Module-I Introduction

Concept and Need for ADRs

Any method of resolving or settling disputes without litigation and outside courtroom.

 includes early neutral evaluation, negotiation, conciliation, mediation, and arbitration

 some of these programs are voluntary; others are mandatory.
 two most common forms of ADR are arbitration and mediation

Negotiation is mostly attempted first to resolve a dispute. It is the preeminent mode of dispute resolution.
Negotiation allows the parties to meet in order to settle a dispute. The main advantage of this form of
dispute settlement is that it allows the parties themselves to control the process and the solution

Mediation is also an informal alternative to litigation. Mediators are individuals trained in negotiations,
who bring opposing parties together and attempt to work out a settlement or agreement that both parties
accept or reject. Mediation is not binding.

Arbitration

Arbitration is more formal than Mediation

A simplified version of a trial involving limited discovery and simplified rules of evidence (ex.hearsay is
usually admissible in arbitration).

Pre-dispute- Parties usually enter into a binding arbitration agreement or any other form of agreement
with an arbitration clause. This allows them to lay out major terms for the arbitration process (number of
arbitrators, arbitration forum; arbitration rules; fees etc.).

Post-dispute- If parties still have disputes about certain terms before entering into an arbitration they can
petition to a court to resolve a dispute.

Arbitration can be held ad hoc or with the administrative support from one of the institutional providers
like Indian Council of Arbitration (ICA), Delhi International Arbitration Centre (DIAC) and Mumbai
Centre for International Arbitration (MCIA)

Other institutional Arbitration centers:

UAE: Dubai International Arbitration Centre ('DIAC'), the Abu Dhabi Commercial Conciliation and
Arbitration Centre ('ADCCAC'), the Arbitration Centre of the Dubai International Financial Centre-
London Court of International Arbitration ('DIFC-LCIA')

Worldwide: International Chamber of Commerce (ICC’s) International Court of Arbitration; London

Court of International Arbitration; American Arbitration Association and International Center for Dispute
Resolution; Permanent Court of Arbitration; Singapore International Arbitration Centre; Vienna
International Arbitral Centre, etc

The arbitration is headed and decided by an arbitral panel or a single arbitrator, depending on the
agreement of the parties.
Arbitrators do not have to be lawyers, parties can select arbitrators from other fields that they consider
more suitable for the resolution of the dispute. For example, parties can choose an arbitrator with an
engineering background to arbitrate a construction dispute.

To comprise a panel, either both sides agree on one arbitrator, or each side selects one arbitrator and the
two arbitrators elect the third.

Arbitration hearings usually last between a few days to a week, and the panel only meets for a few hours
per day. The panel or a single arbitrator then deliberates and issues a written binding decision or arbitral
award. Opinions are not public record.

Arbitration has long been used in labor, construction, and securities regulation, but is now gaining
popularity in other business disputes.

Arbitration and Conciliation Act, 1996

General Provisions, Definitions, receipt of written communications, waiver of right to object, extent of
Judicial Intervention, Administrative Assistance, Arbitration Agreement, power to refer parties to
arbitration where there is an arbitration agreement, Interim measures by court.

General Provisions (Chapter I)

Definitions

 receipt of written communications

 waiver of right to object
 extent of Judicial Intervention
 Administrative Assistance

Definitions

2. Definitions.—(1) In this Part, unless the context otherwise requires,—

“arbitration” means any arbitration whether or not administered by permanent arbitral institution;

- When parties agree to have their disputes decided with the mediation of a third person, but with all the
formality of a judicial adjudication, it may be called an arbitration.

Romilly MR in the case of Collins v Collins: An arbitration is a reference to the decision of one or more
persons, either with or without an umpire, of a particular matter in difference between the parties.

Collins v Collins: the parties to a sale wanted the price to be determined by a third party.. Held this was
not an arbitration. This is about valuation and hence appraisement and not arbitration.

(b) “arbitration agreement” means an agreement referred to in section 7;

(c) “arbitral award” includes an interim award;

*(ca) “arbitral institution’’ means an arbitral institution designated by the Supreme Court or a High Court
under this Act;
(d) “arbitral tribunal” means a sole arbitrator or a panel of arbitrators;

(e) “Court” means

in the case of an arbitration other than international commercial arbitration, the principal Civil Court of
original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil
jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the
same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such
principal Civil Court, or any Court of Small Causes;

in the case of international commercial arbitration, the High Court in exercise of its ordinary original civil
jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the
same had been the subject-matter of a suit, and in other cases, a High Court having jurisdiction to hear
appeals from decrees of courts subordinate to that High Court;]

(f) “international commercial arbitration” means an arbitration relating to disputes arising out of legal
relationships, whether contractual or not, considered as commercial under the law in force in India and
where at least one of the parties is—

(i) an individual who is a national of, or habitually resident in, any country other than India; or

(ii) a body corporate which is incorporated in any country other than India; or

(iii) an association or a body of individuals whose central management and control is exercised in any
country other than India; or

(iv) the Government of a foreign country;

(g) “legal representative” means a person who in law represents the estate of a deceased person, and
includes any person who intermeddles with the estate of the deceased, and, where a party acts in a
representative character, the person on whom the estate devolves on the death of the party so acting;

(h) “party” means a party to an arbitration agreement;

*(i) “prescribed” means prescribed by rules made under this Act;

** (j) “regulations” means the regulations made by the Council under

this Act.’;

Definition clauses are of three types

Those using the word ‘means’ in defining a word or expression (this means the definition is a hard-and-
fast definition, and no other meaning can be assigned to the expression than is put down in the definition)

Those employing the word ‘includes’, ie definition of concept or of inclusion; (if both means and includes
are specified it is meant to be exhaustive)

Those using the word means, but does not include i.e. a definition of concept and of exclusion
Place of arbitration in India S. 2(2)

Sec. 2(2)- This Part shall apply where the place of arbitration is in India

Where the contract of an Indian company with a foreign company containing an arbitration clause specify
New York to be the place of arbitration, a petition before the Chief Justice of India or his designate for
appointment of an arbitrator was not maintainable. (Shreejee Taco v Paperline Int’l Inc (2003) 9 SCC 79

Service of Communications

Receipt of written communications- Sec. 3 (1) Unless otherwise agreed by the parties,—

(a) any written communication is deemed to have been received if it is delivered to the addressee
personally or at his place of business, habitual residence or mailing address, and

(b) if none of the places referred to in clause (a) can be found after making a reasonable inquiry, a written
communication is deemed to have been received if it is sent to the addressee's last known place of
business, habitual residence or mailing address by registered letter or by any other means which provides
a record of the attempt to deliver it.

(2) The communication is deemed to have been received on the day it is so delivered.

(3) This section does not apply to written communications in respect of proceedings of any judicial
authority.

Waiver of Rights

Waiver of right to object- Sec 4 —A party who knows that—

(a) any provision of this Part from which the parties may derogate, or

(b) any requirement under the arbitration agreement,

has not been complied with and yet proceeds with the arbitration without stating his objection to such
non-compliance without undue delay or, if a time limit is provided for stating that objection, within that
period of time, shall be deemed to have waived his right to so object.

