all the authorities ' which are vested with judicial powers
specifically .conferred by the State. The expression 'Court' is defined in
Section.2(1)(e) of the Act, 1996.
VIJI. Definition of'Legal Representative'
Under the Section and Conciliation Act, 1996,
'legal representative' means a person who in' represents the estate o(a
deceased person and includes any person who intermeddles with the estate of
the deceased, and, where a party acts in a representative character. the person
on whom the estate devolves on the death ofthe party so acting.
Originally the word 'legal representative' has been defined under Section
2(11) of the Civil Procedure Code, J908, which states that, "'legal
representative' means a person who inJaw represents the estate of deceased
person, .and includes any person who intermeddles with the estate of the
deceased, and where a party sues or is sued in representative character the
person on whom the estate devolves on the death of'the party so suing or sued."
Arbitration would not be terminated by the death ofthe party as the rights
of a deceased would be transferred to the person, ' namely the legal
representative. .
The Indian Succession Act, extends the expression legal representative
and also the Courts, now it includes heirs and persons who without the title
i.e, heirs; administrators or executors, however they are in possession of the
estate of the deceased. The following persons are legal representatives
(I).w.!to represents the estate ofdeceased person;
(2) who interferes Withthe estate ofthe deceased person; Md
(3) a representative ofany legal representatives.
An arbitration agreement is enforceable by or against the legal
. representatives by compelling them to step into the shoes ofthe deceased person.
So also an arbitration award be enforced by or against the legal
'representative provided tl:1e legal representative who has been allowed to
participatein the arbitration.proceedings has represented the case on behalfof
the deceased party. .
r:":. ,...

;_
-,,:
. -' General.ProVJsforu __:' ".. :.
The definition of'legalrepresentatiJ>e'
(i) 'Legal representative' means a person 'who represents estate.of
the deceased person; . ..;
(ii) and includes any persdit intermeddles with the estate of the
. deceased; .
h :- (iii) and ihcludes a person (sues.orissued) itta representative
representing an entireclass to 1;he person suing
::.- , .; belongs as such.
" . .
':1:':'r.. A legal representative ofthe party to an arbitration agreement acquires
;../ .the rights and Iiabilities under -the agreement as the party himself, He
has a nght to-

(a) enforce the agreement;
..;;
J;:
.
::, ,:. .'(b) to present his case in arbitration proceedings;
""' io- - ' . '
. ." . (6) , to bind the other party by the aWard or be bound by it.
;:. A stranger to the agreement-can neither enforce the arbitral agreement,
y. nor the award .
t , . An arbitration agreement can be enforced by or againstthe legal
. representative compelling the other party to settle the dispute byarbiti-ation
either directly and actively, or indirectly and defensively when the award is
attacked under Section 34 and the award can be enforced by or against the
legal representative.
IX. Definition of 'Party'
. Under Section 2(1)(h) of the Arbitration and Conciliation Act, 1996
' party ' means a party to'an arbitration. The parties to an arbitration dispute
lire called 'claimant' or 'respondent' instead of plaintiff and defendant as is
done in a civil suit. The party to an arbitration agreement may be two or
more persons, it may also be a body of persons or incorporated bodies.
Certainly, the partiesare disputed parties who submit their dispute for .
settlement under an arbitration agreement. Persons who represent the estate
even without title either as executors or administrators in possession of the
estate of the deceased claimant or respondent are also to be included as 'party'
to. an arbitration agreement.
The persons who are not a party to an arbitration agreement but may
affect or be affected by the arbitral award are called 'parties interested' iiI
that arbitration but it would be to call them 'party' to arbitration.
The arbitral tribunal will decide disputes as between, the parties .to the
arbitration agreement but it would not settle the claims :or .?f.Jhr
'parties interested' . , ...i :

. . . ......._..
82 . s, The Arbitration and Concniatlon . [Unit-Ii; Ch-:3
i
,+

Thereis another expression calledrpersons claimingunder the parties'.
They.are those who have participated in arbitration proceedings as witnesses
either .to enforce the claim or defend the claim on behalf or a party. They
may be persons interested in the arbitral proceeding but not a party to it.
XI. General Provisions
1. Scope and Applicability of Part I of the Arb'itration and
Conciliation Act, 1996:---: The Arbitration and Conciliation Act; 1996 extends
to the whole of India. But, Parts I. III and IV shal'!extend to the State of
Jammu and Kashmir only in so.far as they relate to international commercial
arbitration or, as the case may be, international commercial .conciliation (Sec.
1(1. .
. Sub-section (2) of Section 2 deals with the scope of application ofPart
Ii. Sub-section (2Xa) of Section 2 states that the Part 1shall apply to domestic
arbitration. According to sub-section (2)(b) of Section 2, Sections 8, 9,27,
35 and 36 of this Part shan apply fo international arbitration: (whether
. commercial or not) where the place of arbitration is outside India or is not
specified in the arbitration agreement. The sub-sections 2(a) and 2(b) of Section
2 substitutes.the sub-sectionIz) ofSection2 ofthe Arbitration and Conciliation
Act, 1996 by the .proposed Arbitration and Conciliation (Amendment) Bill,
2001. . " . .
. .As per sub-section (3) Of Section 2, the Part 1 shall not affect any other.
law for the time being in force by virtue ofwpich certain disputes may not be
submitted to arbitration, So a foreign award would not be applied if it is
opposed to the public pol icy in India and enforcement of foreign awards would
also not be applicable if it is contrary to the law of India. .
Sub-section (4) of Section 2 states that the Part I except sub-section (I)
of Section 40, Sections 41 and 43 shan apply to every arbitration under any
other enactment for the time being in force, as if the arbitration were pursuant
to.an.arbitration agreement and as if that other enactment were an arbitration
agreement, except in so far as the provisions ofthis part are inconsistent with
that other enactment or With any rules made thereunder,
Section 2(5) of the Arbitration and Conciliation Act, 1996 states that
subject 'to the provisions of sub-section (4), and save in so far as is otherwise
provided by any law for the time being in force or in any agreement in force
between India and any other.country or countries, this Part shall apply to all
arbitrations and to all proceedings-relating thereto.
2 . Construction of references of Part i ofthe Act:- Section 2(6) of
the Arbitration and Conciliation Act, 1996 provides that the Part I ofthe Act
leaves the: parties free to determine a certain issue, that freedom shall include
Unit,.I1. . . Pefipiti
ons
and.Genera
l
.....:.
. the .right of the parties .tp,'al,lthorise any person an to
determine that issue except Section 28 whichprovidesrules
in case of disputes and the matter required to be referred to arbitration which
shall be applied to arbitration in India equally effective to inmatter of
commercial arbitration. . " '
Section 20) of the Act states that an arbitral award made 'wider Part I
shall be considered as adomestic award,
Accor.ding to Section 2(8) ofthe Act, 1 where the Part I- .
(at refers to the fact that the parties have agreed or.that they may agree;
Or
. (b) in any other way refers to an agreement ofthe parties, ..
that agreement shall include any arbitration rules referred to in that
agreement. " ' . -,
. Section' 2(9) provides thatwhere the 'Part I, other than clause (a) of
Section 25 or Clause (a) ofsub-section (i) of Section 32, refers to a claim, it
shall also apply to a CO\D1ter claim, and where it refers to a defence, it shan
also apply to a defence to that counter-claim.
According to Section 2(10) of the Act, which has beenproposed by the
Amendment Bill, 2001 the Principal Civil Court of originaljurisdiction in a
.district or the Court of Principal Judge, City Civil Court exercising original
jurisdiction in a city, as the case may be, may transfer any matter relating to
any proceedings under the Act pending before it to any Court of coordinate
jurisdiction, in thedistrict or the city. as the case may be, for decision from
time to time.
3. Receipt of Written Communications:- Section 3 of the Arbitration
and Conciliation Act, 1996 is similar to that of Article 3 of Model Law of
UNCITRAL. It deals with the communications in writing inter-parties and
it prescribes modes of receipt of written communications.
Sect ion 3(1) states that unless and otherwise agreed by the parties
. (af any written communication is 'deemed b:> have been received ifit is
delivered to the addressee personally or at his place of business,
habitual residence or mailing address; and
(b) if none of the places referred to in clause (a) can be found after.
making a reasonable inquiry, a written communication is deemed
to have been received ifit is sent to the addressee's last known place
of business; habitual residence<or mailing address by registered letter
or by any other means which provides a record of the attempt to
deliver it. ....,',
85
... .. .._- _._-- -
"
. Tile MbitfatloJ1 'and .. '
84
As per Section )(2) 'Ofthe Act; the communicatiori' is deemed ttl have.
been received on the day ids so delivered. ' 1 '
'According to Section, 3(3) Qf 1;he Act, the Section' 3 does not apply to
written Communications in respect of'proceedings ofaDY authority.
4. Waiver of to Gbjecf:- According to Section 4 of the,
Arbitration and Conciliation Act, 1996, 'a party who knows that any provision,
ofthe Part I from which the parties may derogate, or any requirement urid.r'
the arbitration agreement, has not been 'complied with and yet proceeds with
the arbitration without stating his objection to such non-compliance withOU1
undue delay or, if a time limit is provided for stating that objection, within'
that period oftime, shall deemed to have waived his right to :';0 object.
Ifthe following conditions are satisfied, it is regarded as waiver ofright
to object as statedby S.c. 'Tripathi : ' . " ',' ,
(i) The party has knowledge ofnon-compliance against whom Section
, 4 is invoked. Thc voluntary forsaking of a 'right at t@ proper
opportunity. ' ,"
(ii) There should not be the arbitration under objection, where the party
submitted his statement to this effect. Hence, there is no waiver of
right to object.
(iii) Under Section 4, the objection to non-compliancemust be submitted
without undue delay or within a time limit if it is provided to state
objection.
(iv) The right to object deemed to have waived only, where the party
proceeds with the arbitration without stating objection.
(v) There must be international relinquishment ofa known right.
(vi) .The party appears at a hearing or makes .corrimunication to the
arbitral tribunal or the other party without objecting, It is said that
he has waived his right to object,
The principle of waiver would not apply in arbitration proceedings in
the following circumstances:
J(a) where there is no arbitration agreement;
(b) where the arbitration agreement or arbitration clause in the contract
o . is void or voidable;
"
(c) where a mandatory provision oflaw has been violated in the conduct
ofarbitration proceedings or making the award;
(d) where there 'is inherent lack ofjurisdiction, it cannot be cured by
acquiescence or waiver. .
Unlt..n, Ch-3) Dermitions and General Provisions ....
S. 'Extent of Section 5 of the
Arbitration and Conciliation Act, 1996, notwithstanding anything contained
in law for the time being in force, in matters' governed by Part I,
no judicial authority shall interveneexcept where provided in Part I.'
The Arbitration and Conciliation (Amendrnentj.Bill, 2001 proposed the
following explanation to the Section 5 of the Principal Act. '
. ' . . . .
"For the removal ofdoubts, it is hereby declared that theexpression 'any
other law for the time being in force' shall always be deemed to include:
(a) the' Code ofCiviJ Procedure,!908; "
(b) any law providing for internal within
(c) any enactment for interventicn by a judicial authority
in respect of'orders passed byany other judicial authority." ,
6.. A,ssJstanc.,:- Section 6 of the Arbitration and
Conciliation Act, states that in order to facilitate the conduct of the
pitra\ proceedings, parties, may arrange for administrative assistance by
a suitable QT person, ".'
r . - .
Here includes services in respect of'arbitration
communications, arranging meeting, translation,
interpretation, list lhrbitrators and also appointing arbitrators etc. The term
' suitable institution or person' means any person or institute which is
economical, efficient and having good-will in the field of arbitration.
The purpose of this section is to give recognition to arbitration
administered by a permanent arbitral institution. The function of arrarbitral
.institution.is not to arbitrate itself but to provide administrative assistance,to
i.e., arbitral tribunals. The rules of institutional arbitration provide
a-self-contained, comprehensive system drawn up on the basis of specialised
expertise and experience ofthe organisation in administering arbitration cases.
;;
..
t
{

.. j,i.
)1
I."
I
.,
f
I

r :..;:: \ r -. f"
.. .:..::::, ":i... ., t.. ""4'::' , ..::..
r .' ' . ' H ' . Y. _
. . :< 'ARBITRAdYA6REEMbitl<JI.!:
_" :.; / (i ! .. : : i;". . . .... ..... . . . ' .. . . .f : : : t , " ,
': /\.s per Sectior{:2tbJ of the'Arbitiatio'h arid CbndiiatiO;( Xft, :-) 996
'arbjtnitioih'greeIn:erit>: means' an agreementreferredto in: 71'.,
.:. .: Section :7(IYofthe XH:Jthrbnnltioihigreeriteiii' means an .
agreement by the lilI- ot-certilin"disputeli whieh
ItAye arisen-or.which them.in .respect 4efmed legal
P,<lt: '; . >: : : :1 .. ' . . ,. ; :.L :;.:'..
1. Form of Arbitration An may
be in the form of an arbitration clause in a contract or in the form ofa Separate
agreemerit(SeG;!7(2))," ::' " . ,;:. ' , : ' ., ... . : . ,: ,., :
JI M 3rbitra'tionagteeirieitt 8liaU he ill Writmg(See>7{3)';,.'
in' jfif
:.' :;(a) : the .' : :"(' .. :!; .::: . . ..;;.'. ;,- -.. ". ...'
.' .,,(b} any :py one,plu1y to ftMd.ler
or by impIicati'onby the other
telex, or other means oftelecommunication which provide
. : . ;' .' ' I' a reb6rd()f'th6"agteemerit;'[In this firr'ib!?wiifas' lJanHidhange
:,. ,;I:ofle<mi" tlie existfug e:x.pressiori Atbftrlltiori arid
. 1" 2001]. cit ; ". :.' .
. (c)' .of C?iaim and deienceiri w6ich ik.
of the agreement is alleged by one party an<f"not deo'ji;!d by the other
(Sec. 7(4. . . . : ' .
. The reference acontract to documehi containirig an arbitration clause
constitutesan arbitrationligfeementifthe contract is iiI' Writing 'ena1be reference
is such as to make iliat arbitiaiioriclause part 'ofthe'conti'ict"(Sec:
'.-.-: '' 2. In I<.ir. .J404i vJlN:.Modi,
(1998 (35SCC573j,'the Supreme Court has laid emphasis 'on ; ." " .
(1) the agreement must be relatedto the dispute as against interim to
avoid future disputes.
(2) The tribunal .or ' form must be chosen and agreed by the parties
through the agreement or from the order of the Court or from statute,
(3) arbitral tribWlal
will be binding on the parties of the agreement.
. ' I . ".;' : : ;-"( ! . ' . "! . ' . <" ; . . I : . ' .
, ' , ' ! ' - ' . '
86
..:-.L., :; '.:. .' .;:,;r . . .. ..J!t
, -. . . ... . . . . . . .. ... - - - -_. - .. ...._.
: ".
rill agreed, tribunal after takjp,g..

evideneehe.fPteit. .: .. -. , .;:: r". ' . .. ; ..1 " ' : 1:., . , . . .. "J. :' - :. ' <. ";
" .' : (5.) The':iiecisiqn isintended io.:binchheparties.Irheie 1Ile.of the
statutoI}''teqniTemerttsuf awrittenagreement,
ari'iritentibriil(frefef tlfetii'to arbitratiOn iiiUldecft()
iri'iaw;l. :)1: .: .J::>?,.,...,. ., " !. , . . ,; ;;'.' ;:;", . '. '}; ' .: .!: r" .
" " ::.,.; . : "";, -:: .... -. 't.!.:- .. ...;.; .. : :v ; .{ , t oO" : " ... ".: . l ..r-:..
An arbitration agreement.must .be .
been prescribed can be il:l one document or it can from
lb.i
.- , . . ", !. " .. r; . . ' , .' : . : . . ' . ' ". . : " . i , "f ': t . .
PJ.lmq<:r fllX, I,J1(lSli;\gq&.t!'legrams meseages. ;
. ' . . . . . .. . ' . .' . . ,.." . "" . " _. . . . . .. ..., () . . . J. ", " '. ... .,.... :.' '. ' "
The arbitration li'greemerit' shaU'be
conducted. accQIlclins.to !ho.'!Ule..a.an,arbitral . Tn -such a case,
e.f-th\Hub1tr@tion agreement- .,".... : ' . ..'
Thearbitratiqa must not be uncertain.aifci
'of being ' . . 'agteemeiitWiU
be rbtiflea: : agrfertibht of
arbitration must and
.: . , .., ..
spggest
.requirelllent of the number of is a part of an agreement.
The sariw 'wa,s observeq by the Court in lVLUT.C. Lt&!. v. Sterlite Industries
(India) Ltd.,. (NR 1997 SC 605). " ' . ' . ,
" .- .. - . . . "' : ; ) ' .
Arbitration i . . . must be offer and
acceptance. ConsideratiQt:\ for- the contract comprises' in the promi!ie by each
party to the oiiief'that any di'spute or bet*een'them he
would abstain from any action in a Court of Law.
to the other to abstain frOm )egal- actionanCl 'too;peifcirm the a:Ward of tlte
lhe.considel'ation for.the contract..,
Parties to ttle agreement must be
be ad idem. 'mistSke'in understanding as t<>"the suhject
. matter in respect Qf:whiqlJ.,tb,ey their,disputes pr .
arbitration. The. to submit.d'ispJites shouffl
andqe by P,wties;i, .
. ...' ,."

..

must be lawful. . .., ' ". : . "':' <"d tr' m w :J ,f.,)noi:f
. " -. _ . , . 1 .1 \
89
_,_, . !?96 (Y0lilIllma..
. .
. .:.!I' : 3. ' Pdwet' to Reier'Partie'$"' ao
'by
. Conciliation (Arnendn.tet1t) 2001 Section 8 ofthe ActA996
i
. teBc:&tl.:.
':if .' :,:(iii).Subject ,the 'provisiotts' of-sub-seotions (4); ajudicial .
matter-
.
flI'St.statement.on the substance ofthe ,
questio.ns to sub-section (4) as preliminary issues under
tltatJ:W.:seetiOfFrefet 't,.'1eparties to affiikatibrl", . ... ,; . . : ., ' .: ' , . .,; .,....
. .". 'r ' ; . ' . ' . ' . . ". .
T '.' :
toe the'pl ose'6f
se'Ci'iQri(4)8rld'ffih'Stay so g&hted shall be$iillject tdthe
:i 1
... ... .
'. ..'. (2frhe entertained referred
unless. it is accompaniedbY-',tite ,oiligiriaLarhitration-,B:Jleement 01": a-duly
._.': .- . ...- 'j. :" ; .-.:: '- ' f ' ;'''. ' : : ' :'., '. " ., ;
.... ... (;)
.(I J .tlfe. j !JQ\9Ja'.
may .cPAi'm . l ced arid/ail aibiircirilWarariiail" .. .' . ' ". '.
. J ,' , : .. " . : .-: ".-' ... : ,: ; :': ' :. " ':; 1' . . ' " " : ' : . ' ( ; ;: ! : . : ; '
Provided that the arbitration so stand
tenninated ifthe judicial authority, after heiuing all the parties, passes an order
under sub:'sectibh (4) to the'effct that-l: ,. : .' .' . i ; ,; '," . ." . .
(a) " a to cwmot 'inilde b.ecause pf its 'decislon on
. .' . '8hy qiiestiorl:referted'to 'fit '(a)'to {e,J ofthat or
(b) though a toarbitration has to the 'proceedings have
" .. :.' to coitdUcfed 'o:1'a'dift'er-enfarbitral tiibilMJ; ';:. ":".".. ..; ..
.. , ,:.; . :;.; : . ,': ." .' : : . I .. , . ; . .
' . (4) appl,i.catlon mll-de ,tpt,hc? judicial authgrity by a 'party
. J J " n. ... . . .. ,. . .... .... : ,', .J " ' . ", . - : '/ ' ; .
ralsmg anY'auestion: .
". . . 1:: :,: ; J.:11''.' ,'.:i,. " . "', . . ' ., ; ': " '.: . i .. I ,
.)riI : - , t\1!lt : . '., .: . ..'. " " .' . .
. (bj that the arbitratioh' agreerrientior ;)1' is nidi aJ'ld ;vQid
.";d ..,. ' " '. "JW :X. ; ,:.' lI u : ii; .. : ;i ; ;: i ' . . . ' '; ' ,
. ::" i!i1.,?):.,tba;t; tb.e of:-being
, ' 1 ;:;':':{f'1";' llikt cit-t. is'i'i6'f di I" ...L_ :'ty .
UI . . . u ela aUu-wfl
:\..; the
.. :'; the qUaHoWs 'nien6otiecl itt 'sub
section (4)' cannot be decided because, ; .- : . ,-.:
lhiit-U;' Ch-41 -- :' 3 m bltr'aryAgr.eement -.\.J ....: . 'In .
(8).. the-relevantjt'aqts"otdocuments-ere .in-dispute;,-ot.;,: m; t.:lIJi,L?: . ; .
(b) dim' i6r i : ';'-/.<; ;
' . . . . .: . ' i: ' ):Y_' . I -n ..; .. ...
(c} into to to .
.' ,. ili'bitratio!1' or . . . ..... . .>, .. . j : ' " . J l . , ' . . " . III
' I t : .' .. , I : : ; i.d l ' "' ; h;i :.' .. :;"' :; ';:. i:-i'"
(d) the request .,: ':11";.
; . ('r) !ilc ?IY i
. . m. 9.r. ';' .. ,,; ... ., '; ;. : . " '.
(f) there is no good reason why these questions should be deeided'at
.. >', . : ': ' , . :. " ' : '. ' "
it shall refuse to deGide :thesaid' questions and shall-refer thesame-to .
. ': ' - : " ' .
.(6) If the judicial authoritY; holds that tltough the arbitration agreement
,bu}j,t :?f p.fbeing
performed and refuses to stay the legal proceedings,..any provisionin the
arbitration agreement that the award is a condition IP-ecedent the initiation
of legalproceedings inrespect'of any-matter, willb:e ofrib effect in relation
to the proceedings. ,". '.: . . ' '. ' . .... :.:.::.. . . ;<
4. Parties in Pending Prt)'ceedings may agree to seek
Acbitrtltion::-.1Jte proposed Arbitratjon (Amenc:iment) Bill,
200I inserted in Conqji iation' Act , i 996 a new Section
8Aand 'it states: . ' '. : , .. . ..
. . ., . . .. . ' . . . " .; ' ! ! .. i .
' .. at any stage of a legal in the Supreme Court or the
High Court or in the Principal Civil Court of original in a district
or in. the. Court; of.;the Judge; the .City Court of original
.jurisdil'tion in.a, .city or any court ofcoor.dinatejurisdic.tion or inferior in 'grade
to such Princ.ipal Courts, as: the be, .all the parties enter into an
arbitration agreement to .resolve their disputes, then the Court in which the
said legal IS shalt on'an application made by any party
Ito agreement, .refer,the'disputes in relation to the subject matter
of the legal proceeding, to arbitration.
.Exp! anation:--:- the purp;oses of- this section;:
means any,,proceeding involving pendipg
'Nbether. at the stage of instiw.oP 9f .!!.Mlw
,ofa.pp.al or . . : '\':':',
:;;
in 221
on further appeal, if any, to the Supreme Court. . . billa
...
90 The Arbitration:arul{iqucij1ation A1:t, 1996
5. Interim and
Conciliation (Amendment) Bill, substituted the Sect.ion 9 .in the
' ,1": 0',; '),":
(1) A 'party 1)ef?re or during arbitral any time
after the making of the arbitral award,but before it is enforced in accordance .
with Section applyto aCodrt 'f6i(i1iterfutmesSufCS:: k;" V '" :
: .(2) The Court shall the far makiJ'lg:drcfufs'un'dersUb- .
section (1) at it has forthe purpose 'of;' t<:VatW'proceedings
before it. ...; ;. :i.' " . ,' " . , .. ' . . . .
(3) In particular and without prejudice to a'party may
apply. to the Court,for .any of the :: : 'J j : r . ; : ,, '
. .. .d ,,:. . . ' . .. ' . ..
(a) appointment of a guardian for a minor'br a'peisoit ofunsound 'rnind
for t. ;'1::., '.: 1; i oJ '
.(1: inreii'titmeasure 'ofptodti,ction id tit 6fthe .
:'. ', : : .. :" ... .'....... ... ;.. .:. . ..' t .
,: " .. ,(i) the.preservation, custody goodswhich
are the subject-matter of the arbitration; . . . , >. ':';i. . '
. .(ii) securing the amQUlilfjn m.the,lU-bitTAtion; . ; . \
.. (iii)'": ihe de'tentidn, or t}jing
... which is ' matter' 'of the 'in arbitration, or as
to which any question may arise therein and authorizing for any
', } . of the aforesaidpbrposes anyperson.to enter upon any land or
building in the possession ofanyparty, or authorizing ariy
j" , . '. . : !: 0'
samples' to obe taken or any observation. to-be made, or
. l-.. ,. " , ' . ,' " expetim'oo't'to be tried; which may be .necessaryor-expedient
..- '. for the purpose df obtainingfuli information I
.. ... . . . . . , ; " I -" . .. , " , ,: .-;
. :(iy) , interim mjunctioo ot. the ofa ' . . .
. ' . _. . i. ' . . . , ' . , ".: J ) . ' I , <' - . . j .... . , ,
. ::,{tJ:0ther,interim-trieastire:of prbtectioii as may appear' t()the!80uit:tc>
. be'just and convenient. "';;; ' I; ; . -; ', . '. , ; : ....:. 'J . ' .. :5' " .... '
(4}:;Where a party makeS: an applreEitioQ' 'under- sub.sebtitm- 1(l-) the
.gnint ofinteriri1 ineaSures beraTe:the cdrtUne:Ficen1eli't ofarbittilti4ln,. the:(i;ourt
.ShaH mieet the to take
.' istt$S f(jtiHm: 'accdrdance with
iii'ScGtihh l1h#thi'ii'a'#6rlod 'of tliirlydays ftOtii tOe
date of the said order. .j ' ..; , ' ) .. ; ., ' iG'.';:; ::! ' l:t
L
: : ; ., (;.: : ; ' ,f ':!; .
Unit"II, Cb-4)

(1)
are not taken within the under sub-section
(4), the interim measure granted under sub-sections (2) und

vacated on the expiry of the said penod: ': '. [ 1, ':; '. ;'. 'b ; 1" ' ; :-'''' ':jHH:: J J.

