Dispute Resolution Law

DISPUTE
RESOLUTION
LAW
(FOR PRIVATE CIRCULATION ONLY)

2018
PROGRAMME COORDINATOR
Mr. Vishal B. Ranaware
COURSE DESIGN AND REVIEW COMMITTEE

Mrs. Medha Kolhatkar Adv. Vaishali Bhagwat
Dr. Shashikala Gurpur Ms. Ujjwala Sakhalkar
Mr. Yogesh Jaiswal Ms. Carolin Dennis
COURSE WRITERS
Ms. Nehaa R. Satalkar Ms. Sneha Sakhalkar
EDITOR
Ms. Neha Mule
Published by Symbiosis Centre for Distance Learning (SCDL), Pune

July, 2011 (Revision 01, 2015)
Copyright © 2018 Symbiosis Open Education Society

All rights reserved. No part of this book may be reproduced, transmitted or utilised in any form or by any
means, electronic or mechanical, including photocopying, recording or by any information storage or retrieval
system without written permission from the publisher.
Acknowledgement
Every attempt has been made to trace the copyright holders of materials reproduced in this book. Should any
infringement have occurred, SCDL apologises for the same and will be pleased to make necessary corrections
in future editions of this book.
PREFACE
Dispute Resolution through alternative modes and systems other than the customary and traditional
way of litigation and going to the Courts for the redressed, is being given a chance by the disputing
parties because of the time consuming tactics and the delay in the courts and thereby denial of justice.
These units try to give a good and detailed overview of Alternative Dispute Resolution Systems of
our country in particular and the world over in general.
The main topics that are covered in this book are the topics on Alternative Dispute Resolutions
(ADRs) and their importance in resolving the disputes between the litigants. Arbitration is in the
forefront of the ADR system as people and the big companies of the corporate world do enter into
Arbitration Agreements for the resolution of their disputes that might come up in the future of their
contractual work. Hence every care has been taken to incorporate every detail as and when necessary
about the dispute resolution laws.
We find that methods like arbitration, conciliation, mediation, negotiation are of great help in trying
to solve disputes between people. They take much less time to solve disputes, are more of an informal
way unlike litigation, which is mostly based on the laws made and their procedure, and they normally
do not require the presence of learned counsels for solving their dispute, i.e. the third person necessary
to solve dispute between parties need not necessarily be a learned counsel.
All these methods of dispute resolution are simple, informal and are of great help, though in India at
present, they are recently introduced legislatively. They have thus raised great expectations and hopes
in the minds of the litigants for a more satisfactory, acceptable and early resolution of their disputes.
This book aims to make the law on Arbitration look uncomplicated. It has been prepared mainly
for those students who have opted for the distance education mode of learning. Hence we have
highlighted the main points in a manner that is simple to understand and memorise at the same time.
Ms. Nehaa R. Satalkar
Ms. Sneha Sakhalkar
iii
ABOUT THE AUTHOR
Ms. Nehaa R. Satalkar has completed her LLM from the University of Pune. She has also done
her PG Diploma in Labour Laws and Labour Welfare from the University of Pune. Nehaa Satalkar
has over ten years of deep domain knowledge and experience of the Indian legal practice and has
successfully worked with US corporate clients. She is the author of several course contents for the
Distance Education Programmes of Bharati Vidyapeeth, Pune.
She is also a well-qualified and accomplished Legal Process Outsourcing (LPO) consultant with
extensive experience in the LPO industry; including specific exposure in document review, contract
management and deposition summarization having been engaged primarily with clients across the
United States.
Ms. Sneha Sakhalkar is a practicing advocate in the District and Sessions Court of Pune. She
has done her M.A. in Philosophy from Wilson College of the Bombay University and L.L.B. from
ILS College of the University of Pune. She is into practice of law for about 10 years now and has
experience in the field of family, labour, industrial and civil law. She has also attended appeals in the
High Court of Bombay.
iv
CONTENTS
Unit No. TITLE Page No.

1 Judicial/Basic Dispute Resolution 1 - 16
1.1 Meaning and Characteristics of Judicial Dispute Resolution
1.2 Evolution/History of Law
1.3 Civil and Criminal Law
1.4 Different Methods of Dispute Resolution under Section 89 of CPC
1.5 Power and Limitations of Law
1.6 Theories of Disputes
Summary
Key Words
Self-Assessment Questions
Answers to Check your Progress
Suggested Reading
2 Litigation 17 - 38
2.1 Theories and Stages of Litigation
2.2 Advantages and Disadvantages of Judicial Dispute
Resolution
2.3 Hierarchy of Courts in India
2.4 Conflict Resolution Initiatives of the SC
2.5 Tribunals – Meaning and Characteristics
2.6 Establishment of Administrative Tribunals in India
2.7 Types of Tribunals and Benches
2.8 Consumer Protection Councils
Summary
Key Words
Suggested Reading
v
3 Alternative Dispute Resolution (ADR) 39 - 56
3.1 Need for ADR
3.2 History of ADR
3.3 Comparative Study of ADR - Negotiation, Mediation,
Conciliation and Arbitration
3.4 Unique Features of ADRs
3.5 State Authorities of ADR
3.6 ADR in Indian Statutes
3.7 Main Process of ADR
3.8 Innovative Methods and Usefulness of ADR
3.9 Difficulties, Advantages and Disadvantages of ADR
Summary
Key Words
Suggested Reading
4 Alternative Models of ADR 57 - 72
4.1 Gram Panchayats
4.2 Lokpal, Ombudsman and Lok Ayuktas
4.3 The Legal Services Authority Act, 1987
4.4 Main Objectives of Legal Aid
4.5 Jurisdiction, Purpose and Functioning of Lok Adalats
4.6 Powers and Award of Lok Adalats
4.7 Benefits of Lok Adalats
4.8 Limitations of Lok Adalats
4.9 International Center for ADR (ICADR)
4.10 Plea Bargaining, Compoundability of Crimes
4.11 Supreme Court’s Judgment of 2005 and ADR in Civil Litigation
4.12 Family Courts and Counselling Centres
Summary
Key Words
Suggested Reading
vi
5 Arbitration 73 - 88
5.1 History of Arbitration System in India
5.2 The Arbitration and Conciliation Act, 1996 (Salient Features and
Scope)
5.3 Types of Arbitration
5.4 Agreement of Arbitration
5.5 Beneficial Aspects of Arbitration
Summary
Key Words
Suggested Reading
6 Arbitral Tribunals 89 - 106
6.1 Arbitral Tribunals
6.2 Jurisdiction of Arbitrator
6.3 Commencement of Arbitration and Appointment of Arbitrator
6.4 Proceedings before the Arbitrator
6.5 Appointment of an Expert
6.6 Termination of the Arbitrator
6.7 Termination of the Arbitration Proceedings
6.8 Death, Insolvency and Minority of the Parties
6.9 ADR’s Unique Features
6.10 Arbitration Procedure and Widely Used Procedures
Summary
Key Words
Suggested Reading
vii
7 Arbitration Award 107 – 124
7.1 Definition and Components of Arbitration Award
7.2 Foreign Arbitral Awards
7.3 Form and Contents of the Award
7.4 Terms of the Award
7.5 Essentials and Attributes of the Award
7.6 Interim Award
7.7 Arbitral Award Acts as Res Judicata
7.8 Execution of an Award
Summary
Key Words
Suggested Reading
8 Finality of the Arbitration Award 125 – 142
8.1 Effect of an Arbitration Award
8.2 Recourse against an Arbitration Award
8.3 Grounds for Setting Aside an Arbitration Award
8.4 Correction of an Award
8.5 Recognition and Enforcement of an Arbitration Award
8.6 Finality of an Arbitration Award
8.7 Law of Limitation as applicable to Arbitration Award
8.8 Appealable Orders under Section 37
8.9 Unappealable Awards
8.10 Waiver as Applicable to Arbitration
Summary
Key Words
Suggested Reading
viii
9 International Law on Arbitration Governing International 143 – 154
Commercial Transactions
9.1 Branches of International Laws
9.2 Conflict of Laws
9.3 Definition of Commercial Transaction
9.4 Arbitration – The Only Way
9.5 Standard of Arbitration
9.6 The Law Applicable
9.7 Choice of Forum, Law and Arbitrator
9.8 Commencement of Arbitration
9.9 Execution of Awards made in India, and Outside India
Summary
Key Words
Suggested Reading
10 Conciliation 155 – 164
10.1 Meaning and Definition of Conciliation
10.2 Conciliation under the Arbitration and Conciliation Act, 1996
10.3 Statutory Conciliation
10.4 Application and Scope of Conciliation (Disputes to which
applicable)
10.5 Conciliation under Industrial Disputes Act, 1947
10.6 Recourse to Conciliation
10.7 Initiation and Commencement of Conciliation Proceedings
10.8 Number, Appointment, Powers, Functions and Role of Conciliators
10.9 Conduct and Stages of the Conciliation Proceedings
10.10 Role of Conciliator in Subsequent Proceedings
Summary
Key Words
Suggested Reading
ix
11 Conciliation Proceedings and Settlement Agreement 165 – 178
11.1 Termination of Conciliation Proceedings
11.2 Institutional and Administrative Assistance
11.3 Settlement of Disputes under Conciliation
11.4 Legal Effect, Status and Effect of Settlement Agreement
11.5 Disclosure and Confidentiality under Conciliation Settlement
Proceedings
11.6 Costs of Conciliation
11.7 Enforceability
11.8 Advantages of Conciliation
11.9 UNCITRAL Model of Conciliation
11.10 Conciliation Under Family Courts
11.11 Conciliation as Differentiated from Other Methods of Dispute
Settlement
11.12 Conciliation under Amended CPC
Summary
Key Words
Suggested Reading
12 Negotiation 179 – 194
12.1 Need and Meaning of Negotiation
12.2 Essentials, Phases and Characteristics of Negotiations
12.3 Negotiation as a Compromise and Exchange of
Information
12.4 Essential Skills of a Negotiator
12.5 Negotiation Styles
12.6 Five Approaches
12.7 Strategies of Negotiation
12.8 Negotiation Power
12.9 BATNA and WATNA
12.10 Domestic Disputes and Tools of Negotiation
Summary
Key Words
Suggested Reading
x
13 Mediation 195 – 212
13.1 Introduction and Ethics of Mediation
13.2 Meaning of Mediation
13.3 Techniques as Applied in Different Countries
13.4 Essential Characteristics and Attitudes of a Mediator
13.5 Skills of a Mediator
13.6 Duties and Responsibilities of a Mediator
13.7 The Mediation Process and its Essential Characteristics
13.8 Initial Steps and Stages of Mediation
13.9 Models and Styles of Mediation
Summary
Key Words
Suggested Reading
14 Civil Procedure Mediation Rules 213 – 227
14.1 Advantages and Disadvantages of Mediation
14.2 Court Annexed Mediation in India
14.3 CPC and Mediation Rules
14.4 Appointment of a Mediator
14.5 Qualifications of Panel of Mediators
14.6 Procedure for Mediation
14.7 Limitations and Role of a Mediator
14.8 Confidentiality and Disclosure of Information
14.9 Essentials of Mediation Agreements
14.10 Enforceability of Settlement Agreement
14.11 Difference between Mediation and Conciliation
Summary
Key Words
Suggested Reading
References 228
xi
xii
Judicial/Basic Dispute Resolution
UNIT
1
Structure:
1.1 Meaning and Characteristics of Judicial Dispute Resolution

1.2 Evolution/History of Law
1.3 Civil and Criminal Law
1.4 Different Methods of Dispute Resolution under Section 89 of CPC
1.5 Power and Limitations of Law
1.6 Theories of Disputes
Summary
Key Words
Suggested Reading
Judicial/Basic Dispute Resolution 1

Notes
Objectives
----------------------
After going through this unit, you will be able to:
----------------------
• Explain the meaning of Judicial Dispute Resolution
----------------------
• Identify and analyze the evolution of law
---------------------- • Classify the theories of disputes
---------------------- • List the characteristics of Judicial Dispute Resolution
----------------------
1.1 MEANING AND CHARACTERISTICS OF JUDICIAL
----------------------
DISPUTE RESOLUTION
----------------------
Introduction
----------------------
When two parties are at loggerheads, and if one of the parties is adamant, there
---------------------- seems to be no other way out but to approach the courts for the dispute to be
resolved. Hence the Judiciary has been into existence since time immemorial
----------------------
and there are instances of the Kings and the Monarchs themselves resolving the
---------------------- disputes in their own ways. Some of the disputes can easily be solved than by
going to the courts. In modern times, disputes can be resolved in more than one
---------------------- way. The important attributes of the system of justice are equal justice, provision
---------------------- of Legal Aid by the State and the accommodation of the changing conditions of
the society. Many Special Courts and Tribunals have been established for the
---------------------- speedy redressed of the pending cases. For example, to expedite the disposals
of cases concerning the transactions related to banks, a special tribunal is being
----------------------
established. Hence now we shall study the meaning, history and the evolution
---------------------- of law and dispute resolution in India.
---------------------- Meaning of Judicial Dispute Resolution:

The settlement of disputes or the adjudication of the litigation through the
----------------------
Courts is known as the Judicial Dispute Resolution System. The Courts are
---------------------- empowered to render justice by listening to both the sides and relying upon the
evidence sought and placed before it. Dispute also refers to a quarrel between
---------------------- a party asserting a right and the other party denying the liability or the non-
---------------------- performance of the obligation, or a duty.
Characteristics of Judicial Dispute Resolution:
----------------------
●● Judicial dispute resolution is the adjudication of the litigation. It is done
---------------------- successfully through the establishment of Courts of Law. Litigation
---------------------- means a law suit, or that which is concerned with the parties to litigation
or a contest in a Court of Law.
---------------------- ●● The disputes may relate to property matters, financial and commercial
---------------------- matters, family matters and inheritance matters to name a few. When
2 Dispute Resolution Law

nothing else works, the parties have to resort to litigation through judicial Notes
dispute resolution.
----------------------
●● Each person has been bestowed with legal and moral, rights and duties.
The right of a person becomes the duty of the other person. Hence disputes ----------------------
are of two kinds,
----------------------
1) Legal and
2) Moral disputes. ----------------------
●● If a duty is omitted or is not performed according to the legal duty of ----------------------

that person, it is termed as a liability. The different kinds of liabilities
----------------------
are criminal liability, civil liability, penal liability, vicarious liability,
tortuous liability, strict or absolute liability and remedial liability. The ----------------------
different types of obligations or duties are contractual obligations, quasi
contractual obligations, civil obligations, criminal obligations and delictal ----------------------
obligations. ----------------------
●● The essential condition of a court is that it has to give a decision after
following the process of due procedure and the due process of law and that ----------------------
decision shall have a finality and authoritativeness which is the essential ----------------------
test for judicial pronouncement.
----------------------
●● There are three kinds of courts:
1) Court of Inquiry: A court that makes a preliminary investigation of ----------------------
charges.
----------------------
2) Court of Record: A court whose proceedings are recorded
permanently and which can punish for contempt of court. ----------------------
3) Court not of Record: A court of limited and inferior jurisdiction. ----------------------

●● Advocates or lawyers assist the judges in rendering justice to the citizens ----------------------
of the State.
----------------------
●● The lawyers are the only persons recognized under the Advocates Act,
and registered by the Bar to practice in the courts. ----------------------
●● Judicial dispute resolution is based on law. Law contains rules for the
----------------------
governance and well being of the society, to protect and enforce the
rights and duties of the citizens and to make every citizen abide the rules, ----------------------
regulations and laws of the State.
----------------------
●● The delivery of justice is based on the hierarchy of courts which is required
to protect the rights and duties of the citizens. The subordinate judiciary ----------------------
plays an important role for the delivery of justice. The apex court in the
----------------------
hierarchy system in India is the Supreme Court, then the High Courts and
the highest courts in each of the State and District Judiciary at the District ----------------------
levels.
----------------------
●● In delivering justice, the Courts in India must have jurisdiction and venue.
It is related to the subject matter, place of litigation and parties. The civil ----------------------

