ADR FAQs

IDRC stands for Indian Dispute Resolution Centre.

It is an initiative of 'Indian Dispute Resolution Council', subsidiary of a Not-for-Profit Organisation ‘International Dispute Resolution Council’, which is a Company duly registered with Ministry of Corporate Affairs, Government of India (Registration No.: U93000DL2020NPL365512) and is also registered with NITI Aayog (Registration No: DL/2020/0261004).

IDRC is duly empanelled with Ministry of Law & Justice, Government of India

IDRC is duly empanelled with Ministry of Law & Justice, Government of India for providing Alternative Dispute Resolution services through Arbitration, Mediation and Conciliation online to Government Ministries, Departments, Organizations and Public Sector Undertakings.

IDRC was inauguratied by Hon'ble Mr. Justice AK Sikri, Former Judge Supreme Court and International Judge, Singapore International Commercial Court.

 NITI Aayog CEO Sh. Amitabh Kant had also graced an event organized by IDRC where he stressed that small and medium value disputes of NBFCs and MSMEs shall be decided by adopting ADR methods and professional online platforms like IDRC can help leverage India's position in 'Enforcement of Contract' and 'Ease of Doing Business'.

IDRC has affiliate Centres pan India but also in Asia Pacific and Europe

Today, IDRC is not only the leading digital Arbitration Institution in India, but also has its Affiliate Centres pan India but also in Asia Pacific and Europe, handling hundreds of domestic and international arbitrations.

IDRC also provides services of Expert Determination and Early Neutral Evaluation as also education and training in alternative dispute resolution mechanisms through its Indian Institute of Arbitration – IIArb, Indian Institute of Mediation (IIMed) and Indian Institute of Dispute Resolution (IIDR).

IDRC Headquaters

Indian Dispute Resolution Centre
703-704, Indraprakash Building,  Barakhamba Road
Connaught Place, New Delhi, 110001

IDRC Corporate Office

Indian Dispute Resolution Centre
10, Third Floor, Poddar House, 'A' Lane
Marine Drive, Mumbai, 400020

IDRC NCR Office

Indian Dispute Resolution Centre
395, MSR Heights, NH-10, Opp. City Park
Bahadurgarh, Haryana - 124507

IDRC Contact Details

Tel. : 
+91 9968 141414
+91 9563 141414
+91 11 4652 1414
E-mail : info@theidrc.com
Website : www.theidrc.com

The Indian Dispute Resolution Centre is an initiative of 'Indian Dispute Resolution Council'.

It is subsidiary of a Not-for-Profit Organisation ‘International Dispute Resolution Council’, which in turn is a Company which is duly registered with Ministry of Corporate Affairs, Government of India (Registration No.: U93000DL2020NPL365512).

Indian Dispute Resolution Centre is also registered with NITI Aayog

Indian Dispute Resolution Centre is also registered with NITI Aayog (Registration No: DL/2020/0261004).

IDRC is duly empanelled with Ministry of Law & Justice, Government of India for providing Alternative Dispute Resolution services through Arbitration, Mediation and Conciliation online to Government Ministries, Departments, Organizations and Public Sector Undertakings.

Indian Dispute Resolution Centre was Inauguratied by Hon'ble Mr. Justice AK Sikri, Former Judge Supreme Court of India and International Judge, Singapore International Commercial Court. 

NITI Aayog CEO Sh. Amitabh Kant had also graced an event organized by IDRC

NITI Aayog CEO Sh. Amitabh Kant had also graced an event organized by IDRC where he stressed that small and medium value disputes of NBFCs and MSMEs shall be decided by adopting ADR methods and professional online platforms like IDRC can help leverage India's position in 'Enforcement of Contract' and 'Ease of Doing Business'.

Today, IDRC is not only the leading digital Arbitration Institution in India, but also has its Affiliate Centres pan India but also in Asia Pacific and Europe, handling hundreds of domestic and international arbitrations.

IDRC also provides related services like Expert Determination and Early Neutral Evaluation as also education and training in alternative dispute resolution mechanisms through its Indian Institute of Arbitration – IIArb, Indian Institute of Mediation (IIMed) and Indian Institute of Dispute Resolution (IIDR).

IDRC Headquaters

Indian Dispute Resolution Centre
703-704, Indraprakash Building,  Barakhamba Road,
Connaught Place, New Delhi, 11000

IDRC Corporate Office

Indian Dispute Resolution Centre
10, Third Floor, Poddar House, A Lane,
Marine Drive, Mumbai,400020

IDRC NCR Office

Indian Dispute Resolution Centre
395, MSR Heights, NH-10, Opp. City Park,
Bahadurgarh, Haryana-124507

IDRC Contact Details

Tel. : 
+91 9968 141414
+91 9563 141414
+91 11 4652 1414
E-mail : info@theidrc.com
Website : www.theidrc.com

IDRC Headquaters

Indian Dispute Resolution Centre
703-704, Indraprakash Building,  Barakhamba Road,
Connaught Place, New Delhi, 11000

IDRC Corporate Office

Indian Dispute Resolution Centre
10, Third Floor, Poddar House, A Lane,
Marine Drive, Mumbai,400020

IDRC NCR Office

Indian Dispute Resolution Centre
395, MSR Heights, NH-10, Opp. City Park,
Bahadurgarh, Haryana-124507

IDRC Contact Details

Tel. : 
+91 9968 141414
+91 9563 141414
+91 11 4652 1414
E-mail : info@theidrc.com
Website : www.theidrc.com

IDRC stands for Indian Dispute Resolution Centre

IDRC was Inauguratied by Hon'ble Mr. Justice AK Sikri, Former Judge Supreme Court and International Judge, Singapore International Commercial Court. 

NITI Aayog CEO Sh. Amitabh Kant had also graced an event organized by IDRC where he stressed that small and medium value disputes of NBFCs and MSMEs shall be decided by adopting ADR methods and professional online platforms like IDRC can help leverage India's position in 'Enforcement of Contract' and 'Ease of Doing Business'.

Indian Dispute Resolution Council is a subsidiary of a Not-for-Profit Organisation International Dispute Resolution Council

It is an initiative of 'Indian Dispute Resolution Council', subsidiary of a Not-for-Profit Organisation ‘International Dispute Resolution Council’, which is a Company duly registered with Ministry of Corporate Affairs, Government of India (Registration No.: U93000DL2020NPL365512) and is also registered with NITI Aayog (Registration No: DL/2020/0261004).

IDRC is duly empanelled with Ministry of Law & Justice, Government of India

IDRC is duly empanelled with Ministry of Law & Justice, Government of India for providing Alternative Dispute Resolution services through Arbitration, Mediation and Conciliation online to Government Ministries, Departments, Organizations and Public Sector Undertakings.

IDRC Headquaters-

Indian Dispute Resolution Centre
703-704, Indraprakash Building,  Barakhamba Road,
Connaught Place, New Delhi, 110001

IDRC Corporate Office-

Indian Dispute Resolution Centre
10, Third Floor, Poddar House, A Lane,
Marine Drive, Mumbai,400020

IDRC NCR Office-

Indian Dispute Resolution Centre
395, MSR Heights, NH-10, Opp. City Park,
Bahadurgarh, Haryana-124507

IDRC Contact Details-

Tel. : 
+91 9968 141414
+91 9563 141414
+91 11 4652 1414
E-mail : info@theidrc.com
Website : www.theidrc.com

The term Arbitrator is not defined under The Arbitration and Conciliation Act, 1996

The term Arbitrator is not defined under The Arbitration and Conciliation Act, 1996, while all related terms like Arbitration, Arbitration Agreement, Arbitration Award, Arbitral Tribunal and Arbitration Institution stands defined.

Section 11 of The Arbitration and Conciliation Act, 1996 provides that a Person of any Nationality can become an Arbitrator

Section 11 of The Arbitration and Conciliation Act, 1996 provides that a Person of any Nationality can become an Arbitrator, unless agreed otherwise by the Parties. 

The original Arbitration and Conciliation Act, 1996 did not provide for any qualification for becoming an Arbitrator.

While the original Act aimed to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and for matters connected therewith or incidental thereto but it did not provide any qualification for Arbitrators.

Arbitration and Conciliation (Amendment) Act, 2019 introduced Eighth Schedule which laid qualification for Arbitrators in India

In Arbitration and Conciliation (Amendment) Act, 2019 a whole Eighth Schedule was dedicated to lay down the qualifications of an Arbitrator but the 2019 Amendment was not received well due to the introduction of such tough norms which were quite restrictive and contrary to the nature of independence of arbitration itself. The norms were looked upon as those affecting the party autonomy.

On March 10, 2021, the Arbitration and Conciliation (Amendment) Act, 2021 gained Parliamentary assent and is deemed to have come into force on November 04, 2020, thereby replacing the Arbitration and Conciliation (Amendment) Ordinance, 2020 promulgated by the President of India on November 04, 2020. 

Arbitration and Conciliation (Amendment) Act, 2021 omitted the Eighth Schedule from Arbitration and Conciliation Act, 1996

The 2021 Amendment also omitted the Eighth Schedule which was introduced by way of 2019 Amendment on 09.08.2019 and provided for Qualification of an Arbitrator.

Section 43J.of The Arbitration and Conciliation Act, 1996 provides that the qualifications, experience and norms for accreditation of arbitrators shall be such as may be specified by the regulations.In addition, it was noted that the 2019 Amendment left no opportunity for foreign qualified professionals to be appointed in Arbitrations in India, which would greatly affect and compromise the freedom of parties to opt for arbitrator(s) of their choice.

Law in India does not prescribe any specific qualifications for becoming an Arbitrators

Consequently the Legal position as on date is that the Law in India does not prescribe any specific qualifications for becoming an Arbitrators. Any person who is of major in age and is of sound mind can be appointed as an Arbitrator.

Institutional Arbitration Centres like IDRC have included wide range of experts in their panel after drawing them from Judiciary including Former Chief Justice of India, Supreme Court Judges, HIgh Court Chief Justices, High Court Judges and Judges of District Courts.

Also Domain Experts from various other professions, trade and business are empanelled including CAs, Doctors, Corporate Leaders, Public Sector Executives and Engineers. The Panel of persons are prepared on the basis of their proven track-record of impartiality, for their domain knowledge, experience and integrity.

Eighth Schedule of Arbitration and Conciliation Act, 1996

(Now Omitted)

A person shall not be qualified to be an arbitrator unless he -
(i) is an advocate within the meaning of the Advocates Act, 1961 (25 of 1961) having ten years of practice experience as an advocate; or

(ii) is a chartered accountant within the meaning of the Chartered Accountants Act, 1949 (61 of 1949) having ten years of practice experience as a chartered accountant; or

(iii) is a cost accountant within the meaning of the Cost and Works Accountants Act, 1959 (23 of 1959) having ten years of practice experience as a cost accountant; or

(iv) is a company secretary within the meaning of the Company Secretaries Act, 1980 (56 of 1980) having ten years of practice experience as a company secretary; or

(v) has been an officer of the Indian Legal Service; or

(vi) has been an officer with law degree having ten years of experience in the legal matters in the Government, Autonomous Body, Public Sector Undertaking or at a senior level managerial position in private sector; or

(vii) has been an officer with engineering degree having ten years of experience as an engineer in the Government, Autonomous Body, Public Sector Undertaking or at a senior level managerial position in private sector or self-employed; or

(viii) has been an officer having senior level experience of administration in the Central Government or State Government or having experience of senior level management of a Public Sector Undertaking or a Government company or a private company of repute;

(ix) is a person, in any other case, having educational qualification at degree level with ten years of experience in scientific or technical stream in the fields of telecom, information technology, Intellectual Property Rights or other specialised areas in the Government, Autonomous Body, Public Sector Undertaking or a senior level managerial position in a private sector, as the case may be.

General norms applicable to Arbitrator

(i) The arbitrator shall be a person of general reputation of fairness, integrity and capable to apply objectivity in arriving at settlement of disputes;

(ii) the arbitrator must be impartial and neutral and avoid entering into any financial business or other relationship that is likely to affect impartiality or might reasonably create an appearance of partiality or bias amongst the parties;

(iii) the arbitrator should not involve in any legal proceeding and avoid any potential conflict connected with any dispute to be arbitrated by him;

(iv) the arbitrator should not have been convicted of an offence involving moral turpitude or economic offence;

(v) the arbitrator shall be conversant with the Constitution of India, principles of natural justice, equity, common and customary laws, commercial laws, labour laws, law of torts, making and enforcing the arbitral awards;

(vi) the arbitrator should possess robust understanding of the domestic and international legal system on arbitration and international best practices in regard thereto;

(vii) the arbitrator should be able to understand key elements of contractual obligations in civil and commercial disputes and be able to apply legal principles to a situation under dispute and also to apply judicial decisions on a given matter relating to arbitration; and

(viii) the arbitrator should be capable of suggesting, recommending or writing a reasoned and enforceable arbitral award in any dispute which comes before him for adjudication.

IDRC stands for Indian Dispute Resolution Centre.

It is an initiative of 'Indian Dispute Resolution Council', subsidiary of a Not-for-Profit Organisation ‘International Dispute Resolution Council’, which is a Company duly registered with Ministry of Corporate Affairs, Government of India (Registration No.: U93000DL2020NPL365512) and is also registered with NITI Aayog (Registration No: DL/2020/0261004).

IDRC Headquaters

Indian Dispute Resolution Centre
703-704, Indraprakash Building,  Barakhamba Road,
Connaught Place, New Delhi, 110001

IDRC Contact Details

Tel.: 
+91 9968 141414
+91 9563 141414,
+91 11 4652 1414
E-mail : info@theidrc.com
Website : www.theidrc.com

IDRC stands for Indian Dispute Resolution Centre.

It is an initiative of 'Indian Dispute Resolution Council', subsidiary of a Not-for-Profit Organisation ‘International Dispute Resolution Council’, which is a Company duly registered with Ministry of Corporate Affairs, Government of India (Registration No.: U93000DL2020NPL365512) and is also registered with NITI Aayog (Registration No: DL/2020/0261004).

IDRC Corporate Office

Indian Dispute Resolution Centre
10, Third Floor, Poddar House, A Lane,
Marine Drive, Mumbai, 400020

IDRC Contact Details-

Tel.: 
+91 9968 141414
+91 9563 141414,
+91 11 4652 1414
E-mail : info@theidrc.com
Website : www.theidrc.com

IDRC is an ideal choice for Institutional Arbitration in India

IDRC is an ideal choice for Institutional Arbitration in India since-

• IDRC is a duly registered Company under Section 8 of Companies Act, 2013 under Registration Number: U93000DL2020NPL365512;
• IDRC is a not-for-profit entity run by Professionals;
• IDRC is duly registered with NITI Aayog under Registration No: DL/2020/0261004;
• IDRC is duly empanelled with Ministry of Law and Justice, Govt of India for providing Arbitration and other ADR Services under F.No.A-60011/97/2018-Admin.III (LA) Dt. 18.09.2020;

IDRC has in-house Domestic Arbitration, Mediation and Conciliation Rules

• IDRC has its own Panel of Arbitrators and Mediators which includes former CJIs, SC Judges, HC Chief Justices, HC/District Court Judges, former Secretaries to GoI, CAs, CMDs and Directors of PSUs, Corporate Leaders & more;
• IDRC also has Overseas Arbitrators including Kings Counsels in London, Singapore, Kuala Lampur and more;
• IDRC has its in-house state-of-the-art software where claim petitions can be filed in bulk 24x7 by e-filing mode;

IDRC eArbitration and eADR software can carry out entire Arbitration in a paperless mode on cloud

• IDRC has its Headquarter in commercial hub of Connaught Place, New Delhi and Corporate Office at Marine Drive, Mumbai;
• IDRC has its physical presence at all important Cities in India and world over;
• IDRC has its in-house ADR Legal Education wings namely Indian Institute of Arbitration (IIArb), Indian Institute of Mediation (IIMed) and Indian Institute of Dispute Resolution (IIDR).

What is Mediation Process

‘Mediation’ means the process by which a Mediator appointed by parties or by the Court, as the case may be, mediates the dispute between the parties to the suit by facilitating discussion between parties directly or by communicating with each other through the Mediator, by assisting parties in identifying issues, reducing misunderstandings, clarifying priorities, exploring areas of compromise, generating options in an attempt to solve the dispute and emphasising that it is the parties own responsibility for making decisions which affect them.

Mediation has been defined in the Cambridge Dictionary as "the process of talking to two separate people or groups involved in a disagreement to try to help them to agree or find a solution to their problems."

No Statute codified by the Parliament or the State Legislature dedicated to regulate Mediation in India

The only reference of Mediation we can find is in Section 89 of the Code of Civil Procedure, 1908 -

PART V

Special Proceedings

Arbitration

 [89. Settlement of disputes outside the Court .-

(1) Where it appears to the Court that there exist elements of a settlement which may be acceptable to the parties, the Court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observations of the parties, the Court may reformulate the terms of a possible settlement and refer the same for-
(a) arbitration;
(b) conciliation;
(c) judicial settlement including settlement through Lok Adalat; or
(d) mediation.

(2) Where a dispute has been referred-
(a) for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the provisions of that Act;
(b) to Lok Adalat, the Court shall refer the same to the Lok Adalat in accordance with the provisions of sub-section (1) of section 20 of the Legal Services Authority Act, 1987 (39 of 1987) and all other provisions of that Act shall apply in respect of the dispute so referred to the Lok Adalat;
(c) for judicial settlement, the Court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal Services Authority Act, 1987 (39 of 1987) shall apply as if the dispute were referred to a Lok Adalat under the provisions of that Act;
(d) for mediation, the Court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.]

Generally speaking the Mediation is a purely voluntary process whereby structured negotiation is facilitated and carried out with the assistance of a neutral third party. The aim is to amicably resolve their dispute in a mutually acceptable manner. 

The neutral third party, called the Mediator, actively participates in the negotiation process to help parties evaluate the options and to find the acceptable terms of agreement.

The Mediator plays an important role in helping the Parties in communicating with each other and perform various duties to facilitate  an amicable settlement. 

High Court of Delhi has promulgated Mediation and Conciliation Rules, 2004

Rule 2 of The Delhi High Court's Mediation and Conciliation Rules, 2004 provides that parties to a suit or other proceedings, may agree on the sole mediator or group of mediators for mediation between them. The parties may either appoint the mediators by their own or may appoint the mediator from the panel of mediators prepared by the High Court or the Session/District Courts under Rule 3 of the Mediation and Conciliation Rules, 2004. Therefore, the autonomy to appoint the mediator is given to the parties.

The category of persons who may be empaneled as Mediator under Rule 3 of Mediation and Conciliation Rules, 2004 by the Delhi Hight Court, Session/District Courts must have the following qualifications given under Rule 4 of the 2004 rules.

Following persons can be empanelled as Mediators in India

• Retired Judge of the Supreme Court of India
• Retired Judge of High Court
• Retired District and Session Judge
• Retired Officers of Delhi Higher Judicial Services
• District and Sessions Judge
• Officers of Delhi Higher Judicial Services
• Legal practitioner with at least 10 years standing at the bar at the level of the Supreme Court, High Court and District Court
• Expert or other professionals with at least fifteen years standing
• Persons who are themselves expert in the mediation

However, parties can exercise the autonomy given to them and appoint a mediation beyond the above qualifications. There are some disqualifications of a mediator set out in Rule 5 of The Mediation and Conciliation Rules, 2004. 

Following persons are not qualified to be empaneled as a Mediator in India

• Person adjudicated as insolvent
• Against whom criminal charges involving moral turpitude are framed by a criminal court and are pending
• Persons convicted by a criminal court for any offence involving moral turpitude
• Any person against whom disciplinary proceedings have been initiated which are pending or have resulted in a punishment
• Any person who is connected or interested in the subject matters of the dispute
• Any legal practitioner who is appearing for any of the parties in the suit

Clause (c) of Rule 3 also specifies that the consent of the person whose names are included in the panel must be obtained.

According to Clause (c) of Rule 2 of The Mediation and Conciliation Rules, 2004 the mediator(s) appointed by the parties need not necessarily be from the panel of mediators referred to in Rule 3 nor bear the qualifications referred to in Rule 4 but should not be a person who suffers from disqualifications referred to in Rule 5.

In better part of the Country Mediation still continues to ne a Court attached ADR Process which is primarily used for amicable settlement of Sub-judice Cases.

The concept of private Mediation has somehow not picked up in India on account of non availablity of a method of ensuring enforceablity of Private Mediated Settlements.

The Court attached Mediations being carried out of permitted to be done by only such Advocates or Judges who have undergone 40 Hours intensive Mediation Training Course, as designed by the Mediation and Conciliation Project Committee, MCPC of Supreme Court of India.

Some institutions like Indian Institute of Mediation, IIMed are carrying out the 40 hours Training for Mediation but they instill and provide settlement skills to help Parties to a dispute aalso work as Conciliator arrive at an amicable settlement. Private Mediators can function as Conciliators under Arbitration and Conciliation Act, 1996. This will provide the necessary legitimacy for enforceablity of the Settlement Agreement.

Pre-Institution Mediation under Commercial Courts Act, 2015

Lately after promulgation of Commercial Courts Act, 2015 in order to leverage India's position in Ease of Doing Business (EoDB) a Concept of mandatory 90 days Pre-Institution Mediation was introduce in all Commercial Disputes by way Commercial Courts Pre-Institution Mediation Rules, 2018.

How ever it was provided that the Mediation shall be carried out by Mediation Centres run by Institutions functioning under Legal Services Authorities under Legal Service Authorities Act, 1987. For this purpose Notification of Legal Service Institutions for Pre Institution Mediation in Commercial Disputes, 2018 wa carried out apart from Section 12A of the Commercial Courts Act, 2015 -

[CHAPTER III A]

Pre-Institution Mediation and Settlement

Section 12A. Pre-Institution Mediation and Settlement -

(1) A suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government.

(2) The Central Government may, by notification, authorise the Authorities constituted under the Legal Services Authorities Act, 1987, for the purpose of pre-institution mediation.

(3) Notwithstanding anything contained in the Legal Services Authorities Act, 1987, the Authority authorised by the central Government under sub-section (2) shall complete the process of mediation within a period of three months from the date of application made by the plaintiff under sub-section (1):

Provided that the period of mediation may be extended for a further period of two months with the consent of the parties:

Provided further that, the period during which the parties remained occupied with the pre-institution mediation, such period shall not be computed for the purpose of limitation under the Limitation Act, 1963.

(4) If the parties to the commercial dispute arrive at a settlement, the same shall be reduced into writing and shall be signed by the parties to the dispute and the mediator.

(5) The settlement arrived at under this section shall have the same status and effect as if it is an arbitral award on agreed terms under sub-section (4) of section 30 of the Arbitration and Conciliation Act, 1996.

Mediation as an ADR method for dispute resolution

‘Mediation’ means the process by which a Mediator appointed by parties or by the Court, as the case may be, mediates the dispute between the parties to the suit by facilitating discussion between parties directly or by communicating with each other through the Mediator, by assisting parties in identifying issues, reducing misunderstandings, clarifying priorities, exploring areas of compromise, generating options in an attempt to solve the dispute and emphasising that it is the parties own responsibility for making decisions which affect them.

Mediation has been defined in the Cambridge Dictionary as "the process of talking to two separate people or groups involved in a disagreement to try to help them to agree or find a solution to their problems."

In better part of the Country Mediation still continues to ne a Court attached ADR Process which is primarily used for amicable settlement of Sub-judice Cases.

Concept of private Mediation has not gained popularity in India

The concept of private Mediation has somehow not picked up in India on account of non availablity of a method of ensuring enforceablity of Private Mediated Settlements.

The Court attached Mediations being carried out of permitted to be done by only such Advocates or Judges who have undergone 40 Hours intensive Mediation Training Course, as designed by the Mediation and Conciliation Project Committee, MCPC of Supreme Court of India.

Indian Institute of Mediation, IIMed are carrying out the 40 hours Mediation Training in India

Some institutions like Indian Institute of Mediation, IIMed are carrying out the 40 hours Training for Mediation but they instill and provide settlement skills to help Parties to a dispute aalso work as Conciliator arrive at an amicable settlement. Private Mediators can function as Conciliators under Arbitration and Conciliation Act, 1996. This will provide the necessary legitimacy for enforceablity of the Settlement Agreement.

Lately after promulgation of Commercial Courts Act, 2015 in order to leverage India's position in Ease of Doing Business (EoDB) a Concept of mandatory 90 days Pre-Institution Mediation was introduce in all Commercial Disputes by way Commercial Courts Pre-Institution Mediation Rules, 2018.

How ever it was provided that the Mediation shall be carried out by Mediation Centres run by Institutions functioning under Legal Services Authorities under Legal Service Authorities Act, 1987. For this purpose Notification of Legal Service Institutions for Pre Institution Mediation in Commercial Disputes, 2018 wa carried out apart from Section 12A of the Commercial Courts Act, 2015.

High Court of Delhi has drafted Mediation and Conciliation Rules, 2004

Rule 2 of The Delhi High Court's Mediation and Conciliation Rules, 2004 provides that parties to a suit or other proceedings, may agree on the sole mediator or group of mediators for mediation between them. The parties may either appoint the mediators by their own or may appoint the mediator from the panel of mediators prepared by the High Court or the Session/District Courts under Rule 3 of the Mediation and Conciliation Rules, 2004. Therefore, the autonomy to appoint the mediator is given to the parties.

The category of persons who may be empaneled as Mediator under Rule 3 of Mediation and Conciliation Rules, 2004 by the Delhi Hight Court, Session/District Courts must have the following qualifications given under Rule 4 of the 2004 rules.

Qualification of Persons who can be empanelled as Mediators in India

• Retired Judge of the Supreme Court of India
• Retired Judge of High Court
• Retired District and Session Judge
• Retired Officers of Delhi Higher Judicial Services
• District and Sessions Judge
• Officers of Delhi Higher Judicial Services
• Legal practitioner with at least 10 years standing at the bar at the level of the Supreme Court, High Court and District Court
• Expert or other professionals with at least fifteen years standing
• Persons who are themselves expert in the mediation

However, parties can exercise the autonomy given to them and appoint a mediation beyond the above qualifications. There are some disqualifications of a mediator set out in Rule 5 of The Mediation and Conciliation Rules, 2004. 

Persons who cannot be empanelled as Mediators in India

• Person adjudicated as insolvent
• Against whom criminal charges involving moral turpitude are framed by a criminal court and are pending
• Persons convicted by a criminal court for any offence involving moral turpitude
• Any person against whom disciplinary proceedings have been initiated which are pending or have resulted in a punishment
• Any person who is connected or interested in the subject matters of the dispute
• Any legal practitioner who is appearing for any of the parties in the suit

Clause (c) of Rule 3 also specifies that the consent of the person whose names are included in the panel must be obtained.

According to Clause (c) of Rule 2 of The Mediation and Conciliation Rules, 2004 the mediator(s) appointed by the parties need not necessarily be from the panel of mediators referred to in Rule 3 nor bear the qualifications referred to in Rule 4 but should not be a person who suffers from disqualifications referred to in Rule 5.

Conciliation is governed by Part III Sections 61 to 81 of The Arbitration and Conciliation Act, 1996. 

Section 64 of the Arbitration and Conciliation Act, 1996 provides that Parties to a dispute are free to appoint any Person as Conciliator.

When the invitation to the conciliation is accepted by the other party, the parties have to agree on the composition of the conciliation tribunal. In the absence of any agreement to the contrary, there shall be only one sole Conciliator. 

In case parties wish to have a panel of Two Conciliators, they may appoint one Conciliator each.

In Conciliation proceedings with three Conciliators, each party may appoint one Conciliator and the parties may agree on the name of the third Conciliator who shall act as the presiding Conciliator.

The parties to the dispute may instead of appointing the Conciliator themselves may enlist the assistance of an institution or person of their choice for appointment of Conciliators. But the institution or the person should keep in view during appointment that, the conciliator is independent and impartial.

Although the Law is silent on the qualifications of Conciliators, but person appointed as a Conciliator shall:

• be major in age;
• be of sound mind 
• bear High moral character;
• have recognized competence in the fields of Law, Commerce or Finance; 
• have a prooven track record of public morality and carry high integrity;
• not have any conflict of interest;
• be proficient in language which parties can speak and understand;
• have some experience in ADR methodologies; and
• have the capacity to carryout Conciliation in an independent and impartial manner without any fear or favour.

There is no nationality precondition in Conciliation cases.

As per IDRC Conciliation Rules, Conciliator can be appointed by the parties themselves of their own choice with consensus i.e. both should agree upon the appointment of the Conciliator. IDRC has a Panel of Conciliators with rich experience in varied fields.

Principles governing Conciliation includes-
 

1) Confidentiality [Section 70]-
The Conciliator and the parties are bound in Law to maintain confidentiality in all matters relating to Conciliation process. Any information received by the Conciliator shall be kept confidential and the Conciliator should not disclose that information to the other party unless specific consent is obtained.

2) Independence and impartiality [Section 67(1)]-
Conciliator shall function in an independent and impartial manner. He/she shall assist the parties in a manner which is without any fear or favourvwhile attempt is made to reach an amicable settlement of their dispute.

3) Fairness and justice[Section 67(2)]-
Conciliator shall be guided by the principles of neutrality, fairness and justice. He should take into consideration, among other things, the rights and obligations of the parties, the usages of the trade concerned and the circumstances surrounding the dispute, including any previous business practices between the parties.

4) Disclosure of the information[Section 70]-
Any information received by the Conciliator about any fact relating to the dispute from a party, he should disclose the substance of that information to the other party without consent.

5) Co-operation of the parties with Conciliator [S. 71]-
The disputing parties shall in good faith fully cooperate with the Conciliator. Parties should submit the written materials , provide evidence and attend meetings when the conciliator requests them for this purpose.

Conciliation is an Alternative Dispute Resolution, ADR process for amicable settlement of disputes

Conciliation is an option out-of-court dispute resolution instrument whereby the parties to a dispute use a conciliator, who meets with the parties both separately and together in an attempt to resolve their differences. It is governed by Part III Sections 61 to 81 of The Arbitration and Conciliation Act, 1996. 

Part III Sections 61 to 81 of The Arbitration and Conciliation Act, 1996 governs Conciliation

Section 64 of the Arbitration and Conciliation Act, 1996 provides that Parties to a dispute are free to appoint any Person as Conciliator.

When the invitation to the conciliation is accepted by the other party, the parties have to agree on the composition of the conciliation tribunal. In the absence of any agreement to the contrary, there shall be only one sole Conciliator. 

In case parties wish to have a panel of Two Conciliators, they may appoint one Conciliator each.

In Conciliation proceedings with three Conciliators, each party may appoint one Conciliator and the parties may agree on the name of the Third Conciliator who shall act as the Presiding Conciliator.

The parties to the dispute may instead of appointing the Conciliator themselves may enlist the assistance of an institution or person of their choice for appointment of Conciliators. But the institution or the person should keep in view during appointment that, the Conciliator is independent and impartial.

Qualifications needed for becoming a Conciliator in India

Although the Law is silent on the qualifications of Conciliators, but in order to become a Conciliator the Person shall:

• be of major age;
• be of sound mind 
• bear High moral character;
• have recognized competence in the fields of Law, Commerce or Finance; 
• have a prooven track record of public morality and carry high integrity;
• not have any conflict of interest;
• be proficient in language which parties can speak and understand;
• have some experience in ADR methodologies; and
• have the capacity to carryout Conciliation in an independent and impartial manner without any fear or favour.

There is no nationality precondition in Conciliation cases.

Qualities for becoming a successful Conciliator

Some qualities a Person need to inculcate in oneself to become a successful Conciliator are-

• Objective
• Compassion
• Qualified
• Experience
• Understanding
• Counsellor
• Patience
• Temperament
• Impartiality
• Licensing
• Trustworthy
• Punctuality
• Optimistic

IDRC Conciliation Rules

As per IDRC Conciliation Rules, Conciliator can be appointed by the parties themselves of their own choice with consensus i.e. both should agree upon the appointment of the Conciliator. IDRC has a Panel of Conciliators with rich experience in varied fields.

Any person who is of major in age and is of sound mind can be appointed as an Arbitrator.

Arbitrator as a term is not defined under The Arbitration and Conciliation Act, 1996, while other related terms like Arbitration, Arbitration Agreement, Arbitration Award, Arbitral Tribunal and Arbitration Institution stand defined.

Section 11 of The Arbitration and Conciliation Act, 1996 provides that a Person of any Nationality can become an Arbitrator, unless agreed otherwise by the Parties. 

The parties to an Arbitration agreement can agree to refer their disputes to a specific person by either name such person or give his designation in the Arbitration agreement or by agreeing over the name of an Arbitration Institution, who in turn can appoint an Arbitrator out of its inhouse Panel.

In cases where the name or designation of the Arbitrator is not agreed upon amicably between the parties, in that event the Court will have jurisdiction to appoint Arbitrator.

When the procedure for appointment of Arbitrator, as agreed between the parties fails and an application is filed in court for appointment, the court cannot ignore provisions contained in Clause (a) of Sub-section (8) of section 11 of the Act wherein it is specifically provided that the Chief Justice or the person or institution designated by him, in appointing an arbitrator, shall have due regard to any qualifications required of the arbitrator by the agreement of the parties.

Consequently, the Legal position as on date is that the Law in India does not prescribe any specific qualifications for becoming an Arbitrators.

Institutional Arbitration Centres like IDRC have included wide range of experts in their panel after drawing them from Judiciary including Former Chief Justice of India, Supreme Court Judges, High Court Chief Justices, High Court Judges and Judges of District Courts.

Also, Domain Experts from various other professions, trade and business are empanelled including CAs, Doctors, Corporate Leaders, Public Sector Executives and Engineers. The Panel of persons are prepared on the basis of their proven track-record of impartiality, for their domain knowledge, experience and integrity.

'Eighth Schedule'

(Now Omitted)

A person shall not be qualified to be an arbitrator unless he -
(i) is an advocate within the meaning of the Advocates Act, 1961 (25 of 1961) having ten years of practice experience as an advocate; or

(ii) is a chartered accountant within the meaning of the Chartered Accountants Act, 1949 (61 of 1949) having ten years of practice experience as a chartered accountant; or

(iii) is a cost accountant within the meaning of the Cost and Works Accountants Act, 1959 (23 of 1959) having ten years of practice experience as a cost accountant; or

(iv) is a company secretary within the meaning of the Company Secretaries Act, 1980 (56 of 1980) having ten years of practice experience as a company secretary; or

(v) has been an officer of the Indian Legal Service; or

(vi) has been an officer with law degree having ten years of experience in the legal matters in the Government, Autonomous Body, Public Sector Undertaking or at a senior level managerial position in private sector; or

(vii) has been an officer with engineering degree having ten years of experience as an engineer in the Government, Autonomous Body, Public Sector Undertaking or at a senior level managerial position in private sector or self-employed; or

(viii) has been an officer having senior level experience of administration in the Central Government or State Government or having experience of senior level management of a Public Sector Undertaking or a Government company or a private company of repute;

(ix) is a person, in any other case, having educational qualification at degree level with ten years of experience in scientific or technical stream in the fields of telecom, information technology, Intellectual Property Rights or other specialised areas in the Government, Autonomous Body, Public Sector Undertaking or a senior level managerial position in a private sector, as the case may be.

General norms applicable to Arbitrator

(i) The arbitrator shall be a person of general reputation of fairness, integrity and capable to apply objectivity in arriving at settlement of disputes;

(ii) the arbitrator must be impartial and neutral and avoid entering into any financial business or other relationship that is likely to affect impartiality or might reasonably create an appearance of partiality or bias amongst the parties;

(iii) the arbitrator should not involve in any legal proceeding and avoid any potential conflict connected with any dispute to be arbitrated by him;

(iv) the arbitrator should not have been convicted of an offence involving moral turpitude or economic offence;

(v) the arbitrator shall be conversant with the Constitution of India, principles of natural justice, equity, common and customary laws, commercial laws, labour laws, law of torts, making and enforcing the arbitral awards;

(vi) the arbitrator should possess robust understanding of the domestic and international legal system on arbitration and international best practices in regard thereto;

(vii) the arbitrator should be able to understand key elements of contractual obligations in civil and commercial disputes and be able to apply legal principles to a situation under dispute and also to apply judicial decisions on a given matter relating to arbitration; and

(viii) the arbitrator should be capable of suggesting, recommending or writing a reasoned and enforceable arbitral award in any dispute which comes before him for adjudication.

Special Courses for Arbitrators

Special Courses are also being organised these days in India for Training of Professionals as Arbitrators.

These Courses are being organised by leading institutes like  Indian Institute of Arbitration – IIArb and NLU Delhi.

Eligibility

• Senior Secondary School Examination (10+2 System) or Equivalent Examination with 55% marks.

Who may apply

• Students doing LL.B., LL.M., B.Com., M.Com., M.B.A., C.A., C.S., Lawyers, etc.

Course Objectives

• To understand the limitations of courts as a system of dispute resolution in respect of few disputes
• To understand effective resolution of dispute
• To familiarize with domestic and international commercial arbitration
• To know about various legal and regulatory framework governing arbitration
• To learn the latest development in the field of arbitration

Learning Outcomes

After successful completion of the course, the participants will -

• Develop a thorough understanding of the arbitration as a method of dispute resolution
• Understand the legal and regulatory framework governing both domestic and International Commercial Arbitration Agreements
• Understand the legal framework for enforcement of Arbitral Awards
• Acquire theoretical and practical understanding of arbitration process

The law which governs Arbitration in India is Arbitration and Conciliation Act,1996

The claimant shall submit a written Request for initiation of Arbitration to the Arbitration Institute or the Ad-hoc Arbitrator, as the case may be.