. . r. P{6vided .th3.i the : fo-r jhe
delaym wong such J: " "-. " .'ii;
. : . ' : :. '; . . ' ( . . : "t ' : ':i l' "" . : . i' " ! ', , t :. . :. : ;: :_',' .. . .#" ' : i ! ". . " :rr.
,(6) Where an .order. grantingan
. sub-section .(5), the Court .may pass.such,further orders.as.torestinrtion.ae it
may. deem;fitagaiast the party in whose favour ,the',mterim -measurerwas
grantedunder this section, ",; ,,.. '. ' .: ., : .. ;';: . ' , . .. .: :,
. :: ;. . " : ' : (t ' ; 1" t
. . . . i ' .
' , f . c : : ," i h ' "
" : .' " I : , : : ' : . : : ,'.!.
1, : :
" ; '
.... ...... ..
",:::,.;.. ;, : .
to; ', i .... : t ."
.- . . i ;;, I . t t : .
'.1'
i .
t : J...
" "
I- ,I. . , ..
-"!" : ' :L
... j: '
: 1
;.: ; . . i
"" ' .--.:-'
' , 1"
"
:,:i i
-.
.
.. -': j
:i
i
,
.
.: .. ' ._,. _,.',::,':.:':, I. " "):,,,
. , ,AND.8ESPONSI:8IUTIfi$'Of
: ., . . ' .
:" .' .. . : :": ', ;ARBITRAL,TRIBUlI(tb ,, ' ,;; , - , '
. : .i; .: :: i}; ,,: C.' .... . ' ," .., :.:,,(; 1',: , l""'J - ! :' : : ' : . "; .": ' . . : , " ' : J
I. Composition of Arbitral Tribug.JlI, " , . t - >: . . . . . I ;
" t . _ .".... . . / t . - .
;r:. .". :l J), tI!e .
and Conciliation Act, 1.996'!91 to ..
arbitrators, provided that such number shall not bean even .number, This
ulke1i ftOIri Attidle1O(-i)!of. the Mode'r'Law 6'fUNortRAL.
of the' parties td app'oortt'orily
anuneven.number.ofarbitrators whereas Article10(1) cfthe Model -Isawgives
freedom to the parties to appoint both even and unevennumber o:s.rb!ttators.
Section 10(2) ofthe Arbitration and Conciliation Act, 1996 ensures that
ifthe parties could not arrive into agreement in respect ofnumber ofarbitrators
(only an uneven number), tlie arbitral Tribunal shall consist ofa sole arbitrator.
Under Article 10(2) ofthe Model Law, faii!itg agreement between the parties
the practiceprevails in' international commercial arbitration to be adopted,
that is the number of arbitrators shall be three. The Section 10(2) of the Act,
1996 adopt the prevailing practice in domestic commercial arbitration by
prescribing, that. an arbitral tribunal shall consist of a sole arbitrator.
There is no restriction under the Act if the parties prefer to have multi
arbitrator system, whether it is in international commercial arbitration or in
domestic commercial arbitration.
2. Employees, etc. not be appointed as Arbitrators in certain
cases:- The Arbitration and Conciliation (Amendment) Bill, 200 I proposed
a new Section lOA thus: .
, ( I) Subject to the provisions of sub-section (2) where any arbitration
agreement contains a clause enabling one of such parties to appoint his or its
own employee or. consultant or advisor or other person having business
relation wi.tJ:1 him or it,llll. lln art>itrator, such a clause shall be voidtC)tpat
extent.
(2) The provisionsof sub-section (1) shall not:
(a) apply to an agreement in international arbitration (whether
commercial or not);
(b) render any clause, in 'arbitration agreement which enables the
. Central Or a State Goyl!htment"or Sector Undertaking or a
. of a.sfuttitoiy corporation 'or other public authority,
.; 1 . . .
92
6 :.;SJ ConiptJsitibJi; .... ..
.. )
' .::. ,'/iaS the'.case'.ritay"!be,lofu or
I
s advisor or' any: having iiltfl
... < .. arbitiiltar; ivblli...;.," ..'; . : ' ';:":. ' . , .f,:!"' .: ':
.J
I . : . . ... . ".. ', ; . ,.....:... . ,;; .." C; ! ; . "0. ': . :. . :'"
II; Appointment of Arbitrators ' . . ' . . '
, '; ;.. . _ . . ..... .. . .: : .:' : .:. ' ' . :: ' . ,o; :;, ;; ! , ." ;.::: i
Under Section II of the Arbitration arid Conciliation. Act; 1996, !he
following are the provisions relating the appointment of aI:bitratoi-s: . '. . .
.. / "l'H = .,;. ;.. . . : . . ' ..;'. "'-:
'. ..:'; (1) A 3rbi,f,ta,tor;;tmles.ll ..
agreed PYJheparti.e.s,,/ :; " -',' '.! ,;, . . .: 'J'. .n: : :. ::: .'" ',' " :;',,': ' (1., . i .. .;' r;"i,::,': .
This sub-section.of the.Act provides freedom to t6 appdiilt a
person an arbitFat0r; iHowev.er; .tite pames ,maytestrict
themsetvesctocertain nationalities ofthe States lippointed as an arbitrator,;
There.isno discriminationin'respect an arbitrator; Hence, a
foreigner.mav.be appointed.asan arbitrator; ..'.' ' ' : '. ' . .
."(??: a
for appointing.arbitrator, '.. .' . .. . .." .. . " '; . . i
. : , " " . ,. ' . ' }' .., " ." . , . ", . . ' . . . '.
According to this sub-section the parties are ' f'l'eetolay down ' the'

procedure,appoiHting But; subject to certain

.restrictionas to follow mandatory provisions laid.down (6) of t
;j
tJ.te: . i 996.wh'iqh' the procedure Ira.party
.;
fails to act as required under that procedure agreed upon by the .
"
"
j;
.The parties may agree that the arbitrator or arbitrators may be appointed
by a designated or theymay themselves appoint, They
may agree upon arbitration by a sole arbitrator orby.a number of arbitrators..
They may agree.upon the number tobe appointed by each of the parties, The
parties are free to determine the number of arbitrators, provided that such
number shall not be an even number. .
.. . .: . . ." ' . ;: . . ,r' :: .. ; . . .: .
(3) if the parties fail to on a procedure for appointing the arbitrator
or arbitrators and' thenumb'erdfarbitrators agh':ed 'up6n is j ;each'party shall .
appoint one arbitrator, and the two appointed arbitrators shall appoint the third
arbitrator who shall act as the preSIding arbitrator. .Thus, sub-section:wouJ.p
not aI?P!y if the agreed of a.r\:litra..!ors: any- other number than
(4) If the appointment proceduttt-insub-sectioll (3) ".-:::
(a) a party fails to appoint ali arbitrator withiHSixt)fida-Ys ft'ofu,thcll
,.;
receipt of a requestto frDmthe,'other paTtY;:oinq j i ::; In.Jn w99f; . " " .
"

' ..

;: '." . days .from .the date, .:;1tfj'
- , .'
9.L...." Tbe'ArbJtraUoR:and;Co.nclliatiaD Aet"J996,H . (J1nlt4Ij
T ' . . .
... the right to make .suchappeintment shali ibedeemed.,t,o have been
waived, -if sucb,:appointtne4t js nQ.t madewitbin;. the .said .period and the
appointment shall be made, upon requestofa party or instttution
designed by the High Court o! any person or instituticndesignatedby It. ..
.... ... ; . ..v "
This sub-section is riot subject to sub-section (6) unlike sub-section (2) .
Ids selfcontained. . . . . . .. ' i . " . . , .
. . ' .
. . . ' . : ; ' . . ' '' L.,. .. ", ' : \ . ,' .' : .. . . -: . . ' :-' : ' ! ' ,. i ",.:"f ; . i, . ' :
Only 'upon the request, of a party',hot otherwise would the High Court
or any'person or mstitiitibil designated l1r rt:fo fuaktNtie 'appo'intnienf" the
situation is clearwhen no request is made to the High Courtiand the principle
of waiver ,r . ' .' ' . '" . . .
. . . : l , . . . . . . . " ' . " .
(5) Failingany.agreement referred to in sub-section an-arbitration:
with a -sole arbitratorif1he partiesfailto agree.on the arbitrator-withinstxty.
days -fromthe.receipt ofa request by-one party from the other partjoto-se agree;
then the right to make such ,appointment shallbe-deemed to have been waived;
appointn:te!},t. is no!, within the period and the appointment
shallbemade by"the HighCourf orany pers:i:>ri o(institution designated by
it. This sub-section has been proposed' oy'the ArBitration and Conciliation
(Amendment) Bill, 200l. -. -: , r:
(SA) \Vli-ete the
i
i pp6inttrient' 'procedure- :containedin the arbitration
agreement'becomesvoid under sub-section'(1) ofSection:10'A, the'partiesmay
agree to appoint ari within SIXtydays of 'a request' frotn"iJhe Ofthe
parties,' " " ,.'. . .
Provided that where the 'part ies fail to agree on 'an arbitrator within the
saidperiod of sixty days, the appointment -shall be' made, upon request of a .
party,bythdHigh .Cotirt:oranypers6n:or institution designated by it. This'
new sub-section is' proposed by the Arbitration and Conciliation (Amendment)
Bill,2001.
, .' .
(6) Where, under an appointment procedure agreed upon by the parties,
- '. ' . ' (, ;." ; " . .' . " ; . ' , ' . . ; . ' . . , .
(aj a partr fails as that
. (b) the parties, or the two appointed arbitrators, .fail to reach an
agreement expected of'them that procedure; or:
"(c) a inclUding an it>pcirronn any function
entrusted 'fp. ,hi:m ,oroit JUlder; that .' ; . :
:",:' .. aep,ordan<:e with the
take such
measures shall be deemed tohlive 'been waived and a party may request the
totake the necesslU-y
appointrilentprocedliteprovides other
iT - :.... " ,
Unit-IIi (!Jh-S] .... ....,
..
..
means. for-securing the.appointment.s'Ibis-sub-sectiea hasalsQ;l)ccn:J'jJlQpOsed
.by,the Arbitrntioniand Conciliation (Amendment) ain, '?I09J:. ,: :, " " ;.;;r::',.,.)
4;
',.:[;:. .
(7) A decision on a matter entrusted by .subZseotiQnr
(5)" (SA) .?r sub-section (6) ..Court W or

institution designatedby it is final. " . .. . . --. ... .. ', . .... ' .
: .
.(8) The High Court .or any person or by 'it, in
appointingan'arbitrator: sJUilillave due regard' to:-::..' , .. ' :, ";.': . :
i
(a) any qualifibiiiioni"fequited:ofthe'arbib-atbf"tiy the ltgreemdtlt'ofthe
.parties; and ""." .. .. .. . :: : .':, . , . ::'. .:"" ,' :
."i,;'
ltJ::'
. :,(by corikidefiltfonsasliie"IikeIY tcVsecure. '0, lin
t.
. . " inaependertt and 'impartial arbitrator," ,:/ . .. : ' -. - . ". ' " .. .::
, I (9) 'In the case of'appointment 'of a sotecrthtrd in an
I., .
'interriationiiI"(whether commercial or 'not);'the Supreme COurt "(It the person
or institution designated by it may appoint an arbitrator ofa nationality'other
than the nationalitiesof the. parties where the different
,
nationalities. . This sub-section has been substituted by the proposed
';
Arbitration and Conciliation ... , ." :';' ,
i '" . ,. ' . , ' - . .' . . . . " . .. I t"' .. _I ;
. (l0) The High Court iliaymake such scheme aM it may appropriate
for dealing with matters entrusted by sub-section (4) or sub'::settloi}'(5) or sub
section (5A), .or sub-section (6) .to it, .' '
'. (I.I) Where more then one request has been made under.sub-section (4)
or sub-section (5) or sub-section {SA) or sub-section (6) to different High
Courts or their des ignates, the High Court or its designate to whom a request
has been first made 'under the relevant sub-section shall alone be 'competent
to decide on the request. This sub-section by the proposed
Arbitration and Conciliation (Amendment) Bill, . : .
h: ' "
(12)(a) Where the matters referred to in sub-sections (4); (5), (6), (7),
(8) and (10), arise in an international arbitration (whether commercial or not),
the reference to 'High Court' wherever it occurs in sub-sections, shall
be construed alia 'to the CoUrt;. " '. ' r .
. 1. 1, . . ' ,.: . . ; . : .' " . . ...: . 1; "'" _ .
(b) Where the referred to in sub-sections J4), Jli). (7)"
-'.
and (10), arise in any' iQther ' arbitration, 'the reference to the "ffigh CoUH"
.wherever it OCCUrS in thpse a,refer,ence to
. the High CoUrt, within whose territorial :limits the Prinoip.al:
the Principal Judge of City Civil Court referred to
(1) ofSection.2, as the. case may be,-issituated !heJJ)gl} Co_urt ' :"': : '
itSelf is the Court witl:ifn'the meaningoftI1at dIause;..
,. ;:: " ,
,
,..,,)/!hi>i
sub-section has been substituted by the proposed Arbittangn'iha<ec?nci?
(Amendment) Bill, 2001. . . ' . .' . '.' ' :: :, ; ', j ' C; J6 im 8
mgl
-
96 " ''''iIDh-e- " :; [Uldt..U.,Q-5
' ';I( U!) Where IllD; aWlication is:niade :totbc:Sqpreme ,eourtonthe:lHigh
Court as the ;bel,UDderthisiSection -by raisingany.question->
' : ::>{atithlit'there-eho dispute in:existence;, :';- . '. c ' ' ; : ''-'" , " ' :
<P)' .thai the there&t, 'l.!i nul}:tiitJ
or inoperative; . , .: ; ' .;. " i' . ' ; . ";!' ; : ' . ; ::, : ..r,1
.". (c) , ,,' .
. -. - . . . ....r .. ' . ". 1\-.. " : . ' . " . '
",' .(d). thatthe agreementis , . . '. . ." ,
. . . . . ..; . " .,"' ....'. I. .. ." '..... -,
the Supreme Court or the High Court, as the case fuay be/may, subject
.to . has
been proposed by 200l.
....nM.,i;f. Court .or the.High Court, .. the.'. .may be.
sub-section decided
. . : ,; ', " .;., ,'1,;" .. "" . ' , . .' .
" . . ':;;: (d). or doc:uriients ere in dispute; or ' ... . : " " . :.
. t .. :. ; ' . .. . . :: ' ::j :,' :.' ", ,,:-- ''':., ".. ,;. : ."': , ': '._, ";' .. :
'(b) oral evidence.is.necessaryto be '" . .
. .. .. . _. 1' _.. : . :...) . . ..z :
" c : .
r
Wt.? questionsis.Iikely to
r , . ' ..; . . :: ' . .' , . . .':. , , " . ' . . .. " , . ., ". . '
(d) the request for deciding the question was unduly.delayed;' or .
(e) the decision on the questionisnot.Iikely to produce substantial
savings in costs of arbitration; 'or .
(f) "il1ere i s no.go6d reason 'as to why.these decided
at shall refuse to decide' the said questions shah
.refer to' the arbitral tribunal. lbis sub-section 'has been
proposed by 'the' Arbitration and (Amendment) Bill.
'. " 2001'. ' . ' ." . ,
. t1te.p.w0sions appointment
tipio 'be ,9,n tlie Law qf and
rectified the defects found iiidiffererifcases in CoUrts: . . . . . . .
o j . .. . ' . ' : r:- ; : '" . " ' ... " '

;. ' ": . ::Thearbitrat-<>I-s OifiatbitraQl.trlbillllil ;poWers as per
o'Aibitratidn :3rtd:Cbtf($iHatidh the proposals made
rllJY 'Bill, 200 i .. '. ': .
' t, ' (I ) '1":;!-\ '" brv; /':';lfilJJtl:> . 'j." : . " ' .' . ' . ' .
:,:;.1'i AT1?'itziiors ,have
.
cnallengmgaJ;l Itf.ator nQt success (Sec. 13(5)] , . '.' .. .., .' . "
" '. "j . ,' ': " .:
,.
. . _ !I
. 2. can -withdraW
[Sec. 15(1)(a)J. :.' , : .:.--:" ':_': :! i ' .<:!, .. ' . ',", ' ;,,;
.,:,' . ' 3. The '
. o.vp. ;includipg on
objections to the -existenceor agreerrieiit,
and for that purpose- .... . .
: ': :. ,. .. ' ; ' . . l; ' :' " , J ' t + .,: . ' 1' ,
. c ' (a) .an
. as ap o!,the i?ther
(b)' 'a decision by -the Ihatthe contract-is
! :shaUn otientail 'ips(Jjure'thevalidity of the 'arbithliion'cliltlse [Sec.
: : " '. ' , . .. .. , . . , .
'The artiiti'al to dec(!de On aplea about
'or scope ofits authority aridwhere the iifuitfal triblmaf:takes a
'dt:t>tsion rejecting the above plea, it continues With'thcfarbitrnl proceedings and
make an arbitral award [Sec. 16(5)]. .
; , . ' :.. : "I Dt eriin dir ecti oDs by arbltrill 'tribuDalandother powers:- The'
arbitral tribunal may. pending' arbitralproceedings, direct-> .
. .
, .(a) at therequest of a-party to 'the arbitral the other party
;to take for'the protection ofthe subjed matter ofthe dispute in
the manner considered necessary by the arbitral tribunal; or
(b) aparty, to furnish appropriate security in connection with the
directions issued; or . ,
(c) a party making any claim. to furnish security for the cost of
arbitration; or .
(d) in relation to any.property which is the subject matter of arbitral
proceedings - the taking ofphotographs, taking of samples from;
or .
, ' " , ",
(e) a party or witness to be examined on oath or or
(f) a party to take steps for the preservation of'aily evidence iD. his
custody or control which may be necessary for the purpose of the
, proceeding (Sec. 17). .
5. Hearing and Written Proceedings:- The power of the, arbitfcll
tribunal to pass orders regarding various aspects of

shall include-- f . ..'. .
, .
'(a) the fixing Q.f time schedule for the to adduce <irk) . .'
ifany; ' . ' , . ' : . , , :: ' ,.:.<,.,!.

.; ." :, , J I 'J1Q1: "
"
a
.
98 ...
. .
'. . - . ., : ..(b)
(e) the mannerin which oral evidence-is to be recorded; i. ": : .: ' ,>. :
;Ii ; shallhe
i
d6fi411cfed only
:.. :' : ": oh' th'e: othc;rfiliiienaIs;b'f- ththifuer iiliiiiDer
u:>(: , 'prd&eedingS" rnaybetoIliiJ'6tiil [886:'1'7(18)]. .
. , . . ' :'>::". '.:.,; : ; .,' . i : .' .' .
. 6., of arbitral tdbunal to enforce its (1) Ifwithout.
i PttrtY:$ifS'tl> arbitral
. paS$eo statement of
and:bearingijlOd written' proceedings
(under-Section;24J..in,.Chapter .ofouduct Qf. ,arhiltatio!J,<;lpryceedillgs. as the
case may be, arbitral tribunal may make a peremptory order effect,
complianceas .. , . . :.... .
, .: . : . .. (..:1. . ' . .; ,,.. : 3 1 . ..' . .' .3 '" .. s .' .... - : ' . .1.: I . . ' " 1. ' \ ... .' . ..
,: .(2),.1f, tin
.relation for arbitration, the arbitral .
tribunal may dismiss his claimand make.an " j _:; '
. . . .
: .. , '.
by the arbitraltribunak.then ;. ' .:' , .
.' ' " , . ' . ' . ' ' . . , I . . . ",
(a) make such Qrperas,jt.tQiJs fit.as arbitral
. . : ! ' . : ., .. ' .. .i.... , . . ' . . ;. . .,\ " ". . . ...: .- . -. .' . ... ..' .
,. e - in consequence Qfthe;n9.n-coinpliance;
J . . . J . f of , .. . : " . , . . . , J -. - . ' . .
(b) -direct-that ;the: party.in.default- shalf not be entitled: to-rely upon any
ip. upon , Wpi?h was the
subject-matter of the order; . . . ..
. . . ' . .
(c) draw suchadverse influence from the act of non-compliance as the
. circumstances Ju'sti'fy; '. ' . ."
(d) proceed to make an award on the basis of such material as has been
. prejudice action that' may be taken
, . ! ', ' : ,: . .
7. Default of a Party:- When the claimant fails to communicate his
statement :of :witlJ,o"(1t ,showing', cause, arbitral Tribunal
...;::, ..; :,,;., ii ;...: . L j : ;
.' fail$.W statement of defence,
without sufficient cause; the arbittaFTribl.inaJ han continue the
an the
':':J : " . .. :. ' ' . ' . i "
. . When If party faili;"W'i.ippearat an oral hearing or to produce
-t . cause .tn,earbitral Tribunal
'\.. .i6e evidence
before it 2'5)/ . . ' " . . . ' "
._._-_._- .- . . - ...
..,.
. S'{ExP'ert' 'Arbltnd,'ftibu!iili:.-1!lie
canappoint one 'or moreexperts to rep6rt to -it00' specific isSUclil'.tdl.ffe
determined bythe arbitraITribumil'lSCc':26(1)(a)J. .
. . ' . . . .
. . , Arbitral \Award:-Art arbitral award:can'be made. duly
arbittiitors [Sec. 31(1)]. " ., . . ; , ', , :.' U :.
: : . , .. : .. ... ..:
,, : during the.
make an interirn arbitral award on any matter with respect .to which
make afinal arbitral award [Sec. 3i(6)]. . .
.:; : i ;".. : '. ; H. : : : .. 1 . ..t r : :'. , e: 1: '.,; , ; :.', : : .
otherwise agreedby.the parties, the arbitraltribunal
. .. . ,. ;,' ". "":" ,,:. "
IV... . Duties and Responsibfhttes :of,Arbitrator.s.or :Ar bit r al .
Tribunal ' J:" - . . ' '-' . : . , , ::.' . , " . ". -" .
. Arbitrators the and :
Arbitration aniJ'C6nciliation Act, 1996 after incorporating the 'amendments !
proposed by the Arl>ittatiori and Conciliation (Amendment)gm. 200I. ' .
A. Independence:-{I) When Ii person is in
his possible appointmentas an arbitrator; he shall disClose ' in;writing any :
circumstances. such as the existence of any past' or present telationsh,ip.
direct or indirect, with any of the part ies or arty of their counsel' whether ;
financial, business, professional; social orother-kind or in relation to the .
subject-matter in dispute, which are likely to give rise to justifiable doubts .
as to his indep.endence or impartiality [Sec..1ie1)J. '.. . .
An arbitrator, from the time of his appointment and throughout the
arbitral proceedings shall, without delay, disclose to the parties in writing any
circumstances referred to in Section 12(1) above unless they have already been
iriformed ofthem by him[Sec. 12(2)] . .
Treatment of Parties:- (2) The parties shall be treated with
equality and each party shall be given .full.opportunity to present his case (Sec.
18). .
oCProcedure:- (3) The arbitraltribi.uial shall not be -bound
by .the Code Procedure , 1908 [Sec, 190)J. . ". ' ;
Arbitral tribUnal shall conduct its proceedings as agreed by pes
[Sec. 19(2)]. .