Notes courts have jurisdiction over civil matters and the criminal courts have over
criminal matters. The court’s jurisdiction falls under the circumstances
---------------------- where the litigants reside or the disputed property is located in the limits
of that particular court. Jurisdiction means the authority of the power of
----------------------
the court to decide the matter or act and the venue is the actual location.
---------------------- ●● There is scope for rectification or reorganization in the decisions through
the system of appeals. An appeal lies against the decision of the lower
---------------------- court in matters where the lower court fails to take into consideration any
---------------------- facts or issues regarding the litigation at hand. The Appellate court may
reconsider the facts and change the decision or the verdict. This decision
---------------------- will then be executed to provide justice. The appeal from the district
courts of Civil or Criminal nature lies to the High Courts of the respective
---------------------- States. The appeal from the High Court from any of its decisions, verdicts,
---------------------- decrees or final orders, lies to the Supreme Court of India.
Main Principles of Judicial Dispute Resolution:
----------------------
The Civil Courts must follow the procedure based on the rules and regulations
---------------------- as codified in the Civil Procedure Code. The Criminal Courts must follow the
procedure as laid down in the Criminal Procedure Code.
----------------------
The procedure as followed by the courts in India for the judicial dispute
---------------------- resolution is as follows: the two litigating parties are called as the plaintiff and
the defendant in the civil cases and the accused and the State prosecution in the
----------------------
criminal cases.
---------------------- ●● The plaintiff is the person who is wronged by the action or the inaction
of the defendant.
----------------------
●● The plaintiff prepares and files his plaint in the court.
----------------------
●● The plaintiff presents his claim with the cause of action.
---------------------- ●● The plaint must state the facts, material facts and facts on which the party
pleading relies and must not state the evidence.
----------------------
●● The facts stated must be concise, precise and must be stated with certainty.
----------------------
●● The main object of the pleadings is that it makes both the parties aware of
---------------------- their cases and allegations made against each other.
---------------------- ●● The suit is commenced with the filing of the plaint.
---------------------- ●● The Court then after registering the suit sends the summons along with a
copy of the suit, to the defendant.
---------------------- ●● The defendant shall, within thirty days from the date of service of
---------------------- summons on him, present a written statement of his defence.
●● New facts must be specially pleaded by the defendant.
----------------------
●● The defendant must deal specifically with each allegation of fact of which
---------------------- he does not admit the truth, except damages.
---------------------- ●● Where a defendant denies an allegation of fact in the plaint, he must not
do so evasively, but answer the point of substance.
●● With certain exceptions, every allegation of fact in the plaint, if not denied Notes
specifically or by necessary implication, or stated to be not admitted in
the pleading of the defendant, shall be taken to be admitted. ----------------------
●● In a suit for money, the particulars of set-off must be given in written ----------------------
statement of the defendant.
●● Based on the trial, the examination-in-chief, cross-examination, re- ----------------------
examination and after the judge hears the arguments of both the sides, the ----------------------
Judge pronounces finality of judgement.
●● If the party is not satisfied with the judgement, it can file for an appeal in ----------------------
the higher court. ----------------------
Advantages of Dispute Resolution:
----------------------
The Courts follow systematic procedure based on rules and regulations which
results in the cases being presented to the best advantage and a detailed inquiry ----------------------
into the facts of the case. The Courts have authority, dignity and honour which
attract the public confidence. There is a large body of substantive law and ----------------------
procedure that exists which automatically controls the lawsuit and the parties ----------------------
don’t have to create the rules that will govern the lawsuit. The judge, by law,
must be impartial and the judge’s paycheck is not dependent upon whether the ----------------------
parties ever use that particular judge in another matter. The place of the trial is
in the courthouse and therefore neutral territory. If a litigant is unhappy with a ----------------------
decision of the judge or the jury the possibility of an appeal exists ----------------------
Disadvantages of the Judicial Dispute Resolution:
----------------------
Prolonged litigation causes stress, concern and anxiety. The delays are
widespread. No litigant expects finality within a reasonable time. The litigation ----------------------
involves high costs. There is overcrowding of the court cases. At a rough
estimate, it would take a minimum of 324 years for their final disposal, provided ----------------------
there is no new filing of any suit. The rate of the suit disposal is also very ----------------------
disappointing. Over two million cases are pending in 18 High Courts and more
than 200,000 cases are pending in the Supreme Court for admission, interim ----------------------
reliefs or final hearing. Normally it takes between 5 to 15 years for a case to be
decided in an Indian Court. ----------------------
----------------------
1.2 EVOLUTION/HISTORY OF LAW
----------------------
What is Law?
----------------------
Law is a tool of social control. It is a rule of conduct. The law steps in whenever
wrongs are committed against the society or individuals. Law is a rule of human ----------------------
conduct, traditions and customs codified as law, and it is imposed and enforced
by the State. It is the rules which concern the human behaviour. The goal of ----------------------
law is to render justice and equality. Law is an instrument to deliver justice. ----------------------
Everyone is equal in the eyes of law. Law aims at equality and uniformity. Law
should have a definite meaning, and must be publicized for the citizens to know ----------------------
it beforehand. Law must necessarily be impartial.
----------------------

Notes According to Roscoe Pound the purpose of law is described to be Social
Engineering. It helps the humans to co-exist peacefully. There has to be
---------------------- a controlling or a regulatory power to control man as he is a social animal.
Consequence for failing to follow a rule of law is known as a sanction or
---------------------- punishment. It is the human behaviour that is codified into rules and evolved
---------------------- from time to time. Justice, Equity and Good Conscience are the main guiding
principles of natural justice.
----------------------
Evolution/History of Law:
---------------------- The main source of English Law is the Common Law and Statute Law. The
chief source of American Law is the Judge made law and the codified law.
----------------------
The English law evolved from the Romanian Law which had three main
---------------------- principles.
---------------------- ●● Hurt nobody by word or deed.
●● Be true and just in one’s dealings.
----------------------
●● One’s life must be free of any crimes and scandal.
----------------------
According to Bentham, if one breaks the process of peaceful order, he must
---------------------- suffer an unpleasant consequence which is pain and suffering. The first written
codes of law were codified by the Sumerians. The Neo-Sumerian King of Ur,
---------------------- enacted the oldest written legal code in around 2100-2050 BC as the Code
of Ur-Nammu although an earlier code of Urukagina of Lagash (2380-2360
----------------------
BC) is also found to have existed. After the revival of Roman law in the 12th
---------------------- century, sixth-century Roman classifications and jurisprudence provided the
foundations of the distinction between criminal and civil law in European law
---------------------- from then until the present time.
---------------------- The first signs of the modern distinction between crimes and civil matters
emerged during the Norman Invasion of England. Before the Norman Conquest,
---------------------- customary and traditional law was applied by the local courts. After the Norman
Conquest, the Curia Regis (King’s Court) was established. The customs of the
----------------------
vicinity were applied as the law of the Court. It was later on known as the
---------------------- Common Law, i.e. the law common to the whole of England. By the end of the
13th Century, the King’s Bench, the Common Law Courts, and the Exchequer
---------------------- were established. Whenever there was any ambiguity regarding the application
of the common law, the statute modified it which provided the answer. The
----------------------
development of the state dispensing justice in a court clearly emerged in the
---------------------- eighteenth century when European countries began maintaining police services.
---------------------- Equity was one of the main sources of English Laws. It is the bulk of legal
doctrines having taken birth from the common law. ‘Good Faith’, ‘Public
---------------------- Interest’, ‘Public Policy ‘are the principles based on Equity.
---------------------- Before 1726, the East India Company delivered justice to its subjects. If Indians
were one of the litigants, then the law of the defendant was applied to the case.
---------------------- There was also the Indian dispute resolution system which was in place in the
form of community courts. According to the Charter of 1726, the Mayor’s Courts
---------------------- were established in all the Presidency towns which were the Royal Courts. In

the years that followed, Supreme Courts, High Courts and the Civil Courts were Notes
established in these Presidency Towns. Following the Indian High Courts Act
1861, High Courts were also established in the Presidency Towns. The Criminal ----------------------
Courts were established under the Criminal Procedure Code of 1989.
----------------------
SOURCES OF LAW
----------------------
The three main sources of law are:
●● Legislation or State made law or Statute law or Enacted Law ----------------------
●● Customs and ----------------------
●● Judicial Precedents
----------------------
Legislation is the law making authority. Legislation is that source of law
which consists in the declaration of legal rules by a competent authority. ----------------------
Legislature is the direct source of law. Legislature frames new laws, amends
----------------------
the old laws and cancels existing laws in all countries. In modern times this is
the most important source of law making. The term legislature means any form ----------------------
of law making. Legislature is the competent body to make laws. Hence the law
made by the legislature is known as the Act of Legislature. It is the written form ----------------------
of law.
----------------------
Customs: Customs are the practices evolved out of the daily use, convenience
and necessity. It is the repeated application of a usage from generations ----------------------
together. Thus customs are the main source of law world over. It is common to
----------------------
a particular place and area of operation. The law based on customs is known as
the Customary Law. It is voluntary and a uniform rule of action. For a custom to ----------------------
become law there must be continuity, of the usage of custom. The custom must
have been observed for a long time with certainty and reasonableness. ----------------------
Judicial Precedents: These are the decisions given by the Courts. They are ----------------------
binding upon similar litigations across the country based on similar facts.
It is based on the principle that what has already been decided in an earlier ----------------------
case is binding, and need not be decided again thereby wasting the Court’s
----------------------
precious time which involves huge costs. This is based on the ‘Doctrine of
Stare Decisis’ or precedents. When there is no legislature on particular point ----------------------
which arises in changing conditions, the judges depend on their own sense of
right and wrong and decide the disputes. Such decisions become authority or ----------------------
guide for subsequent cases of a similar nature and they are called precedents.
----------------------
The dictionary of English law defines a judicial precedent as a judgement or
decision of a court of law cited as an authority for deciding a similar state of fact ----------------------
in the same manner or on the same principle or by analogy. Precedent is more
flexible than legislation and custom. It is always ready to be, used. ----------------------
----------------------
----------------------
----------------------
----------------------

Notes
Check your Progress 1
----------------------
---------------------- Multiple Choice Single Response.

1. The suit is commenced with the filing of the_______
----------------------
i. Written statement
----------------------
ii. Oral statement
---------------------- iii. FIR
---------------------- iv. Plaint
---------------------- Fill in the blanks.
1. ________was one of the main sources of English Laws.
----------------------
2. _________are the practices evolved out of the daily use, convenience
---------------------- and necessity.
---------------------- 3. _____________is the competent body to make laws.
----------------------
---------------------- Activity 1
----------------------
1. Find out the nearby court in your area. Check out the no of cases
---------------------- registered there in one month time span.
2. Find out at-least one custom in your religion which has got the
----------------------
shape of law.
----------------------
---------------------- 1.3 CIVIL AND CRIMINAL LAW

---------------------- Civil Law:
---------------------- Civil wrongs are redressed before civil courts by granting injunctions or by
payment of damages or compensation to the aggrieved party. The Civil Law
---------------------- provides a system of remedies and it is concerned with the rights and duties of
individuals towards one another.
----------------------
The civil law includes and is not limited to:
----------------------
i. Law of Torts: Civil wrongs due to one’s negligent behaviour for which
---------------------- the remedy is liquidated damages. Examples of any civil wrongs are
defamation, slander and nuisance.
----------------------
ii. Law of Succession: When an individual dies intestate leaving behind his
----------------------
property to be divided amongst his or her legal heirs, the property has to
---------------------- be divided according to the law of succession. This law deals with the
devolution of property on the death of an individual.
----------------------

iii. Law of Contracts: When two or more people enter into an agreement to Notes
carry out the obligations as spelt out in it, that agreement has the force of
law. This law determines the enforceability and legality or otherwise of ----------------------
an agreement.
----------------------
iv. Family Law and Personal Law: Under this law, the rights, duties and the
status of the husband, wife, parents and children are determined. ----------------------
v. Law of Property: This law deals with the transfer of property which is the ----------------------
most important aspect of this law. ----------------------
vi. Public and Private Law: Public deals with the State in its sovereign
----------------------
and political power. Private law deals with the rights and duties of the
individual subjects. It protects individual interests rather than the public ----------------------
interests.
----------------------
vii. Substantive and Procedural Law: Substantive law states the basic
principles of rights, duties and obligations. It is the basic principle and rule ----------------------
of law. It contains the definition of wrongs, and prescribes the sanctions
and remedies. Whereas procedural law is the process of litigation that ----------------------
the courts have to follow. The procedural law governs the manner in ----------------------
which the rights are enforced under the civil or criminal law. Procedural
law explains and provides the way to achieve the rights. The procedural ----------------------
law determines the procedure, practice, and the legal machinery for the
enforcement of an individual’s rights and duties. ----------------------
viii. Hierarchy of Civil Courts in India: ----------------------
The Apex Court is the Supreme Court ----------------------

(Chief Justice of India and other Supreme Court Judges) High Courts (Chief ----------------------
Justice of High Court and Other Judges) District Court (District Judge)
----------------------
----------------------
City Civil Court (Chief Judge) Junior Division, Civil Judge Senior Division,
----------------------
Courts of Small Causes Courts or Sub Courts (Sub-Judge) ----------------------
District Munsiff Court ----------------------

Criminal Law: ----------------------
Crimes are considered as offences against the State and prosecutors have been
----------------------
appointed by the Government to carry out criminal cases before Courts of Law.
Courts of law administer justice by considering the nature of the wrong done. ----------------------
The important elements are ‘mens rea’and ‘actus reus’. The victim of crime
is an individual. In case he keeps to himself about the crime, the State can ----------------------
take cognizance and file a criminal suit against the perpetrator of the crime.
----------------------
Hence the wrongdoer is punished accordingly. The chief concern of criminal
law is to protect and preserve certain fundamental social values and institutions. ----------------------

Notes Criminal law also prescribes ‘penal sanction’, a formal expression of the
‘societal reaction ‘to the dangerous ‘forbidden ‘human conduct. Penal law of
---------------------- a country, therefore, needs to be accepted and understood in the milieu of its
prevailing socio-ethical-cultural values and political ideologies.
----------------------
The Indian Penal Code, 1860 (IPC) was prepared in the mid-19th Century
---------------------- by Lord Thomas Babington Macaulay and his colleague Law Commissioner.
Most of the ideas and concepts relating to ‘crime’ and ‘criminal liability’ and
----------------------
fundamental principles relating thereto, are incorporated in the IPC, which
---------------------- have their roots in the then existing philosophical and theological values and
precepts in the United Kingdom. Modern criminological theories consider
---------------------- crime as a harmful, harmful behaviour that needs to be redressed in the present
and prevented in the future. The nineteenth century view that crime is evil and
----------------------
unlawful or dishonest behaviour must be punished. It is the criminal justice
---------------------- system which impinges upon and restricts the constitutional guarantees of
life, liberty and equality. Right to bail, right to be treated with dignity even
---------------------- inside prison walls, right not to be handcuffed or tortured, and right against
self-incrimination are all rights guaranteed under Articles 20, 21 and 22 of the
----------------------
Constitution. Before the Criminal Courts, the Public Prosecutors conduct cases
---------------------- for the State. Penal law consists of a wide variety of criminal law ranging from
cheque bouncing offences defined in Section 138 of the Negotiable Instruments
---------------------- Act, Essential Commodities Act, Environment Protection Act, Bonded Labour
Abolition Act, Food Adulteration Act, Packaged Commodities Act, Industrial
----------------------
Disputes Act and Factories Act, etc. Administration of criminal justice is carried
---------------------- out through Magistrate Courts and Sessions Courts
The appellate jurisdiction of the Supreme Court can be invoked in both civil
----------------------
and criminal cases, if the High Court certifies that the case involves a significant
---------------------- question of law as to the interpretation of the Constitution. The hierarchy of
criminal courts is given below.
----------------------
Supreme Court
----------------------
---------------------- High Court