5. Extent of judicial intervention.—Notwithstanding anything contained in any other law for the time
being in force, in matters governed by this Part, no judicial authority shall intervene except where so
provided in this Part.

6. Administrative assistance.—In order to facilitate the conduct of the arbitral proceedings, the parties, or
the arbitral tribunal with the consent of the parties, may arrange for administrative assistance by a suitable
institution or person.

Arbitration Agreement (Chapter II)

Arbitration Agreement, power to refer parties to arbitration where there is an arbitration agreement,
Interim measures by court
Arbitration Agreement

S. 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 1[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.

Power to refer parties to arbitration where there is an arbitration agreement

S. 8 (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.
Interim measures by Court

9. (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 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.
International Centres of Arbitration

Arbitration has had an impact on solving international disputes in modern times especially because of the
shift of the ideology of the nations in solving disputes from aggressive to peaceful methods. This has
happened because of several reasons.

 EUROPE
 AFRICA
 AMERICA
 ASIA
This article discusses the international centres of arbitration. Arbitration has had an impact on solving
international disputes in modern times especially because of the shift of the ideology of the nations in
solving disputes from aggressive to peaceful methods. This has happened because of several reasons.

The most important reason is that arbitration is non-aggressive law-binding, interactive, confidential,
party-friendly and most importantly it uses a single statutory authority to resolve the disputes. Several
surveys show that the nations prefer using arbitration as a means of dispute resolution in the courts of law.

Internationally there are many organizations working providing cutting edge arbitration services to the
nations to solve their disputes.
There are many arbitration styles adapted to suit the circumstances of different types of disputes. The
difference separating the types of ADR and international arbitration is that in most cases the parties agree
to solve the disputes through arbitration before entering into a contract. This makes it binding for the
parties to try to resolve the disputes through that process.

International Centres of Arbitration

I. EUROPE
1. London Court of International Arbitration (LCIA)
ESTD: 1986

LOCATION: London

A large percentage of the members of the LCIA are countries outside the UK. Therefore it is capable of
providing arbitration services anywhere in the world. It deals with a number of disputes ranging from
energy to foreign trade, transport, distribution, technology, construction, and engineering. The LCIA has
devised the system called the User’s council for particular regions to refine the system of providing
arbitration practices.

2. International Chamber of Commerce (ICC)

ESTD: 1923

LOCATION: PARIS

It is one of the most active and influential ADR centres providing international arbitration services.  It has
its own set of arbitration rules known as the ICC Arbitration rules which are followed whenever the
parties agree on giving the matter of dispute to be resolved by the ICC
 3. Swiss Chambers Arbitration Institution (SCAI)
LOCATION:  SWITZERLAND

The organization alleges to have been resolving international arbitration disputes for more than 150 years.
The arbitration in the SCAI follows the guidelines in the Swiss Rules of International Arbitration.

4. Stockholm Chamber of Commerce (SCC)

ESTD: 1902

LOCATION: Stockholm and Uppsala Capital Region.

The wing of the SCC dealing with arbitration is also called the Arbitration Institute of the Stockholm
Chamber of Commerce. It has its own guidelines and also follows the UNCITRAL guidelines for
International Commercial Arbitration.

5. Permanent Court of Arbitration(PCA)

ESTD: 1899

LOCATION: Hague, Netherlands.

Established by the Convention for the Pacific Settlement of International Disputes of 29 th July 1899 and
18th October 1907.  The PCA has 122 Contracting Parties. The PCA has a three-pronged structure which
consists of an Administrative Council whose main function is to look after the policies and budgets, panel
arbitrators nominated by the contracting parties who are known as the Members of the Court, and the
Secretariat, known as the International Bureau, which is headed by the Secretary-General.
6. Chartered Institute of Arbitrators (CIArb)
ESTD: 1915

LOCATION: LONDON

A not-for-profit, UK registered charity working in the public interest through an international network of
branches, existing for the global promotion, facilitation, and development of all forms of private dispute
resolution to maximize the contribution that dispute resolution practitioners make.

7. WIPO [World Intellectual Property Organization] Arbitration and Mediation Center

ESTD: 1967

LOCATION Geneva, Switzerland,

WIPO has a further office in Singapore, the WIPO Arbitration and Mediation Center was established in
1994 to offer Alternative Dispute Resolution (ADR) options, in particular, arbitration and mediation, for
the resolution of international commercial disputes between private parties.
II. AFRICA
1. Kigali International Arbitration Centre (KIAC)
ESTD: 2013

LOCATION: RWANDA

The main objective of KIAC was to promote the use of arbitration in Rwanda.  It is reputed in solving
major arbitration cases in Africa.

2. Lagos Court of Arbitration

ESTD: 2012

LOCATION: Lagos, Nigeria

The International Centre For Arbitration & ADR (ICAA) serves as the permanent headquarter of the
LCA.  It asserts on being Africa’s one of the most influential arbitration centres and proud itself on
having a highly qualified arbitrator with the aim of resolving the dispute.

III. AMERICA
1. American Arbitration Association (AAA) and the International Centre for Dispute
Resolution (ICDR)
ESTD: 1996

LOCATION: New York City, Mexico.

AAA is one of the recognized associations providing internationally relevant arbitration services. In the
year 1991, it adopted arbitration rules known as the AAA International Arbitration Rules.  These rules are
based on the UNCITRAL model laws on International Commercial Arbitration.

2. International Centre for Settlement of Investment Disputes (ICSID)

ESTD: 1966

LOCATION: Washington,

An autonomous international institution established under the Convention on the Settlement of

Investment Disputes between States and Nationals of Other States with over one hundred and forty
member States. The primary purpose of ICSID is to provide facilities for conciliation and arbitration of
international investment disputes.
IV. ASIA
1. China International Economic and Trade Arbitration Commission (CIETAC)
ESTD: 1956

LOCATION: CHINA

It is one of the most important centers for arbitration in the Chinese mainland.   A large number of
disputes are controlled by a number of exceptionally experienced arbitrators from around the world.

2. Hong Kong International Arbitration Centre (HKIAC)

ESTD: 1985

LOCATION: Hong Kong

Hong Kong International Arbitration Centre (HKIAC) independent and non-profit organization and the
area of important areas of construction, commercial disputes, joint ventures, and shipping. The
organization has a number of highly experienced.

3. Singapore International Arbitration Centre (SIAC)

ESTD: 1991

LOCATION: Singapore

This organization is funded by the Singapore Government.

According to recent research, the UNCITRAL Model Law on Arbitration is the most used by the
countries. The United Nations General Assembly by resolution 2205 (XXI) of 17 December 1966
introduced.