:.:;"-!;
. . ,,' .'.
. Failing any.agreement of proceedings by
may 'conduct the' proceedings in the manner it
19(3)J. . . .
11)0 . . rlie, CqncUiatloJl .19.f),6-.J.f Clj-5
_ _ . . _ . . . . . . . .". . ". J.. . ... _. .. ... .. .. _ ". -. _ .....
.. The ;aclI11;flS:fuility. relevance,
evidence during the procedure of arbitration
[Sec. 19(4)J. ", ,-- ' " , j ! ; , :; . , " , ' : " ,,; >'.. ' ,. , " !' ', : .! .' ,
'.:' arbitral. tribunal.. may. unless and
otherwise agreed by the parties, meet at any place It,
''for consultation among its members, for hearing witness. experts or the parties,
or' rot the' inspection of documents, goods 'br:other:propertY'(P'roVisb:to.Sec,
. 0( )' . . " , . . . . . " ", ., , '
2 '1 J.. '.' ' ." I .. . ' . " . ' ., . , .
;": ). :' '. ,: ' ;-t . . I ' , : ; : . .
The arbitral tribunal shall determine the place ofarbitration, failing any
agreenient :l5Ythe'parties; havirlg the case,
including the convenience ofparties'[Sec..20(2)Ji ; ';' '' . . . ; ..:.; . :' ':.
: ; 1 ' ( : 5. The'atbitral1'fribunal ;shalb :letttmitie<the, language 'or
languages to be used in the arbitral' proceedings if the parties fail .ta agree
about it[Sec. 22(2)J. ,. . . .
. ",: . . . . ; :_' . . . ;;' ." . ' -.' i ;. . s ' .' . J',. " . I . "
, . The order any documentary evidence-shall be
accompanied;by;a .languagetsj .agreed upon by, the parties
or determined by the arbitral tribunal [Sec. 22(4)J.
. ;i , " , . , .. : ' ., . ... . , . . ' :
, . 6. Statements of claim and .defence:- The arbitral tribunal shall
endeavour .. subject' to such rules .as may be
made me High Court in this behalf [Sec. 23(1A)J.
7. Hearfngs and Written Proceedings:- Subject to such rules as may
be made by the High Court in this behalf, the 'arbitral tribunal shall decide
whether to hold oral hearings for presentation ofevidence or for oralarguments
or whether the proceedings shall be-conducted on the .basis of documents and
other materials or to receive affidavit in lieu of oral evidence subject to the
Witness being questioned . However.t4e arbitral tribunal may, at any
appropriate stage the proceedings,hold Oral hearings for .the puq,ose .of
presentation or oral evidence [Sec. 24(1)J.
,. :_ _ shall. pass_orders' varipus the
pro'cedure before it [Sec. 24(IA)J. . . ..
.. . 8. Defaulto( Party:- The arbitral tribunal shall tenninate the
; ': :"i ..: r..(1 I Oi! .. . !; . ", . ' . : .. . } . ' . - . _. . ' -'
proGeedmgs Ifthe clatmant fails to comml:lnic;ltehis statement ofclaim.
." . . , "4 1 . . .
.. , the proc.eedings resppndent fails
., , . .. . . .
" '. .' .. tltC:: JIlakethe arbitral
award it-ir2 pllrtYfailldo appear aflmoral hearin or
. t6 '2S): ' :=:.,.,:,-,' ,.. . g
... . x .{4Q!...:--::,.< ..... # 1
. .
:
._.. 1'*
.: '9. EKpe.-t atbitl-lt
by the::pattieS;.1:lie .
to to. it on specific issues tobe determined by the arbitral'tIfibmiSlaaJ
a to
10. in takirig evidence:- The arbitral tribunafmay: .
app1r $e:S9w:t ft.p, ':,.> !
,h ;; "U " an
. international arbitration, the arbitral tribunal shall decide the disp4te .
to arbitration in accordance with the substantive law for the time being in
force iIi ';.:',::' '\.,,< ;'.'.. ': .. .. '.'
. fu
in India: . _. . , .. . :' '/ o'
j !h .. , ":. i' .:"h :", ",; :.:. ,: :: . " . :<i : c, rt) ':,:. J
(i) the arbitral tribunal shall decide the dispute in accordance
, rules oflaw designated by the parties as applicable to the
';';';!;"II::
i
: -1,;i>:},..(.. .;:<:f .. 'j !"
";<W); g!yen
.: ';.. " be construed, unless.: directly
. , refer;nng the substantive country and Q9.t to
.,: :.. ' J.Qn aWnl,l#I>;. ' -,: ' :,.;: " .C:<' , ;; ,' .:! . , . ;' . ,' :; ., , : " . '. .
(iii) failing any designation of the law by the parties, tribunal :
apply the rules oflaw all
circumstances surrounding . . . "
" . . , .' . ' . ' . ..' .' . ' . . .. .'
T.he arbitral .Tribunal shall decide' ex aequo et -bonoet as amiable
compositeur only if the parties have expressly authorised, it to .do so [Sec.
;
I
i
,;
28(2)J. . ! ! : .: . ; , .
.,.1'
. '. In all cases, the arbitral tribunalshalh:lecidein.accordance with,the terms
of the contiact- and shall take:into accoutlttbeusages of the'trade applicable
to the transaction [Sec. 28(3)J. ;' . ..,'. '
, . up of proceedings time limit for makiJig awatd:-"
The arbitraltriblinal.shallmake. its awards within a period of'one year after
the commencement of arbitral proceedings [Sec. 29A(l)]; , ," '" .
The parties may, by C()Jlsent, extend the above period fou
not exceeding onc year [Sec;,29A(2)]. Section 29A has been ,propesed,by,the.
Arbitration and Conciliation (Amendment) Bill,'2001. .. .
13. If, during arbitral proceedings. the p8rties
. the the
settlement III the form ofan arbItral award on agreed terms. . .
. " ; :.. :...... :; 1
"
10.2, .. . '. >. : rQpjt-UJiCb.;5 i
4 .j _. . S .. _.. . ... . _...:c ' .. ' . . . .... . ... . . . _. .... . . .
. . .
. '. '
he in:writitigand shaH:be . py. the ici.the
[Seq,.-r3.1(1)]. ' ,,', : , l :' ." . . ' .. . . .. ..ci . ' : <) . '" .
The;arbitral s:W8tchfiliiUtate the 'reasbtlSJUpaiHirhich ifis';lji!sed '[Sec.
31(3)J. , .,':.: ' -. i: " .i: ....... r, ,) . ". , .' .... , . ; .:; ;.:.: : , ; :. ..., : .,.' ...,i .. : ' " ''' j iC ' ;' ..' . i ) !
The'arbitral itsdate aftq plac;eof
' A:fter theartiitr.l1'8Wanr ls Sigtie'a eoj>y'sb8:11 'Db id each
';,j ':' ::..:: . : ":" ,':' : ': ':,:.' . . . . : ': '! :".'; . " ., " <:; .; :' ::.;: .: .
" , ' ; \ , 1 : ;. ; " r.' .... . .. . : ; " :I .: ! r. ' . . '.' :t t :, !,;';: ",i . :; : . ; ' ! ". : \ . I ' \1 ; ,
Whereas m, so faras an arbitral award ISfor the;- pf money, .
. arbitral tribunal may include in the sum. for which the award' mterest;'
31(7)]: : ' . ;. .,. ';;: " c". : .
. . The costs -of the arbitration shall be fixed by the arbitral tribuna'1 ' :
3'1!(8)ta)1. ': /' : . fY;(r j :H , I . :"; -..: ... ..;: " .; . , '." ': .':., ... . .'..;; '): ":; :.":'.:':; . . ;. ' . : ,
" : j : .,' . "--, I : : " .. Jd: - ,.,. ! ! . , ' ; ; :", ' "!:x< .::.:
15. Filing of a copy' of tbe in the regbter .
ofaward:-Aphoto copy of the arbitral award' only SIgned on each page by
the 'a.liltz:al tlie'bngmaJ-arbitrlU
flfed'bY the"arbUi'aJ tf1oUi'iiii iiltlie' CoUrt Witl1iri
1
:thirtY' days of the
mdlli'g-il'f with;e: -list 6I'papers' compris'fugthe:arBitral record
[Sec. 31A(1)]. Section 31A is proposed by
( A- endment):DiU 200:1 ., ..,. . ' F " ', ' ' . ' . . ' : ' . " " " i
I#- _ I . . ". . . . " .' . "''' . .
. . of arbitral issue an
order for the tentunatlon the :iiiaithimtWithdraws
his claim or the parties agreed on the;termination or when the. proceedings
become unnecesslll)'oFimpossible. [Sec..32(2)J.. . , " ',
17. Correction and interpretatioJiof award, additional award:- If '
the arbitrahtribunal considers;.the::ccqtiest fof the:,parties for correction 'and
interpretation; shaH-givethem :witlUn!thirty.,day-sfroJl1 the'receipt of.therequest
[Sec. 33(2)); ' :. i: ' .. . , .. ; .
.. "The alibitral tribunal,-bn,req'Uest Q:f.' the an .additional
arbitral: as .tocIaimsflp'tesented 'in the ;arbitral
proceedings but on.rifta04'roih:.the:arbiti.alawanf-{See: .
1-c.ln.additiOtlc.itd;1he' and he :has fother
resp(Visibi1:iqesQlSI tteto:wacdO'tding toU.K. 'KWattai 'Exeeutive Director, The'
Indian Council ofArbitriltl()il,:,;I : ,, ' ': , . " , , '. ' .
. '. . - '.' .
' ( l)- Aft iwl1ittiiioF's!ibultt'lJe'mit' and absolutely impat-tiaVY i.; ' ' . . ' :'
artd'slio"uid d'
. ! . . . 'I i , ..$P" . : f : : ; : ; .', ' .
.... . '103
(3) He should :.' . . .,. .
. . . :., . ' . . .: ' )
(4) He should gr. ..
of or many ofth.e partiesand shouldnot aetas ail advocate ' ,
,','...':, . '.
(5) He should not miscondusthimself or .. ;t '. i ;",boM' ,
.. ..!WY pr
"c' nb., ,)';
?: : : '.' " .: . :.:, ; . ,' .., . ; . : ;: .' ')" ""! ..
. ' Ji".: (7) .Art arb.ator shO;Ud diseiissiort- Or
" ;;::\Vith.tOilC'bfthe parties"on 9'riY'miittej-:ooilnb'cttdwit.
1
i'thid ir6itr.1n brt, .
;;' .. . ' -in'the' atJ'senccVof,thcfoppl:isite pltrtyl ':The proceeduigs tnust:bei
! . , .... ..' ., ;'.' 1. 'j :<: " :".
: _: ; ; ,, ;. ' : 01: , :: '1: : ( ' , ', .....,. ' l . ;, - " d .. ":' ; .. .
.. (8) .Ail'aroitrator must give theparties notice .
opportunity prescribed in the Act to present their case. ' ..
. ".' . . : ..: :- 'P ,., .:, .: . , : ' . i .(,. ; ' . : .. .
:.
, ' I . ' . _ .' . . . ' . .. . . . . . ' . , . :; . ; " ( .J I . . . ' t . . ..... .
is cleariridiClluonthat he has no of ' . . : I .
. , ' . " ' : . : . t , ' . - " . . . ' , . . . 1 " _
. , . : : :,; t :
:. " " J; ' .'"
. ' , : ..
, " ..': . ,
' : ; 1.
'.. ;' t , )'J; : :' " :
. ..:L ,
.; . J . ' I . . ";:.
I
. ..... . '; .L .. :: .; .; . ' . ' : . ; (! '
.r; ..', ' ; .':
::..
. ; j ;
. . .:;
>
.' \ ' , .
'; :',

.:.;r7"})
; ... .
. ...: . . . "j d , '
. .. : t ,' :': Liti;/ i
, .. ' ...)
. f ,', )'iiicj5iir
i .:. , ...
.... :;.:m t; SJ
106 The _._... .
, r., sjgnificant to'riote< that the
whosnppointment ...Ifthech:llh;d,ged'arbitratofovetii1fes'
tbc'objeom:lii;:
given;. .
34:toget;the:award:set :asidei';!l'J:J::':; 'I,,:'J ..,: , ' :l" : :.:.: ,,,.,'. ,' .
.<,: ;:):
. Se9tjpF ' 19.96
f
i$, on
Article 13 of the Model Law of UNCIT.R.AL. This section 'deals with the
-r : t " ,;, " . " ,,;:.,H
1
.; ::. ' . ; : : ." ;
.::.'::'O)i
. ; , !" JU;;: , .
for challenging'an arbitrator. . ' .., .'..
. ' . (2) whq
intenclsi\b. 'cffa'Ugnge:lM arbittatot fifteen days:iifter becoming
awaret1f tllC"ai'bitrill:frioWta}' ot'alter of
ariyiciroUIftiitiull:::e9eftlit'c!tl'tl!, O{''SdCtlOld iiWiitterl
statementofthe 'reasons for the challenge to the arbitral tribunal: t ,' t !i " " ' . ;
: . ; ' i (JJ sifb-secticn '(7)
His !6ffl(!c or'the otHer'PartY 'to ithe 'iribumiFsHitU'
decide on the challenge. .... ;,.,' ,.. ' . ' . ' ".; ; ;-a ... ; . , i " .. . . " . . . ,.
iinder arty 4pon.bY. the padfes or
aibitraltnbunal
shall'coIitinue the arbitral pniceedings ana make lin'arbitral award.
. . ..
l(lIl is under. sub-section (4), the party .
.may for setting aside sucll W\ '
" i:-.. . . . . .:;;.
' . (6) .Where an :arbitrah ward;isset aside on'art 'applicatron' made Uriaer:
sub-section (5), the Court may decide as' to whether the arbitnitor' wHtf;is'
' . " . ..' ' . I ! " r . '. '
. . . . . . . j . I. l .. . . ... . !. " J.u ; ,. , "
. '-,oTtieAt1jitratibn ahdConcilia'tion to thepilrties
by Whi6h',the 'ati5iWtbt!iri 'questionwould
be chalk!nged: If thete: is n6 poitif'6i-;'{fie'p8rties have failed
to agree,' to present
. . the other.
withdraw, .
.. FJ19t successful, the
make The party
who challenge the .to is made. and then he
. .. ._.. . .__.- _. ..... ' - - ' .
444 , .( 4 4 . . . '."
r :
l
Unlt-4liiChT61! . l , ! C.lullle..plfalan,iMbftaton,,';Hdl/, :lIfT. . . '.
'lutl'aPPlidatiJih!fut'! .
: .::'\ .,;>:;.:!;::.::;:; '{Bm
This' the'
seeking the:
An arbitration agreement likeany Cali be}re-VOke.d only with
the' 'C6' rlsirlf of bO'th pitfties: " FililiHk'ateh 'lrfj{iraidr1fets ali
PfQpeediw.ilh:*<lnatter.eyCn.ilOile'.Odie parties
refuses to submit t9 the ' \ :; ! ' : " f f : ;; ': , . .. 'h i ; : .
The 'Court tbt.:pa.ttie9:6Qoul<1.not:be.ttelieve9di',om a
Tribunal they have .. til :( , : .
'.'1 :"'J" : ; . ; '.
:.:.;;'":![ .. .' .
"
".,: 3: '
J,
d' '... "" fl'. . ti ". ;..1" .:. .', ' ,.i r'o ,' k'I,... '."j" ,.

ISquarI ca bn'O ar lUillUl" ' .' " , . . .' t ." _ ..
.: ';: .... :.:,: :i::;,::;;;
(5) exceptiona .cases. ' . IN' ...;... . ' ,..,),,: ',' ...f i' .... , ." ,. \ .." ., '.. '.
. . . n .: _' J ., l J ,.. I ,' .1 . 1 ' . :. . - I " I
: o[Arz.4
h,:a
. y. ,.. R,at?, SC

vu<J, .." J iIi" "becaiise' ,..Illi'e
. , ... ,.' p . .. . . J?,., ... _" ,.r .). P. ., .. ." ,Wi,<."NrR, r. .. .. . " '.;,;, .
of the 3iOitiafor linda forma! awar(J'was
the maintainability of the special leave petitiJli'?M
1
ihd
nC' :'." '.' .. .... .'..
. , . ' ' .' . . . . .,, '..11 . . . . ' . . . " ( .
.. Failure or impossibility to to Scctipn: 14:.of the
Arbitration and Conciliation Act, 1996:
(l) The mandate of an arbitrator shaII terminate
(a) he becomes dejure or de/acto unable to perform his functions or
for other reasons fails to act 'without undue delay; and
. (b) he withdraws from ..or the p-lIrties to thetermination
ofhis maridate.
(2) If a controversy remains concerning any of the grounds referredto .
in clause (a) (I), a party may, unless otherwise agreed by the. .
parties, apply to the CoUrt to decide on-the termination ofthe mandate. ' ,
(3) If, under this section or sub-section (3) of Section 13, aD arbitratQT. , .
withdraws from his office or it party agrees to the termination ofthe .,. ,
,
of an arbitrator, shall not imply of the
.
...
referred to in this section or sub-section (3).of Section 12.
IDB The Arbitration"ahd ConciUati"",,Ad,.1996 . Ch.;.6
.' (4) Wher.e the mandate of the arbitraU!ll':hai been
may-decide the quantum of fee payable to such arbttratcr .This: sub-section-is
.. 200i..
rv,','"TenbinatioDof mandate;arid substltutlon of. JU!bjtiiltb:t -. '
;' I i '" ..; .. '- ,. e . s , .. .: ;; ( .-: , . ' . : . ' : ' . . . .. . . . , " : .. . .
t
. :. . and !
.6).In'addition to,the circumsta't1beh'eierred to in Section 1'3"ot' Section
14, the mandate of'anarbitrator'shall terminate-s-: .;.. .) 'i:.1< ';.';.. ,.
;;(,(a) ",:: ) ' j :'<1
.:. . . . - .n.. : ... . I ! ", ' ,! -,
(b) by or puiS(mnt ro agreement'Of (ne 'pllri ies: -- . . . .. ,."
. . -.. .: i :i :, .; ;.-... .; . q " " : "" " ." ; ' . . f -r- . : . .
(2) Where the mandateofan arbitrator terminates,'itsuhs.titiiiearbitrator
shall be .appointed within' a period 'of thirty days acico'iding''toth'e rUles that
.were applicable to the appointment ofthe arbitrator being.fCRlil,Ceq. j . .
(3) Unless otherwise agreed by the parties, where @arbit@t9r il!.replaced
under sub-section (2), any hearings previously held may be repeated.at the
discretion of'the arbitral tribunal. . .., .: ,. " , ' " "
I ; : ' ' : .; ) . .. " ' , : .', ' :. ' , ' . , : ,'; . ; ' " : ; ' " (
..': 4)
the .. ap
section shall nof be' mva11d solely because mere,has been a cliange .m the
..;.!.: .:: ' : ,.-.:,::;.;;,,:. .
(5) Where the of an Cmp:t
may decide the quantum offee to stich arbitrator: 'I1iis sub-section '
has been proposed by the Arbitration and Conciliation (Amendment) Bill,
2001. '" . ' /"
, ,T I ': : ' ' .' .. : ;
. ' ; : ' ; t' . .: t l"; .' ".I '
il . .. : ..' t . J '
'
( " . , .
. , : ,1ii::. ,. ' i
.., 1, : ' ,
.;:.,.;':("i '
.r;,
1
, . (
h .! ' ;. '.:.'".
;. :.' ..;;'< .
:! " " ' 1' l u.i-l nv "j. ' ; , ' : ' ' ? ... . . !.
,., : ,.
'. l q (; .

J I ;':! -:: . .'. . ..: ' i
Ii
U a-m
.. .. { 1 ?;: . .: l : ,. .'
I

: :...-r:; :nD
\I
.. . . . . s ;. .. . . Cbapte-t ;.L...;l :,. ;>; :' '. ,, : .,! : ;; I " I
'J'OA'SDIC1"IONClf ARSITRACtRIBUNAtS ' ,..t'-\ ':. f' I::1
< ;;1' .' .. r ... : ... . . , ... . ,'
I
" ., ..: '..: ' " .
. :. . . . : ; .i .. . ' ., . : !: :. :-'.;' ,. ..'.' . :J..'
I
, . ;. of the ConoiliationAct, I 996'is-a key sCction
. /
of the k'ticJe 160f.,theJ Model Law. .It: empowei"S"the 'j
deal witlfall itbe:issues suchas--Jv'alidity-, effect-QIi eXistence 1
r
ofthe arbitration agreement. . : ,. ..i' ;- I . " ',
H. ; Competence of atbitralTribunalto:ndeoBJts jurisdiction
., the A,-bt that on iis"pwn .
J
i
1
l
jurisdiction, inciudiiig ruling' on any'objections withrespect to' the existence or
j/
valiWty.ofthe arbitrationagreement; and for the pfupose,-::" :
. - . . . / - . ! . . ' . . : . . . . . . ,
(a) ' 'an' arbitration clause'which forms part of a contractshall be treated !
; , ' ;. ' as an 'other Q{ihe I
" . ; . , . 1 " z;: . . . ' .'. r ' .' . ' . , . \ .
(b) a decision by.the arbitral Tribunal that the contract is null and void
shall netentail ii;sojU:re the hlvnlidiiyofthe arbitration
11
. .. . ... . . . _ . ' . . . .. .. . '."' .

Here. arbitral Tribunal may-rule" means it is the discretionary powerS
ofanarbitral tribunal it may e?teJicise on its own motion orat the request
of a party. An arbifratorcannot .be compelled to exercise those -pOwers. The
powers conferred are mandatory. "Jurisdiction" means 'the power to decide' .
... ' , . . , . '
Section 16(1) ofthe Aqt principle of 'autonomy' and distinguish
arbitration clause fro.m other clauses in the agreement. Thus, an arbitration
clause L'1dependent ofthe other tenns ofcontract and the arbitral tribunal carinot
invalidate an arbitration clause while invalidating the other clauses. of an
. . . .
,TheSection16( 1) states that the 'jurisdiction' is all inclusive. It includes:
also the existence or validity of the arbitration agreement, besidc;s the .'scope
of authority' and its jurisdiction to decide the disputes refex:red' 19, 'nliln,e)y
Objections on these mat;ters shalJ 'be raised
tribunal, not before a Court. . : ., .' ', _.,
, " ... , '-}. ' .... ;
Section 16(2) of the Act states that a plea that arbitral tribunal do.esll\Qti ,
havejurisdic.tion shall be raised not than the submission ofthe
of defence; 'however, a party shall not be precluded from misingIS-tlch:a..piik
109
) ' .
...) ;" .
- - -:j":
no. . Tribunals (Unit-III, Cb":l
tl <.. ! ., < . . " / . }, .-' t(t.. ..'5. . .
.. of,
an.erbitrator, .... -__.....,... ... .... .'.- ..... ... .. .. .. ....., .
. . Section 16(2) provides plea: to but no time
. . limit is relating.to
question ofjuriSdictiort;'liowevei' the parties fuiveatso .vested nghts to raise
but of
defence. . A pai1ysbaU not be depnved of"such nght to raise.objections .to
jurisdietion mercty"on. the ground.that hebas 'B'ppbintedor participated'in the
appointmentrofan .. an.ag8Iieved'PartY:has' an:0l>port unify to
. raise:ajurisdictionaljilea;before-an arbitra11iiibmrM of
an arbitratOr. . . .: :- c.. ,..,. .... ::. . '
61'
its authority. shallbe raised.as as the matter alleged to .be beyond the
sb6P66r"iis:llutborlt'/ is' die . ' ,. . :\ ....
;: <' . ,' ! . . OJ .' . . .' ' . . .': . : .' : ! .: '. , , . . . ". ' . .
Sections 16(2) and ;16(3) -of the Act regulate. the timing ofraisingthe
9bjectiort! a.s ,to thanthe submission of

co1'1sidetci1 tobe outSIde the scope IS raised dtiririg the arbitration proceedings,
,:( . -, either
of the cases 'reterrcifto 'in sub-section (2}or sub-section (3), admit a later plea
if it considers. the delay-justified. Section 16(4) of the Act, authorises the
arbitral tribunal to .admit -t.'le plea aste exceeding the scope of its 'authori ty
even later than when the matter is-raised before the arbitral proceedings.
Secti6n '16(5) of the Act states that the arbitral Tribunal shall decide on
a plea referred to in sub-section (2) or sub-section (3) ofSection 16 and, where
thearbitral Tribunal 'takes a decision rejecting the plea, continue with the arbitral
proceedings1mdmake an arbitral award. : . .
.:St!ctiori 16(6) of the Act states that a party aggrieved by such an arbitral
award 'may make an application for .setting aside such an arbitral award in
aecordance with Section 34. ..
. . (6) are not modelled on thc? basis ofthe Model Law.
tojurisdiction made.?y party before
iiti .arolffiil tnl)unal and an arbitral tribunal proceeds by rejecting such plea
.and 'also make an arbjtral in such .caSes, an aggrieved party may
apptoaah settitrg!a'si.de suchan arbitral according to
Section,34af.1he is available to an aggi'ieved party under
sub-section(6) OfSectkih '160f1he Act. .
Section 16 does not declare that none else than the arbitral tribunal can
determine' questions like 'existence' of arbitral agreement. Section i 6 of the

.tu
_ . -.- " .,. _ _ . -. .- ..- "i:' . . . . . ' . . . ..:
.lJ<.lt away.. Chief atjlnd(a.lOr his
delegflte, ifneed be, todecide-the question ofthe
ofagreement,\ . -= . . . , '. . .
:, ">J-;'; .i.: .... '._ ...:: -. - e-. . .. : ;fw \ ) . : i.(; r,t:; . -:t... . .. ! ch, : .
:' ...' .: ,J:t4, Y, ... .(1999) 5
SCC651],itisheld.tbat: ' . . " ; '
.' ;JUle' QD its own J,o
rWiMog;aIWi .w.ith.. existence
. .-: '.! : ', . ; : : : . .
." ..... ,by; null::md. void
shall not . ., '.: :
::. : tlJe,Jtlt)itrator.

at the stage left open". . ... . '.',' ,.. ;;' ; ' . ' : . :e.. :..' : .. ,. ' .'
. .,Jn We./Iingto.n Associates.v, K;r;(;M(?hta. I. Arl>,.LR690] it is
. ., '. ...: "., .' ,
"It must be noted that the language employed by Sec'; 16 shows thatthe
said provision is only an enabling one Whichnow pennits the arbitral tribunal
to decide a question relating to the 'existence' ofthe arbitration clause. This
section corresponds to Article 16 ofthe UNCITRAL Modei Law and Art. 21
:t of the UNCITRAL Arbitration Rules. While Art. 16 of the Model Law says
that the arbitral tribunal may rule on its own jurisdiction, Art:21 ofthe Rules
*"
states that the 'arbitral" tribunal shall have power to rule' on these questions.
. Such power given to the arbitral tribunal is also referr.ed to as "Kompetenz
Kompetenz",

IiI. Interim directions by arbitral tribunal and other powers
Section 17 of the Arbitration and Conciliation Act, 1996 is substituted
by the proposed Arbitration and Conciliation (Amendment) Bill, 2001 and ;
states thus: . __ C - . ,
"The arbitral tnbunal may, pending arbitral proceedings, direct,
(a) at the request of a party to the arbitral proceedings, the other PartY. .
to take steps fot the protection of the subject matter of the dispute
in.the manner considered necessary by the arbitral trlbwtaI; or' " : "
'1
(b) aparty, to furnish appropriate security in cOl1l1ectlonWitii ..
directions issued wider clause (a);.or . ' "
tt
[
J '. "
112
_ n __ ....
' . : \; C' ''7.. ... - .. ' s:..
'0 . .,' . . . 2., ' .' .... Chapter
: . ... '. PI"Qceedings fir .
CONDUCT OF ARBITOAL' pfuicEEoillios' .' -.'
. . .. .. . . . . . .: . .... ' ; ::
.( c); 's 1party ,making any eIaim, -to furnish::secui'itY for'the
' ".' :arbitration;or . r . " . . ' ,,; : . , So
Equal of Parties .. . . , . ...."
\ , .: .. ' ;" , . .: .,
(d) in relation to any property which is the subject matter of arbitral
Section 18 ofthe Arbitration and Conciliation Act, 1996 ihat the
' : ' f . "'proceedlngs ,andJwhich is owned'by oris'ih;'the ofli party parties shall 'be .treated equality and' each party be given a full
to the proceedings.-c- . : :. '. :". ":' r " . ; . f j-- < opportuility to present his case. . , . . .' ,; .
.{i) 'the taking ofphotogiapHs; ciistodyor J Section 18 ofthe Act, 1996 is in pattern ofArticle 18 ofthe Model Law.
. ., .: detention'of.the br the arBitral an expert
','1 :'" ItproVides that principle ofnatural justice, that an 'arbitral tribunal should treat
or by a party for the purposes of dT-, i: ' . :
h:, the parties with equality lind provide -equal opportunities for preSentation,
' i'-11: ' Prosecution, defence.aridinterim application in respect ofthe case. Under this
. '.'i , : (ii) . the takirig:6f'isattlples:froiti, or"makirig'of'aIiy observation, 'or
section principle ofjustice and fairplay must be applicable during entire process
condutti.,gatiyexphiiment upon the Said property;' or .'....
ofan arbitration. This section provipes .!hat.n9 arbitrator spould.identi.4}r himself
" ':" (e). -a party: to be ' exaiiliried'ah'oath for
With the interests .of a particular Paro' merely because of the reason that he
waS appomted by tbat}i3rty:: ". . ' . .
. anynecessary'oatli'ordifebf tlie"iakihg bf
any necessaryaffirmation; or .'.' . ; J: " ., ' . .
. ' '. Russelsays, "Once the arbitrators enter into a 'reference' they virtually
.become Judges in the 'cause' and must act impartially., They must observe
' (f) a' pllt 1y.'to take 'steps fof ine preservation 'of in his
in their proceedings the ordinary rilles ofadministration ofjustice":
custody or control. which may be necessary for the purpose of the
proceedings". ... ., .. ! ' , . '. , . ; ,
Bias is the enemy ofequality. The arbitrators should free their mind from
, ' any kind ofbias which may affect their decision.
.: ;.
....., . { : '
Arbitral tribunal should make theaward based on evidence and documents
submitted before it, inpresence ofboth parties. Awards should not be based
upon the result of private enquiry by the arbitrators behind the back 'of the
parties.
The principle of natural justice is that no man should be condemned
unheard. Each.party must be given reasonable and sufficient opportunity to
make representation ofhis own case and on that ofhis opponent.

n. Determination of rules of procedure
Section 19 of the Arbitration and Conciliation Act, 1996 states the
determination ofrulesof'procedure thus:
(1) The arbitralTribunal. shallnotbe bound by the' Code of cr-ri
Procedure, 1908 or the Indian Evidence Act, 1872.
(2) Subject to this part, the parties are free to agree on the procedure to '
.. be followed by the arbitral tribunal in conducting its proceedings. ' .
. .'. i:!
. .... ....': . :({ l, ' ;' . ." ';. ,
. (3) Failing any agreement referred to in (2), the, arbitral ' .
tribunal may, subject to this part, conduct the proceedingfijl themanner it,
IJ .fi.
'.
... .) :..