----------------------
---------------------- Sessions Courts (District Level)

----------------------
---------------------- Metropolitan Magistrates’ Courts (Metropolitan City Level) and Judicial

Magistrate (District Level)
----------------------
and Family Courts, Motor Accident Claims Tribunal, Industrial Courts, Co-
---------------------- operative Courts.
---------------------- The District Court or Additional District Court exercises jurisdiction both on
original and appellate side in civil and criminal matters arising in the District. The
---------------------- criminal jurisdiction is exclusively derived from Code of Criminal Procedure

(Cr.P.C). It also prescribes the maximum sentence which a District Court may Notes
award. The District Court exercises appellate jurisdiction over all subordinate
courts in the district on both civil and criminal matters. ----------------------
----------------------
----------------------
Fill in the blanks.
----------------------
1. The Indian Penal code, 1960 was prepared by ________.
----------------------
1.4 DIFFERENT METHODS OF DISPUTE RESOLUTION ----------------------
UNDER SECTION 89 OF CODE OF CIVIL PROCEDURE ----------------------

(CPC) ----------------------
The principles of natural justice have been embodied in the procedural laws of
----------------------
CPC and CrPC. The procedural due process is very important for the disputes
to be resolved through the alternative dispute resolution (ADRs) systems. The ----------------------
ADRs do not depart from the law and procedural due process of Law. The Indian
Parliament amended the CPC to expedite the process of trial which came into ----------------------
force on July 1st 2002, introducing the alternative dispute resolution methods
----------------------
within the CPC, prescribing the timeframe for conducting the trials, thereby
increasing the financial limits, and also permitting the filing of affidavits as ----------------------
proof of facts. The civil courts have been given the power to refer the matters
before it for settlement to arbitration, conciliation, negotiation, Lok Adalat or ----------------------
mediation.
----------------------
Section 89 of CPC is provisions in law to facilitate introduction of court annexed
ADR. This provision of the CPC has not really reduced the burden on the courts. ----------------------
Section 89 of CPC has been inserted to try and see that all the cases which are
----------------------
filed in court may be alternatively disposed off.ADR is a continuous process.
Section 89 reads thus ----------------------
(1) Where it appears to the court that there exist elements of a settlement ----------------------
which may be acceptable to the parties, the court shall formulate the
terms of settlement and give them to the parties for their observations and ----------------------
after receiving the observations of the parties, the court may formulate the ----------------------
terms of a possible settlement and refer the same for -
a) Arbitration ----------------------
b) Conciliation ----------------------
c) Judicial settlement including settlement through Lok Adalat; or ----------------------
d) Mediation
----------------------
(2) Where a dispute has been referred -
----------------------
a) for arbitration or conciliation, the provisions of the Arbitration and
Conciliation Act, 1996 (26 of 1996) shall apply as if the proceedings ----------------------

Notes for arbitration or conciliation were referred for settlement under the
provisions of that Act;
----------------------
b) to the Lok Adalat, the court shall refer the same to the Lok Adalat,
---------------------- in accordance with the provisions of sub section (1) of Section 20
of the Legal Services Authorities Act, 1987, (39 of 1987) and all
---------------------- other provisions of that Act shall apply in respect of the dispute so
referred to the Lok Adalat;
----------------------
c) for judicial settlement, the court shall refer the same to a suitable
---------------------- institution or person and such institution or person shall be deemed
to be Lok Adalat and all the provisions of the Legal Services
----------------------
Authorities Act, 1987, (39 of 1987) shall apply as if the dispute
---------------------- were referred to a Lok Adalat under the provisions of that Act;
d) for mediation, the court shall effect a compromise between the
----------------------
parties and shall follow such procedure as may be prescribed.
---------------------- ORDER - X
---------------------- Examination of parties by the Court
---------------------- Under Order X various provisions including and not limited to opting for any of
the ADRs, abolition of untouchability and working towards the equality before
---------------------- law and equal protection of laws.
---------------------- 1A. Direction of the court to opt for any one mode of alternative dispute
resolution: After recording the admissions and denials, the court shall
---------------------- direct the parties to the suit to opt either mode of the settlement outside
the court as specified in sub section 1 of Section 89. On the option of the
----------------------
parties, the court shall fix the date of appearance before such forum or
---------------------- authority as may be opted by the parties.
1B. Appearance before the conciliatory forum or authority: Where a suit
----------------------
is referred under Rule 1A, the parties shall appear before such forum or
---------------------- authority for conciliation of the suit.
---------------------- 1C. Appearance before the court consequent to the failure of efforts of
conciliation: Where a suit is referred under Rule 1-A and the presiding
---------------------- officer of conciliation forum or authority is satisfied that it would not be
proper in the interest of justice to proceed with the matter further, then,
---------------------- it shall refer the matter again to the court and direct the parties to appear
---------------------- before the court on the date fixed by it.
By amending the Court Fees Act 1870, the CPC Amended Act 1999,
---------------------- provides for the refund of the court fee to the plaintiff if in case the matter
---------------------- is referred to the alternate dispute resolution system under the Section 89
of the CPC.
----------------------
----------------------
----------------------

Notes
----------------------
Multiple Choice Multiple Response. ----------------------
1. According to the section 89 the court can refer the dispute for
----------------------
settlement to:
i. Arbitration ----------------------
ii. Conciliation ----------------------
iii. Lok Adalat ----------------------
iv. Gram Panchayat
----------------------
----------------------
1.5 POWER AND LIMITATIONS OF LAW
----------------------
The courts must try the cases which come before them based on their jurisdiction.
The power to entertain the case or administer justice is based on the place of the ----------------------
commission of the crime or the cause of action that has arisen. The jurisdiction
----------------------
is also based on the subject matter or the pecuniary limits of the litigation. The
court may have the original or the appellate jurisdiction. The District Courts ----------------------
and the High Courts have both the original as well as the appellate jurisdiction.
Hence the power of the Civil or the Criminal Courts pertains to their particular ----------------------
jurisdictions as prescribed by the respective Codes. A statute or an Act, may
----------------------
specifically and expressly bar a certain court to entertain a particular type
of litigation. For example, a civil court is not allowed to decide questions of ----------------------
religious nature. The nature, place of cause of action or the criminal act of the
case decides the jurisdiction of the court. Very rigid adherence to the procedural ----------------------
laws hinders the rendering of justice. It imposes certain limitations on the
----------------------
power of the courts and the law. Jurisdiction of a court is the power to hear
the case and decide the cause. Hence in a way it also decides the power of an ----------------------
individual’s capacity to chase for a suitable solution. The non-existence of any
of the conditions of the limits of jurisdiction will make the judgement a nullity ----------------------
or completely annulled.
----------------------
1.6 THEORIES OF DISPUTES ----------------------
In the logical sense, a dispute means that it can be an act of omission on one ----------------------
of the parties or the commission of an act by the other party which raises a
contention of law or fact. Dispute also refers to the fight or a quarrel between ----------------------
the parties. ----------------------
Causes of Dispute: Disputes arise due to difference of opinions or sociological
----------------------
or psychological factors. Causes of disputes differ depending upon the nature
of the wrong or crime, persons, places or the status of the parties. Sociological ----------------------
factors are based upon the wealth, income, power, caste, race or religion of the
parties. It is mainly due to inequalities of the above mentioned causes. There ----------------------

Notes are rights and duties entrenched in each individual. For example, every citizen
or an individual has a right to life and personal liberty, right to reputation, etc.
---------------------- The opposite of legal duty is legal wrong. One person’s duty becomes another’s
right. Disputes can be of legal, moral and of tortuous nature.
----------------------
The different types of legal liabilities are: civil liability, criminal liability,
---------------------- remedial liability, penal liability, vicarious liability and strict or absolute liability.
Breach of a legal duty is due to the carelessness on the part of the wrong doer and
----------------------
hence it is known as negligence. The obligation is synonymous of a legal duty
---------------------- and also it is a co-relative right. Breach of contractual obligations, or of express
warranties, or commission of a fraud, misrepresenting, misappropriation of
---------------------- goods or money, negligent misrepresentation, all of these often lead to disputes.
---------------------- Litigation is the development of disputes. People file and fight cases in the
court for the redressal of their misery and loss suffered by them. It is when the
---------------------- disputing parties have often exhausted all the remedies available to them; they
approach the courts in the form of litigation.
----------------------
Objectives of Litigation: To try to drag the court matter so that the maxim
---------------------- ‘Justice delayed is justice denied’ fits the bill. Mutually beneficial structure
by employing litigation reducing techniques and use of regional networks as
----------------------
practised by the western world is the best objective of litigation. The need
---------------------- of the hour is to expeditiously identify and narrow the differences. Criminal
law is characteristic for the exceptionally serious probable consequences or
---------------------- sanctions for failure to abide by its rules. Five objectives are widely accepted for
enforcement of the criminal law by giving punishments, retribution, deterrence,
----------------------
rehabilitation, restitution and incapacitation.
---------------------- Theories and Stages of Litigation: There is no concrete theory regarding
---------------------- the litigation based on various Indian and foreign decisions. The legislative
history of the law is best left to be interpreted by the Courts from time to time
---------------------- though some of the pioneering theories help to resolve the litigation pretty fast
to the satisfaction of the litigating parties. Certain innovative theories have
---------------------- to be applied to reduce the burdens of courts to the four stages of litigation
---------------------- being: Pre-trial research, expert opinions and bringing the Indian cases to the
international standards, and providing protection to the cases involving human
---------------------- rights violations.
---------------------- The legal system of India is too rigid and technically biased. Enormous delays,
irreversible complications, exorbitant clauses, higher costs of litigation and
---------------------- heavy use of conventional dispute resolution systems lead to inordinate delay
in dispensing justice to the needy. Common man dare not go to anywhere near
---------------------- precincts of the court for getting redressal for his dispute. Hence there is a need
---------------------- for alternate dispute resolution systems to be in place.
---------------------- Summary
---------------------- ●● The settlement of disputes or the adjudication of the litigation through the
---------------------- Courts is known as the Judicial Dispute Resolution System.

●● The law has evolved from the Romanian Law and Indian law is derived Notes
from the principles of British Law. There is a differentiation between the
Civil and Criminal Law. Disputes are an intangible part of humans as ----------------------
there are differences of opinion, but the conventional methods of dispute
resolution are proving to be too rigid and time consuming thereby denying ----------------------
justice to the aggrieved party. ----------------------
●● Hence the need for the amendment for the section 89 of the CPC was felt
and it has given the powers to the court to refer matters to the arbitrators, ----------------------
mediators and negotiators. ----------------------
Keywords ----------------------
●● ispute: It refers to a quarrel between a party asserting a right and the

D ----------------------
other party denying the liability or the non-performance of the obligation, ----------------------
or a duty.
●● Supreme and Subordinate Legislation: Law enacted by the Parliament ----------------------
is known as the Supreme Legislation and the delegated legislation is ----------------------
known as the Subordinate Legislation. Crimes are considered as offences
against the State and prosecutors have been appointed by the Government ----------------------
to carry out criminal cases before Courts of Law.
----------------------
●● CPC and CrPc: The Civil courts must follow the procedure based on
the rules and regulations as codified in the Civil Procedure Code. The ----------------------
Criminal Courts must follow the procedure as laid down in the Criminal
Procedure Code. ----------------------
●● ADR: Alternative Dispute Resolution System. ----------------------
----------------------
----------------------
1. How has the law evolved in ancient times?
----------------------
2. What do you mean by Judicial Dispute Resolution?
3. Write some of the main characteristics of Judicial Dispute Resolution? ----------------------
4. What are the main principles of Judicial Dispute Resolution? ----------------------
5. Write the structures of the hierarchy of Civil and Criminal Courts in India. ----------------------
6. How many types of civil wrongs are there?
----------------------
7. What is the amendment carried out to the Section 89 of the CPC?
----------------------
8. In what ways can the delays in deciding legal cases be reduced?
----------------------
----------------------
----------------------
----------------------

Notes Answer to the Check your Progress
---------------------- Check your Progress 1

1. The suit is commenced with the filing of the_______
----------------------
iv. Plaint
----------------------
Fill in the blanks.
---------------------- 1. Equity was one of the main sources of English Laws.
---------------------- 2. Customs are the practices evolved out of the daily use, convenience and
necessity.
----------------------
3. Legislature is the competent body to make laws.
---------------------- 1. The Indian Penal code, 1960 was prepared by Lord Macaulay.
----------------------
Multiple Choice Multiple Response.
----------------------
1. According to the section 89 the court can refer the dispute for settlement
---------------------- to
---------------------- i. Arbitration
ii. Conciliation
----------------------
iii. Lok Adalat
----------------------
---------------------- Suggested Reading

---------------------- 1. Goldber, Stephen B., Frank E.A. Sander, Nancy H. Rogers and Sarah
Rudolph Cole. 2012. Dispute Resolution: Negotiation Mediation & Other
----------------------
Processes.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Litigation
UNIT
2
Structure:
2.1 Theories and Stages of Litigation

2.2 Advantages and Disadvantages of Judicial Dispute
Resolution
2.3 Hierarchy of Courts in India
2.4 Conflict Resolution Initiatives of the SC
2.5 Tribunals – Meaning and Characteristics
2.6 Establishment of Administrative Tribunals in India
2.7 Types of Tribunals and Benches
2.8 Consumer Protection Councils
Summary
Key Words
Suggested Reading
Litigation 17
Notes
Objectives
----------------------
----------------------
• Explain what litigation is
----------------------
• Identify and analyze different types of rights and duties
---------------------- • Describe different types of courts and Benches
----------------------
2.1 THEORIES AND STAGES OF LITIGATION
----------------------
---------------------- Introduction
Many key features of the Indian Constitution are directly taken from the provisions
---------------------- of the Government of India Act of 1935, which had not been implemented fully,
---------------------- had a great impact on the Constitution of India. Although the Constitution is
federal in nature having strong unitary features, in case of emergencies it takes
---------------------- unitary structure. The litigation process, the Indian Legal System, the Indian
law is based on the British common law model of jurisprudence. Each state in
----------------------
India has its own laws of litigation. It offers litigants different types of courts,
---------------------- based on the nature of the solution being sought, together with the appellate
forums. Now let us study the theories, stages and the basis for the hierarchy of
---------------------- different courts in India.
---------------------- Indian Legal System:
---------------------- The litigation in India includes a single hierarchy of courts and much of the
modern India law is based on the substantial American and European Law.
---------------------- Litigation is a very complex and time taking process in India. Despite the various
---------------------- ways in which justice may be sought, there are regular complaints that justice
is not being done and delivered through the courts. Hence this gives credibility
---------------------- to the old proverb that “justice delayed is justice denied”. Our judicial system
has been entangled in severe condemnation for its huge backlog, stringency of
----------------------
procedure, excessive costs and endless delays in adjudication of disputes.
---------------------- Characteristics of Litigation:
---------------------- ●● There has to be an extensive pre trial research.
---------------------- ●● There has to be a deliberate desertion of subtle issues by the parties.