The United Nations Commission on International Trade Law (UNCITRAL), “Which plays an important
role in developing that framework in pursuance of its mandate to further the progressive harmonization
and modernization of the law of international trade by preparing and promoting the use and adoption of
legislative and non- legislative instruments in a number of key areas of commercial law? Those areas
include dispute resolution, international contract practices, transport, insolvency, electronic commerce,
international payments, secured transactions, procurement and sale of goods”.[1]
With the emergence of UNITRAL a new era of ADR came about., all the countries had framed their
arbitration laws on the basis of the model laws.
 UNCITRAL Model Laws on International Commercial Arbitration

This article discusses UNCITRAL model laws on international commercial arbitration. The United
Nations Commission on International Trade Law (UNCITRAL), established by the United Nations
General Assembly in its 21st session by resolution 2205 (XXI) of 17 December 1966. Previously in the
20th session, the UNGA had considered initiatives to be taken for progressive development in the field of
private international law with a particular view to promoting international trade.
The UNCITRAL considers itself to be a legal body focused on the modernization and harmonization of
commerce especially those related to international trade. Its headquarter is in Vienna, Austria.
UNCITRAL’s current director is Anne Joubin-Bret. The Members of the United Nations can become a
member of the UNCITRAL as well.

Initially, it had members from 29 States. It was expanded by the United Nations General Assembly in
1973 to 36 States and again in 2002 to 60 States. The UNCITRAL website is available at 6 different
languages. UNCITRAL’s work is divided into 3 layers, the first being the commission the second the
inter-governmental layer and the third being the secretariat whose main work is to assist the members in
the conduction of their work.

The first session of the organization was in the year 1968, with nine subject areas. The organization has
been instrumental in the formulation of several model laws which are set of guidelines for the countries to
be able to adopt for developing the standards of trade and commerce. Some of the model laws drafted by
the UNCITRAL are the UNCITRAL Model Law on International Commercial Arbitration (1985),
UNCITRAL Model Law on Electronic Commerce (1996), UNCITRAL Model Law on Public
Procurement), etc.

The genesis of UNCITRAL model laws on international commercial arbitration

On June 21, 1985, after a three-week diplomatic conference attended by representatives and observers
from 58 states and 18 international organizations, the United Nations Commission on International Trade
Law (UNCITRAL) adopted a model law on international commercial arbitration.

It was adopted at its 18th session after deliberation and consultation with arbitral institutions and
individual experts on international commercial arbitration. The model law was duly prepared for the
Working Group on International Contract Practices, which was entrusted with the project in 1981.

Provisions of UNCITRL model laws on arbitration

The UNCITRAL model law is divided into two sections the first one being the theory of UNCITRAL
model law on international commercial arbitration and the next being the explanatory note by the
UNCITRAL secretariat on the model law on international commercial arbitration.

The first section is divided into VIII chapters, of the following:

1. General provisions
Which includes the scope and application which is restricted to international commercial arbitration. This
chapter lists the various definitions and rules of interpretation and also enumerates the provisions for
receipt of written communications. The provision of a waiver of the right to object is explained. The
extent of court intervention and court and other authority for certain functions of arbitration and
supervision can also be found listed in this chapter.

2. Arbitration agreement
This chapter defines an arbitration agreement and explains the various features of the arbitration
agreement which include the submission of all possible relationships that can arise in addition to solely
contractual relationships. Article 8 refers to the claims before the court in relation to the arbitration
agreement. Through article 9 the court has been given the power and the parties given the option of
getting interim measures of protection from the court.

3. Composition of the arbitral tribunal

This includes the number of arbitrators and the procedure adopted for the appointment of arbitrators. An
arbitrator is bound to disclose all the grounds for leading to the appointment. Apart from certain
circumstances, the parties are free to agree on a procedure for challenging an arbitrator. Circumstances
may arise when an arbitrator becomes unable to perform the function or withdraws from the process.

This chapter enumerates the implications when an arbitrator fails to perform an act. Subsequently, the
provision for the appointment of a substitute arbitrator is also provided in this chapter.

4. Jurisdiction of an arbitral tribunal

This is one of the most debated over the chapter of the model laws. It explains the competence of arbitral
tribunal to rule on its jurisdiction and gives the power to the arbitral tribunal to order interim measures.

5. jurisdiction of arbitral proceedings

Despite the fact that arbitration is an informal process, there are guidelines for the conduct of the arbitral
tribunals in the proceedings. This includes equal treatment of parties. The procedure as to who shall
determine the rules of procedure, the choice of the venue of the procedure, the date and time of the
commencement of the procedure, etc. Language becomes a crucial aspect of the international arbitration
procedure.

Therefore this chapter gives the freedom to the parties to decide upon the language of the proceeding.
This chapter also provides the provisions with relation to the statement of claim and defense and hearings
and written proceedings. Experts can be appointed by the arbitral tribunal under Article 26 of this chapter.

6. Making of award and termination of proceedings

The chapter provides for the rules applicable to the substance of the dispute, decision making by panel of
arbitrators, Settlement, Form, and contents of an award, termination of proceedings, Correction, and
interpretation of award and additional award.

7. Recourse against award

This chapter provides the ways to apply for setting aside as exclusive recourse against the arbitral awards
and the requirements to be fulfilled for setting aside the award.

8. Recognition and enforcement of awards

As the name of the chapter suggest this chapter enumerates the grounds under which awards are
considered as enforceable and also enshrines the grounds for refusal of recognition or enforcement of the
award.

Importance of UNCITRAL model law on international commercial arbitration

UNCITRAL model in international commercial arbitration has been adopted in a number of countries and
made municipal law. India, for example, has adopted the model laws and has formulated the  Arbitration
and Conciliation Act, 1996 on its lines. Several of its provisions are in consonance to the guidelines of the
UNCITRAL model law on international commercial arbitration.

The importance of the model law is increasing because of the wider acceptability of rules under this act
by several nations and international organizations including the permanent court of arbitration.
The model law has been accepted as one of the most famous guidelines with respect to international and
domestic arbitration. As the importance of arbitration as a method of resolution of disputes continues the
importance of UNCITRAL model laws also keeps on increasing.

Module-II Composition of Arbitral Tribunal

Composition

S. 10 Number of arbitrators.—(1) The parties are free to determine the number of arbitrators, provided
that such number shall not be an even number. (2) Failing the determination referred to in sub-section (1),
the arbitral tribunal shall consist of a sole arbitrator.

S. 11. Appointment of arbitrators- 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.

**(6) Where, under an appointment procedure agreed upon by the parties,— (a) a party fails to act as
required under that procedure; or

(b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that
procedure; or

(c) a person, including an institution, fails to perform any function entrusted to him or it under that
procedure,

a party may request 1[the Supreme Court or, as the case may be, the High Court or any person or
institution designated by such Court] to take the necessary measure, unless the agreement on the
appointment procedure provides other means for securing the appointment.

“(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, 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.

(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.

Jurisdiction

Article 16 of Chapter IV of the UNCITRAL model rules on International Commercial Arbitration
established in India by Section 16 of Chapter IV of the Arbitration and Conciliation Act 1996 mention
that “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” which implies that
the arbitral tribunal has the independence of choosing its own jurisdiction and freedom from the
interference of courts regarding any matter related to arbitration.