, . 1:. .
.
considers appropriate. . .
113
:" .t ;"'.
114 Proceedings In',Arbltral Tribunals . [Unlt-ill, Ch-2
(4) The of the arbitral (3) includes
. the power to determine the admissibility, relevance, materiality and weight
of evidence. .
Section 19 ofthe Act is in pattern ofArticle 19 ofthe Model Law except
sub-section (1) ofSectioo 19. .Section 19 provideS.the procedure to be adopted .
:
-.
.
by the arbitral tribunal.
'The provisions' Civil Procedure, :1908. must not be .applied.
in arbitration proceedings where mere procedure is likely to hinder speedy
justice, but there should be no hesitation toinvoke them ifthey may be helpful
in rendering.justice.
The Code of civil Procedure applies only to ' judicial proceedings in
Courts whereas the proceedings before the arbitrator are not judicial
proceedings in a Gourt but are ofa quasi-judicial nature'. 'The' arbitrator being
the creationof an agreement, he is supposed to follow the procedure by the
agreement. under which he has been appointed by the parties but he need not
. follow the procedure oftheCode of Civil Procedure.
The purpose of freeing arbitral tribunal from the bondage of rules of
Civil Procedure and Evidence is to get rid oftechnicalities and rigours oflaw.
The arbitral Tribunal need not record formal order sheet or to record '
statements of witnesses during the arbitration proceedings, nor is it necessary
for it to makea long and reasoned order on preliminary objections. The
arbitral Tribunal can make an award on the whole case instead of giving an - ,
award on each point separately.
In cases where the parties agree to submit to arbitration by a permanent .
arbitral institution, the arbitral proceedings are governed by the rules of that '
institution and they become a part ofthe arbitration clause by implication. [In
Amarchand v. Sree Ambica Mills, (AIR 1966 SC1036)]. .
Sub-section (2) provides freedom to the parties to determine the procedure . ':
for conducting arbitral proceedings. However, the parties cannot derogate from
. the .mandatory provisions of Part I of the Act.relating to conduct of arb itral
proceedings e.g. Section 14(1), 18, 240), (6) & 9,32(1),34 and
36. , ' . .
. . ' v : , : : " <" J .
incase the parties have failed to determine
.:' the to ofPart I of
. the . .
' 'J I .. , :J. ) .... .l , !) ! I_ .' . . .
, Sub-section (4) provides arbitraltribunal the freedom in 'the matter of
admission or rejection. C!f evi.dence.; It is 'an empowering section.
> t .
." f llnlt-llI, Cb-2J .: .' , .Conduct of Arbftnl-Proeeedings
"fUS
HI. Arbitration , . . .. .:'3' 0;:,
Section 20 of the Arbitration and ConciliatiPD Adt; .
by the proposed Amendment Bill, 2001. It states that: . . . .
'.. (1) Subject to of sub-section (2)', :iIie
agree on the place ofarbitration. . ' . " . .. ' "
. .
But, where the parties fail to agree, the place of arbitration..shall be
determined 'by tht arbitral tribunal having regard to the circumstances ofthe
case, including the cOhvemence ofthe parties. However, the
may, unless' otherwise agreed by the parties, meet at any place it considers
appropriate for consultation among its members, for heariiig Witnesses, eXperts
or.the parties, or f(J[' inspection ofdocuments, goods or other.property, '
(2) The place ofarbitra.tion shall be within India.
Section 20 is modClied on Article 20 ofthe Model ofUNCITRAL.
The section allows the parties' freedom to agree on the place ofarbitration .
within India and in case oftheir failing to agree, authorises the arbitral tribunal
to determine the place taking into account the circumstances of the case and
the convenience of the parties.
. .
The provision of sub-section (1) permits the Tribunal the discretion to
meet at any appropriate place within India for the purpose of
(i) consultation among its members;
(ii) hearing witnesses;
(iii) hearing experts;
(iv) hearing the parties;
(v) inspection ofdocuments; and
(vi) inspection ofgoods or other property.
N. Commencement of arbitral proceedings
According to Section 21 of the Arbitration Act, 1996,
unless otherwise agreed by the parties, the arbitral. proceedings in respect 'of a
particular dispute commence on the date on which a request for that dispute
to be re,ferred to arbitration is received by the respondent, .
The date Of commencement of arbitral proceedings does notrelate to
arbitrators entering on the reference or having been called

.
as
arbitrator but on " receipt of request by.the respondent' that the dispute be
referred to arbitration-for settlement Therefore, once.therequest
by the oppositeparty; it is immaterial whether he
.
II
i
I
i
{i
J
t
==
fol
116 . Proceedings:in ArbitralTnbunals . [UnWm,Ch-2
arbitration or not, whereas a reference is made under' an agreement already
into.by mutual consent ofthe parties and.thc:rc;i .is no.point in requiring
a party to make a request and the.other again when.the
dispute between them arises . Hence, unilateralreference may be sufficient .
for .the commencement of the arbitral proceedings' if It is proved that the
request had actually been made by the party. " , . . ' .'
Making ofa claimby the party'is not request for reference.to .arbitration.
Making aclaim does not necessarily imply the of'a dispute whereas
the question .ofrequest for reference .would arise only when a dispute, has
. arisen between the.parties to an arbitration
Particulars ofall disputes taken'together'sheufdbe'referred to arbitration.
If some of the disputes arising under .the terms of.agreement between the
parties are omitted, they cannot be raised subsequently. through another
reference. : . . " .. . . ", " , '
v; .:r"anguage
As per Section 22 of the Arbitration and Conciliation Act; 1996:
. .
(1) The parties are free to agree upon the language or languages 'to be
used in the arbitral proceedings.
(2) Failing any agreement referred to in sub-section (I), the arbitral
Tribunal shall determine the language or languages to be used in the arbitral
proceedings.
(3) The agreement or determination, unless otherwise specified, shall
apply to any written statement by a party, any hearing andany arbitral award,
decision or other communication by the arbitral Tribunal.
(4) The arbitral Tribunal may orderthat any documentary evidence shall
be accompanied by a translation into the language or languages agreed upon
by or determined by the arbitral Tribunal.
.: :Section 22 of. the Act gives the parties freedom to agree upon the
language or languages .to be used in arbitral proceedings. In case the parties
fail ' to agree, the arbitral tribunal shall determine the language to be used in
.and such language shall be used for any written
'..',:., / :;r; : ,. . , ,
.: . ;.'The,prmnsions.ofthjssection' have been incorporated in the Act keeping
in vi.er-v.the eyet',irwree.singdCdtlanrl: for Intematienal arbitration which involves
languagtt9 ;ofJdiff.nt eauntties:.. However. rin.India. the arbitral proceedings
are conducted mostly in English Language.
.._ _ . _.h _.... .:.,..,." .:'. . . ..... c
. Ch-2] : i 11'71 1
_.
VI. -Statement aCClaimand defence . ' ... ;; . ,.... , I .' ( H ; )..
According to Section 23 of the :Arb itration and Ac(i996? 'v
. (1) WiihL. , a period of time to be by the trlbwial, .
the claimant shall state the facts in support of his claim,
and the relief or remedy sought, the respondent shall state' his defencein, ,,'
respect of these particulars and the may file his rejoinder; if any, \
and the parties shall abide by the time schedule so fixed 'by the arbitral .
tribunal; .unless thetrfbunalextends the same. This sub-section is proposed
to be substituted by the Arbitration and ConciIiati01'l.(Amendment) Bill, 2001.
(lA) The arbitral tribunalshall endeavour to expedite the arbitral process
subject to such rules as.may.be made by the High Court in this behalf. This
sub-section has been inserted.by 'the Amendment Act; . .
(2) The parties may submit with their statements all documents they
consider to be relevant. or may-add It,reference 'to the documents.or .other
evidence they will submit,
(3) Unless otherwiseagreed by the parties, either party may amend or
supplement his claim or defence during the course of the arbitral proceedings, .
un!ess the arbitral Tribuna! considers it inappropriate to allow. the amendment .
or supplement having regard to the delay in.making it.
Section 23 provides as to'how the as to what
facts the parties shaH mention in their statement of claim or statement of
difference by abiding thetime schedule so fixed by the arbitral Tribunal. This
section deals with the initial stage of the arbitral proceedings; This section
does not specify that statement of claim and defence are to be in writing but
commonly (he statements will be submitted in writing: These statements and
any documents as such to be communicated on according to Section 24(3) of
the Act.
. .
VII-. Hearing and Proceedings
.. . .
. According to Section 24 ofthe Arbitration and Conciliation Act, 1996:
(1) Subject to 'such rules as may ' be made by the High Court in this ' ., " . ,
behalf, the arbitral Tnbuhal shall decide whether to hold oral hearings for
presentation of evidence' or for oral arguments or whether the proceedings
shall be conducted on the basis of documents and other materials or to receive' ;
affidavit in lieu of oral evidence subject to the witness being questioned orally.' r
But, the arbitral tribunal may. at any appropriate stage of the proceedings,
hold oral hearings for the purpose of preseptation or oral .evidence. ,_ . "
., ;-,f
c""r' ,...
o'A) Subject 'to 'the provisions 'o'fsub-secti0l1-.(1), 'the'
shall, pass orders regarding various aspects of the procedure before 11.-, "
:.;
118 :
. Proceedings in Arbitr81 Tribuaals
[Unlt-m, CIt-2.
(lB) Without prejudice to the pro\-isjons 0'
ofthe arbitral tribunal to pass orders shall iriclude: .
' . : .
(a) the fixing of the -time schedule for the parties to. adduce, oral
evidence. ifany; . .
(b) the' fixing ofthe time schedule for oral armUnents;
.(tl) the manner iriwhich Oral evidence is to be recorded;
. ' . . ' : , :. .". . . . . .- . ' .
(d) the power to decide whether theproceedings shall .be conducted only.
. :. ' on the basis.of documents and other materials or the other manner
in which the proceedings may be conducted, .
. . . '. ' . ". ' .
(IC) The procedure determined under sub-section (lAl and the time!
schedule fixed under sub-section (lB) by the arbitraJ .tribtmal. shall be binding
'on the .
. .:
Sub-section (1), (IA). (IB),{IC) ofSection 24 have been substituted by
the proposed Amendment Bill. 2001.
(2) The parties shan be given sufficieritadvance notice of any hearing
and of any meeting of the arbitral Tribunal for the 'purposes of inspection of .
documents, goods or other property. .
(3) All statements, or other supplied to, or
applications made to the arbitral Tribunal by oneparty shall be communicated
to the other party, and any expert report or eVideritiary document on which the
arbitral Tribunal may rely in making its decision shall be comrinmicated to
the parties. This provision underlies the basic principle that nothing should
transpire at the back of the parties and each party must be apprised by the
other party's stand in the matter urider arbitration so that full justice is done

. After the amendments made by the proposed and
Conciliation (Amendment) Bill. 2001. the parties no optionio agree that
'no oral hearing shall be held' provided in theoiiginal enactment. Now
without the request ofthe parties to hold oral hearing. the Tribunalshall decide
hearings. . The powers orders
regardmg the time schedule and the manner m which oral IS to be
recorded. " . . .
1 , - " . l . , : . ..
'"4"
$:


(, .
IX.
..
-t
:
'
i
.
_ M __ _
. ,_. qa.. $, Idt4;WJ,,,, .
.: ....:. .. .::::. '::j
#Un(t-m, Ch-2) Conduc:tof.ArblualProceedinp' ...' '..1
.r - ' r : . I
1. .Jf without showing.sufficient cause. a party fails to complY withiaDy::'::' :. . . I
f orders ofthe arbitraltriblD'lal passed under Section 17,: Section
24. as the case may be; arbitral tribunal may make a peremptory order; to the, ."
t same effect, prescribing such time for compliance as it considers alWropriate. :,. ':
.
(2) If a .claimant fails to comply,with a peremptory order passed under . . .
(. sub-section (1) in relation to a direction under clause (c) of Section.17 for .,
i .furnishing security for costs of arbitration, the arbitral tribunal may dismiss .
his claim and make.an accordingly.
. (3) Ifa party fails to comply with any other-peremptory order passed'by
the arbitral tribunal under sub-section (I), then thesaid tribunal
(a) makesuch order as it thinks fit as to payment ofcosts ofthe arbitral
.proceedings incurredin consequence' ofthe nan-oomplianee; .:
(b) direct that the party in default shali not be entitled to rely Uponany
ailegations in his pleadings or upon any material which was the
subject-matter ofthe order;
(c) draw such adverse inference from the act ofnon-compliance as the
circumstances justify; , . .
(d) proceed to make an award on the basis of such materials as have
been provided to it. without prejudice to any action that may be taken
under Section 25.
'Powers of the Court for enforcement of the peremptory
orders of the arbitral tribunal
Section 24B of the Arbitration and Conciliation Act, 1996 has been
proposed by the Amendment Bill, 2001 and states thus: .'
(1) Without prejudice to the powers of the Court under Section 9,' the
Court may, on-an application made by a party. make an order requiring the '
party to whom the order of the arbitral tribunal was directed, to comply with .
theperemptoryorders of the arbitral tribunal passed under sub-section (I) of
Section 24A.
(2) An application under sub-section (1) may be made by
(a) the arbitral tribunal, after giving notice to the parties, or .
(b) a party to the arbitral proceedings with the permission ofthe arbitral
tribunal, after giving notice to other parties. ... . ' .
. .. l ..
(3) No order shall be passed under sub-section (1) by the ' .
it is satisfied the person to whom the order of the arbitral..

' .. .. : ..
on .. ; ;(.;i/ ,f /;
directed. has failed to comply with it within the time fixed in
arbitral.tribunal or, ifno time.was.fixed.within reasonable tifue.r....., ' .?TJ
120 Proceedings in' [Unlt-m, Ch-2
(4) Any order-passed'by the Court under sub-section (1), shall be-subject
to such orders, ifany; as may be -passed by the Court-onappeal, under clause
(b) of sub-section (2). ofSection 37. . .:
X. .Default of a Party
Section 25 of the Arbitration and Conciliation Act; ' 1996 states that
unless otherwise agreed by the parties, where; without showing sufficient
cause,-:-
(a) the claimant fails to communicate his statement of claim in
accordance with sub-section (1) ofSection 23, the arbitral Tribunal
shallterminatethe proceedings; '
(b) the respondent fails to .communicate his statement of defence in
accordance with sub-seetionj l) of Section 23, .thearbitral Tribunal
.th.eprop.eediJlg.s treating that failure in itself.
as an admission of the allegations by the claimant; lind
(c) a' to hearing to documentary
evidence, the arbitral Tribunal may continue the proceedings and
make the arbitral award on'the' evidence before It. .
However, Section 25 the Act does not apply in
situations: .
(i)where there is an agreement to the contrary between theparties;
or
(ii) where the party can show 'sufficient cause' for his default,
.however it is to be determined by the arbitral tribunal;
(iii) when no negligence or inaction or want of bona fide is
imputable to a party.
The principle contained in Section 25 is that .providing speedy, just and
equitable'machinery of arbitration.
In Atul Shah v. U. Vrijlal, [(1999) 2Aib.LR 54 (Bom.j], the Court held
that parties can agree to a different procedure in which event that procedure
will be the procedure set out under Section 25 Ifsufficient cause IS shown
the Tribunal can set the clock back and give the party an opportunity to meet
any ofrequirelllen,ts under.(a)(b) or (c).
XI. by Arbitral Tribunal
Under Section 26 of the A%iii'ation and Conciliation Act, 1996, unless
otherwise agreed by the parties, thearbitral Tribunal.may- .
. (a) " to to it' on specific ' issues to be
deteml"ined by the arbitral Tnouna"i; 'Mer . .
-. . : . . " . . '.' .,,. :
. J. t (5($ .. ..:. .
Unlt..,III, Ch-2] ColUluet ofArbitral .. ",

.' (b) require a party .to give-the expert anyrelevantinfcmiiatiori dr.I to
produce; or to provide access to; .
other property for his inspection. . -."..-t--: . . -.' ..
. . . . ' ...: . .
(2) Unless otherwise agreed by the .parties, if a party so.tequestscor:i(;.:
the arbitral Tribunal considers it necessary, the expert shall, after ilelivery.of .>.
his written or oral reportsparticipate in an oral hearing where theparties'have! .
the opportunity to put questions to him and to present expert witnesses irnerder- : .
to testify on the points at issue. .:' : ...
.:(3) .Unless .anq,otherni se agreed by the parties, the expert shall, on the
request of a.party, make available to the party for examination all"documents" .
goods or other property in the possession of the expert with which he was .
provided in order to prepare his report.
. . . . I . .
Russel says, '.'A1:bjttaiors are impliedly authorised, depending upon the '
subject-matter referred to.them far their decision, to obtain such assistance as
may be necessary to enable them to perform their duties.
But arbitrators themselves must have special knowledge ofthe particular
subject-matter and it wouldbe.nnfair on the part of-arbitrator to depend on ' .
some other expert. Section 26:confers ' expressauthority ' to .appoint 'one or
more experts' . The 'permanent arbitral institutions' would not misuse the
..
provisions ofthis section. .
XII. Court assistance in taking evidence
As per Section 27 ofthe Arbitration and Conciliation Act, 1996:
(I) The arbitral Tribunal, or a party with the approval of the arbitral
Tribunal, may apply to the Court for assistance in taking evidence.
(2) The application shall specify
(a) .the names and addresses of parties and the arbitrators;
(b) the general nature of the claim and the relief sought;
(c) the evidence to be obtained, in particular,
(i) the name and addresses ofany person to be heard as witness or .
expert witness and a statement of the subject-matter of the
testimony required;
(ii) the description of any document to be produced or property to .
be inspected.
(3) The Court may, within its competence and according to its rules-on. "" ';'0
taking evidence, execute the request by ordering that the evidence be
directly to the arbitral Tribunal.

;.;
,
'-.-. ,. f. 1. ,44.
122 Proceedings In ArbltraFFrlbuti.1s (Un!t-m, Cb-2 . , .:", ,;.:: " . _....:. " . ..n
t; i n! ;
(4) The Court -may, whilemakingan order-under issue
OF PROCEEDING. :: ' .. <.: ' .-,:1., ,; . ,; , ;;iW '
the same.pro,cesses to witnesses as it may issue in 'suits tried before it.
\
I. Rules lUbstance of dispute . , I i '.! :; ,'; '" i o"
(5) Persons failing to attend in accordance with sucbprocess, or making
any other-default, or refusing to give their evidence, or'guilty ofany-contempt
Sec. 28 ofthe Arbitration and Conciliation Act, 1996is after
to the arbitral Tribunalduiingthe conduct of arbitral proceedings, shall be
Article 28 of the M9detLaw.of UNCITRAL. It provides rules :appl icable.
subject tothe-Iikedisadvantages, penalties and punishments by order ofthe
when Jhe place of arbitrationis in India, Jet 't be domestic .commercial
Court-onthe representation ofthe arbitral Tribunalesthey wouldfncur for '
arbitration or international commercial atbitration. It is divi4c4 parts
the like offences in suits tried before the Court.
- one related to international arbitration and other applies to .other than
international commerCiafli.rbitratiori. " . " . .:,. 'l j, .:' '. '. '
.communicationsfor the examination ofWitnesses andsummonses to produce
.(6) In this -section .the expression "processes" includes summons arid
Section 28 ofthe states that- i , ', "J ,' " .
documents. .
(1) In an arbitration, other .than an international ,ar:bitrati9D (whet4er
In Manohar Lal v. Vinesh Anand & Others, [IT 2001 (4)SC it is
commercial or not). thearbitral shall decide to
held that arbitrator cannot be termedto Court, withinthe meaning'of Section
arbitration in accordance .*w.for the .time in force.
195 of Criminal -Procedure-Code and therefere Section' 340 of CriPC, in
in India,
arbitration proceedings does not arise;
fr o
.
(1A) In an international arbitration (whether commercial or not) where
, In intematienal.arbitrations questions may arise as to' which Countries
the place of arbitration is situated in India. ,
Court will have jurisdiction. The place ofarbitratiOn should be the exclusive
I '
"
determining factor. Indian Courts arc the proper Courts where place of
(i) the arbitral tribunal shall decide the dispute, in accordance with the
arbitration.is in India. .
rules of law designated by the parties as to the'substance
of the dispute;
(ii) any designation by the parties ' cifthe law or legal system ofa' given
country shall be construed, unless otherwise expressed, as directly
referring to the substantive law ofthat country and not toits conflict
ofIaws rules;
(iii) failing any designation of the law under clause (ii) by the parties,
the arbitral tribunal shall apply the rules of law it considerste be
appropriate given all the circumstances subordinating the dispute.
Sub-sections (I) and (lA) has been substituted by the proposed
Arbitration and Conciliation (Amendment) Bill,200l.
(2) The arbitral Tribunal shall decide ex aequo et bono or as amiable
compositeur only ifthe parties have expressly authorised'It to do so. .
. , . j . .. ,
The above sub-section (2) of Section 28 of the Act expands i
/ j '.1Hi "t t ) "
l' to autho?se tribunal decide 'ex ae.(l':'f!
IS, on from, 'f{ttflqt .
_. ' ,'j!.' J .lrt ':!: :' amiable almost synonymous With 'ex
.. ' . ' '
-
123' t: ' " .:" . q
. , i, , :.: ; \1 ; :;%or!J'lo

;
p .... , ... -.
.
124 .Proceedings In Arbfn,aI T"ibull8ls [Unft-m, Ch-3
not exceptionto of (1) . : The lirMtrai ti't'6tina:t bound
and shall decide in accordance . .
(a) the substantive law (to be distinguished from' procedurallaw) of
India in domestic arbitration; and .' .>
(b) the rules' of iawdesignated by the parties, 'or in :absence of such
. designation the rides of law as the arbitraltribunal .may consider
appropriate. . . .
(3) In allcases, the arbitral Tribunal 'shall decide in accordance with
the terms of the contract and shall take into account the usages of the trade
'applicable to the transaction.
"::It is'advisable for the parties to specify in the arbitration agreementthe
law iitteSp'ed'ofsuch;relationsbips, bywhich they would like to
instead of the tribiuiiil 'to exercise the choice on
behalf. The mandatory provisions of sub-section (3) must be invariably
incorporated, . . .... ,::,:.,
II. Decision making by Panel of
..As per Section 28 of the Arbitrntion and Conciliation Act,
.' : ! : . ! . : . . ' . ' . .
(1) Unless otherwise agreed by the parties in arbitral proceedings with
more.than one arbitrator, any decision of the arbitral Tribunal shall be made
by a .majority of all its members, But where there is no majority, the award
shall 'be' by thepresiding arbitrator ot-the arbitral Tribunal.
(2) 'Notwithstanding sub-section (I), if authorised by the parties or all
the members ofthe arbitral Tribunal, questions ofprocedure may be decided
by the presj4!ngarbitrator.
.. .; . ...1'. -., . .
(3) The minoritydecision shall, if made available within thirty days of
the receipt of the decision of the other: members, be appended to the award.
This sub-section (3) has been proposed by the Amendment Bill,,2001.
.. Section 28 ofthe Act applies where the arbitral Tribunal comprises more
. than one arbitrator. When more than one arbitrator constitutes the tribunal,
the decisions mayor may not be unanimous. Theparties may lay down in
the h:!>\v decision shallbe made whereunanimity is not possible.
not for,it, the law: in this section
that made of
the triounal. 'The expession 'decision shall be made by majority of all the
members' means majority of aUthe members constituting the arbitral tribunal
, and not merely of those present and attending the arbitration proceedings.
. MakingofAr.bitral Awar.cf.andiTermination . M.:I1S
HI. Speeding up of proceedings time lilllit for 'making
. ' awards ..... .. .. ::'. . . .."
. . . . ' .' .' - .:; -" :- . . . .. '. -, ' . ..: :.>{..
29A of the and Conciliation
proposed by the Amendment Bill, 2001 and it states: . :;, ... ', .:
..:..{ ..... . .
. (1) J?te arbitral or one
. year after the commencement otarbitral proceedings, or Within S\l'*extended .
period specified in to (4)," ' . . , . .
. - . . . . -.
. (2) The parties may, by consent, extend the period' specified in sub- :
. section (I) for a fi.n1her period not exceeding one year.
. (3). If the award is not made within'the period specified. in sub-section
(1) and the period agreed to by theparties .under sub-section (2), thearbitral
proceedings shall, subject to the provisions 'of sub-sections (4) to (6); stand
suspended until an application for extension is made to the Court by any party
to''the arbitration, or where none of the .parties mak;es. application as .
.foresaid, ' until such an application is' made by the
(4) Upon filing ofthe application for extension oftime under sub-section
(3) , suspension of the arbitral proceedings shall stand revoked and pending
consideration ofthe application for extension oftime before the Court under
that sub-section, the arbitral proceedings shall.continue before. the arbitral ._.
tribunal and the Court shall not grant any stay ?f the arbitral proceedings.
(5) The Court shall, upon such application for extension of time being
made under sub-section (3), whether the time for making the award has been
made or not, extend the time for making of the award beyond the period referred
to in sub-section (I) and the period agreed to by the parties under sub-section
(2), .
(6) The Court shall, while extending the time under sub-section (5); pass . .
such orders as to costs or as the future procedure to be followed by the arbitral .
tribunal, after taking int() accouiit,:":
(a) the extent ofwork already done;
(b) the reasons for delay;
(c) the conduct of the parties or ofany person representing the parties;
(d) themanner in which proceedings were' conducted by the arbitral
tribunal; . ,. ;..
(e) the future work involved; " ."
(0 the amount of money spent by the parties toward?- fee and
: :':';ir-. n uo:) .
")l flrl1 1
' .' i
expenses ofarbitration; " . ' -. ' .. . .!
. . ' . .. ... . ' . ., ' .; r' ' G?/
(g) any other relevant circumstances . . " , ' e, :,"i : !
' . 126 : :Proceedings In,Arbitral Tribunals , ' . Ch-3
!Uut the Court shall. pass such orders from time to time with. a view to
speed up the arbitral process, till the awardispessed. But, 'any order as to
future proceedings passed by the be subject to such rules as may
': 'b e made' by .the High Court in for expediting .the arbitral
proceedings, . . . . . .
" (7)' p'arties cannot by consent; extend the period beyond the period
specifiCidin (I) andthe to .in. sUb-section
(2) and save as otherwise provided in thesaidsub-sections, any provisionin
an arbitration. agreement whereby the arbitral tribunal may further extend the
time for making the .award;s1u!ltbe void and ofno effect. .
. ' . (8) The first .0f;1he,.orders ofextension under sub-section(5) together with
directions, if'any.amdersub-section (, .shall be-passed by the Court, within
':a period ofone month from the-date of-service on theopposite party. .
:In Union ofindia i,. Mis. Hanuman Prasad '[IT 20QO (8)
SC 330], H that Section ' 5 ' of the Act applies t() the
Arbitration' pro'de6tlftig also. ' ' . . .
. 'I V. Settlement
Under Section 30 of the Arbitration and Conciliation Act, 1.996:
(1) It is not incompatible with an arbitrationagreement for an arbitral
Tribunal to encourage settlement ofme dispute and, with the agreement ofthe
parties, the arbitral Tribunal may use mediation, conciliation or other procedures
at any time during the arbitralproceedings to encourage settlement.
(2) If; during arbitral proceedings, .the parties settle the dispute, the
arbitral Tribunal shall terminate the proceedings and, if requested by the
parties and not objected to by the arbitral Tribunal, record the settlement in
(he fonn ofan arbitral award on agreed terms.
(3) An arbitral award on agreed terms shall be made in acco;dance with
Section 31 and shall state that it is an arbitral award.
(4) An arbitral award on agreed terms.shall have the same status and
effect as any other arbitral award on the substance of the dispute. I
."i ..... . . " ' . , . . : ." . ' , ;". . . .. .. . ' . .
. . .Rpj e,et.of .Section 30 . of the, Act is that to permit the use of
'conciliation' or other measures as a means to reach a 'settlement
agreement' even after a disp).!te,or to arbitration.
. :C04e been so amended that the
Court may refer the parties to 'arbitration"of.'llronOiliation' where it appears
that there is a possibility settlement the parties. .
, ... .- ...,_. :--....P, . _. _ _ :
. UDit-m, Ch-3) .... Maldag ttf:Aroltr&1 Aw,anL.,ui iTermiDation .<3U 27
Section 30(3) ofthe Act.requires.thatthc.ubitraJ award-soRc:btded shall
be made. with ofthe
Act makes a specific exception m case of such awardS to the .law that the
arbitral award shan state reasons Upon it is based. The: for the
exception is that the award is based on settlementagreed betweenthe Parties.
. V. Form and Contents ofArbittalJ\.ward
. . .. . .'.: , .. . . . . . ... .
According to Section 31 ofthe Atbitration and Conciliation Act, 1996:'
. (1) be signed b;
the members ofthe arbitral Tribunal, . .
;". ; ; r ; .
(2) For the purposes ofsub-section (1), proceedings with more .
one arbitrator, the -signatures of-the majoritY the members of the
arbitralTribunal shall besuf'ncieritso IQ'ngas thereason for any omitted
signature is stated. . .,' .
'(3) The' arbitral a'wai-d sbil.ii .state ,the UPOn.which it .is based, .
unless-- . . .
. t
(a) the parties have agreed that no reasons are to be given; or
(b) the award is an arbitral award on agreedterms under Section 30.
(4) Thearbitral award shallstate its dateand the place of arbitration as
determined in accordance with the Section 20 and theaward shall be deemed
to have been made at the place.
(5) After the arbitral award is made, a signed shall be delivered to
each party; . .
(6) The arbitral Tribunal may, at any time during the arbitral proceedings,
make an interim arbitral award on any matter with respect to which it may
make a final arbitral award.
(7)(a) Unless otherwise agreed by the parties, where and in so far as an
arbitral award is for the payment of'money, the arbitral Tnbunal may include
' in the sum for 'which the award is made, futere.st, atsu.ch-illte as it deems
reasonable, on the whole or any part of the money, for the whole or any part
of the period between the date on which the Cause ofaction arose and'the date.'
on which the award is made, .:. ,:':i
(b) A sumdirectedto be paid by an arbitral award shall, unless the award.
otherwise directs; carry interest at the r ate of'eighteen pereentum
from the date ofthe award to the dateof'payment, . ,' . .. ." .'
50tJO ....
:q