●● rivolous appeals are to be curtailed leading to a clogging of backlogs of
F
---------------------- cases.
---------------------- ●● The cases have to be brought to an international standard.
---------------------- ●● ew common sense rules should help to reduce the adamant nature of
F
litigants.
----------------------
●● awyers must resort to the proper application of legal theories and must
L
---------------------- keep aside their own unnecessary legal theories. Lawyers must act in

conformity with the law in force, to the law, and the law that is current Notes
and recent and applicable.
●● The adherence to the Doctrine of Strict Liability. ----------------------
The adversarial character of litigation in combination with the requirement ----------------------

of procedure makes the judiciary incompetent to address the established
problem of court blockage. Delay in disposal of cases are due to several ----------------------
reasons such as considerable number of old and pending cases, shortage of ----------------------
courts, frequent adjournments sought by lawyers, etc. Temporary motions
to hold-up trial have become commonplace. There are more than 40 lakh ----------------------
cases pending in the 21 High Courts in the country. The situation in the
subordinate courts is no different as they are inundated with a backlog of ----------------------
over 2 crore cases.
----------------------
A large administrative arrangement has been developed to route the
amount of case filings. In recent years, there have been many reforms ----------------------
in the judicial system, such as amendments to Civil Procedure Code ----------------------
for timely disposal of cases, addition of new courts and appointment
of new judges, setting up of a judicial reforms committee for providing ----------------------
recommendations for judicial reforms, etc.
----------------------
Under the Criminal Law, the Principles of Natural Justice and Fairness
are the basis of the Code of Criminal Procedure, 1973, (CrPC). A person ----------------------
accused of any crime or a wrong doing, should be given an equal possibility
and a chance to be heard and to defend him. There are provisions in CrPC ----------------------
related to the issue of process and summons. Provisions in Section 161
----------------------
(3) and provision in Section 162 of the code state that any statement
recorded during the course of investigation, shall not be signed by the ----------------------
person making the statement. “No person accused of any offence shall
be compelled to be a witness against himself.” It is completely based on ----------------------
principle of natural justice that the parties in dispute should be given equal
----------------------
chance to be heard and the final decision must be completely based on the
merits of the arguments presented by both the parties. There are certain ----------------------
innovative theories which help to resolve the litigation faster and to the
satisfaction of the litigating parties. The average Indian is not confident ----------------------
in the matters of legal knowledge that affects his day to day life. The
majority of the Indian population does not have a complete knowledge of ----------------------
the personal rights and liberties guaranteed to them by the Constitution of ----------------------
India. Therefore the adaptation and the application of the proper law have
become very important. ----------------------
Stages of Litigation: ----------------------
For different civil cases, the Schedule to Limitation Act, 1963 prescribes
----------------------
different limitation periods. A time limit starts from the date on which cause of
action or the dispute arose. The time taken for obtaining the copy of judgments, ----------------------
etc. is excluded in case of any appeal. To protect the interests of the petitioner, a
civil court can award ex parte order at the first occasion itself, generally till the ----------------------
next date of hearing by way of an interim relief termed as temporary injunctions
and interlocutory orders. ----------------------
Litigation 19
Notes Procedure for initiating a Civil Litigation in India
●● filing a plaint/application
----------------------
●● issue of notice or summons by the Court to defendant(s) or respondent(s)
---------------------- ●● appearance of defendant(s) and filing of written statement or the response
---------------------- ●● framing of ‘issues’ between the parties
●● recording of evidence of petitioner
----------------------
●● recording of evidence of defendant(s) or respondent(s)
----------------------
●● hearing of oral arguments and
---------------------- ●● Declaration of the judgment, decree by the Court.
---------------------- Procedure of a Criminal Trial:
●● In respect of offences punishable with death, life imprisonment or
----------------------
imprisonment for a term exceeding seven years, the trial is conducted in a
---------------------- Sessions Court after being forwarded to the court by a magistrate.
●● In Summons Cases, there is no need to frame a charge.
----------------------
●● he HC can empower Magistrates of First Class to try certain offences in
T
---------------------- a summary way.
---------------------- The stages of a criminal case are as follows:
●● Registration of FIR.
----------------------
●● ommencement of investigation and collection of evidence by
C
---------------------- investigating agency.
During this time, the accused persons can be arrested.
----------------------
●● Production of accused before Magistrate within 24 hours of his arrest.
----------------------
●● or further investigation, the accused to be remanded to police custody or
F
---------------------- to judicial custody for interrogation of the accused.
●● ail hearing before appropriate court in bailable offence – generally the
B
----------------------
arguments of the defence counsel is denied by the public prosecutor.
---------------------- ●● fter investigation is completed, if investigating agency feels a prima
A
facie case is made out, then a Charge sheet is filed in the Court by the
----------------------
Public Prosecutor.
---------------------- ●● I n case no prima facie case is made out, a final report is filed by the police,
in the Court.
----------------------
●● fter hearing the public prosecutor and the counsel for defence a decision
A
---------------------- is taken by the Court on the question of the Charge sheet.
---------------------- ●● he Court is empowered to reject the Charge sheet, and hence the accused
T
is discharged.
---------------------- ●● hen the Court accepts that a prima facie case is made out, it frames the
W
---------------------- charges, and posts the case for trial.
●● he Court can reject the final report, and hence can direct the police
T
---------------------- to further investigate the case. At this stage, the case goes back to the

commencement of investigation stage. Then it further directs the case to Notes
be posted for trial. The case goes to next stage of the framing of charges
by the court. ----------------------
●● raming of Charge by Court: At this stage if the accused pleads guilty to
F ----------------------
the Charge, and based on the gravity of the crime, the Court may either
convict the accused on the basis of his pleading guilty or further post the ----------------------
case for trial.
----------------------
●● I n case the accused does not plead guilty, the case is posted for trial and
the trial commences, by the process of the examination of witnesses and ----------------------
other evidence placed on record.
----------------------
●● hen the examination of prosecution witnesses by public prosecutor,
T
marking of exhibits, and the cross-examination by defence counsel is ----------------------
done.
----------------------
●● The statement of the accused is recorded under section 313 of the CrPC.
●● I f defence wants to, it can examine its defence witnesses, who are then ----------------------
cross examined by the public prosecutor.
----------------------
●● he Public Prosecutor and the defence counsel present their final
T
arguments. The prosecutor then sums up the prosecution case and the ----------------------
accused is allowed to reply.
----------------------
●● ased on the evidence, examination and the cross examination, the Judge
B
then pronounces the Judgment and Sentence which leads to either the ----------------------
acquittal of the accused, or the Conviction of the accused. The CrPc lists
----------------------
out a range of compoundable offences under the Indian Penal Code, of
which 21 may be compounded by the particular aggrieved party without ----------------------
the consent of the court.
●● n accused can also be withdrawn from prosecution at any stage of trial
A ----------------------
with the permission of the court, under the provisions of CrPC. ----------------------
●● I n case of a conviction, there will be arguments of the public prosecutor
and the defence counsel on the amount of the sentence of the accused. ----------------------
●● n the court passing the Judgment, an appeal can be filed by party
O ----------------------
aggrieved by the judgment on either the acquittal or the conviction or the
reduction of the sentence of the accused. ----------------------
●● uring the stage of the Appeal, notice is issued to the opposite parties, for
D ----------------------
the arguments to be placed before Appeal Court by the defence counsel
and the public prosecutor. ----------------------
●● Then the Judgment of the Appeal Court is passed. ----------------------
It is understood that a criminal liability cannot be passed on to the
----------------------
heirs and the legal representatives of a person, who is said to have been
responsible of the offence in question. If in case the legal heirs are sent ----------------------
notice regarding the same, then it is an abuse of the procedure of court.
One can move the High Court for quashing of the said complaint by filing ----------------------
a petition under Section 482 of the Code of Criminal Procedure. The
----------------------
pendency of a civil proceeding relating to a particular matter concerned
Litigation 21
Notes is no bar to launch a criminal proceeding in case the action complained
amounts to a criminal offence, too.
----------------------
2.2 ADVANTAGES AND DISADVANTAGES OF JUDICIAL
----------------------
DISPUTE RESOLUTION
---------------------- Advantages:
---------------------- ●● It is believed to be the conventional settlement system preferred by the
litigants.
----------------------
●● he Courts follow systematic procedure based on rules and regulations
T
---------------------- which results in the cases being presented to the best advantage and a
detailed inquiry into the facts of the case.
----------------------
●● he Courts have authority, dignity and honour which attract the public
T
---------------------- confidence.
●● he CPC was amended as the new Section 89 was introduced; providing for
T
---------------------- the resolution of disputes outside Court, through arbitration, conciliation,
---------------------- mediation, or the judicial settlement through Lok Adalat.
●● he Court proceedings may sometimes lead to alternately settle the
T
---------------------- disputes by a compromise or negotiation.
---------------------- ●● Legal Aid is made available by the State for the poor people.
●● The principles applied by the Courts are reasonable.
----------------------
Disadvantages:
----------------------
●● Indian courts continue to suffer from a grave accumulation of cases.
---------------------- ●● Judicial resources have been inadequate to correct the situation.
---------------------- ●● I ndian Court system is a totally neglected and outdated system which has
far outlived its efficacy and function.
---------------------- ●● here is no judicial regulation or any case management system in place
T
---------------------- for the regular delays in the working of the courts or the development of
the lawsuits.
---------------------- ●● acancies of the Judges and thus the posts lying vacant are a grave
V
---------------------- problem.
●● I t was almost a command by the Parliament to courts that conciliation
---------------------- and mediation should be given preference over judicial dispute resolution
in each and every litigation, as an alternative, to bring a harmonious
----------------------
settlement amongst the parties to the litigation, either before going to the
---------------------- trial or after it.
●● inor disputes are also dragged to the court and hence the backlog of
M
----------------------
cases piles up adding to the delay in their Redressal.
---------------------- ●● rolonged litigation causes stress, concern and anxiety. Litigation is
P
dragged and prolonged beyond imagination. The delays are widespread.
---------------------- No litigant expects finality within a reasonable time.
---------------------- ●● The litigation involves high costs.

●● here is overcrowding of the court cases. At a rough estimate, it would
T Notes
take a minimum of 324 years for their final disposal, provided there
is no new filing of any suit. The rate of the suit disposal is also very ----------------------
disappointing. Over two million cases are pending in 18 High Courts and
more than 200,000 cases are pending in the Supreme Court for admission, ----------------------
interim reliefs or final hearing. ----------------------
●● ormally it takes between 5 to 15 years for a case to be decided in an
N
Indian Court. ----------------------
●● he unnecessary delay in the duration of the litigation process is the
T ----------------------
inappropriate framing of charges on the part of the authorities, like the
police authorities who are responsible for the primary stages of the ----------------------
enquiry and legal proceedings. Decisive evidence and the witnesses, in ----------------------
the early phases of the case history are often manipulated.
●● The First Information Report (FIR) sometimes lacks accuracy in reporting. ----------------------
●● rom small court fees to the litigant’s attendance in the court being
F ----------------------
mandatory, there are an extremely high number of legal formalities and
paper work that a litigant must go through if he wishes to be even heard ----------------------
in the court of law.
----------------------
●● Illiteracy and poverty is a major hurdle for the litigants to go to the courts.
----------------------
Check your Progress 1 ----------------------
Multiple Choice Single Response. ----------------------

1. The statement of the accused is recorded under section __________ ----------------------
of the CrPC.
----------------------
i. 135
----------------------
ii. 315
iii. 313 ----------------------
iv. 133 ----------------------
2. A person can move to the High Court for quashing of the complaint ----------------------
by the lower court by filing a petition under Section ____ of the Code
of Criminal Procedure. ----------------------
i. 248 ----------------------
ii. 482
----------------------
iii. 428
----------------------
iv. 284
Fill in the blanks. ----------------------
1. __________ and ________ are a major hurdle for the litigants to go ----------------------
to other courts.
----------------------
Litigation 23
Notes
Activity 1
----------------------
---------------------- Try to follow at- least one case from the stage of its filing. And note down
the chronological order in which case proceeds in the court.
----------------------
---------------------- 2.3 HIERARCHY OF COURTS IN INDIA

----------------------
a) Supreme Court of India (SC):
---------------------- ●● he Supreme Court of India is at the apex of the hierarchy for the
T
entire country and 21 HCs at the top of the hierarchy in each State.
----------------------
●● The SC is a court of record.
----------------------
●● The SC can even punish for contempt of any lower courts in India.
---------------------- ●● nder Article 32, the SC is the guardian of the constitution and is
U
the supreme guardian of the people’s fundamental rights too.
----------------------
●● rticles 226 and 32, which give the HC and the SC their power of
A
---------------------- judicial review, respectively, are the basic features of the constitution
which cannot be amended.
----------------------
●● J urisdiction: Jurisdiction in Latin means juris meaning “law” and
---------------------- dicere meaning “to speak”. It is the realistic power granted to an
officially constituted legal body. It refers to indicate the geographical
---------------------- area or subject-matter to which such power applies.
---------------------- ●● rt 131 bestows original jurisdiction in any dispute arising between:
A
Center and one or more states b) Center and one or more states on
---------------------- one side and one or more states on another, c) two or more states.
---------------------- ●● nder the original jurisdiction, individuals cannot bring a suit
U
against the Government of India. The suit must involve a question
---------------------- of law or fact on which a legal right depends.
---------------------- ●● rt 132 Appellate Jurisdiction - Constitutional: The SC is the
A
highest court of appeal in the country. A person can appeal to the SC
---------------------- under its appellate jurisdiction if:
---------------------- ●● h e is not satisfied with the decision of the lower courts or the High
Courts or
----------------------
●● u nder the Art 132(1) an appeal can be filed in the SC if the order
---------------------- appealed is against the judgement of a HC in civil, criminal, or any
other proceedings or
----------------------
●● i f the case involves a question of law as to the interpretation of the
---------------------- constitution and if the HC, under 134A certifies that the case be
heard by the SC.
---------------------- ●● rt 136 Special Leave to appeal by SC: the SC is authorized to grant,
A
---------------------- based on its own discretion, special leave to appeal from any order,