Section 23 of Arbitration and Conciliation Act,1996

Section 23. Statements of claim and defence. - (1) Within the period of time agreed upon 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 of those statements.

(2) The parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence they will submit.

[(2A) The respondent, in support of his case, may also submit a counterclaim or plead a set-off, which shall be adjudicated upon by the arbitral tribunal, if such counterclaim or set-off falls within the scope of the arbitration agreement.]

(3) 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 inappropriate to allow the amendment or supplement having regard to the delay in making it.

[(4) The statement of claim and defence under this section shall be completed within a period of six months from the date the arbitrator or all the arbitrators, as the case may be, received notice, in writing, of their appointment.]

Arbitration Claim Petition shall contain

(a) the names and contact details of the parties and of their counsel or other representatives;

(b) identification of and, where possible, a copy of the arbitration agreement under which the dispute is to be settled;

(c) identification of any contract, other legal instrument or relationship out of or in relation to which the dispute arises;

(d) a brief description of the nature and circumstances of the dispute giving rise to the claims;

(e) where claims are made under more than one arbitration agreement, identification of the arbitration agreement under which each claim is made;

(f) a preliminary statement of the relief sought, together with the amounts of any quantified claims and, to the extent possible, an estimate of the monetary value of any other claims;

(g) the claimant’s observations or proposals as to the number of arbitrators, the language, the seat of arbitration and the law or rules of law applicable to the substance of the dispute;

(h) if the arbitration agreement provides for three arbitrators, and the parties have not agreed otherwise, the name and contact details of the arbitrator nominated by the claimant; and

(i) proof of payment of the Filing Fee applicable.

IDRC Domestic Arbitration Rules, 2019

Under the Indian Dispute Resolution Centre Domestic Arbitration Rules, 2019 or IDRC Domestic Arbitration Rules, 2019 Part IV pertains to conduct of Arbitration. 

PART IV. CONDUCT OF ARBITRATION

Article 13 - General Provisions

Article 14 - Seat and Venue of the Arbitration

Article 15 - Language

Article 16 - Statement of Claim

Article 17 - Statement of Defence

Article 18 - Amendments to the Claim or Defence

Article 19 - Jurisdiction of the Arbitral Tribunal

Article 20 - Further Written Statements

Article 21 - Time Limits

Article 22 - Evidence and Hearings

Article 23 - Interim Measures of Protection

Article 24 - Emergency Arbitration

Article 25 - Tribunal-Appointed Experts

Article 26 - Default in completion of pleadings

Article 27 - Joinder of Additional Parties

Article 28 - Consolidation of Arbitrations

Article 29 - Single Arbitration under Multiple Contracts

Article 30 - Concurrent Proceedings

Article 31 - Closure of Proceedings

Article 32 - Waiver

IDRC is a state of the art Digital ADR Platform

The IDRC has a state of the art Digital Platform to carry out Virtual, Hybrid as well as Physical Arbitrations. It has its indegenously developed eADR Software which has as eFiling facility as well.

eFiling - The eADR Software provides for 24x7 eFiling of Arbitration, Mediation and Conciliation Claim Petitions/ Applications by Registered Advocates/Law Firms and Litigants/Corporates. Registration of Advocates/Law Firms and the Registration of Litigants/Corporates is a very simple process. Once the same is done they simply need to Login to their personal Dashboard and the Step by Step Guide to eFiling of Claim Petitions. All the Petitions, Replies, Applications and other Documents can be digitally signed before and after eFiling is carried out. 

eHearing/Virtual Hearing – The eADR Software has inbuilt World renowned Video Conferencing Platforms which are total y secured with end to end encryption and Licensing. The VC Platform has facility to arrange eHearing participation of up to 100 Persons. The has the facility to carry out discrete hearing in Breakaway VC Rooms even while the Arbitral Proceeding s are underway. The eHearings are accessed through password and can be attended through desktops, laptops and mobile phones as well. There is an option to record the complete hearing and even live stream it on demand.

eProceedings – There is a functionality in the IDRC’s eADR Software to record the eProceedings in a multifunction Textbox available within the eFiled Case Page. Once the proceedings are entered it gets converted into PDF and can be eSigned in the IDRC Cloud Server itself. Once signed it becomes a permanent record which cannot be altered. Its eCopy can be shared with all stake holder via eMail.

eSignatures – One of the most convenient feature of eADR Portal is facility to append eSignatures to the Petition, Reply, Application, Documents and Proceeding Sheets. The eSignatures can be appended through DSC (Digital Signature Cards) or even through more convenient eAadhaar and mobile phone.

eCertified Copy - The eADR Software has a unique feature whereby one can apply online for obtaining eCertified Copy of any Document, Proceeding Award, Settlement od the entire Case File. The same shall be provided by the IDRC duly Certified either by the Arbitrator or the Secretary General of IDRC on payment of requsite fees..

Cloud Servers with 24x7 Access – IDRC has state of the art secured Cloud Servers for hosting its eADR Software. Registered users can access the same 24x7 from the comfort of their Home or Office and use the same for uploading the Documents and download the proceeding sheets etc.

Law which governs Arbitration in India is Arbitration and Conciliation Act,1996

Owing to its global development, Law of arbitration do recognizes that there is a difference between the law governing the main contract and the law governing the conduct of the proceedings before the Arbitral Tribunal.

Arbitration gives independence to the Parties to nominate which of the specific national laws will govern either or both these divisions.

Substantive Law and Curial Law

In international commercial arbitration, it has become a norm that at the very inception the parties agree upon a Substantive Law and on Curial Law.

Parties are free to choose substantive law applicable to the contract, curial law applicable to arbitration proceedings and the judicial seat of arbitration. Such choice can be express or by implication Substantive law is the law governing the contract while the curial law is the law governing the arbitration proceedings between the parties to the dispute.

This doctrine of separate existence means that it is possible for an Arbitration agreement to be governed by a different substantive law than the governing law of the substantive main contract. To avoid uncertainty it is always advisable to specify the applicable law in the arbitration agreement itself.

The law which governs Arbitration in India is Arbitration and Conciliation Act,1996.

International Arbitration is usually governed by more than one Law

• the law governing the substantive bilateral contract
• the law governing the Arbitration procedure or seat of Arbitration
• the law governing the Arbitration agreement/clause
• the law of the Country/State where the award will be enforced.

Generally, the mutual understanding and the agreement to resolve disputes by way of arbitration emanates from a clause within a Business contract. As such the Arbitration agreement is a mutually binding Contract on its own and is quite independent in its existence from the substantive contract in which it incorporated.

The Arbitration and Conciliation Act,1996 applies to arbitrations which are held in India between Indian nationals and to international commercial arbitrations whether held in India or out of India. Part 1 of the Act covers all kinds of international commercial arbitrations.

In case where there is no express choice of law governing the contract as a whole or the arbitration agreement in particular, there is, in the absence of any contrary indication, a presumption that the parties have desired that the proper law of the contract as well as the law governing the arbitration agreement are the same as the law of the country in which the arbitration is agreed to be held.

Choice of seat of Arbitration

The choice of a particular seat of Arbitration may have important and unexpected consequences as the law of that place may confer powers on the courts or on the Arbitrators that may not be in the knowledge of the parties.

Part VI of Indian Dispute Resolution Centre Domestic Arbitration Rules, 2019 Article 48 - Governing Law provides that the terms of the Schedule and any non-contractual obligation arising out of or in connection with them shall be governed by and construed in accordance with India law.

Section 89 of  Civil Procedure Code (CPC)

Commercial Mediation in India was given life in 1996 when the Indian parliament amended the Civil Procedure Code (CPC) and introduced Section 89, which empowered courts to direct settlement of disputes by mediation amongst other means. This provision governs mediation in the court system in India. The year 1996 also saw the introduction of the Arbitration and Conciliation Act, 1996. The provisions of the Act govern private Mediation (Conciliation) in India.

Pre-Institution Mediation in India

Other legislation that covers mediation is the Commercial Courts Act, 2015, whereby it is mandatory for parties to exhaust the remedy of pre-institution mediation under the Act before instituting a suit. The Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 (the PIMS Rules) have been framed by the government under the Act.

Mediation is resorted to as a means of dispute resolution as against the traditional adversarial mode of litigation.

Why choose Mediation

Dispute Resolution Centre of Thurston County has enumerated 10 main reasons to choose Mediation as:

Benefits of Mediation

1. Mediation is affordable.
2. Mediation is fair and impartial.
3. Mediation saves time and money.
4. Mediation is confidential.
5. Mediation avoids litigation.
6. Mediation fosters cooperation.
7. Mediation improves communication.
8. Mediation identifies underlying issues.
9. Mediation allows personalized solutions.
10. Mediation works.

Stages in a Mediation Process

1. Introduction and Opening Statement;
2. Joint Session;
3. Caucus or Separate Session and
4. Closing

The objective of these stages is to establish neutrality, create an awareness and understanding of the process, develop rapport with the parties, gain confidence and trust of the parties, establish an environment that is conducive to constructive negotiations, motivate the parties for an amicable settlement of the dispute and establish control over the process.

Law on Mediation

‘Mediation’ means the process by which a Mediator appointed by parties or by the Court, as the case may be, mediates the dispute between the parties to the suit by facilitating discussion between parties directly or by communicating with each other through the Mediator, by assisting parties in identifying issues, reducing misunderstandings, clarifying priorities, exploring areas of compromise, generating options in an attempt to solve the dispute and emphasising that it is the parties own responsibility for making decisions which affect them.

Commercial Mediation in India

Commercial Mediation in India was given life in 1996 when the Indian parliament amended the Civil Procedure Code (CPC) and introduced Section 89, which empowered courts to direct settlement of disputes by mediation amongst other means. This provision governs mediation in the court system in India. The year 1996 also saw the introduction of the Arbitration and Conciliation Act, 1996. The provisions of the Act govern private Mediation (Conciliation) in India.

In India ADR and Mediation Rules, 2003 were drafted after the judgment of the Supreme Court of India in Salem Bar Association vs. Union of India, in which the Supreme Court has requested this committee to prepare draft model rules for Alternative Disputes Resolution (ADR) and also draft rules for mediation under Section 89(2)(d) of the Civil Procedure Code, 1908. Pursuant to the said judgment, we have prepared the following set of draft rules. They are in two parts – the first part consisting of the procedure to be followed by the parties and the Court in the matter of choosing the particular method of ADR. The second part consists of draft rules of mediation under section 89(2)(d) of the Code of Civil Procedure, 1908.

Mediation under Commercial Courts Act, 2015

Other legislation that covers mediation is the Commercial Courts Act, 2015, whereby it is mandatory for parties to exhaust the remedy of pre-institution mediation under the Act before instituting a suit. The Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 (the PIMS Rules) have been framed by the government under the Act.

Rule 2 (f): "Mediation" means a process undertaken by a Mediator to resolve, reconcile and settle a commercial dispute between the parties thereto.

Other salient features of PIMS Rules, 2018 are-

Rule 3. Initiation of Mediation process

    (1) A party to a commercial dispute may make an application to the Authority as per Form-1 specified in Schedule-I, either online or by post or by hand, for initiation of mediation process under the Act along with a fee of one thousand rupees payable to the Authority either by way of demand draft or through online;
    (2) The Authority shall, having regard to the territorial and pecuniary jurisdiction and the nature of commercial dispute, issue a notice, as per Form-2 specified in Schedule-I through a registered or speed post and electronic means including e-mail and the like to the opposite party to appear and give consent to participate in the mediation process on such date not beyond a period of ten days from the date of issue of the said notice.
    (3) Where no response is received from the opposite party either by post or by e-mail, the Authority shall issue a final notice to it in the manner as specified in sub-rule (2).
    (4) Where the notice issued under sub-rule (3) remains unacknowledged or where the opposite party refuses to participate in the mediation process, the Authority shall treat the mediation process to be a non-starter and make a report as per Form 3 specified in the Schedule-I and endorse the same to the applicant and the opposite party.
    (5) Where the opposite party, after receiving the notice under sub-rule (2) or (3) seeks further time for his appearance, the Authority may, if it thinks fit, fix an alternate date not later than ten days from the date of receipt of such request from the opposite party.
    (6) Where the opposite party fails to appear on the date fixed under sub-rule (5), the Authority shall treat the mediation process to be a non-starter and make a report in this behalf as per Form 3 specified in Schedule-I and endorse the same to the applicant and the opposite party.
    (7) Where both the parties to the commercial dispute appear before the Authority and give consent to participate in the mediation process, the Authority shall assign the commercial dispute to a Mediator and fix a date for their appearance before the said Mediator.
    (8) The Authority shall ensure that the mediation process is completed within a period of three months from the date of receipt of application for pre-institution mediation unless the period is extended for further two months with the consent of the applicant and the opposite party.

Rule 4. Venue for conducting Mediation

The venue for conducting of the mediation shall be the premises of the Authority.

Rule 5. Role of Mediator

The Mediator shall, on receipt of the assignment under sub-rule (7) of rule 3, facilitate the voluntary resolution of the commercial dispute between the parties and assist them in reaching a settlement.

Rule 6. Representation of parties in Mediation

A party to a commercial dispute shall appear before the Authority or Mediator, as the case may be, either personally or through his duly authorised representative or Counsel.

Rule 7. Procedure of Mediation

(1) The mediation shall be conducted as per the following procedure-
    (i) At the commencement of mediation, the Mediator shall explain to the parties the mediation process;

    (ii) The date and time of each mediation sitting shall be fixed by the Mediator in consultation with the parties to the commercial dispute.

    (iii) The Mediator may, during the course of mediation, hold meetings with the parties jointly or separately, as he thinks fit;

    (iv) The applicant or opposite party may share their settlement proposals with the Mediator in separate sittings with specific instruction as to what part thereof can be shared with the other party;

    (v) The parties to the mediation can exchange settlement proposals with each other during mediation sitting either orally or in writing;

    (vi) During the process of mediation, the Mediator shall maintain confidentiality of discussions made in the separate sittings with each party and only those facts which a party permits can be shared with the other party;

    (vii) Once both the parties reach to a mutually agreed settlement, the same shall be reduced in writing by the Mediator and shall be signed by the parties to the commercial dispute and the Mediator as per Form-4 specified in the Schedule-I;

    (viii) The Mediator shall provide the settlement agreement, in original, to all the parties to a commercial dispute and shall also forward a signed copy of the same to the Authority; and

    (ix) Where no settlement is arrived at between the parties within the time specified in the sub-section (3) of section 12A of the Act or where the Mediator is of the opinion that the settlement is not possible, the Mediator shall submit a report to the Authority, with reasons in writing, as per Form-5 specified in Schedule-I.

(2) The Authority or the Mediator, as the case may be, shall not retain the hard or soft copies of the documents exchanged between the parties or submitted to the Mediator or notes prepared by the Mediator beyond a period of six months other than the application for mediation under sub-rule (1) of rule 3, notice issued under sub-rule (2) or (3) of rule 3, settlement agreement under clause (vii) of sub-rule (1) of rule 7 and the Failure report under clause (ix) of sub-rule (1) of rule 7.

Rule 8. Parties to act in good faith in Mediation

All the parties to a commercial dispute shall participate in the mediation process in good faith with an intention to settle the dispute.

These laws are however not based on the UNCITRAL Model Law on International Commercial Conciliation.

IDRC Mediation Rules, 2019 

IDRC Mediation Rules, 2019 contains a detail procedure for Mediation as under -

Article 1  -  Commencing Mediation – prior existing agreements to mediate
Article 2  -  Commencing Mediation – no prior agreement
Article 3  -  Appointment of Mediator
Article 4  -  Statements by the Parties
Article 5  -  Conduct of the Mediation
Article 6  -  Conclusion of the Mediation
Article 7  -  Settlement Agreement
Article 8  -  Costs
Article 9  -  Judicial or Arbitral Proceedings
Article 10 -  Confidentiality and Privacy
Article 11 -  Limitation of Liability 

Schedule 1- Administrative Costs

‘Mediation’ means the process by which a Mediator appointed by parties or by the Court, as the case may be, mediates the dispute between the parties to the suit by facilitating discussion between parties directly or by communicating with each other through the Mediator, by assisting parties in identifying issues, reducing misunderstandings, clarifying priorities, exploring areas of compromise, generating options in an attempt to solve the dispute and emphasising that it is the parties own responsibility for making decisions which affect them.

Mediation has been defined in the Cambridge Dictionary as "the process of talking to two separate people or groups involved in a disagreement to try to help them to agree or find a solution to their problems."

Black's Law Dictionary has defined Mediation as "A method of non- binding dispute resolution involving a neutral third party who tries to help the disputing parties to reach a mutually agreeable solution."

It has been rightly said by Joseph Grynbaum "An ounce of mediation is worth a pound of arbitration and a ton of litigation."

It has been rightly quoted by Abraham Lincoln, "Discourage litigation. Persuade your neighbors to compromise whenever you can. As a peacemaker the lawyer has superior opportunity of being a good man. There will still be business enough."

Commercial mediation in India was given life in 1996 when the Indian parliament amended the Civil Procedure Code (CPC) and introduced Section 89, which empowered courts to direct settlement of disputes by mediation amongst other means. This provision governs mediation in the court system in India. The year 1996 also saw the introduction of the Arbitration and Conciliation Act, 1996. The provisions of the Act govern private Mediation (Conciliation) in India.

In India ADR and Mediation Rules, 2003 were drafted after the judgment of the Supreme Court of India in Salem Bar Association vs. Union of India, in which the Supreme Court has requested this committee to prepare draft model rules for Alternative Disputes Resolution (ADR) and also draft rules for mediation under Section 89(2)(d) of the Civil Procedure Code, 1908. Pursuant to the said judgment, we have prepared the following set of draft rules. They are in two parts – the first part consisting of the procedure to be followed by the parties and the Court in the matter of choosing the particular method of ADR. The second part consists of draft rules of mediation under section 89(2)(d) of the Code of Civil Procedure, 1908.

Other legislation that covers mediation is the Commercial Courts Act, 2015, whereby it is mandatory for parties to exhaust the remedy of pre-institution mediation under the Act before instituting a suit. The Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 (the PIMS Rules) have been framed by the government under the Act.

Rule 2 (f): "Mediation" means a process undertaken by a Mediator to resolve, reconcile and settle a commercial dispute between the parties thereto.

Difference between Mediation and Conciliation

'Mediation' and 'Conciliation' are both considered as the same given the striking similarities between them. Both Mediation and Conciliation are carried out by a neutral third person helping the parties to communicate, evaluate and understand each other's viewpoint, and agree to a settlement.

What distinguishes Mediation from Conciliation

• Mediation is a structured process of negotiation. In Mediation, the whole process is controled by the Mediator through different and specific stages: introduction, joint session, caucus and agreement, while the outcome is controled by the parties.
• Conciliator on the other hand, may not follow any structured negoation process. The conciliator may carry out the process of conciliation as a traditional negotiation, which may take different forms on need basis.
• The key differences between Mediation and Conciliation are essentially of degree of involvement of the Neutral person rather than of kind. 
• Mediation is governed by Civil Procedure Code, 1908. Conversely, Arbitration and Conciliation Act, 1996 regulates Conciliation.

Confidentiality in Mediation and Conciliation

• Both mediation and conciliation are premised on confidentiality. However, in mediation, confidentiality relies on the trust and in conciliation, the law determines the extent of confidentiality.
• The contract of agreement between the parties under mediation is enforceable by law. On the contrary, the settlement agreement between the parties is binding upon parties like an arbitral award.
• Conciliator can give suggestions and advice on the issue for resolving the dispute between the parties, as a domain expert. Mediator on the other hand only facilitates communication and develop understanding. Mediator on the contrary plays no advisory role.

Role of Mediator and Conciliator

• Under Indian Law and the UNCITRAL model, the role of the mediator is not pro-active and is somewhat less than the role of a ‘Conciliator’. But under Part III of the Arbitration and Conciliation Act, the ’Conciliator’s powers are larger than those of a ‘Mediator’ as he can suggest proposals for settlement.
• The ‘Conciliator’ can devise and make proposals for settlement, ‘formulate’ or ‘reformulate’ the terms of a possible settlement while a ‘Mediator’ in turn cannot do so but would merely facilitate a settlement between the parties.

Arbitration is Private Adjudication

Arbitration is Private Adjudication and is a form of ADR, Alternate Dispute Resolution and its salient features include - 

• Arbitration is basically private adjudication of a dispute, before a forum other than the Court of law, by an independent third party.  An arbitration process may involve the use of an individual ad-hoc Arbitrator or an Arbitral Tribunal. 
• Arbitration is the most traditional form of private dispute resolution.
• Arbitration is popular as it aims to minimize the burden from the shoulders of the court of law and provide speedy remedy to the parties.
• Matters in arbitration are disposed within 1 year whereas in courts the parties to the dispute have to wait for several years depending upon the complexities of their case.
• Arbitration is also preferred by the parties because of the autonomy granted by it and exercised by the parties in determining the course that the proceedings may take.
• The term Arbitrator is not defined under The Arbitration and Conciliation Act, 1996, while all related terms like Arbitration, Arbitration Agreement, Arbitration Award, Arbitral Tribunal and Arbitration Institution stands defined.
• The object of arbitration is to arrive at a fair resolution of disputes by an impartial third party without unnecessary expense or delay.
• Parties are free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest.

Courts generally do not interfere in the Arbitral proceedings

• The arbitrator has the power to render a legally binding decision which both parties must honour and the award is enforceable in our courts and the courts of 142 countries.
• Arbitration Law in India has always been trending since its inception, in 1940.

Types of Arbitration 

Practically all disputes can be resolved by way of Arbitration except those which are expressely barred under Law. Some fields are-

• Commercial Arbitration is the most common of disputes. Just as it sounds, it is a dispute between two commercial enterprises.
• Consumer Arbitration relates to disputes between a consumer and a supplier of goods or services.
• Labour Arbitration pertains to employment related disputes. 
• Sports Arbitration pertains to disputes related to sports.
• Construction Arbitration focuses on disputes emanating from Construction and infra related projects.
• IPR Arbitration pertains to disputes relating to Trademark, Copyright and other IPR matters.

Concept of Arbitration and Mediation

 In an Arbitration, the arbitral Tribunal considers and weighs the legal rights of a dispute and takes a decision. Once the arbitrator has arrived at a decision, it is binding on parties whether they agree with it or not just as a Court case is decided by a Judge, except that the process does not take place in a court room, and it is not open to the public. 

In a Mediation, the mediator assits and guides the parties in settling their disputes by a process of discussion and bridging their differences. The mediator helps the parties to arrive at an amicable solution. A successful mediation results in an settlement agreement signed by the parties, whereas a contested arbitration results in a decision by the arbitrator himself without the agreement of the parties. In a mediation both sides win, because decision is taken with full consent.

Legal sanctity of Arbitration and Mediation

Dispute resolved by Arbitration and Mediation has the value has the decision passed by court of law. And an Arbitration award and an Mediated settlement if acepted and duly signed by both the parties it is a valid decision.

Nature of process of Arbitration and Mediation

 Arbitration is a formal process and it follows almost same proceeding as in litigation but outside the court whereas, Mediation on the other hand is an informal process.

Need of Evidence in Arbitration and Mediation

Arbitration need steps in evidence. Mediation does not require any kind of evidence.

Cost of process in Arbitration and Mediation

Arbitration is more expensive in so far as it involves a complete trial like process spanning into numerous sittings. On the other hand  Mediation is a less expensive process as it generally bears fruit and concludes within very few sittings.

Party satisfaction in Arbitration and Mediation

Arbitration gives decision under which one party wins and other party loses; after arbitration the relation among parties may be strained. In in mediation the dispute is resolved,  it is win win situation for the party with little compromise so there is a possibility of friendly relation between the parties after the settlement.

Communication between Parties during Arbitration and Mediation

In arbitration, parties have hardly any personal relationship as well as private communication with the arbitrator is prohibited. In Mediation there is as such no restriction.

Court interference in Arbitration and Mediation

Both Arbitration and Mediation help the disputed parties to resolve the dispute without going to the court and it provides efficient and speedy justice to the parties. In Arbitration, there are several occasions when Court's indulgence is sought. Right from seeking interim relief under Section 9 of Arbitration and Conciliation Act, 1996 to appointment of Arbitrator under Section 11 of Arbitration and Conciliation Act, 1996, Section 27 of Arbitration and Conciliation, 1996 for Court assistance in taking evidence, Section 34 of Arbitration and Conciliation Act, 1996 for hearing objections against thr Award and Appeal under Section 37 of Arbitration and Conciliation Act, 1996, apart from seeking Court's indulgence in Execution of Award.

Whereas in Mediation the only indulgence sought is in passing of a Settlement Decree in a pending Suit. As also for Execution of such Decree. Since the Mediated Settlement is always on mutually agreed terms the occasion for Court's interference is minimal.

Consent of Parties in decision making in Arbitration and Mediation

The main difference between arbitration and mediation is that in arbitration the arbitrator hears evidence and makes a decision. Arbitration is like the court process as parties still provide testimony and give evidence similar to a trial but it is usually less formal. In mediation, the process is a negotiation with the assistance of a neutral third party. The parties do not reach a resolution unless all sides agree.

Decision in Arbitration and Mediation

Mediation may or may not reach a solution in so far as it depends on the disputing parties to arrive at an amicable solution. In case parties fail to reach to an consensus the Mediation can fail to bear any result; Arbitration usually does result into a decision as it is akin to a trial done on merits of the case where Arbitrator acts as a Private Judge.

Governing Law in Arbitration and Mediation

Arbitration is governed by  The Arbitration and Conciliation Act, 1996 while Mediation does not have any specfic governing Law but it finds mention in Section 89 Code of Civil Procedure, 1908. Recently the Draft Mediation Bill, 2021 has been published by Govt to invite suggestions from Public.

Arbitration as an ADR method has several advantages over Court litigation or decisions arrived at various Tribunals. Some of these advantages are-

Choice of Decision Maker in Arbitration

As compared to litigation, where one cannot "choose the judge", arbitration allows the parties to choose their own tribunal. This is especially useful when the subject matter of the dispute is highly technical: arbitrators with an appropriate degree of expertise (for example, quantity surveying expertise, in the case of a construction dispute, or expertise in commercial property law, in the case of a real estate dispute) can be chosen. For example, parties can choose a technical person as arbitrator if the dispute is of a technical nature so that the evidence will be more readily understood.

Efficiency of Arbitral Proceedings

Arbitration is often faster than litigation in Court. Arbitration can usually be heard sooner than it takes for court proceedings to be heard. As well, the arbitration hearing should be shorter in length, and the preparation work less demanding. Arbitration hearing  is generally fixed for one matteror dispute unlike Court where there is a whole causelist of ases listed for the day. 

Privacy in Arbitration

Arbitral proceedings and an arbitral award are generally non-public, and can be made confidential. Arbitration hearings are confidential, private meetings in which the media and members of the public are not able to attend. As well, final decisions are not published, nor are they directly accessible. This is particularly useful to the employer who does not want his ‘dirty laundry’ being aired.

Convenience of hearings in Arbitration

Hearings are arranged at times and places to suit the parties, arbitrators and witnesses. In the pandemic conditions Arbitration hearings were carried out virtually as well. IDRC has carried out hundred's of such successful hearings through its Virtual ADR Hearing Module.

Flexibility of procedure in Arbitration

The procedures can be segmented, streamlined or simplified, according to the circumstances and specific need of the disputing parties. Generally the statute do provide broad procedure as in Arbitration and Conciliation Act,1996. Arbitration institutios on the other hand have their own procedure as in IDRC ie Indian Dispute Resolution Centre Domestic Arbitration Rules, 2019. Parties can also agree to a new imporvised hearing procedure which can be amalgamation of several codified procedures.

Finality of decision in Arbitration

In most legal systems there are very limited avenues for appeal of an arbitral award, which is sometimes an advantage because it limits the duration of the dispute and any associated liability. There is in general, no right of appeal in arbitration except statutory Objections under Section 34 of Arbitration and Conciliation Act, 1996.

Language in Arbitration

In arbitral proceedings the language of arbitration may be chosen, whereas in judicial proceedings the official language of the country of the competent court will be automatically applied. Generall in better part of India and most on INternational Arbitrations are carried out in English Language.

Execution of Arbitration Award

Under Arbitration and Conciliation Act,1996 Arbitral Award can be executed in a Civil Court of competent pecuniary jurisdiction as if its a court Decree by filing of an Execution Petition under Order 21 of Code of Civil Procedure.

Because of the provisions of the New York Convention 1958, arbitration awards are generally easier to enforce in other nations than court verdicts. 

The differences between Arbitration Act 1940 and Arbitration and Conciliation Act 1996 can be understood as follows - 

1. Extent of applicablity of Old and New Arbitration Law

Old Law only concerns with domestic arbitration proceedings while New Law concerns with domestic arbitration, international arbitration and enforcement of foreign tribunal award.

2. Role of Judiciary in Old and New Arbitration Law

OLd Law conferred wide discretion on the courts and very little on the arbitral tribunal itself while New Law limits the judicial intervention and broadens the scope of the powers vested with the arbitral tribunal.

3.  Dependency on Courts in Old and New Arbitration Law

Under Old Law heavy reliance was placed on the courts to ensure that arbitration proceedings are conducted in a particular manner. Under New Law heavy reliance on the arbitral tribunal to ensure proceedings may continue without placing unnecessary reliance on the overburdened judiciary.

4. Procedural Regulations Old and New Arbitration Law

OLd Law does not give freedom to the parties and impose a number of regulations over them while New Law gives freedom to the parties and do not impose any regulations over them.

5. Power of Tribunal in Old and New Arbitration Law

Under Old Law Arbitral Tribunal had no real powers but rather acts as a proxy for the Court but under New Law principle of competence-competence plays a pivotal role in the scheme of the new act.

6. Interim Orders in Old and New Arbitration Law

Under OLd Law arbitral tribunal does not have the power to pass interim order against the party but under New Law arbitral tribunal has the power to pass the interim order against the party.

7. Legal background of Old and New Arbitration Law

Old Law was based upon the English Arbitration Act, 1934 which prevailed in the British but New Law is based upon the UNCITRAL Model Law on International Commercial Arbitration, 1985.

The law which governs Conciliation in India is Arbitration and Conciliation Act,1996

PART III of this Act includes following Sections-
CONCILIATION
61. Application and scope.
62. Commencement of conciliation proceedings.
63. Number of conciliators.
64. Appointment of conciliators.
65. Submission of statements to conciliator.
66. Conciliator not bound by certain enactments.
67. Role of conciliator.
68. Administrative assistance.
69. Communication between conciliator and parties.
70. Disclosure of information.
71. Co-operation of parties with conciliator.
72. Suggestions by parties for settlement of dispute.
73. Settlement agreement.
74. Status and effect of settlement agreement.
75. Confidentiality.
76. Termination of conciliation proceedings.
77. Resort to arbitral or judicial proceedings.
78. Costs.
79. Deposits.
80. Role of conciliator in other proceedings.
81. Admissibility of evidence in other proceedings.

For ready reference the Part III of Arbitration and Conciliation Act,1996 is reproduced hereunder-

Application and scope of Conciliation

(1) Save as otherwise provided by any law for the time being in force and unless the parties have otherwise agreed, this Part shall apply to conciliation of disputes arising out of legal relationship, whether contractual or not and to all proceedings relating thereto. (2) This Part shall not apply where by virtue of any law for the time being in force certain disputes may not be submitted to conciliation.

Commencement of conciliation proceedings

(1) The party initiating conciliation shall send to the other party a written invitation to conciliate under this Part, briefly identifying the subject of the dispute. (2) Conciliation proceedings shall commence when the other party accepts in writing the invitation to conciliate. (3) If the other party rejects the invitation, there will be no conciliation proceedings. (4) If the party initiating conciliation does not receive a reply within thirty days from the date on which he sends the invitation, or within such other period of time as specified in the invitation, he may elect to treat this as a rejection of the invitation to conciliate and if he so elects, he shall inform in writing the other party accordingly.

Number of conciliators

 (1) There shall be one conciliator unless the parties agree that there shall be two or three conciliators. (2) Where there is more than one conciliator, they ought, as a general rule, to act jointly.

Appointment of conciliators

(1) Subject to sub-section (2), (a) in conciliation proceedings with one conciliator, the parties may agree on the name of a sole conciliator; (b) in conciliation proceedings with two conciliators, each party may appoint one conciliator; (c) in conciliation proceedings with three conciliators, each party may appoint one conciliator and the parties may agree on the name of the third conciliator who shall act as the presiding conciliator. (2) Parties may enlist the assistance of a suitable institution or person in connection with the appointment of conciliators, and in particular, (a) a party may request such an institution or person to recommend the names of suitable individuals to act as conciliator; or (b) the parties may agree that the appointment of one or more conciliators be made directly by such an institution or person: Provided that in recommending or appointing individuals to act as conciliator, the institution or person shall have regard to such considerations as are likely to secure the appointment of an independent and impartial conciliator and, with respect to sole or third conciliator, shall take into account the advisability of appointing a conciliator of a nationality other than the nationalities of the parties.

Submission of statements to conciliator

(1) The conciliator, upon his appointment, may request each party to submit to him a brief written statement describing the general nature of the dispute and the points at issue. Each party shall send a copy of such statement to the other party. (2) The conciliator may request each party to submit to him a further written statement of his position and the facts and grounds in support thereof, supplemented by any documents and other evidence that such party deems appropriate. The party shall send a copy of such statement, documents and other evidence to the other party. (3) At any stage of the conciliation proceedings, the conciliator may request a party to submit to him such additional information as he deems appropriate. Explanation. - In this section and all the following sections of this Part, the term conciliator applies to a sole conciliator, two or three conciliators as the case may be.

Conciliator not bound by certain enactments

The conciliator is not bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872).

Role of Conciliator

(1) The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute. (2) The conciliator shall be guided by principles of objectivity, fairness and justice, giving consideration to, among other things, the rights and obligations of the parties, the usages of the trade concerned and the circumstances surrounding the dispute, including any previous business practices between the parties. (3) The conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate, taking into account the circumstances of the case, the wishes the parties may express, including any request by a party that the conciliator hear oral statements, and the need for a speedy settlement of the dispute. (4) The conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of the dispute. Such proposals need not be in writing and need not be accompanied by a statement of the reasons therefor.

Administrative assistance

In order to facilitate the conduct of the conciliation proceedings, the parties, or the conciliator with the consent of the parties, may arrange for administrative assistance by a suitable institution or person.

Communication between conciliator and parties

(1) The conciliator may invite the parties to meet him or may communicate with them orally or in writing. He may meet or communicate with the parties together or with each of them separately. (2) Unless the parties have agreed upon the place where meetings with the conciliator are to be held, such place shall be determined by the conciliator, after consultation with the parties, having regard to the circumstances of the conciliation proceedings.

Disclosure of information by Conciliator

When the conciliator receives factual information concerning the dispute from a party, he shall disclose the substance of that information to the other party in order that the other party may have the opportunity to present any explanation which he considers appropriate: Provided that when a party gives any information to the conciliator subject to a specific condition that it be kept confidential, the conciliator shall not disclose that information to the other party.

Co-operation of parties with Conciliator

The parties shall in good faith co-operate with the conciliator and, in particular, shall endeavour to comply with requests by the conciliator to submit written materials, provide evidence and attend meetings.

Suggestions by parties for settlement of dispute by Conciliation

Each party may, on his own initiative or at the invitation of the conciliator, submit to the conciliator suggestions for the settlement of the dispute.

Settlement agreement by Conciliation

(1) When it appears to the conciliator that there exist elements of a settlement which may be acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to the parties for their observations. After receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in the light of such observations. (2) If the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement agreement. (3) When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under them respectively. (4) The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.

Status and effect of settlement agreement under Conciliation

The settlement agreement shall have the same status and effect as if it is an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal under section 30.

Confidentiality under Conciliation

Notwithstanding anything contained in any other law for the time being in force, the conciliator and the parties shall keep confidential all matters relating to the conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where its disclosure is necessary for purposes of implementation and enforcement.

Termination of Conciliation proceedings

The conciliation proceedings shall be terminated (a) by the signing of the settlement agreement by the parties on the date of the agreement; or (b) by a written declaration of the conciliator, after consultation with the parties, to the effect that further efforts at conciliation are no longer justified, on the date of the declaration; or (c) by a written declaration of the parties addressed to the conciliator to the effect that the conciliation proceedings are terminated, on the date of the declaration; or (d) by a written declaration of a party to the other party and the conciliator, if appointed, to the effect that the conciliation proceedings are terminated, on the date of the declaration.

Resort to arbitral or judicial proceedings in Conciliation

The parties shall not initiate, during the conciliation proceedings, any arbitral or judicial proceedings in respect of a dispute that is the subject-matter of the conciliation proceedings except that a party may initiate arbitral or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his rights.

Costs of Conciliation

(1) Upon termination of the conciliation proceedings, the conciliator shall fix the costs of the conciliation and give written notice thereof to the parties. (2) For the purpose of sub-section (1), costs means reasonable costs relating to (a) the fee and expenses of the conciliator and witnesses requested by the conciliator with the consent of the parties; (b) any expert advice requested by the conciliator with the consent of the parties; (c) any assistance provided pursuant to clause (b) of sub-section (2) of section 64 and section 68; (d) any other expenses incurred in connection with the conciliation proceedings and the settlement agreement. (3) The costs shall be borne equally by the parties unless the settlement agreement provides for a different apportionment. All other expenses incurred by a party shall be borne by that party.