. . . . ' . . ' .' . ' . .." . , ., ,,
(8) Unless otherwise agreed by
(a) the costsofan arbitration shaiibe,

C
128
Proceedings In' [Unit-lII, Cb-J
(b) the arbitral Tribunal shall .
. '(i) the party entitledto C9stS; . . .. .
.(ii) : the party':Who shall pay the '. .,
. (iii) ' .the amount of ot: thatamount; and
. . .
(iv) the manner in w)tiqh costs shaUbe paid,
Here, 'costs' costs
(i) the fees and expenses ofthe arbitrators and witnesses; .
(iii legal fees ana expenses; .' . '
t t:.: ./ .
(iii) any administration fees of the Institutionsupervising the
arbitration:'and ' . . .. . . . .. '
(iv) any' othi!r expenses incurred 'In connection with the' arbitral
and 'the arbitral award.
An arbitral award shall be fn writing. ' Although the 'award' has to be
. in writing; the arbitratorIs not bound to reduce into Writiiigthe 'evidence'
taken before him. Arbitrator need not record the Minutes or the Notes Of the
proceedings; . : ., ..,. .
Mere writing ofthe;award does not amount to making ofthe award. It
must be signed to be an award, signature of the on award are not
required. .' . . . ..
In T.N. Electricity Board v. Bridge Tunnel Constructions, [1997 (4) SCC
121], it is held that the law on the award as governed by this Act mandates
that the award should state the reasons upon which the award is based. In
other words, unless (a) the parties have agreed that no reasons are to be given,
or (b) the award is ail arbitral award on agreed terms wider Section 30, the
award should state the reasons in support of determination of the liability/
non-liability.
VI. Filing of a copy of the a:ward and originalarbJtral records in
the Court for th'epurposes-of records and maintena.nce of
regiSter"o( awards -" . . . " ;, '. -; . ..--
.s ; ' ." ' . , . . .
Section 31A of the Arbitration and Conciliation Act, 1996 has been
proposed by the Amendment Bills, 200 I and it states: . ,.
(I) .t\ !PllotO:Popy.of.:.-the arbit:f-al award duly-signed on each page by the
membersoftlJ,e.. original arbitral records, shall
be filed 'by the arbitral flourt.within thirty days ofthe making
of the award along With the arbitral record.
within the
meaning of clause (eY of (I) orSection 2, then the award shall be
' .
Court.
. U'iiitm; lCb-i ] Ma
r

f
- ' f Ar:bltralA -:or. .,.: .,.
.

..' N:.J.
... . . , . . . . .........g. 0 :WIll u .a(J.u :rlttmlutUicua ...
( .
filed in the Principal Civil Court of OriginalJuriSdictioh in'a' diStrl<5t',or in
the CoW1ofthe Principal Judge ofthe City CiVIl cOurt ofOrigiliiI jiJiiSdiefioh:
in a city within whose .terri torial j urisdictioI!- the .subject .
is situated. . . ' .. '.. , : .:: "j ;;.
According to Explanation I, arbitral award in this section means -the,
arbitral award whether pursuant tp..a referettce by .a j/,lFcial to
authority under Section 8, or by any ofthe Courts referred to in
or by the parties or by the High Court or by the Supreme Court tinder Section
11, or by the parties to a Fast Track ArQjtration underSection 43:A.. -.
According to Bxplenation'z, arbitral records shan includethe pleadings
in the claim filed by the -parties, the documentary and oral evidence if any
recorded, the pleadings' ininterlocutory applications, the orders thereon, the
proceedings ofthe arbitral tribunal and all other papers relating to the arbitral
proceedings: . . . . , . .
(2) Where the arbitral tribunal fails to file the photocopy of the arbitral
award and the arbitral records under sub-section (1) any ofthe parties may
give notice to the arbitral tribunal to do so within a period of thirty days of
the receipt of the notice, failing' which, the party may request the said Court
to direct the arbitral tribunal to file the photocopy of the arbitral award and
.the arbitral records in the said Court. .
(3) Upon the filing of the P1>toCoPY ofthe arbitral award and the arbitral '
records under sub-section (2), the Presiding Officer of the said Court or a
Ministerial Officer of the said Court designated by the said Presiding Officer,
shall affix his-signature with date .and seal of the. said Court on each page of
the photocopy of the arbitral award aforesaid and shall after verification,
acknowledge receipt ofthe photocopy ofthe arbitral award and arbitral records
as per the list referred to in sub-section (I).
(4) The said Court shall maintain a register containing
(a) the names and of the parties to the awards;
(b) --thedate of the award; ..'- ..
(c) the names and addresses ofthe'arbitrators;
(d) thereliefgranted;
(e) the date of the filing of the award intothesaid g9Wt; and
. . .
(f) such other particulars as may be prescribed. . " . ' ,,".
(5) If any party makes-an application, the Court mlly..granJ;a
copy of the photocopy of the arbitral award or of'the-erbitra!
arbitral proceedings, as -the case maybe, in
' "' ' .- ,.; .. '
:,, !.' ; ". .. [UJlft..,IJ.1.Sbj3
.

i
. 0 _ , . _ , . . _ _ ._.. .
.: . use in
:fqr. setting aside of. ar:bitra,laward thereof
... for return 'of origmai docutriintsorfor preservation
ofthe arbitral records so filed shall be subject to such rules as may beapplied
talthe: saidCo.urt from time 'ta time/ '". ' ., .,
:" (8) The fllirig a*ar<f UD'der tl,iis (of .
:.:,: .. .: '..\ '.' " . , . : . ,
VII." Termmation.ofProceedings .' ":.
Section 32:ofthe Ar.bitt;ationand Concilitttion.A ct; ' 1996 the
s.bmtions: that-when-and;hfjW'the: aPbitraIftributm:1lJt1iljr termuuited. ;n is
modelledon the Article 32;oftheM-odelLaw:ofUMCtfRAL. :...; ':. .'
. . . , . ,
., . ' ' : ' . ; , . ; : " 'i .; ;.' .. t: ' . , . ; ,
.. Section 32 of the Act states regarding the termination of proceedings
thus:
;.1 .' (.i :: .: . .; t o. " . : 1
. " (1) The.arbitral ,proceedingsshall. beterminated by-the-final arbitral
award or by anorder of the arbitral Tribunal under sub-section (2) . ,
'(2) shall issueari order for the termination
,, ' . , " ,, .
:, ' . : .". '; ' -:
,(a) claimant .'7'lthdraws hisclaim, unless the respondent objects to
. "'il;u:: ,order ariel the. arbitral Tribunal recognises a legitimate
" on:hlspart in obtaining a final -settlement of'the dispute; .
. (b) ,the'p arties' agree 'or' l'the terminatlonof the proceedings; or
. . . . .. . ' . . . . : . . ! '. .; '.' :' . ! ;": . . : ,; . .:' . ' . '
(c) the arbitral Tribunal finds that the. continuation of the proceedings
has for any other reason: become.unnecessary or impossible.'
(3) Subject.to.Section 33 andsub-sectionqa) of Section 34; the mandate
of the arbitral Tribunal shall terminate with the termination of the arbitral
proceedings.
Sub-section (1) 'of Secrion is not complete jn respect of termination
of arbitral proceedings because such termination of arbitration proceedings .
are also dealt byother Sections 25(a), 30(2) and 38(2)ot'theAct.
'The arbitration proceedings stand terminated when the
final arbitration award is award an' awiitdcomplete on
ar:bitrat-itJ>h.'.r.l?ihaliaward:would :include an:award'made
undeF. iems' i :,1lli-e1far.bitt:al 'pl'oeeedings' may be
,e'lRI1vbei'e'no'final 'award;hils
.Mlikllig:Of _..' "jrt,l ' .' .
becli mad'e. 'It1 certam'cesesdie at6i(tal the'
. ' . . ' . ' '. : . 1 - " ,
iroceedings'are terminated; They are: , \ . . ' . ,," +'
. p . " . ,,,'. ' . i;,. _: . ;, ',UI-:';
(i) when the claimant withdraws his claim; . .
. ' ' . . - .
(ii) when pai!ti.;s agree to' the ' >: : " .... , u! "
. , . . : .' . .' . .. . ..... .
(iii) when the continuation'of the proo'eedings: basbecomeumic:cessary
or impossible.
I r, . - ; . ' i!":
VIII. Correction interpretatiqil of ,
Section 33 of the A.,Tbin-ation and Act, 1996 is fu 'pattern
ofArtide :33 ofilie Modelt.aw oftiNCrrRAi. it entrusts th1W .
mainly to an arbitral .the of:thC is'
terminatedunder Section32 ofthe .Act niunely- ' ,. - .' -. " <
(i) corrections in the award; ifany
(ii) interpretations of'speeific points ofthe aWard;':':' .
. . ' . , ;
(iii) it may make an additional award.
Section 33 'Of the Act states about correct, interpretation'
awardthus: :
(i) within thirty days :from the receipt of the arbitral award, unless
another period oftime has beenagreed upon by the parties,
(a) a party, with notice to the other party, may request the arbitral
Tribunal to correct any computation error, any clerical or
typographical errors or any other ,errors of a similar. nature
occurring in the award; '
(b) ifso agreed bythe..parties, a party, with notice to the other party,
may request the arbitral Tribunal to give an interpretatio:n ofa
specific point or part ofthe award.
(2) Ifthe arbitral Tribunal considers therequest made under sub-section
(1) to be justified, it shall make the correction or give the interpretation within
thirty days from the receipt of the request and the interpretation shall fonn
part of the arbitration award. .
(3) The arbitral Tribunal may correct any error ofthe type referred to in
clause (a) of sub-section (1), on its own initiative, within thirty days from the
date of the arbitral award. .,
. . . '. . . .
(4) Unless otherwise agreed by tIte parties, a party '
other party, may request, within thirty days, from receipt
award, the arbitral Tribunal to make an additional atbitral awvdas:t$_ "- ...
presentedin-the-arbitral proceedings
\. . _ . J'
..-._-- _.- ....

qA_J}&}!"'r:;... ..A...
_._...,;.. -------_._. .- .
; Chitpier. "-:' ..'::.":'j .. . _.... . ..::,... .. . 1?2 . . Ch-3
-'" . .,. . _. . . . . . ' . . - ' .
.RECOURSE.. AGAINST:ARBtTRAL'AWARO: ' .' ;'
'. ;{S) Tribunal under sub-section.
(4) to be justified, it shall make the additional arbitral .
.[ .. ..'.;
.' the receipt such request. -. , . ., ' . . v
- - ' . .. ' : ." . . '.. . ;" . : '
.." Section '34 of 'the Arbitration lind Conciliation Act,' i996, states about
(6) The arbitral Tribunal may extend; if necessary, the period of time
application for setting asidearbitral award funs: ' . ., ',' .
' wi thin which it shall make a make an
(1) Recourse to a Court against an arbitral 'award may by
additional arbitral a...vard under sub-section(zj-or sub-section'(S). :
an application for setting asidesuch award
(1) Section 31 shall apply to a correction or interpretation ofihe arbitral
(a) . in (2) and : . .
. award an additionalm-blttitl award'made WlderthiHectIbn; " . "
. (b) in. the case of -an aWlif.9 made in an other than an
. . . international arbitration (whether commercial or not), in accordance
....Ah Dray be ifit front" it clerical or an
t , :'with sub-sections (2) a,riif'<3) arid the grounds mentioned
errot:jfotn slip or 6missi';'n:'. iIi the'
. ; ', 1. ;- , ' , <d il Section 34A. >,;...:...; ..,:,-::.. ,. 'J " . . I; .'
.can also teclffy the mistake ' or the rectification may .be .had with the '
..... . , . . : ' : . " '.. _.. -. , . :1..: . : . : ' :: ' -: ': :..: !': .... .. ' ., -:i .' / .. ".. ..: . -, ' .
.... _ /I..! . ' i >: ':, J ' . r'" . .>. . ,... .. : ....
intervention of the Court. . This suo.;section (1) has been substituted by theproposedAmendqumt .
Bill. -2001. . ' . ' .. '
. The Court can pass a decree in tenus ofmodifications mutually accepted
..: . . .:
by the parties. ". .' . ".. .. .. .' . . .. . .
.' ..,
. ... . " ' . '. '.: '
be aceorripanied by the original award. But where the parties havenot been
The power ofarbitral tribunal to modify the award is discretionary. given the original award, they may file in the Court,' a'photoCoPY of'the award
. ... . : ... . . : .. . ' . .. . ' ; .. .'. : - . . .' .
. signed by the arbitrators. .:
This section permits a party to request the Arbitral Tribunal to givean
This sub-section (lA). has..been proposed to be inserted by the
interpretation '?f: a specifio point.or part of the award. "This can be done only
Amendment Bill, 2001. ' .
when there is an agreement between the parties-for doing so. Such application
(2) An arbitral award may beset'iside by the only if
. should be made under notice to the other party.
. . ' . -' . ' . ' .
(a) the party making proof'that-e
j '; , . ' ,'
(i) a party was under some incapacity; or " .
(ii) the arbitration agreement is not .valid 'under the to
theparties have subjected it or, failing indication thereon,
under the law for the time being in' force; or . . .
' 1 '"
(iii) the party making the application was not given proper notice
oftheappointment ofan arbitrator or of thearbitral proceedings
or was otherwise unable to present his case;'or ,' '- - .. .
. . . . (iv) not contemplated by or,
not fading within the terms of submission to .arbitration.pr"
if contains on matters beyond the scope
submission to arbitration. But, if the decisions on matters
submitted. to arbitration can be separated from so
; .
submitted, only that part :pfthe arbitral award
::. .. . -; i! .r r: , . . ! : decisions on .mattersnot submitted to arbitration
' ' , ' : :lt l :'wI' i ' : ", :O";'!f , .! . ' I .. . , . , aside; or: ' ." ." . '. ' ".
.133 .' : :. . : )';"f 1.;
-. :. ; ,: '\ ! ' .i : :.oJ :'
134
in, Tribu.nals
'[Unft-m, Ch4
(v) TribWi8Joothe;arbi1raI procedure
was not in accordance with the agreement ofthe parties, unless
such agreement-was incohfJict with aproi'iSimi"ofthis:pktfi'om
. the.paroes cannot derogate, or, fail.ing,suPh
was hoi jn' accordance with ibis part; Qr .:. ... . . ' ." .
(bJ.the Court ,.. . ,
(i) the subject-matter of the dispute is not capable of settlement
by arbitrationunderthe iawfortheJime being irt force; or
.(ii) .the arbitral award is iii With the ptibllc poiicy ofIndia.
. Acc.ordiP,g to ofsub
clause (ii), an aWard.isiii coiiflict with the making
ofthe award wasinduced or affected by fraud or conuptil?J1.0i' w8$.in violation
ofSeBtion 75'i:iFSectloJi"81. '. ". " " ' . < -;.., ;
'. per,Explanation 2,. to seek to. set an .arbitral .awardunder sub
(1); mayinclude the questioning of
the ....
. . ; ' ''. . ! '. . I . ' : ..: '.. ', . .: " . '. ,' I . " .
(i) a challenge made under SUb-section (2) of SC<?ti0n 13;
'(ii) under SUb-section (2) ci r SUb-section (3) of Section 16.
. .
(3) An application for setting aside may not be made after three months
have elapsed from the date 'On which the party making that application had
received the arbitral award or; .i fa request had been made under Section 33,
from the date on which had been disposed of by the arbitral
Tribunal. But, if the Court is satisfied that the applicant was prevented by
sufficient cause from making' the application within the said period of three
months it 'may entertain the application '0thiri a further ofthirty days,
but not thereafter. .' , ,; .: ' .. . . ..
. : : (4) (I); the Court may,
where {t 'is' ; andIt is so .by a party, adjourn the
proceedings for aperiod determined by it in order to give the arbitral
:iu1.OpportunitY to' the arbitral .or to take such
oilier'Metlon 'as inthe- opinion:ofarblttiil TribJn'af\.viIi the grounds
fot'setfhig'llsidethe award;"! t i : .. , ; . . .. . . ' . , " ;
:.-.-;: t I J; i O ri '.::... f, .: i' ' ." . . " : I
:' the. under SUb-section (4)
,proeeedings or take
todn this section or in
Section 34A for setting aside the award, the arbitral. tribunal shalt pass
appropriate orders within sixty days of'the receipt ofthe request made under
. , "-."- " :.,. _-In
sub-section (4yby the'Court' and ome
dotisideration: ' . -: ' . ...::.. : . ::i;,::;.'.:':', :':';; .
This sub-section (5) of the Section 34 ofthe Act has beenpoposed by
the Amendment Bill, 2001.' .. ' .' , ':; ' . ' ,. " " . i.:-:( ' : ; ' ; ; ;' . r, ' . ,.',rl
j
: ' . ' :
. . ".:; ' ::.;" . ... In .
(6) Any party aggrieved by the orders ofthe arbitral tribunal sub- .
section (S),:sJialfbe entitled'to'file its'objectidnS days of
the receipt ofthe.said order from the:aroiit'at tribWial'lIDi.11lre
i
ijJp1iclition made
sr.aU:, tp;.tbeproyjsion4 .
of-sub-sections (2) 8Jld(3) be the Court,
taking into account fue orders ofthe arbitral tribunal madc;U@der sub-section
(5) and the filed under this .sub-section, . . .' .: , . ,:
.' ... ...: : : .. . . i J . : : . . ;. s..; . , :
; .. ." ,' This, thd
Amendment Bill, 2001. .<. " . ." :; .',:,;'. :-, ;
. Toe Arbitration and Conciliation Act, 1996 does not provide for an:
appeal against an arbitral award, However, the party who is aggrieved with
an arbitral award may take recourse to a Court against the said award, Section '
34 provides for the ground' and circumstances when an arbitral award may
be set aside.' It empowers the Courts to review the whole.arbitration process
followed in a presented case and also to examine constitutionality of the
arbitration process and the parties are not permitted to lessen the dignity of
it.
II. Additional grounds of challenge in case of certain awards
Section 34A of the Arbitration and Conciliation Act, 1996 has been
proposed by the Arbitration and Conciliation (Amendment) Bill, 200 I and
states thus:
(1) In the case of an arbitral award made in an arbitration other than an
international arbitration (whether conunercial or not), recourse to the following
additional grounds can be had in an application for setting aside an award
referred to in sub-section (1) of Section 34, namely:
(a) that there is an error which is apparent on' the of the arbitral
award giving rise to a substantial question of law;
. . .
(b) that the arbitral award is an award in respect of which reasonshaye..
',r
to be given under sub-section (3) of Section 3I but the
does not state the reasons. . . .;
(2) Where the ground referred to in clause (a) of sub-section ,
invoked in the application filed under Section 34, the .
-- . .r:
. . __._-_.-...
...:-.::" =-_ .
-. Pro.e.ec;cUngs in rrJbunJ.l1s
separate applicationseeIcWe leflvti ofthe f:;ourt to raise the said ground. But,
the Court shall not grant leave unless it is primafacie ofthe opinion that all
the following conditions are satisfied, namely: \
. (a) that' 'will substantially affect the
rights ofone or more parties; .
{b . of.I!!'w was one which. the .arbitral
.tribunal was asked and' .' :. ,;,., ,. . ." ,
. : . "" . . .
(c) that the application made for' leave'identiflesthe substantial question
oflaw't6 'be 'decidCd and states relevant grounds on which leave
to be . . ,
' j . ' . ' " . . . . . : ' . . . ; ', '
(3) Where aspecified question oflaw has been referred to the arbitral
tribunal, an awardshall not be set-aside on the groundreferred to in clause
(a) ofsub-section 0)., .
-'.
":.. " .:: i "
) ' , ' .
';' .'
: , I ! 'J' : : -: . . ; ' .'; u ; ' 1
. p : .;"!,'; .'.' : 'J:: '".,' : . (' ! . I . :
. / ,.
:i':',' : ; T"
' ,.J . ;'. , :1"J :: : ' .:"
' ; '- ' . ' I
. . . .. :. _ . .. ._..--- _. . ":,,: ; ..-- _.... . ' - .- ....
.. - -.
. : , :: .-r:' . .. _ _.__
FINALITY AND' ENFORCEMENT OF ARBITRAL AWARDS ', .
. ' - ' . . . " .' ....
. . . . . . . . ' . " ... i f ' . - . . ,
J. ' Finabty of arbitral 'awards . . . .. -..,. ,
..... .. . . . ' . . .' ' . " '.: :i ;!l,.
As per ofthe Arbitration and Concilia-tloo '1996; SuOject
to the Part I of.theAct, an atbitral awardshalI be final and-binding.on the
parties and'persons claiming under them respectively,
1 ' . ,
. finality, the arbitral award should, not be challenged within
the period ofthree monthstimeprovided under Section 34(3).
. The finality ofarbitral :aWard should have some legai effe.Cts. ' An
award may declare, extingUish; limit, title or ,it is' Qr
future, whether-vested or contingent, effect of such 'and if'tbe value of the
immovable property is one hundred rupees and more to be mandatorily
registered under the Registration Act, 1908 under Sectim'l7(l)(b);' The award
which :is required to be registered under the Registration Act, t908, -but'has
not it cannot.be received as evidence:ofany transaction affeetltfg
irnmoyable property, : " . .'.'
The award isfinaI inthe sense that there can neither be; award
on the same subject, nor an appealagainst the finality ofthe . ' ',
The arbitrator's power over the matter referred to him is complete and
his award puts an endto tllfhiroceedings.The Court\vill notinterfere
the findings of the arbitratorevenif the Court' feels on merits thilt arbitrator
should have come to 'adifferent conclusion,' His awardon both fact and law
is final. There is no ' appeal from.his verdict. The Court cannot review his
correct any mistake in his adjudication unless an 'obj eCtion to the
validity of the award.is apparent on the face of it, .
Subject to the remedies provided in the Act, the award cannot be set '
aside, amended, modified or affected in any way whatsoever. . ' . ..
II. Stay of operation of award or its enforcement .
I Section 36,..J the Arbitration
substitutedby the ArbitJ;atjon andConciliation (Amendment) Act'lmd 'states::
thus: ' . ' : ,) ";C" J .' ;
. . , . " 0') I
(I) Where the timeformaking an application to set aside the ,"
award under sub-section (1) of Section 34 'has expired, then, si!bjectto'fi)c;'-'
provisions of sub-sections (2). to (4); the award shal-l be enforced' urtd6Hhe
Code of Civil Procedure, 1908 in the same manner as
.. " i "