judgement, decree, or any sentence, in any case or matter, passed by Notes
any court or tribunal in the territory of India. It was decided by the
SC that a private party can appeal against the acquittal even if the ----------------------
state government has not appealed under exceptional circumstances
and to be used sparingly. ----------------------
●● rt 137 gives the SC, the power to review its own judgement, under
A ----------------------
some exceptional circumstances.
----------------------
●● rt 139 A gives the SC the power to withdraw before itself any case
A
or cases from High Courts if it feels that these cases involve the ----------------------
similar question of law which is of general importance.
----------------------
●● rt 141 provides that the judgement of the SC is binding on all
A
courts, except on itself. ----------------------
●● rt 143 provides that if at any time it appears to the President of
A
----------------------
India, that a question of law or fact has arisen or is likely to arise
which is of public importance and that an expedient opinion of the ----------------------
SC is required, then he may refer it to the SC.
----------------------
Art 143(2) gives the power to the SC to give opinion on matters that
are not permitted under Art 131. ----------------------
b) High Courts (HC):
----------------------
The High Court works under the direct supervision of the Supreme Court
of India and is generally the last court of regular appeals. ----------------------
Jurisdiction of the High Courts ----------------------
●● erritorial Jurisdiction: The jurisdiction of the High Court
T
runs over a state, a union territory or a group of states and union ----------------------
territories. The jurisdiction of each High Court varies according to ----------------------
the States.
●● he HCs have a jurisdiction over a hierarchy of subordinate courts
T ----------------------
such as the civil courts, family courts, criminal courts and various
----------------------
other district courts.
●● he principal civil courts of original jurisdiction in the state are the
T ----------------------
High Courts and they can try all offences including those punishable
----------------------
with death.
●● he main thrust of High Courts’ cases consists of Appeals from lower
T ----------------------
courts and writ petitions under the Article 226 of the Constitution of
----------------------
India. Under Art 129 and 215, the SC and the High Courts have the
power to punish anybody for civil and criminal contempt. ----------------------
●● rit Jurisdiction: The person whose constitutional or legal right has
W
been infringed or for the enforcement of a legal duty, has the right ----------------------
to apply to the HC under Art 226 of the Constitution, in the form ----------------------
of orders or writs, including writs in the nature of habeas corpus,
mandamus, prohibition, quo warranto and certiorari. This power is ----------------------
even wider than that of the SC. The HC can issue orders of any kind
that the situation may require. ----------------------
Litigation 25
Notes ●● nless there is a violation of statutory rights by any statutory
U
authorities, the SC has held that the extraordinary jurisdiction of
---------------------- HC cannot be exercised in any disputes relating to property rights
of the private parties.
----------------------
●● he writ jurisdiction of the HC can run only in the territorial
T
---------------------- jurisdiction of the High Court and the person or authority who is
seeking the writ must lie in that jurisdiction according to Art 226.
----------------------
●● he remedy available is a discretionary remedy and the High Court
T
---------------------- has the option to accept or refuse a petition if there is an alternate
remedy available elsewhere.
----------------------
●● ffect of Laches or delay: Remedy under 226 is allowed within a
E
---------------------- reasonable time only. Under exceptional cases and circumstances,
and after admitting the “condonation of delay” petition filed by the
---------------------- appellant, and if there is a reasonable cause for delay in seeking
---------------------- justice, the HC may admit the appellant’s appeal.
c) Lower Courts or the District Courts:
----------------------
The District Court or Additional District courts exercise their jurisdiction
---------------------- both on the original and the appellate side in the civil and criminal matters
arising in that particular district.
----------------------
The District Court or Additional District court exercises jurisdiction both
---------------------- on original and appellate side in civil and criminal matters arising in
the District. The territorial and pecuniary jurisdiction in civil matters is
---------------------- usually set in concerned state enactments on the subject of civil courts.
---------------------- On the criminal side, jurisdiction is almost exclusively derived from code
of criminal procedure. This code sets the maximum sentence which a
---------------------- district court may award which currently is capital punishment.
---------------------- The Labour Court is generally found in every District that has the original
jurisdiction under the provisions of various Labour Laws and related
---------------------- enactments. Appeal and revision from the judgments and orders of the
Labour Courts lie to the City Civil & Sessions courts.
----------------------
Jurisdiction of Civil Court under Section 9 of CPC:
----------------------
The courts shall have jurisdiction to try all suits of a civil nature except
---------------------- for suits of which cognizance is either explicitly or impliedly barred.
---------------------- ●● he competent legislature can bar jurisdiction of civil courts with

T
respect to a particular set of suits of a civil nature.
---------------------- ●● uits impliedly barred are those suits which are barred by general
S
principles of law or on the ground of public policy.
----------------------
●● ivil court also has jurisdiction to see whether tribunal and quasi-
C
---------------------- judicial bodies or any constitutional power acted within the
jurisdiction.
----------------------
●● he Civil Court has appellate jurisdiction over all lower courts in
T
---------------------- the district on both the civil and criminal matters.

The Lower Court Setup: Notes
●● he lower courts usually consist of a Senior Civil Judge Court,
T
Principal Junior Civil Judge Court and the Junior Civil Judge Court ----------------------
on the civil side. ----------------------
●● n the criminal side there are the Chief Judicial Magistrate’s Courts,
O
Judicial Magistrate Court of First Class and the Judicial Magistrate ----------------------
Court of Second Class. ----------------------
●● I f a particular law makes a provision to the effect, then certain
matters on criminal or civil side cannot be tried by a court other than ----------------------
the District Court. Thus the District Court has original jurisdiction ----------------------
in such matters.
●● ppeals from the district courts lie directly to the High court of the
A ----------------------
state concerned.
----------------------
●● J urisdiction of civil courts can be divided on the Pecuniary or
Monetary and Territorial or Area Wise categorization. ----------------------
●● he amount of pecuniary jurisdiction is different for all District
T ----------------------
Courts under the particular High Courts as decided by the respective
High Court Rules. Many of the HCs do not have a pecuniary ----------------------
jurisdiction. Hence all civil suits are to be tried before the District
----------------------
Courts, and only the appeal lies before High Court.
Foreign judgment: ----------------------
In India, the Indian Code of Civil Procedure, 1908 (CPC) governs the ----------------------
implementation of decrees, whether foreign or domestic.
----------------------
A foreign judgment can be enforced in India in one of two ways:
1. Directly by filing before an Indian Court an Execution Petition for an ----------------------
Execution Decree, under Section 44A of the CPC, from Courts in
----------------------
“reciprocating territories”. It is defined in explanation 1 to Section 44A of
India’s Civil Procedure Code as: “Any country or territory outside India ----------------------
which the Central Government may, by notification in the Official Gazette,
declare as a reciprocating territory.” Decrees of any of the Superior Courts ----------------------
of any reciprocating territory are treated executable as a decree passed by
the local Indian Courts; otherwise the decree is not directly executable in ----------------------
India. ----------------------
E.g.: The United Kingdom and Canada. Presently, the United States of
America is not declared as a “reciprocating territory” by the Government ----------------------
of India. That is, it is a “non-reciprocating territory”. ----------------------
2. Secondly by filing a suit upon the foreign judgment/decree: That is,
judgments from “non-reciprocating territories”, can be enforced only by ----------------------
filing a law suit in an Indian Court based on the foreign judgment and ----------------------
judgments from “non-reciprocating territories”, may be construed as a
cause of action for the said suit. The foreign judgment is considered only ----------------------
as evidentiary. The suit limit for filing is three years from the date of the
foreign judgment. ----------------------
Litigation 27
Notes A foreign judgment is considered definite by an Indian Court if such
judgment has been pronounced by a court of competent jurisdiction and
---------------------- is based on the merits, and on accurate view of international law of the
case, and it must have followed principles of natural justice. It must not
---------------------- have been brought on by any kind of fraud, and may also be in relation
---------------------- to jurisdictional facts, and it does not continue a claim on a violation of
any law in force in India. Enforcing a foreign judgment in India could be
---------------------- delayed, depending upon the complication of the issues caught up in the
litigation. The Supreme Court of India has also laid down broad principles
---------------------- to be followed by Indian courts concerning foreign judgments in marital
---------------------- matters.
---------------------- 2.4 CONFLICT RESOLUTION INITIATIVES OF THE SC

---------------------- Settlement in the Union Carbide Corporation vs. Union of India
---------------------- ●● The SC turned towards the off-the-court settlement of the victims’ disputes
in one of the major environment blunders and a grave crime against the
---------------------- humanity, regarding the Bhopal Gas Plant. It was unavoidable as it had
---------------------- taken a very long time to almost over 35 years to come to any conclusion.
●● A highly criticized settlement was reached.
----------------------
●● The powerful multinational corporation would have loved to drag on the
---------------------- case and fight each and every legally challengeable issue.
●● It was one of the best initiatives taken by the SC for the dispute resolution
----------------------
of the victims’ case for damages.
---------------------- ●● The SC evolved the concept of comprehensive rule of absolute and strict
liability.
----------------------
●● The SC applied the alternative dispute resolution machinery.
---------------------- Tamil Nadu Mass Dismissal Case:
---------------------- ●● The SC negotiated a very expensive settlement to protect the employments
of the striking employees.
----------------------
●● In 2002, the Supreme Court invented a new ‘curative petition’ to ‘cure’
---------------------- injustice.
---------------------- Justices M.B. Shah and Justice Lakshmanan’s observation in the Tamil Nadu
Mass Dismissal case was that the right to strike is not a legal or moral right,
---------------------- need to be reviewed.
---------------------- ●● The strike was encouraged by the authoritative action of the Tamil Nadu
Government to revise pension payments.
---------------------- ●● The law required the impracticable while mass dismissing 1, 70,000
---------------------- Government employees, the ‘mass dismissal’ possibly being the worst
known to Indian labour history.
---------------------- ●● The Supreme Court stopped the case by allowing the employees to pursue
---------------------- their solution on the Government’s indiscretion and Ordinance in Chennai.

●● The SC uncared for the necessity of the striking employees and also Notes
ignored the question of the Constitutional force of the mean amendment
contrary to the letter and spirit of the law, to the Essential Services law. ----------------------
●● The SC ruled that there is no fundamental right to go on strike. ----------------------
----------------------
State True or False.
1. Art 145 provides that the judgment of the SC is binding on all courts, ----------------------
except on itself. ----------------------
2. Supreme court is court of record.
----------------------
3. Appeals from the district courts lie directly to the High court of the
state concerned. ----------------------
4. In India, the Indian Penal Code (IPC) governs the implementation of ----------------------
decrees, whether foreign or domestic.
----------------------
Activity 2 ----------------------
----------------------
Find out whether there is any difference between the writ issuing power
of SC and HC if yes then what it is? ----------------------
----------------------
2.5 TRIBUNALS – MEANING AND CHARACTERISTICS ----------------------

The inadequacy of the ‘Judge-population ratio’ has led to the below ----------------------
mentioned provisions of our Constitution. The Parliament is empowered to
establish additional courts for the administration of justice under Article 247, ----------------------
Administrative Tribunals under Article 323-A and tribunals relating to Income
----------------------
Tax, Foreign Exchange, Industrial and Labour disputes, etc. under Article 323-
B of the Constitution of India, to ease the backlog of cases of the Courts. These ----------------------
tribunals do not restrict the jurisdiction of the High Court under Art 226 or 227
and of Supreme Court under Art 32. ----------------------
Meaning of Tribunal: ----------------------
It means any court, judicial body, or board which has quasi-judicial functions ----------------------
or a committee appointed to adjudicate on claims of a particular type. It is also
referred to as an officer or body with the power to state judgment on a matter ----------------------
based upon the evidence or to conduct judicial business. It need not follow
the procedures of the regular civil or criminal courts. The Judges are called or ----------------------
referred to as the Chairman, Officer, Commissioner Etc. It is a Latin term, and
----------------------
derives its origin from the superior chair where the tribunes administered justice.
For example Labour Courts, Industrial Disputes Courts, Fast Track Courts, ----------------------
Motor Accident Claims Tribunals, Central and State Appellate Tribunals, Debt
Recovery Tribunals, National Tax Tribunal, Consumer Courts, and Family ----------------------
Litigation 29
Notes Courts have been established under the special powers granted to the Parliament
by the Constitution of India.
---------------------- Characteristics of Tribunals:
---------------------- ●● I t enables the flexibility of standards for the execution of law.
---------------------- ●● These tribunals are the authorities outside the regular court system in India.
●● They are not courts of law but are quasi judicial in nature.
---------------------- ●● They are not bound by the procedural method or the strict rules of evidence
---------------------- as followed by the regular courts.
●● They are agencies created by the specific laws to give a ruling upon disputes
---------------------- arising in the course of the execution of the provisions of the said enactment.
---------------------- ●● They are required to follow the Principles of Natural Justice.
●● They have a special benefit over the ordinary courts because they
---------------------- guarantee easy accessibility, liberty from details, are expeditious and
have the expert knowledge of that particular subject.
----------------------
●● They are the by-product of the “Laissez Faire” theory meaning the Welfare
---------------------- State policy.
---------------------- ●● The technical experts from the field of operation of the particular
enactment are appointed; hence they are able to solve the cases with
---------------------- expert knowledge of the subject matter.
●● They have the power to summon witnesses, administer oath, and also
---------------------- compel the production of evidence.
---------------------- ●● They are supposed to be independent of any administrative meddling in
the discharge of their duties.
----------------------
●● They offer a cheap and decentralized mode of the adjudication of disputes.
---------------------- ●● Appeals from the tribunals lie directly to the HCs.
---------------------- ●● All tribunals in India are created under a statute.
●● They are subject to a judicial review and the writ jurisdiction of the higher
---------------------- judiciary.
---------------------- ●● Appeals against the orders of the tribunal lie to the SC by a special leave
under the Art. 136 of the Constitution.
----------------------
----------------------
---------------------- Multiple Choice Multiple Response.

1. Which one of the following are the characteristics of tribunal?
----------------------
i. They have the power to summon witnesses, administer oath,
---------------------- and also compel the production of evidence.
---------------------- ii. They are required to follow the Principles of Natural Justice.
iii. They are not courts of law but are quasi judicial in nature.
----------------------
iv. Appeals against the orders of the tribunal cannot lie to the SC
---------------------- by a special leave petition.

2.6 ESTABLISHMENT OFADMINISTRATIVE TRIBUNALS Notes
IN INDIA
----------------------
Administrative tribunals have emerged not only in India but also in many other
countries with the purpose of providing a new type of justice. These tribunals ----------------------
are manned by practical experts in the field, with elasticity in operations,
----------------------
simplicity in procedures that have gained importance in the settlement process.
The Parliament enacted the 42nd Amendment Act, 1976 inserting the Articles ----------------------
323A and 323B for the provision of the establishment of the Administrative
Tribunals in India. The Parliament had enacted the Administrative Tribunals ----------------------
Act, 1985 and established the Administrative Tribunals in November, 1985 at
Delhi, Mumbai, Calcutta and Allahabad. There are 17 Benches of the Tribunal ----------------------
located in the country at the seat of a High Court, with 33 Division Benches. ----------------------
Circuit sittings are being held at various centers in India. They are the bodies
under the Executive branch of the government. They deal with the settlement ----------------------
of disputes with respect to employment and conditions of service of persons
appointed to public services. ----------------------
Administrative law covers the whole extent of public administration and ----------------------
including the Statutes, Charters, Rules, Regulations, Procedures and Decisions,
etc. that are required for administration of the Administrative Tribunals in India. ----------------------
They are not a court of law nor are they a decision-making body. They are a good
----------------------
mixture of both these things. They are necessary to act judicially and carry out
quasi-judicial functions. Only in certain matters, they have the powers of a civil ----------------------
court. They are not bound by the complicated rules of evidence or procedure.
There are certain single member tribunals and multi member tribunals. The ----------------------
Chairman is supposed to be or to have been a Judge of the HC or the District
Court. The Chairman of the Central Administrative Tribunal is a sitting or ----------------------
retired Judge of a High Court. ----------------------
Some of the Administrative Tribunals set up by the Parliament and the relevant
enactments are Central Administrative Tribunal (CAT), Customs and Excise ----------------------
Revenue Appellate Tribunal (CERAT), Monopolies and Restrictive Trade ----------------------
Practices Commission (MRTPC), Election Commission (EC), Foreign Exchange
Regulation Appellate Board (FERAB), Income Tax Appellate Tribunal, Railway ----------------------
Claims Tribunal and Industrial Tribunal. The CAT has the power to prescribe its
own rules of practice for discharging its functions subject to the Administrative ----------------------
Tribunals Act, 1985 and Rules made there under.
----------------------
2.7 TYPES OF TRIBUNALS AND BENCHES ----------------------
The Parliament has constituted different types of Tribunals under the Constitution ----------------------
to deal with the particular subject matter jurisdiction.
----------------------
These Tribunals
●● Accident claim tribunals – To try the Claims of the victims of various ----------------------
road accidents. ----------------------
●● or rail accidents and complaints regarding the railways, the Railway
F
Claims Tribunals are established under the Railways Act. ----------------------
Litigation 31
Notes ●● dministrative tribunals have been established in each State of our
A
country for the reason of conducting various punitive actions against the
---------------------- superior and other government employees, as well as for any other related
grievance.
----------------------
●● entral Administrative Tribunal accords adjudication of matters relating
C
---------------------- to employment and conditions of service of persons appointed to Indian
public services in Union Government.
----------------------
●● he Company Law Board (CLB) is an appellate board for disputes
T
---------------------- relating to company or corporate affairs.
---------------------- ●● entral Information Commission (CIC), a newly established commission,

C
is the uppermost power to grant entrée to Indian citizen under their Right
---------------------- to Information Act.
●● ustoms, Excise & Service Tax Appellate Tribunal (CESTAT) is the
C
----------------------
highest Appellate authority to deal with disputes relating to excise,
---------------------- customs and service tax laws.
●● ompetition Commission is the commission set up for adjudication of
C
----------------------
disputes concerning Monopolies and Restrictive Trade Practices and
---------------------- competition.
●● ebt Recovery Tribunal (DRT)/Debt Recovery Appellate Tribunal
D
----------------------
(DRAT): The DRT adjudicates matters regarding recovery of debts,
---------------------- beyond a certain limit, and are dealt with by the DRT under the provisions
of Debt Recovery Act. Appeal lies to the DRAT.
----------------------
●● o-operative courts are courts with original jurisdiction, established for
C
---------------------- hearing the cases directly filed under the various Co-Operative Laws.
●● I ncome Tax Appellate Tribunal (ITAT) deals against the order passed by
---------------------- Commissioner of Income tax as the Appellate body.
---------------------- Advantages of the Administrative Tribunals are, they offer flexibility,
they are inexpensive, they offer some relief to the ordinary courts from
---------------------- the burden of more filings, and they also possess the ability to experiment
---------------------- some new standards of procedure.
Some of the disadvantages are that they have no set procedures and are
---------------------- a reversal of Rule of Law. They sometimes tend to violate the Principles
---------------------- of Natural Justice. They sometimes do not follow any precedents as they
sometimes hold summary trials.
----------------------
----------------------
---------------------- State True or False.

