Arbitration

General Definition
"Arbitration" means any arbitration whether or not administered by permanent arbitral institution; "Arbitration agreement" means an agreement referred to in section 7; "Arbitral award" includes an interim award; "Arbitral tribunal" means a sole arbitrator or a panel of arbitrators;

General Definition
"Court" means the principal Civil Court of original jurisdiction in a district, 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 any Court of Small Causes;

General Definition
"international commercial arbitration" means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India and where at least one of the parties is An individual who is a national of, or habitually resident in, any country other than India; or A body corporate which is incorporated in any country other than India; or A company or an association or a body of individuals whose central management and control is exercised in any country other than India; or The Government of a foreign country;

General Definition
"legal representative" means a person who in law represents the estate of 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 of the party so acting; "Party" means a party to an arbitration agreement.

Arbitration
Definition: Arbitration is the process of bringing a business dispute before a disinterested third party for resolution. The third party, an arbitrator, hears the evidence brought by both sides and makes a decision. Sometimes that decision is binding on the parties.

Governing law of Arbitration

The Arbitration Act, 1940 dealt with only domestic arbitration intervention of the court was required in all the three stages of arbitration i.e. prior to the reference of the dispute to the arbitral tribunal in the duration of the proceedings before the arbitral tribunal after the award was passed by the arbitral tribunal

Governing law of Arbitration

The Arbitration and Conciliation Act, 1996

The 1996 Act has two significant parts Part 1: provides for any arbitration conducted in India and enforcement of awards thereunder. Part II provides for enforcement of foreign awards. Any arbitration conducted in India or enforcement of award thereunder (whether domestic or international) is governed by Part I, while enforcement of any foreign award to which the New York Convention or the Geneva Convention applies, is governed by Part II of the 1996 Act.

Governing law of Arbitration

The Arbitration and Conciliation Act, 1996 The 1996 Act contains two unusual features that differed from the UNCITRAL Model Law. First, while the UNICITRAL Model Law was designed to apply only to international commercial arbitrations, the 1996 Act applies both to international and domestic arbitrations. Second, the 1996 Act goes beyond the UNICITRAL Model Law in the area of minimizing judicial intervention.

Arbitration agreement
"arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. An arbitration agreement shall be in writing.

Arbitration agreement
An arbitration agreement is in writing if it is contained in A document signed by the parties; An exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or An exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.

Types of Arbitration
1. Domestic Arbitration Arbitration which takes place in India, when the subject matter of the contract, the merits of the 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 2. International Arbitration Arbitration becomes International when at least one of the parties involved is resident or domiciled, outside India or the subject matter of the dispute is abroad. The law applicable to an arbitration proceedings may be the Indian law or a foreign law, depending on the terms of the contract in this regard and the rules of conflict of laws

Types of Arbitration
3. Foreign Arbitration An arbitration conducted in a place outside India, where the resulting award is sought to be enforced as a foreign award & quot; 4. Ad Hoc Arbitration Arbitration agreed to and arranged by the parties themselves without recourse to an Institution. The proceedings are conducted by the arbitrator (s) as per the agreement between the parties & apos; or with concurrence of the parties It can be domestic, international or foreign arbitration

Types of Arbitration
5. Institutional arbitration An institutional arbitration is one in which a specialized institution with a permanent character intervenes and assumes the functions of aiding and administering the arbitral process, as provided by the rules of that institution

Arbitrator and Administration Fees (Indian Council of Arbitration)

Amount in Dispute Up to INR 0.5 million From INR 0.5 million one to INR 2.5 million Arbitrator's Fee (in INR) 30,000 30, 000 plus 1, 500 per one hundred thousand or part thereof subject to a ceiling of 60, 000 60, 000 plus 1, 200 per one hundred thousand or part thereof subject to a ceiling of 150, 000 150, 000 plus 22, 500 per ten million or part thereof subject to a ceiling of 240, 000 240, 000 plus 15, 000 per ten million or part thereof subject to a ceiling of 315, 000 315, 000 plus 12, 000 per ten million or part thereof Administrative Fee (in INR) 15,000 15, 000 plus 750 per one hundred thousand or part thereof subject to a ceiling of 30, 000 30, 000 plus 600 per one hundred thousand or part thereof subject to a ceiling of 75, 000 75, 000 plus 11, 250 per one hundred thousand or part thereof subject to a ceiling of 1 20, 000 120, 000 plus 8000 per ten million or part thereof subject to a ceiling of 160, 000 315, 000 plus 12, 000 per ten million or part thereof

From INR 2.5 million one to INR 10 million

From INR 10 million one to INR 50 million

From INR 50 million one to INR 100 million

Over INR 100 million

Disputes that may be referred

MATTERS THAT CAN BE REFERRED TO Sec 9 of CPC, 1908, inter alia, provides that all matters in ARBITRATION dispute between parties relating to private rights or obligations, which civil courts may take, cognizance of may be referred to arbitration

Example - Property ,Insurance ,Contract (including employment contracts) ,Business / partnership disputes ,Family disputes (except divorce matters), Construction ,Commercial recoveries Exception - Any matter, which is forbidden by any law or is against public policy, shall not be referred to arbitration

Disputes that can't be referred

1. Matrimonial matters e.g. divorce or restitution of conjugal rights 2. Testamentary matters like the validity of a will 3. Insolvency matters 4. The guardianship of a minor 5. Public charities and charitable trusts 6. Lunacy proceedings 7. Matters of criminal nature 8. Execution proceedings

Appointment of Arbitrators
(1) A person of any nationality may be an arbitrator (2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators. (3) Failing any agreement referred to in sub-section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator. (4) If the appointment procedure in sub-section (3) applies and (a) A party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or (b) The two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, The appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him.