Deposit of advance cost in Conciliation

(1) The conciliator may direct each party to deposit an equal amount as an advance for the costs referred to in sub-section (2) of section 78 which he expects will be incurred. (2) During the course of the conciliation proceedings, the conciliator may direct supplementary deposits in an equal amount from each party. (3) If the required deposits under sub-sections (1) and (2) are not paid in full by both parties within thirty days, the conciliator may suspend the proceedings or may make a written declaration of termination of the proceedings to the parties, effective on the date of that declaration. (4) Upon termination of the conciliation proceedings, the conciliator shall render an accounting to the parties of the deposits received and shall return any unexpended balance to the parties.

Role of conciliator in other proceedings

Unless otherwise agreed by the parties, (a) the conciliator shall not act as an arbitrator or as a representative or counsel of a party in any arbitral or judicial proceeding in respect of a dispute that is the subject of the conciliation proceedings; (b) the conciliator shall not be presented by the parties as a witness in any arbitral or judicial proceedings.

Admissibility of evidence in other proceedings

The parties shall not rely on or introduce as evidence in arbitral or judicial proceedings, whether or not such proceedings relate to the dispute that is the subject of the conciliation proceedings, (a) views expressed or suggestions made by the other party in respect of a possible settlement of the dispute; (b) admissions made by the other party in the course of the conciliation proceedings; (c) proposals made by the conciliator; (d) the fact that the other party had indicated his willingness to accept a proposal for settlement made by the conciliator.

Sepatare Conciliation Institutions can have their own Conciliation Rules as well.

Indian Dispute Resolution Centre, IDRC has its own set of Conciliation Rules

The Indian Dispute Resolution Centre, IDRC has its own set of Conciliation Ruleswhich are reproduced hereunder-

Rules applicable to Conciliation 

A conciliator is a person who is to assist the parties to settle the disputes between them amicably. For this purpose, the Conciliator is vested with wide powers to decide the procedure to be followed by him like the Code of Civil Procedure or the Indian Evidence Act, 1872. When the parties are able to resolve the dispute between them by mutual agreement and it appears to the conciliator that there exists an element of settlement which may be acceptable to the parties, he is to proceed in accordance with the procedure laid down in Section 73, formulate the terms of settlement and make it over to the parties for their observations; and the ultimate step to be taken by a conciliator is to the terms formulated by him.

The settlement takes shape only when the parties draw up the settlement agreement or request the conciliator to prepare the same affix their signatures to it. The settlement agreement signed by the parties is final and binding on the parties and persons claiming under them. On the basis of notes by the conciliator during the course of conciliation proceedings held separately and jointly with each of the parties to the dispute, and also on the basis of written statements and documentary evidence produced by the parties in support thereof, the conciliator shall reduce to writing the terms of the possible settlement, if he finds that there exists the possibility of a settlement which may be acceptable to both parties. The conciliator shall send the draft settlement to both the parties.

For their consideration and approval. If the parties make any observation on the draft settlement, the conciliator shall reformulate the draft settlements incorporating therein the observations made by the parties. If, after going through the reformulated draft settlement, the parties agree thereon, they shall convey the same to the conciliator, either orally or in writing, that they have no objection to the reformulated draft settlement. They will also make a formal request to the conciliator to either himself draw up the settlement agreement, or assist the parties in drawing up the same. It is not every agreement or arrangement between parties to the dispute arrived at in whatever manner or form during the pendency of the conciliation proceedings that automatically acquires the status of a settlement agreement so as to have the same status and effect as if it were an arbitral award for being enforced or as if it were a decree of the court. It is only that agreement which has been arrived at in conformity with the manner stipulated and form envisaged and got duly authenticated in accordance with this section, alone can be assigned the status of a settlement agreement within the meaning of and for effective purpose of the Act and not otherwise.

If the draft settlement agreement is agreed to the entire satisfaction of the parties, and thereafter they finally draw up the document and sign the same, the said document shall be final and binding, not only on the parties to the controversy, but also on the persons claiming under them. When the parties sign the settlement agreement, the conciliator shall authenticate the same as having been executed in his presence, as a result of their free volition and the conciliator shall hand over a copy of such authenticated settlement agreement to each of the parties and retain a copy thereof in his possession for future reference, if required the settlement agreement arrived at between the parties, and duly authenticated by the conciliator, shall not only be final and binding on the parties, but will have the same effect as if the settlement agreement is an arbitral award on agreed terms on the substance of the dispute rendered by a duly constituted arbitral tribunal under Section 30 of the Act, 1996.

A successful conciliation comes to an end only when the settlement agreement signed by the parties comes into existence. It is such an agreement, which has the status and effect of legal sanctity of an arbitral award under this section. But if a conciliator, after holding some meetings with the parties and after having discussions with them, draws up the so-called settlement agreement by himself in secrecy and send the same to the court in a sealed cover (being without the signatures of the parties) cannot be given recognition of a settlement agreement. If a statue prescribes a procedure for doing a thing, that thing has to be done according to the prescribed procedure.

Number of conciliators can be one, or more than one. In case of more than one conciliator, it is necessary that they should all jointly, and in case of one conciliator, he should be independent & impartial and must be guided by principal of objectivity fairness & justices. He is also bound to keep confidential all matters relating to the conciliation from the other party. All the concerned evidence regarding the dispute be disclosed to the other party to enable them to present an appropriate explanation.

There is no specific procedure provided for making proposal for settlement. Conciliator may seek legal opinion from any solicitors firm or lawyer on any point, which involves complicated question of law. No arbitral or judicial proceeding can be initiated in respect of a dispute, which is subject matter of conciliation proceeding between the parties.

There are restrictions on admissibility of evidence in arbitral or judicial proceedings of the proposal & suggestion made by parties of the conciliation during conciliation proceedings If such restriction is not imposed the parties may not come forward with more acceptable proposals or suggestion due to the fear of being trapped in judicial proceeding with admission made earlier. If the parties enter into agreement contrary to these provisions the agreement shall be void.

However if such agreement is for mutual advantage of the parties & is not against Public Policy is valid. In this way generally the conciliation in India works.

Domestic Arbitration is a form of Alternative Dispute Resolution

Domestic Arbitration is a form of Alternative Dispute Resolution (ADR) where one or more person(s) are appointed to arbitrate upon a dispute that takes place within one specfic jurisdictional Country.

Definition of Domestic Arbitration

Arbitration and Conciliation (Amendment) Bill 2003, the definition of the term domestic arbitration was given as:
‘Domestic Arbitration’ means an arbitration relating to a dispute arising out of legal relationship whether contractual or not, where none of the parties is:
i) An in individual who is a nationality 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 individuals whose central management and control is exercised in any country other than India; or
iv) The Government of a foreign country.

How to find whether an Arbitration is Domestic or International

In order to test as to whether an Arbitration is Domestic or International one need to check-
1) If the arbitration takes place in India
2) If the subject matter of contract is in India
3) If the merits of the dispute are governed by the Indian Law
4) Whether the procedure of arbitration is also governed by the Indian Law

In other words a Domestic arbitration is one concerned with purely national or domestic issues. Meaning thereby that all aspects of the arbitration proceedings are related to a single jurisdiction. 

Salient advantages of Domestic Arbitration includes

Choice of Decision Maker – As compared to litigation, where one cannot "choose the judge", arbitration allows the parties to choose their own tribunal. This is especially useful when the subject matter of the dispute is highly technical: arbitrators with an appropriate degree of expertise (for example, quantity surveying expertise, in the case of a construction dispute, or expertise in commercial property law, in the case of a real estate dispute) can be chosen. For example, parties can choose a technical person as arbitrator if the dispute is of a technical nature so that the evidence will be more readily understood.

Efficiency – Arbitration is often faster than litigation in court. Arbitration can usually be heard sooner than it takes for court proceedings to be heard. As well, the arbitration hearing should be shorter in length, and the preparation work less demanding.

Privacy – Arbitral proceedings and an arbitral award are generally non-public, and can be made confidential. Arbitration hearings are confidential, private meetings in which the media and members of the public are not able to attend. As well, final decisions are not published, nor are they directly accessible. This is particularly useful to the employer who does not want his ‘dirty laundry’ being aired.

Convenience – Hearings are arranged at times and places to suit the parties, arbitrators and witnesses.

Flexibility – The procedures can be segmented, streamlined or simplified, according to the circumstances.

Finality – In most legal systems there are very limited avenues for appeal of an arbitral award, which is sometimes an advantage because it limits the duration of the dispute and any associated liability. There is in general, no right of appeal in arbitration except statutory Objections under Section 34 of Arbitration and Conciliation Act, 1996. 

Language - In arbitral proceedings the language of arbitration may be chosen, whereas in judicial proceedings the official language of the country of the competent court will be automatically applied.

Execution of decision - Because of the provisions of the New York Convention 1958, arbitration awards are generally easier to enforce in other nations than court verdicts.

Definition of International Arbitration

An International Arbitration is a form of Alternative Dispute Resolution (ADR) where one or more person(s) are appointed to arbitrate upon a dispute that takes place which is not specfic to one jurisdictional Country. Here the Arbitration subject and dispute reaches beyond the borders of a single jurisdiction.

Arbitration is Private adjudiciation

Procedurally the International Arbitration is somewhat similar to domestic court but it does not take place in courtrooms instead it is held before private adjudicators known as the Arbitrators. This form of Arbitration is bu its very nature is neutral, consensual, binding, private, and enforceable means of international dispute resolution which is quicker and easier than the court proceedings..

Legal Definition of Arbitration under Arbitration and Conciliation Act,1996 

The most significant contribution of Arbitration and Conciliation Act,1996 is the categorical definition of international commercial arbitration. Clause(f) of sub-section (1) of section 2 of the 1996 Act defines international commercial arbitration as - 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:

    a) An individual who is a national of, or habitually resident in or any country other than India
    b) A corporate body which is incorporated in any country other than India
    c) A company or an association or a body of individuals whose central management and control is exercised in any country other than India
    d) The government of foreign country.

Procedure followed - Evidently international arbitration can take place in India in accordance with the same procedure as domestic 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.

Law applicable - In International arbitration the law applicable may be the Indian Law or a foreign law, depending on the terms of contract in this regard and the rules of conflict of laws.

Language barriers - International arbitration provides a way of dispute resolution for the parties of different culture, languages, legal rules under one common procedure which is a binding on the disputed parties. Here no legal formalities such as courtrooms are conducted so, the people are getting easy access to justice without any form of lengthy procedures.

Custom procedure - International Arbitration can have a healthy amalgamation of Civil Procedures and Common Procedural laws to adjuducate the disputes arising between the parties to the contract and provide them with fair decisions in the form of Arbitral Awards

Scope of International Arbitration 

Any arbitration matter between parties to the arbitration agreement shall be called an international commercial arbitration if:
(1) The matter relates to a commercial dispute between Two or more Parties;
(2) Such fiscal disputes have arisen out of binding legal relationship;
(3) Such legal relationships may or may not be contractual in nature;
(4) The disputes should be those which are considered commercial under the law in force in India ie Commercial Courts Act, 2015 
5) In Internation Commercial Arbitration at least one of the parties is;
    (i) habitually resident overseas, whether a national of that country or not; or
    (ii) A body corporate which is incorporated abroad as per Law;
    (iii) A company or an association or a body of person whose central management and control is exercised abroad; or
    (iv) The government of a foreign country.

How to identify an International Dispute

There are three ways of establishing the international character of arbitration. An arbitration may be international because;
     (a) Its subject matter or its procedure or its organization is international or
     (b) The parties involved are connected with different jurisdiction; or
     (c) There is combination of both

a) The objective criterion: The objective criterion focuses on the subject matter of the dispute and the international or national character of the underlying transaction. Hence the international commercial interest or the cross border element of the underlying contract, or the fact that the dispute is referred to a genuinely international arbitration institution. 

b) The subjective criterion: According to the subjective criterion the focus is on the different nationality or domicile or place of business of the parties to the arbitration agreement. It follows that parties, individuals or companies should come from different jurisdiction. 

c) The Modern Combined Criterion: A third approach combines both the subjective and objective criteria. 

How does Domestic Arbitration and International Arbitration differ

Broad difference between Domestic Arbitration and International Arbitration can be understood under following heads -

1. Definition - 
‘Domestic Arbitration’ means an arbitration relating to a dispute arising out of legal relationship whether contractual or not, where none of the parties is:
i) An in individual who is a nationality 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 individuals whose central management and control is exercised in any country other than India; or
iv) The Government of a foreign country.

This definition is as per Arbitration and Conciliation (Amendment) Bill, 2003.

'International Arbitration' means 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:

    a) An individual who is a national of, or habitually resident in or any country other than India
    b) A corporate body which is incorporated in any country other than India
    c) A company or an association or a body of individuals whose central management and control is exercised in any country other than India
    d) The government of foreign country.

This is contained in Clause(f) of sub-section (1) of section 2 of the  Arbitration and Conciliation Act,1996.

2. More than One Law applicable in International Arbitration

'Domestic Arbitration' is India is governed by Arbitration and Conciliation Act,1996. The Arbitration and Conciliation Act,1996 applies to arbitrations which are held in India between Indian nationals and to international commercial arbitrations whether held in India or out of India. Part 1 of the Act covers all kinds of international commercial arbitrations.

In International arbitration the law applicable may be the Indian Law or a foreign law, depending on the terms of contract in this regard and the rules of conflict of laws.

In international Arbitration it is not unusual if more than one law apply. 

• the law governing the substantive bilateral contract
• the law governing the Arbitration procedure or seat of Arbitration
• the law governing the Arbitration agreement/clause
• the law of the Country/State where the award will be enforced.

3. Procedure followed - 

'Domestic Arbitration' is governed by procedure as provided in Arbitration and Conciliation Act,1996 with basic inputs from Code of Civil Procedure, 1908.

Some Institutional Arbitration Centres like IDRC have their own in-house Procedures available in public domain at Indian Dispute Resolution Centre Domestic Arbitration Rules, 2019. 

'International Arbitration' can take place in India in accordance with the same procedure as domestic 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.

4. Custom procedure - 

'Domestic Arbitration' is generally governed by procedure as provided in Arbitration and Conciliation Act,1996 with basic inputs from Code of Civil Procedure, 1908. However Parties can customise the procedure by amalgamating the peculiar need and procedures codified by individual Arbitration Institutions.

'International Arbitration' can take place in India in accordance with the same procedure as domestic arbitration. While parties can customise the procedure by adopting the whole or part of Procedure Code adopted by leading International Arbitration Institutions viz, ICC, LCIA, SIAC etc.

5. Choice of Decision Maker -

'Domestic Arbitration' generally gives option to Parties to mutually agree to appoint any Ad-hoc Arbitrator or go for a Tribunal of Three Members where each Party choose one Arbitrator and the in turn choose the Third who becomes the presiding Arbitrator. Also Parties are at liberty to assign the case to an Institution like IDRC which has its in-house Panel of Arbitrators. Here either the Institution itself appoints the Arbitrator as per the nature of the Dispute or Parties can agree over a name mutually out of the Panel.

In 'International Arbitration' this is especially useful when the subject matter of the dispute is highly technical: arbitrators with an appropriate degree of expertise (for example, quantity surveying expertise, in the case of a construction dispute, or expertise in commercial property law, in the case of a real estate dispute) can be chosen. With this the choice can get enlarged greatly as availability can increase in International arena.

6. Efficiency -

'Domestic Arbitration' has the capacity to give decisions in a time bound manner. However till late delays in delivery of Award by Ad-hoc Arbitrators has led to erosion of confidence in the capability of Arbitration as a method, to deliver timely justice. This issue was addressed by inclusion of Section 29A in Arbitration and Conciliation Act, 1996 since 30.08.2019.

'International Arbitration' is often faster than Domestic version or litigation in court. Time is always looked upon as essence as the financial stakes on the International Arbitration is so huge that any amount of avoidable delay can lead to ripple effect on losses. Most International Arbitration Institutes have strict timelines and costs can be imposed on parties causing delay. 

7. Emergency Arbitrations under Domestic Arbitration and International Arbitration

'Domestic Arbitration' Law in India do not contain any provision for Emergency Arbitration. Whenever any Party is in need to seek urgent relief the are permitted to approach the Courts under Section 9 of Arbitration and Conciliation Act, 1996. In case it is a pending Arbitration matter urgent relief can be sought by invoking Section 17 of Arbitration and Conciliation Act, 1996. However lately Delhi High Court gave recognition to an Interim Award passed by an Emergency Arbitration of Singapore in Amazon.com vs Future Coupons Pvt. Ltd, 2021 Latest Caselaw 907 Del which was upheld by Hon'ble Supreme Court for the purpose of its Execution in India in Amazon.Com NV Investment Holdings LLC v. Future Retail Limited & ors, 2021 Latest Caselaw 312 SC.

Supreme Court's this decision in Amazon v. Future is being looked upon as an important precedent strengthening the party autonomy in India. In so far as this decision gives legitimacy to an emergency awards made under the rules of an arbitral institution by treating it on par with an interim order made by an arbitral tribunal seated in India it paves the way for an emergency arbitration award in an India-seated arbitration to be enforced by Indian courts in the same way as if it were a decree of an Judicial forum in Indian.

Under 'International Arbitration' Emergency arbitration is looked upon as a mechanism which allows a disputing party to apply for urgent interim relief before a regular Arbitration Tribunal has been formally constituted. 

Several arbitral institutions have adopted specific rules for emergency arbitration in the field of international commercial arbitration, - see e.g. Indian Dispute Resolution Centre Domestic Arbitration Rules, 2019, the ICC Rules (2017 and 2021), the LCIA Rules (2014 and 2020), and the HKIAC Rules (2018) the spread of such mechanism to the field of investment arbitration remains quite confidential to date. For instance, neither the ICSID Arbitration Rules, nor the UNCITRAL Arbitration Rules contain provisions for the appointment of an emergency arbitrator.

8. Language barriers -

'Domestic Arbitration' Law in India primarily carries Arbitral proceedings in English. Although under the Law there is no bar on the language but in so far as Hon'ble Supreme Court and all the High Courts functions only in English language, carrying out of proceedings in any other language would entail additional Translation Costs. Article 343 Constitution of India: Official language of the Union.

Under 'International Arbitration' since the dispute resolution is for the parties of different language, culture, languages, legal rules under one common procedure which is a binding on the disputed parties. Here no legal formalities such as courtrooms are conducted so, the people are getting easy access to justice without any form of lengthy procedures in a Language which both sides agree to.

The Indian Dispute Resolution Centre is an initiative of Indian Dispute Resolution Council.

It is subsidiary of a Not-for-Profit Organisation ‘International Dispute Resolution Council’, which in turn is a Company which is duly registered with Ministry of Corporate Affairs, Government of India (Registration No.: U93000DL2020NPL365512).

Indian Dispute Resolution Centre is also registered with NITI Aayog (Registration No: DL/2020/0261004).

IDRC is duly empanelled with Ministry of Law & Justice, Government of India for providing Alternative Dispute Resolution services through Arbitration, Mediation and Conciliation online to Government Ministries, Departments, Organizations and Public Sector Undertakings.

Indian Dispute Resolution Centre was Inauguratied by Hon'ble Mr. Justice AK Sikri, Former Judge Supreme Court of India and International Judge, Singapore International Commercial Court. Its Domestic Arbitration Rules are - 

Indian Dispute Resolution Centre Domestic Arbitration Rules, 2019 (Download PDF)

Today, IDRC is not only the leading digital Arbitration Institution in India, but also has its Affiliate Centres pan India but also in Asia Pacific and Europe, handling hundreds of domestic and international arbitrations.

THe IDRC Rules can be accessed here - 

 Indian Dispute Resolution Centre Domestic Arbitration Rules, 2019

IDRC also provides related services like Expert Determination and Early Neutral Evaluation as also education and training in alternative dispute resolution mechanisms through its Indian Institute of Arbitration – IIArb, Indian Institute of Mediation (IIMed) and Indian Institute of Dispute Resolution (IIDR).

Strengthening of Alternative Dispute Resolution

Government of India has been taking various policy initiatives for promotion and strengthening of Alternative Dispute Resolution (ADR) mechanisms through amendment in existing laws and by enactments, for facilitating quick disposal of disputes, outside of traditional court systems. As a continuation of the exercise, bringing a standalone law on Mediation is under consideration.

Since the laws on Mediation are contained in several enactments including Rules and Regulation, it was felt necessary to ascertain the present statutory framework on mediation and bring an umbrella legislation including amendments in the existing laws.

The Bill takes into contemplation the international practice of using the terms ‘conciliation’ and ‘mediation’ interchangeably. Further, it has also become expedient to enact a law in mediation on issues of domestic and international mediation as India is a signatory to the Singapore Convention on Mediation.

Accordingly, a draft bill with the objective to promote, encourage and facilitate mediation especially institutional mediation for resolution of disputes commercial and otherwise, enforce domestic and international mediation settlement agreements, provide for a body for registration of mediators, to encourage community mediation and to make online mediation as an acceptable and cost effective process and for matters connected therewith or incidental thereto has been prepared.

Main features of the Mediation Bill, 2021

1. The draft Bill proposes for pre-litigation mediation and at the same time safeguards the interest of the litigants to approach the competent adjudicatory forums/courts in case an urgent relief is sought.

2. The successful outcome of mediation in the form of Mediation Settlement Agreement (MSA) has been made enforceable by law. Since the Mediation Settlement Agreement is out of the consensual agreement between the parties, the challenge to the same has been permitted on limited grounds.

3. The mediation process protects the confidentiality of the mediation undertaken and provides for immunity in certain cases against its disclosure.

4. The registration of Mediation Settlement Agreement has also been provided for with State/District/Taluk Legal Authorities within 90 days to ensure maintenance of authenticated records of the settlement so arrived.

5. Provides for establishment of the Mediation Council of India.

6. Provides for community mediation.

Full text of the Mediation Bill, 2021

Full text of the Mediation Bill, 2021 can be accessed here - 

Mediation Bill, 2021

Dispute Resolution by Conciliation

Conciliation is an option out-of-court dispute resolution instrument whereby the parties to a dispute use a conciliator, who meets with the parties both separately and together in an attempt to resolve their differences.

Just like another ADR method Mediation, Conciliation is also a deliberate, confidential and consent based procedure. The parties deliberate and strive to arrive at a mutually acceptable, amicable dispute settlement agreement with the help of the neutral Conciliator.

Sole distinction between Conciliation and Mediation ADR methods is that during the Conciliation, the neutral Conciliator can offer to the Parties to dispute a non-binding settlement proposal. Whereas the Mediator as a procedural Rule always refrain from making such a settlement proposal.

Conciliation a willful process

Conciliation is a willful proceedings, where the parties involved are allowed to agree and endeavor to resolve their dispute by way of Conciliation. As a form of Conciliation is more akin to Negotiation. A neutral Conciliator assists each of the parties to independently develop a list of all of their objectives and reach a settlement, the terms of which are mutually acceptable.

The law which governs Conciliation in India is Arbitration and Conciliation Act, 1996.

Appointment of conciliators 

(1) In conciliation proceedings with one Conciliator, the parties may agree on the name of a sole conciliator in conciliation proceedings with two conciliators, each party may appoint one conciliator in conciliation proceedings with three conciliators, each party may appoint one conciliator and the parties may agree on the name of the third conciliator who shall act as the presiding conciliator.

(2) Parties may enlist the assistance of a suitable institution or person in connection with the appointment of Conciliators, and in particular, a party may request such an institution or person to recommend the names of suitable individuals to act as conciliator, the parties may agree that the appointment of one or more conciliators be made directly by such an institution or person.

Provided that in recommending or appointing individuals to act as conciliator, the institution or person shall have regard to such considerations as are likely to secure the appointment of an independent and impartial conciliator and, with respect to sole or third conciliator, shall take into account the advisability of appointing a conciliator of a nationality other than the nationalities of the parties.

Conciliation Process - 

(1) The party initiating conciliation shall send to the other party a written invitation to conciliate under this Part, briefly identifying the subject of the dispute.

(2) Conciliation proceedings shall commence when the other party accepts in writing the invitation to conciliate.

(3) If the other party rejects the invitation, there will be no conciliation proceedings.

(4) If the party initiating conciliation does not receive a reply within thirty days from the date on which he sends the invitation, or within such other period of time as specified in the invitation, he may elect to treat this as a rejection of the invitation to conciliate and if he so elects, he shall inform in writing the other party accordingly.

Number of conciliators - 

(1) There shall be one conciliator unless the parties agree that there shall be two or three conciliators.

(2) Where there is more than one conciliator, they ought, as a general rule, to act jointly.

Submission of statements to Conciliator -

(1) The conciliator, upon his appointment, may request each party to submit to him a brief written statement describing the general nature of the dispute and the points at issue. Each party shall send a copy of such statement to the other party.

(2) The conciliator may request each party to submit to him a further written statement of his position and the facts and grounds in support thereof, supplemented by any documents and other evidence that such party deems appropriate. The party shall send a copy of such statement, documents and other evidence to the other party.

(3) At any stage of the conciliation proceedings, the conciliator may request a party to submit to him such additional information as he deems appropriate. 

Settlement agreement in Conciliation

(1) When it appears to the conciliator that there exist elements of a settlement which may be acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to the parties for their observations. After receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in the light of such observations.

(2) If the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement agreement.

(3) When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under them respectively.

(4) The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.

Status and effect of settlement agreement in Conciliation

The settlement agreement shall have the same status and effect as if it is an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal under Section 30 of Arbitration and Conciliation Act, 1996..

Confidentiality in Conciliation

The Conciliator and the parties shall keep confidential all matters relating to the conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where its disclosure is necessary for purposes of implementation and enforcement.

Broadly speaking the salient benefits of Conciliation includes - 

1. Ensures party autonomy.
   Conciliating parties can choose the timing, language, place, structure and content of the conciliation proceedings.
2. Ensures the expertise of the decision maker.
   Conciliating parties are free to select their conciliator. A conciliator does not have to have a specific professional background. The Conciliating parties may base their selection on criteria such as; experience, professional and / or personal expertise, availability, language and cultural skills. A conciliator should be impartial and independent.
3. It is time and cost efficient.
   Due to the informal and flexible nature of conciliation proceedings, the Conciliating parties can be conducted in a time and cost-efficient manner.
4. Ensures confidentiality.
   The Conciliating parties usually agree on confidentiality. Thus, disputes can be settled discretely and business secrets will remain confidential.

Conciliation under Indian Law

Under Indian Law Conciliation is governed by Part III Sections 61 to 81 of The Arbitration and Conciliation Act, 1996. 

Section 64 of the Arbitration and Conciliation Act, 1996 provides that Parties to a dispute are free to appoint any Person as Conciliator.

When the invitation to the conciliation is accepted by the other party, the parties have to agree on the composition of the conciliation tribunal. In the absence of any agreement to the contrary, there shall be only one sole Conciliator. 

In case parties wish to have a panel of Two Conciliators, they may appoint one Conciliator each.

In Conciliation proceedings with three Conciliators, each party may appoint one Conciliator and the parties may agree on the name of the third Conciliator who shall act as the presiding Conciliator.

The parties to the dispute may instead of appointing the Conciliator themselves may enlist the assistance of an institution or person of their choice for appointment of Conciliators. But the institution or the person should keep in view during appointment that, the conciliator is independent and impartial.

IDRC Conciliation Rules

The IDRC Conciliation Rules can be accessed here - IDRC Conciliation Rules

What does IDRC do

IDRC stands for Indian Dispute Resolution Centre.

It is an initiative of 'Indian Dispute Resolution Council', subsidiary of a Not-for-Profit Organisation ‘International Dispute Resolution Council’, which is a Company duly registered with Ministry of Corporate Affairs, Government of India (Registration No.: U93000DL2020NPL365512) and is also registered with NITI Aayog (Registration No: DL/2020/0261004).

IDRC is duly empanelled with Ministry of Law & Justice, Government of India for providing Alternative Dispute Resolution services through Arbitration, Mediation and Conciliation online to Government Ministries, Departments, Organizations and Public Sector Undertakings.

IDRC was Inauguratied by Hon'ble Mr. Justice AK Sikri, Former Judge Supreme Court and International Judge, Singapore International Commercial Court. NITI Aayog CEO Sh. Amitabh Kant had also graced an event organized by IDRC where he stressed that small and medium value disputes of NBFCs and MSMEs shall be decided by adopting ADR methods and professional online platforms like IDRC can help leverage India's position in 'Enforcement of Contract' and 'Ease of Doing Business'.

Today, IDRC is not only the leading digital Arbitration Institution in India, but also has its Affiliate Centres pan India but also in Asia Pacific and Europe, handling hundreds of domestic and international arbitrations.

The complete List of IDRC Panel of Arbitrators can be accessed here - 

IDRC Panel of Arbitrators

Some of the Arbitrators on IDRC Panel are:

FORMER CHIEF JUSTICES OF SUPREME COURT OF INDIA

Mr. Justice Ramesh Chandra Lahoti (Retd), Chief Justice of India

FORMER JUDGES OF SUPREME COURT OF INDIA as Arbitrators

Mr. Justice Arjan Kumar Sikri (Retd), Judge, Supreme Court of India
Ms. Justice R. Bhanumathi (Retd), Judge, Supreme Court of India

FORMER CHIEF JUSTICES OF HIGH COURT as Arbitrators

Mr. Justice Badar Durrez Ahmed (Retd), Chief Justice J&K High Court
Mr. Justice Virender Singh (Retd), Chief Justice Jharkhand HC, Ex. Chairman, AFT
Mr. Justice Sunil Ambwani (Retd), Chief Justice, Rajasthan High Court

FORMER JUDGES OF HIGH COURT as Arbitrators

Mr. Justice SN Dhingra (Retd), Delhi High Court, Ex. Member, Competition Commission of India
Mr. Justice JP Singh (Retd), Delhi High Court
Mr. Justice GP Mittal (Retd), Delhi High Court, Ex. Member Competition Commission of India
Mr. Justice R.C. Chopra (Retd), Delhi High Court
Ms. Justice Deepa Sharma (Retd), Delhi High Court
Mr. Justice J.M. Malik (Retd), Delhi High Court, Ex. Member, NCDRC
Ms. Justice Reva Khetrapal (Retd), Delhi High Court
Mr. Justice S.P. Garg (Retd), Delhi High Court
Mr. Justice V.B. Gupta (Retd), Delhi High Court
Ms. Veena Birbal (Retd), Delhi High Court, Ex. Chairperson, Delhi State Consumer Commission
Mr. Justice Krishn Kumar Lahoti (Retd), MP High Court
Mr. Justice Vinod Goel (Retd), Delhi High Court
Mr. Justice Rameshwar Singh Malik (Retd) Punjab & Haryana HC
Mr. Justice Rajiv Raina (Retd), Punjab & Haryana HC
Mr. Justice Rajesh Tandon (Retd), Uttrakhand High Court

FORMER BUREAUCRATS / PUBLIC SECTOR OFFICERS as Arbitrators

Dr. Viswapati Trivedi, IAS (1977) (Retd) Secretary, Min. of Mines & Minerals and Shipping, GoI
Dr. Brahm Avtar Agrawal (Retd) Secretary Law, Min. of Law & Justice, GoI
Mr. PK Malhotra, (Retd) Secretary Law, Min. of Law & Justice, GoI
Dr. RK Srivastava, IAS (1984), (Retd) Chairman, Airport Authority of India
Mr. Brij Mohan Bansal, (Retd) Chairman, Indian Oil Corporation
Mr. SS Rana, (Retd), Director General, Excise & Customs, GoI
Mr. Naresh Kumar Mathur, (Retd) CMD, State Trading Corporation of India
Mr. VS Jain, (Retd) CMD, Steel Authority of India
Mr. SS Sirohi, (Retd) Member, Telecom Commission of India
Mr. Subir Bikas Mitra, Executive Director, GAIL
Dr. Ashok Sharma, (Retd) CGM, MMTC and Director, CIArB
Mr. Deepak Dhawan, (Retd) Executive Director, Indian Oil Corporation Limited
Mr. MM Sharma, (Retd) Director, State Trading Corporation of India and more....

FORMER DISTRICT AND SESSIONS JUDGES as Arbitrators

Mr. Inder Pal Singh, (Retd) District & Sessions Judge
Mr. Amarnath, (Retd) District & Sessions Judge
Mr. Arun Arya, (Retd) District & Sessions Judge
Mr. AS Yadav, (Retd) District & Sessions Judge
Mr. BB Chaudhry, (Retd) District & Sessions Judge
Mr. Rakesh Kapoor, (Retd) District & Sessions Judge
Mr. HS Sharma, (Retd) District & Sessions Judge
Mr. PK Saxena, (Retd) District & Sessions Judge
Ms. R. Kiran Nath, (Retd) District & Sessions Judge and more....

CENTRAL ADMINISTRATIVE TRIBUNAL

Mr. Shankar Raju, Advocate (Retd) Judicial Member CAT

SENIOR ADVOCATES as Arbitrators

Mr. Siddharth Luthra, Senior Advocate, Supreme Court, Ex. ASG
Mr. Sanjeev Sindhwani, Sr. Advocate, Delhi High Court
Ms. Geeta Luthra, Sr. Advocate, Delhi High Court and more...

ADVOCATES as Arbitrators

Mr. Tanmay Mehta, Advocate, Delhi High Court
Mr. Ashok Arora, Secretary, Supreme Court Bar Association
Mr. Sanjay Rathi, Advocate, Co-Chairman Bar Council of Delhi
Mr. Bhumesh Verma, Managing Partner, Corp Comm Legal
Mr. DK Sharma, Co-Chairman, BCD
Mr. Shashank Garg, Advocate, Delhi High Court
Mr. Rajneesh Gaur, Advocate, Partner SNG & Co.
Mr. Ajay Chaudhry, Advocate,Delhi High Court
Mr. Devender Pratap Singh, Advocate Delhi High Court, Ex. AAG for Haryana in SC
Mr. Satish Kumar, Advocate, Delhi High Court
Mr. Kaviraj Singh, Secretary, Indian National Bar Association
Ms. Alka Sharma, Advocate, Supreme Court
Mr. Joginder Sukhija, Advocate, Delhi High Court
Mr. Manjeet Singh Oberoi, Advocate, Delhi High Court
Mr. Ashutosh Lohia, Advocate, Delhi High Court
Mr. HP Singh,Advocate, Delhi High Court
Mr. Divyakant Lahoti, Advocate, Supreme Court and more....

CHARTERED ACCOUNTANT as Arbitrators

Mr. DK Saxena, Chartered Accountant
Mr. AS Bajaj, Chartered Accountant
Mr. Chaddha, Chartered Accountant
Mr. Anuj Khanna,Chartered Accountant
Mr. Lalit Kumar Gupta, Saria Gupta & Company, Karol Bagh, N. Delhi
Mr. Mukesh Aggarwal, Chief Managing Partner, KSMC Associates, East Punjabi Bagh, N. Delhi

DEFENCE SERVICES

Maj. Gen. Ajay Gahlaut, (Retd)
Col. D. K. Bishnoi (Retd)
Col. JS Rangi (Retd)

OVERSEAS ARBITRATORS

Mr. Richard Wilmot-Smith, QC, London
Mr. Charles Manzoni, QC, London
Ms. Marion Smith, QC, London
Mr. Charles Manzoni, QC, London
Mr. Peter Rees, QC, London
Mr. Adrian Hughes, QC, London
Mr. John Tackaberry, QC, London
Mr. Paul Darling, QC, London and more...

Understanding IDRC

IDRC stands for Indian Dispute Resolution Centre.

IDRC was Inauguratied by Hon'ble Mr. Justice AK Sikri, Former Judge Supreme Court and International Judge, Singapore International Commercial Court. 

NITI Aayog CEO Sh. Amitabh Kant had also graced an event organized by IDRC where he stressed that small and medium value disputes of NBFCs and MSMEs shall be decided by adopting ADR methods and professional online platforms like IDRC can help leverage India's position in 'Enforcement of Contract' and 'Ease of Doing Business'.

It is an initiative of 'Indian Dispute Resolution Council', subsidiary of a Not-for-Profit Organisation ‘International Dispute Resolution Council’, which is a Company duly registered with Ministry of Corporate Affairs, Government of India (Registration No.: U93000DL2020NPL365512) and is also registered with NITI Aayog (Registration No: DL/2020/0261004).

The complete list of IDRC Mediators can be accessed here - 

IDRC Mediators

Some Mediators empanelled with IDRC are:

Ms. R Kiran Nath, Ex. Registrar Vigilance, Delhi High Court

Mr. PK Malhotra, ILS, Ex. Secretary, Min. of Law & Justice, Govt of India

Mr. Dr. RK Srivastava, IAS, Ex. Chairman, Airport Authority of India

Ms. Mamta Tayal, Ex. Addl. District and Sessions Judge

Mr. Sanjay Rathi, Advocate, Co-Chairman Bar Council of Delhi

Mr. Bhumesh Verma, Managing Partner, Corp Comm Legal

Mr. Devender Pratap Singh, Advocate Delhi High Court, Ex. AAG for Haryana in SC

Mr. D. Sarvanan, Advocate, Madras High Court

Mr. Manjeet Singh Oberoi, Advocate, Delhi High Court

Mr. Sanjeev Ralli, Advocate, Delhi High Court

Ms. Mona Marwah, Advocate, Delhi High Court

Mr. Ramesh Sethi, Advocate, Delhi High Court

Mr. Gulshan Chawla, Advocate, Delhi High Court

Ms. Asha J. Bhuta, Advocate, Bombay High Court

Mr. Divyansh Hanu Rathi, Advocate, Delhi High Court

IDRC is a Non-Profit Institution

The IDRC or Indian Dispute Resolution Centre is an initiative of 'Indian Dispute Resolution Council'.