---------------------- 1. Income Tax Appellate Tribunal (ITAT) deals against the order passed
by Commissioner of Income tax as the Appellate body.
---------------------- 2. The Labour Law Board (LLB) is an appellate board for disputes
---------------------- relating to company or corporate affairs.

2.8 CONSUMER PROTECTION COUNCILS Notes
Consumer Protection Act postulates for providing the enhanced security of the ----------------------
interests of consumers and to make provision for the organization of consumer
councils at the Central, State and District level to promote consumerism levels ----------------------
for the purpose of spreading consumer awareness and other authorities for
----------------------
the resolution of consumers’ disputes and related matters. As per the Act, the
objects of the Consumer Councils shall be to endorse and protect the rights of ----------------------
the consumers such as:
----------------------
●● he right to be protected against the marketing of goods and services
T
which are dangerous to life and property. ----------------------
●● he right to be conversant about the quality, quantity, strength, clarity,
T ----------------------
standard and price of goods or services, as the case may be so as to protect
the consumer against unfair trade practices. ----------------------
●● he right to be guaranteed, and access to a range of goods and services at
T
----------------------
reasonable prices.
●● he right to be heard and to be guaranteed that consumer’s interests will
T ----------------------
be given due consideration at suitable forums.
----------------------
●● he right to look for Redressal against unjust trade practices or restricted
T
trade practices or dishonest exploitation of consumers. ----------------------
●● The right to consumer education. They have very little statutory powers. ----------------------
Central Consumer Protection Council:
----------------------
●● he Consumer Protection Act empowers the Central Government to set
T
up a Central Consumer Protection Council. ----------------------
●● he Minister in charge of consumer affairs in the Central Government is
T ----------------------
the Chairman and other official and non-official members representing
such interests as may be prescribed. ----------------------
●● he membership of the Council is restricted to 150 members under the
T ----------------------
Consumer Protection Council Rules of 1987.
●● The term of the Council is three years. ----------------------
●● he Central Government may constitute a standing working group from
T ----------------------
amongst the members of the Council under the Chairmanship of the
Member Secretary of the council. ----------------------
●● he Council meets as and when necessary to monitor the functioning of
T ----------------------
the recommendations of the Council.
----------------------
●● t least one meeting of the Council shall be held at such time and place
A
as the Chairman may think fit. ----------------------
●● It shall consist of the following members, not exceeding 35, namely:
----------------------
●● he Minister in-charge of Consumer Affairs in the Central Government
T
who shall be the Chairman of the Central Council. ----------------------
----------------------
Litigation 33
Notes ●● t he Minister of State or the Deputy Minister in charge of Consumer Affairs
in the Central Government who shall be the Vice-Chairman of the Central
---------------------- Council.
---------------------- ●● he Minister in-charge of Consumer Affairs of two of the States from
T
each region as mentioned in Schedule I to be changed by rotation on
---------------------- expiration of the term of the Council on each occasion.
---------------------- ●● n administrator of a Union Territory, to represent a Union Territory, as
A
mentioned in Schedule II, to be changed by rotation on expiration of the
---------------------- term of the Council on each occasion.
---------------------- ●● wo Members of Parliament—one from the Lok Sabha and one from the
T
Rajya Sabha.
---------------------- ●● epresentatives of the Central Government Departments and autonomous
R
organizations concerned with consumer interests shall not exceed five.
----------------------
●● he Registrar, National Consumer Disputes Redressal Commission, New
T
---------------------- Delhi.
---------------------- ●● epresentatives of consumer organizations from amongst the Indian
R
members of the International Organization, namely, Consumer
---------------------- International – not exceeding six, to be nominated by the Central
Government.
----------------------
State Consumer Protection Council:
----------------------
●● he State Governments establish the State Consumer Protection Councils
T
---------------------- empowered by the Consumer Protection Act.
●● I ts Chairman is the Minister in-charge of consumer affairs in the State
----------------------
Government and such number of other official or non-official members
---------------------- representing such interests as may be prescribed by the State Government.
●● en nominees of the Central Government are also appointed to the State
T
----------------------
Consumer Councils.
---------------------- ●● The State Council shall meet as and when necessary.
---------------------- ●● At least two meetings shall be held every year at such time and place as
the Chairman may think fit.
---------------------- District Consumer Protection Council:
---------------------- ●● he Consumer Protection Act provides for the establishment of a District
T
Consumer Protection Council in every district in order to encourage and
---------------------- defend the rights of consumers, within the district.
---------------------- ●● I ts Chairman is the District Collector and such number of other official and
non- official members representing such interests as may be prescribed by
---------------------- the State Government.
---------------------- ●● It shall meet as and when necessary.
---------------------- ●● At least two meetings shall be held every year.

●● The Chairman is to decide the time and place of the meeting.
----------------------

Notes
----------------------
1. The membership of the Central protection Council is restricted to 150
----------------------
members under the Consumer Protection Council Rules of 1987.
i. 100 ----------------------
ii. 120 ----------------------
iii. 150 ----------------------
iv. 140
----------------------
Summary ----------------------
----------------------
●● here are different stages of litigation in Indian procedures. The Supreme
T
Court is the apex court having a variety of Jurisdictions. ----------------------
●● Consumer Protection Act postulates for providing the enhanced security
of the interests of consumers and to make provision for the organization ----------------------
of consumer councils at the Central, State and District level to promote ----------------------
consumerism levels for the purpose of spreading consumer awareness
and other authorities for the resolution of consumers’ disputes and related ----------------------
matters.
----------------------
Keywords ----------------------
●● CPC: Civil Procedure Code. ----------------------

●● Cr.P.C: Criminal Procedure Code. The Parliament enacted the 42nd ----------------------
Amendment Act, 1976 inserting the Articles 323A and 323B for the
provision of the establishment of the Administrative Tribunals in India. ----------------------
●● onsumer Protection Councils: Consumer Protection Act postulates for
C ----------------------
providing the enhanced security of the interests of consumers and to make
provision for the organization of consumer councils at the Central, State ----------------------
and District level to promote consumerism.
----------------------
Self-Assessment Questions ----------------------
1. What are the advantages and disadvantages of Judicial Dispute Resolution? ----------------------
2. Write about the Supreme Court’s jurisdiction. ----------------------
3. How many types of writs does a High Court issue? ----------------------
4. Write the setup of the Indian courts in the ascending order of hierarchy.
----------------------
5. What are the different types of Tribunals in India?
----------------------
Litigation 35
Notes 6. Write about the working of the Administrative Tribunals of India.
7. How can the foreign judgements be enforced in India?
----------------------
8. What are the different types of Consumer Protection Councils in India?
----------------------
9. Write the working of the Consumer Councils of India.
----------------------
----------------------
----------------------
Multiple Choice Single Response.
----------------------
1. The statement of the accused is recorded under section __________ of the
---------------------- CrPC.
---------------------- iii. 313

2. A person can move to the High Court for quashing of the complaint by
---------------------- the lower court by filing a petition under Section ____ of the Code of
---------------------- Criminal Procedure.
ii. 482
----------------------
Fill in the blanks.
----------------------
1. Iliteracy and poverty are a major hurdle for the litigants to go to other
---------------------- courts.

----------------------
1. False
----------------------
2. True
---------------------- 3. True
---------------------- 4. False

Multiple Choice Multiple Response.
----------------------
1. Which one of the following are the characteristics of tribunal?
----------------------
i. They have the power to summon witnesses, administer oath, and
---------------------- also compel the production of evidence.
---------------------- ii. They are required to follow the Principles of Natural Justice.
iii. They are not courts of law but are quasi judicial in nature.
----------------------
----------------------
---------------------- 1. True
---------------------- 2. False

Check your Progress 5 Notes
----------------------
1. The membership of the Central protection Council is restricted to 150
members under the Consumer Protection Council Rules of 1987. ----------------------
iii. 150 ----------------------
----------------------
Suggested Reading
----------------------
1. Sridhar, Madabhushi. 2006. Alternative Dispute Resolution.
ISBN 9788180381157. ----------------------
----------------------
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----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
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----------------------
----------------------
----------------------
----------------------
----------------------
Litigation 37
Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
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----------------------
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----------------------

Alternative Dispute Resolution (ADR)
UNIT
3
Structure:
3.1 Need for ADR

3.2 History of ADR
3.3 Comparative Study of ADR - Negotiation, Mediation,
Conciliation and Arbitration
3.4 Unique Features of ADRs
3.5 State Authorities of ADR
3.6 ADR in Indian Statutes
3.7 Main Process of ADR
3.8 Innovative Methods and Usefulness of ADR
3.9 Difficulties, Advantages and Disadvantages of ADR
Summary
Key Words
Suggested Reading
Alternative Dispute Resolution (ADR) 39

Notes
Objectives
----------------------
----------------------
• Explain the need for ADR
----------------------
• Analyze the comparative study of ADR- negotiation, mediation,
---------------------- conciliation and arbitration
• Identify and analyze the advantages and disadvantages of ADR
----------------------
----------------------
3.1 NEED FOR ADR
----------------------
Introduction
---------------------- We have learnt about the meaning, evolvement and history of ‘Law’. We have
---------------------- also learnt the different types of courts and their hierarchy in India and the
various streams of law, including the Civil and the Criminal Law, the different
---------------------- theories of disputes and litigation, the advantages and the disadvantages of
Judicial Dispute Resolution. Now in the following unit we shall study the
----------------------
alternative dispute resolution mechanism as adopted in India and the world over.
---------------------- As truly said by Abraham Lincoln “Discourage litigation; persuade your
---------------------- neighbors to compromise whatever you can. Point out to them how the normal
winner is often a loser in fees, expenses, cost and time”. The statement is true
---------------------- to the last point because after such a long inordinate delay and the expenses
incurred, it is the winner who loses it anyway. A dispute is said to be one
----------------------
which often occurs when someone rejects the wishes of another, and that other
---------------------- person whose wishes are rejected, complains. Disputes are a normal part of
everyday human nature, involvement and communication. It is more of a costly
---------------------- method of resolving disputes. In the conventional litigation, the result is always
---------------------- adversarial meaning it is a “Win-Lose” situation whereas in an ADR it is always
a “Win-Win” situation. The judge always upholds the claim of one of the parties
---------------------- and rejects the claim of the other losing party. The judge in a court trial is
appointed by the State whereas the third party in an ADR is a neutrally decided
----------------------
person to act as either a negotiator or an arbitrator. The disagreement is still
---------------------- there even after the judge delivers the judgement. There is strong resentment in
the warring minds. People do not want to forget the situation that led them to
---------------------- the dispute at all. The conflict is still very much there in their minds.
----------------------
3.2 HISTORY OF ADR
----------------------
Before formation of law Courts in India, people were settling the matters of
---------------------- dispute by themselves by mediation. The mediation was normally headed by a
---------------------- person of higher status and respect among the village people and such mediation
was called in olden days “Panchayath”. The Panchayath will be headed by
---------------------- a person of higher statues, quality and character who will be deemed to be

unbiased by people of the locality, called Village headman and he was assisted Notes
by some people of same character or cadre from several castes in the locality.
The dispute between individuals and families will be heard by the Panchayath ----------------------
and decision given by the Panchayath will be accepted by the disputants. The
main thing that will be considered in such Panchayath will be the welfare of the ----------------------
disputants as also to retain their relationship smooth. Similarly in the case of ----------------------
dispute between two villages, it will be settled by Mediation consists of person
acceptable to both villages and people from both the villages and the decision ----------------------
of such mediation will be accepted by both village people. The disputes in olden
days seldom reached law Courts. They will be even settling the complicated ----------------------
civil disputes, criminal matters, family disputes etc. Such type of dispute ----------------------
resolution maintained the friendly relationship between the disputants even
after resolution of their disputes. But subsequently, this type of Panchayath has ----------------------
failed due to intervention of politics and communal feeling among the people.
----------------------
History during the British Rule in India: The East India Company’s rule went
on for more than a century and a half years. After the East India Company’s ----------------------
takeover by the British crown, the law was more codified and there was in
----------------------
place a certain amount of organized justice system. Procedural laws were also
in place. Hence there was change- over from the traditional mode of rendering ----------------------
justice to the more organized way of the hierarchy of courts. The kings and the
emperors were ripped off their powers. There was chaos everywhere due to the ----------------------
unsettlement of the traditional tribunals or the Hindu and Muslim courts which
----------------------
gave way to the British Judges who knew nothing of the traditional Hindu or
the Muslim law. The British law and the procedural law did not suit the Indian ----------------------
mindset.
----------------------
History regarding the Arbitration in India: As early as 1781, the British
Crown had issued certain regulations regarding arbitration and it said “the judge ----------------------
do recommend and so far as he can without compulsion and prevail upon the
parties to submit to the arbitration by one person, to be mutually agreed upon ----------------------
by the parties”. The proviso further added that no award of the arbitrator or
----------------------
arbitrators could be set aside under exceptional circumstances. Fresh regulations
were issued in 1787 which provided for the courts to promote the arbitration in ----------------------
cases where the value of the suit or property did not exceed Rs. 200/-. Further, the
Regulation VII of 1833 i.e. after fifty odd years, the Governor of Bombay issued ----------------------
the Regulation which provided for the arbitration agreement to be in writing.
----------------------
It also talked about the prearranged time limit within which the arbitrator had
to pass an award. In 1857, the Civil Procedure Act was passed which provided ----------------------
for the two types of arbitrations. One was with the intervention of the court and
the other without the intervention of the court. This Act was amended in 1882 ----------------------
which provided for the choice of the arbitrators or the arbitrators to be named
----------------------
in the agreement. The ambit of arbitration was also extended to future disputes
as well. Thereupon as the Civil Procedure Code had replaced the earlier Civil ----------------------
Procedure Act of 1857 and 1882, the CPC had made place for all the provisions
for the Indian Arbitration Act, 1899 and appended them to the CPC. They were ----------------------
then re- enacted as the separate Act of 1940. But due to this Act, there was too
----------------------
much interference of the courts at every stage of the arbitration proceedings.