The honourable court interpreted the intention of the plea of non-jurisdiction of an arbitral tribunal under
section16(5) of the Act in the case of Union of India vs. M/s. East Coast Boat Builders & Engineers
Ltd. where the court held that

“From the scheme of the Act, it is apparent that the legislature did not provide appeal against the order
under section 16(5) where the arbitral tribunal takes a decision rejecting the plea that the arbitral
tribunal has no jurisdiction. The intention appears to be that in such case; the arbitral tribunal shall
continue with the arbitral proceedings and make an award without delay and without being interfered in
the arbitral process at that stage by any court in their supervisory role.”

An arbitral tribunal cannot be said to have a statutory jurisdiction. The tribunal makes and decides its own
jurisdiction to fit the requirements of the parties. The arbitral agreement decides the scope and extent of
jurisdiction of the arbitral tribunal. The principal of party-autonomy states that when two parties have the
right to settle their disputes on their own then they have the right to present this right to any third party, to
decide overt that dispute.

Thus it is extremely important to consider a well-drafted agreement because it ensures giving full power
to the tribunal to decide matters regarding the jurisdiction. The Arbitration and Conciliation Act 1996
additionally mentions the jurisdiction over deciding certain matters in Section 17 of the Act.

1. Appoint a guardian for minor/unsound person during the process of arbitration

2. Protection/Preservation/ Detention/ temporary injunction of the subject matter of the arbitration.
There are certain cases in which the competence of the arbitral tribunal subject to getting questioned.

Section 11(6) of the Arbitration and Conciliation Act states that “a party may request the Chief Justice or
his designate to take required steps when under an appointment procedure agreed to by the parties, one of
them fails to act as required under the procedure, or the parties or the two arbitrators fail to reach an
agreement expected of them under the procedure, or a person or institution fails to perform a function
entrusted to him under such procedure”.

And section 11(7) states that a decision was taken by the Chief justice or his designate under section
11(4), section 11(5) or section 11(6) shall be final. This implies a restriction on the part of the tribunal to
look into its own jurisdiction when the Chief Justice has already looked into it.

In the case of Konkan Railway Corporation Ltd. vs. Rani Construction Pvt. Ltd. the judgment
“It might also be that in a given case the Chief Justice or his designate may have nominated the
arbitrator though the period of thirty days had not expired. If so, the Arbitral Tribunal would have been
improperly constituted and be without jurisdiction. It would then be open to the aggrieved party to
require the Arbitral Tribunal to rule on its jurisdiction. Section 16 provides for this. It states that the
Arbitral Tribunal may rule on its own jurisdiction.”

Similarly in the judgment of the SBP and Co. vs. Patel Engineering Ltd. case, the power of the arbitral
tribunal was relegated to that of the choice of Chief Justice in deciding over its jurisdiction.
The question, in the context of sub-section (7) of Section 11 is, what is the scope of the right conferred on
the Arbitral Tribunal to rule upon its own jurisdiction and the existence of the arbitration clause,
envisaged by section 16(1), once the Chief Justice or the person designated by him had appointed an
arbitrator after satisfying himself that the conditions for the exercise of power to appoint an arbitrator are
present in the case.

Prima facie, it would be difficult to say that in spite of the decision of the Chief Justice, the Arbitral
tribunal can still go behind that decision and rule on its own jurisdiction or on the existence of an
arbitration clause.

Sundaram Finance Ltd. v. NEPC India Ltd. held that an order under Section 11 of the Act was an
“administrative order”. This would mean that no appeal could lie under Article 136(1) of the Constitution.
This case showcases a clear reluctance on the part of the Court to impinge upon the autonomy enjoyed by
the arbitration process and by holding that the function exercised by the Chief Justice was administrative,
the Court essentially prohibited the Chief Justice from ruling upon questions such as the existence or
validity of the arbitration agreement.
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.

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.

19. Determination of rules of procedure.—(1) The arbitral tribunal shall not be bound by the Code of
Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 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.

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.

21. 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.

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.

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.

1[(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.”.

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:

2[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.

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 3[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.

26. Expert appointed by arbitral tribunal.—(1) Unless otherwise agreed by the parties, the arbitral tribunal
may—

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.

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

Settlement

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.

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.

(8) The costs of an arbitration shall be fixed by the arbitral tribunal Explanation.—For the purpose of
clause (a), “costs” means reasonable costs relating to—

(i) the fees and expenses of the arbitrators and witnesses, (ii) legal fees and expenses,

(iii) any administration fees of the institution supervising the arbitration, and

(iv) Any other expenses incurred in connection with the arbitral proceedings and the arbitral award.

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.

33. Correction and interpretation of award; additional award.—(1) Within thirty days from the receipt of
the arbitral award, unless another period of time has been agreed upon by the parties—

(a) a party, with notice to the other party, may request the arbitral tribunal to correct any computation
errors, any clerical or typographical errors or any other errors of a similar nature occurring in the award;

(b) if so agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to
give an interpretation of a specific point or part of the award.

(2) If the arbitral tribunal considers the request made under sub-section (1) to be justified, it shall make
the correction or give the interpretation within thirty days from the receipt of the request and the
interpretation shall form part of the arbitral award.

(3) The arbitral tribunal may correct any error of the type referred to in clause (a) of sub-section (1), on its
own initiative, within thirty days from the date of the arbitral award.
(4) Unless otherwise agreed by the parties, a party with notice to the other party, may request, within
thirty days from the receipt of the arbitral award, the arbitral tribunal to make an additional arbitral award
as to claims presented in the arbitral proceedings but omitted from the arbitral award.

(5) If the arbitral tribunal considers the request made under sub-section (4) to be justified, it shall make
the additional arbitral award within sixty days from the receipt of such request.

(6) The arbitral tribunal may extend, if necessary, the period of time within which it shall make a
correction, give an interpretation or make an additional arbitral award under sub-section (2) or sub-section
(5).

(7) Section 31 shall apply to a correction or interpretation of the arbitral award or to an additional arbitral
award made under this section.

Module III- Recourse against Arbitral Award

Application for setting aside Arbitral Award

S. 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 furnishes proof 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.
1[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.]

2[(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.

S. 35. Finality of arbitral awards.—Subject to this Part an arbitral award shall be final and binding on
the parties and persons claiming under them respectively.

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).

S. 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) 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.

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.
39. Lien on arbitral award and deposits as to costs .—(1) Subject to the provisions of sub-section (2)
and to any provision to the contrary in the arbitration agreement, the arbitral tribunal shall have a lien on
the arbitral award for any unpaid costs of the arbitration.

(2) If in any case an arbitral tribunal refuses to deliver its award except on payment of the costs demanded
by it, the Court may, on an application in this behalf, order that the arbitral tribunal shall deliver the
arbitral award to the applicant on payment into Court by the applicant of the costs demanded, and shall,
after such inquiry, if any, as it thinks fit, further order that out of the money so paid into Court there shall
be paid to the arbitral tribunal by way of costs such sum as the Court may consider reasonable and that
the balance of the money, if any, shall be refunded to the applicant.

(3) An application under sub-section (2) may be made by any party unless the fees demanded have been
fixed by written agreement between him and the arbitral tribunal, and the arbitral tribunal shall be entitled
to appear and be heard on any such application.