It is subsidiary of a Not-for-Profit Organisation ‘International Dispute Resolution Council’, which in turn is a Company which is duly registered with Ministry of Corporate Affairs, Government of India (Registration No.: U93000DL2020NPL365512).

Indian Dispute Resolution Council is an initiative of International Dispute Resolution Council, a Company duly registered under Section 8 of the Companies Act, 2013.

What are Objective of Section 8 Companies

• The primary purpose of registering a company as a Section 8 Company is to promote non-profit objectives such as trade, commerce, arts, charity, education, religion, environment protection, social welfare, sports research, etc.
• To incorporate a Section 8 Company, a minimum of two directors are required. Also, there is no requirement of minimum paid-up capital in the case of Section 8 Company.
• In India, a non-profit organization can be registered under the Registrar of societies or as a Non-profit company under the Section 8 Company of the Company Act,2013.
• The profits of this company, if there are any, are applied towards promoting the objectives of the company and not distributed as dividends to its shareholders.
• A Section 8 Company is the same as the Section 25 Company under the old Companies Act, 1956. As per the new Companies Act of 2013, Section 25 has now become Section 8.

Eligibility to Apply for Section 8 Company

An individual or an association of individuals are eligible to be registered as Section 8 Company if it holds below-mentioned intentions or objectives. The objectives have to be confirmed to the satisfaction of the Central Government.

• When the company intends to promote science, commerce, education, art, sports, research, religion, charity, social welfare, protection of the environment or alike other objectives;
• When the company holds an intention to invest all the profits (if any) or any other income generated after incorporation in the promotion of such objects only;
• When the company does not intend to pay any dividend to its members.

What is Section 8 of the Companies Act, 2013

Formation of companies with charitable objects, etc. -

(1) Where it is proved to the satisfaction of the Central Government that a person or an association of persons proposed to be registered under this Act as a limited company -

     (a) has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object;

     (b) intends to apply its profits, if any, or other income in promoting its objects; and

     (c) intends to prohibit the payment of any dividend to its members, Formation of companies with charitable objects, etc. the Central Government may, by licence issued in such manner as may be prescribed, and on such conditions as it deems fit, allow that person or association of persons to be registered as a limited company under this section without the addition to its name of the word "Limited", or as the case may be, the words "Private Limited" , and thereupon the Registrar shall, on application, in the prescribed form, register such person or association of persons as a company under this section.

(2) The company registered under this section shall enjoy all the privileges and be subject to all the obligations of limited companies.

(3) A firm may be a member of the company registered under this section.

(4) (i) A company registered under this section shall not alter the provisions of its memorandum or articles except with the previous approval of the Central Government.

     (ii) A company registered under this section may convert itself into company of any other kind only after complying with such conditions as may be prescribed.

(5) Where it is proved to the satisfaction of the Central Government that a limited company registered under this Act or under any previous company law has been formed with any of the objects specified in clause (a) of sub-section (1) and with the restrictions and prohibitions as mentioned respectively in clauses (b) and (c) of that sub-section, it may, by licence, allow the company to be registered under this section subject to such conditions as the Central Government deems fit and to change its name by omitting the word "Limited", or as the case may be, the words "Private Limited" from its name and thereupon the Registrar shall, on application, in the prescribed form, register such company under this section and all the provisions of this section shall apply to that company.

(6) The Central Government may, by order, revoke the licence granted to a company registered under this section if the company contravenes any of the requirements of this section or any of the conditions subject to which a licence is issued or the affairs of the company are conducted fraudulently or in a manner violative of the objects of the company or prejudicial to public interest, and without prejudice to any other action against the company under this Act, direct the company to convert its status and change its name to add the word "Limited" or the words "Private Limited", as the case may be, to its name and thereupon the Registrar shall, without prejudice to any action that may be taken under sub-section (7), on application, in the prescribed form, register the company accordingly:

Provided that no such order shall be made unless the company is given a reasonable opportunity of being heard:

Provided further that a copy of every such order shall be given to the Registrar.

(7) Where a licence is revoked under sub-section (6), the Central Government may, by order, if it is satisfied that it is essential in the public interest, direct that the company be wound up under this Act or amalgamated with another company registered under this section:

Provided that no such order shall be made unless the company is given a reasonable opportunity of being heard.

(8) Where a licence is revoked under sub-section (6) and where the Central Government is satisfied that it is essential in the public interest that the company registered under this section should be amalgamated with another company registered under this section and having similar objects, then, notwithstanding anything to the contrary contained in this Act, the Central Government may, by order, provide for such amalgamation to form a single company with such constitution, properties, powers, rights, interest, authorities and privileges and with such liabilities, duties and obligations as may be specified in the order.

(9) If on the winding up or dissolution of a company registered under this section, there remains, after the satisfaction of its debts and liabilities, any asset, they may be transferred to another company registered under this section and having similar objects, subject to such conditions as the Tribunal may impose, or may be sold and proceeds thereof credited to [Insolvency and Bankruptcy Fund formed under section 224 of the Insolvency and Bankruptcy Code, 2016]

(10) A company registered under this section shall amalgamate only with another company registered under this section and having similar objects.

(11) If a company makes any default in complying with any of the requirements laid down in this section, the company shall, without prejudice to any other action under the provisions of this section, be punishable with fine which shall not be less than ten lakh rupees but which may extend to one crore rupees and the directors and every officer of the company who is in default shall be punishable [***] with fine which shall not be less than twenty-five thousand rupees but which may extend to [twenty-five lakh rupees]:

Provided that when it is proved that the affairs of the company were conducted fraudulently, every officer in default shall be liable for action under section 447.

Decoding IDRC

The IDRC or Indian Dispute Resolution Centre is an initiative of 'Indian Dispute Resolution Council'.

Indian Dispute Resolution Centre is registered with NITI Aayog (Registration No: DL/2020/0261004).

It is subsidiary of a Not-for-Profit Organisation ‘International Dispute Resolution Council’, which in turn is a Company which is duly registered with Ministry of Corporate Affairs, Government of India (Registration No.: U93000DL2020NPL365512).

Indian Dispute Resolution Council is an initiative of International Dispute Resolution Council, a Company duly registered under Section 8 of the Companies Act, 2013.

NITI Aayog is National Institution for Transforming India

NITI Aayog, National Institution for Transforming India, came into existence on Jan,1,2015 by succeeding the Planning Commission of India.

NITI Aayog is largely a company for the govt. of India, that aims to achieve the property development and to reinforce cooperative political theory in India by the participation of center still as a state minister.

It is headed by the Honorable Prime Minister of India(Prime Minister is that the Ex-officio chairman of NITI Aayog) and also the governing council consists of all the Chief Minister of states as well as CM of an urban center and Pudducherry, conjointly the Leiutient Governor of Andaman and Nicobar.

Benefits of NITI AAYOG Registration

The aim of the Government is to maintain the databases of the organizations/trust/society that are working for the welfare of the society and asking for the fund to practice their activities. However, the major benefits of getting registered under Niti Aayog are as following:

• At the time of FCRA registration, a Niti Aayog unique ID is required, however, at present it is optional. 
• If NPO want to avail the grants offered by the government then it is mandatory to get registered under Niti Aayog.
• The databases of all currently active as well as the blacklisted NGOs are maintained with the help of NGO Darpan Portal. 
• It increases the credibility of the NGO/trust/society which helps them to get a donation from the general public. 
• Through this portal, you can directly apply for the grant offered by the government which you want to avail.

The Indian Dispute Resolution Centre is an initiative of 'Indian Dispute Resolution Council'.

IDRC is registered with RoC, Ministry of Corporate Affairs

‘International Dispute Resolution Council’, which in turn is a Company which is duly registered with Ministry of Corporate Affairs, Government of India (Registration No.: U93000DL2020NPL365512).

Indian Dispute Resolution Centre is registered with NITI Aayog as a Not-for-Profit Organisation

NITI Aayog registration of IDRC is (Registration No: DL/2020/0261004).

IDRC is duly empanelled with Ministry of Law & Justice, Government of India

IDRC is empanelled for providing Alternative Dispute Resolution services through Arbitration, Mediation and Conciliation online to Government Ministries, Departments, Organizations and Public Sector Undertakings.

Related question which people frequently ask about IDRC are-

What does IDRC do?

IDRC is duly empanelled with Ministry of Law & Justice, Government of India for providing Alternative Dispute Resolution services through Arbitration, Mediation and Conciliation online to Government Ministries, Departments, Organizations and Public Sector Undertakings.

IDRC was Inauguratied by Hon'ble Mr. Justice AK Sikri, Former Judge Supreme Court and International Judge, Singapore International Commercial Court. NITI Aayog CEO Sh. Amitabh Kant had also graced an event organized by IDRC where he stressed that small and medium value disputes of NBFCs and MSMEs shall be decided by adopting ADR methods and professional online platforms like IDRC can help leverage India's position in 'Enforcement of Contract' and 'Ease of Doing Business'.

Today, IDRC is not only the leading digital Arbitration Institution in India, but also has its Affiliate Centres pan India but also in Asia Pacific and Europe, handling hundreds of domestic and international arbitrations.

IDRC also provides services of Expert Determination and Early Neutral Evaluation as also education and training in alternative dispute resolution mechanisms through its Indian Institute of Arbitration – IIArb, Indian Institute of Mediation (IIMed) and Indian Institute of Dispute Resolution (IIDR).

What is the full form of IDRC?

The Indian Dispute Resolution Centre.

Is IDRC a government?

IDRC is a Indian Govt approved Alternative Dispute Resolution Centre. Indian Dispute Resolution Centre is registered with NITI Aayog as a Not-for-Profit Organisation. 

How many people work for IDRC?

IDRC has its Headquater in New Delhi and Corporate Office at Mumbai. It has its affiliate Centres at major Cities in INdia and othe International Cities like LOndon, Singapore, Kuala Lampur, Dubai etc.

MOre than Hundred Arbitrators, Mediators, Conciliators and Employees serve with IDRC globally.

Arbitration is a popular ADR method for timely dissolution of disputes.

Cost of Arbitration is much less and is cost effective than Litigation

The reason is simple as there are no Appeals to an Arbitration award. The main grievance concerning Arbitration over the past two decades, has been its cost. 

Breakup of Cost of Arbitration

1. Cost of Arbitral Tribunal;
2. Cost of Expert Witness;
3. Cost for Legal Fees of Legal Teams of both disputing Parties;
4. Cost of Physical space at the seat of Arbitration;
5. Cost of secretarial services for Arbitration;
6. Travel expenses incurred in Arbitration and
7. Administrative Fees by Institutional Arbitration Centres

Cost od Ad-hoc Arbitration vs Institutional Arbitration 

There is a huge variation in the Cost of Arbitration in Ad-hoc Arbitrations depending upon the profile of the Arbitrator and Lawyers representing the disputing Parties.

In case the Arbitral Tribunal is presided over by a former Chief Justice of India, former Supreme Court Judge, former High Court Judge then the Cost can esclate substantially. 

Likewise in high stake cases Parties engage the services of designated Senior Advocates, then also cost can reach in several Lakh of Rupees for each hearing. 

Other expenses as detailed above can have spiralling effect on the Arbitration. What add to the woes of the Parties is the tendency of prolonging the Arbitration when the payments are to be made for each hearing.

Whereas in Institutional Arbitration, majority of Cost components are easily taken care of in so far as the Fee of Arbitration is calculated on ad valorem basis. The tolal Cost of Arbitral Tribunal and Venue etc are pre-fixed and there is no element of surprise.

Rather the Institutional System that Arbitrators get their Fees only after they deliver the Award results in lesser adjournments and timely termination of Proceedings.

Cost of Domestic Arbitration 

Section 31A(1) of Arbitration and Conciliation Act, 1996 provides that in relation to any arbitration proceeding, the arbitral tribunal has discretion to determine:

• whether costs are payable by one party to another;
• the amount of such costs; and
• when such costs are to be paid.

Section 31A(2) of Arbitration and Conciliation Act, 1996 provides that if a tribunal decides to make an order as to the payment of costs, the general rule is that the unsuccessful party will be ordered to pay the successful party's costs. In alternative, an Arbitral tribunal may make a different order for reasons which must be recorded in writing.

In exercising their powers under Section 31A of the act, tribunals must consider certain factors provided for in Section 31(A)(3) – namely:

• the conduct of all parties;
• whether a party has partly succeeded in the case;
• whether a party made a frivolous counterclaim which delayed the disposal of the arbitral proceedings; and
• whether any reasonable offer to settle the dispute has been made by one party and refused by another.

What can be added in Arbitration Cost

In accordance with the explanation to Section 31A(1) Arbitration and Conciliation Act, 1996, 'costs' covers:

• the fees and expenses of the arbitrators, courts and witnesses;
• legal fees and expenses;
• the administrative fees of the arbitral institution; and
• any other expenses incurred in connection with the arbitral or court proceedings and the arbitral award.

Notably, Section 31A(1) allows only for reasonable costs to be recovered (and not actual costs). Therefore, the test of reasonableness must be met and the tribunal must consider the reasonableness of the costs claimed. The factors which may be taken into consideration to determine reasonableness vary and such an assessment is not straightforward. The problems in determining reasonable costs are further compounded by the significant costs imposed on parties by their solicitors and counsel, which, along with the manner of billing, vary.

Cost of International Arbitration 

the CIArb Costs of International Arbitration Survey, based on 254 arbitrations conducted between 1991 and 2010, contained perhaps the most extensive analysis of the cost of international arbitration to date. The survey included data from ICC, LCIA, LMAA, AAA, SCC, ad hoc and other types of arbitrations, finding the overall average cost of international arbitration to be approximately GBP 1,580,000 (USD 2.6 million or EUR 2 million using historical exchange rates roughly equivalent to Rs.15 Crore) for claimants, and approximately 10% less for respondents. These figures remained similar in later surveys, although the cost of investment arbitration was higher and individual disputes could cost significantly less.

It was found that Claimants spend 12% more than the Respondent.

Supreme Court of India on Cost of Arbitration

The Supreme Court recently in the matter of National Highways Authority of India and Ors. v. Gayatri Jhansi Roadways Limited and Ors. 2019 SCC OnLine SC 906 settled the position on the issue regarding arbitrator’s fee in cases where the parties had agreed to a schedule of fees in the arbitration agreement. It held that the Fourth Schedule of the Arbitration and Conciliation Act, 1996 is not mandatory in determining the fees where the fees has been fixed by agreement between the parties and overruled the judgment of the Delhi High Court.

Statutory cap on the Cost of Arbitration

This was done by inclusion of Schedule IV in the Arbitration and Conciliation Act, 1996. 

The Fourth Schedule of Arbitration and Conciliation Act, 1996

[See section 11 (3A)]

Note. - In the event, the arbitral tribunal is a sole arbitrator, he shall be entitled to an additional amount of twenty-five per cent. on the fee payable as per the table set out above.

Likewise the Institutions have their own Fees Schedule viz IDRC has its own Fee Schedule as under -

SCHEDULE II

ARBITRAL TRIBUNAL’S FEES, EXPENSES, TERMS AND CONDITIONS

Effective 2nd October 2019

1. Scope of Application and Interpretation

1.1 Subject to any variations agreed by all parties or changes the Council considers appropriate, this Schedule shall apply to arbitrations in which the arbitral tribunal's fees and expenses are to be determined in accordance with Article 10 of the Rules and to the appointment of an emergency arbitrator.

1.2 The Council may interpret the terms of this Schedule as well as the scope of application of the Schedule as it considers appropriate.

2. Payments to Arbitral Tribunal

2.1. Payments to the arbitral tribunal shall generally be made by the Councilfrom funds deposited by the parties in accordance with Article 41 of the Rules.

2.2. Payments to the arbitral tribunal shall be made in Indian Rupees.

2.3. The parties are jointly and severally liable for the fees and expenses of an arbitrator, irrespective of which party appointed the arbitrator.

3. Arbitral Tribunal's Expenses

3.1. The arbitral tribunal shall be reimbursed for its reasonable expenses, in accordance with the Practice Note, if any, referred to at paragraph 1.3.

3.2. The expenses of the arbitral tribunal shall not be included in the arbitral tribunal's fees charged by reference to Schedule II and III..

4. Miscellaneous Expenses

The parties shall be responsible for expenses incurred and relating to arrangement of support services engaged for the purposes of the arbitration including, but not limited to, the cost of hearing rooms, interpreters and transcription services. Such expenses may be paid directly from the deposits referred to in Article 41 of the Rules as and when they are incurred.

5. Cancellation Fees

If a scheduled arbitral tribunal hearing is cancelled at the request of parties or their counsel than the concerned party can be burdened with cost which can either be deposited with IDRC or can be paid in part to the opposite party as ordered by the tribunal.

Where hearing days are cancelled or postponed other than by agreement of all parties or request of the arbitral tribunal, this may be taken into account when considering any subsequent apportionment of costs.

SCHEDULE III

ARBITRAL TRIBUNAL'S FEES, EXPENSES, TERMS AND CONDITIONS

Note -

• In addition to the Arbitrator's Fee and the Administrative Charges referred to hereinabove, the parties shall also deposit in advance any applicable taxes thereon including requisite stamp duties.

• Each Member of the tribunal is entitled to be paid as per the Schedule above. Sole Arbitrator the arbitral tribunal’s Fees shall be paid 25% more in addition to what is provided in the Schedule

• Air fare and cost of stay in hotel of the member(s) of the Arbitral Tribunal are excluded, which are to be borne equally by the parties.

• In case of bulk filing the rates payable under the Schedule can be suitably adjusted by the Council.

• The initial valuation of claim/counterclaim done by the parties shall be provisional and the final valuation shall be decided by the IDRC for calculation of fees as per the Schedule.

But as far as its cost is concerned several questions arise in the mind of disputing Parties to an Arbitration which includes

How costly is the Arbitration Process

How to calculate cost of Arbitration

Is Arbitration expensive

Is Arbitration cost effective

Who bears cost of Arbitration

Does both Parties share Arbitration Cost

Is arbitration expensive in India

Cost of Domestic Arbitration

Cost of International Arbitration

How much does Arbitrators earn

Which is more costly the Institutional Arbitration or Ad-hoc Arbitration

How much fee do Arbitrators charge

Effect or consequences of non payment of Arbitration fees

Early Neutral Evaluation of Disputes

Early Neutral Evaluation of dispute or in short ENE, is an independent and impartial process where an Advisor or an Evaluator is appointed by the parties to give an assessment or "evaluation" of the merits of their respective cases.  
Origin and Development of ENE is dated to 1985 at the Federal Courts of California where it had operated an experimental program in the expedited dispute resolution by way of Early Neutral Evaluation (ENE).

The development of ENE was led by the desire of the judges to make litigation less expensive and burdensome for clients. They thought that this could best be achieved by getting a neutral party to intervene in the early stages of the litigation process and to inject a dose of “intellectual discipline, common sense, and more direct communication.

When should early neutral evaluation be used?

The evaluator can provide an authoritative view of the issues at the heart of the case and an experienced evaluation of the strength of the evidence available to deploy in addressing those legal issues. This valuation may then be used as the basis for settlement negotiations. 

The ENE process is very flexible. It can be used to explore any combination of legal, evidential, factual or technical questions.

What is the role of an early neutral evaluation?

The neutral evaluator considers each side's position and renders an evaluation of the case. Contracting parties can include an ENE clause in the contract, which represents their agreement to submit to ENE in good faith to resolve any contractual disputes.

How does Early neutral evaluation works?

It is a confidential process in which a neutral third party, who is an expert in the subject matter of the dispute, hears abbreviated arguments on the claims, defenses and expected court outcomes from each party.

The neutral evaluator then issue a non-binding opinion of the projected likely outcome of dispute, related issues or the likely court decision.

An ENE interactions are intended to occur relatively early at the pretrial stage so litigants can use it to reduce the disproportion between litigation transaction costs and case value and to rework the most pointedly focused and efficient case development plan possible.

Is early neutral evaluation binding?

The view of ENE is without prejudice and has no binding effect on the parties.  

Expert Determination Process

Expert determination is a legal procedure in which a dispute or a difference between the parties is submitted, by agreement of the parties, to one or more Domain Experts who make a determination on the matter referred.

Is Expert Determination decision binding?

The decision under Expert Determination is binding, unless the parties agreed otherwise.

Is Expert Determination consensual?

Expert determination by nature can only take place if both parties have agreed to it. In the case of future disputes/differences arising under a contract, the parties can decide to insert an expert determination clause in their contract. An existing dispute/difference can also be referred to expert determination by means of a submission agreement signed between the parties.

Can a Party withdraw from Expert Determination?

In contrast to mediation, a party cannot unilaterally withdraw from expert determination.

Expert determination is a confidential procedure

In terms of specifically defined exceptions, the  process requires confidentiality of the existence of the expert determination, any disclosures made during that procedure, and the resulting determination by the Expert.

Meaning of Arbitration Clause

Its a clause in a written Contract laying down that in case disputes arise between the parties they should be resolved by Arbitration. Businessmen often include Arbitration clause in their contracts to avoid costly litigation. Clause can propose holding of Arbitrations through Ad-hoc Arbitrators or through Arbitration Institution like The IDRC.

As such Arbitration clause is a contract provision which states that dispute resolution shall be carried out by way of Arbitration.

Section 7 of The Arbitration and Conciliation Act, 1996 provides - 

Section 7. Arbitration Agreement

(1) In this Part, 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.

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

(3) An arbitration agreement shall be in writing.

(4) An arbitration agreement is in writing if it is contained in

    (a) a document signed by the parties;

    (b) an exchange of letters, telex, telegrams or other means of telecommunication [including communication through electronic means] which provide a record of the agreement; or

    (c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.

(5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.

Should you include an Arbitration clause in your contract?

It is always recommended to go for ADR methods as the obvious advantage of including an arbitration clause in your contract before the dispute arises is that once the dispute does arise, you can decide to keep out of the court system, and you can compell the other side to arbitrate.

What should an arbitration clause include?

Drafting of an Arbitration clause is important for any Arbitration to function smoothly. Where arbitration clauses contain defective wordings one may observe, recurrent scenarios of unnecessary incidents and procedural debates. 

Points to be kept in mind while drafting Arbitration Clause-

1. Read standard Arbitration Clauses of Institutional Arbitration Centres.

2. Use all terms wisely and precisely as they are important and are going to be interpreted by the arbitral tribunal.

3. Some best drafted arbitration clauses are those which are simple, precise and unambiguous.

4. Be clear about the scope and ambit of application of the arbitration clause ie the specific issues and disputes that are sought to be covered by the clause. 

5. The parties are free to agree on the number of Arbitrators that will sit on an arbitral tribunal.

6. Be clear about the specific applicable Substantive Law and Procedural Law.

7. Be clear about the Seat and Venue of Arbitration hearings.

8. Include the specific desired language of arbitration in their arbitration clause.

9. Go for Institutional Arbitration if you need timebound disposal of dispute through not-for-profit Institutions like The IDRC.

What is the purpose of including an arbitration clause?

The purpose of the Arbitration Clause is to submit present or future disputes between the parties to a particular arbitrator or Institutional Arbitration Centre to resolve their disputes arising out of a particular business relationship.

Are arbitration clauses good?

Arbitration is one of the most popular Alternative Dispute Resolution Mechanism.

In Commercial World Arbitration is opted over Court Litigation as it is-

• Usually cheaper than litigation.
• Help resolve disputes peaceably rather than escalate angst and hostility.
• Quick and result oriented.
• Its procedure is flexible.
• Confidentiality is maintained at all stages.
• Availablity of Domain Experts

What are the pros and cons of arbitration clauses?

Pros of Arbitration includes-

1. It helps resolve disputes in a cordial manner
2. Result quicker as compared to Litigation 
3. Procedure of Arbitration is flexible.
4. Parties are able to maintain confidentiality
5. Domain Experts pitch in as Arbitrators

Cons of Arbitration are-

1. It is always looked upon as a Rich man's ADR
2. Large Corporations have better chances of success against Employees
3. Lack of clarity of applicable Laws
4. Procedures uncertain
5. Absence of dedicated Bar Members for Arbitration.
6. International Arbitration quite costly.
7. Frequent interference by Judicial Courts.

Can I sue if I signed an arbitration agreement?

Arbitration Clause allows parties to submit present or future disputes between the parties to a particular arbitrator or Institutional Arbitration Centre. However it does not totally prohibit filing of a Civil or Commercial Suit altogether. When one Party files a Court Case the other side has an option to move Section 8  Arbitration and Conciliation Act, 1996 objection.

But if no such objection is signed then the Suit shall continue to survive and shall be decided as per law applicable.

Can you refuse Arbitration?

In case there is no binding Arbitration Clause, either of the disputing Party can resist and refuse Arbitration.

How is arbitration clause legal?

Resolution of disputes by way of Arbitration is permissible in India and world over.

 The statutory recognition to Arbitration is more than century old. Law governing Arbitration in India is Arbitration and Conciliation Act, 1996.

What is meant by Arbitration Agreement?

Arbitration Agreement is any ordinary Business Contract which has a clause in which you agree to settle and resolve your disputes out of court, through arbitration.

Arbitration agreements are common in consumer contracts and employment contracts, but they can be proposed additions to any contract negotiation in which one or both parties would like to head off the possibility of a future Court suit.

As compared to a adversarial Court suit, Arbitration is relatively considered to be inexpensive, quick and confidential. 

Section 7 of The Arbitration and Conciliation Act, 1996 provides definition of Arbitration Agreement.

Section 7. Arbitration Agreement

(1) In this Part, 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.

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

(3) An arbitration agreement shall be in writing.

(4) An arbitration agreement is in writing if it is contained in

    (a) a document signed by the parties;

    (b) an exchange of letters, telex, telegrams or other means of telecommunication [including communication through electronic means] which provide a record of the agreement; or

    (c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.

(5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.

Advantages of Arbitration Agreement

• Usually cheaper than litigation.
• Help resolve disputes peaceably rather than escalate angst and hostility.
• Quick and result oriented.
• Its procedure is flexible.
• Confidentiality is maintained at all stages.
• Availablity of Domain Experts

Essentials of Arbitration Agreement

Basic essentials of any Arbitration Agreement include-

1. Use all terms wisely and precisely as they are important and are going to be interpreted by the arbitral tribunal.
2. Some best drafted arbitration clauses are those which are simple, precise and unambiguous.
3. Agreement shall be clear about the scope and ambit of application of the arbitration clause ie the specific issues and disputes that are sought to be covered by the clause. 
4. Agreement shall allow the parties are free to agree on the number of Arbitrators that will sit on an arbitral tribunal.
5. Agreement shall be clear about the specific applicable Substantive Law and Procedural Law.
6. Agreement shall be clear about the Seat and Venue of Arbitration hearings Include the specific desired language of arbitration in their arbitration clause.
7. Agreement shall propose Institutional Arbitration for a timebound disposal of dispute through not-for-profit Institutions like The IDRC.

What does it mean to invoke arbitration?

Either Party to a contract in which there is an Arbitration clause can either himself or through an authorised agent may invoke Arbitration so as to refer the dispute to arbitration, as per provisions of the arbitration clause.

How do you invoke arbitration in India?

Arbitration under The Arbitration and Conciliation Act, 1996 can be invoked for the purpose of quick resolution of disputes at lcost which is less as compared to that of a suit in a court of law.

Section 21. of The Arbitration and Conciliation Act, 1996 provides - 

Commencement of arbitral proceedings. - 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 referred to arbitration is received by the respondent.

How do you enforce an arbitration agreement?

 In case a dispute has arisen and the party has opted to follow the procedure of arbitration then the party against whom the default has been committed will send an arbitration notice for invoking arbitration process steps between the parties.

Can arbitration be invoked without an arbitration clause?

In case both the PArties to a dispute agrees, recource can be made for Arbitration even if there is no Arbitration Clause.

What is the history of arbitration?

The United States and Great Britain were pioneers in the use of arbitration to resolve their differences.At the First International Conference of American States in 1890, a plan for systematic arbitration was developed, but not accepted. The Hague Peace Conference of 1899, saw the major world powers agreed to a system of arbitration and the creation of a Permanent Court of Arbitration. Arbitration was widely discussed among diplomats and elites in the 1890–1914 era.

New York Convention, 1958 and United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 paved way for international cooperation in execution of Awards. UNCITRAL Model Law on International Commercial Arbitration, 1985 prompted Member Nations to amend and legislate Laws to bring uniformity on International Arbitration and execution of International Awards. 

History of Arbitration can be understood in Three Phases in India-

Arbitration during Ancient India period

As per the Hindu Law, one of the earliest known treatise that mentions about arbitration is "Brhadaranayaka Upanishad". Arbitration is prevalent in India right from the Vedic era. Rishi Yajnavalkya has refered to some Arbitration bodies like Sreni, Puga and Kula and they were known as Panchayat. Many disputes were refered to a small group of wise men of community known as ‘PANCHAYAT’ and the senior most is named as Sarpanch, Member are know as ‘Panchas’, the decision taken by them are binding on the parties. So, earlier the disputes were solved through “Panchayati Raj system”.

The disputes which were referred to the Panchayats were well recognized and received belief in the awards passed by them. The Privy Council in the case of Vytla Sitanna vs. Marivada Viranna, AIR 1934 PC 105 recognised them.

Arbitration at the commencement of British rule

 The relatively modern and first Arbitration law was enacted in India in as early as 1772 by Bengal Regulation of 1772, during the British rule. Thereafter Arbitration in India was recognized as dispute resolution and for the first time when India Arbitration Act, 1899 was enacted which applied to only Three presidency town: Madras, Bombay and Calcutta.

Bengal regulation 1781 provided that the judge can recommend to the parties to submit to arbitration of one person to be mutually agreed upon by the parties. However there was no compulsion.

The Bengal Regulation of 1787, 1793 and 1795 thereagter introduced some procedural changes by empowering the court to refer suit to arbitration with the mutual consent of parties. It was extended via Bombay Regulations Act of 1799 and the Madras Regulation Act of 1802.

Bengal Regulation of 1802, 1814 and 1833 also brought further changes in the applicable procedure. The 1st Legislative Council for India was formed in 1834.

The Legislative Council of India, 1834 and then Code of Civil Procedure Act, 1859 were passed with the object of introducing the procedure of civil courts but this code was not made applicable to the supreme court. This was replaced by passing the civil the Civil Procedural Code, 1877. This code of 1877 and 1879 and the third civil procedure code was enacted in 1882, which replaced the previous code.

Legislative Council enacted the Indian Arbitration Act, 1899. It was based on model of English Act of 1899. This act applied to the cases where if subject matter submitted to arbitration were the subject of suit.

Arbitration Act, 1940 applied the whole of India brought uniformity in law across the nation but the Awards were not given finality and left to scrutiny of Civil Court before they acquire finality by way of Rule of Court.

Arbitration under The Arbitration and Conciliation Act, 1996 

Arbitration under The Arbitration and Conciliation Act, 1996 adopted the UNCITRAL Model of United Nations. It also recognised International Arbitration. Apart from minimising Court interference it also provided finality to the Arbitral Awards and made them akin to a Civil Court Decree. Subdequent amendments like Section 29A fixed time duration to complete an Arbitration to One Year after completion of pleadings.

When was arbitration first used in India?

Although the term Arbitration might not find any specific reference in our History books but India has been using Arbitration Method of dispute resolution sicce ancient times. 

As per the Hindu Law, one of the earliest known treatise that mentions about arbitration is "Brhadaranayaka Upanishad". Arbitration is prevalent in India right from the Vedic era. Rishi Yajnavalkya has refered to some Arbitration bodies like Sreni, Puga and Kula and they were known as Panchayat.

Who is the founder of arbitration?

Arbitration is prevalent in India right from the Vedic era and hence this method of dispute resolution is founded in India.

Why was arbitration created?

Growth in International Trade and Commerce catalysed the need of a universally acceptable quick dispute resolution mechanism. Arbitration, by its concept, gives parties sufficient autonomy to decide which Substantive Law to follow and what Procedure to adopt. It allows roping in of Domain Experts and best international legal brains for tefficient dispute resolution.

What does UNCITRAL model mean?

UNCITRAL is United Nations Commission on International Trade Law. Its  UNCITRAL Model Law on International Commercial Arbitration,1985 is designed to assist Member States in reforming and modernizing their Arbitration Laws on procedure so as to take into account the particular peculiar features needed of international commercial Arbitration.

It covers all stages of the arbitral process right from the arbitration agreement, the composition and jurisdiction of the arbitral tribunal and the extent and stages of court/judicial intervention through to the recognition and enforcement of the arbitral award. It reflects worldwide consensus on key aspects of international arbitration practice having been accepted by States of all regions and the different legal or economic systems of the world.

The UNCITRAL Arbitration Rules provide a comprehensive set of procedural rules upon which parties may agree for the conduct of arbitral proceedings arising out of their commercial relationship and are widely used in ad hoc arbitrations as well as administered arbitrations. The Rules cover all aspects of the arbitral process, providing a model arbitration clause, setting out procedural rules regarding the appointment of arbitrators and the conduct of arbitral proceedings, and establishing rules in relation to the form, effect and interpretation of the award.

UNCITRAL is United Nations Commission on International Trade Law

What is UNCITRAL Arbitration Rule?

UNCITRAL Arbitration Rules, 1976

 UNCITRAL Model Law on International Commercial Arbitration,1985 

What is the importance of uncitral model law?

The UNCITRAL Rules on Transparency for Treaty-based Investor-State Arbitration.

The UNCITRAL Arbitration Rules were initially adopted in 1976 and have been used for the settlement of a broad range of disputes, including disputes between private commercial parties where no arbitral institution is involved, investor-State disputes, State-to-State disputes and commercial disputes administered by arbitral institutions. In 2006, the Commission decided that the UNCITRAL Arbitration Rules should be revised in order to meet changes in arbitral practice over the last thirty years. The revision aimed at enhancing the efficiency of arbitration under the Rules without altering the original structure of the text, its spirit or drafting style.

The UNCITRAL Arbitration Rules (as revised in 2010) have been effective since 15 August 2010. They include provisions dealing with, amongst others, multiple-party arbitration and joinder, liability, and a procedure to object to experts appointed by the arbitral tribunal. A number of innovative features contained in the Rules aim to enhance procedural efficiency, including revised procedures for the replacement of an arbitrator, the requirement for reasonableness of costs, and a review mechanism regarding the costs of arbitration. They also include more detailed provisions on interim measures.

With the adoption of the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (the "Rules on Transparency") in 2013, a new article 1, paragraph 4 was added to the text of the Arbitration Rules (as revised in 2010) to incorporate the Rules on Transparency for arbitration initiated pursuant to an investment treaty concluded on or after 1 April 2014. The new paragraph provides for utmost clarity in relation to the application of the Rules on Transparency in investor-State arbitration initiated under the UNCITRAL Arbitration Rules. In all other respects, the 2013 UNCITRAL Arbitration Rules remain unchanged from the 2010 revised version.

What is foreign Award?

A foreign arbitration is an arbitration conducted in a place outside India, and the resulting award is sought to be enforced as a foreign award. Ad hoc Arbitration. Ad hoc arbitration is arbitration agreed to and arranged by the parties themselves without recourse to any institution.

 Section 44 Arbitration and Conciliation Act,1996 defines "foreign award" as an arbitral award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India.

The Section further provides that the above mentioned provisions should be in pursuance of an agreement in writing for arbitration to which the Convention set forth in the First Schedule applies, and in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said Convention applies.

Foreign Award passed in International Arbitration

The New York Convention defines "Foreign Award" as an arbitral award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on or after the 11th day of October, 1960-

1. In pursuance of an agreement in writing for arbitration to which the Convention set forth in the First Schedule applies, and
2. In one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said Convention applies.^[1]

From the abovementioned conditions, it is clear that there are two pre-requisites for enforcement of foreign awards under the New York Convention. These are:

1. The country must be a signatory to the New York Convention.
2. The award shall be made in the territory of another contracting state which is a reciprocating territory and notified as such by the Central Government.

What is the purpose of international arbitration?

The use of international arbitration has evolved to allow parties from different legal, linguistic and cultural backgrounds to resolve their disputes in a final and binding manner, typically without the formalities of the procedural rules of their own legal systems.

Recognition of foreign award in India

Under the Arbitration and Conciliation (Amendment) Act, 2015. There are two avenues available for the enforcement of foreign awards in India, viz., the New York Convention and the Geneva Convention, as the case may be.

Section 46 of the Arbitration and Conciliation Act,1996 provides the criterion as to when such foreign award would be binding on the parties. According to the said Section, any foreign award which would be enforceable shall be treated as binding for all the purposes on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defence, set off or any other purpose in any legal proceedings in India. Such right in a third country can be enforced after the execution of the Arbitral Award in that particular country.

Therefore, an Award may be recognized without being enforced, but if it is enforced, then it is necessarily recognized.