Notes The courts were flooded with the cases relating to the arbitration awards and the
courts too in turn played their role as the appellate courts. Hence in 1985, the
---------------------- UN General Assembly adoption of the recommendations of the United Nations
Commission on International Trade Law (UNCITRAL)’s Model Law and Rules
---------------------- on Arbitration, led to enactment of the Indian new Arbitration and Conciliation
---------------------- Act of 1996 thereby repealing the earlier Act of 1940.
The amendment of the Section 89 of the CPC in 2002 has recommended the ADRs
----------------------
in the form of conciliation, mediation and pre-trial settlement methods. Consumer
---------------------- forums, Ombudsman for a particular Industry, namely the Banking, Insurance
or the Pension matters of the Central Government have been in existence for
---------------------- settling the long pending issues relating to the insurance claims, motor accident
claims, pensions, and recruitment, employment and administration matters of
----------------------
the same. As a Directive Principle of State Policy, Article 51(d) of the Indian
---------------------- Constitution provides for the settlement of International disputes byArbitration.
ADR must help achieve the goals as set out in the Indian Constitution, the
---------------------- common goal of the Government being “to secure to all the citizens of India
Justice social, economic and political, Liberty, Equality and Fraternity”. For the
----------------------
growth of ADR methods of dispute resolution, the Department of Legal Affairs
---------------------- setup an autonomous body, the International Centre for Alternative Dispute
Resolution (ICADR). The Chairman being the Minister for Law & Justice. The
---------------------- main goal being to promote the Alternative Dispute Resolution system to try to
reach an early settlement of disputes.
----------------------
International Scenario of ADR: In China and Japan, mediation was used
---------------------- as a chief way of dispute settlement since the 12th century. In ancient times
including in India, unofficial dispute resolution was used in many cultures of the
----------------------
world. In Japan, statutory law enforces ADR. Judges themselves get involved
---------------------- expansively during the in-court settlement; every Japanese Judge is expected,
to take a case in the direction of conclusion both by law and by litigants alike.
---------------------- The Judge acts as an intermediary. The concept of ADR played a significant part
in various forms, like in case of Philippines, the local area leader tried to resolve
----------------------
trivial issues which were there amongst the parties.
----------------------
----------------------

---------------------- 1. ANADR it is always a “Win-Win” situation.
2. The amendment of the Section 89 of the CPC in 2002 has recommended
----------------------
the ADRs only in the form of conciliation.
----------------------
---------------------- Activity 1
----------------------
From the official website of UNCITRAL, mention the UNCITRAL rules
---------------------- for arbitration.

3.3 COMPARATIVE STUDY OF ADR - NEGOTIATION, Notes
MEDIATION, CONCILIATION AND ARBITRATION
----------------------
The various types and methods of ADR are:
----------------------
●● Negotiation: As defined by Dr. Myneni, “negotiation is a non-binding
procedure in which discussions between the parties are initiated without ----------------------
the intervention of third party with the object of arriving at a negotiated
----------------------
settlement of the dispute”. The parties to the dispute take part voluntarily
in the ADR process of negotiation. If the parties so desire, any sort of a ----------------------
trivial dispute but not a grievous crime can be resolved by negotiation
for example domestic and matrimonial matters, political rivalry, financial ----------------------
matters, partition of the property, etc. It is mainly a communication way of
----------------------
resolving the dispute. It advances as the parties further negotiate amongst
themselves. The negotiation can be based on an agreement, or consensus ----------------------
also can be had between the parties as to the resolution of the dispute. In
negotiation, both the parties sit face to face and they themselves settle the ----------------------
disputes. These oral or written agreements can be implemented by the
----------------------
parties themselves. There is no authentication as such by any third party.
There has to be commitment on both the parties to a negotiation. There ----------------------
is always reciprocity and a mutual benefit for the parties. It is generally a
co-operative course of action. Unless one party co-operates, there can be ----------------------
no room for negotiation. The parties can go to the court and seek judicial
----------------------
proceedings, at any time for the settlement of their dispute.
●● Mediation is a form of negotiation that is assisted by an impartial, neutral ----------------------
and an unbiased third party called a mediator. In mediation, the neutral
----------------------
third party plays a more dynamic role in putting forth his own ideas for
the settlement of the dispute. To understand the issues, facts, and positions ----------------------
of the parties, a mediator conducts informal joint and separate meetings
with the parties in question. If successful, mediation is capable of coming ----------------------
to a conclusion of the dispute and thus can reach an agreement.
----------------------
●● Conciliation is a non-binding process in which an unbiased or a neutral
third party, the conciliator, helps the parties to a dispute in reaching an ----------------------
equally beneficial, acceptable and decisive resolution of the dispute. It ----------------------
seeks to reconcile the warring parties. It makes the parties to continue
their association despite conciliation proceedings as a result of the ----------------------
conciliation. Conciliation seeks to make the goodwill grow among the
parties. In conciliation, a settlement agreement may be drawn with ----------------------
the help of the conciliator. As in arbitration, this settlement agreement ----------------------
is authenticated by the conciliator and can be enforced as an award.
Conciliation proceedings cannot be terminated unilaterally by any one of ----------------------
the parties to conciliation but it can be terminated by giving in writing to
the other party and the conciliator. In conciliation, one party may invite ----------------------
the other party by writing to it but that other party may refuse to accept ----------------------
the proposal. In conciliation, the dispute has to be there already. It cannot
be started in anticipation of any dispute. In conciliation, the conciliator is ----------------------

Notes barred from acting as an arbitrator, or as a lawyer of any of the parties, to
which he is acting as a conciliator. Conciliation award does not have any
---------------------- evidentiary value in judicial proceedings.
---------------------- ●● Arbitration is a process of ADR where the parties to a dispute table their
case in front of a neutral arbitrator or panel of arbitrators who provide a
---------------------- verdict called an award. The award may be obligatory or non-obligatory
based upon the circumstances of each case. Arbitrators can be chosen
----------------------
by the parties. It is a binding process where the parties have submitted
---------------------- their dispute to an arbitration tribunal for adjudication as a result of their
agreement. The parties can get institutional and administrative help from
---------------------- the government. The parties can choose the number of arbitrators. The
parties also can choose the method of arbitration. The arbitration tribunal
----------------------
can pass interim orders. The parties to arbitration can seek the court’s help
---------------------- in asking for an interim order even before the starting of the arbitration
process. The arbitrator does not only help resolve the dispute, but also
---------------------- helps the parties to reach an agreement and a solution. Arbitration is a
quasi judicial process wherein the parties do have to submit the documents
----------------------
as evidence for inspection. The arbitrator gives an “Award”. It is an
---------------------- authentication that the settlement has been reached. The award has to be
enforced and implemented as a judgement. This can be done without any
---------------------- procedural formalities. This process cannot be terminated unilaterally.
Arbitration has to be based on the clauses in the contractual agreement or
----------------------
by way of a separate arbitration agreement which mention that in case of
---------------------- any dispute, the parties would appoint an arbitrator to resolve the dispute.
The arbitrator may be a known person to the parties or any mutually
---------------------- agreed person. The arbitration award has got an evidentiary value. It can
be used in any judicial proceedings in the same subject matter.
----------------------
---------------------- Activity 2
----------------------
Make a comparison table of the above mentioned ADR processes.
----------------------
---------------------- 3.4 UNIQUE FEATURES OF ADRS

---------------------- As studied in earlier units, and as compared with litigation:
---------------------- ●● DR offers more solution that is cost-effective and it is more efficient.

A
●● DRs can be invoked only when both the parties are definitely interested
A
---------------------- in settling the issue at hand.
---------------------- ●● lawyer’s role may or may not be required.
A
---------------------- ●● DR is also generally faster and simpler.
A
●● There is no bias at all.
----------------------
●● ADR can be put to use at any time and they can even be terminated by
---------------------- anyone and at any of the stages of the process.

●● The parties are free to choose the arbitrator or the conciliator of their Notes
choice.
----------------------
●● he chosen third party can follow the rules of natural justice.
T
●● he parties are also free to choose the rules of procedure.
T ----------------------
●● ADR unburdens the courts to adjudicate upon the more serious matters ----------------------
and hence is especially suited to simple and clear cut cases.
●● We have seen and read in the newspapers that many under trials are locked ----------------------
up in jails for very trivial and silly matters. ----------------------
●● ADR also helps those who are deprived of funds and the lack of legal
knowledge. ----------------------
●● It puts the people at an ease by way of informality of the proceedings as ----------------------
people are more scared of the court procedures.
----------------------
●● I t is a privately and confidentially operated mechanism.
●● I t is also a less disruptive mechanism. ----------------------
●● In ADRs, the help of a skilled expertise also can be engaged by way of a ----------------------
mediator.
----------------------
●● It is not an adversarial process but it is a Win-Win situation for both the
parties. ----------------------
●● Generally, the ADR proceedings are conducted in the manner as wished
by the parties. ----------------------
●● DR is meant to supplement the judiciary.

A ----------------------
●● he parties are free to go to the court at any stage of the ADR procedure.
T ----------------------
●● ADR can only act as an alternative to the litigation process.
----------------------
●● Some of the ADR procedures are quasi judicial in nature.
●● Some of the ADR systems are brought on by the intervention of the court ----------------------
or by mutual consent of the parties.
----------------------
●● ositive results can be expected through the ADRs.
P
----------------------
●● I n addition, ADR does a wonderful job by asking the perpetrator of the
offence or the one who has deprived the legal right to the other, by asking ----------------------
him to apologies and thus calm the victim.
----------------------
●● The ADR also allows the parties the benefit of providing them with the
chance to reduce resentment, get back to a sense of control, feel satisfied, ----------------------
superior, determine disagreement in a peaceful manner, and accomplish a
sense of righteousness in each individual case. ----------------------
●● ADR cannot set any precedence as in the case of litigations which can ----------------------
help in setting up a judicial precedence.
●● As mentioned earlier, in any litigation the one who wins after all is a ----------------------
kind of a loser because of the amount of efforts that he has put in and ----------------------
the escalation of the costs of the litigation involved. Thus, people are
more likely to be content with the result in an ADR. The idea of Conflict ----------------------

Notes Management through Alternative Dispute Resolution (ADR) has
introduced a new mechanism of dispute resolution.
----------------------
●● It helps in maintaining the friendliness among the parties to the dispute.
---------------------- ●● ADR often tries to rebuild the lost relationship of the parties.
---------------------- ●● In ADRs generally, after a lot of compromise the parties agree for a
settlement.
----------------------
●● ADRs are controlled by the parties themselves regarding the time spent,
---------------------- costs incurred and the delays.
---------------------- ●● In some forms of ADRs, the parties eventually make the decision.
---------------------- ●● The cultural factors play an important role in the dispute resolution.
---------------------- ●● ADR can often result in a customized solution for the mutual benefit of
the parties.
---------------------- ●● ADR often tries to go to the root cause of the dispute.
---------------------- ●● The place as well as the pace of the ADRs can be mutually decided upon
by the parties themselves.
----------------------
●● The speedy delivery of justice can be expected through the ADRs by
---------------------- persistently, relentlessly and ceaselessly pursuing the matter and taking it
---------------------- to the desired result.
●● The Lok Adalat generally go to the doors of the people by conducting a
----------------------
camp in their villages for solving any trivial matters.
---------------------- ●● • Regularly holding the Insurance Adalat, Pension Adalat and the Motor
---------------------- Accident Claim Adalat helps in the speedy delivery of justice.
●● • Finally, ADR offers the warring or the litigating parties and everyone
---------------------- who is in any ways involved in the dispute to get something or the other
---------------------- as benefit.

----------------------
Fill in the blanks.
----------------------
1. ADR of entries to ________ lost relationship of the parties.
---------------------- 2. ADR is a __________ and ________ operated mechanism.
----------------------
---------------------- Activity 3
----------------------
Try to attend the arbitration proceeding to witness the advantages of ADR
---------------------- mechanism over court.
----------------------

3.5 STATE AUTHORITIES OF ADR Notes
Providing legal aid is somewhat of a human right in the light of a conflict. ----------------------
The UN General Assembly by imposing an obligation on the States of the
world, that have ratified the Universal Declaration of Human Rights, makes ----------------------
them obligatory for the promotion of the respect for the human rights, and for
----------------------
their effective recognition and implementation. Article 14 of the International
Covenant on Civil and Political Rights 1966 mentions that an accused must be ----------------------
considered as an innocent person until he is proved to be guilty of the charge.
The hearings of any impartial judicial tribunal shall be fair and just and must ----------------------
follow the principles of natural justice. The Article 14 as stated above also
----------------------
makes provision for the legal aid to the needy. Most of the countries that have
ratified the UN Resolution have also made the right to have assistance of a ----------------------
lawyer especially in criminal proceedings as their fundamental right under
their respective Constitutions. In the US, the sixth Amendment has guaranteed ----------------------
the above mentioned right as a Constitutional right and is made applicable
----------------------
in all states. In the US, the Legal Aid Corporation has been setup under the
management of the American bar Association for providing the services of ----------------------
the attorneys. The Japanese and the Chinese Constitutions have recognized
the right to counsel and free legal aid in a criminal trial to an accused. Article ----------------------
22 of the Indian Constitution provides that no person who is arrested shall be
----------------------
detained in custody without being informed, as soon as may be, of the grounds
of such arrest nor shall be denied of the right to consult and to be defended by ----------------------
a legal practitioner of his choice. This broadly speaks about the Constitutional
right of an accused person and the free legal aid and other services that he is ----------------------
entitled to. This is mainly because majority of the population in India is rural
----------------------
based and the people are unaware of their fundamental and legal rights. This
also tries to put an end to police atrocities. Article 21 also guarantees that no ----------------------
person shall be deprived of his life or personal liberty except according to the
procedure established by law, which also means that it is a fundamental right ----------------------
and irrespective of the status of the person, he has to be provided with free legal
----------------------
aid services too. It is also mandatory under the Article 39A of the Constitution’s
Directive Principles of the State Policy to provide equal justice and free legal ----------------------
aid to the needy persons. The State is under a mandatory obligation for not only
to provide free legal aid services but also to provide equal justice. Section 304 ----------------------
of the Cr. P C ensures that a needy person who does not have sufficient funds
----------------------
to engage the services of a lawyer shall be provided the same, at the expense of
the State. ----------------------
Lok Adalat: In the Indian scenario, where majority of the population is rural ----------------------
based and illiterate, there was a need for an informal ADR system for the
dispensation of speedy and inexpensive justice. Hence the Lok Adalat came into ----------------------
being. It was introduced in 1982. The first ever Lok Adalat was organized on
14th March 1982 at Junagadh, in Gujarat. It is an informal ADR system to put ----------------------
at ease the warring parties and try to settle the disputes as amicably as possible. ----------------------
The Lok Adalat system is based on the functioning style of mobile courts, the
legal camps and the Nyaya Panchayats, which were already in existence. The ----------------------