the Court. .. , . ,. ' . ... '"
". 1 . 1 . . . .. 137
138
. . _ _ _
. . ' ; "'" . : . _..
Proceedings fn.ArbfWal Tribunals [Unit-nI, Cb-S ,
is' 'tllt/C6'trl (1) of
Section 34 to set aside an arbitral Qf.s
1Jch
.m,t ,application
shall not by itself operate as a stay of the award unless, upon a further
application made for the purpose; the 'Court grants'-stay of the.operation of
the award in accordance witbthe provisions of sub-section (3). ' . ,
(3) On' the filing to (2) iors.ta;
oOhe.operatiQll ofthe award; the Court may, withbutpicljtidfi::eto'any:action
it may take under.sub-section (1) ofSection 31-Aand subject to' such
as it may deem fi. to impose, grant stay of the operation of the award
for reasons in'brief i6be .recorded .m.writing; But tlle Court,..
considering the'grounds for 'asi de award in
mind, ;J.... . . ..:'" '.. :. '." :'
,, ' l: .' (4) ')1lerpo,"ver to 'imposecotiditions referred to' in' sub'-section''(3) ,
includes theipower to grant ad interim:measures not only against the parties
f9.- ..t1te .award. OF in respect.ofthe.property which is the 'subj ect the
but also to issue ad interim measures against third parties or iii'respect
.. matter.of the award, in sofar.as it is
nec'essary to protect the interests of. the.party. in whose favoqr the award is
passed. ' . ' .. ... . .. .
(5) .The. ad interim:measures . be
confirmed, mcdifiedorvacated, as the Court subject to
such any, as deemfit, hearing affectedpersons. .
' : . r - .. . ' .
. h!.City.$q()pe Developers v. Atka Builders; [(2000) 1 CaLHN 381] ;rthe
Court held-thasan-arbitral award attains the character.of 'decree' without any
further approval of the Court; ifnot-challenged under Section 34 or 'if not set
asidewhen challenged. The.law:has createda legal fiction by using the words
"at'i(it Were ,....;.:::. .. . '.' .>..':,,'. :..: .' .
In fact an arbitral awarq is. not a.decree-of the..Court but, 'mutatis ,
mutandis' -shall of arbi';';i Section 36 .
.., containsjhc) ,the trianner'a's if'itwete a deereeof the Court"
thus, ar.tubitral ;awardmusfine{utJe:essential deetee'dr' the'.
Court, to become' capable of being enforced. Thus though the award is a
of a .pri vate tribunal, it is, now at par wit;hthe judgement;of a Court
0l)fl'-Y: py O\VD . . : . : '. . . ; . .
',r! t against the>Goverihhetlt does not
SectiQn.60;'of Ci\!'il:ProtedUie Code' because'of the fact .
that the Gov.emment has been:a' party in the suit and as it is already 'in'
possession ofall the information. .
An arbitral awardmade on oratsu6inission is not enforceable.
... . -... .. ... - .... ; _
- ... ......."<_ ... .. ... .. ........I!',.. .,,. . EI . """ .ji5"' .. . :. .
. ;' . :".: . ' : :"' '': ':'. .... . . Iltoi
..... .....- . ._._._ .:
. -. .... APPEALS .
; t . '" r : ; ; .'.
I. ..., '. . . i .r . \ . ' : '; r..,:" .:.... -,
: ' . . .. . ' . . . . . . " ... , ' . . . .. j j :i I ' . . ,"
s.ection '37 of the Arbitration and Conciliation Act; 199'6'states abOut
I I . . .. .. , . . . .' ... l .
appealable orders 'thus:. ' .: ' . . ': .
. . . . . . I . " , . '
(I) An appeal shalllie from the following orders (and from no.others)
to the Court authorised by law to hear appeals from original decrees of the
Court'passingthe order,'nariiely:--:- ;: . . .' , . " . ,. ' . .. ' ':" . ..'
i , (a) :' .
(b) setting-aside or refusing tosetaside anarbitral awar<J under Section
34. ' . , , .
. ' (2) An appeal shall also -fieito aCourt' from 8Ii" order of the a'ibitral
' " '.:: ' .:' ' . " :: . '. :' . '. .:: ".,. "
(a) accepting the plea referred to in (2) 'or sub-section (3)
ofSection 16; or . .. '
. : ;' 1.
(b) granting or refusing to grant an interim measure under Section 17.
(3) No i.n unde'r this
section, but nothing in this section shall affect ortakeaway'any right toappeal
. . ,. .. . . . ' I ' .
to the Supreme Court." . . ' . .
II. -. .Substantlal prejudice to' be sri'own for Intervention under
SeCtions 34 and3'l'ttJid time limits ' " '.;' ..
Section' 37A of the Arbitration and Conciliation Act, 1996 has been
proposed by the Arbitration and (Amendment) arn, 2001 and
states thus:
(1) The C6urt referred to in sub-section (I) of Sci:tioii"34, while dealing
With an application under that sub-section 'or the Court to
section (1) or sub-section (2) ofSection 37 while dealing with an appeal
any ofthesisub-sections, may. ir"irthiriks fit so to do, and after fixing a'dAy
for :hearing the applicant or ;appellant or his 'col,lDsel end .heari ng him
accordinglyif he appears on that day, 'wsmiss the application orthe appeal;'
as the case may be. ., . . ' . ; - , :,,:;.w
(2) No award passed by the' arbitral tribunal shall beset m;i8e'onan
application under sub-section (I )o. Section 34 and no' order t>asse<l:byith(j:!
arbitral tribunal .or by the 'Court shall be' set aside in an ;appeal" tiBdd'isUfPs .
section (1) or sub-section (2) of Section 37, ,as the . . , .' ,
prejudice .:,. .;. : 1 .
139 . ':" . ' :: '; ..

..- -..._--_.- .
140 Proceedings iii Ar'&ltral Tribunals {Unit-nI, Ch.(i
(3) Every or referred to in sub-section (1) shall be
disposed of'within six months from the date ofservice ofnotice on the.opposite
party. But, while del'llingwith an application under sub-section (1) ofSection
34', i{tlit5>Uri adjourns the proceedings under sub-Section .(5)9fthat section.
the period ofsix months shall be reckoned from the date 'of receipt ofthe order
from the arbitral tribunal under the sub-section: . .. ..
of the Act 'specifies the scope of of
the Court and the Arbitral Tribunal. No period' oftime is, however, specified
for filing' an appeal. 'But, the provision Of Art. ,l16 ofthe ScheduIeofLimitation
Act, 19-63. will apply in. matters ofappeals made.under this section.
It is significant to note that Section 37(1) provides for appeal against
'orders' not against the :award'. The orders against which an appeal lies
are' specifically laid down and no other orders are appealable. The appeal lie
from the following orders: .
(a) ' granting or: refusing to measure ot
Section 9;
(b) setting refusing to lL.'1 Section 34(2).
. . (2)' Act lays thatan appeal shall
the 'of the arbitral Trlbooal- . , I ' . " "
(tV .. order upholding the objection of that the arbitral. tribunal
. " 'does not have jurisdiction or it has' its scope.of authority;
. . . . . t. . . . - . . '
.(b) anorder granting or refusing to grant interim measure ofprotection
under Section 17(1) 'or; 17(2). . . .
The arbitral Tribunal has been conferred with wide powers under.Section
17 to take decisionson interlocutory matters. When an: objection is not
' . . " _ . ) J J " . . '. , .
accepted 'QY a.Tnbu'naI, there is n9. appeal. But in the case, the award itself
can be challenge<i'under Section 34 .and the order made by theCourt on the
applic'alion'under"Section 34 is also appealable. . .
. J .:.:. - ;'
, sectipn.i.3]of the Act barred.a second.appeal froman appellate.order,
application against an appellate order under SectionS? is not
maintainable; even before the High Court.
,::;:' .'In Bengal v, Gauranga Lal, [(:I993) 3 sec 2]; the Supreme Court
grounds of misconduct or corruption of
this ground is the section relating to appeal against
. ', .
hi Neelakantha v. Superintending Engineer. [(989) 1 Arb .LR 34(SC)],
the Court held that there is no appeal from the decision of the Arbitrator and
... _--- _ _-_..
. ._ - .__.
. . f: '"
Un,t-lII, Chrlil . ,Appeals,. .
" 0 I . ' .
lilll'

the Court has no power to correct any error or mismlte.in,thcHlrlU.tmtor's
verdict nor it .can review Pte award, . i . . " , : ; , . .: .. , ':
III. , Power of High::Courttij.Make Rules :" :' -: : ;" ..,:,:;.q x:.;
. .. . : ! . . ' . . ::', , . . . ; . .' : . ' '.: '::- : ' i,_, !i -:.i f i tJ' H-:
Section. 82 of the ,Arbitratton and Conciliation Act, 199.6,
substituted by the
, . . ,. . . . . .. ,,;' .. . .- .1
(1) The High Court may make rules consistent with this Act as 'to all "
proceedings before the Court under this . .
(2) Withoutp;ejudice to the genealityofthe'provisions ofsub-section :
(1) , rules may be made in respect ofthefollowing, nanielY:...:- . .s. .:
the mluineifu whlch thd arbitral . -. .
. . : . . . :. ' . . . . .1 ., >: ; r : ' " .. . ...
C'!') the number of days ,for whjch the arbitral proceedings have to be
conducted continuously on each oeeasion when the tribunal meets; .
(c) .the time scheduleand thenumberof'hours forwhich'the proceedings
have to be conducted on each-day; . , .
(d) the time schedule for the filing ofthe pleading for purposes ofsub
section (lA) of Section 23;
(e) the time the recording of evidence and
. . " ' . .
submission ofargurrien,ts for purposes ofsub-section (I) ofSection
24; .
(f) the time schedule as to .the future procedure to. be followed by the
arbitral tribunal, referred to'in sub-section (6) of

(3) The Chief Justice of India may .issue guidelines to the High Courts
in relation to the items referred in.sub-section (2) and other procedure to be
followed by the arbitral tribunal so that uniform rules may be made by all
V;"
the High Courts.
The High Courts may make rules relating to the items listed in Section
82(2) for. speedy procedures, smooth proceedings and expeditious disposal
of the cases before the Court under this J\ct. .Under the directions ofthe CIe! ' .
Justice of India, High Courts may make rules relating to the provisions of. .
the Sections 8 and 9; sub-sections (5) and (6) of Section 13; sub-section (2)
of Section 14; (6) of Section 16; Sections 27, 34, 36 and37; sub
. sections (2) , (3) and (4) of Section 39; Section 42; sub-sections (3) and' (4)
of Section 4.3; Sections 45 to 50 and Sections 54 to 59: :
The rules made 'by High Courts withIn the scope: and purview ..

! ; tJ;;.t'T , ' . ... , _.
... ;. :tJ: " .

of the
rulemakingpower under a statute arid in conformity with its
'. , . ' ' "
partofthe statute.
i
I
I
I
I
,
142 'fribuD,als
tIi StJndaram Finance Ltd. v. NEPCIlidi'a Ltd., (Am. 1999 SC 565), the'
Supreme Court directedthe High Courts 'to frame' appropriate rules 'as
expeditiously as possible so as and satisfactory-disposal of
arbitration cases. Some High Courts like Rajasthan, Bombay, Allahabad,
AndfiIal't2desh, Calcutta;.Delhi, 'Guj arat,
Orissa,Madhya Pradesh etc. have made Rules under theSection . .
the insertion of sub-section (2) by the proposed Amendment am.zooi, they
too have.to recast the rules already made. 0 ' :' .
. The Arbitration and Conciliation Act, 1'996 is aCentral Act; 'buf the
subject in of.the.Constitution> Entry 13
ofthe Seventh Schedule; :11J.f< power of'High Courts to makerules isHinited
only to proceedings before the under their ' respective supervisory
'There 'for't.'ie'SUpreme'Court to makerules, nut,
under-Section S2(3}ofthe Ad; 'the ChiefJuSticd ofIndia may issueguidelines
to the High Courts iit relat40n'to theitemsreferred in sub-section (2) ofSection
82 and procedure lobe.followed py the arbitral tribunal so thet uniform
rules may bemadeby all the High .: .
The Chief Justice of India has framed a 'scheme' for appointment of
arbitratorsunder Section 11(10) of the Act. Section 42A of' .Act which is
proposed by the Amendment Bill, 2001 also gtves powers to the ChiefJustice
of India to prepare a scheme, for constlttitjii-g'apanel of arbitrators to enable
either the parties or the Supreme Court or the' High Court under Section 11 .
of the Act to appoint arbitrators from such panel.
IV. The' Scheme for Appointment of Arbftrators of Andhra
Pradesh High Court . . ,
In exercise of the powers conferred by' sub-section (10) of Section II
of the Arbitration and 'Conciliation Ordinance, 1996 the ChiefJustice of the
High Court of Andhra Pradesh, Hyderabad hereby makes the following
scheme. .
:.: :1.,SubnJissioD (i) The request undersub-section (4) of
Seetioall oftlie Ordinance (i.e. the A'rbitration and Conciliation Act, 1996)
shall-be.made -inwriting in the formprescrfbed in AppendixTandshall be

;.;. ',(h)!
pr. of Section 11 of the
. ; ; :(!'ft:,Act liS be, before making the
requestto the person designated by .the Chief Justice has been
satisfied.' -.
. , .,.>
QI,4;)
" , . i;;". ,. .. s: .,,
.:..
t , , ( i i) T1J.e request referredto .in sub-para 2(i)! of:!this';paraiJshBl !lre>
-,accompanied by as many copies of the request together
(b) of sub-para as the. 'Of
such riumbe{wmch'iheperson
! . . . .. . . . . . . . . I : : . ; .. . ' . . , . .,' ,' ' : .." 8 . " , " ,,'. ' '\
.(iii) In case-the person making the. request does nothav.e.'the oriwat ;
arbitration agreement or a copy thereofhe shall file anaffidavit giving relevant .
facts iit that' behalf and request thiit the 'party may be' to
' :"-, :.:"; ' . : . , : <.".. ....'
2. Authority to lrlth'the cij
Withtherequestmade unCfer'para 2;"thtfChief
n,: cd)
of Hyderabad and Secunderabad, where the value of the subject
.matterdoes not exceedRs, ,' , '.' '."' ,: . ..
.: ' . , .r- . " ::
. '(b) the District Dist1:lct the ChiefJudge!
. Additional Chief Judge, City Civil Court in. .the 'twin cities of
Hyderabad and Secunderabad, where the value ofthe subject-matter
does not exceed RS. 5,OO,O()0/-. . . . .
. " .
. (c) the Judge ofthe High Court who at the relevant time has been allotted'
original side work in the High Court, where.the value ofthe subjeot- :
matter exceeds Rs. 5,00,000/- but does not exceed Rs. one crore;
and " . . . " ., . . . ' . .
(d) the ChiefJustice of the High Court, where the value ofthe subject
matter exceeds Rs. One crore;
..
(ii) the requests falling under sub-para (a) ofpara 3 shall be placed before
the Subordinate Judge, having jurisdiction to try a suit in respect ofa dispute
arising out of contract or matter in respect of which there is an arbitration
agreement. .Where there is more than.one sub-Judge, the request shall initially
be placed before the Principal Subordinate Judge or First Additional iudge in
the twin cities of Hyderabad and Secunderabad, as the case may be, for
appropriate allotment. -... .
The requests falling under sub-para (b) ofpara 3 shall initially be; placed
before the District Judge or the ChiefJudge, City civii
ofHyderabad and Secunderabad, as the case may be, for appropriate allotment. .
. . " , , . , ' "
The requests falling under sub-para (c) ofpara 3 shall t
the Judge of'the High Court to whom the original side work in
has been al.lotted.at the relevant time. ' . .. '. . , ' : .=' uh
. falling under sub-para..(d)
the ChiefJustlee ofthe High Court, who may, in his
. .

o

, " .cUnIt-III, Ch.(6)

;: "Appeals ';. .' ." . ". .','
144
in :TJ:ibllDals . [Unit-Df, C-b.;()' .
consideration or make it over to the Judge of the High Court mentioned in
sub-p3ra:(c) of'para 3; ..:. , : . . .
....'._..i (i? The.' under
para 3 may seek such further iriforlnation or clarification or documents from
the party making the request under thisscheme, as he maydeem fit.
. " . ' . . .. . . ; ,. : ; . " f : :' ',
(ii) The party Iilaking the request shall file as many copies .of *e written
infonnarlon or clarification or copies of.documents as may berequired to.be
filed by the person designated in para 3 ofibis scheme. '
. . . ;".': . ' . '. .. .: . .: ;' . . t
4. under
paragraph 2 IS not in accordance wi th the provisions scheme. the person
designated'm para1niayreject .' .: ; : .. " -, '
. s. to affected Subje.ct to ofparagraph
5 the person designated in paraS shall direct thata notice of the application
begiven toalHhc'pai1ies' :to the arbitration agreement and such other person
or persons as may.seern to rumor is lilcely to 'be affected by to such request
to show cause, wi'thiit the time specified in the notice, as to why the
appointment of the arbitrator(s) or the measures fo be taken should
not. be.made or taken and such notice shall be accompanied by copies of all
documents referred.to in paraZ;
6; of action OD ' The appointment made
or measures taken by the person designated in para 3 in pursuance of the
request under paragraph 2 shall be communicated in writing to:
(a) the parties to the arbitration agreement;
. , .' , . ' . .
(b) the arbitrators, if any, already appointed by the parties to the
. arbitration agreement; ,
(c) the person or institution, if any, to whom or to which any function
has been-entrusted by the parties to the arbitration agreement under
the appointment procedure agreed upon by them;
... . .. .... . .. , ..
" . (d) the arbitrator appointed in pursuance of the request.
". r: Requsts and be sent to ;the authorised .
.uJ?-per the scheme.and relating thereto ,
shallbe presented'to the officer authorised by the person designated in para
3 and' separate register of suchrequests and
:.; :, ' ;/ ' .... . " , . .' . . .
requests under para 2 are received, the authorised officer shall"
as soon as ttlaY'lJtSi place the same before the persons designated in para 3.
:.... .' : .' : j:. ! l ' I . . i ;" !. .

Until otherwise notified in respect of
(a) and (b) ofsub-para (1) ofpara 3, the Authorised
ofthe,Fourt
. under -clause(c)
(Jftjudicial) High Court of Andhra Pradesh, Hyderabad, shall'b.C
cer. . ' '
. . ', ," : i. "l: -, ., .
The provisions of the Civil Rules OfPractice and Circular Orders, 1969
and the Code of Civil Procedure, 1908 relating to procedure
interlocutory applications shall apply as far as may-be to.the reqaests made
under para 3 and every such request shall be registered .as .arbitration
application. " ,' . .. ,
,.' . ' : .4:' :
8. Delivery Recetpt. Written The
provisions of sub-sections (l) and (2) ofSection :3 ofthe (j.. Act,
199,6) shall so faras may be, apply.to all.written, communications received
or sent under thisscheme, . ' . .. .. , . .. . ..'
The designated person or the.Chief Justice ofHigh Courts. ias the case
may be. may calLforand maintain such Jist orlists ofinstitutions or indiViduals
who in their opinion by virtue'of technical qualifications and experience in
various fields .are fit to be nominated as arbitrators. '
. " I
9. Costs for Processing Requests:- The party making a request under
: this Scheme shall, along with the request for arbitration pay an ' amount of
: Rs, 250/- in case the request is made to the person designated under para 3(a)
of this scheme; Rs. 500/- in case the requestis made to person designated
under para 3(b) and Rs. 1000/- in case the request .is .made to a person
designated under para 3(c) and Rs. 2000/- in case the request is made to the
Chief Justice of the High Court under para 3(d) . The amounts so deposited
towards costs, shall be dealt with in accordance with the rules under the
Ordinance or, in accordance with the directions issued by the Chief Justice of
the High Court. '
10. Interpretation:- (i) Ifany question arises with reference to.the-c.
interpretation of any of the provisions of this scheme before a person
designated under para 3(c) of this scheme or the Chief Justice of the High
Court under para 3(d) it shall be decided by that person or the Chief Justice
of the High Court, as the case may be.
(ii) In case the question arises before the person designated underpara
0- ; -: ..! J . ;;: . .-= ' ,

3(a) and (b) of this scheme, the said person shall formulate the question and
refer the same for decision of the Chie'f Justice or a Judge of the High Court
of Andhra Pradesh designated by the Chief Justice.
i 14 6
Proceedings in (Volt-nI, .Ch-6
'. ..:. .:(iii) The.decision:by .the person to,whomthe;question isr.eferred to as
: :stated,inpamH(i) or'(if) sbaUbe final. ' ; : . .
.' " . it1:PP'tver to.AD1er.\dthe TIte rriay;1j-om.thne
. a1ttehd;bjr"way'o{adciitlbIi or variation p.oVisi'on of
;.... :.;.;;...;.; of200
..
. " -: . : : ' :;'. '. . . ' . ,. . . . ::i,:; :. . ' .: '.

. : I . : r. .
. . :- :. '..... ", ' . ' : .' .
.
. I...Pr<>VisiCin underwhich the apr;)jcatirin is filed: :
2. Namefs) ofthe applicant(s) with complete addressees):
..j . ' of
i
th1:
l
dth'er parties to' thearbttration agreementwith complete
.. . -' : : \. : .; .:'/ .. , ' ' :... :..:.. : . . ,.'
.'4. ' ana' of!thi arliitiiiocs, 'if any, already 'appointed 'by
parties: . .. . ", : .' ,
5. . Name and address of the-person or institution; if any, to whom any
function hes.beenentrusted by the parties' to the arbitration agreement
.underthe appointtnent:procedure'agreed'upon by themr
6. . Qualification requirements, 'if-any; 'of the arbitrator by the agreement of
the parties: .
7. "A brief written statement describing the general nature ofthe disputes and
the points at issue: ....
8: . Valuation of the subject matter: .
. 9. Relief or the remedy sought:
Signature of the Applicant
Date:.
Advocate, ifany.
'i :OJ:": I .
w;, (,'
, .
-.
;: ; ' .: :':i JI.. . ' ;J " ! .: ' . . ' '' . : ,k '
. ; ; ; . : f : , .' :.:. :""j t " ' . :: ' i ,
. '. ' } :..;.
- ._ . ' , .---". _ '"
; " oK;
. :>->:...:...I!: ... _':.:, .:"'.": (;':::.1.':...
. FAST TRACK ARBITRATIQN . : .' .- '.. ...'...--- .
. , !..' , ' i':: : , J' :: ' ' , .. ". / , -..:, ; .J: !; : , /,.; ." ,I (li). . , ' .
The Arbitration and Concili!lti(:)D.: haS proposed
a new Chapter XI with Sections'43A to 43D and the Fourth R1Jatiiig
. to FastTniekArbitration. ..... . :: I; ' :-.; . ' .. .. .. "; . .: I : . . ,?, ! ,!:. Ui .
t .:. ' ResolidioD'OrdfSputes'tbrougb
' .. Act, 1996:
. . . : ... . . . ' ", :' ' . '.. .! .: '.....\. . :.... .' . . . . . .;.: : .'
' (1) The 'parties to an action, before a judiciaI authority referred toin
:Section before any of.thcCourfs;referredto in Section
. arbitretion,.agreement..or to :anapplication before the Supreme
Court or theHigh Courrunder.Section -11, be, may, at any
stage before or at the time ofappointment ofthe arbitral trlbumil, agree.
.in \tnitfugto have their resolved-byathittafiOri iii; with the
provisions ofthis section, Sections 43Bto 43D and in
the Fourth Schedule. .
. . ;. ' . . : ' '<" ':: : . " .
(2) If the parties referred to in sub-section (1>. tohave the disputes
resolved through Fast Track Arbitration under that sub-section, then die arbitral
tribunal agreed to between the said parti es shall be called the Fast. Track
Arbitration Tribunal. .
(3) Notwithstanding anything contained'in' the arbitration agreement
. . .
.(i) the' Fast Track Arbitral Tribunal shall consist ofa sole arbitrator;
(ii) the sole arbitrator shall be chosen' by parties unanimously;
(iii) the fee payable' to the arbitrator and' the mariner of payment of the
fee shall be such as may be agreed between the sole arbitrator and
the parties; ' .
.(iv) the procedure laid down in the Fourth Schedule shall apply.
. II. Other-provisions of tbe Act to apply subject to modifications
As per Section 43B of the Arbitrat ion and Conciliation Act, '1996, the
.. other provisions of this part, in so far as they are matters not provided in the
Fourth Schedulc.shall 'apply to the Fast Track Arbitration they applY-to
other arbitrations subject to the following modifications, namely: '. " . .
(a) the references to . . . , .{
(i) "arbitral tribunal ' shall ;.unless the context otherwiserequires,
be deemed to includereferences to the
(.lye
. , ' :; ' .
Fast
Tribunal; and , . '
147
" '""