Section 47 of the Arbitration and Conciliation Act,1996provides the requirement as to the evidence, which are required for enforcement of the Arbitral Award. Section 47 of the Act reads as under:

1) The party applying for the enforcement of a foreign award shall, at the time of the application, produce before the court -

a) the original award or a copy thereof, duly authenticated in the manner required by the law of the country in which it was made;

b) the original agreement for arbitration or a duly certified thereof; and

c) Such evidence as may he necessary to prove that the award is a foreign award.

2) If the award or agreement to be produced under subsection (1) is in a foreign language, the party seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in India.

Explanation- In this Section and all the following Sections of this Chapter," 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 over the subject- matter of the award 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.

What are commercial cases?

A commercial dispute or Commercial Cases is defined to include any dispute related to transactions between merchants, bankers, financiers, traders, etc. Such transactions deal with mercantile documents, partnership agreements, intellectual property rights, insurance, etc.

What is commercial dispute India?

Section 2 (c) of Commercial Courts Act, 2015 defines Commercial Disputes - 

 "Commercial Dispute" means a dispute arising out of-

(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;

(ii) export or import of merchandise or services;

(iii) issues relating to admiralty and maritime law;

(iv) transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same;

(v) carriage of goods;

(vi) construction and infrastructure contracts, including tenders;

(vii) agreements relating to immovable property used exclusively in trade or commerce;

(viii) franchising agreements;

(ix) distribution and licensing agreements;

(x) management and consultancy agreements;

(xi) joint venture agreements;

(xii) shareholders agreements;

(xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;

(xiv) mercantile agency and mercantile usage;

(xv) partnership agreements;

(xvi) technology development agreements;

(xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;

(xviii) agreements for sale of goods or provision of services;

(xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum;

(xx) insurance and re-insurance;

(xxi) contracts of agency relating to any of the above; and

(xxii) such other commercial disputes as may be notified by the Central Government.

Explanation. - A commercial dispute shall not cease to be a commercial dispute merely because-

(a) it also involves action for recovery of immovable property or for realisation of monies out of immovable property given as security or involves any other relief pertaining to immovable property;

(b) one of the contracting parties is the State or any of its agencies or instrumentalities, or a private body carrying out public functions;

What is an example of commercial litigation?

What comes under a commercial dispute?

While commercial disputes cover a wide field, some of the most common types of dispute include:
– Contractual disputes, including breaches and lack of delivery
– Competition disputes
– Business disputes, commonly between shareholders, directors, and other ranking individuals
– Professional insolvency
– Professional and commercial negligence
– Fraud
– Outsourcing disputes
– Construction disputes, including contractual, building, and regulatory issues
– Partnership disputes
– Reputation management, including countersuits, defamation, NDA breach
– Patent and Intellectual Property disputes

These can come from a wealth of professional sectors including finance, aviation, construction, information technology, and a range of other fields. While there are a number of variables and regulations, it is essential that you seek professional guidance before enacting a dispute or becoming the subject of one.

What is Commercial arbitration India?

Commercial Arbitration in Indian context means of method of settling disputes by referring them to a neutral person called an Arbitrator. Arbitratal Tribunal is selected by the parties either mutually or as per Arbitration clause. It is a private adjudication where the decision based on the evidence and arguments presented by both the sides before the arbitration tribunal.

The law which governs Arbitration in India is Arbitration and Conciliation Act,1996. Decision to settle disputes is taken either in the broader business Contract or mutually post the arising of the dispute. 

Term Commercial is used to denote Commercial Transactions as defined under Commercial Courts Act, 2015. 

What is an international commercial arbitration?

International commercial arbitration is an alternative method of resolving disputes between private parties arising out of commercial transactions conducted across national boundaries by way of Arbitration.

International commercial arbitration allows the parties to avoid litigation in national courts.

What is the purpose of international commercial arbitration?

Arbitration customarily has been used for the settlement of disputes between members of trade associations and between different exchanges in the securities and commodities trade globally.

Form contracts often contain a standard arbitration clause referring to specific arbitration contracts entered between Citizens or Corporate entities of two or more Countries.

Numerous arrangements between parties in industry and commerce also provide for the arbitration of controversies arising out of contracts for the sale of manufactured goods, for terms of service of employment, for construction and engineering projects, for financial operations, for agency and distribution arrangements, and for many other undertakings.

Recognition of international commercial arbitration in India?

Generally, the mutual understanding and the agreement to resolve disputes by way of arbitration emanates from a clause within a Business contract. As such the Arbitration agreement is a mutually binding Contract on its own and is quite independent in its existence from the substantive contract in which it incorporated.

The Arbitration and Conciliation Act,1996 applies to arbitrations which are held in India between Indian nationals and to international commercial arbitrations whether held in India or out of India. Part 1 of the Act covers all kinds of international commercial arbitrations.

In case where there is no express choice of law governing the contract as a whole or the arbitration agreement in particular, there is, in the absence of any contrary indication, a presumption that the parties have desired that the proper law of the contract as well as the law governing the arbitration agreement are the same as the law of the country in which the arbitration is agreed to be held.

An International Commercial Arbitration is a form of Alternative Dispute Resolution (ADR) where one or more person(s) are appointed to arbitrate upon a dispute that takes place which is not specfic to one jurisdictional Country. Here the Arbitration subject and dispute reaches beyond the borders of a single jurisdiction.

Which Law governs International Commercial Arbitration?

Law which governs International Commercial Arbitration is usually more than one in number-

• the law governing the substantive bilateral contract
• the law governing the Arbitration procedure or seat of Arbitration
• the law governing the Arbitration agreement/clause
• the law of the Country/State where the award will be enforced.

What is the concept of Construction Arbitration?

Arbitration is a form of alternative dispute resolution (ADR) that provides a mechanism to settle construction related dispute.

Construction Arbitration is private, with the aim to resolve disputes fairly, keeping costs and delays to a minimum. Disputes are resolved based on material facts, documents, and relevant construction law principles.

Construction disputes are always considered as more complex in every aspect viz. technically, financially, revenue record wise and architecturally. A typical construction disputes arises between the property owner and the main contractor, subcontractors, sub-subcontractors, architects, end purchasers and design professionals. Similar complexities arese in highrise Commercial and Residential Societies.

Why disputes arise in Construction Arbitration?

•  Failure to administer the contract due to ambiguous terms of the contract or technical issues, force majeure;
• Employer/contractor/subcontractor failing to understand their obligation under the law or incomplete design ;
• Organizational behaviour and culture;
• Poorly drafted contract, errors in contract document or incomplete claims.

What are Pros and Cons of Construction Arbitration?

Cost of Construction Arbitration

Pro: Unlike court litigation, it’s not necessary to engage an Advocate to file or defend claim in Construction Arbitration. 

Con: While its not mandatory, most parties elect to be represented by a lawyer. Consequently, the cost savings of not using a lawyer often is not realized. Arbitral Tribunal with Domain Experts and Domain Expert Witness are quite rare and comes at a Cost.

Timely decision of Construction Arbitration

Pro: The Construction Arbitrator sets the date, time and place for the hearing after consulting with the parties. Under newly added Section 29 A of Arbitration and Conciliation Act, 1996 such proceeding has to be finished within One Year.

Con: A lawsuit ordinarily takes nine to 12 months to get from the initial filing to the trial. However, unlike in an arbitration, a lawsuit opens up the opportunity to have the court make legal rulings in advance of the trial that narrow the issues or dismiss all or part of the claims.

Decision taking authority in Construction Arbitration

Pro: In an Construction Arbitration, the parties can choose an arbitrator who has experience with construction. Additionally, unlike a judge in a court proceeding whose docket is often dominated by criminal, divorce and personal injury cases, an arbitrator ordinarily has the time to evaluate and decide the dispute.

Con: Unlike an Construction arbitration, a judge or jury ordinarily does not have a background as an owner, general contractor, subcontractor or architect. Consequently, they do not have a bias in favor of one segment of the construction industry. For this reason, general contractors often object to the selection of a subcontractor as an arbitrator.

Recording of Evidence in Construction Arbitration

Pro: The rules of evidence and Evidence Act per se not applicable in an arbitration proceeding. This makes it less time-consuming and less expensive to present a case in an arbitration proceeding than in a court trial.

Con: While a party in an arbitration proceeding can be confronted with documents available during cross-examination but in an Construction Arbitration proceeding, proof of damages can be based on mere speculation and conjecture, in the absence of detailed Evidence.

Discovery of Facts and Documents in Construction Arbitration

Pro: Construction Arbitration proceeding provide limited rights to discover information from the opposing party except for an exchange of exhibits and lists of witnesses before the hearing. But the arbitrator has the discretion to direct the parties to exchange documents and other information and identify witnesses, however usually there is no other discovery except for an exchange of exhibits few days before the hearing.

Con: Court rules allow each party to use different methods to discover information known only by the opposing party or a third party, including depositions, interrogatories under oath and for the production of documents. This greatly increase the chances that each party will discover the weaknesses and strengths of their respective cases before trial.

Confidentiality under Construction Arbitration

Pro: Construction Arbitration proceedings carried out behind closed doors in the presence of parties and are not open to the public and the parties can agree to keep the proceeding confidential.

Con: On the other hand in the court proceeding, confidential information cannot be concealed from the public as hearings are carried out in open Court.

Joining of Third Parties in Construction Arbitration

Pro: Construction Arbitration is usually carried out between the Contracting Parties and Third parties who might be responsible for the dispute may not be brought into the arbitration at all. For example an architect who is responsible for the defective designing may not join the arbitration between the owner and building contractor without the architect’s consent. Thus, most arbitration proceedings involve only the two parties to the contract.

Con: Court on the other hand can allow impleadment of a third party who has been sued for something for which a third party is found to be responsible for the dispute.

Right to Appeal under Construction Arbitration

Pro: Appeals against an arbitration award is not permitted under Indian Law. However some orders are Appealable as provided under Section 37 of Arbitration and Conciliation Act, 1996.

Con: In a Court Trial the loosing Party has a right to appeal to a higher court. The basis for the appeal can include alleged errors made by the trial judge as well as alleged mistakes made by the jury, including that the result is not supported by the evidence.

Enforcement of Construction Arbitration Award

Pro: Award holder can file an application with the local court for Execution of an arbitration award unless the same is stayed by the Court hearing the Objection Petition under Section 34 of Arbitration and Conciliation Act, 1996

Con: Court Decree can be executed by Civil Courts and the Arbitral Award is also treated as same par.

What is Maritime Arbitration in India?

Maritime arbitration is generally speaking any Arbitration which has some relation or concern with a ship. It can be for the carriage of goods or passengers by sea route or the sale of used/second-hand ships or building of a new ones or the chartering of a yacht or offshore support vessel.  

Variety and range of maritime arbitration is mainstake of international commercial arbitration and it is clearly covered in the definitions of ‘international’ and ‘commercial’ in Article 1 of the UNCITRAL Model Law. 

World over Maritime law follows a different system and is generally separate from national law. The United Nations (UN) has founded the International Maritime Organization (IMO), which has published several important Maritime conventions that are being implemented by nations who have signed the treaties.

Last year the Gujarat Maritime University and the International Financial Services Centres Authority signed a Memorandum of Understanding (MoU) at GIFT City to launch the Gujarat International Maritime Arbitration Centre (GIMAC). This will be the country's first arbitration and mediation centre for the marine and shipping industries.

Why is it called maritime?

The word Maritime originated from the Latin word maritimus, which means "of the sea." 

What is International Maritime Arbitration?

Maritime Arbitration is a recognised branch of dispute resolution in international trade and commerce.

London and New York have traditionally been the dominant centres of maritime arbitration. In recent years, South Asian Countries have done significant work to develop arbitral systems dedicated to the resolution of maritime disputes.

International Congress of Maritime Arbitrators (ICMA) organised every two or three years hosts maritime arbitrators and other participants in maritime arbitration from around the world.

Amicable resolution of business disputes in Maritime trade has become pivtol in a worldwide market marked by fast economic growth and comprehensive logistical services. Maritime Arbitration is quite different from general arbitration in so far it sets its own norms and procedures.

What do you mean by Sports Arbitration?

Broadly Sports Arbitration can be understood as a method of settlemrnt and resolution of sport-related disputes by way of a duly binding arbitral decision.

Sports Arbitration is now on the path of becoming a predominant method for resolution of sports disputes through adoption of uniform procedures and conventions as laid by the Court of Arbitration for Sport (the “CAS”), based in Lausanne, Switzerland.

Court of Arbitration for Sport

The CAS or Court of Arbitration for Sport is an independent  institution of any sports organisation which provides for servic­es in order to facilitate the settlement of sports-related disputes through mediation or arbitration by means of procedural rules adapted to the­ specific needs of the sports world.

The CAS was established in 1984 and is placed under the administrative and financial authority of the International Council of Arbitration for Sport (ICAS).

 The CAS as on date has nearly 300 arbitrators from 87 countries, chosen for their specialist knowledge of arbitration and sports law. Around 300 cases are registered with CAS every year.

Sport Arbitration in India?

The Union Minister of Law and Justice, Kiren Rijiju has inaugurated the first Sports Arbitration Centre of India at Ahmedabad in Gujarat. This Sports Arbitration Centre of India (SACI) will serve as an independent body to fast track disputes in the sports sector and serve as a mechanism to redress issues related to sports.

The SACI will be promoted with legal backing by the Ministry of Law and Justice. The SACI will have a far-reaching impact for the sports sector of the country by creating a reputation and establishing credibility for itself through the provision to settle disputes and other issues and concerns of the sports sector in a fast, transparent and very accountable manner.

What is Arbitration of Oil and Gas?

Last 25 years have witnessed an increase in number of international arbitral awards pertaining to the petroleum industry. While a few notable Oil and Gas related disputes have reached the convential courts, international arbitration still remains the favoured dispute resolution mechanism.

Petroleum disputes are broadly divided into three categories:

• Petroleum Disputes between investors and the host state;
• Petroleum Disputes between investors; and disputes between investors (typically via the operator) and
• Third parties Petroleum Disputes (e.g., oilfield services providers, insurers).

Each category gives rise to unique issues. Complexity of dispute may vary depending upon hosts of other reasons.

Petroleum Arbitration has been described as a private process which commences with the agreement of parties to an existing, or potential, dispute to submit that dispute related tp oil, gas and other hydrocarbons for decision by a tribunal of one or more arbitrators.

International Arbitration in Petroleum Industry

Internationally Arbitration is being widely used in the oil and gas industry and the UNCITRAL Rules are being adopted more often in oil industry arbitrations.

Factors which contribute to the use of arbitration as a tool for dispute resolution in international agreements in the petroleum industry broadly includes:

1) Owin to the technical nature of the industry domain knowledge is needed for resolution of disputes.

2) Contracts are drafted by professional advisers and dispute are anticipated owing to risks involved.

3) Operations of multinational Petroleum companies are often global and as such favour arbitration for dispute resolution.

Nature of disputes under Petroleum Arbitration

Disputes in the oil and gas sector could arise as a result of multifarious reasons-

• environmental claims;
• shareholder value related issues,
• regulatory issues,
• trade restriction among others,
• fluctation in Foreign Currency rates,
• price variation in product due to external reasons,
• breach of delivery timelines due to war or environmental reasons.

Contracts in the oil and gas industry more often do involve individual foreign parties.  It could be an individual, an agency representing a state or even a NOC.

Recourse to a conventional court to redress any contractual disputes between these parties would mean that, the national court would be a foreign court to the other party.

These courts have their own rules; formalities and procedure designed to deal with domestic issues and may not have the competence and experience to handle complex international cases.  The language of these courts may not be the language of the contract and hence cannot be used to settle such international energy disputes.

What is Emergency Arbitration?

Emergency arbitration is a mechanism whereby disputing party apply for urgent interim relief before an Arbitration Tribunal has been formally constituted for dissolution of disputes. 

Such arbitration is usually agreed to and arranged by the parties themselves without taking recourse to a regular Arbitral Tribunal at the first instance. The proceedings either domestic or international are conducted by an Arbitrator as per the agreement between the parties or with the concurrence of the parties.

An Emergency Arbitration can order for interim measures or conservatory relief only for a fixed period of time. An Arbitrator appointed for the purposes of an Emergency Arbitration is known as an Emergency Arbitrator. The Emergency Arbitrator becomes functus officio once the Interim Order is passed.

Under 'International Arbitration' Emergency arbitration is looked upon as a mechanism which allows a disputing party to apply for urgent interim relief before a regular Arbitration Tribunal has been formally constituted. 

What is the legal status of an Emergency Arbitration in India?

In order to recognise emergency arbitrations, The Law Commission's 246th Report² on amendments to the Arbitration and Conciliation Act, 1996, proposed an amendment to Section 2(d) of the Act. This amendment was to ensure that institutional rules such as the SIAC Arbitration Rules, or ICC Rules or any other rule which provide for an appointment of an emergency arbitrator are given statutory recognition in India:

"Section 2(d): "Arbitral tribunal" means a sole arbitrator or a panel of arbitrators and, in the case of an arbitration conducted under the rules of an institution providing for appointment of an emergency arbitrator, includes such emergency arbitrator."

It was expected that the Arbitration and Conciliation (Amendment) Act, 2015³ would embrace this global turn of tide and create provisions for appointment of Emergency Arbitrator. The Amendment of 2015, however, failed to incorporate the recommendation of the Law Commission and does not provide at all for Emergency Arbitration.

'Domestic Arbitration' Law in India do not contain any provision for Emergency Arbitration. WHenever any Party is in need to seek urgent relief the are permitted to approach the Courts under Section 9 of Arbitration and Conciliation Act, 1996. In case it is a pending Arbitration matter urgent relief can be sought by invoking Section 17 of Arbitration and Conciliation Act, 1996. However lately Delhi High Court gave recognition to an Interim Award passed by an Emergency Arbitration of Singapore in Amazon.com vs Future Coupons Pvt. Ltd, 2021 Latest Caselaw 907 Del which was upheld by Hon'ble Supreme Court for the purpose of its Execution in India in Amazon.Com NV Investment Holdings LLC v. Future Retail Limited & ors, 2021 Latest Caselaw 312 SC.

Supreme Court's this decision in Amazon v. Future is being looked upon as an important precedent strengthening the party autonomy in India. In so far as this decision gives legitimacy to an emergency awards made under the rules of an arbitral institution by treating it on par with an interim order made by an arbitral tribunal seated in India it paves the way for an emergency arbitration award in an India-seated arbitration to be enforced by Indian courts in the same way as if it were a decree of an Judicial forum in Indian.

Section 8. Power to refer parties to arbitration where there is an Arbitration agreement

[(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.]

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

[Provided that where the original arbitration agreement or a certified copy thereof is not available with the party applying for reference to arbitration under sub-section (1), and the said agreement or certified copy is retained by the other party to that agreement, then, the party so applying shall file such application along with a copy of the arbitration agreement and a petition praying the Court to call upon the other party to produce the original arbitration agreement or its duly certified copy before that Court.]

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.

Scope of Section 8 of Arbitration and Conciliation Act

Section 8 of the 1996 Act denotes a provision which puts a limit to judicial intervention in the process of arbitration. However, the judiciary has drawn exception to the extent of intervention on the basis of the arbitrability of the subject matter and the competence of the arbitral tribunal to deal with it.

The scope of Section 8 of the Arbitration and Conciliation Act, 1996 and the extent of judicial intervention on its invocation have been the subject-matter of a series of pronouncements of the Supreme Court and various High Courts.

Section 8 of the 1996 Act mandates that a judicial authority before whom an action is brought, which is the subject of an arbitration agreement between the parties, shall refer the parties to arbitration. 

Section 9. Interim measures, etc., by Court

[(1)] A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a Court:

(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or

(ii) for an interim measure of protection in respect of any of the following matters, namely:

(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver;

(e) such other interim measure of protection as may appear to the Court to be just and convenient,

and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.

[(2) Where, before the commencement of the arbitral proceedings, a Court passes an order for any interim measure of protection under sub-section (1), the arbitral proceedings shall be commenced within a period of ninety days from the date of such order or within such further time as the Court may determine.

(3) Once the arbitral tribunal has been constituted, the Court shall not entertain an application under sub-section (1), unless the Court finds that circumstances exist which may not render the remedy provided under section 17 efficacious.]

What is the difference between Section 9 and 17 of the Arbitration Act?

Scheme of Section 9 and Section 17

Supreme Court of India has observed that Section 9(1) of the Act enables a party to an arbitration to apply to a Court for interim measures for protection before/during the arbitral proceedings or any time after the making and publishing of the award but before the enforcement of the final arbitral award under Section 36 of the Act.

This is qualified by Section 9(3), which has two limbs:

• the Court cannot entertain an application after the constitution of the Arbitral Tribunal
• unless the Court finds that circumstances exist which may render the remedy under Section 17 inefficacious.

To discourage the filing of applications for interim measures in Courts, the Arbitral Tribunal has been clothed with the same powers as the Court to grant interim measures under Section 17 under Section 9(1).

An order of the Arbitral Tribunal is deemed to be an order of the Court for all purposes and is enforceable as an order of the Court. Therefore, there is no reason for the Court to continue to take up applications for interim relief once the Arbitral Tribunal is constituted and is in seisin of the dispute between the parties, unless there is some impediment in approaching the Arbitral Tribunal or the interim relief sought cannot expeditiously be obtained from the Arbitral Tribunal. This is the backdrop for the prescriptions contained in Section 9(3).

Meaning of the term ‘entertain’ in Section 9(3)

The Supreme Court observed that the word ‘entertain’ means to “consider by application of mind to the issues raised.” A Court entertains a case when it takes a matter up for consideration. Once an application is entertained in the sense it is taken up for consideration, and the Court has applied its mind to the matter, it can certainly proceed to adjudicate the application. The process of consideration could continue till the pronouncement of judgment. However, that would make no difference – the question is whether the process of consideration has commenced, and/or whether the Court has applied its mind to some extent before the constitution of the Arbitral Tribunal. If so, the application can be said to have been entertained before constitution of the Arbitral Tribunal.

A combined reading of Section 9 with Section 17 of the Act suggests that  once an Arbitral Tribunal is constituted, the Court would not entertain and/or in other words take up for consideration and apply its mind to an application for interim measure, unless the remedy under Section 17 is inefficacious, even though the application may have been filed before the constitution of the Arbitral Tribunal. However, the bar of Section 9(3) would not operate once an application has been entertained, as in the instant case, where hearing was concluded and judgment had been reserved. It could never have been the legislative intent behind Section 9(3) to turn back the clock and require a matter already reserved for orders to be considered in entirety by the Arbitral Tribunal under Section 17.

Even if an application under Section 9 has been entertained prior to the constitution of the Arbitral Tribunal, the Court has the discretion to direct the parties to approach the Arbitral Tribunal, if necessary by passing a limited order to interim protection. The Court may pass such an order particularly when there has been a long gap between hearings and the application, for all practical purposes, deserves to be heard afresh, or if the hearing has just commenced and is likely to consume a lot of time.

Section 11. Appointment of Arbitrators under Arbitration and Conciliation Act, 1996

CHAPTER III
Composition of arbitral tribunal of Arbitration and Conciliation Act, 1996

Section 11. Appointment of Arbitrators

(1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.

(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.

[(3A) The Supreme Court and the High Court shall have the power to designate, arbitral institutions, from time to time, which have been graded by the Council under section 43-I, for the purposes of this Act:

Provided that in respect of those High Court jurisdictions, where no graded arbitral institution are available, then, the Chief Justice of the concerned High Court may maintain a panel of arbitrators for discharging the functions and duties of arbitral institution and any reference to the arbitrator shall be deemed to be an arbitral institution for the purposes of this section and the arbitrator appointed by a party shall be entitled to such fee at the rate as specified in the Fourth Schedule:

Provided further that the Chief Justice of the concerned High Court may, from time to time, review the panel of arbitrators.]

(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, on an application of the party, by the arbitral institution designated by the Supreme Court, in case of international commercial arbitration, or by the High Court, in case of arbitrations other than international commercial arbitration, as the case may be].

(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 on an application of the party in accordance with the provisions contained in sub-section (4).].

(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 [the appointment shall be made, on an application of the party, by the arbitral institution designated by the Supreme Court, in case of international commercial arbitration, or by the High Court, in case of arbitrations other than international commercial arbitration, as the case may be] to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment.

[(6A) ***]

[(6B) The designation of any person or institution by the Supreme Court or, as the case may be, the High Court, for the purposes of this section shall not be regarded as a delegation of judicial power by the Supreme Court or the High Court.]

[(7) ***]

[(8) [The arbitral institution referred to in sub-sections (4), (5) and (6)], before appointing an arbitrator, shall seek a disclosure in writing from the prospective arbitrator in terms of sub-section (1) of section 12, and have due regard to-

(a) any qualifications required for the arbitrator by the agreement of the parties; and

(b) the contents of the disclosure and 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 arbitral institution designated by the Supreme Court] may appoint an arbitrator of a nationality other than the nationalities of the parties where the parties belong to different nationalities.

[(10) ***]

[(11) Where more than one request has been made under sub-section (4) or sub-section (5) or sub-section (6) to different arbitral institutions, the arbitral institution to which the request has been first made under the relevant sub-section shall be competent to appoint.

(12) Where the matter referred to in sub-sections (4), (5), (6) and (8) arise in an international commercial arbitration or any other arbitration, the reference to the arbitral institution in those sub-sections shall be construed as a reference to the arbitral institution designated under sub-section (3A).

(13) An application made under this section for appointment of an arbitrator or arbitrators shall be disposed of by the arbitral institution within a period of thirty days from the date of service of notice on the opposite party.

(14) The arbitral institution shall determine the fees of the arbitral tribunal and the manner of its payment to the arbitral tribunal subject to the rates specified in the Fourth Schedule.

Explanation. - For the removal of doubts, it is hereby clarified that this sub-section shall not apply to international commercial arbitration and in arbitration's (other than international commercial arbitration) where parties have agreed for determination of fees as per the rules of an arbitral institution.]

Scope of Section 11 of Arbitration and Conciliation Act

Parliament has ensured that the Act contains adequate provisions to deal with situations and circumstances which require intervention of courts whenever necessary.

One such provision is Section 11 of the Act which apart from granting parties the liberty to devise their own procedure to appoint arbitrator(s) (subject to provisions of the Act) describes the extent and role of courts in appointment of arbitrators.

In case of non-appointment in an international commercial arbitration i.e. an arbitration where at least one of the parties is foreign, the party concerned can approach the Supreme Court or before the relevant High Courts in all other cases.

Originally Section 11 of the Act envisaged that if one of the parties failed to appoint an arbitrator in terms of the agreement between the parties (or within 30 days of the receipt of a request to do so from the other party, in case there is no agreed procedure), the requesting party could approach the Chief Justice of India and request the Chief Justice to appoint the arbitrator. The appointment would then be made either by the Chief Justice himself, or by any person or institution designated by him for this purpose.

The 2015 Amendment Act also introduced a timeline for the disposal of a Section 11 application by introducing sub-section (13). Notably, this timeline of sixty days from the date of service of notice on the opposite party is only directory and the Supreme Court or the person or institution designated by it are required to make an endeavour to adhere to this time-period.

The Supreme Court has not designated an institution for exercising the powers under the Act and therefore continues to hear Section 11 applications itself. However, pursuant to Section 11(10) of the Act (before its amendment in 2015), the Chief Justice of India formulated ‘The Appointment of Arbitrators by the Chief Justice of India Scheme’ on May 16, 1996 (“the Scheme”) which is still in force. Therefore, the provisions of the Act, the Supreme Court Rules, 2013, and the Scheme govern Section 11 applications.

A two judge bench of the Supreme Court has recently passed a landmark judgment, expanding the scope of judicial inquiry under Section 11 of the Arbitration and Conciliation Act, 1996, in DLF Home Developers Limited v. Rajapura Homes Private Limited, 2021 Latest Caselaw 427 SC and DLF Home Developers Limited v. Begur OMR Homes Private Limited & Ano.

The Supreme Court has finally clarified that the Courts are “not expected to act mechanically merely to deliver a purported dispute raised by an applicant at the doors of the chosen Arbitrator.”  The Courts are, in fact, “obliged to apply their mind to the core preliminary issues, albeit, within the framework of Section 11(6-A) of the Act.”  The Supreme Court held that while such a review is not intended to usurp the jurisdiction of the Arbitral Tribunal, it is aimed at streamlining the process of arbitration. As such, “even when an arbitration agreement exists, it would not prevent the Court to decline a prayer for reference if the dispute in question does not correlate to the said agreement.”

Section 12. Grounds for challenge of appointment of Arbitrator

CHAPTER III
Composition of arbitral tribunal of Arbitration and Conciliation Act, 1996

Section 12. Grounds for challenge

[(1) When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances,-

(a) such as the existence either direct or indirect, of any past or present relationship with or interest in any of the parties or in relation to the subject-matter in dispute, whether financial, business, professional or other kind, which is likely to give rise to justifiable doubts as to his independence or impartiality; and

(b) which are likely to affect his ability to devote sufficient time to the arbitration and in particular his ability to complete the entire arbitration within a period of twelve months.

Explanation 1. - The grounds stated in the Fifth Schedule shall guide in determining whether circumstances exist which give rise to justifiable doubts as to the independence or impartiality of an arbitrator.

Explanation 2. - The disclosure shall be made by such person in the form specified in the Sixth Schedule.]

(2) 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 sub-section (1) unless they have already been informed of them by him.

(3) An arbitrator may be challenged only if.

(a) circumstances exist that give rise to justifiable doubts as to his independence or impartiality, or

(b) he does not possess the qualifications agreed to by the parties.

(4) A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made.

[(5) Notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator:

Provided that parties may, subsequent to disputes having arisen between them, waive the applicability of this sub-section by an express agreement in writing.]

Scope of Section 12 of Arbitration and Conciliation Act

Section 12 of Arbitration and Conciliation Amendment Act, 2015 mainly deals with the neutrality of the arbitrators. Section 12 does not allow an arbitrator to conduct an arbitration proceeding, if the arbitrator is biased towards the parties or party in that particular proceeding.

The amendment in Arbitration and Conciliation Act in 2015, a special provision was inserted which is, according to Section 12 of Arbitration and Conciliation (Amendment) Act, 2015 “Every person who has been contacted by the parties to select an arbitrator shall report in writing, expressly or indirectly, all the particulars of the past or current relationship with the parties, the lawyer or the subject-matter concerned and also the result of the arbitration, which could be financial, professional, commercial or some other kind likely to give rise to justifiable concerns as to impartiality and freedom, which may also contribute to the failure to commit adequate time to the arbitration and to the willingness of the arbitrator to operate and to give the parties a verdict within 12 months”.

According to the rules and regulation of 6^th  Schedule, every arbitrator has a duty to disclose all the facts before the beginning of the Arbitration proceedings and on the basis of the disclosure provided by the arbitrator, it will be decided whether any such condition occurs or whether it comes under the scope of any of the grounds set out in the Fifth or Sixth Schedule.

Section 13. Challenge procedure under Arbitration and Conciliation Act, 1996

CHAPTER III
Composition of arbitral tribunal of Arbitration and Conciliation Act, 1996

Section 13. Challenge procedure

(1) Subject to sub-section (4), the parties are free to agree on a procedure for challenging an arbitrator.

(2) Failing any agreement referred to in sub-section (1), a party who intends to challenge an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in sub-section (3) of section 12, send a written statement of the reasons for the challenge to the arbitral tribunal.

(3) Unless the arbitrator challenged under sub-section (2) withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.

(4) If a challenge under any procedure agreed upon by the parties or under the procedure under sub-section (2) is not successful, the arbitral tribunal shall continue the arbitral proceedings and make an arbitral award.

(5) Where an arbitral award is made under sub-section (4), the party challenging the arbitrator may make an application for setting aside such an arbitral award in accordance with section 34.

(6) Where an arbitral award is set aside on an application made under sub-section (5), the Court may decide as to whether the arbitrator who is challenged is entitled to any fees.

What is the Scope of Section 13 of Arbitration and Conciliation Act, 1996

Section 13 provides the procedure in this regard, subject to what is agreed between the parties. U/s 13(1), if a party intends to challenge the arbitrator, then he may send a written statement giving reasons for challenging the arbitral tribunal, within 15 days of becoming aware of the constitution of the tribunal. The tribunal is competent to look into the controversy however, Section 13 (4) clearly prescribes that the tribunal shall continue with the proceedings. Subsequently when the award is made, the party can challenge the award and it can be the said ground which he had taken at the initial stage.

The recourse for withdrawal to the challenged arbitrator himself under Section 13(3) is, truly speaking, little more than an empty formality. At best, it is a dignified way of showing the exit to an arbitrator who cares. But an arbitrator who does not care may refuse to withdraw and also, sitting on the challenge as the arbitral tribunal under Section 13(3), decide against the challenge thereby clearing the way for himself under Section 13(4) to continue and complete the arbitral proceeding and make the arbitral award leaving the challenging party high and dry.

What is the remedy if the Arbitrator is not working properly?

It is often said that an Arbitration is only as good as the Arbitrators appointed for the same. Efficiency of any arbitration process revolves around the Arbitrator choosen.  An Arbitrator shall always be independent, neutral and impartial.

As the Arbitration is a quasi-judicial process, it has to necessarily adhere to the laws of the State, chosen institution and principles of natural justice and fairplay.

The UNICITRAL Model Law, Arbitration and Conciliation Act, 1996 ensure that the entire Arbitral exercise is based on fair play and equity. 

If an Arbitrator has an ulterior motive, he/she may not adjudge the challenge fairly and continue to be Arbitrate till the end of the proceedings. In such a scenario, the aggrieved party will have to continue to wait for the entire duration of the arbitral process.  The resultant effect will be loss of valuable time because now the aggrieved party has already made up mind to file for setting aside of Award pass by the Arbitrator. By allowing such an Arbitrator to continue with the proceeding, the provision is actually empowering him to continue with the Arbitral proceedings.

Section 14. Failure or impossibility to act on the part of Arbitrator

CHAPTER III
Composition of arbitral tribunal of Arbitration and Conciliation Act, 1996

Section 14. Failure or impossibility to act

[(1) The mandate of an arbitrator shall terminate and he shall be substituted by another arbitrator, if']

    (a) he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay; and

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

(2) If a controversy remains concerning any of the grounds referred to in clause (a) of sub-section (1), a party may, unless otherwise agreed by the parties, apply to the Court to decide on the termination of the mandate.

(3) If, under this section or sub-section (3) of section 13, an arbitrator withdraws from his office or a party agrees to the termination of the mandate of an arbitrator, it shall not imply acceptance of the validity of any ground referred to in this section or sub-section (3) of section 12.

Scope of Section 14 of Arbitration and Conciliation Act, 1996

Party interested in removal of Arbitrator shall file a petition under Section 14 of the Act, if it is found that she/he is disqualified on the basis of grounds (relationships) stated in the Seventh Schedule. Once covered he becomes de jure disqualified to continue to act as arbitrator under Section 14(1) (a) of Arbitration and Conciliation Act, 1996.

When an arbitrator is disqualified on the basis of the grounds stated in Section 12(5) read with Schedule Seven then lot of time shall be spent in challenging such termination under Section 13. Further if such challenge does not succeed, then the party will have to wait for the passing of final award to be passed and challenge the same under Section 34. Hence, if an arbitrator is de jure ineligible under Section 12(5) read with Seventh Schedule of the act then termination can be sought under Section 14(1) (a) directly by filing an application before the Court

In case titled WEST HARYANA HIGHWAYS PROJECTS PVT. LTD V NATIONAL HIGHWAYS AUTHORITY OF INDIA, 2017 Latest Caselaw 2389 Del a petition was filed before Delhi High Court under Section 14 of the Arbitration and Conciliation Act, 1996 for termination of the Arbitrator appointed by the Respondent on grounds of ineligibility as stated in Section 12(5) read with Schedule Seven of the Act. The Court framed a question of law as to whether a party can approach court directly under Section 14 of Arbitration and Conciliation Act for removal of arbitrator on grounds stated in Section 12(5) along with Schedule Seven of the Act.

Bench held, the Seventh Schedule is essentially a subset of the Fifth Schedule of the Act. The grounds indicated in the Fifth Schedule would indicate circumstances giving rise to justifiable doubts as to the independence or impartiality of an arbitrator; it is not necessary that such grounds would render the arbitrator ineligible to act. The Fifth Schedule is only to serve as a guide for the disclosure to be made by an arbitrator. The schematic interpretation of Section 12(1) read with Section 13 of the Act indicates the legislative intent that in such cases, the challenge must be considered by the arbitral tribunal and an unsuccessful challenge before the arbitral tribunal must not be permitted to interdict the arbitral proceedings.

It was ruled that the learned Arbitrator due to being on panel of advisers of the Respondent shall be terminated and a new arbitrator shall be appointed by the Respondent within a period of 30 days. On failure to appoint within specified period, the Petitioner shall be free to approach the Court for the same.

Section 15. Termination of mandate and substitution of arbitrator under Arbitration and Conciliation Act, 1996

CHAPTER III
Composition of arbitral tribunal of Arbitration and Conciliation Act, 1996

Section 15. Termination of mandate and substitution of arbitrator -

(1) In addition to the circumstances referred to in section 13 or section 14, the mandate of an arbitrator shall terminate

     (a) where he withdraws from office for any reason; or

     (b) by or pursuant to agreement of the parties.

(2) Where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced.

(3) Unless otherwise agreed by the parties, where an arbitrator is replaced under sub-section (2), any hearings previously held may be repeated at the discretion of the arbitral tribunal.

(4) Unless otherwise agreed by the parties, an order or ruling of the arbitral tribunal made prior to the replacement of an arbitrator under this section shall not be invalid solely because there has been a change in the composition of the arbitral tribunal.

