Akshay raj

PRN: 16010323006
Div - A
Batch 2016-2021

Question-7. Discussed concept of waiver principle as provided under sec.4 Act.

Answer:
Arbitration is a party friendly procedure where due to arbitration agreement agreed upon or
the compliance as per law then this provision applies.

● Some provisions are mandatory (non derogable) and non-mandatory (derogable).

The provisions which are non-mandatory, the parties may derogate and one of the

parties has right to object but only within reasonable time without undue delay.

● Thus u/s 4 if the parties know such derogable deviation does not raise objection

within reasonable time or within the time limit for making such objection, then it is

deemed that the right to objects waived.

Principles of waiver

1. Sec 4 is based on the principle of estoppel, through which a party with knowledge

of noncompliance fails to object within reasonable time is stopped from raising

objection after lapse of time.

2. Pre-condition for waiver is that the” noncompliance is with derogable (non-

mandatory provision) “. It is applicable to mandatory provision of law such as filing

of written pleadings.

3. Narayan Prasad labia v Nikunj Kumar Lohia section 10 stated that the parties can

appoint any no. of arbitrators but not an even number. The SC declared that s 10 is

a derogable provision & any deviation must be questioned within reasonable time.

u/s sec 4 when it is not objected within reasonable time the right of object is

waived.
 4. ONGC Vs Saw pipes. if the tribunals fail to follow mandatory provisions U/s

section 24, 28, 31(3) etc. are patently illegal and award may set aside under section

34.

5. Knowledge of noncompliance is the second pre-condition. If the party comes to

know after the award has been made then section 4 does not apply and challenge

can be made under section 34. This is because without knowledge of non-

compliance, there is no scope of raising objection.

6. The object must be raised without delay for non-applicability of section 4 the object

must be within reasonable time limit, which is calculated from the time from which

he comes to know of the irregularity.

7. Failure to object without undue delay or within reasonable time, is an essential

condition. The waiver under section 4 does not apply if party gets the knowledge

after the award is made.

Q1.What are the various Alternative Dispute Resolution methods available? Explain the
limitations of each of the ADR’S which are legally recognized in India.

Answer:

The ADR mechanism has proven to be one of the most efficacious mechanisms to resolve
commercial disputes of an international nature.

Types of ADR methods widely followed in India are:-

Negotiation:

A non-binding procedure in which discussions between the parties are initiated without the
intervention of any third party, with the object of arriving at a negotiated settlement of the
dispute.

Mediation:
Mediation is more formal but still leaves control of the outcome to the parties. An impartial
mediator helps the parties try to reach a mutually acceptable resolution to the dispute. The
parties control the substance of the discussions and any agreement reached. A typical session
starts with each party telling their story. The mediator listens and helps them identify the
issues in the dispute, offering options for resolution and assisting them in crafting a
settlement.

Arbitration:
Arbitration is the most formal of the ADR procedures and takes the decision making away
from the parties. The arbitrator hears the arguments and evidence from each side and then
decides the outcome of the dispute. Arbitration is less formal than a trial and the rules of
evidence are usually relaxed. Each party can present proofs and arguments at the hearing.
There isn’t, however, any facilitative discussion between the parties. Unlike other forms of
ADR, the award is often supported by a reasoned opinion.
Limitation:

There is no guaranteed resolution.

It means it is possible that you could invest the time and money in trying to resolve the

dispute out-of-court and still end up having to proceed with litigation and trial before a judge

or jury.

Arbitration decisions are final.

With very few exceptions, the decision of a neutral arbitrator cannot be appealed, with fraud

being an obvious exception. Additionally, some states will not enforce decisions of arbitrators

that are patently unfair, a high standard to meet. Decisions of a court, on the other hand,

usually can be appealed to an appellate court for a variety of legal grounds and for numerous

alleged procedural errors.

Limitations of Negotiation:
Parties May Have Unequal Power. Not All Issues Are Negotiable. Negotiations are a Stalling
Tactic.
Limits on Arbitration Awards.

Arbitrators can only resolve disputes that involve money. They cannot issue orders

compelling one party to do something, or refrain from doing something

Warning.
 The parties pursuing ADR must be careful not to let a Statute of Limitation run while a

dispute is in any ADR process. Once the statute expires, judicial remedies may no longer be

available.

Question- 4. Define Arbitration Agreement. What are the forms and formalities of

arbitration agreement?

Answer:

It is known to us that section 2(l)(b) of the Act of 1996 provides that the word "Arbitration

Agreement" is to be interpreted and understood with reference to 7 of the A&C Act, 1996.

Section 7 of the Arbitration and Conciliation Act of 1996 defines arbitration agreement as an

agreement by the parties to refer to arbitration all or some disputes which have arisen or will

arise on a future date between them with reference to a defined legal relationship, whether

contractual or not.

An Arbitration agreement is made by any two parties entering into a contract by which any

disputes arising between them with regard to the contract agreement is to be resolved,

without going to the Courts and with the help of an Arbitrator. The agreement should mention

who should select the arbitrator, regarding what kind of dispute the Arbitrator should give

decision, the place of arbitration, etc.