,.-..
"
I
148 .Proceedings in Arbitral Tribunals [Unit-m, Ch-7
(ii) 'Court' shall be deemed to be references to the High Court,
except in Sections 27
(b) in Section 33 (correction and interpretation of award, additional
: award), In.. .sub-sections (i) to (4), for the words "thirty days'
: wherever they occur. the words, 'fifteen days" shall be substituted,
(c) .in 34 for setting aside arbitral award)
(i) in sub-section (3), for the words "threemonths" the words
."thirty days" and for the words "thirty days" the words "fifteen
. days" shall respectively be substituted;
. (ii) in sub-section (5) for the words "sixty days" the words "thirty
.days" shall be substituted;
(Hi) in sub-section{6), for the words, "thirty days" the words "fifteen
days" shall be substituted.
(d) in Section 37 (Appellate orders); in sub-section (1), the provision
for appeal shall not apply to orders referred to: in clauses (a) and
(b) of sub-section (1) of Section 37.
(e) in Section 37A (time limits) for the words "six months", the words
"three months" shall be substituted.
III. Proper Courts for filing subsequent applications
Under Section 43C of the Arbitration and Conciliation Act, 1996,
notwithstanding anything containing in this Part or in any other law for the
time being in force but subject to sub-clause (ii) ofclause (a) of Section 43B,
where with respect to an arbitration agreement, any application is made or is
required to be made before a 'Court' in the manner mentioned in this Part,
such an application..shall be made to. the .. .Court', and all subsequent.
applications arising. out of that agreement and the arbitral proceedings shall
be made in that High Court and in no other High Court.
. IV. High Court for purposes of this Chapter I
Section 43D of the Arbitration and Conciliation Act, 1996 states that
the reference to High Court in Sections 43B and 43C shall be construed as a
reference to' the' High Court within whose territorial limits, the Principal Civil
Court or the Court of the Principal Judge of the City Civil Court referred to
in clause (e) of sub-section (1) of Section 2?as the case may be, is situated.
Unit-III, Ch-7) Fast Track Arbitration i49.
v. Procedure of the Fast Track Arbitration (The Fourth
Schedule)
1. Constitution of Fast Track Arbitral Trlbunal:- oxo the
purposes ofFast Track Arbitrations wider sub-section (1) of Section 431\ the
Fast Track Arbitral Tribunal shall be deemed to be constituted with effect
from the date on which the' parties after obtaining the consent of the' sole
arbitrator, agree in writing that the sole arbitrator shall be the Fast Track
Arbitral Tribunal under sub-section (1) of the Section 431\.. .
(ii) Parties shall communicate the said agreement to the sole arbitrator .
on the same day. .
2. Procedure to apply from date of ccnstitutioil of Fast Track
Arbitral Trlbunals-> (2) The procedure specified in the Schedule shall,:with
effect froni thedate of the constitution of the Fast Track Arbitral Tribunal,.
apply to all Fast TrackArbitrations under sub-section (1) ofSection 43A.
3.. Procedure:--- (3)(i) Within fifteen days ofthe constitution ofthe Fast
Track Arbitral Tribunal, the person who has raised' the dispute [i.e.: the
claimant) shall send simultaneously to the tribunal and the opposite parties
(i.e. respondents)- .
(a) a claim statement containing the facts, the points in issue and
the relief claimed;
(b) documentary evidence, ifany, in support. ofhis case.
(c) where reliance is placed on the testimony of any witness
(including that of a party) a copy of the witness's affidavit in
writing;
{d) Where reliance is placed on the opinion of an expert, the
particulars relating to that expert, his qualifications and
experience, and a copy of his opinion;
(e} list of interrogatories.jfany;
(f) application for discovery or production of documents, if any,
mentioning their relevancy;
. (g) full address, including e-mail or fax, telephone numbers, ifany,
of all claimants and of all the parties, for the purpose of
expediting communication and correspondence; .
(h) any other material considered relevant by the applicant;
(ii) The respondent shall, within fifteen days after receipt of the
statement and the documents referred to in sub-paragraph (1), stmultaneously
150 ' .
Proceedings in Arbitral Tribunals fUlilt-:III, :Ch-7
sent to the Arbitral Tribunal as well as' to the claimantshis defence
statement, together with documentaryevidence, testimony by affidavit
(including that ofa party) and expert opinion, ifany," in support thereof, together .
. 'w ith counter claims; ifany, supported by documents.
(iii) Tile procedure in this shall apply to such counter.
,claims as they apply to a claim, '
(iv) Within fifteen days of the receipt. ofthe defence statement Or ofthe
counter claims, the claimant shall send to the Fast 'Track Arbitral Tribunal and .
to the his rejoinder and statement of defence to the counter ciaim.
(v>, Withiif fifteen days of the receipt of the defence statement to the
counter claim, the respondent shall simultaneously send his rejoinder to the
statement, iO the -Fast Track Arbitral Tribunal aswell as to the claimant,
(vi) In case or production ofdocuments is allowed, the parties
'shall be permitted to' submit their supplementary statements, if any, to the
Fast Track Arbitral Tribunal within a specified period and tosimultaneously
.send copies thert:0f to each
(vii) The Fast Track Arbitral Tribunal shaIl decide the disputes on the
basis of the pleadings anddocuments, affidavits ofevidence, expert opinion,
ifany, and the written submission filed by the parties, '
(viii) The Fast Track Arbitral Tribunal maypermit any witness to be '
orally questioned and lay down the manner in which evidence shall be recorded
or for receiving affidavits in lieu oforal evidence.
(ix) The Fast Track Arbitral Tribunal may otherwise permit oral evidence
to be adduced, if it considers that any request for oral evidence by any party
is justified or where the Fast Track Arbitral Tribunal itself considers that such
oral evidence is necessary.
(x) The Fast Track Arbitral Tribunal may, in addition, callfor any further
information or clarification from the parties in addition to the pleadings,
' documents and evidence placed before it: ,.. . . - - - - , . ,
4. Representation by Counseh-c- (4) The Fast Track Arbitral Tribunal
shaIl permit the parties to appear and conduct the case personaIly or through
their counselor by any person duly authorised by the parties to represent them.
5. Written' notes of arguments or oral arguments:- (5) After the
conclusion of the evidence, thcfFastTrack Arbitral Tribunal may direct all the.
parties to file their written notes o.fargument or may, at its discretion. in addition
permit oral arguments and shall fix a time schedule therefor and may also
restrict the length of'oral arguments. ' '
,
Unit-III, Ch-7] Fast Track Arbitration
151
'6. Conduct of Proceedings:- (6)(i) The Fast Track Arbitral TnoWJ31 ' .
shall conduct its proceedings in such '8 manner that the arbitral proceedmgs \
,are, as far as possible, taken up day after day, at least continuously for three .
days on each occasion. '
(ii) The Fast i 'rc1ck Arbitral Tribunal shall ordinarily fix 'the time
schedule in such a manner so that the proceedings may be conducted
continuously from 10.30 A.M. to I PM. and 2 P.M. to 4.30 P.M. every day.
7. Parties to be bouJidby the Procedure and time schedule:- (7)
The time schedule fixed under paragraphs 3 and 5 and the procedure specified
under paragraph 6 by Fast Track Arbitral Tribunal shall be binding on the .
parties. ' , ' .
8. Consultation of experts:- (8)(i) At any time during the course of
arbitration and before the passing ofthe award the Fast Track Arbitral Tribunal
may, at its discretion, if need be, consult any expert or technically qualified
persop,or a qualified accountant for assistance in relation to the subject matter
in dispute, at the expense ofthe parties,' and shall communicate the report of.
the above said person to the parties to enable them to file their response.
(ii) If the Fast Track Arbitral Tribunal thereafter considers on its own
or on the request ofparties that any clarification or examination ofthe above
said persons referred to in sub-paragraph (i) or examination 'of any other
person is necessary, it may call upon the said person to clarify in writing or .
to call him or such other person as a witness for necessary examination. .
9. Procedure in cases of default by parties:- (9)(i) In case there is
default on the part of any party to adhere to the time limits specified in this
schedule or are fixed by the Fast Track Arbitral Tribunal or there is violation
of any interim orders or directions of the Fast Track Arbitral Tribunal issued
under Section 17 or under this schedule, the Fast Track Arbitral Tribunal may
pass peremptory orders against the defaulting party giving further time for
compliance including peremptory orders to provide appropriate security in
connectionwith an interim order or direction. . .,. ' - - - - - .
(ii) In case the Fast Track Arbitral Tribunal is satisfied that a 'part to
the implementation of the peremptory orders, the Fast Track Arbitral Tribunal
may impose such costs as it may deem fit on the defaulting PMtY or may
pass an order striking out the pleadings of the party concerned or excluding.
material or draw adverse inference against the said party and in case security
for costs of arbitration is not furnished as required under sub-paragraph (i),
the claim may be dismissed. '
(iii) Without prejudice to the provisions of sub-paragraph (ii), the Fast
Track Arbitral Tribunal may dismi ss the claim if the.claimant.does.not
152 Proceedings in Arbitral Tribunals (Unit-li, Ch-7
effectively prosecute the arbitralproceeding or file the papers within the time
granted or neglects or refuses to obey the peremptory orders ofthe tribunal or
to pay the dues or deposits as ordered by theFast Track Arbitral Trfbunal.
But, failure to file a statement of defence to the claim statement or to the
c01.J11ter claim shall not by itself be treated as an admission of the allegation
in the.~ l a i m statement or in the counter claim as the case m a ~ be.
(iv) Ifthe opposite party does not file its defence or does not effectively
prosecute its defence or file the papers within the time granted or refused to
obey the peremptory orders of the tribunal, the Fast Track Arbitral Tribunal
may make an ex parte award. .
10. Fast Track Award to be passed in six months:- (IO)(i) The Fast
Track Arbitral Tribunal shall pass an award within six months from the date
ofthe constitution ofthe Fast Track Arbitral Tribunal or within such extended
, period as specified in sub-paragraphs (ii) to (iv).
(ii) The parties may, by consent, extend the period in sub-paragraph (i),
by a further period not exceeding three months. .
(iii) If the Fast Track Arbitration Award is not made within the period
specified under sub-paragraph (i) and the period agreed to by the parties under
sub-paragraph (ii), the arbitration proceedings shall, subject to the provisions
of sub-paragraph (iv), stand suspended until an application for extension is
made to the High Court by any party to the Fast Track Arbitration or where
none ofthe parties makes an application as foresaid, until such an application
is made by the arbitral tribunal.
(iv) The provisions of sub-sections (4) to (8) of Section 29A shall , so
far as may be, apply to the High Court for the disposal of application referred
to in sub-paragraph (iii), till the award is passed. ?
11. Fast Track Award to contain 'reasons:- (11) The Fast Track
Arbitral Tribunal shall pass an award and give reasons for its award keeping
in mind the time limit referred to in paragraph 10 unless it is agreed between
. parties that no reasonsneed.be.given orthe award .is based on settlement of
disputes. .
Chapter--8
MISCELLANEOUS
I. Deposits , ...",..,...
Section 38 of the Arbitration and Conciliation Act, 1996 states that:
(l) The Arbitral Tribunal may fix the amount of the deposit or
supplementary deposit, as the case may be, as an advance for the costs referred
to in sub-section{8) of Section 31, which itexpects will be incurred in respect
of the claim submitted to it. But, where, apart from the claim, a counter
claim has been submitted to the arbitral Tribunal, it may fix separate amount .
ofdeposit for the claim and counter claim.
(2) The deposit referred to in sub-section (I) shall be payable in equal
. shares by the parties. However. where one party fails to pay his share of the
deposit, the other party may pay that share. At thesame time, where the other
party also does not -pay the aforesaid share .in respect of the claim or the
counter-claim, the arbitral Tribunal may suspend or terminate the arbitral
proceedings in respect of such claim or counter-claim, as the case may be.
(3) Upon termination of the arbitral proceedings, the arbitral Tribunal
shallrender an accounting to the parties of the deposits received and shall
return any unexpended balance to the party or parties, as the case may be.
II. Lien on arbitral award and deposits as to ~ o s t s
As per Sect ion 39 of the Arbitration and Conciliation Act, 1996:
(1) Subject to the provisionsof sub-section (2) and to any provisions to
the contrary in the arbitration agreement, the arbitral Tribunal shall have a
lien on the arbitral award for any unpaid costs of the arbitration.
(2) If in any case an arbitral Tribunal refuses to deliver its award except
on payment of the costs demanded by it, the Court may, on an application in
this behalf, order that the arbitral Tribunal shall deliver the arbitral award to
the applicant on payment into Court by the applicant of the costs demanded,
and shall after sueh inquiry, if any,-as-it-thinks fit, further order that out of .
the money so paid into Court there shall be paid to the arbitral Tribunal by
way of the costs such sum as the Court may consider reasonable mid that the
balance of the money, ifany, shall be refunded to the applicant.
(3) An applicant under sub-section (2) may be made by any party unless
the fees demanded have been fixed by writt en agreement between him and
the arbitral Tribunal, and the arbitral Tnbunal shall be entitled to appear and
,
be heard on any such application.
153 . Dl.l:.'
j
154 Proceedings In Tribunals [Unit-HI,. Ch-8
(4) The"Court may make such orders as it thinks fit respecting the costs
of arbitration where any respecting such costs and the
arbitral award contains no sufficient provision concerning them.
III. Arbitration agreement not.to be discharged by death of
party thereto
According toSection 40 of the Arbitration and Conciliation Act, 1996:
(1) An arbitration agreement shall not bedischarged by the death ofany'
party theretoeither as respects the deceased or as respects any other party,
but shall in such event be enforceable, by or against the legal representative
ofthe deceased.
(2) The mandate of 8J) arbitrator shall not be terminated by the death of
any party by whom he was appointed.
. (3) Nothing in
-
this section shall affect the operation ofany
.
law by virtue
of which any right ofaction is extinguished by the death ofa person. .
W. . Provisions in case of insolvency
Section 41 of the Arbitration and. Conciliation Act, 1996 says about
insolvency thus:
(1) Where it is provided by a term in a contract to which an insolvent is
a party that any dispute arising thereout or in connection therewith shall be
submitted to arbitration, the said term shall, ifthe receiver adopts the contract,
be enforceable by or against him so far as it relates to any such dispute,
(2) Where a person who has been adjudged an insolvent had, before the
commencement of the insolvency proceedings, become a party to an
arbitration agreement, and any matter to which the agreement applies is
required to be determined in connection with, or for the purposes of, the
insolvency proceedings, then, if the case is one to.which sub-section (1) does
not apply, any other party or the receiver may apply to the judicial authority
having jurisdiction in-the insolvency proceedings for an order directing that
tbe matter in question shall be submitted to arbitration in accordance with
the arbitration agreement, and the judicial authority may, if it is of opinion
that, having regard to all the circumstances of the case, the matter ought to
be determined by arbitration, make an order accordingly.
(3) In this section the expression includes an Official Assignee.
V. Proper 'Court for filing subsequent applications
Section 42 of the Arbitration and Conciliation Act, 1996 has been
substituted by the proposed Arbitration and Conciliation (Amendment) Bill,
2001 and states-thus:
Unlt-IB, MJseeJlaneous
155
(i) Notwithstanding anything contained elsewhere in Part (i.e, Part.
Ii'or in any other Jaw' for the time beingjn,.JQrce, with-respect
. to.any arbitration.agreement any applicationunder thisPart hasheeD
made to a Court in.accordance with sub-sections (2) to.(S), then all.
subsequent applications otherthan me applications referred to in sub
section (2) of Section 31A arising out of that agreement" and the
arbitral proceedings (i.e, subsequent applications) shall be to
the same Court and in no other Court.
(2) Where an application is madeto a COlh1 withinthe meaning ofclause
(e) of sub-section (1) ofSection 2, the subsequent applications shall be made
in that Court and in no other Court.
(3) Ifin a pending action under Section 8 before a Iudicial authority, an
application. is made;. seeking reference to arbitration with respect to an
agreement, then the subsequent applications shall be made "in the following
manner, namely-s
(i) where the Judicial authority is a Court within the meaning ofclause.
(e) of sub-section (1) ofSection 2, the subsequent application shall
be made in the said Court L71 which the application is made and in
no other Court;
(ii) where the Judicial authority is a Court which is inferior in grade to
the Principal Civil Court of original jurisdiction in a district or the
Court of the Principal Judge of the City Civil Court exercising
original jurisdiction in a city (i.e, the Principal Courts), as the case
may be, the subsequent application shall be made in the said
Principal Court to which the Court to' where the application is made,
is subordinate and in no other Court;
(iii) where the.Judicial -Authority is a quasi-judicial statutory authority,
the subsequent application shall be made in the Principal Court
. mentioned in clause (ii) within whose territorial limits the said
authority is situated and in no other Courtr":":
(4) If in a legal proceedings (i.e, any proceeding involving civil right of
parties pending in the Courts mentioned in this section, whether at the stage
of institution or at the stage of appeal or revision and includes proceedings .
involving civil rights instituted in the High Court under Articles 226 and 227
of the Constitution ofIndia or on further appeal, ifany, to the Supreme Court)
under Section SA before- any of the Courts referred to in that section,' an
application ismade seeking reference'to' an arbitration with respect to an
agreement, then the subsequent applications shall be made in the .
manner, namely- . ... i
... : .;::..i;:fhlf.fl
I
.,
I
'1
156 Proceedings in Arb.ltral Tribunals (Unit-m, Ch-8
(i) .where the application is made in the Supreme Court or in the High
Courtin the Principal Civil Courts mentioned in clause (ii) of sub
as the casemay be, the subsequent application shall be
made in the Court which made the reference and no other Court;
(ii) where the application is made in a Court of coordinate jurisdiction
or inferiorin grade to the Principal Civil Courts mentioned in clause
(ii) ofsub-section (3), as the case may be, the subsequent application
shall bemade in the Principal COurt from where the legal proceeding
was transferred to such Court of coordinate jurisdiction or to which
the said Courtis subordinate, as the case may be, and in" no other'
Court..
For the removal ofdoubts, it is hereby declared that in the case ofarbitral
proceedings which have commenced pursuant to a reference made by the
Supreme Court or' the High Court under Section 8A and awards passed
pursuant thereto, the reference to 'Court' wherever it is used 1..'1 this Part shall,
except in Section 27 and Section 31A, be construed as reference to the Supreme
Court or the High Court, as the case may be.
. (5) Where an application seeking reference to arbitration with respect
to an agreement is made under Section 11, in the Supreme Court or in the
High Court, as the case may be, the subsequent applications shall be made in
the Court within the meaning of clause (e) of sub-section (1) of Section 2
and in no other Court.
VI. Scbeme for Panel of Arbitrators
Section 42A of the Arbitration and Conciliation Act, 1996, which has
been proposed by the Amendment Bill, 2001 states that the Chief Justice of
India may prepare a scheme for constituting a panel of arbitrators to enable
either the parties or the Supreme Court or the High Court under Section 11 or
the judicial authority under Section 8 or the Courts referred to in Section SA
or the parties under Section 43A, as the case may be, to appoint arbitrators
from suehpaneland subject tosuchconditionsas maybe specified by the Chief
Justice ofIndia in that scheme. .
VII. Special provision relating to unregistered partnerships under
the Indian Partnership Act, 1932 as amended by the'
Maharashtra Amendment Act, 1984
Section 42B of the Arbitration and Conciliation Act, 1996 which has
been proposed by the-Amendment Bill, 2001 states that the provisions of the
Indian Partnership (Maharashtra Amendment) Act, 1984 amending Section
69 of the Indian Partnership Act, 1932 in its application to the State of
Maharashtra, shall not affect the initiation of any proceedings under the
Unit-In, Ch-8]
Mise.eDaneous
157
0.;.
Arbitration and Conciliation Act, 19.96for the purpose of ofany
right to seek- ' - .


(a) the dissolution ofa finn;
#"
(b) the settlement of the accounts ofadissolution finn; or "
(c) the realization ofthe property ofa dissolved fum.

VIII. Limitations
'SI
OJ'
According to Section 43 of the Arbitration and Conciliation Act, 1996:
oJ
(1) The Limitation .Act, 1963 shall apply to arbitration as it applies to
proceedings in Court.
(2) For the purposes of this section and the Limitation Act, 1963 an
j
arbitration shall be deemed to have commenced on the date referred iiI Section
21..
(3) Where an arbitration agreement to submit future disputes to
'arbitration provides then any claim to which the agreement applies shall'be
unless. some step to commence arbitral proceedings is taken within a
time fixed by the agreement and a dispute arises to which the agreement
applies, the Court, jfit is ofopinion that in the circumstances ofthe case undue
hardship would otherwise be caused, and notwithstanding that the time so
fixed has expired, may on such terms, if any, as the justice of the case may
require extend the time for. such period as it thinks proper"
For removal of doubts, it is hereby declared that any provision in the
arbitration agreement which provides that any such claim shall be barred
unless some step to commence arbitral proceedings is taken within a time
fixed by the agreement, shall be deemed to be" void from the date of
commencement.of the Indian Contract (Amendment) Act, 1996.
(4) Where the Court orders that an arbitral award be set aside, the period
between the commencement ofthe arbitration and the date of the order of the
Court shall be excluded"incomputing the timeprescribed by the Limitation
Act, t 963, for the commencement of the proceedings (including arbitration)
with respect to the dispute so submitted, .
(5) In computing the time prescribed by the Limitation Act, 1963 for
the commencement of proceedings in relation to any dispute, the. period
between the commencement of the arbitration and the date of the orders
mentioned below, shall be excluded, namely:
(a) an order of the arbitral accepting a plea referred to in sub
section (2) or sub-section (3) of Section 6.
,.: j
: .- _ _. .- - - ' ; ':'".._..~ ~ - -
158 . Proceedings in Arbitral Tribunals '[Unit-ro, Ch-8
(b) an order under clause (a) of sub-section "(2) of Section 37 by the
(j'.ourt affirmiilg an order under clause (a) OIan order ofthe Supreme
Court on further appeal, ifany, affirming the last mentioned order;
(c) an order declaring ari arbitration agreement as nul'- and void or
inoperative or iacepable of being performedor as not in existence,
passed by
(i) the High Court under sub-section (13) of Section 11 in the case
of an arbitral other than an .international arbitration (whether
commercial or not) or by the Supreme'Court on further appeal;
. ' .
(ii) the Supreme Court under sub-section (13) of Section II in the
case ofan international arbitration (whether commercial or not).
Thissub-section (5) of Section 43 has been 'proposed by the Arbitration
and Conciliation (Amendment) Bill, 2001. .
Chapter-9 .
,' ';'.'
CONVENTIONS FOR THE ENFORCEMENT OF FOREIGN
ARBITRAL AWARD.S
The decision ofCommercial 'arbitrator or umpire is called the award. In
many cases the award is carried out faithfully by the parties, but sometimes
it is necessary to ascertain the means by which the aWard-can be enforced iii
law. The methods of execution of an overseas award are different in the .
various countries, where it is sought to enforce it, and further differences are
made, within a particular jurisdiction, according to the country where the
award originates.
Aniong efforts to evolve a legal system on the multi-national level
wherein international arbitral legislation, practices and inStiiutions.could be
promoted, the noteworthy are the following:
(1) ' The Geneva Protocol on Arbitration clauses ~ f 2 4 September,
. 1923.
(2) The convention on the Execution ofForeign Arbitral Awards of
26 September, 1927.
(3) The UN convention of the Recognition and Enforcement of
Foreign Arbitral Awardof 10 June 1958.
1. The Geneva Protocol and Convention:- The Geneva Protocol on
Arbitration Clauses and the Convention on the Execution ofForeign Arbitral
Award were adopted under the auspices of the League of Nations. They were
limited to persons who were subject to the jurisdiction ofdifferent contracting
States. Only the States ofProtocol could become parties to convention.
The protocol on Arbitral clauses has been included in the Arbitration
and Conciliation Act, 1996 as the second schedule and the convention on the
Execution of Foreign Arbitral Awards has been included in the Act, 1996 as
the third Schedule.
Section 53 of the Arbitration and Conciliation Act, 1996 has stated that
a 'foreign award' means an arbitralaward on differences relating to matters
considered as commercial under-thelaw'lit'force in India made after the28th"
day of July, 1924 in pursuance of an agreement for arbitration to which the
Protocol set forth in the second schedule applies; and betweenpersons ofwhom
one is subject to the jurisdiction of some one of such powers as the Central ,
Government being satisfied that reciprocal provisions have been made, may,
by notification in the official gazette, declare to the parties to the convention
set forth in the Third Schedule, and 9f whom the other is subject to the
jurisdiction of some other of the powers aforesaid. Sections 53 to 60 of the
J "
159
. "
I
", i .i{;Oi h
160 - Proceedings in Arbitral Tribunals [Unit-III, Ch-9
Arbitration and Conciliation Act, 1996 are based on the provisions of the
protocol on Arbitration Clauses of Second Schedule and Convention on the
. --- - .-- . Execution ofForeign Arbitral Awards ofThird Schedule.
2. The Second Schedule - The Geneva on Arbitration
Clauses:- The Geneva Protocol on Arbitration Clauses of 24 September,
1923, which is included in the Second Schedule of the .Arbitration and
Conciliation Act, 1996 contains the following provisions:
(I) Each ofthe ContractingStates recognises the validity ofan agreement
whether relating to existing or 'future differences betWeen parties subject
respectively to the jurisdiction of different Contracting States by which the
parties to a contract agree to submit to arbitration all or any differences that
may arise in connection with such contract relating to commercial matters or
to any other matter capable of settlement by arbitration, whether or not the
arbitration is to take place in a country to whose jurisdiction none ofthe parties
is subject.
Each Contracting State reserves .the right to limit the obligation
mentioned above to contracts which are considered.as commercial under its
national law. Any Contracting State which avails itselfofthis right will notify
the Secretary-General of the League of Nations in order that the other
Contracting States may be so informed.
(2) The arbitral procedure, including the Constitution of the Arbitral
Tribunal, shall be governed by the will of the parties and by the law of the
country in whose territory the arbitration takes place.
The Contracting States agree to facilitate all steps in the procedure which
require-to be taken in their own territories, in accordance with the provisions
of their law governing arbitral procedure applicable to existing differences.
(3) Each Contracting State undertakes to ensure the execution by its
authorities and in accordance with the provisions of its national laws of arbitral
awards made.i.n its own articles.
(4) The Tribunals ofthe Contracting Parties on being seized of a dispute
regarding a contract made between persons to whom Article I applies and
including an Arbitration Agreement whether referring to present or future
.. differences which is valid in virtue of the said article and capable of being
carried into effect, shall refer the parties on the application of either of them
to the decision of the Arbitrators.. .
Such reference shall not prejudice the competence of the judicial
tribunals in case the agreement or the arbitration cannot proceed or becomes
inoperative.
.;' :;
Unit-III, Ch-9] Conventions forthe Enforcemeo_t of Foreigo ..
.161
(5) The present Protocol, which shalI remain open for signature byalI
States, shall be-ratified.The ratificatiorrshall he deposited as soon as possible
with the Secretary-General of the League of Nations, who shall notify- such
deposit to all the Signatory States.
(6) The present Protocol will come into forceas soon as two ratifications
have been deposited. Thereafter it will take effect, in the case of each
Contracting State, one month after the notification by the Secretary-General
of the deposit of its ratification.
(7) The present Protocol may be denounced by any Contracting State
on giving one year's notice. Denunciation shall he effected by a notification
addressed to the Secretary-General of the League .of Nations, who will
immediately transmit copies ofsuch notification to all the other Signatory States
and inform them ofthe date on which it was received. The denunciation shall
take effect one year after the date on which it was notified to the Secretary
General, and shall operate only in respect of the notifying State.
(8) The Contracting States may deciare that their acceptance of the present
Protocol does not include any or all ofthe under-mentioned territories that is
to say, their colonies, overseas possessions or territories, protectorates or the
territories over which they exercise a mandate. . .
The said States may subsequently adhere separately on behalf of any
territory thus excluded. The Secretary-General of the League of Nations shall
be informed as soon as possible of such adhesions. He shall notify such
adhesions to all Signatory States. They will take effect one month after the
. notification by the Secretary-General to all Signatory States . .
The Contracting States may also denounce the Protocol separately on
behalf of any of the territories referred to above. Article 7 applies to such
denunciation.
3. The Third Schedule - Convention on the Execution of Foreign
Arbitral Awards:
.....,-,-_.....
Article 1
.
(I) In the territories of any High Contracting Party to which the present
Convention applies, an arbitral award made in pursuance of an agreement,
whether relating to existing or future differences (hereinafter called "a
submission to arbitration") covered by the Protocol on Arbitration Clauses
opened at Geneva on September 24th, 1923, shall be recognised as binding
and shall be enforced in accordance the rules of the procedure of the
territory where the award is relied upon:
. .
;.;
.... ,'.,:
162
<
ProceedingsiD Arbitcai Tribunals
[Unit-lilt Ch-9
Provided that the said award has been made in a territory of one of the
High Contracting Parties to which the present Convention applies and between
persons who ari- subject to the jurisdiction of one of the High Contracting
. .'. . - .
(2) To obtain such recognition or enforcement, it shall, further, be
. Q.ecessary,
. (a) that the award has been made in pursuance of a submission to
arbitration which is valid under the law applicable thereto;
(b) that the subject-matter of the award is capable of settlement by
arbitration under the law of the country in which the award is sought
to be relied upon; : .
,
(c) that the award has been made by the Arbitral Tribunal provided for
in the submission to arbitration or constituted in the manner agreed
upon by the parties and in conformity with the law governing the
arbitration procedure;
(d) that the award has become final in the country in which it has been
made, in the sense that it will not be considered as such if it is open
to opposition, appeal or pourvoi en cassation (in the countries where
such forms ofprocedure exist) or ifit is proved that any proceedings
for the purpose of contesting the validity ofthe award are pending;
(e) that the-recognition or enforcement of the award is not contrary to
the public policy or to the principles of the law of the country in
which it is sought to be relied upon.
Article 2
Even if the conditions laid down in Article I hereof are fulfilled,
recognition and enforcement of the award shall be refused if the Court is
satisfied,
(a) that the award has been annulled in the country in which it was
... _ made;
(b) that the party against whom it is sought to use the award was not
given notice of the arbitration proceedings in sufficient time to enable
him to present his case; or that, being under a legal incapacity, he
was not properly represented;
(c) that the award does not deal with the differences contemplated by
. or falling within the terms ofthe submission to arbitration or that it
contains decisions on matters beyond the scope of the submission to
arbitration.
...
"{1'
.: .., .