Scope of Section 15 of Arbitration and Conciliation Act, 1996

While Section 14 of the Arbitration and Conciliation Act, 1996 governs the situation relating to termination of the mandate of the arbitrator because of his/her failure to act the Section 15 of the Act emphasises on the withdrawal of office by the arbitrator himself and thereafter substitution by way of appointment of another Arbitrator.

Any party all alone does not have the authority to revoke the appointment of the arbitrator. But both/all parties in the agreement together can do the same and do not need to file any petition in the court to enforce the decision of termination.

Important Case Laws on Section 15

In S.B.P. and Company v. Patel Engineering Limited and Another (2009), the Supreme Court analysed the scheme of Sections 11, 14 and 15, and noted that the legislature has repeatedly laid emphasis on the necessity of adherence to the terms of agreement between the parties in the matter of appointment of arbitrators and procedure to be followed for such appointment. It was held that:

“Even Section 15(2), which regulates appointment of a substitute arbitrator, requires that such an appointment shall be made according to the rules which were applicable to the appointment of an original arbitrator. The term “rules” used in this sub-section is not confined to statutory rules or the rules framed by the competent authority in exercise of the power of delegated legislation but also includes the terms of agreement entered into between the parties.”

In Yashwith Constructions (P) Ltd. v. Simplex Concrete Piles India Ltd. and Another (2006 Latest Caselaw 359 SC), the Supreme Court was called upon to examine the scope of Section 15 of the Act in the backdrop of the fact that after resignation of the arbitrator appointed by the Managing Director of the respondent company, another arbitrator was appointed by him in accordance with the arbitration agreement. At that stage, the petitioner thereon filed an application under Section 11(5) read with Section 15(2) of the Act praying for appointment of a substitute arbitrator to resolve the disputes between the parties. The said application was dismissed by the Chief Justice holding that Section 15(2) refers not only to the statutory rules framed for regulating the appointment of arbitrators but also to contractual provisions for such appointment upholding the view taken by the Chief Justice. It was held as under:

“The withdrawal of an arbitrator from the office for any reason is within the purview of Section 15(1)(a) of the Act. Obviously, therefore, Section 15(2) would be attracted and a substitute arbitrator has to be appointed according to the rules that are applicable for the appointment of the arbitrator to be replaced. Therefore, what Section 15(2) contemplates is an appointment of the substituted arbitrator or the replacing of the arbitrator by another according to the rules that were applicable to the appointment of the original arbitrator who was being replaced. The term “rules” in Section 15(2) obviously referred to the provision for appointment contained in the arbitration agreement or any rules of any institution under which the disputes were referred to arbitration. There was no failure on the part of the party concerned as per the arbitration agreement, to fulfil his obligation in terms of Section 11 of the Act so as to attract the jurisdiction of the Chief Justice under Section 11(6) of the Act for appointing a substitute arbitrator.”

In Rajasthan Small Industries v. M/S Ganesh Containers Movers (2019 Latest Caselaw 52 SC), Supreme Court stated that Section 11(6) of the Act has application only when a party or the person concerned had failed to act in terms of the arbitration agreement. When Section 15(2) says that a substitute arbitrator can be appointed according to the rules that were applicable for the appointment of the arbitrator originally, it is not confined to an appointment under any statutory rule or rule framed under the Act or under the scheme. It only means that the appointment of the substitute arbitrator must be done according to the original agreement or provision applicable to the appointment of the arbitrator at the initial stage. In this case it was held, the High Court was not right in appointing an independent arbitrator without keeping in view the terms of the agreement between the parties and therefore, the impugned order appointing an independent arbitrator/retired District Judge was not sustainable.

In Shailesh Dhairyawan v. Mohan Balkrishna Lulla (2015 Latest Caselaw 712 SC) the Supreme Court enunciated that the provisions of Section 15(2) of the Act require purposive interpretation so that the aforesaid objective/ purpose of such a provision is achieved thereby. The principle of 'purposive interpretation' or 'purposive construction' is based on the understanding that the Court is supposed to attach that meaning to the provisions which serve the 'purpose' behind such a provision. The basic approach is to ascertain what is it designed to accomplish? To put it otherwise, by interpretative process the Court is supposed to realise the goal that the legal text is designed to realise.

Applying the purposive interpretation, the Apex Court expounded that,

“Once we keep in mind the aforesaid fundamental aspects of the arbitration, the irresistible conclusion would be that whenever parties agree for arbitration, and even name a specific arbitrator with no specific provision for appointment of another arbitrator on the recusal/withdrawal of the said arbitrator, the said omission is made up by Section 15(2) of the Act and unless arbitration agreement between the parties provides a categorical prohibition or debarment in resolving a question or dispute or difference between the parties by a substitute arbitrator in case of death or the named arbitrator or non-availability of the said arbitrator, Courts have the power to appoint substitute arbitrator, which power is given by Section 15(2) of the Act as this provision is to be given liberal interpretation so as to apply to all possible circumstances under which the mandate of the earlier arbitrator may be terminated.”

Section 16. Competence of arbitral tribunal to rule on its jurisdiction under Arbitration and Conciliation Act, 1996

CHAPTER IV

Jurisdiction Of Arbitral Tribunals

Section 16. Competence of arbitral tribunal to rule on its jurisdiction

(1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose,

     (a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and

     (b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.

(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence; however, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of, an arbitrator.

(3) A plea that the 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 the arbitral proceedings.

(4) The arbitral tribunal may, in either of the cases referred to in sub-section (2) or sub-section (3), admit a later plea if it considers the delay justified.

(5) The arbitral tribunal shall decide on a plea referred to in sub-section (2) or sub-section (3) and, where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral proceedings and make an arbitral award.

(6) A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with section 34.

Scope of Section 16 of Arbitration and Conciliation Act, 1996

Article 16 of the UNCITRAL Model law embodies Legal doctrine i.e., "Kompetenze - Kompetenze" which means the court or an arbitral tribunal to rule upon its 'own' jurisdiction, brought forth by one of the parties to the dispute. Section 16 of the Arbitration and Conciliation Act, 1996 has been framed in accordance with the same. 

However this provision is not saying anything on whether it is permissible for any arbitral tribunal to determine other preliminary issues in the begining itself when an application filed under Section 16 of the A&C Act.

This statute came under scrutiny of Hon'ble Supreme Court in the case of Indian Farmers Fertilizers Cooperative Limited vs. Bhadra Products, 2018 Latest Caselaw 33 SC. Bench heard submissions on two aspects, whether an award passed on the issue of limitation can be said to be an interim award and whether it can be set aside under Section 34 of the act and whether a decision on a point of limitation would go to jurisdiction so as to be covered by Section 16 of the Act.

While stating that an Award on issue of limitation can be treated as interim award bench ruled on the second aspect of covering it under Section 16 that the language of Section 16(1) states that Arbitral Tribunal may rule on its own jurisdiction, which makes it clear that it refers to whether the arbitral tribunal may embark upon an enquiry into the issues brought forth by the parties.

If the arbitral tribunal finds that it is not competent, an appeal can be filed under Section 37. Still, the situation is different if the arbitral tribunal considers that it is capable, then no right to appeal is provided in such cases if an award is passed.

The jurisdiction should be challenged at the initial stage. If there is a refusal to go into the merits, then it is considered a jurisdictional issue.

Section 17. Interim measures ordered by arbitral tribunal under Arbitration and Conciliation Act, 1996

CHAPTER III
Composition of arbitral tribunal

Section 17. Interim measures ordered by arbitral tribunal

(1) A party may, during the arbitral proceedings [***], apply to the arbitral tribunal-

    (i) for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or

    (ii) for an interim measure of protection in respect of any of the following matters, namely:-

        (a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;

        (b) securing the amount in dispute in the arbitration;

       (c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken, or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;

         (d) interim injunction or the appointment of a receiver;

      (e) such other interim measure of protection as may appear to the arbitral tribunal to be just and convenient, and the arbitral tribunal shall have the same power for making orders, as the court has for the purpose of, and in relation to, any proceedings before it.

(2) Subject to any orders passed in an appeal under section 37, any order issued by the arbitral tribunal under this section shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure, 1908, in the same manner as if it were an order of the Court.]

Scope of Section 17 of Arbitration and Conciliation Act, 1996

A mechanism is available for the parties to an arbitration to seek interim reliefs from the arbitral tribunal during the pendency of the arbitral proceedings by way of Section 17 of the Arbitration and Conciliation Act, 1996.

Disputing Parties in an arbitration can seek the interim reliefs after invocation of the arbitration proceedings till the passing of the award. Prior to 2015 amendments arbitral tribunal was not having enough teeths as its powers to pass orders were quite restricted in comparison to the wide powers vested to courts under Section 9 of the Act.

Post 23 October 2015 it was specifically included that the Arbitrator can pass interim orders for appointment of a guardian, securing the amount of dispute in the arbitration, preservation, interim custody or sale of any goods or property which are the subject matter of the arbitration agreement.

The Amendment Act of 2015 further provides that every order passed by the arbitral tribunal under Section 17 of the Act would be deemed to be an order of the Civil Court and is binding and enforceable under the provisions of the Code of Civil Procedure, 1908. The anamoly that such interim orders can be passed even afyer passing of final Award was corrected in 2019 Amendments. 

Interim Relief under Arbitration

Both Section 9 and Section 17 of the Arbitration and Conciliation Act, 1996 are crucial as they provide mechanism for the parties in arbitration to seek interim relief. Need for interim measures arise for varied reasons and circumstances for example it can be an apprehension of selling off the disputed asset or pligging a continuous breach of contract. 

Difference between Power of Court and Arbitrator to grant Interim Relief

The broad differences between Section 9 and 17 of the Arbitration and Conciliation Act can be understood under following heads-

Forum for Interim Relief in Arbitration

Section 9 of the Arbitration and Conciliation Act empowers Civil Court to grant interim reliefs.

Whereas Section 17 of the Arbitration and Conciliation Act empowers Arbitral Tribunal to grant interim reliefs.

Scope of Section 9 and 17 of the Arbitration and Conciliation Act

Section 9 of the Act gives powers to the Civil Court hear and pass orders for interim relief to disputing parties desirous of dispute resolution by way of Arbitration in all kinds of matters.

Section 17 of the Act allows the duly appointed Arbitral Tribunal to pass interim orders only in the ongoing Arbitration pending before him/her.

Can power to pass interim relief order be excluded in Arbitration

Power confered by Section 9 of the Arbitration and Conciliation Act on a Civil Court emanates from a duly promulgated statute and is not open for review or rescind by the Parties.

Power confered by Section 17 of the Arbitration and Conciliation Act on a Arbitral Tribunal is subject to concurence of the disputing parties. By inclusion of a stipulation in the Arbitration Agreement the power under Section 17 can be removed.

Stage of passing of Interim Relief in Arbitration

Power confered by Section 9 of the Arbitration and Conciliation Act on a Civil Court can be exercised at any stage, even before Arbitral Tribunal is constituted.

Power confered by Section 17 of the Arbitration and Conciliation Act can be exercised only when an Arbitral Tribunal is duly constituted.

Interim Relief in Domestic and International Arbitration

Section 9 of the Act can be invoked only in case of Domestic Arbitration.

Section 17 on the other hand Invoked even in International Arbitrations.

Execution of Interim Orders under Arbitration

Interim Orders passed by Civil Court are easier to execute owing to conventional respect the Court Orders garner.

Interim Relief orders passed by Arbitral Tribunal has now been accorded same status under amended Section 17 but their acceptablity by other Govt agencies like Police is still achallenge.

Section 18. Equal treatment of parties under Arbitration and Conciliation Act, 1996

CHAPTER V

Conduct of Arbitral Proceedings

18. Equal treatment of parties. - The parties shall be treated with equality and each party shall be given a full opportunity to present his case.

Scope of Section 18 of Arbitration and Conciliation Act, 1996

It is mandate of Parliament that the disputing parties shall be treated by the Arbitral Tribunal with equality and each party shall be given a full and equal opportunity to present their respective case.

Hon'ble the Supreme Court has ruled in Pam Developments Pvt Ltd v State of West Bengal, 2019 Latest Caselaw 556 SC that the government, as a party to arbitration, is not entitled to special or exceptional treatment.

The spirit of Natural justice should be adhered to through the entire arbitration proceedings. The principles of natural justice mandates that that maxim of audi alteram partem ie every body shall get a fair opportunity of being heard.

Section 19. Determination of rules of procedure under Arbitration and Conciliation Act, 1996

CHAPTER V

Conduct Of Arbitral Proceedings

Section 19. Determination of rules of procedure. 

(1) The arbitral tribunal shall not be bound by the Code of Civil 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.

(3) Failing any agreement referred to in sub-section (2), the arbitral tribunal may, subject to this Part, conduct the proceedings in the manner it considers appropriate.

(4) The power of the arbitral tribunal under sub-section (3) includes the power to determine the admissibility, relevance, materiality and weight of any evidence.

Scope of Section 19 of Arbitration and Conciliation Act, 1996

In case titled Sahyadri Earthmovers Vs. L & T Finance Limited and Anr. Bombay HIgh Court ruled ion Section 19 scope,-

'Section 19 of the Arbitration Act, which is reproduced contemplates when the parties agree on a particular procedure to be followed by the Arbitral Tribunal, all are bound to follow the same, but in its absence, the Arbitral Tribunal is bound to conduct the proceeding in the manner it considers appropriate. It also means that the Arbitrator has power to determine the admissibility, relevance, materiality and weight in evidence though the provisions of the Code of Civil Procedure and/ or Indian Evidence Act, are not binding upon the Tribunal.

The principles of natural justice, fair play, equal opportunity to both the parties and to pass order, interim or final, based upon the material/evidence placed by the parties on the record and after due analysis and/or appreciation of the same by giving proper and correct interpretation to the terms of the contract, subject to the provisions of law, just cannot be overlooked.'

Section 20. Place of arbitration under Arbitration and Conciliation Act, 1996

CHAPTER V

Conduct Of Arbitral Proceedings

20. Place of arbitration. - (1) The parties are free to agree on the place of arbitration.

(2) Failing any agreement referred to in sub-section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.

(3) Notwithstanding sub-section (1) or sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property.

Scope of Section 20 under Arbitration and Conciliation Act, 1996

Text of Section 20 makes it amply clear that as far as the place or seat of Arbitration is concerned in India, the parties are free to agree to any "place" or "seat" of choice within India. In cases where the parties do not have any agreement or consensus, Section 20(2) authorizes the arbitral tribunal to determine the place/seat of such arbitration. Section 20(3) enables the arbitration tribunal to hold hearings at any place for conducting hearings at a place of convenience in matters such as consultations among its members for hearing witnesses, experts or the parties.

Hon'ble Supreme Court of India in the Balco Employees Union (Regd.) Vs. Union of India & Ors (10 December 2001), 2001 Latest Caselaw 646 SC held that Part-I of the 1996 Act is applicable only to all the arbitrations which take place within India and as such have no application to International Commercial Arbitrations being held outside India. Hence, these awards would only be subject to the jurisdiction of the Courts in India when the same are sought to enforced in India in as per the provisions contained in Part-II of the Indian Arbitration Act.

The Supreme Court India in BALCO judgment has taken the stand that the Parliament has intentionally given jurisdiction to two set of courts i.e. the court which would have jurisdiction where the cause of action is located and the courts where the arbitration takes place. This was pertinent as there are several occasions when the agreement itself may provide for a place of arbitration at a venue which can be neutral to both the disputing parties. Accordingly, the Civil Courts of the place where the arbitration hearings happen shall have the jurisdiction and the supervisory control over the Arbitration.

Section 22 of Arbitration and Conciliation Act, 1996

CHAPTER V

Conduct Of Arbitral Proceedings

Section 22. Language - (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 (1), 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 and any arbitral award, decision or other communication by the arbitral tribunal.

(4) The arbitral tribunal 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.

Scope of Section 22 of Arbitration and Conciliation Act, 1996

Language to be used in Arbitral Proceedings in India

Section 22 of the Act deals with the language which can be used during the arbitral proceedings. The disputing parties to the agreement containing arbitration clause are free to choose the particular language or more than one language which can be used in the arbitral proceedings.

In a situation where the disputing parties fail to arrive at a consensus, the arbitral tribunal has to determine the language or languages which have to be used in the arbitral proceedings. The chosen or agreed language would also apply to any written statement by a party, hearings during the Arbitration and the arbitral award, decision or other communications issued by the arbitral tribunal.   

Once the decision on the language is arrived, the Tribunal it may order that any documentary evidence shall be accompanied by a translation into the language agreed. The arbitral tribunal must ensure that in every case and proceedings all the parties are able to follow and understand the proceedings. 

What is the Language of Arbitration

The relevant provision of Law which governs the Language is enshrined in Section 22 of Arbitration and Conciliation Act, 1996.

CHAPTER V

Conduct Of Arbitral Proceedings

Section 22. Language - (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 (1), 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 and any arbitral award, decision or other communication by the arbitral tribunal.

(4) The arbitral tribunal 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.

Arbitration in Hindi and other vernacular Languages

Plain reading of this provision shows that the Disputing Parties are free to chose the Language which for that matter can be Hindi or ever any other vernacular Language.

In a situation where the disputing parties fail to arrive at a consensus, the arbitral tribunal has to determine the language or languages which have to be used in the arbitral proceedings. The chosen or agreed language would also apply to any written statement by a party, hearings during the Arbitration and the arbitral award, decision or other communications issued by the arbitral tribunal.   

However where the Parties chosing to Arbitrate in Hindi they shall keep in mind that in case the Objection Petition under Section 34 of Arbitration and Conciliation Act, 1996 is filed it may be heard in Hindi as per State District Court language practice but further challenges before High Court or Supreme Court shall definitely shall have to be in English and in that case Translation of entire Arbitral Record into English would entail monetary cost.

Pleadings in Arbitration Proceedings

Similar to conventional Civil Court litigation where Pleadings of Parties ie. Plaint and Writter Statement and occasional Replication, the Statement of Claim and the Statement of Defence are the primary pleadings in the arbitration proceedings.

The Claimant side in an Arbitration submits a ‘Statement of Claims’ (SoC) before the tribunal wherein the Claimant is given an opportunity to provide the facts supporting the claims, the points of issues, and the reliefs sought.

The Respondent or Respondents are allowed to submit a responce to SoC by way of a ‘Statement of Defence’ (SoD) before the arbitral tribunal wherein they provide facts constituting the defence and other relevant information to rebut the claim raised by the Claimant.

Section 23 of the Arbitration and Conciliation Act, 1996 provides that Statement Claim and Defence must provide all facts, relevant reliefs, and documentary evidence. 

Section 23 Arbitration and Conciliation Act, 1996

Section 23. Statements of claim and defence - (1) Within the period of time agreed upon 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 of those statements.

(2) The parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence they will submit.

[(2A) The respondent, in support of his case, may also submit a counterclaim or plead a set-off, which shall be adjudicated upon by the arbitral tribunal, if such counterclaim or set-off falls within the scope of the arbitration agreement.]

(3) 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 inappropriate to allow the amendment or supplement having regard to the delay in making it.

[(4) The statement of claim and defence under this section shall be completed within a period of six months from the date the arbitrator or all the arbitrators, as the case may be, received notice, in writing, of their appointment.]

Section 24 Arbitration and Conciliation Act, 1996

Section 24. Hearings and written proceedings - (1) Unless otherwise agreed by the parties, the arbitral tribunal shall decide whether to hold oral hearings for the presentation of evidence or for oral argument, or whether the proceedings shall be conducted on the basis of documents and other materials:

Provided that the arbitral tribunal shall hold oral hearings, at an appropriate stage of the proceedings, on a request by a party, unless the parties have agreed that no oral hearing shall be held.

[Provided further that the arbitral tribunal shall, as far as possible, hold oral hearings for the presentation of evidence or for oral argument on day-to-day basis, and not grant any adjournments unless sufficient cause is made out, and may impose costs including exemplary costs on the party seeking adjournment without any sufficient cause.]

(2) The parties shall be given sufficient advance 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, documents or other information supplied to, or applications made to the arbitral tribunal by one party shall be communicated to the other party, and any expert report or evidentiary document on which the arbitral tribunal may rely in making its decision shall be communicated to the parties.

Section 25 Arbitration and Conciliation Act, 1996

Section 25. Default of a party - 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) of section 23, the arbitral tribunal shall terminate the proceedings;

(b) the respondent fails to communicate his statement of defence in accordance with sub-section (1) of section 23, the arbitral tribunal shall continue the proceedings without treating that failure in itself as an admission of the allegations by the claimant [and shall have the discretion to treat the right of the respondent to file such statement of defence as having been forfeited];

(c) a party fails to appear at an oral hearing or to produce documentary evidence, the arbitral tribunal may continue the proceedings and make the arbitral award on the evidence before it.

Importance of SoC and SoD in Arbitration

Relevance and criticality of the SoC and SoD is provided by legislature in Section 25 of the Arbitration and Conciliation Act, 1996.

It is provided that in case the claimant side fails to submit its SoC before the arbitral tribunal, it can very well terminate the entire arbitration proceedings. Section 25(2) empowers the arbitral tribunals to continue with the proceedings even if the respondent side fails to submit its SoD. This statute also provides the tribunal the power to consider the failure of the respondent to furnish the SoD as a forfeiture or waiver of their right. Consequently the faliure on the part of parties to submit their Statement of Claim (SoC) or Defence (SoD) it would have an negative impact on their case before the arbitral tribunal.

The content of the SoC and SoD submitted by both sides form the basis of the final arguments advanced by them at the time of adjudication of the dispute. Therefore, drafting of the SoC and SoD is of great value. 

What is Time frame for completion of Arbitration ?

Section 29A of the Arbitration and Conciliation Act, 1996 provides the time limit for passing of an Arbitral award in India. As on date, the statute has fixed a time limit of 12 months to be reckoned from the time when the pleadings are completed. It is for the tribunal to complete the arbitration proceeding and hearings and pass the arbitral award within this period.

What is Section 29A of the Arbitration and Conciliation Act, 1996?

CHAPTER VI

Making of Arbitral Award and Termination of Proceedings

Section 29A. Time limit for arbitral award - (1) The award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23:

Provided that the award in the matter of international commercial arbitration may be made as expeditiously as possible and endeavour may be made to dispose of the matter within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23.]

(2) If the award is made within a period of six months from the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree.

(3) The parties may, by consent, extend the period specified in sub-section (1) for making award for a further period not exceeding six months.

(4) If the award is not made within the period specified in sub-section (1) or the extended period specified under sub-section (3), the mandate of the arbitrator(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period:

Provided that while extending the period under this sub-section, if the Court finds that the proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding five per cent. for each month of such delay.

[Provided further that where an application under sub-section (5) is pending, the mandate of the arbitrator shall continue till the disposal of the said application:

Provided also that the arbitrator shall be given an opportunity of being heard before the fees is reduced.]

(5) The extension of period referred to in sub-section (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court.

(6) While extending the period referred to in sub-section (4), it shall be open to the Court to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator(s) appointed under this section shall be deemed to have received the said evidence and material.

(7) In the event of arbitrator(s) being appointed under this section, the arbitral tribunal thus reconstituted shall be deemed to be in continuation of the previously appointed arbitral tribunal.

(8) It shall be open to the Court to impose actual or exemplary costs upon any of the parties under this section.

(9) An application filed under sub-section (5) shall be disposed of by the Court as expeditiously as possible and endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party.

Scope of Section 29A of the Arbitration and Conciliation Act, 1996?

The Act fixes a time limit of 12 months, upon completion of the pleadings before the tribunal, to complete the arbitration proceedings, final hearing and pass the arbitral award.

As per Section 23 of the 1996 Act, the completion of pleadings, i.e., statement of claim, statement of defence and rejoinder, if any, shall be completed within six months from the date of issuance of Notice to the Arbitrators, in writing, for their appointment.

Statutarily a maximum of six months is available for completion of pleadings and additional 12 months is available for completion of the remaining the Arbitral proceedings.

What is the timeline within which arbitral award need to be passed?

time limit of 12 months to be reckoned from the time when the pleadings are completed. It is for the tribunal to complete the arbitration proceeding and hearings and pass the arbitral award within this period.

Can the time period for Arbitration be further extended?

This timeline of 6 months + 12 months can be further extended by another six months only by the mutual consent of the parties.

The said timeline has been introduced through the amendment of the Act made by way of the Arbitration and Conciliation (Amendment) Act of 2019, which was rendered effective through a notification dated 30 August 2019. While the said timeline under section 23 is mandatory for domestic arbitration, it is only recommendatory for international commercial arbitration. Before the amendment of 2019, a total time of 12 months was available to the tribunal to complete the entire arbitral proceeding including the pleadings.

Is arbitration time bound?

Yes. The Arbitration and Conciliation (Amendment) Act of 2019, notified on 30 August 2019 provides that time limit of 12 months is provided to complete the arbitration proceedings, final hearing and pass the arbitral award, post completion of the pleadings before the tribunal within initial 6 months.

However this timeline of 6 months + 12 months can be legally further extended by another 6 months with the mutual consent of the parties.

What is the timeline within which arbitral award need to be passed?

This timeline of 6 months (Completion of Pleadings) + 12 months (Completion of Hearings and passing of Award) can be further extended by another 6 months only by the mutual consent of the parties.

Hence, the time limit for making the Award under the 1996 Act now is 18 months from the arbitral tribunal entering upon the dispute Arb. proceeding. If the award is not made within the aforesaid period of 18 months, the mandate of the arbitrator(s) was to terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period. This can be further extended by another period of 6 months only under the mutual consent of the parties.

In case titled Shapoorji Pallonji and Co. Pvt. Ltd. v. Jindal India Thermal Power Limited the High Court of Delhi took a view that the amended sections 23(4) and 29A(1) of the Act, being procedural law, would be applicable to the pending arbitrations as on the date of the amendment.  

Role of Expert in Arbitration

CHAPTER V

Conduct Of Arbitral Proceedings

Section 26. Expert appointment by arbitral tribunal - (1) Unless otherwise agreed by the parties, the arbitral tribunal may

(a) appoint one or more experts to report to it on specific issues to be determined by the arbitral tribunal, and

(b) require a party to give the expert any relevant information or to produce, or to provide access to, any relevant documents, goods or other property for his inspection.

(2) Unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal considers it necessary, the expert shall, after delivery of his written or oral report, participate in an oral hearing where the parties have the opportunity to put questions to him and to present expert witnesses in order to testify on the points at issue.

(3) Unless otherwise agreed by the parties, the expert shall, on the request of a party, make available to that 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.

Scope of Section 29A of the Arbitration and Conciliation Act, 1996

Cases where there is no prior agreement between the parties on the aspect of usage of services of Expert, the arbitral tribunal may:

1. Appoint one or more experts
2. Ask such experts to determine specific issues
3. Deliberate upon such issues
4. Ask the expert to participate in the oral arbitral proceedings
5. Permit the parties to put questions to such experts who had made the report
6. Permit the parties to present their own expert witnesses to have viewpoints over the issue.

More often than not the Expert advice is given in the form of a written Expert Report which is produced prior to the hearing of an Arbitration.

In the case of Ramesh Chandra Agrawal vs. Regency Hospital Ltd. 2009 Latest Caselaw 758 SC, the Hon'ble Supreme Court held that, in Arbitration Disputes where scientific issues involved is highly specialized, expert’s role assumes great importance. Expert is supposed to analyse the matter critically and place all materials with necessary scientific criteria for resting accuracy of conclusions together with reasonsbefore court, so that court may form its own independent judgement.

Court assistance in taking evidence during Arbitration

CHAPTER V

Conduct Of Arbitral Proceedings

Section 27. Court assistance in taking evidence -

(1) 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 the 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 address of any 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 taking evidence, execute the request by ordering that the evidence be provided directly to the arbitral tribunal.

(4) The Court may, while making an order under sub-section (3), issue the same processes to witnesses as it may issue in suits tried before it.

(5) Persons failing to attend in accordance with such process, or making any other default, or refusing to give their evidence, or guilty of any contempt to the arbitral tribunal during the conduct of arbitral proceedings, shall be subject to the like disadvantages, penalties and punishments by order of the Court on the representation of the arbitral tribunal as they would incur for the like offences in suits tried before the Court.

(6) In this section the expression Processes includes summonses and commissions for the examination of witnesses and summonses to produce documents.

Scope of Section 27 of Arbitration and Conciliation Act, 1996

Section 27 of the Arbitration and Conciliation Act, 1996, as amended upto date, lays down a mechanism whereby the arbitral tribunal or a party to the dispute, upon seeking the approval of the arbitral tribunal, can seek assistance of the Civil Court in taking evidence.

This is one of the several legal provisions of the Arbitration and Conciliation Act, 1996 which permits the judicial interference in an arbitration proceedings.

Any kind of Judicial intervention is always looked down upon a matter of hardship as these interventions are generally perceived to be reason of causing delay in completion of proceedings before Arbitral Tribunal. 

However the same can not be said about Section 27 in so far as it is aimed to fast track and assist the Tribunal in completion the recording of Evidence.

The salient features of Section 27 are:

1. Under Section 27 the Civil Court is not carrying out an ‘adjudicatory’ duty and as such court cannot revisit the arbitral tribunal finding or view on admissibility, relevancy, materiality, and weight of any evidence.
2. However, the civil court do have the power to decline such request of the arbitral tribunal under following circumstances:
   • if such prayer is beyond the power of the court, for example summoning of a witnesses from foreign country;
   • if such prayer is not as per the law applicable to court for taking evidence;
   • where either of the disputing party can be prejudiced by it during a criminal proceeding;
   • where the Court is of the view that documents sought are privileged/confidential;
   • where the Court finds that the arbitral tribunal has passed the order without application of mind;
   • where the Court finds that the arbitral tribunal has passed an order based on a misconception of the law.

When the Court finds no such infirmity the court can agree to the request of the arbitral tribunal.

What is Fast Track Procedure in Arbitration?

Legislature has via Arbitration and Conciliation Amendment Act, 2015 introduced the Fast Track Arbitration procedure in India to speed up the arbitration process in India and is not regulated by ordinary rules and regulations.

In India, the concept of fast-track arbitration means that the proceedings are to be concluded within 6 months, and there is no provision for oral proceedings, rather than written pleadings.

Salient features of Fast Track Arbitration in India -

• Single Arbitrator: The parties in a Fast Track Arbitration select a single arbitrator.
• No recording of Oral Evidence:  Prevents stage of interviewing a witness.
• Parties bound by strict time limits: Fast Thasck Arbitration is strict time-limit policies so that the matter is decided in the shortest practicable timeframe.
• Reduction of Arbitration Fees for delay: There is a provision of reduction in the Arbitrator 's fees for each month of the delay in terms of Section 15 of the Act which specifiy this penalty method.
• No oral hearing of Arguments: The Fast Track Arbitration has no oral hearings and solely depend only on written submissions.

What is Section 29B of Arbitration and Conciliation Act, 1996?

CHAPTER VI

Making of Arbitral Award And Termination of Proceedings

Section 29B. Fast track procedure - (1) Notwithstanding anything contained in this Act, the parties to an arbitration agreement, may, at any stage either before or at the time of appointment of the arbitral tribunal, agree in writing to have their dispute resolved by fast track procedure specified in sub-section (3).

(2) The parties to the arbitration agreement, while agreeing for resolution of dispute by fast track procedure, may agree that the arbitral tribunal shall consist of a sole arbitrator who shall be chosen by the parties.

(3) The arbitral tribunal shall follow the following procedure while conducting arbitration proceedings under sub-section (1):

(a) The arbitral tribunal shall decide the dispute on the basis of written pleadings, documents and submissions filed by the parties without any oral hearing;

(b) The arbitral tribunal shall have power to call for any further information or clarification from the parties in addition to the pleadings and documents filed by them;

(c) An oral hearing may be held only, if, all the parties make a request or if the arbitral tribunal considers it necessary to have oral hearing for clarifying certain issues;

(d) The arbitral tribunal may dispense with any technical formalities, if an oral hearing is held, and adopt such procedure as deemed appropriate for expeditious disposal of the case.

(4) The award under this section shall be made within a period of six months from the date the arbitral tribunal enters upon the reference.

(5) If the award is not made within the period specified in sub-section (4), the provisions of sub-sections (3) to (9) of section 29A shall apply to the proceedings.

(6) The fees payable to the arbitrator and the manner of payment of the fees shall be such as may be agreed between the arbitrator and the parties.

Scope of Section 29B of Arbitration and Conciliation Act, 1996

The concept of Fast Track Arbitration came up in India with the 246th Law Commission Report recommendations on 5th August 2014. The Report refers to a number of benefits of a speedy arbitral proceeding. 

This concept of Fast Track Arbitration was originally developed by the ICC, International Chambers of Commerce and has been used in settlement of variety of cases internationally.

Subsequently this was introduced by way of Amendment Act of 2015, where section 29B of the Arbitration and Conciliation Act, 1996 which talked about the procedure involved for fast track arbitration.

Section 29B talks about the procedure involved and the rules to be followed for fast track arbitration.

What is Section 32 of Arbitration and Conciliation Act, 1996

CHAPTER VI

Making of Arbitral Award and Termination of Proceedings

Section 32. Termination of proceedings 

(1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub-section (2).

(2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where

(a) the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute,

(b) the parties agree on the termination of 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 and sub-section (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings.

Scope of Section 32 of Arbitration and Conciliation Act, 1996

Section 32 of the 1996 Act provides for termination of arbitral proceedings by final arbitration award or an order under Section 32(2) of the Act.

Section 32(2) of the 1996 Act enumerates Three additional grounds on which the arbitral proceedings can be terminated namely:

• the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute,
• the parties agree on the termination of the proceedings, or
• the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.

While the first 2 (two) grounds relate to consent of the parties, the third ground is at the discretion of the arbitrator.

The said discretionary ground is enumerated in Section 32(2)(c) of the Act empowers the arbitrator to issue an order of termination of arbitral proceedings where it finds that continuation of the said proceedings has for any other reason become ‘unnecessary’ or ‘impossible’.

It is relevant to note that pursuant to Section 32(3) of the Act the mandate of the arbitrator terminates with the termination of the arbitral proceedings (subject of course to Section 33 and Section 34(4) of the Act).

Delhi High Court has in its judgment dated January 12, 2021 in the matter of M/s PCL Suncon v. M/s National Highway Authority of India 2021 Latest Caselaw 102 Del, held that an order terminating arbitration proceedings under Section 32(2)(c) of the Arbitration and Conciliation Act, 1996  is not an award, and can be disputed under Section 14(2) of the ACA.

Important Case Laws on Section 32

In Dakshin Haryana Bijli Vitran Nigam Ltd. v. M/S Navigant Technologies Pvt. Ltd. (2021 Latest Caselaw 111 SC) the Supreme stated that, “Section 32 provides that the arbitral proceedings shall be terminated after the final award is passed. With the termination of the arbitral proceedings, the mandate of the arbitral tribunal terminates, and the tribunal becomes functus officio.”

The Apex Court further stated that, “In an arbitral tribunal comprising of a panel of three members, if one of the members gives a dissenting opinion, it must be delivered contemporaneously on the same date as the final award, and not on a subsequent date, as the tribunal becomes functus officio upon the passing of the final award. The period for rendering the award and dissenting opinion must be within the period prescribed by Section 29A of the Act.”

In Ashok Tubes and Another v. Steel Industries of India (1997) the Supreme Court dealt with the question whether the award which has been re-written by the Arbitrator on a stamp paper can be regarded as a valid award. The Court held that,

“An Arbitrator becomes functus officio after passing the award and he has no power to re-write the award on a stamp paper for the purpose of presenting it in Court or submitting the same for registration. Now the only question that survives is whether it is necessary to set aside the award filed by the sole Arbitrator. In my opinion, the award filed by the Arbitrator is clearly a nullity and therefore, there is no need to set aside the same. The proper course will be to direct the impugned award to be removed from the file of the Court.”

In the case of Orient Transport Co. Gulabra and Another v. Jaya Bharat Credit and Investment Co.(1987 Latest Caselaw 240 SC), the Supreme Court explained the scope of Section 32 in the following words,

“Section 32 of the Act does not contemplate the case suits challenging the validity of a contract because it contains an arbitration clause. If the intention of the legislature were that all documents containing an arbitration clause should come within the purview of sections 32 and 33, the legislature would have said so in appropriate words. These sections have a very limited application, namely, where the existence of validity of an arbitration agreement and not the contract containing the arbitration agreement is challenged.”

What are the grounds for challenging the award under Section 34 of Arbitration and Conciliation Act, 1996?

CHAPTER VII

Recourse Against Arbitral Award

Section 34. Application for setting aside Arbitral Award

 (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).

(2) An arbitral award may be set aside by the Court only if

(a) the party making the application [establishes on the basis of the record of the arbitral tribunal that:]

(i) a party was under some incapacity; or

(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or

(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or

(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or

(b) the Court finds that

(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or

(ii) the arbitral award is in conflict with the public policy of India.

[Explanation 1. - For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,-

(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or

(ii) it is in contravention with the fundamental policy of Indian law; or

(iii) it is in conflict with the most basic notions of morality or justice.

Explanation 2. - For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.]

[(2A) An arbitral award arising out of arbitration's other than international commercial arbitration's, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award: Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence.]

(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, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:

Provided that 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 within a further period of thirty days, but not thereafter.

(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.

[(5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement.

(6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party.]