(4) The Court may make such orders as it thinks fit respecting the costs of the arbitration where any
question arises respecting such costs and the arbitral award contains no sufficient provision concerning
them.

40. Arbitration agreement not to be discharged by death of party thereto.—(1) An arbitration

agreement shall not be discharged by the death of any party thereto either as respects the deceased or as
respects any other party, but shall in such event be enforceable by or against the legal representative of
the deceased.

(2) The mandate of an arbitrator shall not be terminated by the death of any party by whom he was
appointed.

(3) Nothing in this section shall affect the operation of any law by virtue of which any right of action is
extinguished by the death of a person.

41. Provisions in case of insolvency.—(1) Where it is provided by a term in a contract to which an

insolvent is a party that any dispute arising thereout or in connection therewith shall be submitted to
arbitration, the said term shall, if the receiver adopts the contract, be enforceable by or against him so far
as it relates to any such dispute.

(2) Where a person who has been adjudged an insolvent had, before the commencement of the insolvency
proceedings, become a party to an arbitration agreement, and any matter to which the agreement applies
is required to be determined in connection with, or for the purposes of, the insolvency proceedings, then,
if the case is one to which sub-section (1) does not apply, any other party or the receiver may apply to the
judicial authority having jurisdiction in the insolvency proceedings for an order directing that the matter
in question shall be submitted to arbitration in accordance with the arbitration agreement, and the judicial
authority may, if it is of opinion that, having regard to all the circumstances of the case, the matter ought
to be determined by arbitration, make an order accordingly.

(3) In this section the expression “receiver” includes an Official Assignee.

42. Jurisdiction.

Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force,
where with respect to an arbitration agreement any application under this Part has been made in a Court,
that Court alone shall have jurisdiction over the arbitral proceedings and all
subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that
Court and in no other Court.

42A. Notwithstanding anything contained in any other law for the time being in force, the arbitrator, the
arbitral institution and the parties to the arbitration agreement shall maintain confidentiality of all arbitral
proceedings except award where its disclosure is necessary for the purpose of implementation and
enforcement of award.

42B. No suit or other legal proceedings shall lie against the arbitrator for anything which is in good faith
done or intended to be done under this Act or the rules or regulations made thereunder

43. Limitations.

(1) The Limitation Act, 1963 (36 of 1963), shall apply to arbitrations as it applies to proceedings in court.

(2) For the purposes of this section and the Limitation Act, 1963 (36 of 1963), an arbitration shall be
deemed to have commenced on the date referred to in section 21.

(3) Where an arbitration agreement to submit future disputes to arbitration provides that any claim to
which the agreement applies shall be barred unless some step to commence arbitral proceedings is taken
within a time fixed by the agreement, and a dispute arises to which the agreement applies, the Court, if it
is of opinion that in the circumstances of the case undue hardship would otherwise be caused, and
notwithstanding that the time so fixed has expired, may on such terms, if any, as the justice of the case
may require, extend the time for such period as it thinks proper.

JURISDICTION FOR ENFORCEMENT OF FOREIGN ARBITRAL AWARD

New York Convention Awards

44. Definition.—In this Chapter, unless the context otherwise requires, “foreign award” means 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
—
(a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the
First Schedule applies, and
(b) 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.

45. Power of judicial authority to refer parties to arbitration.—Notwithstanding anything contained

in Part I or in the Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, when seized of an action
in a matter in respect of which the parties have made an agreement referred to in section 44, shall, at the
request of one of the parties or any person claiming through or under him, refer the parties to arbitration,
unless it finds that the said agreement is null and void, inoperative or incapable of being performed.
46. When foreign award binding: Any foreign award which would be enforceable under this Chapter
shall be treated as binding for all 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 otherwise in any legal
proceedings in India and any references in this Chapter to enforcing a foreign award shall be construed as
including references to relying on an award.

47. Evidence. (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 copy thereof; and
(c) such evidence as may be necessary to prove that the award is a foreign award.

(2) If the award or agreement to be produced under sub-section (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.

48. Conditions for enforcement of foreign awards. (1) Enforcement of a foreign award may be refused,
at the request of the party against whom it is invoked, only if that party furnishes to the court proof that—

(a) the parties to the agreement referred to in section 44 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 arbitral 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
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) Enforcement of an arbitral award may also be refused if the Court finds that—

(a) the subject-matter of the difference is not capable of settlement by arbitration under the law of India;
or
(b) the enforcement of the award would be contrary to the public policy of India.

2[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.]

49. Enforcement of foreign awards.—Where the Court is satisfied that the foreign award is enforceable
under this Chapter, the award shall be deemed to be a decree of that Court.

50. Appealable orders.—(1) An appeal shall lie from the order refusing to—

(a) refer the parties to arbitration under section 45;

(b) enforce a foreign award under section 48,

to the court authorised by law to hear appeals from such order.

(2) 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.

Geneva Convention Awards

The procedure for enforcement and execution of decrees in India is governed by the Code of Civil
Procedure, 1908 while that of arbitral awards is governed by the Arbitration & Conciliation Act, 1996
(“Act”) as well as the CPC.

In the context of the foreign arbitral awards, India is a signatory to the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, 1958 as well as the Geneva Convention on the Execution
of Foreign Arbitral Awards, 1927 (“Geneva Convention”). According to which a party receives a
binding award from any signatory of the conventions the award would be enforceable in India.

On the 15th of February 2018 in Sundaram Finance v Abdul Samad & Anr, a two-Judge Bench of the
Hon’ble Supreme Court of India (Supreme Court) had erased the confusion regarding the jurisdiction for
the enforcement of the arbitral award. The Supreme Court clearing this confusion mentioned that there
any arbitral award under the Arbitration and Conciliation Act of 1996 can be enforced in any court of
competent jurisdiction and that getting a transfer order from any court. It was indeed a landmark
judgment that increased the scope and power of the arbitral tribunal.
53. Interpretation.—In this Chapter “foreign award” means an arbitral award on differences relating to
matters considered as commercial under the law in force in India made after the 28th day of July, 1924,—

(a) in pursuance of an agreement for arbitration to which the Protocol set forth in the Second
Schedule applies, and
(b) between persons of whom one is subject to the jurisdiction of some one of such Powers as the
Central Government, being satisfied that reciprocal provisions have been made, may, by
notification in the Official Gazette, declare to be parties to the Convention set forth in the Third
Schedule, and of whom the other is subject to the jurisdiction of some other of the Powers
aforesaid, and
(c) in one of such territories as the Central Government, being satisfied that reciprocal provisions
have been made, may, by like notification, declare to be territories to which the said Convention
applies,

and for the purposes of this Chapter an award shall not be deemed to be final if any proceedings for the
purpose of contesting the validity of the award are pending in the country in which it was made.

54. Power of judicial authority to refer parties to arbitration.: Notwithstanding anything contained in
Part I or in the Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, on being seized of a
dispute regarding a contract made between persons to whom section 53 applies and including an
arbitration agreement, whether referring to present or future differences, which is valid under that section
and capable of being carried into effect, shall refer the parties on the application of either of them or any
person claiming through or under him to the decision of the arbitrators and such reference shall not
prejudice the competence of the judicial authority in case the agreement or the arbitration cannot proceed
or becomes inoperative.

