THE ARBITRATION AND

CONCILIATION ACT, 1996

 Why ADRs

 Resolutions of disputes through judicial

process is very time consuming and costly
in terms of time, money and energy.
 Litigations really weakens both the parties
and hence is not a business-based solution.
And so we need Alternate Dispute
Resolution
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 Methods of ADR

 Negotiation
 Mediation
 Conciliation
 Arbitration

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 Arbitration Defined :
Halsbury’s Law
An Arbitration is the reference of
a dispute between not less than
two parties, for determination,
after hearing both sides in a
judicial manner, by a person or
persons other than a court of
competent jurisdiction.

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 Different parts of the Act

Part I – Domestic arbitration

Part II – Enforcement of foreign awards.
Part III – Conciliation procedures.
Part IV – Supplementary provisions
First Schedule – Convention on recognition and enforcement of
foreign arbitral award as New York convention
Second Schedule –Protocol on Arbitration clauses.
Third Schedule - Convention on The execution of foreign arbitral award as
Geneva convention

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 Amendment of the law

 U. N. commission on international
trade law.(UNCITRAL) --1985 ---the
uniformity in the law of Arb procedures
and the specific needs of the
International Commercial Arb.
Practice.
 Rules for Conciliation added.

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 Advantages of Arbitration
Arbitration affords the parties
a choice of the law & a choice
of the judges that they do
want & more important to
reject the law which and to
reject the particular judge
whom they do not want.
•Binding dispute settlement
mechanism
 Objectives of Amendment
 Minimise the supervisory role of the Courts
 Arbitral Tribunal to give reasons for Award
 Permit Arb. Tribunal to use
Mediation,Conciliation, other procedures
 Arbitral Award enforced as if it were a decree
of the court
 Conciliation proceedings --same status and
effect as an Arbitral Award
 Foreign Awards

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 Expectations from Arbitration
 An impartial, and expert, tribunal or arbitrator
will decide the case.

 The parties can select arbitrators with expertise

in the issues and professionals who can be
expected to reach reasonable decisions founded
upon a mixture of law and industry custom.

 Privacy and confidentiality in contrast to

litigation in public forums.

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 Benefits for the Parties
 1. Choose the arbitrator(s);
 2. Choose the issues to be arbitrated;
 3. Choose the place of arbitration;
 4. Choose the substantive law that will control the
merits of the dispute;
 5. Choose the procedural rules;
 6. Choose the schedule;
 7. Choose exhibits, witnesses and other evidence to be
adduced
including arranging for tests and site visits;
 8. Choose the form of relief to be awarded;
 9. Choose the form of the award; and
 10. Agree to facilitate enforcement of the award.
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  In a country signatory to the New York
Convention on the Recognition and
Enforcement of Foreign Arbitral Awards
(the “New York Convention”) the Award
may be enforced relatively ( more than
120 signatory countries)

 No such all-encompassing Convention or

Treaty or legal regime applies to
judgments rendered in national courts.

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 ADVANTAGES OF
ARBITRATION
 Technical matter : appropriate special
qualifications of the Arbitrator.
 Speedier than a court case
 saving in the costs
 unwanted publicity can be avoided
 Convenience of the parties as to time and
place
 Arb. Can view subject at any reasonable
time
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 Conduct of arbitrations by permanent
institutions
 the International Chamber of Commerce's International
Court of Arbitration,
 World Intellectual Property Organization (WIPO)
Arbitration Center,
 American Arbitration Association (AAA),
 China International Economic and Trade Arbitration
Commission,
 Indian Council for Arbitration, or the
 International Center for Settlement of Investment
Disputes (ICSD),
 International Chamber of Commerce (“ICC”), located in
Paris.
 The American Arbitration Association (“AAA”)
 London Court of International Arbitration
 Arbitration Institute of the Stockholm Chamber of
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 TERMS OF AN ARBITRATION
AGREEMENT
 Insert lawful terms as parties wish
 terms must be stated with certainty
 powers of Arbitrator to be clearly stated
 questions to be determined by Arb .
 Any matters for exclusion of reference
 Any technical or legal bar to the parties
should be inserted
 Composition of Arbitral Tribunal

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 Disputes inappropriate for resolution by
arbitration
 French law: bankruptcy matters are inarbitrable.
 India:
 Matrimonial matters, like divorce or restitution of conjugal rights;
 matters relating to guardianship of a minor or other person under
disability;
 testamentary matters, for example, questions about the validity of
a will;
 insolvency matters, such as adjudication of a person as an
insolvent;
 criminal proceedings;
 questions relating to charities or charitable trusts;
 matters falling within the purview of the Monopolies and Restrictive
Trade Practices Act; dissolution or winding up of a company.
 matters involving morality, status and public policy cannot be
referred to arbitration.