Appointment of Arbitrators
(5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him (6) Where, under an appointment procedure agreed upon by the parties,(a) A party fails to act as required under that procedure; or (b) The parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or (c) A person, including an institution, fails to perform any function entrusted to him or it under that procedure, A party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment.

Appointment of Arbitrators
(7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) to the Chief Justice or the person or institution designated by him is final. (8) The Chief Justice or the person or institution designated by him, in appointing an arbitrator, shall have due regard to(a) Any qualifications required of the arbitrator by the agreement of the parties; and (b) Other considerations as are likely to secure the appointment of an independent and impartial arbitrator. (9) In the case of appointment of sole or third arbitrator in an international commercial arbitration, the Chief Justice of India or the person or institution designated by him may appoint an arbitrator of a nationality other than the nationalities of the parties where the parties belong to different nationalities.

Appointment of Arbitrators
(10) The Chief Justice may make such scheme as he may deem appropriate for dealing with matters entrusted by sub-section (4) or sub-section (5) or sub-section (6) to him. (11) Where more than one request has been made under sub-section (4) or sub-section (5) or sub-section (6) to the Chief Justices of different High Courts or their designates, the Chief Justice or his designate to whom the request has been first made under the relevant sub-section shall alone be competent to decide on the request. (12) (a) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in an international commercial arbitration the reference to "Chief Justice" in those sub-sections shall be construed as a reference to the "Chief Justice of India".

Appointment of Arbitrators
(b) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in any other arbitration, the reference to "Chief Justice" in those sub-section shall be construed as a reference to, the Chief Justice of the High Court within whose local limits the principal Civil Court referred to in clause (e) of sub-section (1) of section 2 is situate and, where the High Court itself is the "Court referred to in that clause, to the Chief Justice of that High Court

Arbitral Award
Section 35 of the Arbitration and Conciliation Act 1996 states that an arbitral award shall be final and binding on the parties and persons claiming under them. Thus an arbitral award becomes immediately enforceable unless challenged under Section 34 Sec.36 Enforcement : Where the time for making an application to set aside the arbitral award under section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as it were a decree of the court When the period for filing objections has expired or objections have been rejected, the award can be enforced under the Civil Procedure Code (CPC) in the same manner as if it were a decree passed by a court of law. Section 36 declares that an arbitral award has the force of the decree, though in fact it is not a decree

Check list before enforcement of Arbitral Award

A)Whether the Award is a valid Award ? An Award has to be valid before it is to be enforced An Award has to be made as provided u/s.31 of the Arbitration and Conciliation Act, 1996 The Award should state the reasons upon which the Award is based The Award has to state the date and place and is to be delivered to the parties

Check list before enforcement of Arbitral Award

B) Whether the time period of challenge of the Award is over? Section 34 provides for the manner of challenge of the arbitral Award. The time period for the challenge is the expiry of 3 Months from the date of receipt of the Award (and a further period of 30 days on sufficient cause being shown for condo nation of delay ) If that period expires the award holder can apply for enforcement of the Award as a decree of the Court. But as long as this period has not elapsed, enforcement is not possible.

Check list before enforcement of Arbitral Award

C) What happens when there is a challenge under Sec.34 of the Act The award can be enforced as a decree only when the application under Sec. 34 of the Act challenging the award has been disposed off

Arbitration in construction ARBITRATION

Arbitration has become recognized as the dispute settlement mechanism in the construction industry. It is seen as the final mode of dispute resolution which is beyond the usual attractions of arbitration, such as privacy, speed, flexibility and choice of the arbitrator.

In the construction industry, arbitration is the norm because, The prevalence of arbitration clauses in standard forms of contract The technical content of disputes, leading to the use of arbitrators skilled in technical disciplines The need in many disputes for the arbitrator be empowered to open up, review and revise decisions or certificates, arising from the architects or engineers judgment in administering the contract.

Arbitration in construction
Need of arbitration: Because of the distinctive nature of the construction contracts that contribute to the higher occurrence of disputes in the industry which require a conflict resolution mechanism like arbitration to resolving them. Reasons for distinctive nature: Delivery procedure Site specificity Late revelation of defects Payment and time Execution of work and delay Weather conditions

Case of Arbitration
Case: Khurda to Bhubaneswar 2 lane carriageway road project
Name of the project: Widening to 4/6 lanes and strengthening of existing 2 lane carriageway of NH-5 in the state of Orissa from km 387.700 to 414.000 (Khurda to Bhubaneswar) Claimant: GAMMON ATLANTA (Joint Venture) Respondent: NATIONAL HIGHWAYS AUTHORITY OF INDIA Total Project Cost:700.90 cr. Starting date: 15.01.2005

Case of Arbitration
Breaches of contract conditions committed by the respondent, Delay in appointment of independent engineer Delay in handing over the possession of the site of work: Delay in payment of work done Delay in giving decision: use of CRMB 60 in BC virtual suspension of BC work for several months Failure to sanction adequate extension of time from time to time Failure to constitute dispute review board

Thank You!!!
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