Scope of Section 34 of Arbitration and Conciliation Act

Section 34 of the 1996 Act is one of the most significant provision in so far as it gives an insight into the procedure for setting aside an arbitral award passed by an arbitral tribunal.

The old Arbitration Act of 1940 had failed to resolve the vagueness of the expression “public policy of India” and the grounds which calls for setting aside of arbitral award were also not clearly defined hence giving an opportunity to the Courts to give interpretations according to their understanding and thereby increasing the opportunity of judicial intervention in arbitral process. The Arbitration and Conciliation Act, 1996 and the amendments under the Arbitration and Conciliation (Amendment) Act, 2015 have given a specific shape and character to section 34 of the Act as a tool to decide challenges to Arbitral Award.

Arbitration and Conciliation Act, 1996 which is built on the basis of the UNCITRAL Model Law on International Commercial Arbitration, 1985. 

The Arbitral Tribunal under the 1996 Act cannot review or sit as an Appellate Court against an Award on its own. The aggrieved party who has suffered on account of the Arbitral Award is required to challenge it according to the scope of Law as prescribed.

If the aggrieved party fails to apply and submit objections under Section 34 for setting aside the Award, then a de novo inquiry is not bound to arise on its own.

The Supreme Court has in case titled Indu Engineerinering and Textiles Ltd. v . Delhi Development Authority, 2001 Latest Caselaw 316 SC that “an arbitrator is a judge appointed by the parties and as such an award passed by him is not to be lightly interfered with.” However, since the main aim of the Award is to render legitimate award in the interest of justice, hence the Court is vested with the power to keep a vigil on the Arbitrator’s actions. 

“Public policy” term used in this statute is not defined in the Arbitration and Conciliation Act, 1996 and hence the term has retained its ambiguity. Due to non availability of a precise definition, the term had been given a wide meaning by the courts under the liberty to interpret it according to their understanding. The expression is generally taken to imply larger public interest or public good.

In case titled Renusagar Power Co. Ltd v. General Electric Co. 1993 Latest Caselaw 404 SC where the Apex Court gave a restricted meaning to the expression public policy in an international Commercial arbitration case where an award could be set aside only when the award is against -

1. fundamental policy of India;
2. interest of India and
3. justice or morality.

However the Supreme Court giving a broader meaning to the term “public policy” in ONGC Ltd v. Saw Pipes Ltd, 2003 Latest Caselaw 234 SC, explaining the concept of “ public policy of India” said that it has not been defined in the Act and is vague and is likely to be interpreted widely or narrowly depending on the context in which it is being use and it added another ground namely-

        4. if it is patently illegal.

Law Commission Report No. 246- Amendments to the Arbitration and Conciliation Act,1996 made suggestions so as to make the application for setting aside an arbitral award restricted on grounds of public policy and to apply only when the award was persuaded or affected by fraud or corruption, or was against the fundamental policy of Indian law or in contravention with the most basic notions of morality. The Law Commission was the first to suggest the amendment and its suggestion was later-on incorporated in the Amendment Act.

The Supreme Court in Associate Builder’s v. Delhi Development Authority, 2014 Latest Caselaw 729 SC has elaborated as to what constitutes patent illegality. According to the Court patent illegality shall include:

1. fraud or corruption
2. contravention of substantive law
3. error of law by the arbitrator
4. contravention of the arbitration and Conciliation Act, 1996 itself
5. the arbitrator fails to give consideration to the terms of the contract and usages of trade under section 28(3) of the Act
6. arbitrator fails to give a reason for his decision.

Moreover a proviso is also appended to subsection 2A which states that if the court believes that there is an erroneous application of Law, this cannot be a sole basis for setting aside the award.

Enforcement of Arbitration Award under Section 36 of Arbitration and Conciliation Act

CHAPTER VIII
Finality and enforcement of arbitral awards

Section 36. Enforcement -

(1) Where the time for making an application to set aside the arbitral award under section 34 has expired, then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a decree of the court.

(2) Where an application to set aside the arbitral award has been filed in the Court under section 34, the filing of such an application shall not by itself render that award unenforceable, unless the Court grants an order of stay of the operation of the said arbitral award in accordance with the provisions of sub-section (3), on a separate application made for that purpose.

(3) Upon filing of an application under sub-section (2) for stay of the operation of the arbitral award, the Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for reasons to be recorded in writing:

Provided that the Court shall, while considering the application for grant of stay in the case of an arbitral award for payment of money, have due regard to the provisions for grant of stay of a money decree under the provisions of the Code of Civil Procedure, 1908.]

[Provided further that where the Court is satisfied that a prima facie case is made out that, -

     (a) the arbitration agreement or contract which is the basis of the award; or

     (b) the making of the award,

was induced or effected by fraud or corruption, it shall stay the award unconditionally pending disposal of the challenge under section 34 to the award.

Explanation. - For the removal of doubts, it is hereby clarified that the above proviso shall apply to all court cases arising out of or in relation to arbitral proceedings, irrespective of whether the arbitral or court proceedings were commenced prior to or after the commencement of the Arbitration and Conciliation (Amendment) Act, 2015 (3 of 2016).]

Scope of Section 36 of Arbitration and Conciliation Act

Section 36 of the Arbitration and Conciliation Act lays that Enforcement of an arbitral award in a Domestic Arbitration is to be carried out in the same manner as done in a decree passed by the court.

Upon expiry of limitation for moving Objection Petition under Section 34 of the 1996 Act had expired or the Objection Petition has been dismissed, the execution process can be initiated.Originally the Arbitration Act did not specify as to whether the operation of a domestic arbitral award would be stayed while the Objection Petition under Section 34 of the Arbitration Act is pending disposal.

On this aspect Supreme Court, had in National Aluminum Company Ltd. (NALCO) v. Pressteel & Fabrications (P) Ltd. and Anr. (2004) 1 SCC 540 held that once a domestic arbitral award is challanged under Section 34 of the 1996 Act it becomes unexecutable.

It was through the Arbitration & Conciliation (Amendment) Act, 2015, which sought to emd the era of the automatic stay rule. The amended Section 36 stipulated that the mere filing of a challenge under Section 34 would not render a domestic arbitral award unenforceable, and a stay of the operation of the award would have to be specifically sought from and granted by the relevant court.

As such, unless a court stayed the operation of an award, the award-holder was at liberty to have it enforced in accordance with the Arbitration Act. The 2015 Amendment became effective on October 23, 2015.

The Arbitration and Conciliation (Amendment) Act, 2019 introduced a new Section 87 in the Arbitration Act which provided that the 2015 Amendment:

(i) will apply to arbitration proceedings commenced on or after the Effective Date and to court proceedings arising out of or in relation to such arbitration proceedings; and

(ii) will not apply to arbitration proceedings commenced prior to the Effective Date or to court proceedings arising out of or in relation to such arbitration proceedings (irrespective of whether such court proceedings commenced prior to or after the Effective Date).

Section 37 of Arbitration and Conciliation Act

CHAPTER IX
Appeals

Section 37. Appealable orders 

(1) [Notwithstanding anything contained in any other law for the time being in force, an appeal] shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:

[(a) refusing to refer the parties to arbitration under section 8;

(b) granting or refusing to grant any measure under section 9;

(c) setting aside or refusing to set aside an arbitral award under section 34.]

(2) An appeal shall also lie to a Court from an order of the arbitral tribunal

(a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or

(b) granting or refusing to grant an interim measure under section 17.

(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.

Scope of Section 37 of Arbitration and Conciliation Act

The Arbitration and Conciliation Act, 1996 Section 37 provides for filing of appeals against orders of the Court or for that matter an Arbitrator.

Three Judges bench of the Supreme Court of India of Justices R.F. Nariman, Navin Sinha, and K.M. Joseph, in Chintels India Limited v Bhayana Builders Private Limited, 2021 Latest Caselaw 67 SC, held on 11.02.2021 that an appeal prefered under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 is maintainable and permissible against an order of the Civil Court of refusing to condone delay in filing a objection application under Section 34 of the 1996 Act.

As far as Limitation is concerned, Section 37 of the Act does not provide any period for filing an appeal. This led to several contradictory findings by High Courts. Article 116 of Schedule I of the Limitation Act provides a period of 90 days for filing of appeals. As such an appeal under Section 37 of the A&C Act can be filed up to 90 days extendable up to any grace period as deemed appropriate by the concerned court or condonation of delay under Section 5 of the Limitation Act.

Hon'ble Supreme Court in case titled Consolidated Engineering Enterprises and Ors. v. Principal Secretary Irrigation Department and Ors. 2008 Latest Caselaw 329 SC has held that the provisions of the Limitation Act shall apply to all proceedings under the A&C Act, both before the Courts as well as Arbitrators, unless specifically excluded by the A&C Act.

The Apex Court relied on the legal principle that if the concerned special or local law is silent on the limitation period then the general law ie. schedule to the Limitation Act, 1963 shall apply to such appeals.

What orders are Appealable in Arbitration

The orders against which appeal is maintainablke are -

1. Order refusing to refer the parties to arbitration under section 8;

2. Order granting or refusing to grant any measure under section 9;

3. Order setting aside or refusing to set aside an arbitral award under section 34.]

4. Order of Tribunal accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; 

5. Order of Tribunal granting or refusing to grant an interim measure under section 17.

Section 38 of Arbitration and Conciliation Act

CHAPTER X
Miscellaneous

Section 38. Deposits 

(1) 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 it expects will be incurred in respect of the claim submitted to it:

Provided that where, apart from the claim, a counter-claim has been submitted to the arbitral tribunal, it may fix separate amount of deposit for the claim and counter-claim.

(2) The deposit referred to in sub-section (1) shall be payable in equal shares by the parties:

Provided that where one party fails to pay his share of the deposit, the other party may pay that share:

Provided further that 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 shall render 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.

Scope of Section 38 of Arbitration and Conciliation Act

Section 38 of A&C Act deals with deposits to be made by the parties in relation to the arbitral proceedings. The arbitral tribunal in its wisdom is empowered to fix the amount of deposit or supplementary deposits as an advance for the costs of arbitration. Section 39 provides for arbitral tribunals' lien on the award for any unpaid cost of arbitration.

It is important to take a note that the proviso to Section 38 (1) of the Act provides that the Arbitral Tribunal may fix a separate amount of deposit for the claim and counter claim. Furthermore, proviso to Section 38 (2) of the Act provides that in case of failure of a party to pay fee towards claim and counter-claim and where 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 arbitration proceedings in respect of such claim or counter-claim, as the case may be. As such, it is clear that the Act has provided consequences of failure of parties to deposit the requisite fees.

In case titled Chandok Machineries Vs. S.N. Sunderson and Co. 2018 SCC Online Del 12782, Delhi HC tried to interpret Section 38 of the Act and held that a reading of Section 38 of the Act would show that the Arbitral Tribunal may fix separate amounts of deposit for the claim and the counter-claim.

Bench held that a reading of Section 38 would show that the Arbitral Tribunal may fix separate amounts of deposit for the claims and counter claims. Though the deposit is payable in equal shares by the parties, on the failure of a party to pay its share of the deposit, the other party may pay that share and in case of failure of the other party to pay the aforesaid share in respect of the claims or the counter claims, the Arbitral Tribunal may suspend or terminate the arbitration proceedings in respect of such claims or counter claims.

In case titled Gammon India Ltd. Vs.Trenchless Engineering Services (P) Ltd. 2014 ABR 389 the Hon’ble High Court has held that the Arbitral Tribunal is entitled to a separate fee for the claim and the counter-claim.

What types of disputes go to arbitration?

Practically all types of Disputes of Civil Nature except Probate, Child Custody, Family Court Disputes and Tax and Revenue matters can be decided by way of Arbitration.

In a way most of disputes pertaining to Rights in Personam are Arbitrable, while Dispute pertaining to Right in Rem are beyond relam of Arbitration.

Disputes involving joint ventures, construction projects, partnership differences, intellectual property rights, personal injury, product liabilities, professional liability, real estate securities, contract interpretation and performance, insurance claim and Banking & non-Banking transaction disputes fall within the jurisdiction of Arbitration.

What types of disputes can’t be decided by Arbitration

The Supreme Court of India has listed certain disputes non-arbitrable namely:

• Disputes relating to rights and liabilities which arise out of or give rise to criminal offences.
• Matters of guardianship.
• Matrimonial disputes such as divorce, judicial separation, restitution of conjugal rights and child custody.
• Winding up and insolvency.
• Matters of testamentary like grant of probate, letters of administration and succession of certificates.
• Disputes regarding trust deeds involving trust, trustees and beneficiaries. 
• Matters of tenancy and eviction which are dealt with within the special provisions of a particular statute and have exclusive jurisdiction.

Arbitration and criminal offences are two parallel lines that can never intersect at a point.

What cases are eligible for arbitration?

In the case of Bharat Heavy Electricals Pvt. Ltd. v. Assam State Electricity, (1990) 2 Gau LR 130  the High Court has given the following guidelines in respect of tortious arbitrable claims:

1. Claims which are dependable on scope and subject related to the arbitration clause.
2. A claim, which lies in tort, shall be arbitrable if it arises out of, or is related to, the contract or is consequential upon any breach thereof.
3. If within a contract the claims are connected.
4. The nature of claims depends on the arbitrability of claims.
5. Claims arising out of the contract are still subject to an arbitration agreement if there is a close connection between claim and transaction. 
6. The language of the arbitration clause is interpreted in every case to determine whether the claims are direct and interactable.

Even in case of civil rights following matter cannot be referred to arbitration:

(a) Matrimonial matters and matters connected with conjugal rights.

(b) Industrial Disputes and Revenue matters (Income Tax & other Tax matters).

(c) Testamentary matters under Succ3ession act.

(d) Motor Vehicle Accident conversation.

(e) Matters under Indian Trust Act, Trusteeship of Charitable Institutions, Public charity matters failing within the purview of Monopolies and Restrictive Trade Practices Act.

(f) Determination guardianship or wards.

(g) As per Section 24 of Indian Contract Act matters relating to unlawful consideration are void hence these matters can not be referred for arbitration

Srikrishna Report on Arbitration

The Government of India is committed for speedy resolution of commercial disputes and to make India an international hub of Arbitration and a Centre of robust ADR mechanism catering to international and domestic arbitration, at par with international standards available.

Members of the Srikrishna Report on Arbitration

In order to give an impetus to this endeavor, the Department of Legal Affairs, Ministry of Law and Justice, on 13 January, 2017 constituted a ten Member, High Level Committee under the Chairmanship of Justice B.N.Srikrishna, Retired Judge, Supreme Court of India. Justice R.V.Raveendran, Retired Judge, Supreme Court of India, Justice S. Ravindra Bhat, Judge, High Court of Delhi, Shri K.K.Venugopal, Sr. Advocate and presently Attorney General for India, Shri P.S.Narasimha, Additional Solicitor General of India, Ms. Indu Malhotra, Senior Advocate, Supreme Court of India, Shri Arghya Sengupta, Research Director, Vidhi Centre for Legal Policy, Shri Arun Chawla, Deputy Secretary General, FICCI, Shri Vikkas Mohan, Senior Director CII, were the Members and Law Secretary, Shri Suresh Chandra,  was the Member Secretary of the High Level Committee.

The High Level Committee was given the mandate to review the institutionalization of arbitration mechanism and suggest reforms thereto. The Committee held 7 sittings. It submitted its report on 3 August, 2017 to Shri Ravi Shankar Prasad, Hon’ble Minister of Law & Justice and Electronics and Information Technology.

Salient features of Srikrishna Report on Arbitration

The Committee has divided its Report in three parts. The first part is devoted to suggest measures to improve the overall quality and performance of arbitral institutions in India and to promote the standing of the country as preferred seat of arbitration.

Arbitration Promotion Council of India

The Committee in this context have inter alia recommended –

(i) Setting up an Autonomous Body, styled the Arbitration Promotion Council of India (APCI), having representatives from all stakeholders for grading arbitral institutions in India.

(ii) The APCI may inter alia recognize professional institutes providing for accreditation of arbitrators

(iii) The APCI may hold training workshops and interact with law firms and law schools to train advocates with interest in arbitration and with a goal to create a specialist arbitration bar comprising of advocates dedicated to the field.

(iv) Creation of a specialist Arbitration Bench to deal with such Commercial disputes, in the domain of the Courts.

(v) Changes have been suggested in various provisions of the 2015 Amendments in the Arbitration and Conciliation Act with a view to make arbitration speedier and more efficacious and incorporate international best practices.

Revamping of ICADR

The Committee in Part II of the Report reviewed the working of ICADR working under the aegis of the Ministry of Law and Justice, Department of Legal Affairs. The Institution was set up with the objective of promoting ADR methods and providing requisite facilities for the same. The Committee has preferred for declaring the ICADR as an Institution of national importance and takeover of the Institution by a statute. The Committee are of the view that a revamped ICADR has the potential be a globally competitive institution.

The Committee are also of the opinion that the National Litigation Policy (NLP) must promote arbitration in Government Contracts.

As regards the role of arbitrations in matters involving the Union of India, including bilateral investment treaties (BIT) arbitrations, the Committee in Part III of the Report has inter alia recommended for creation of the post of an ‘International Law Adviser’ (ILA) who shall advise the Government and coordinate dispute resolution strategy for the Government in disputes arising out of its international law obligations, particularly disputes arising out of BITs. The Committee has emphasized that ILA may be consulted by the Department of Economic Affairs (DEA), at the time of negotiating and entering into BITs.

The roadmap of suggested reforms after an in depth examination of the issues, by the High Level Committee can result in a paradigm shift from the current perception of delay in resolution of commercial disputes in India to it being viewed as an investor friendly destination. The suggested reforms will not only lessen the burden of the judiciary, but give a fillip to the development agenda of the Government and aid the financial strength of the country  and serve the goal of welfare of the citizens.

Arbitration Institutions in india

Arbitration proceedings are of two types: ad-hoc arbitration and institutional arbitration.

The parties have the option to seek recourse to either of them depending on their choice and convenience.

Some of the prominent institutions which conduct institutional arbitration in India are:

1. Delhi International Arbitration Centre (DIAC) – New Delhi
2. Indian Council of Arbitration (ICA) – New Delhi
3. Indian Dispute Resolution Centre (IDRC) - New Delhi, Mumbai
4. Construction Industry Arbitration Council (CIAC)- New Delhi
5. LCIA India – New Delhi
6. International Centre for Alternative Dispute Resolution (ICDAR) – New Delhi
7. ICC Council of Arbitration – Kolkata

New Delhi International Arbitration Centre (NDIAC) and Arbitration Council of India (ACI)

Newly appointed Union Law Minister Kiren Rijiju, along with Minister of State for Law SP Singh Baghel, held a meeting with the Department of Legal Affairs and the Legislative Department on Thursday. The law minister said that institutional arbitration is the “need of the hour”.

Kiren Rijiju expressed the need to set up the Arbitration Council of India (ACI) and the New Delhi International Arbitration Centre (NDIAC) to develop India as an international arbitration hub.

He said these institutions will help in reducing the reliance on litigation as a way to resolve disputes and the efforts in this direction would help the country in the promotion of ease of doing business (EODB) environment, particularly with regard to enforcing contracts. It would also help in further improvement in India’s position on the World Bank's EODB list, he said.

Kiren Rijiju further stated that these initiatives would be conducive in attracting foreign investments and strengthening the Indian economy.

Both ministers highlighted the areas of priority for the government with regard to the working of the Law Ministry and emphasised the need for time-bound disposal of files marked to the departments.

How many arbitral institutions are there in India?

There are over 35 arbitral institutions in India. These include, in addition to domestic and international arbitral institutions, arbitration facilities provided by various public-sector undertakings (“PSUs”), trade and merchant associations, and city-specific chambers of commerce and industry

What are international arbitration institutions?

The most popular arbitration forums for Indians are ICC, SIAC, LCIA but this depends on industry sector. In addition, there are several other major players in the international dispute resolution: ICDR, CIETAC, HKIAC, LMAA, JCAA, KCAB, PCA, DIAC, WIPO, JAMS, ASA, VIAC, ACICA, ICADR, CMAC, AAA, FOSFA, FICA, IDAC, NDIAC, NYIAC, SAC, BCDR, BBMC, SCMC, IIAM, JCAA, KLRCA, MMC amongst many other.

Some of the leading international arbitration institutions of the world:

International Chamber of Commerce International Court of Arbitration

The ICC’s International Court of Arbitration was established in Paris in 1923. It is generally described as the world’s leading international commercial arbitration institution, with less a national character than any other leading arbitral institution.

The ICC’s International Court of Arbitration is not, in fact, a court, and does not itself decide disputes or act as an arbitrator. It is rather an administrative body that acts in a supervisory and appointing capacity under the ICC Rules.

The ICC does not maintain a list of potential arbitrators and instead relies heavily on the experience of its Secretariat and also on the ICC’s National Committees in making arbitrator appointments.

The ICC’s Rules have been criticized as expensive and cumbersome. Despite continuing criticisms about cost and efficiency, there are reasonable grounds for believing that the ICC will continue to be the institution of preference for many sophisticated commercial users.

London Court of International Arbitration

Founded in 1892, the LCIA is, by many accounts, the second most popular European institution in the field of international commercial arbitration.

The LCIA has made a determined, and increasingly successful, effort in recent years to overcome perceptions that it is a predominantly English organization. It has appointed five successive non-English presidents, and its vice-presidents include a number of non-English practitioners.

The LCIA Rules contain no Terms of Reference procedure and do not provide for institutional review of draft awards.

American Arbitration Association and International Center for Dispute Resolution

The AAA was founded in 1926, following the merger of two New York arbitration institutions. It is based in New York and has approximately 35 regional offices throughout the United States.

The AAA is the leading U.S. arbitral institution, and reportedly handles one of the largest numbers of arbitral disputes in the world.

Non-U.S. parties have sometimes been reluctant to agree to arbitration against U.S. parties under any of the available versions of the AAA rules, fearing parochial predisposition and unfamiliarity with international practice.

Permanent Court of Arbitration

The Permanent Court of Arbitration (“PCA”), established by the 1899 and 1907 Hague Conventions for the Pacific Settlement of International Disputes, is focused particularly on international arbitrations involving states and state-like entities.

Originally, the PCA was a registry for inter-state arbitrations conducted pursuant to the Hague Conventions, which provided a number of institutional administering services. At the present time, the PCA serves as the default institution to select appointing authorities under the UNCITRAL Rules – a function that has assumed increasing importance in recent decades in both international and commercial arbitrations.

Swiss Chamber’s Arbitration Institution

The Swiss Chamber’s Arbitration Institution was established in 2004 by the Swiss Chamber of Commerce. It is an independent association which consists of a Court of Arbitration and Secretariat.

Arbitrations under the Swiss Rules benefit from the pro-arbitration Swiss Law on Private International Law and from the availability in Switzerland of substantial numbers of potential arbitrators with impressive arbitration experience.

Vienna International Arbitral Centre

The Vienna International Arbitral Centre (VIAC) was established in 1975 and is based in Vienna. It conducts only international arbitrations, as mandated by the VIAC Rules’ requirement that at least one of the parties be of non-Austrian origin or that the dispute be of an international character.

VIAC was originally conceived primarily as a venue for East/West economic disputes during the Cold War. These origins are reflected in the fact that a significant proportion of VIAC’s caseload still includes parties from Central and Eastern Europe or Russia.

Stockholm Chamber of Commerce Arbitration Institute

Founded in Stockholm in 1917, the Stockholm Chamber of Commerce Arbitration Institute (SCC) developed into a substantial forum for disputes involving parties from the USSR and China during the 1970s and 1980s.

The SCC remains a preferred foreign arbitral institution for Chinese state-owned entities, with China-related disputes comprising a sizeable portion of the SCC’s current caseload.

The SCC typically appoints members of the Swedish bar, with international experience, or former Swedish judges, as arbitrators.

Singapore International Arbitration Centre

The Singapore International Arbitration Centre (SIAC) was established in 1991, initially for disputes arising out of construction, shipping, banking and insurance contracts. More recently, consistent with Singapore ‘s increasing importance as an international commercial and financial center, SIAC has been a wider range of disputes, including energy, financial, joint venture, sales and other matters.

The largest number of non-Singaporean parties comes from India and China. Its rules are based largely on the UNCITRAL Rules.

Hong Kong International Arbitration Centre

The HKIAC was established in 1985 and had developed into Asia’s leading international arbitration institution prior to hand-over of the British administration.

Potential users have sometimes voiced concerns about future stability and judicial independence in Hong Kong, and some parties remain reluctant to designate the HKIAC, particularly in disputes involving Chinese parties.

Nonetheless, the HKIAC receives favorable reviews from a number of informed observers, and concerns about Hong Kong’s future have moderated somewhat, at least in cases not involving Chinese state-owned (or similar) entities.

Chinese International Economic and Trade Arbitration Centre

The China International Economic and Trade Arbitration Center (CIETAC) was established by the Chinese government in 1956. It is also known as the Court of Arbitration of China Chamber of International Commerce.

CIETAC enjoys a privileged position in Chinese arbitration and is focused overwhelmingly on Chinese-related disputes. It holds a de facto monopoly on international arbitrations seated in China.

Experienced foreign users remain very skeptical about CIETAC arbitration, particularly in matters involving disputes between Chinese and non-Chinese parties. Uncertainty regarding CIETAC’s management and independence has, in the eyes of many observers, deepened in recent years.

Except in the most routine types of commercial dealings, with limited amounts in dispute, foreign investors and other foreign parties doing business related to China will continue to insist for the foreseeable future on third-country arbitral institutions.

Chinese state entities often suggest that they are unable to accept any arbitral institution other than CIETAC, but experience indicates that this is not correct.

Cairo Regional Centre for International Commercial Arbitration

The Cairo Regional Centre for International Commercial Arbitration (Cairo Centre) is a non-profit, international organization established in Egypt in 1979 under the auspices of the Egyptian Government and the Asian-African Legal Consultative Organization. It administers both domestic and international arbitrations.

The Cairo Centre directs its services primarily towards Asian-African trade and investment disputes, particularly in the Arab world. It reportedly maintains a list of more than 1 000 international arbitrators, drawn primarily from the Asian-African region.

World Intellectual Property Organization

The Arbitral Centre of the World Intellectual Property Organization (WIPO) was established in Geneva, Switzerland in 1994. Its rules are designed particularly for intellectual property disputes, although other types of controversies are not excluded from use of the WIPO Rules and facilities.

WIPO also administers a very large number of domain names disputes.

Court of Arbitration for Sport

The Court of Arbitration for Sport (CAS) was established in Lausanne, Switzerland, in 1984, and is sometimes termed the “Supreme Court of world sport”. Most major sports governing bodies use the CAS’s arbitration facilities, including the International Olympic Committee, International Association of Athletics Federations, Federation Internationale de Football Association (FIFA), and the Union of European Football Associations (UEFA).

The majority of cases, decided by CAS, relate to appeals of FIFA decisions or disputes over doping violations. Other cases cover a mixture of appeals relating to selection and eligibility decisions, governance issues, match-fixing and challenges to the granting of hosting rights for championships.

The efficiency and integrity of CAS arbitrations, including in highly-scrutinized settings such as the Olympics, is a striking illustration of adaptation of the arbitral process to new forms of dispute resolution, using procedures tailored to particular settings and needs.

German Institution of Arbitration

The German Institution of Arbitration was originally founded in 1920 to offer arbitration services in Germany. In 1992, the Committee merged with the German Arbitration Institute to form the German Institution of Arbitration (DIS) to provide nationwide arbitration services in Germany for all sectors of the economy.

Much of the DIS’s caseload consists of domestic disputes, although Germany’s enactment of the UNCITRAL Model Law in 1998 may have helped somewhat to attract greater international usage.

Japanese Commercial Arbitration Association

The Japan Commercial Arbitration Association (JCAA) was founded in 1950 by the Japan Chamber of Commerce and Industry, with a particular focus on international commercial disputes.

The JCAA has adopted the JCAA Commercial Arbitration Rules, most recently revised in February 2014, which have been used principally for Japan-related international transactions.

Australian Centre for International Commercial Arbitration

The Australian Centre for International Commercial Arbitration (ACICA) was established in 1982 on the initiative of the Institute of Arbitrators in Australia.

The ACICA enjoys a growing reputation, particularly in arbitrations involving parties from the Asia/Pacific region, providing a credible alternative to either HKIAC or SIAC.

Kuala Lumpur Regional Centre for Arbitration

The Kuala Lumpur Regional Centre for Arbitration (KLRCA) was established in 1978 to promote international commercial arbitration in the Asia/Pacific region.

Although it still has a relatively limited caseload at this stage (three international arbitrations in 2011), KLRCA provides an alternative to HKIAC, ACICA and SIAC in commercial arbitrations involving parties from the Asia/Pacific region.

Indian Dispute Resolution Centre

IDRC was established in 2020. The Centre has adopted the Arbitration and Conciliation Act, 1996 as amended upto Dec. 2019 and UNCITRAL Rules for Arbitration and has its own set of in house IDRC Domestic Arbitration Rules, 2019 which governs the conduct of the entire Arbitration proceedings from its commencement to its termination. 

Established by Indian Dispute Resolution Council (IDRC), a non profit organisation and located at the heart of New Delhi the  IDRC is the India's leading facility for conduct of Arbitrations, Mediations, Conciliations in both online and offline modes.

 It has developed an in house state of the art Software for eADR which provides an end to end completely digitised paperless functionality for carrying dispute resolution by way of Arbitration, Mediation and Conciliation of Domestic and International Disputes apart from  Early Neutral Evaluation and Expert Determination.

Indian Council of Arbitration

The Indian Council of Arbitration (ICA) was established in 1965 and is regarded as India’s preeminent arbitral institution.

Many users remain cautious about seating arbitrations in India, noting interventionist attitudes of Indian courts and other concerns.

JAMS International

In 2011, JAMS, a leading domestic mediation and arbitral institution in the United States, combined with the ADR center in Italy to form JAMS International, headquartered in London.

JAMS handles more than 10 000 arbitrations or mediations a year in North America, where its panel of neutral is comprised largely of former U.S. judges and litigators.

Seventh Schedule of Arbitration and Conciliation Act

Any person whose relationship with parties falls under any category in Seventh Schedule of Arbitration & Conciliation Act, 1996 is ineligible to be appointed as Arbitrator.

Section 12 (5) of A&C Act, 1996 lays - Notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator:

Provided that parties may, subsequent to disputes having arisen between them, waive the applicability of this sub-section by an express agreement in writing.

[The Seventh Schedule]

[See Section 12 (5)]

Arbitrator's relationship with the parties or counsel

1. The arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party.

2. The arbitrator currently represents or advises one of the parties or an affiliate of one of the parties.

3. The arbitrator currently represents the lawyer or law firm acting as counsel for one of the parties.

4. The arbitrator is a lawyer in the same law firm which is representing one of the parties.

5. The arbitrator is a manager, director or part of the management, or has a similar controlling influence, in an affiliate of one of the parties if the affiliate is directly involved in the matters in dispute in the arbitration.

6. The arbitrator's law firm had a previous but terminated involvement in the case without the arbitrator being involved himself or herself.

7. The arbitrator's law firm currently has a significant commercial relationship with one of the parties or an affiliate of one of the parties.

8. The arbitrator regularly advises the appointing party or an affiliate of the appointing party even though neither the arbitrator nor his or her firm derives a significant financial income therefrom.

9. The arbitrator has a close family relationship with one of the parties and in the case of companies with the persons in the management and controlling the company.

10. A close family member of the arbitrator has a significant financial interest in one of the parties or an affiliate of one of the parties.

11. The arbitrator is a legal representative of an entity that is a party in the arbitration.

12. The arbitrator is a manager, director or part of the management, or has a similar controlling influence in one of the parties.

13. The arbitrator has a significant financial interest in one of the parties or the outcome of the case.

14. The arbitrator regularly advises the appointing party or an affiliate of the appointing party, and the arbitrator or his or her firm derives a significant financial income therefrom.

Relationship of the arbitrator to the dispute

15. The arbitrator has given legal advice or provided an expert opinion on the dispute to a party or an affiliate of one of the parties.

16. The arbitrator has previous involvement in the case.

Arbitrator's direct or indirect interest in the dispute

17. The arbitrator holds shares, either directly or indirectly, in one of the parties or an affiliate of one of the parties that is privately held.

18. A close family member of the arbitrator has a significant financial interest in the outcome of the dispute.

19. The arbitrator or a close family member of the arbitrator has a close relationship with a third party who may be liable to recourse on the part of the unsuccessful party in the dispute.

Explanation 1. - The term "close family member" refers to a spouse, sibling, child, parent or life partner.

Explanation 2. - The term "affiliate" encompasses all companies in one group of companies including the parent company.

Explanation 3. - For the removal of doubts, it is clarified that it may be the practice in certain specific kinds of arbitration, such as maritime or commodities arbitration, to draw arbitrators from a small, specialised pool. If in such fields it is the custom and practice for parties frequently to appoint the same arbitrator in different cases, this is a relevant fact to be taken into account while applying the rules set out above.

Scope of Seventh Schedule of Arbitration and Conciliation Act

A three judge bench of the Hon'ble Supreme Court consisting of Justices L. Nageswara Rao, Indu Malhotra and Ajay Rastogi, held, in the case of Haryana Space Application Centre (HARSAC) and Another v. M/s Pan India Consultants Pvt. Ltd. (delivered on January 20, 2021), that section 12(5) read with the Seventh Schedule of the Arbitration and Conciliation Act, 1996 is mandatory and non-derogable (non-repealable) provision.

The appointment of Sole Arbitrator is subject to the declarations being made under section 12 of the Act with respect to independence and impartiality, and the ability to devote sufficient time to complete the arbitration within the period of six months.

Fifth Schedule of Arbitration and Conciliation Act

[The Fifth Schedule]

[See section 12 (1)(b)]

The following grounds give rise to justifiable doubts as to the independence or impartiality of arbitrators:

Arbitrator's relationship with the parties or counsel

1. The arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party.

2. The arbitrator currently represents or advises one of the parties or an affiliate of one of the parties.

3. The arbitrator currently represents the lawyer or law firm acting as counsel for one of the parties.

4. The arbitrator is a lawyer in the same law firm which is representing one of the parties.

5. The arbitrator is a manager, director or part of the management, or has a similar controlling influence, in an affiliate of one of the parties if the affiliate is directly involved in the matters in dispute in the arbitration.

6. The arbitrator's law firm had a previous but terminated involvement in the case without the arbitrator being involved himself or herself.

7. The arbitrator's law firm currently has a significant commercial relationship with one of the parties or an affiliate of one of the parties.

8. The arbitrator regularly advises the appointing party or an affiliate of the appointing party even though neither the arbitrator nor his or her firm derives a significant financial income therefrom.

9. The arbitrator has a close family relationship with one of the parties and in the case of companies with the persons in the management and controlling the company.

10. A close family member of the arbitrator has a significant financial interest in one of the parties or an affiliate of one of the parties.

11. The arbitrator is a legal representative of an entity that is a party in the arbitration.

12. The arbitrator is a manager, director or part of the management, or has a similar controlling influence in one of the parties.

13. The arbitrator has a significant financial interest in one of the parties or the outcome of the case.

14. The arbitrator regularly advises the appointing party or an affiliate of the appointing party, and the arbitrator or his or her firm derives a significant financial income therefrom.

Relationship of the arbitrator to the dispute.

15. The arbitrator has given legal advice or provided an expert opinion on the dispute to a party or an affiliate of one of the parties.

16. The arbitrator has previous involvement in the case.

Arbitrator's direct or indirect interest in the dispute

17. The arbitrator holds shares, either directly or indirectly, in one of the parties or an affiliate of one of the parties that is privately held.

18. A close family member of the arbitrator has a significant financial interest in the outcome of the dispute.

19. The arbitrator or a close family member of the arbitrator has a close relationship with a third party who may be liable to recourse on the part of the unsuccessful party in the dispute.

Previous services for one of the parties or other involvement in the case

20. The arbitrator has within the past three years served as counsel for one of the parties or an affiliate of one of the parties or has previously advised or been consulted by the party or an affiliate of the party making the appointment in an unrelated matter, but the arbitrator and the party or the affiliate of the party have no ongoing relationship.

21. The arbitrator has within the past three years served as counsel against one of the parties or an affiliate of one of the parties in an unrelated matter.

22. The arbitrator has within the past three years been appointed as arbitrator on two or more occasions by one of the parties or an affiliate of one of the parties.

23. The arbitrator's law firm has within the past three years acted for one of the parties or an affiliate of one of the parties in an unrelated matter without the involvement of the arbitrator.

24. The arbitrator currently serves, or has served within the past three years, as arbitrator in another arbitration on a related issue involving one of the parties or an affiliate of one of the parties.

Relationship between an arbitrator and another arbitrator or counsel

25. The arbitrator and another arbitrator are lawyers in the same law firm.

26. The arbitrator was within the past three years a partner of, or otherwise affiliated with, another arbitrator or any of the counsel in the same arbitration.

27. A lawyer in the arbitrator's law firm is an arbitrator in another dispute involving the same party or parties or an affiliate of one of the parties.

28. A close family member of the arbitrator is a partner or employee of the law firm representing one of the parties, but is not assisting with the dispute.

29. The arbitrator has within the past three years received more than three appointments by the same counsel or the same law firm.

Relationship between arbitrator and party and others involved in the arbitration

30. The arbitrator's law firm is currently acting adverse to one of the parties or an affiliate of one of the parties.

31. The arbitrator had been associated within the past three years with a party or an affiliate of one of the parties in a professional capacity, such as a former employee or partner.