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 THE ARBITRATION AND CONCILIATION
(AMENDMENT) BILL, 2003
 to enable the judicial authority to decide jurisdictional
issues,
 to empower the Courts to make reference to
arbitration in case all the parties to a legal proceeding
enter into an arbitration agreement to resolve their
disputes during the pendency of such proceeding
before it;
 to provide for the appointment of arbitrators by the
Chief Justice of the Supreme Court or the High Court
to prevent writ petitions being filed on the basis that it
is an administrative order of the Chief Justice.

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 THE ARBITRATION AND CONCILIATION
(AMENDMENT) BILL, 2003-2
 where the place of arbitration under Part I of is in
India, between Indian parties or an international
arbitration Indian law will apply.
 completion of arbitrations within one year; at the
end of one year the Court will fix up a time
schedule for completion of the proceedings until
the award is passed.
 empower the arbitral tribunal to pass peremptory
orders for implementation of interlocutory orders
and in case they are not implemented, to enable
the Court to order costs or pass other orders in
default.
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 THE ARBITRATION AND CONCILIATION
(AMENDMENT) BILL, 2003-3

 provide for the Arbitration Division in the High

Courts, for the speedy enforcement of awards
 provide provisions for speeding up and
completing all arbitrations
 to introduce a new Chapter XI relating to single
member fast track arbitral tribunal and award
will have to be pronounced within six months
and to specify procedure therefore in a new
Schedule.

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 Arbitration Agreement-Section -7

(1) an agreement ---to submit all or certain

disputes which have arisen or which may
arise---in respect of a defined legal
relationship, whether contractual or not.
(2) may be a part of a contract or in the
form of a separate agreement
(3) shall be in writing

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 Appointment of an Arbitrator
 Section -11:
(1) person of any nationality
(2) parties to agree on a procedure for appointment
of Arb.
 Failing agreement as in above -- the two Arb
shall appoint a third Arb who shall act as the
presiding Arb---Umpire.
 30 days
 failing which CJ or any person or institution
designated by him
 Sec. 16--may rule on its own jurisdiction

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 Procedure by Arbitrator
 Delivery of points of claim and
defence--similar to pleadings
 particulars of claim and counterclaim
 discovery and inspection of documents
 inspection of property and things by (1)
arbitrator (2) parties
 fixing the time and place of hearing

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 Procedure
 Claimant (or advocate) opens his case
---also defence to counterclaim
 Claimant calls and examines his witness--
who may be cross -examined by the
respondent
 Claimant may re-examine him
 Respondent opens his case
 Respondent calls and examines his witness-
may be cross examined by the claimant

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  If witness is cross examined the Respondent may
re-examine him
 Respondent addresses the Arbitrator
 The claimant replies
 Sec.19 ---not bound by CPC.1908 or the IEA
1872---Freedom to agree on the procedure to be
followed
 Sec.20 ----place of arb
 Evidence--Oral , Documentary, Heresay,Primary
Evidence, Secondary Evidence

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 JUDICIAL INTERVENTION
 Sec.8--shall refer the matter to Arb. In a matter
which is the subject of an Arb.
 Sec. 35 --finality of Arb. Awards
 Sec. 34--court can set aside
 1.incapacity of the parties.
 2.not valid under law.3.no proper notice.4.
beyond the scope of the matter decided to be
referred to Arb.5. Composition of the Arb.
Tribunal defective.

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Sec. 34--court can set aside Arb. Award

1. Incapacity of the parties.

2. Not valid under law.
3. No proper notice.
4. Beyond the scope of the matter
decided to be referred to Arb.
5. Composition of the Arb. Tribunal
defective.

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  No second appeal will lie from an order passsed in
an appeal:: right to appeal to the S.C. is not
affected Sec.--37
 Mandatory for judicial authority to refer to Arb.
Sec.---45
 Limitation act 1963 shall apply to proceedings in
Arb. Sec.---43
 Time commenced --on the date on which the
request for the dispute to be referred to arb is
received by the respondent Sec ---21

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Content of Arb. Award
Sec. 31---
(1) shall be made in writing& signed by the Arb.
Tribunal
(3) shall state the reasons , unless
(a) parties have agreed no reasons be given
(b)
award under agreed terms under Sec. 30
(4) state date and place
(5) signed copy delivered to each party
(6) interim award

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  (7)(a) payment of money: include in the sum
for which award is made ---interest to paid
from date on which cause of action arose
& the date on which award is made
 (b) provision of 18% interest from the date of
award to the date of payment------unless
the award otherwise directs.
 Award does not transfer a property : parties
are directed to execute conveyance or other
wise make a transfer of the property in dispute

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