' 0 '
j


];

Unit-III, Ch-91 Conventions for thtl Enforcement ....

If the award has not covered all the' questions submitted to the arbitral
tribunal, the competent authority of the country where recognition Of
.enforcementof the 'aWard is sought can, if it thinks' fit; po!ltpQne such
recognition Of enforcement or grant it subject to such guarantee that _.
authority may decide.
Article 3
If the party against whom the award has been made proves that, under
the law governing the arbitration procedure, there is aground, other than the
grounds referred to in Article l(a) and (c), and Article 2 (b) and (c), entitling .
him to contest the validity of the award in a Court of Law, the Court may, if
it thinks fit, either refuse recognition or enforcement of the award or adjown
the consideration thereof, giving such party a reasonable time within which
to have the award annulled by the competent tribunal,
Article 4
The party relying upon an award or claiming its enforcement must
supply, in particular,
. .
(I) the original award or a copy thereof duly authenticated, according .
to the requirements of the law of the country in which it was made;
(2) documentary or other evidence to prove that the award has become
final, in the sense defined in Article 1(d), in the country in which' it
was made;
(3) when necessary, documentary or other evidence to prove that the"
conditions laid down in Article I, paragraph (1) and paragraph (2)(a) and (c),
have been fulfilled.
A translation of the award and of the other documents mentioned in this
Article into the official language of the country where the award is sought to
be relied upon may be demanded. Such translations must be certified correct
by a diplomatic or'consular agent of the country to which the party who seeks
to rely upon the award belongs or by a sworn translator of the country where
the award is sought to be relied upon. .
Article 5
The provisions of the above Articles shall not deprive any interested
party of the right of availing himself of an arbitral award in the manner and
to the extent allowed by the law or tHe treaties of the country where such
award is sought to be relied upon. . ;:
. . . 1
L
1
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164
Proceedings in Arbitral Tribunals
(Unit-HI, Cb-9
Article 6
The present Convention.applies only to arbitral awards made after the
coming into force' of the Protocol on Arbitration Clauses opened at Geneva
on September 24th, 1923.
Article 7
.The present Convention, which will remain open to the signature of all
the signatories ofthe Protocol of 1923 on Arbitration Clauses, shall be ratified.
It may be ratified only on behalf of these Members of the League of
Nations and Non-Member states on whose behalf the Protocol of 1923 shall
have been ratified.
Ratification shall be deposited as soon as possible with the Secretary
General of the League of Nations, who will notify such deposit to all the
signatories.
Article 8
The present Convention shall come into force three months after it shall
have been ratified on behalf of two High Contracting Parties. Thereafter, it
shall take effect, in the case of each High Contracting Party, three months
after the deposit of the ratification on its behalf with the Secretary-General
of the League of Nations.
Article 9
The present Convention may be denounced on behalf of any Member
of the League or Non-Member State. Denunciation shall be notified in writing
to theSecretary-General ofthe League ofNations, who will immediately send
a copy thereof, certified to be in conformity with the notifications, to all the
other Contracting Parties, at the same time informing- them of the date on
which he received it.
The denunciation shall come into force only inrespectof the High
ContractingParty whicli- shall have notified it and one year after such
notifu:ation shall have reached theSecretary-General of the League ofNations.
The denunciation of the Protocol on Arbitration Clauses shallentail, ipso
facto. the denunciation of the present Convention.
Article 10 .
The present Convention does not 'apply to the colonies, protectorates or
territories under suzerainty or mandate of any High Contracting Party unless
they are specially mentioned.
"
Unit-HI, Cb-9) Conventions (or tbe Enforcement of Foreign ..
") ,45
The application of this Convention to one or more of.such 'colonies
prptectorates or territories to whioh the"Protocol on Arbitration Clauses oPened
at Geneva on September 24, 1923, applies, can be effected at any time by
means of a declaration addressed 'to the Secretary-General of the League of .
Nations by one of the High Contracting Parties. . .
Such declaration shall take effect three months after the deposit thereof. .
The High Contracting Parties can at any time denounce the Convention .
for all or any of the. CoJonies, Protectorates or territories referred to above.
Article 9 hereof applied to such denunciation.
Article 11
A certified copy of the present Convention shall be transmitted by the
Secretary-General of the League ofNations to every Member of the League
of Nations and to every Non-Member State which signs the same.
The application of these provisions depends on reciprocity being granted
by the country where the award is made. Both the agreements have been ratified
by some countries including the U.K. along with India.
These two conventions failed to gain wide acceptability as they are
inadequate. The ambiguity in the expression "subject to the jurisdiction of
different Contracting States", the onus proof laid on the plaintiff to establish
the competence ofthearbitral tribunal and the finality of the award rendered
in a different country, coupled with the numerous poss ibilities of contesting
the validity ofthe award on grounds other than those listed in the convention,
were considered too timorous and obstructionistic to meet the growing intensity
of international economic relations.
4. United Nations Convention on tbe Recognition and Enforcement
of Foreign Arbitral Awards:- The International Chamber of Commerce
(ICC) advocated the idea of an 'international award' based on the will of the
parties and which could be automatically made enforceable. It also suggested
inclusion ofcommerciaJdisputes.withinthescope of the proposed convention
which would involve legal relationship arising on the territories of different
States. Again it proposed that the agreement of the parties must be basis of
the composition of the arbitral authority and the arbitral procedure.
The icc proposals were debated in the United Nations Economic and
Social Council and a Conference was called in New York from 20th May to
lOth June 1958 in which 45 States participated. It drew up the convention on
the Recognition and Enforcement of Foreign Arbitral Award on 10th June
1958, which came into force on 7th June 1959. The New York convention is
designed to supersede the Geneva Protocol and Convention by one instrument
and, at.the.same. time, to.make.more effective the international-recognition
.r
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166
Preceedfngs in Arbitral Tribunals rUnit-m, Ch-9
of arbitration agreements and foreign arbitral awards and the enforcement of
the latter, However, New York convention is in force in those countries

. which have ratified it acceded to it on mutual agreement.
The New York convention on the Recognition and enforcement of
Foreign Arbitral Awards has ' been included as the First Schedule of the
Arbitration and Conciliation Act, 1996. The Chapter I of Part II consisting
ofSections from 44 to 52 deals with the New York Convention Awards. The
convention oithe Recognition and Enforcement ofForeign Arbitral Awards
contains the following provisions:
5. The First Schedule: The New York Convention of Foreign
Arbitra! Awards:
Article I
(1) This convention shall apply to the recogn ition and enforcement of
'arbitral awards made in the territory ofa State other than the State where the
recognition' and enforcement of such awards are sought and arising out of
differences between persons, whether physical or legal. It shall also apply to
arbitral awards not considered as domestic awards in the State where their
recognition and enforcement are sought.
(2) The term 'arbitral awards' shall include not only awards made by
arbitrators appointed for each case but also those made by permanent arbitral
bodies to which the parties have submitted.
(3) When signing, ratifying or acceding to this convention, or notifying
extension under the Article X hereof, any State may on the basis ofreciprocity
declare tht it will apply the convention to the recognition and enforcement of
awards made only in the territory of another contracting State. It may also
declare that it will apply' the convention only to differences arising out of legal
relationships, whether contractual or not, which are considered as commercial
under the national law of the State making such declaration.
ArticleD .:
. ,
(l)Each Contracting State shall recognise an agreement in writing under
which the parties undertake to submit to arbitration all or any differences
which have arisen or which may arise between them in respect of defined
legal relationship, whether contractual Or not, concerning a subject-matter
. capable 'of settlement by arbitration.
..
(2) The term "agreement in writing" shall include an arbitral clause in
a contract or an arbitration agreement, signed by the parties or contained in
an exchange of letters Or telegrams.
";. '.
,\

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Unit-III, Ch-9] Conventions for the Enforcement of Foreign ._.
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(3) The Court ofContracting State, when seized ofan action.in a matter... :' .
in.respect of which the parties have made agreement within:the .:-::
of this article, shall, at the request of one of the parties, refer the parties'to
arbitration, unless it finds that the said agreement is null and void, inoperative
and incapable ofbeing performed.
Article ill
. .
Each Contracting State shall recognize arbitral awards as binding and
enforce them in accordance with the rules ofprocedure ofthe territory where
the award is relied upon, under the conditions laid down in the following
articles. There shall not be imposed substantially more onerous conditions or
higher fees or charges on the recognition or enforcement of arbitral awards
to which this Convention applies than are imposed on the recognition or
enforcement ofdomestic arbitral awards.
Article IV
(1) To obtain the recognition and enforcement mentioned in the
preceding article, the party applying for recognition and enforcement shall,
at the time of the application, supply,
(a) the duly authenticated original award or a duly certified copy
thereof;
(b) the original agreement referred to in Article II or a duly certified
copy thereof.
2. If the said award or agreement is not made in an official language of .
the country in which the award is relied upon, the party applying for
recognition and enforcement ofthe award shall produce a translation ofthese
documents into such language. The translation shall be certified by an official
or sworn translator or by a diplomatic or consular agent.
Article V ,.
(I) Recognition and enforcement of the award may be refused, at the
request of the party against whom it is invoked, only if that party furnishes
to the competent authority where the recognition and enforcement is sought,
proof that,
(a) the parties to the agreement referred to in Article II were, under the
law applicable to them, under some incapacity, or the said agreement
is not valid under the law to which the parties have subjected it or, .
failing any indication thereon, under the law of the country where
the award was made; or
(b) the party against whom the award is invoked was not given proper
notice of the appointment of the arbitrator or of the arbitration
proceedings or was otherwise unable to present his case; or
168 Pr oceedings in ArbitralTribunals [Unit-nI, Cb-9
the award deals with a difference not contemplated by or not falIing
within the terms of the submission 'to arbitration, or it contains
decisions on. matters beyond the scope of the subrntssionto
arbitration:
Provided that, if the decisions on matters submitted to arbitration can
be separated from those not so submitted, that part ofthe award which contains
decisions on matters submitted to arbitration may be recognised and enforced;
or
(d) the composition of the arbitral authority or the arbitral procedure
was not in accordance with the agreement of the parties, or, failing
such agreement, was not in accordance with the law of the country
where the arbitration took place; or
(e) the award has not yet become binding on the parties, or has been
set aside or suspended by a competent authority of the country in
which, or under the law of which, that award was made.
2. Recognition and enforcement ofan arbitral award may also be refused
if the competent authority in country where recognition and enforcement
is sought finds that,
.(a) the subject-matter of the difference is not capable of settlement by
arbitration under the law of that country; or
(b) the recognition or enforcement ofthe award would be contrary to
the public policy of that country.
Article VI
If an application for the setting aside or suspension of the award has
been made to a competent authority referred to in Article V(I)(e), the authority
before which the award is to be relied upon may, if it considers it
proper, adjourn the decision on the enforcement of the award and may also,
on the application of the party claiming enforcement of the
other party to give suitable security.
Article VU;
(I) The provisions ofthe present Convention shall not affect the validity
of multilateral or bilateral agreements concerning the recognition and
enforcement of arbitral awards entered into by the Contracting States nor
deprive any interested party of any right he mayhave to ava il him self of an
arbitral award in the manner and to the extent aIIowed by the law or the treaties
of the country where such award is sought to be relied upon.
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Unit-III, Cb-9] Conventions for the nforcement of-Foreign ...:
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(2) The Geneva Protocol on Arbitration Clauses of 1923 and the:Genew
Convention on the Execution ofForeign Arbitral Awards of 1927 shall cease
.to have-effect between Contracting States on their becomingbound andto ::'--=-i-' .
the extent that they become bound by this Convention. .
Article VIII
(1) This Convention shall be open until 31st December, 1958 for
signature 011 behalfof any Member of the United Nations and also on behalf

of any other State which is or hereafter becomes member of any specialised
agency ofthe United Nations. or which is or hereafter becomes a party tothe
Statute of the International Court of Justice, or any other State to which an
invitation has been addressed by the General Assembly of the United Nations,
(2) This Convention shall be ratified and the instrument of ratification
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shall be deposited with the Secretary-General ofthe United Nations.
Article IX
(1) This Convention shaIl be open for accession to all States referred to

in Article vrn.
(2) Accession shall be effected by-the deposit ofan instrument ofaccession
with the Secretary-General ofthe United Nations.
Article X
(1) Any State may, at the time of signature, ratification or accession,
declare that this Convention shall extend to all or any of the territories for the
International relations of which it is responsible. Such a declaration shall take
effect when the Convention enters into force for the State concerned.
(2) At any time thereafter any such extension shall be made by notification
addressed to the Secretary-General of the United Nations and shall take effect
as from the ninetieth day after the day of receipt by the Secretary-General of
the United Nations of this notification, or as from the date of entry into force
of the Convention for the State concerned, whichever is the later.
(3) With respect to those territories to which this Convention is not
extended at the time of signature, ratification or 'accession, each State
concerned shall consider the possibility of taking the necessary steps in order
to extend the application of this Convention to such territories, subject, where
necessary for constitutional reasons, to the consent of the Governments of
such territories.
Article XI
In the case of a federal or non-unitary State, the following provisions
shaII apply,
170 Proceedings In Arbitral Tribunals [Unit-III, Ch-9_
<a> with respect of those articles of this Convention that come within
-the legislative jurisdiction of the federal authority, the obligations
of the federal Government shall to this extent be the same as those
ofContracting States which are not federal States ;
(b) with respect to those articles of this Convention that come within
the legislative jurisdiction of constituent States or provinces which,
are not, under the constitutional system of the federation, bound to :
-take legislative action, the federal Government shall bring such
articles with a _favourable recommendation to -the notice of the:
appropriate authorities of constituent States or provinces at the.
earliest possible moment;
"(c) a federal State Party to this Convention shall, at the request of any
>'
other Contracting State transmitted through the Secretary-General of"
the United Nations, supply a statement of the law and practice of
the federation and its constituent units in regard to any particular
provision ofthis Convention, showing the extent to which effect has
been given to that provision by legislative or other action.
Article XII
(1) This Convention shall come into force on the ninetieth day following
the date of deposit of the third instrument ofratification or accession.
(2) For each State ratifying or acceding to this Convention after the
deposit of the third instrument of ratification or accession, this Convention
shall enter into force on the ninetieth day after deposit by such State of its
instniment ofratification or accession.
Article XIII
(1)Any Contracting State may denounce this Convention by a written
notification to the Secretary-General of the United Nations. Denunciation shall
take effect one year after the date of receipt of the notification by the
- Secretary-GeneraL ----- --- .
(2) Any State which has made a declaration or notification under Article
X may, at any time thereafter, by notification to the Secretary-General of the
United Nations, declare that this Convention shall cease to extend to the
tenitory concerned o ~ e year after the date of the receipt of the notification
by the Secretary-General.
(3) This Convention shall continue to be applicable to arbitral awards
in respect of which recognition or enforcement proceedings have been
instituted before the denunciation takes effect.
Unit-III, Ch-9) Conventions for the Enforcement of Foreign -
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Article XIV
A Contracting State shall not be entitled to avail itself of the present
Convention against other Contracting States except to the.extent ~ t it is itself
bound to apply the Convention. '
Article XV
The Secretary-General .of the 'JJnited Nations shall notify the States
contemplated in Article VIII ofthe foUowing, n
(a) signatures a n ~ ratifications in accordance with Article VID;
(b) accessions in accordance with Article IX ;
(c) declarations and notificat.ionS under Articles I, X and XI ;
(d) the date upon which this Convention enters into force in accordance
with Article xn ;
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(e) denunciations and notifications in accordance with Article XIII.
Article XVI
(1) This Convention, of which the Chinese, English, French, Russian
and Spanish texts shall be equally authentic, shall be deposited in the archives
of the United Nations. .
(2) The Secretary-General of the United Nations shall transmit a certified
copy of this Convention to the States contemplated inArticie Xlll.
6. Comparison of the New York Convention and the Geneva
Protocol and Convention:- The New York Convention represents great
progress in the field of international arbitration, when compared with the
Geneva Provisions. They were founded on the requirement of reciprocity
which made it necessary to conclude bilateral agreements between States
before the Geneva Provisions could become operative in their jurisdictions.
Article I of the-Geneva Convention speaks ofa -foreign award a being
binding 'and enforceable, which has been rendered in any of tlie tenitories of
the contracting parties. The requirement of reciprocity is abandoned by the
New York Convention which applies, in principle, to every foreign award,
i.e. an award made in the territory of any State other than that in which its
recognition and enforcement is sought, but when ratifying the convention or
according to it a State may declare that it will apply the Convention only to
awards made in the territory of other member States (Art. I). It has, rightly,
been said by Samuel Pisar that reservation is self-liquidating since its effect
will abate as more and more States ratify the Convention.
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Proceedings In Arbitral Tribunals (Unit-HI, Ch-9
. Further, whilst the application of the Geneva Protocol of 1923 depends
on the parties to the agreement being subject to theJUiis(Jiction of different
States which were members of the Protocol, the New York Convention no
longer stipulates that requirement and applies to allagreements in writing
under which the parties undertake to submit to arbitration (Art.II).
The improvement by the New York Convention is that it has
severely restricted the grounds on which the Courts or other authorities of
the country in which a foreign arbitral award is sought to be enforced can re
examine it, thereby an obstructive defendant is largely deprived of the
opportunity to delay or bar the enforcement in the' country in which he resides,
. ofa foreign award made against him. The authorities ofthe country in which
enforcement is sought may, on their own accord, refuse the recognition or
enforcement of the foreign award only if they find that
(a) the subject-matter of the difference is not capable of settlement by
arbitration under the law of that country; or
(b) the recognition or enforcement of the award would be contrary to
the public policy of that country (Art.\l(2)).
If the defendant contends that the award should not be recognised or
enforced for any other of the reasons admitted by the Convention the onus of
providing the contention is on him (Art.Vf l l). By these provisions the New
York Convention has removed the requirement of double exequatur which
in many countries was a formidable obstacle to the enforcement of foreign
arbitral awards. By double exequatur is understoodthe procedure under which
a party who wishes to. execute an award abroad has first to obtain in the
country in which the award is made a judicial order showing that it is
enforceable there, and there-after in the country in which he wishes to enable
the award adjudicial in order from the Courts of that country.
The New York Convention (the U.N. -Convention) makes an
improvement over the Geneva Convention in the conditions of enforcement
of an arbitral award. In the Geneva Convention the plaintiff had the onus
probandi to show that the conditions of enforcing an award had been fulfilled.
The New York Convention shifts the onus on the defendant to show cause
why the award should not be enforced.
The Geneva Convention provided that an award, to be enforced, must
have become final in the country of its origin. There were some differences
of opinion in the drafting stage of the New York Convention over the word
'final'.
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Unit.. Ch-9J Conventions for the Enforcement of Foreign _-173
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The New York Convention constitutes a definite improvement over the i(
. Geneva Convention. It helps to remove a number of serious obstacles to the
arbitral settlement ofinternational trade disputes. The New York Convention's
technical innovations represent a bold and practical attempts to widen the .class
'of agreements and awards capable of enforcement, to release and simplify
the stringent conditions imposed hitherto, and to allow the parties considerable
autonomy in stipulating the arbitral authority and substantive and procedural
regime desired for the resolution of their controversies.
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Yet, the New York Convention hasnot been widely adopted. Even where
.it is ratified, local laws seem to obstruct its implementation.
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Cbapter:-10
ENFORCEMEIVT OF FOREIGN ARBITRAL AWARDS
I. Enforc.ement of Foreign Arbitral Awards in India before the
enactment of Arbitration and Conciliation Act, 1996 ,=1:.- . - . '
1. Position'in India prior to 1937:- There existed no statutory law
applicable to the enforcement of foreign arbitral awards in India . The earlier
enactments, viz., the Indian Arbitration Act, 1889 and the second schedule of
the Code of Civil Procedure, 1908 did not contain any provisionsrelating to
enforcement of foreign arbitral awards. Section 19 of the Indian' Arbitration
Act, 1889 conferred on courts some discretion to grant stay of local actions in
such cases: On the basis of this section the Judicial Committee of the Privy
Council upheld the maintainability ofa suit ofenforcement ofa foreign award
in some cases.
2. Enforcement of Foreign Arbitral Awards after 1937 Act:- India
enacted the Arbitration Protocol and Convention Act, 1937 in order to give
effect to the Geneva Protocol and Convention and gave effect to the New York .
Convention, 1958 by passing the Foreign Awards (Regulation and Enforcement)
Act, 1961. The 1937 Act does not govern the awards made after 11th October,
1960 in countries which are signatories to the 1958 New York Convention.
The 1937 Act imposes on the party seeking enforcement of foreign
awards the duty to establish the validity of the awards, its finality etc. , while
the 1961 Act enjoins the dependent to prove that the award is not enforceable.
The Court may not grant enforcement of foreign award even without proof
by the contest ing party, ifit is sat isfied that the subject matter of the disputes
is incapable of settlement by arbitration under Indian Law or that the
enforcement of the award is opposed to public policy.
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3 . Foreign Award:- The term 'foreign award' is used 'in the
I
conn ection with arbitration in foreign lands by foreign arbitrators, to which
foreign law is applicable and in which a foreign national is involved' .

Section 2 of the 1937 Act says that 'foreign award' means "an award
, on differences relating to matters considered as commercial under the.law in ,.
forc e in Indi a, made after July 28, 1994".
Section 2 of the Foreign Awards (Recognition and Enforcement) Act,
1961 says that the terms "foreign award' means "an award on differences
between persons ari sing out of the legal relationships, whether contractual or
not , considered as commercial under the law in force in India made on or
after the Il thdayofOctober, 1960....."
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Unit-III, Ch-lO) Enforcement of Foreign Arbitral Awards 175
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Section 2 of the Arbitration (Protocol and Convention) Act, 1937 does
not require the agreement for arbitration to be in writing, while the
applicability of Section 2 of the 1961 Act is conditioned on the existence of' -. = -'-c r.
a written agreement between the parties concerned. Another difference
between them is that the 1937 Act applies to any kind ofcommercial disputes,
but the 1961 Act regulates commercial disputes arising out of legal '
relationships. Thus the scope of the 1937 Act is wider than that of the 1961
Act.
4. Effects of Foreign Award:- Section 4 of the Protocol Act of 1937
deals with the effect of foreign award. It provides asfollows:
(i) A foreign award shall, subject to the provisions of this Act, be
enforceable in India as ifit were an award made on ,a matter referred
to arbitration in India.
[ ii) Any foreign award which would he enforceable under this Act shall
be treated as binding for all purposes on the persons as between whom
it was made, and may accordinglybe reliedon by any ofthose persons
by way of defence set-off or otherwise in any legal proceedings in
India,and any reference in this Act to enforcing a foreign award shall
be construed as including reference to relying on an award.
Section 4 ofthe 1961 Act is identical with the provisions of Section 4 of
the Protocol Act 1937.
5. Enforcement of Foreign Awards:- There is a fundamental
difference between the Protocol Act of 1937 and the Foreign Awards
(Recognition and Enforcement) Act, 1961 relating to enforcement of awards.
The main reason for this is that the New York Convention on which the 1961
Act is based prescribes rules relating to enforcement of foreign arbitral awards,
which differ from those incorporated in the Geneva Convention. The practical
strength ofthe New York Convention is found in this wholly revised scheme
of conditions' it prescribed for the Court seized of an enforcement matter.
Nevertheless, it has not attempted to make any alteration in the principle,
which -is fundamental 'to the Geneva Convention also, that the State whose
judicial machinery is set into motion for recognition and enforcement of a
foreign award may insist on compliance with certain minimum conditions
relating to the arbitral agreement, the arbitral proceedings and the award.
However, the amplitude of the power of scrutiny of the Courts of
enforcement, available to them under the Geneva Convention is curtailed
under the New York Convention. Under the Geneva Convention as well as
under the Protocol Act, the petitioner is charged with the duty ofestablishing
the finality ofan award in the country ofits origin. The petitioner is compelled
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Proceedings in Arbitral Tribunals (Unit-fi, Ch-l0
unit-ill, Ch-l0j Enforcement of Foreign Arbitral Awards 177,
to institute proceedings for a' judicial enforcement order testifying to the
II. Enforc,ement of Foreign Awards under the Arbitration and'
finality of the award in its country of origin. Besides, he has to disprove the
Conciliation Act, 1996 (part ni --'
existence of a number ofother grounds, barring enforcement. .
With the enactment of the Arbitration and Conciliation Act, 1996, the '
the 1961 Act, awards are deemed to be primafacie enforceable
Arbitration (Protocol & Convention) Act, 1937 and the Foreign Awards '
in the country in which they are relied upon. So a petitioner is required to
(Recognition & Enforcement) Act, 1961 which regulate the foreign arbitration .
produce in the enforcing forum no more than,the arbitral submission and the
agreements and awards stand repealed by Section 85 of the Act. The
text of the award. Adequate safeguards have been provided for the defendant
/' provisions of the repealed two enactments are incorporated in Chapter I and ,
underthe new Convention. The burden of proof is shifted to the defendant
Chapter II of Part II of the Act of 1996. It may be stated that Chapters I and '
in order to ensure, as far as possible, that these defences would not be '
II of the Part II of the Act of 1996 relate to awards made under the New York:
employed as devices to delay or frustrate arbitration proceedings. Moreover,
Convention and the Geneva Convention respectively. The provisions relating :
the enforcing authority is empowered to decline enforcement of award on
to enforcement of foreign award are almost similar to that of the domestic ,
grounds that the subject-matter ofthe dispute is not capable of settlement by
award and there is no difference-so far as enforcement of award is concerned. '
arbitration under its own law or that enforcement of award is opposed to the
It should be noted that Section 52 of the Act provides that Chapter I of Part
, public policy of the forum. .
IT exciudes the application of Chapter II but Chapter II does not exclude the,
6. Object of Enactments:- The object of the enactment of the
application ofChapter I.
Arbitration (Protocol and Convention) Act, 1937 and Foreign Awards
(Recognition and Enforcement) Act, 1961 is to enjoin parties to arbitration
agreements to abide by their undertakings relating to arbitration to achieve
this object, the statutes have adopted three measures:
(i) First, they recognize the validity of arbitral awards rendered by
, foreign arbitral tribunals in foreign lands, provided they fulfil certain
conditions laid down by them. '
(ii) Secondly, they provide adequate legal machinery for their
enforcement in India; and
(iii) Lastly, they discourage, resort to judicial proceedings intended to
vitiate the efficacy ofthe arbitration process by granting stay ofthose
judicial proceedings.
And the Courts have fulfilled-the-above statutory objectives with
admissible judicial acumen.
The Arbitration (Protocol and Convention) Act, 1937 and the Foreign
Awards (Recognition and Enforcement) Act, 1961 are repealed by Section
85 ofthe Arbitration and Conciliation Act, 1996 as the Act contained the New
York Convention Awards and Geneva Convention Awards in Chapters I &
II ofPart II, Enforcement of certain Foreign Awards and the Act of 1996 came
into force on 22nd August, 1996.
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