Other circumstances

32. The arbitrator holds shares, either directly or indirectly, which by reason of number or denomination constitute a material holding in one of the parties or an affiliate of one of the parties that is publicly listed.

33. The arbitrator holds a position in an arbitration institution with appointing authority over the dispute.

34. The arbitrator is a manager, director or part of the management, or has a similar controlling influence, in an affiliate of one of the parties, where the affiliate is not directly involved in the matters in dispute in the arbitration.

Explanation 1. - The term "close family member" refers to a spouse, sibling, child, parent or life partner.

Explanation 2. - The term "affiliate" encompasses all companies in one group of companies including the parent company.

Explanation 3. - For the removal of doubts, it is clarified that it may be the practice in certain specific kinds of arbitration, such as maritime or commodities arbitration, to draw arbitrators from a small, specialised pool. If in such fields it is the custom and practice for parties frequently to appoint the same arbitrator in different cases, this is a relevant fact to be taken into account while applying the rules set out above.

Scope of Fifth Schedule of Arbitration and Conciliation Act

Arbitration and Conciliation (Amendment) Act, 2015 has resulted in the introduction of certain stringent and objective parameters for determining the independence and impartiality of an arbitrator.

The fifth schedule and the seventh schedule of the Arbitration and Conciliation Act, 1996 now postulate various criteria for determining independence and impartiality of arbitrators.

As explained by the Supreme Court in HRD Corporation (Marcus Oil and Chemical Division) v. Gail (India) Limited [2018 (12) SCC 471], the existence of circumstance(s) falling within the seventh schedule immediately renders a person ineligible to act as an arbitrator. In the case of circumstance(s) falling within the fifth schedule, the same can be made the basis for an application seeking recusal to be filed before, and considered by, the arbitrator concerned. 

in the judgment authored by Justice Nariman in  BCCI v Kochi Cricket (P.) Ltd. and Ors, 2018 Latest Caselaw 183 SC, Section 36, substituted by the Amendment Act, was granted retrospective applicability in light of the fact that the execution of a decree pertains to procedural rights and not vested rights.

Fourth Schedule of Arbitration and Conciliation Act

[The Fourth Schedule]

[See section 11 (3A)]

Note. - In the event, the arbitral tribunal is a sole arbitrator, he shall be entitled to an additional amount of twenty-five per cent. on the fee payable as per the table set out above.

Scope of Fourth Schedule of Arbitration and Conciliation Act

The Arbitration and Conciliation (Amendment) Act, 2015 (‘2015 Amendment Act’), alongside the various normative changes it ushered in, also sought to put in place a standardized benchmark for the determination of the fee payable to an arbitral tribunal.

The resultant Schedule IV (‘Fourth Schedule’) contains a methodology, premised on the quantum of the amount in dispute, to calculate the fee payable to an arbitral tribunal.

The High Court of Delhi in Paschimanchal Vidyut Vitran Nigam Ltd. v. IL&FS Engineering & Construction Company Ltd. held that the Fourth Schedule is not mandatory in its application, and is merely suggestive.

Thus, the arbitral tribunal is not bound to fix its fee in accordance with the Fourth Schedule, unless the parties specifically agree to the applicability of the said Schedule or if the competent Court while appointing an arbitral tribunal in exercise of powers under Section 11 of the Arbitration and Conciliation Act, 1996 (‘Arbitration Act’) specifically so directs or there are extant Rules notified by the concerned High Court specifically incorporating the Fourth Schedule.

Third Schedule of Arbitration and Conciliation Act

Foreign award under Geneva Convention Awards means an arbitral award on disputes relating to matters considered as commercial under the law in force in India. The Award shall be between persons where atleast one is subject to the jurisdiction of  another Power which is declare by Central Govt to be parties to the Convention set forth in the Third Schedule and with whome a reciprocal provisions have been made.

The Third Schedule

(See section 53)

Convention on the Execution of Foreign Arbitral Awards

Article 1.

(1) 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 with the rules of the procedure of the territory where the award is relied upon, 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 are subject to the jurisdiction of one of the High Contracting Parties.

(2) To obtain such recognition or enforcement, it shall, further, be necessary:

(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 cessation (in the countries where such forms of procedure exist) or if it is proved that any proceedings for the purpose of contesting the validity of the 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 of the submission to arbitration or that it contains decisions on matters beyond the scope of the submission to arbitration.

If the award has not covered all the questions submitted to the arbitral tribunal, the competent authority of the country where recognition or enforcement of the award is sought can, if it thinks fit, postpone such recognition or enforcement or grant it subject to such guarantee as 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 a ground, other than the grounds referred to in Article 1(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 adjourn 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:

(1) 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 1, 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 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.

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 of the Protocol of 1923 on Arbitration Clauses, shall be ratified.

It may be ratified only on behalf of those 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 the Secretary-General of the League of Nations, 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 in respect of the High Contracting Party which shall have notified it and one year after such notification shall have reached the Secretary-General of the League of Nations.

The denunciation shall come into force only in respect of the High Contracting Party which shall have notified it and one year after such notification shall have reached the Secretary-General of the League of Nations.

The denunciation of the Protocol on Arbitration Clauses shall entail, 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.

The application of this Convention to one or more of such Colonies, Protectorates or Territories to which the Protocol on Arbitration Clauses opened at Geneva on September 24th, 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 Colonies, 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 of Nations to every Member of the League of Nations and to every Non-Member State which signs the same.

The Second Schedule provides the Protocol where Foreign award under Geneva Convention Awards means an arbitral award on disputes relating to matters considered as commercial under the law in force in India. The Award shall be between persons where atleast one is subject to the jurisdiction of  another Power which is declare by Central Govt to be parties to the Convention set forth in the Third Schedule and with whome a reciprocal provisions have been made.

The Second Schedule

(See section 53)

Protocol on Arbitration Clauses

The undersigned being duly authorised, declare that they accept, on behalf of the countries which they represent, the following provisions:

1. Each of the Contracting States recognises the validity of an 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 of the 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 itself of this 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 in its own territory under the preceding articles.

4. The Tribunals of the 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.

5. The present Protocol, which shall remain open for signature by all States, shall be ratified. The ratification shall be 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 force as 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 years notice. Deunciation shall be effected by a notification addressed to the Secretary-General of the League, who will immediately transmit copies of such notification to all the other Signatory States and inform them of the 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 declare that their acceptance of the present Protocol does not include any or all of the 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.

First Schedule of Arbitration and Conciliation Act

Under the Arbitration and Conciliation (Amendment) Act, 2015. There are two avenues available for the enforcement of foreign awards in India, viz., the New York Convention and the Geneva Convention, as the case may be.

The design of the new Act is based on the premise that it will provide an efficient and swift method of dispute resolution for both the domestic as well as international investors. With a surge in the business opportunities and entrepreneurship in India, it is only proper to anticipate proper implementation of the Act in harmony with the UNCITRAL Arbitration Rules which forms the foundation of the Act.

The First Schedule

See section 44)

Convention on the Recognition and Enforcement of Foreign Arbitral Awards

Article I

1. This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a 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 article X hereof, any State may on the basis of reciprocity declare that 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.

Article II

1. 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.

3. The Court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning 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 of being performed.

Article III

Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the 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 of domestic 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 of the award shall produce a translation of these documents into such language. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent.

Article V

1. 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

(c) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration; provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the 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 of an arbitral award may also be refused if the competent authority in the 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 of the 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(1)(e), the authority before which the award is sought 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 award, order the other party to give suitable security.

Article VII

1. The provisions of the 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 may have to avail 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.

2. The Ganeva Protocol on Arbitration Clauses of 1923 and the Ganeva Convention on the Execution of Foreign Arbitral Awards of 1927 shall cease to have effect between Contracting States on their becoming bound and to the extent that they become bound by this Convention.

Article VIII

1. This Convention shall be open until 31st December, 1958 for signature on behalf of any Member of the United Nations and also on behalf of any other State which is or hereafter becomes member of any specialised agency of the United Nations, or which is or hereafter becomes a party to the 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 shall be deposited with the Secretary-General of the United Nations.

Article IX

1. This Convention shall be open for accession to all States referred to in article VIII.

2. Accession shall be effected by the deposit of an instrument of accession with the Secretary-General of the 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 shall apply:

(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 of Contracting 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 of this 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 of ratification 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 instrument of ratification 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 territory concerned one 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.

Article XIV

A Contracting State shall not be entitled to avail itself of the present Convention against other Contracting States except to the extent that it is itself bound to apply the Convention.

Article XV

The Secretary-General of the United Nations shall notify the States contemplated in article VIII of the following:

(a) signatures and ratifications in accordance with article VIII;

(b) accessions in accordance with article IX;

(c) declarations and notifications under articles I, X and XI;

(d) the date upon which this Convention enters into force in accordance with article XII;

(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 in article XIII.

What is Conditional Fee Agreements (CFAs)

CFA is basically the “no win no fee” agreement with your Lawyer.  You as a Client filing the claim, won't have to pay any legal fees if your claim fails or is unsuccessful. It is primaarily resorted to in cases such as personal injury, accident claims and any other type of claim where compensation may be awarded. 

The basic concept of a CFA is that, in return for the client paying nothing (or a lower fee) in the event of defeat, the lawyer charges the client an extra fee, known as a success fee, in the event of success. Here Lawyer's fee has to be calculated in the usual way namely with an hourly rate and the numbers of hours worked and emails sent and so on, and the success fee, which is on top of these ordinary charges, and is a percentage uplift on those charges.

Conditional Fee Agreements: A New Avenue for Legal Funding

By definition a Conditional Fee Agreement or CFA is an agreement with a legal representative which provides for payment of fees and expenses, fully or partially, which is to be paid only in certain circumstances. Predominantly CFA is used only if the client wins the case.

How does a conditional fee arrangement work?

The conditional fee agreement is the contract between you and your solicitor when you seek to make a claim for compensation against another party. 

If your case is won and you are awarded compensation,  then the condition of this is that you pay your solicitor and percentage of your compensation for their time and expertise. This means that you carry less risk when making a claim because you are not left with the bill for the legal work should your claim be unsuccessful.  

You should agree the terms of your conditional fee agreements with your solicitor in advance of your claim commencing. If you win your case you pay your solicitor and in most cases the losing party or defendant will pay back any expenses incurred. This may include things such as barrister fees, medical report,s accident reports and travel expenses. If you lose the case you will not be required to pay your solicitor and in most cases you won't be required to pay the defendant's legal costs.

What are the advantages of conditional fee agreements?

When you sign your Conditional Fee Agreement, you don't have to pay your solicitor any fees upfront and this is where it differs from other legal services.

If you win your case you pay your solicitor and in most cases the losing party or defendant will pay back any expenses incurred. This may include things such as barrister fees, medical report,s accident reports and travel expenses 

If you lose the case you will not be required to pay your solicitor and in most cases you won't be required to pay the defendant's legal costs.

Is a conditional fee arrangement completely free?

Well it can be if it is added up with the Success Fee component. 

Now as days Lawyers will go to Great lengths to analyse your case and get as much information as possible from you before agreeing to proceed. The reason for this is that if they aren't successful, they won't get paid. Benefits of the Conditional Fee Agreement is that in most cases your solicitor will take the case on if they think you have a good chance of winning. In most cases you'll also get a free consultation in advance of proceeding.

Who pays the success fee on a CFA?

Under a CFA it is to be borne by you as a Client.

Earlier Internationally Lawyers able to recover a “success fee” from the opposing side if they won the case. This was changed through regulations however and removed the requirements for the other party to pay the success fee. Law firms now charge a percentage of the clients compensation awarded to cover the cost of their legal services and expertise.

How can Court assist in Recording of Evidence in Arbitration

Arbitration is a form of alternative dispute resolution mechanism in which a dispute is resolved by a impartial third party adjudicator whose decision is final and binding upon the parties. 
Arbitrator acts as a private adjudicator and broadly carries out the proceedings on the lines akin to a Civil Court. Just like Civil Court there are Pleadings in the form of a Claim Petition and Statement of Defence. Admission/Denial of Documents is carried out.
Just like a Civil Courts Legal and factual issues are identified followed by recording of Evidence of both sides, if found necessary. All the statements which the Tribunal permits or requires to be made before it by witnesses , in relation to matters of fact under inquiry , such statements are called oral evidence.

All documents including electronic records produced for the inspection of the Tribunal, such documents are called documentarty evidence. Although Section 19(1) in the Arbitration and Conciliation Act, 1996 states that the arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872 but still Section 27 in this act states the Court's assistance can be taken in taking evidence. Section 27 Arbitration and Conciliation Act, 1996 provides -

Section 27 - Court assistance in taking evidence

(1) 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 the 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 address of any 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 taking evidence, execute the request by ordering that the evidence be provided directly to the arbitral tribunal.

(4) The Court may, while making an order under sub-section (3), issue the same processes to witnesses as it may issue in suits tried before it.

(5) Persons failing to attend in accordance with such process, or making any other default, or refusing to give their evidence, or guilty of any contempt to the arbitral tribunal during the conduct of arbitral proceedings, shall be subject to the like disadvantages, penalties and punishments by order of the Court on the representation of the arbitral tribunal as they would incur for the like offences in suits tried before the Court.

(6) In this section the expression "Processes" includes summonses and commissions for the examination of witnesses and summonses to produce documents.

Since the Arbitral Tribunal is appointed by the consent of parties, it cannot by itself enforce its orders against a third party. As such, while recording evidence, the Arbitral Tribunal can on its own apply or allow a party to apply to the Court for seeking assistance in taking evidence.This assistance can be in the form of the Court issuing summons to enforce the attendance of any person or even for compelling production of any document required by the Arbitral Tribunal in the course of recording evidence. All the summons will be issued in accordance with Order 5 of CPC.

But the provision of Section 27 can not be used to enforce the attendance of a party before the Arbitral Tribunal or to compel a party to produce a document before the Arbitral Tribunal. The Arbitral Tribunal independently has the power and jurisdiction to direct a party to produce documents that it thinks are relevant. 

If case the Tribunal refuses to take court assistance on its own and also denies the party’s application in this regard, the party cannot do anything at that stage. The only legal remedy available to it is to challenge the award, after it is passed, under Section 34 of the Arbitration and Conciliation Act, 1996.

Scope of Section 27 of Arbitration and Conciliation Act, 1996

Section 27 of the Arbitration and Conciliation Act, 1996, as amended upto date, lays down a mechanism whereby the arbitral tribunal or a party to the dispute, upon seeking the approval of the arbitral tribunal, can seek assistance of the Civil Court in taking evidence.

This is one of the several legal provisions of the Arbitration and Conciliation Act, 1996 which permits the judicial interference in an arbitration proceedings.

Any kind of Judicial intervention is always looked down upon a matter of hardship as these interventions are generally perceived to be reason of causing delay in completion of proceedings before Arbitral Tribunal. 

However the same can not be said about Section 27 in so far as it is aimed to fast track and assist the Tribunal in completion the recording of Evidence.

The salient features of Section 27 are:

1. Under Section 27 the Civil Court is not carrying out an ‘adjudicatory’ duty and as such court cannot revisit the arbitral tribunal finding or view on admissibility, relevancy, materiality, and weight of any evidence.
2. However, the civil court do have the power to decline such request of the arbitral tribunal under following circumstances:
   • if such prayer is beyond the power of the court, for example summoning of a witnesses from foreign country;
   • if such prayer is not as per the law applicable to court for taking evidence;
   • where either of the disputing party can be prejudiced by it during a criminal proceeding;
   • where the Court is of the view that documents sought are privileged/confidential;
   • where the Court finds that the arbitral tribunal has passed the order without application of mind;
   • where the Court finds that the arbitral tribunal has passed an order based on a misconception of the law.

When the Court finds no such infirmity the court can agree to the request of the arbitral tribunal.

Section 29A lays down time limits for making an award by the arbitral tribunal. In matters other than international commercial arbitration, the award shall be made by the tribunal within 12 months from the date of completion of pleadings. Parties can consent to extend this period by a maximum of 6 months.

If the award is not made within this period, the mandate of the arbitrators shall terminate unless the court extends it. While extending the period, if the court finds that the delay was attributable to the tribunal, it may order a reduction of the arbitrators’ fee by up to 5% for each month of delay. Extension by the court can be sought by any of the parties through an application citing sufficient cause.

While extending the period, the court can substitute one or all the arbitrators and proceedings shall continue from the stage already reached.

The court shall dispose of the application for an extension within 60 days.

In international commercial arbitrations, no strict time frame has been stipulated, although the endeavour is to dispose of the matter within 12 months from the completion of pleadings.

If the award is made in 6 months from the date of reference, the tribunal shall be entitled to an additional fee if parties agree.

Under this Section, it is open for the court to impose actual or exemplary costs upon any of the parties.

The text of the Section 29A can be found below:

“29A.Time limit for arbitral award.- (1) The award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23:

Provided that the award in the matter of international commercial arbitration may be made as expeditiously as possible and endeavor may be made to dispose of the matter within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23.

(2) If the award is made within a period of six months from the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree.

(3) The parties may, by consent, extend the period specified in sub-section (1) for making award for a further period not exceeding six months.

(4) If the award is not made within the period specified in sub-section (1) or the extended period specified under sub-section (3), the mandate of the arbitrator(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period:

Provided that while extending the period under this sub-section, if the Court finds that the proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding five per cent. for each month of such delay.

Provided further that where an application under sub-section (5) is pending, the mandate of the arbitrator shall continue till the disposal of the said application:

Provided also that the arbitrator shall be given an opportunity of being heard before the fees is reduced.

(5) The extension of period referred to in sub-section (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court.

(6) While extending the period referred to in sub-section (4), it shall be open to the Court to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator(s) appointed under this section shall be deemed to have received the said evidence and material.

(7) In the event of arbitrator(s) being appointed under this section, the arbitral tribunal thus reconstituted shall be deemed to be in continuation of the previously appointed arbitral tribunal.

(8) It shall be open to the Court to impose actual or exemplary costs upon any of the parties under this section.

(9) An application filed under sub-section (5) shall be disposed of by the Court as expeditiously as possible and endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party.”

Fast track procedure has been provided under Section 29B of the Act. Parties to an arbitration agreement can agree in writing to resolve their dispute by fast-track procedure at any stage before or at the time of appointment of the tribunal. Parties may agree that the tribunal shall consist of sole arbitrator.

In a fast-track procedure:

• Tribunal decides the dispute on the basis of written pleadings and documents without any oral hearing.
• Tribunal has power to call further information or clarification.
• Oral hearing is held only if all the parties make a request or the tribunal considers it necessary.
• Tribunal may dispense with technical formalities if an oral hearing is held.

The award shall be made within period of 6 months from the date the arbitral tribunal enters upon reference. If it isn’t made, provisions under Section 29A would apply.

The text of the Section 29A can be found below:

“29B. Fast track procedure- (1) Notwithstanding anything contained in this Act, the parties to an arbitration agreement, may, at any stage either before or at the time of appointment of the arbitral tribunal, agree in writing to have their dispute resolved by fast track procedure specified in sub-section (3).

(2) The parties to the arbitration agreement, while agreeing for resolution of dispute by fast track procedure, may agree that the arbitral tribunal shall consist of a sole arbitrator who shall be chosen by the parties.

(3) The arbitral tribunal shall follow the following procedure while conducting arbitration proceedings under sub-section (1):--

(a) The arbitral tribunal shall decide the dispute on the basis of written pleadings, documents and submissions filed by the parties without any oral hearing;

(b) The arbitral tribunal shall have power to call for any further information or clarification from the parties in addition to the pleadings and documents filed by them;

(c) An oral hearing may be held only, if, all the parties make a request or if the arbitral tribunal considers it necessary to have oral hearing for clarifying certain issues;

(d) The arbitral tribunal may dispense with any technical formalities, if an oral hearing is held, and adopt such procedure as deemed appropriate for expeditious disposal of the case.

(4) The award under this section shall be made within a period of six months from the date the arbitral tribunal enters upon the reference.

(5) If the award is not made within the period specified in sub-section (4), the provisions of sub-sections (3) to (9) of section 29A shall apply to the proceedings.

(6) The fees payable to the arbitrator and the manner of payment of the fees shall be such as may be agreed between the arbitrator and the parties.”

Section 30 provides that an arbitral tribunal can encourage settlement of the dispute and if the parties agree, use mediation, conciliation or other procedure anytime during the arbitral proceeding.

If the parties settle the dispute, the tribunal shall terminate the proceedings and may, upon request of the parties, record the settlement in an award in accordance with Section 31 which pertains to form and content of arbitral award.

Such an arbitral award on agreed terms shall have same status and effect as any other award.

The text of the Section 30 can be found below:

“30. Settlement- (1) It is not incompatible with an arbitration agreement for an arbitral tribunal to encourage settlement of the dispute and, with the agreement of the parties, the arbitral tribunal may use mediation, conciliation or other procedures at any time during the arbitral proceedings 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 the form of an arbitral award on agreed terms.

(3) An arbitral award on agreed terms shall be made in accordance 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.”

Section 31 lays down the requirements of form and content of an arbitral award. It states that award shall be in writing, signed by all the arbitrators or at least majority of them, stating reason for omitted signature.

Singed copy of the award shall be delivered to each party.

Award shall state the reasons on which it’s based unless the parties have agreed that no reasons are to be given. It shall also state date and place of arbitration.

An award for the payment of money, tribunal may include interest at reasonable rate in the sum. Unless award directs otherwise, the interest rate shall be 2% higher than current rate of interest prevalent.

Tribunal can also make an interim arbitral award during the proceedings.

The text of the Section 31 can be found below:

“31.- Form and contents of arbitral award.

(1) An arbitral award shall be made in writing and shall be signed by the members of the arbitral tribunal.

(2) For the purposes of sub-section (1), in arbitral proceedings with more than one arbitrator, the signatures of the majority of all the members of the arbitral tribunal shall be sufficient so long as the reason for any omitted signature is stated.

(3) The arbitral award shall state the reasons upon which it is based, unless—

(a) the parties have agreed that no reasons are to be given, or

(b) the award is an arbitral award on agreed terms under section 30.

(4) The arbitral award shall state its date and the place of arbitration as determined in accordance with section 20 and the award shall be deemed to have been made at that place.

(5) After the arbitral award is made, a signed copy 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 tribunal may include in the sum for which the award is made interest, at such rate 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 of action arose and the date on which the award is made.

(b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of two per cent. higher than the current rate of interest prevalent on the date of award, from the date of award to the date of payment.

Explanation.— The expression "current rate of interest" shall have the same meaning as assigned to it under clause (b) of section 2 of the Interest Act, 1978 (14 of 1978).

(8) The costs of an arbitration shall be fixed by the arbitral tribunal in accordance with section 31A.”

Section 31A was added to the Act in 2016 to lay down the cost regime which is in line with the international costs regime. The losing party bears the cost of arbitration which innocent party from bearing the costs.

The court or tribunal has the power to determine which party is liable to pay costs, what would be the amount and when the payment has to be made.

Costs would relate to fees and expenses of arbitrators, courts and witnesses, legal fees, administration fees of supervising institution, other expenses in connection with the arbitral or court proceedings and the award award.

The general rule followed by the court and tribunal is that the unsuccessful party shall bear the cost of the successful party or a different order can be passed for the reasons recorded in writing.

While taking this decision the court or the tribunal shall consider the conduct of the parties, whether a party has succeeded, whether a frivolous counter claim has been made leading to delay and whether a reasonable offer to settle has been made by a party and refused by the other party.

The court or the tribunal may order to pay a proportion or a stated amount in another party’s costs, costs from certain date only, costs before the proceedings have begun, costs related to particular steps or a distinct part of the proceedings and interest on costs from or until a certain date.

Parties can agree that a party would pay whole or part of the costs only after the dispute in question has arisen.

The text of the Section 31A can be found below:

“31A. Regime for costs- (1) In relation to any arbitration proceeding or a proceeding under any of the provisions of this Act pertaining to the arbitration, the Court or arbitral tribunal, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), shall have the discretion to determine-

1. whether costs are payable by one party to another;
2. the amount of such costs; and
3. when such costs are to be paid.

Explanation- For the purpose of this sub-section, "costs" means reasonable costs relating to-

1. the fees and expenses of the arbitrators, Courts and witnesses;
2. legal fees and expenses;
3. any administration fees of the institution supervising the arbitration; and
4. any other expenses incurred in connection with the arbitral or Court proceedings and the arbitral award.

(2) If the Court or arbitral tribunal decides to make an order as to payment of costs,

1. the general rule is that the unsuccessful party shall be ordered to pay the costs of the successful party; or
2. the Court or arbitral tribunal may make a different order for reasons to be recorded in writing.

(3) In determining the costs, the Court or arbitral tribunal shall have regard to all the circumstances, including-

1. the conduct of all the parties;
2. whether a party has succeeded partly in the case;
3. whether the party had made a frivolous counterclaim leading to delay in the disposal of the arbitral proceedings; and
4. whether any reasonable offer to settle the dispute is made by a party and refused by the other party.

(4) The Court or arbitral tribunal may make any order under this section including the order that a party shall pay-

1. a proportion of another party's costs;
2. a stated amount in respect of another party's costs;
3. costs from or until a certain date only;
4. costs incurred before proceedings have begun;
5. costs relating to particular steps taken in the proceedings;
6. costs relating only to a distinct part of the proceedings; and
7. interest on costs from or until a certain date.

(5) An agreement which has the effect that a party is to pay the whole or part of the costs of the arbitration in any event shall be only valid if such agreement is made after the dispute in question has arisen.”

Seat of an arbitration is the country in which the arbitration proceedings take place. In international arbitrations, it is usually a neutral country i.e., a country other than the country of habitual residence of the parties. The law of the seat of arbitration governs the proceedings of the arbitration. It is also known as lex arbitri. The choice of seat also determines which courts would exercise supervisory jurisdiction.

However, it is not necessary that each and every proceeding should take place at the seat of arbitration. Hence, a “venue” i.e., a geographical location where arbitration takes place can be different from the “seat” of the arbitration. Nevertheless, the law of the seat would continue to apply as though the proceedings are being conducted at the seat itself. For instance, the courts of the seat of the arbitration have to the power to set aside an award if challenged by one of the parties.

As per Section 20 of the Arbitration and Conciliation Act, the parties are free to agree on the place of arbitration, failing which it shall be determined by the tribunal having regard to the circumstances of the case and convenience of the parties.

Section 32 deals with the termination of proceedings. It provides that the proceedings automatically terminate when the final award is made. Arbitration is also terminated by an order of the tribunal where-

• Claimant withdraws the claim unless the respondent objects and the tribunal finds legitimate interest in obtaining a final settlement.
• The parties agree on the termination of proceedings.
• The tribunal finds the continuation of the proceedings is unnecessary or impossible.

The mandate of the tribunal also terminates with the termination of the proceedings.

Section 32(2)(c), which lays down the ground for termination due to continuation becoming unnecessary or impossible, has been a source of uncertainty as it leaves room for debate as to what exactly is meant by impossibility and uncertainty. “Unnecessary” usually encompasses situations where the parties have no legitimate interest in continuing the proceedings. “Impossible” implies a legal or material barrier to the continuation of the proceedings.

The text of the Section 32 can be found below:

“32. Termination of proceedings- (1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub-section (2).

(2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where—

(a) the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute,

(b) the parties agree on the termination of 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 and sub-section (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings.”

Correction is a post award remedy provided under Section 33(1)(a). A party, with notice to the other party, can request the arbitral tribunal to correct any computational, clerical or typographical errors in the award within 30 days from the receipt of the arbitral award, unless another time period has been agreed by the parties.

If the tribunal feels that the request is justified, it shall make the correction within 30 days from receipt of request.

Such correction can be made by the tribunal on its own initiative as well, within 30 days from the date of the award.

A party, with notice to the other party, may request the tribunal to make an additional award on claims presented in the proceedings but omitted in the award. Such additional award shall be made within 60 days from receipt of request.

Time periods for correction and additional award can be extended by the tribunal.  

The court of the seat of arbitration has the power to set aside an award. In India, an application for setting aside an award can be filed under Section 34, which lists down the following grounds:

Award may be set aside if the party making the application establishes that:

• A party was under some incapacity,
• Arbitration agreement is not valid,
• It was not given proper notice of the appointment of an arbitrator or of the proceedings or was unable to present their case,
• The award deals with a dispute beyond the scope of the submission to arbitration, or
• Composition of the tribunal or the procedure was not in accordance with the agreement of the parties.

Award may be set aside also if the Court finds that:

• The subject matter of the dispute is not capable of settlement by arbitration, or
• The award is in conflict with the public policy of India

The Section explains that violation of public policy entails an award induced by fraud or affected by fraud or corruption, or in violation of fundamental policy of Indian law or the most basic notions of morality and justice. This enquiry shall involve no review on the merits of the dispute.

In the recent amendment of 2016, a new ground was added as per which award may be set aside if it is vitiated by patent illegality. However, it cannot be set aside merely on the ground of erroneous application of the law or by reappreciation of evidence.

The application for setting aside an award can be made within 3 months from the date on which party had received the award. Court may entertain application within further period of 30 days if it is satisfied that there was a sufficient cause for not making the application within 3 months.

Under Section 34(4), a party can file an application to adjourn the proceedings to give arbitral tribunal an opportunity to eliminate the grounds for setting aside an arbitral award.

An application for setting aside has to be disposed within 1 year from the date of notice served upon other party.

The text of the Section 32 can be found below:

“34.   Application for setting aside arbitral awards.

(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).

(2) An arbitral award may be set aside by the Court only if--

(a) the party making the application 1[establishes on the basis of the record of the arbitral tribunal that]--

(i) a party was under some incapacity, or

(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or

(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or

(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or

(b) the Court finds that--

(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or

(ii) the arbitral award is in conflict with the public policy of India.

Explanation 1.-For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,

(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or

(ii) it is in contravention with the fundamental policy of Indian law; or

(iii) it is in conflict with the most basic notions of morality or justice.

Explanation 2.-For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.

(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:

Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.

(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, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:

Provided that 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 within a further period of thirty days, but not thereafter.

(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.

(5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement.

(6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party.”

Section 36 of the Act deals with enforcement of awards. It states that after the time for setting aside an award under Section 34 has expired, an award shall be enforced in accordance with the Code of Civil Procedure, 1908, as if it were a decree of the court.

If an application for setting aside the award has been filed, it shall not render the award unenforceable, unless the court grants stay of the operation of the award for reasons recorded in writing.

However, if the court is satisfied that a prima facie case is made out that the arbitration agreement, or the contract or the making of the award was induced or effected by fraud or corruption, it shall unconditionally stay the enforcement until challenge under Section 34 is disposed of.

The text of the Section 36 can be found below:

“36. Enforcement- (1) Where the time for making an application to set aside the arbitral award under section 34 has expired, then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were a decree of the court.

(2) Where an application to set aside the arbitral award has been filed in the Court under section 34, the filing of such an application shall not by itself render that award unenforceable, unless the Court grants an order of stay of the operation of the said arbitral award in accordance with the provisions of sub-section (3), on a separate application made for that purpose.

(3) Upon filing of an application under sub-section (2) for stay of the operation of the arbitral award, the Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for reasons to be recorded in writing:

Provided that the Court shall, while considering the application for grant of stay in the case of an arbitral award for payment of money, have due regard to the provisions for grant of stay of a money decree under the provisions of the Code of Civil Procedure, 1908 (5 of 1908).]

Provided further that where the Court is satisfied that a Prima facie case is made out that,-

(a) the arbitration agreement or contract which is the basis of the award; or

(b) the making of the award,

was induced or effected by fraud or corruption, it shall stay the award unconditionally pending disposal of the challenge under section 34 to the award.

Explanation.- For the removal of doubts, it is hereby clarified that the above proviso shall apply to all court cases arising out of or in relation to arbitral proceedings, irrespective of whether the arbitral or court proceedings were commenced prior to or after the commencement of the Arbitration and Conciliation (Amendment) Act, 2015 (3 of 2016).”

As per Section 37 of the Act, appeal lie from the following orders only:

1. Court orders-
   1. Refusing to refer the parties to arbitration under Section 8.
   2. Granting or refusing to grant any measure under Section 9.
   3. Setting aside or refusing to set aside an award under Section 34.
2. Arbitral Tribunal’s orders-
   1. Accepting plea under Section 16(2) or (3).
   2. Granting or refusing interim measure under Section 17.

Appeal lies to the Court authorised to hear appeals from the original decrees of the courts which passed the appealed order. No second appeal shall lie from an order under this section except an appeal to the Supreme Court.

Section 37 does not provide any limitation period for filing an appeal but Section 43 of the Act provides that Limitation Act shall apply to arbitrations.

In Government of Maharashtra v. Borse Brothers Engineers & Contractors Pvt. Ltd, the Supreme Court stated that if the value of the subject matter is ₹3,00,000 or more, then an appeal under Section 37 must be filed within 60 days from the date of the order as per Section 13(1A) of the Commercial Courts Act. If the value is for a sum less than ₹3,00,000 then the appeal under Section 37 would be governed by Articles 116 and 117 of the Limitation Act, which provides for a limitation period 90 days for filing an appeal.

The text of the Section 37 can be found below:

“37.   Appealable orders- (1) Notwithstanding anything contained in any other law for the time being in force, an appeal] shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:

1. refusing to refer the parties to arbitration under section 8;
2. granting or refusing to grant any measure under section 9;
3. setting aside or refusing to set aside an arbitral award under section 34.

(2) Appeal shall also lie to a court from an order of the arbitral tribunal--

1. accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or
2. granting or refusing to grant an interim measure under section 17.

(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.”

Courts have held that certain kinds of disputes may not be capable of adjudication through the means of arbitration. Certain disputes like criminal offences of a public nature, disputes arising out of illegal agreements and disputes relating to status, such as divorce, cannot be referred to arbitration. Following categories of disputes are generally treated as non-arbitrable:

1. 1. 1. patent, trademarks and copyright;
      2. anti-trust/competition laws;
      3. insolvency/winding up;
      4. bribery/corruption;
      5. fraud;
      6. criminal matters.

Fraud is one such category spelled out by the decisions of this Court where disputes would be considered as non-arbitrable.

Section 16 of the Act confers power to the arbitral tribunal to rule on their own jurisdiction, including objection with respect to existence or validity of arbitration agreement.

This power is also referred to as the principle of competence-competence. The principle of separability gives effect to the principle of competence-competence as it entails that arbitration clause shall be treated separate and independent of the other terms in the contract. As a result, even if tribunal rules that the contract is null and void, it shall not ipso jure invalidate the arbitration clause.

A plea that the tribunal lacks jurisdiction can be raised only before submission of statement of defence. Participation in appointment of tribunal does not preclude a party from raising such a plea.

A plea that the tribunal exceeded the scope of authority shall be raised as soon as the matter beyond the scope of its authority raised.

The tribunal can reject such pleas and continue with the proceedings and make an arbitral award. Aggrieved party can make an application for setting aside such award under Section 34.

If a tribunal decides that it does not have jurisdiction, it cannot make an award on the merits.

Arbitration Council of India shall be established by the Central Government as a body corporate, having perpetual succession, common seal, power to hold and dispose property, enter into contracts, sue and be sued.

Its head office shall be in Delhi. The duty of the Council would be to promote and encourage arbitration, mediation, conciliation by framing policy and guidelines for establishment, operation and maintenance of uniform professional standards.

As per Section 43D of the Act, the Council would discharge the following functions:

1. 1. 1. 1. Frame policy governing the grading of arbitral institutions.
         2. Recognise professional institutes providing accreditation of arbitrators.
         3. Review of grading of arbitral institutions and arbitrators.
         4. Hold training, workshops and courses on arbitration in collaboration of law firms, universities and arbitral institutes.
         5. Frame, review and update norms to ensure satisfactory level of arbitration and conciliation.
         6. Act as a forum for exchange of views and techniques to make India a robust centre for domestic and international arbitration.
         7. Make recommendations to the Central Government to make provisions for easy resolution of commercial disputes.
         8. Promote institutional arbitration by strengthening arbitral institutions.
         1. Conduct examination and training on various subjects relating to arbitration and conciliation and award certificates.
         10. Establish and maintain depository of arbitral awards.
         11. Make recommendations regarding personnel, training and infrastructure of arbitral institutions.
         50. Such other functions as decided by the Central Government.

Section 43C(1)(a) provides that a person who has been a Judge of the Supreme Court or Chief Justice of a High Court or an eminent person having special knowledge and experience in the conduct or administration of arbitration, would be appointed as a Chairperson of the Council by the Central Government in consultation with the Chief Justice of India.

As per Section 43C, there shall be two members, two ex-officio members, one part time member and one ex officio member secretary.

Members:

1. An eminent arbitration practitioner having substantial knowledge and experience in institutional arbitration, both domestic and international, to be nominated by the Central Government.
2. An eminent academician having experience in research and teaching in the field of arbitration and alternative dispute resolution laws, to be appointed by the Central Government in consultation with the Chairperson.

Members, ex officio:

1. Secretary to the Government of India in the Department of Legal Affairs, Ministry of Law and Justice or his representative not below the rank of Joint Secretary.
2. Secretary to the Government of India in the Department of Expenditure, Ministry of Finance or his representative not below the rank of Joint Secretary.

Part-time member:

1. One representative of a recognised body of commerce and industry, chosen on rotational basis by the Central Government.

Member-Secretary, ex officio:

1. Chief Executive Officer