Essentials of Arbitration Agreement:

1. Written Agreement

As per Section 7 (4) of the Act, arbitration agreement is considered to be in writing, if it is

contained in:

a. A document signed by the parties;

b. An exchange of letters, telex, telegrams or other means of telecommunication
which provide a record of the agreement; or
c. An exchange of statements of claim and defence in which the existence of the
agreement is alleged by one party and not defined by another.
 2. Intention: Intention of the parties is of prime importance.
3. Signature: An arbitration agreement needs to be signed by the parties.

Forms and formalities of Arbitration Agreement:

1. Under section 7(4), an arbitration agreement is said to be in writing if

➔ It is contained in a document signed by the parties. If the intent of the parties

is clear through such signed documents. It is an arbitration agreement.

➔ It is contained in exchange of letters, Telegram or other means of

communications which provide a record of the agreement. This may be an

exchange of offer and acceptance.

➔ By exchanging a statement of claim and statement of defence where the

existence of arbitration agreement is alleged by one party and not denied by

the other party.

2. Under section 7(5) arbitration agreement by incorporation deals with the situation

where the requirements of the arbitration process are mentioned but arbitration is not

mentioned expressly. The moment 'arbitration' is used expressly, it becomes an

arbitration agreement. But where the word is not expressly used, the contract thus

refers to the arbitration procedure and becomes an arbitration agreement.

The reference to other documents in the main contract must expressly include

arbitration clauses and not expressly exclude it.

Question-6. What are the matters which are outside of preview of arbitration?
Answer:
There are some matters which are outside the jurisdiction of arbitration proceedings.
Following are some of those-

1. Criminal cases- since they are public offences. The only exception is the Legal
Services Authority Act which lists compoundable criminal offences for ADR.
2. Matrimonial Disputes which results in judgement in rem or declaratory judgement
are not arbitrable. However, where the dispute gives a judgment in personam, then
it may be resolved through arbitration since it only binds the parties and not a third
party.
3. Guardianship matters are dealt by a public forum only.
4. Testamentary proceedings, i.e. probate matters since it is judgement in rem and
non-arbitrable
5. Insolvency proceedings also are judgement in rem and non-arbitrable.
6. Winding up proceedings under Company law- Haryana telecom Ltd vs Sterlite
Industries Ltd. Claim inn a petition for winding up is not only for money and
should be dealt with by the body prescribed by special enactment i.e. NCLT only.
7. Labour Disputes- Industrial Disputes Act U/s 10 gives only specific cases where it
may be by ADR but no other dispute may be referred.
8. Consumer Disputes- They are governed by Consumer Protection Act.
9. Disputes under Trusts Act- The Supreme Court held that the Trusts Act provides for
specific mechanisms for beneficial ownership and admin ownership with trustees.
The disputes between trust/trustee and third parties are not under ADR and Act
provides for jurisdiction of court for disputes under the act.

3.Explain the salient features of the Arbitration and Conciliation Act , 1956 and factors
influenced the legislature in bringing Arbitration and Conciliation Act, 1996.

Answer:

In light of discrepancies and inconsistencies found in the previous legislations on arbitration,

a conference presided by the Prime Minister of India, P.V Narasimha Rao, considered
international models like the United Nations Commission on International Trade Law
(UNCITRAL) Model on Commercial International Arbitration and discussed the fate of
arbitration in India on 4th December 1993. As a result of this conference and the failure of
previous legislations to satisfy the needs of the people, the Arbitration and Conciliation Act,
1996 was enacted. The Act repealed the then existing Arbitration Act, 1940 and improved
upon the laws of arbitration in force at that time in India, like the Arbitration Act, 1961. The
1996 Act, as mentioned above, incorporated rules and regulations from the UNCITRAL
Model Law on International Commercial Arbitration and the UNCITRAL rules on
Conciliation. In this way, the Act also covers conciliation which was a new method of
Alternate Dispute Resolution (ADR) that had not been codified before.

Features from preamble:

Part I of the Act lays down rules for domestic arbitration which can only be applied if the
seat or place of arbitration is within the territorial limits of India, Part II relates to
enforcement of certain foreign awards, Part III provides for the rules regarding conciliation
and Part IV contains certain supplemental provisions.

Following are some of its salient features:

● The Act emphasises the importance of the Arbitration agreement without which
arbitration proceedings cannot be instituted. The arbitration agreement is a clause in a
contract or an agreement between parties stating that any dispute will be referred to
arbitration proceedings.
● The Act mentions that the arbitration agreement or arbitration clause must contain the
following information – subject matter of dispute, timing of dispute
(past/present/future), number of arbitrators, qualifications of arbitrators, jurisdiction
and composition of tribunal.
● The Act empowers parties to choose the seat of the arbitral tribunal or place of
arbitration, and the venue of the arbitration proceedings to be conducted by the
tribunal.
● The parties can choose the rules relating to conduct od the arbitral tribunal and if so,
must be specified in the arbitration agreement or arbitration clause
● True to the spirit of arbitration, the Act allows parties to choose the substantive law to
be applied by the arbitration tribunal and this must also be mentioned in the
arbitration agreement.
● The Act also specifies that the arbitration agreement must contain provisions
regarding the mandate of the arbitration and the termination of this mandate
The Act also specifies the power and functions of the Tribunals, abolishes the umpire system
allows new forms of conciliation, provides for finality of awards by the arbitrators, states
rules for international applicability and enhances powers of the arbitrators.