55. Foreign awards when binding.—Any foreign award which would be enforceable under this Chapter
shall be treated as binding for all 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 otherwise in any legal
proceedings in India and any references in this Chapter to enforcing a foreign award shall be construed as
including references to relying on an award.

56. Evidence. (1) The party applying for the enforcement of a foreign award shall, at the time of
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) evidence proving that the award has become final; and
(c) such evidence as may be necessary to prove that the conditions mentioned in clauses (a) and (c)
of sub-section (1) of section 57 are satisfied

(2) Where any document requiring to be produced under sub-section (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 in the sections following in this Chapter, “Court” means the High Court
having original jurisdiction to decide the questions forming the subject-matter of the arbitral award if the
same had been the subject-matter of a suit on its original civil jurisdiction and in other cases, in the High
Court having jurisdiction to hear appeals from decrees of courts subordinate to such High Court.

57. Conditions for enforcement of foreign awards.—(1) In order that a foreign award may be
enforceable under this Chapter, it shall be necessary that—

(a) the award has been made in pursuance of a submission to arbitration which is valid under the law
applicable thereto;
(b) the subject-matter of the award is capable of settlement by arbitration under the law of India;
(c) 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) 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 or appeal or if it is proved that any proceedings
for the purpose of contesting the validity of the award are pending;
(e) the enforcement of the award is not contrary to the public policy or the law 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.

(2) Even if the conditions laid down in sub-section (1) are fulfilled, enforcement of the award shall be
refused if the Court is satisfied that—

(a) the award has been annulled in the country in which it was made;
(b) 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) 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:

Provided that if the award has not covered all the differences submitted to the arbitral tribunal, the Court
may, if it thinks fit, postpone such enforcement or grant it subject to such guarantee as the Court may
decide.

(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 clauses (a) and (c) of sub-
section (1) and clauses (b) and (c) of sub-section (2) entitling him to contest the validity of the award, the
Court may, if it thinks fit, either refuse 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.

58. Enforcement of foreign awards.—Where the Court is satisfied that the foreign award is enforceable
under this Chapter, the award shall be deemed to be a decree of the Court.

59. Appealable orders.—(1) An appeal shall lie from the order refusing—

(a) to refer the parties to arbitration under section 54; and

(b) to enforce a foreign award under section 57,
(a) to the court authorised by law to hear appeals from such order.

(2) 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.

APPEAL OF ARBITRAL AWARDS

There is no appeal of arbitral awards against the merits of the arbitral award. The Supreme Court has
observed, “an arbitrator is a judge appointed by the parties and as such an award passed by him is not to
be lightly interfered with.” In one of the recent judgments, the Supreme Court held that the consideration
of the award being satisfactory cannot solely be decided on the basis of the whims of any person. This,
however, does not make the arbitral award absolute and does not prevent from questioning the product of
arbitration.

Certain remedies are ensured by law to ensure proper conduct of proceedings. In The repealed Arbitration
and Conciliation act 1940 Act three remedies were mainly available against an arbitration award-
modification, remission and setting aside which has been further mended by the Arbitration and
Conciliation Act, 1996 and the remedies have been categorized into two parts. As far as the remedy for
rectification of errors is concerned, it has been handed over to the parties and the Tribunal to decide.

The remedy for setting aside has been changed and now the award after the process of the Arbitration
process will be returned back to the Tribunal for removal of defects. Section 34 provides certain grounds
for setting aside the arbitral award which are incapacity, invalid agreement, inefficiency on the part of one
of the parties, the incongruity in the subject of the arbitration proceeding and the arbitral award,
discrepancy in the appointment of the arbitrators, opposing the public policy, etc.

The Amendment Act enumerates that an arbitral award will not be set aside by the court merely on an
erroneous application of law or by re-appreciation of evidence. In the case of Brijendra Nath v.
Mayank, the court held that where the parties have acted upon the arbitral award during the pendency of
the application challenging its validity, it would amount to estoppel against attacking the award.

Each country has specific rules related to the setting aside or appealing of the arbitral award. However,
there are three major principals for challenging the arbitral award.
 1. That the jurisdiction of the award does not let to a binding agreement between the parties

2. The arbitral award can be challenged on the ground of substantive law, from the utilization of
different guidelines to the mistake or misrepresentation caused during the process.

3. That there was some defect of a procedure of any part of arbitration from the formation of the
agreement to the creation of award or the selection of the arbitrator

Module V - ADR and different types of Dispute

Family and Matrimonial Disputes

Mediation is a process by which an impartial third person (sometimes more than one person) helps parties
to resolve disputes through mutual concessions and face-to-face bargaining. The mediator does not force
parties to settle their dispute but tries to convince them that they and their family will benefit from
reaching an agreement.

The mediator helps the parties understand what is happening to them and encourages the parties to
negotiate in good faith and to enter into arrangements that will be enforceable in future years.

Marital mediation is a type of private mediation practice that deals with marriage related issues. Divorce
is the dissolution of the marital bond, either mutually or otherwise by an order of a competent court. In
the pre-litigation stage if the parties consider it suitable or the court finds it reasonable the parties are
advised to take to mediation. For a divorce case, the best way to settle a dispute is through meditation.
The process of mediation in divorce cases is the same as that of any mediation.

The parties alone or along with their lawyers designate a mediator who acts as a neutral third party. In
cases of divorce mediation the parties generally call for private sessions of mediation with the mediator.
The role of the mediator is, however, passive because his work is restricted to presenting whatever the
party’s desire. However, in certain cases the mediator acts as a facilitator to prevent the marriage from
being annulled.

Advantages of Mediation in Marital Cases

1. Mediation is an affordable method of dispute resolution. It is best for mutual divorce cases because
the parties can forgo the long hours at the court and it is friendly to their pockets. Furthermore, since
the order of the mediator is the same as that of the court the process is speedy.
2. The process of mediation is party-based. The time and place as decided by the parties according to the
time that they find suitable. Furthermore, the process of mediation is best suited for deciding over
alimony and compensation.
3. Mediation is a confidential process. Generally, in marital cases, the mediator does not allow the right
of an audience because the matters are extremely secret in nature.
4. Mediation is a client-driven process. The mediator will never present an award which is contradictory
to the desire of the parties.
5. The environment in mediation is favorable to the parties in a marital dispute. The conducive
environment is best suited for disputes in the case of highly charged parties.
6. Mediation allows the presence of an advocate. It is essential for the advocate to carry his power of
attorney with him. The advocate is helpful in giving legal advice when the parties require it.
7. Seldom if any when the mediation is successful and the parties to a dispute decide on continuing their
conjugal relation, it facilitates the parties to understand their differences when advised by a matured
and experienced veteran.

Mediation is not always successful in the case. For example, in the cases of domestic violence, the
mediation sessions often end up in heated arguments which further make bitter the relationship between
the parties. In mediation sessions, the parties are in equal footing. Nobody is in a position to dominate the
will of the other. Since mediation is dependent on the parties the parties are free from the influence of the
argumentation of the advocate.

In domestic violence cases, the victim party has a better opportunity of receiving compensation because
the mediator will not order anything that the parties are opposed to. Mediation is advised for the marital
cases in both the pre-litigation stage and during the time of the litigation process.

The only essential requirement for a mediation process to commence in the presence of the parties. The
parties are the sole runners and the process continues on their own will. The outcome of the mediation
process depends solely on the party’s willingness to settle the dispute. However, in certain cases where
settlement seems impossible in the beginning, post mediation can result in proper settlement.

The Process of Mediation

The approaches taken up are different for different mediators. Usually, mediators start by explaining the
process of mediation. The parties are allowed to introduce themselves after which the mediators ask for
the background of the case. Basic information like the Code in which the marriage was registered and the
point of dispute is often asked by the mediators. During the mediation, the mediator can call for a coccus
wherein the party can share their confidential information which they are not free to share in front of the
other party.

In cases of violence, the victim party can even be intimidated in sharing confidential information in the
presence of the opposite party. Coccus helps the mediator understand the actual story behind the dispute
and thus facilitate the settlement of disputes. The mediator can even ask the parties to signify that they
will not reveal anything that is said in the process of mediation. The work of the mediator Is to make the
parties feel comfortable and create an environment that is conducive for meaningful interaction.
Ultimately the mediator tries to facilitate the finding of common ground between the parties, be it
alimony or the custody of the child in divorce cases and finally presents an order stating whether the
process of mediation was successful or failure.

“While there are numerous practical adaptations of the mediation concept, there are basically two
schools of thought: “structured mediation”5 and “comprehensive mediation.”[3]

Structured

It starts with the orientation process wherein the parties sign a contract to abide by the rules of the
mediation. The rules are decided and include a  formal mediation agreement. Then the parties agree on
the preparation of a financial statement.

The parties sign an agreement that requires them to show evidence of their present status which would
help the mediator to decide on the following four issues: spousal maintenance, child custody and support,
and property division. They are generally long joint mediation sessions. The advocate acts like a veteran
for giving legal consultation.

Comprehensive

In the comprehensive process there are no rules made at the beginning of the mediation nor does it entail
the number of sessions required or the contract to be made. The comprehensive process needs not to be a
joint process throughout.

Collaborative Divorce Process

The process in which the parties deny the courtroom battle and want to peacefully collaborate and settle
the disputes is known as the collaborative process. Collaborative advocates are hired who provide legal
advice regarding the process of the law of the collaborative meditative divorce process.

The collaborative process is designed in a way to help the parties to come to a common ground with the
help of their advocates and the other specialists and professionals, such as child custody specialists and
neutral accountants, committed who give advice in a best-suited manner to help the parties prevent the
courtroom drama and thus prevent the scope of litigation in the later years.

 A “no court” agreement is signed between the parties and their respective advocates. The Advocates
generally are fired in the instance that the case reaches the court. The role of the court is restricted to
give a legal document finalizing the annulment of their conjugal relationship.

The only disadvantage of collaborative divorce is that the parties have to start all over again if the
mediation is not successful. Thus entailing more money than they would in the case of normal annulment
or mediation process. There are corporations that provide effective collaborative services to the parties.

Lawyers in the Marital Mediation

Normally in the cases of mediation with regards to Family law, the advocates are not allowed. The
mediators request the presence of solely the parties. The advocates are kept away because the mediation
session is aimed to be party-friendly and non-influential. The presence of a lawyer would entail that the
parties are influenced by the presence of their lawyer.

Furthermore, the lawyer is only allowed if he has the original copy of the power of attorney present with
him at the tie of the process of mediation. The lawyer should only be present if the party thinks that he
will be well represented by the lawyer. The process of marital mediation is a non-adversarial approach:-

In the report by William I. Weston, he mentions 6 basics to marital mediation which are as follows:-

There are six basics to marital mediation:

1. The parties must seriously and honestly want to reach an agreement.

2. The parties must be willing to face each other, talk with each other and negotiate with each
other.
3. The parties must have confidence in the objectivity, integrity, and competence of the mediator.
4. All parties, including the children, are indispensable to mediation.
5. The mediator must not direct the clients’ attention in any particular way (called channeling) and
must remain sufficiently detached to let the clients recognize the issues and make the
appropriate decisions themselves.
6. The mediator must keep control of the process so that the parties can deal with the issues in
dispute.

Child Custody: The child in the case of divorce is already in distress. When the child is brought to the
courtroom the psychology of the child is grossly affected by due to the intimidating atmosphere. The
custody of the child is best decided in an atmosphere that is peaceful so that the best possible way can be
adopted for the child to enjoy a flourishing childhood and there is no impediment to the child’s growing
up.

Obstacles to Mediation

1. The husband generally controls all the legal documents of which the wife is ignorant. They are
also aware of their financial position. The husband dominates and prevents wives from
effective compensation.
2. One party was to separate and the other party wants to continue their conjugal relationship.
3. When it is impossible to bring the parties to a common ground where they can negotiate about
alimony and compensation and child custody.
4. High Internal conflict wherein the parties are not in a position to negotiate with hurling abuses
at each other.

Stress and Marital Relationships

There is a prevalence of stress in marital relationships. Various clinical stress symptoms have been
detected such as work and economical stress which are a reason for the divorce. The main objective of
mediation is to allow the parties to forget their differences and to reengage in conjugal relationships in a
non-stressful manner. To combat stress in a marital relationship, mediation is the best option that the
parties can adopt.

Labour and Industrial Disputes

Workplace mediation is that type of mediation followed in the disputes which are an amalgamation of all
the labour, employee and industrial disputes mainly related to the professional arena. This includes labour
strikes, professional mistakes, employer-employee disputes, employee disputes, etc.

All kinds of organizations -public or private have three important considerations in common -Reputation,
Reliability, and Revenue.

These three considerations are the major reasons that the organizations are not bent onto using litigation
as a tool for dispute resolution and utilize other methods of dispute resolution as an alternative. An
organization’s reputation is an asset.

Reputation in the market brings in clients, increases credibility, increases the scope of a business,
enhances growth and thus regulates the economy of the organization. However, building a reputation is a
lengthy process. It takes a great amount of effort to spread through a large number of years to ultimately
gain a reputation in the market.

Litigation requires the organization to visit the court and at times face trial situations

The audience in the court is witness to the trial which is a major blow to the reputation of the
organization. Therefore organizations prefer using mediation as a method of dispute resolution because of
the confidentiality of the process.

 A good organization works on its reliability because reliability is a stick used by organizations to expand
its business. Any organization which is non-reliable does not gain reputation or revenue in the market.
Any dispute that arises in the market about its reliability is fatal to the organization. Organizations are
based on the trust that people have towards those, any small error could possibly ruin the hard-earned
reliability. Furthermore, reliability is a major concern of the organizations that deal with items of food
and health, including pharmaceutical medicines.

For example, in the case of Maggie, the business took a steep fall after the allegations of excessive lead
content in it.  Disputes about organizations that can possibly question the reliability of the organization
should be handled very carefully.

Workplace Mediation is preferred by the organizations in such cases because of the advantages that
mediation has to that of litigation. The objective of all the organizations is earning profit. Organizations
work to create revenue.

In a litigation suit the organizations have to incur heavy losses not only from the successive fees to be
given to the counsels, but also the amount to be spent increases when the litigation relegates the
reputation and the reliability of the organization. In a mediation session, confidentiality does not only
save it from the losses but also prevents the drain of wealth such as fees to the council and other court
fees.

Apart from the three considerations that the organizations passionately protect labour is also considered
as one of the important considerations of any organization. Labour is the life of any organization, the
organizations intently maintain the quality and efficiency of the labour. Litigation amongst labourers or
amongst the organization and the labours would mean that the organization does not take effective care
towards its workers. It is a setback to the organization’s reputation and an impediment in the future
recruitment of workers.

Disputes that can arise in a workplace

  Strikes by Labour Union

All organizations have labour unions which are groups of employees who look after the needs of the
employees and are concerned with the improvement of the employment standards of the employees.
Labour unions are normally very active. They call for a strike whenever any employee is subjected to
ruthless behaviour by the employer.

Labour unions agitate over issues such as conditions of employment, payment schemes, subjugation or
harsh behavior by an employer, administrative malpractices, granting of relief hours, working conditions
etc. The employer is in a vulnerable position when faced by the labour union because labour unions often
turn violent and hurl slogans to agitate the employer.

Workplace Mediation is the best way to solve the dispute in labour union problems because the leader
represents the union in mediation so there is no scope of violence. Furthermore, mediation lifts up the
strike quickly and restores original working conditions in the organization.

 A mistake by a professional of a company

The professionals in a company in their human capacities can be prone to mistakes, for example,
overlooking of date sheets, mistakes in a medical or legal field or even the mistakes of bankers. These
mistakes can cause serious repercussions to the extent of charging heavy compensation from the
professional or even putting a ban on his practicing for a certain period of time. The company would be
vicariously liable for the mistake caused by the professional.

The reputation and the reliability of the organization will be at risk. In such cases, mediation is the best
way to seek compensation for the mistake caused. Both parties are given a reasonable scope of
explanation after which compensation is decided upon.

 A dispute between two employees

A dispute between two employees can come about because of a plethora of reasons, belonging to all
fields of law. Cases can range from sexual harassment, assault, slander, libel to promotional aspects and a
lot more.

The dispute between two different employees tenses the environment of the entire place of work. the
organization here is liable to initiate mediation prospects between the parties because the dispute came
about at the time of their work.

Mediation is the best way to resolve the dispute between two employees and in certain circumstances get
the required compensation. The mediators act as counsellors bridging the gap between the parties.

 A dispute between employer and employee

The employer and the employee can be caught in a dispute over the terms and the conditions of the
employment, promotional aspects, examination for induction, service schedule, number of hours,
remuneration, increment in salary, etc. The parties in a mediation session are considered to be equal.
Unlike, the setting at the court, the influential employer cannot manipulate the process of mediation.
For the successful resolution of disputes, both parties have to sacrifice and both parties should have the
intention of settling the dispute. In the dispute between the employer and the employee until and unless
both the employer and the employee are satisfied, the mediation will not be considered successful.
Mediation is a non-aggressive process and will ensure that good relations remain between the employer
and the employee even after the completion of the mediation.

Role of the mediator to resolve disputes in a workplace mediation

The arbitrator should endeavour to bridge the gap between the parties in a dispute. The mediator has to
understand the vulnerable position of the parties in the dispute because of the dispute being related to
their source of income. The arbitrator should effectively diffuse the tensions between that prevail between
the parties. The arbitrator should ensure the participation of both parties in the negotiation.

He should be careful about the employers who would try to assert their power to grab the best deal. The
arbitrator should ensure that there is no intimidation by any party at the opposite party. After setting the
agenda, the mediator should let the other parties feel that the process would be absolutely confidential and
private.

The mediators will have to be careful while handling the sensitive information. Leakage of sensitive
information would be a drawback to the process. In the end the arbitrator should encourage the parties
to maintain cordial relations with one another.

Advantages of workplace mediation

 Mediation is a non-aggressive process

The policy of mediation is to establish a win-win situation where both parties’ interests are equally
relevant. Until both parties are satisfied with the outcome the mediation will not be successful. Thus,
mediation takes a completely different principle from the win-lose principal followed in litigation. In
workplace mediation, the stakes are high for the organization as well as the workers. Workers and
organizations have close relations with one another.

In this case, it is important to maintain a decorum in the dispute resolution process. Unlike litigation in
mediation, the parties do not hurl abuses at each other and bring out each other’s faults. It is detrimental
to the relationship between an employer and an employee or between employees in the future. Mediation
tries to cover up the damage and does not cause additional damage.

 Mediation sessions are confidential in nature

As mentioned above the 3 Rs which are essential considerations to the organization require the dispute
resolution to be confidential and in private. Confidentiality is not always feasible in a litigation suit.
Mediation promises that the parties feel comfortable that the process will be in absolute secrecy.

In addition to this, there may be an engagement of some confidential information regarding the
functioning of the organization revealed during the time of the mediation which is highly classified.
Revealing such information in the courtroom might lead to the loss on the part of the company.

 Mediation is a client-driven process

In a mediation session, the parties actually have a  scope of talking to each other. The ambiance and the
setting facilitate the clearing of doubts and sorting of allegations hurled at from both sides.  An employee
may have many allegations against the employer and vice-versa. Both of them can effectively resolve
their disputes without any courtroom drama in a mediation session.

The mediators are welcoming and make it easy for the parties to open up their hearts to each other. The
parties in a dispute can control the process of mediation, and effectively schedule dates that would be
comfortable for both parties.

 Mediation is a speedy way of dispute resolution

Mediation is considered to be a speedy process of dispute resolution because it does not depend on
lengthy processes, paperwork, evidence, and trials. This is beneficial in the case of labour strikes where
the workers stop working until the organization bends to their demands because the shutdown situation of
an organization would lead to its loss.

However, in certain cases neither of the parties agrees to accept the proposal by the other party in such
situations the parties can walk-away and an impasse is created. In such situations, mediation is
unsuccessful.

 Mediation is cheaper than litigation

Litigation involves drainage of wealth from both parties in the form of fees for the council and court-
related fees. Workplace disputes often involve workers who are not financially strong enough to afford
the lengthy and costly litigation process. Mediation comes to the rescue.

The only price to bear in the process of mediation is that of the fees of a mediator.

 Good relations can be sustained even after the dispute

Since mediation is a non-aggressive process, it does not widen the gap between the parties. The parties in
a dispute can be colleagues who would be working with each other after the dispute is resolved. Since
talking is the best way to resolve any dispute mediation helps one understand the problem of one’s
opponent. Thus dispute is resolved through understanding which ultimately paves the way for the
preservation of good relations.