Notes Lok Adalat has proved to be a better alternative for the trial of petty money
suits, and small cause’s suits. In the Lok Adalat’ system of functioning, there
---------------------- is mediation, conciliation along with counseling of the parties. Discussions are
held with the parties and explanations are given to them regarding the strengths
---------------------- and weaknesses of their case. They are also enlightened about the advantages
---------------------- and the disadvantages of the ADR systems. The setting up of the Lok Adalat has
proved to be a good form of Conciliation. The award of the Lok Adalat is given
---------------------- the legal sanctity by the court.
---------------------- The jurisdiction of Lok Adalat is to try all cases of civil, criminal or revenue
disputes. It has to follow the principles of natural justice and fair play. For the
---------------------- appointment of the judges of the Lok Adalat, any judicial officer of the area
specified by the State or the District Authorities can be considered.
----------------------
The Legal Services Authority Act 1987 was brought into force on the 11th of
---------------------- October, 1995. This Act institutionalized the Lok Adalat. Under Sections 12
and 13 of the said Act, certain criteria are given for the provision of the free
---------------------- legal services to the weaker sections of the society. The criteria shall satisfy
---------------------- the authorities concerned regarding the financial status of the person who has
applied for the free legal services under the Act.
---------------------- The legal services that are offered are:
---------------------- • Payment of court fees, process fees, and all other charges,
---------------------- • drafting charges, preparing and filing of any legal proceedings,
---------------------- • cost of obtaining and the supply of certified copies of judgements, orders
and other documents of the legal proceedings,
----------------------
• Cost of preparation of paper book and expenses incidental thereto for use
---------------------- in legal proceedings.
---------------------- Activity 4
----------------------
Attend the Lok Adalat proceedings in your vicinity.
----------------------
---------------------- 3.6 ADR IN INDIAN STATUTES

----------------------
●● CPC: The Order 32-A Rule 3 of the CPC recognizes the ADR system.
---------------------- That means the ADR processes have been given the statutory authority
under the CPC. In civil matters the ADR mechanism can be pressed into
---------------------- service either voluntarily or through the intervention of the court. Cases
---------------------- of nuisance are dealt with the help of ADRs. Regulatory violations of the
technical kind of criminal cases can be solved and settled out of the court
---------------------- through ADRs.
---------------------- ●● Indian Evidence Act 1872: Section 20 of the Act, the Arbitrator’s power
to take into consideration the evidence adduced by the parties or upon
---------------------- enquiries, is recognised. .

●● Limitation Act is also applicable to the ADR processes. Notes
●● Industrial Disputes Act 1947: Section 12 of this Act states that the
dispute has to first go through the conciliation proceedings and only later ----------------------
on go the collective bargaining mode. In a way, Conciliation is mandatory ----------------------
for the dispute to proceed further in case of no settlement.
●● Hindu Marriage Act 1955: Section 23 of the Act has recognised the ----------------------
need for the ADR process. ----------------------
●● Family Courts Act 1984: To settle the family disputes and the domestic
disputes of matrimony, the Act has made it mandatory for the warring ----------------------
members to go through the conciliation process. The couples who apply ----------------------
for the divorce proceedings have to face the counselor first, each facing
him separately and then jointly. The report is then submitted to the court. ----------------------
●● Arbitration and Conciliation Act of 1996: The Act has acknowledged ----------------------
and has given credence to the parallel mechanism of the ADR.
●● Legal Aid: The Indian justice system has been brought to the door step of ----------------------
the poorest of the poor by providing him with the services of Legal Aid.
----------------------
This has been guaranteed under the Article 14 of the Indian Constitution
which envisages the equality before law and the equal protection of laws. ----------------------
●● Legal Services Authorities Act 1987: This Act was instrumental in
----------------------
setting up the Lok Adalat.
----------------------
----------------------
1. Which section of the HinduMarriageAct1955 has recognized the ----------------------
need for the ADR process?
i. 45 ----------------------
ii. 23 ----------------------
iii. 32 ----------------------
iv. 35
----------------------
----------------------
3.7 MAIN PROCESS OF ADR
----------------------
The different types of the ADR procedures have been in use for quite some time
in the foreign countries including the US. It is still a new phenomenon in India. ----------------------
There are as of now many ADR processes that are prevalent in India including
the foreign countries. All the following ADR processes are extra judicial in ----------------------
nature. These can be employed in all cases of disputes under the law. Some of ----------------------
them are listed below:
●● Negotiation: It is a non-binding voluntary process of ADR. It is mostly ----------------------
preferred by the Indian people. The process is initiated without the help of ----------------------

Notes any third party. The process is a non-planned process. The parties are free
to adopt any method and rules for negotiating their points for a settlement.
---------------------- In negotiation, the parties must be willing to arrive at settlement of their
dispute.
----------------------
●● Mediation: This method, which is a non-binding process, involves the
---------------------- services of a neutral, non-biased third party, acting as a mediator helps
the parties to reach a consensus regarding the disputable issues at hand.
---------------------- In mediation the parties make a brief introduction orally to the mediator
---------------------- regarding their points of dispute and make clear their position. The
mediator then holds separate confidential meetings with each of the
---------------------- parties and goes from the first party to the other party hopping between
the two holding the private sessions and the joint sessions too, and later
---------------------- summarizing the discussions of the meetings. These meetings are held
---------------------- until a settlement agreement is reached. It is rather an assisted way of
negotiation.
---------------------- ●● o-mediation is typically a process involving more than one mediator.
C
---------------------- ●● onciliation can be used along with mediation and negotiation. It is a
C
more organised form of the ADR. It is also a non-binding process. There
---------------------- is a non-biased third party acting as a conciliator for the parties to the
---------------------- dispute. The conciliator is chosen with the mutual consent of the parties.
The meetings are held separately with the individual parties at a time but
---------------------- whatever the allegations are hurled or made by the party against the other
party; they are to be disclosed to it for any comments. Unlike in mediation,
---------------------- the conciliator himself settles the disputes. Whereas in mediation the
---------------------- mediator shows the ways to the warring parties to reach for a settlement.
●● Arbitration is another of those binding ADR processes which are
---------------------- statutorily enforced.
---------------------- ●● Arbitrators can be chosen even before any dispute has arisen by way of
an agreement or by way of a clause in the contractual agreement. There
---------------------- may be a single or a panel of arbitrators. The arbitration award settles the
dispute taking it to finality.
----------------------
●● Partnering is a process whereby the parties having a common problem
---------------------- solve it cooperatively. It’s again a win-win situation for the parties. The
parties meet at regular intervals. The meetings are held in front of a neutral
----------------------
catalytic person who helps in trying to get to the solution.
---------------------- ●● Early Neutral Evaluation is a process by which the parties to a dispute
are made aware of the logical evaluation which is based on the merits
----------------------
and demerits of the dispute at hand. This procedure is carried out by the
---------------------- neutral third party.
●● Expert Appraisal is a type of ADR in which the expert individual
---------------------- investigates and gives his non-biased opinion which is a non-binding one.
---------------------- ●● Mini Trial or sometimes it is also known as Case presentation is an
ADR process whereby each party to the dispute presents its case in a
---------------------- concise manner to a panel of higher-ranking executives. It is generally

done in some large commercial value disputes. The presentation of the Notes
case to the higher executives brings out the strengths and weaknesses of
the dispute at hand. This then gives a way out for the settlement of the ----------------------
dispute through the help of a neutral non-biased advisor.
----------------------
●● Fast-Track Arbitration or Speed-up Arbitration is a process of
arbitration which is a type of an arbitration that is rendered in a short span ----------------------
of time involving much lesser expenditure.
----------------------
●● Hybrid Arbitration: In this type of ADR, the arbitration process is
amalgamated along with some of the other ADR processes. For example, ----------------------
arbitration process may be combined with the negotiation, mediation or
the conciliation processes. ----------------------
●● Med-Arb: It is a pre-agreed process for arbitration wherein the settlement ----------------------
of the dispute either by mediation or conciliation has failed. Here in this
process, the mediator first tries to settle the dispute but when it fails as ----------------------
agreed beforehand, the mediator settles the dispute in accordance with the ----------------------
arbitration procedure and passes an award which is binding.
●● MEDOLA: It is a process wherein if the parties fail to reach a settlement ----------------------
through mediation, the neutral person or the mediator selects the best final
----------------------
negotiated offers and this selection is binding on the parties.
●● Adjudication: It can also be called “private judging”. In this case, a ----------------------
neutral third party makes summary decisions without having to follow
----------------------
any of the rules of arbitration or litigation processes. This can also be
called as Fast-Track Adjudication. ----------------------
●● Concilio-Arbitration: The case or the dispute is to be processed
----------------------
informally and the non-binding award is passed as is done in the case of
court annexed arbitration. ----------------------
●● Court Annexed Arbitration: This is a scenario wherein the arbitrator
----------------------
is approved by the court. At the beginning, the neutral’s verdict is not
binding but it becomes binding when no party asks for further rehearing. ----------------------
Costs are to be incurred by the party seeking a rehearing.
●● Moderated Settlement Conference: This process is similar to the court ----------------------
annexed arbitration, only difference being that instead of the arbitrator, a ----------------------
panel or a group of third party is present to assist and pass the award.
●● Rent-A-Judge: It is introduced and sanctioned by law into some of the ----------------------
US jurisdictions wherein the parties to the dispute together approach the ----------------------
court for the appointment of a retired judge to be the referee. It is binding
upon the parties to pay the judge his fee, and the judge has to follow ----------------------
informal rules. The decision of the referee is enforceable by law.
----------------------
●● Summary Jury Trial: In the US where this is practiced, there is a mock
jury trial held which gives a perception as to the reaction of the real jury ----------------------
in future when later on the case is to be presented before them.
----------------------
●● High-Low Arbitration: As often used in the US, this is a process where
the parties agree to adjudication of their dispute having put in some ----------------------

Notes limitations on the range of variations and conditions as set out in the
award.
---------------------- ●● Ex aequo et bono: It means ‘Overriding the strict rule of law’, wherein
---------------------- the parties present their monetary claims and disputes before the panel
and the case is decided on a case by case basis.
----------------------
----------------------
---------------------- Match the following.

---------------------- i. Summary jury trial a. Pre—agreed process for arbitration where
in the settlement of the dispute it herby
---------------------- mediation or conciliation has failed.
---------------------- ii. Med-Arb b. private judging
iii. Partnering c. mock jury trial in US
---------------------- iv. Adjudication d. It is a process whereby the parties having
---------------------- a common problem solve it cooperatively.
----------------------
Activity 5
----------------------
---------------------- Enlist the extra judicial ADR techniques that are used worldwide other
than above mentioned ones
----------------------
----------------------
3.8 INNOVATIVE METHODS AND USEFULNESS OF ADR
----------------------
In a classless and democratic society, there are in place certain self reliant
---------------------- management methods including the dispute resolutions. In these cases, the
usefulness of ADR is often felt. In a democracy every citizen is free to take his
---------------------- own decision. There are two types of dispute resolution systems; litigative and
non-litigative methods. The non-litigative methods are more useful in nature
----------------------
because of the speedy processes and are less expensive too. The ADR can be
---------------------- either a formal or a non-formal dispute resolution process. Court annexed ADR
processes are some of the different types of ADRs. The ADR processes can be
---------------------- moulded to the satisfaction of the warring parties. Thus choosing an ADR has
become a creative skill of the litigants because of the flexibility that it offers. As
----------------------
the litigation process in India is adversarial in nature, because one loses and the
---------------------- other wins, that means as already mentioned above it is a “Win-Lose” situation
and not a “Win-Win” situation. The conflict still remains as a result of the award.
---------------------- The Article 14 of the Constitution guarantees equality before law and equal
protection of laws. Hence if a person is poor, it is the State’s duty to provide free
----------------------
legal aid to that person. The courts are inaccessible to the poor in our country.
---------------------- There is a big gap in the financial status of the people. This difference in status
sometimes makes it difficult for the poor people to seek justice. The right to
---------------------- legal aid is embodied in the Article 39Aof the Constitution. The Articles 14 and

21 play a supplemental role regarding the legal aid provisions of the Article Notes
39A. Hence it is said that all the ADRs should be made a part of the legal aid
programme. ----------------------
A mediator or a conciliator may adopt several methods at the same time to ----------------------
come to conclusion for the resolution of the dispute. In a mini-trial, an expert
in the subject matter of the dispute tries to sit with the management and tries to ----------------------
gain knowledge of the dispute. The management often comes to know its own
----------------------
strengths and weaknesses and even that of the other party, tries to negotiate with
that other party to resolve the dispute amicably. It is also a mode for the parties ----------------------
to enter into a solution. The other method of ADR is Early Neutral Evaluation
wherein the parties to the dispute are made aware of the sensible, pragmatic ----------------------
estimation of what is in store for the future if the case goes to trial. Hence more
----------------------
and more innovative methods of the ADRs are to be used to settle the disputes.
Anticipatory mechanisms are being adopted to resolve the employer-employee ----------------------
issues and human resources conflicts too.
----------------------
3.9 DIFFICULTIES, ADVANTAGES AND DISADVANTAGES
----------------------
OF ADR
Difficulties of ADRs: ----------------------
Sometimes the harmonious settlement of the dispute is not preferred in some of ----------------------
the following circumstances:
----------------------
●● In financial matters, for example, if one party owes some money to the
other party, that other party is just waiting for the finality of the award so ----------------------
that he gets back his money, as in an arbitration or litigation and does not
----------------------
look forward to any settlement of the dispute by other ADR methods.
●● ADR in the above case may be used as a delay mechanism thereby making ----------------------
that owed party to incur more extra costs. This may act as a disadvantage ----------------------
in following litigation or arbitration.
----------------------
●● ADRs cannot be used in cases of bodily injuries or grievous hurt. The
parties have no other option but must go to the litigation processes only. ----------------------
That means ADRs are not always useful in each and every case or disputes.
----------------------
●● Anon co-operative party can often disrupt the implementation of the
innovative ADR processes to arrive at an amicable solution. ----------------------
●● There has to be mutual trust among the parties that one can lead the other ----------------------
to the solution. This may encourage future claims.
Advantages of ADRs ----------------------
Dr. P.C. Rao, the former Secretary General of the ICADR and now the Judge ----------------------
of The International Tribunal for the Law of the Sea, Hamburg, Germany, has
----------------------
stated some of the following advantages of the ADR system:
●● The ADR process can be used any time during, before or after the judicial ----------------------
process has started, i.e. even when a subject matter is sub-judice, though ----------------------

Notes it can be more beneficial when the parties take recourse to ADR as soon
as the dispute has arisen.
---------------------- ●● It can be terminated at any time at any stage by any one of the parties.
---------------------- ●● It can be used in the reduction of the litigious issues between the parties.
---------------------- ●● As stated earlier, it reduces the cost of the resolution of the dispute and is
speedy in nature.
---------------------- ●● There are no rigid rules to be followed; hence the procedure is more
flexible.
----------------------
●● The parties can themselves initiate the ADR processes.
----------------------
●● ADR process can be used with or without the services and help of a
---------------------- lawyer.
●● Even an unsuccessful ADR procedure can still have some importance in
----------------------
terms of the understanding of the issues in question.
---------------------- ●● ADR helps in unburdening the work load of the courts. The parties can
come directly to the contentious issues without wasting much of their
---------------------- time in gathering evidence and the gathering of the witnesses for the trial
---------------------- as in a litigation process.
Disadvantages of the ADR system
----------------------
●● The unfamiliarity of the ADR process is the main hindrance in its
---------------------- implementation. The dispute resolution factor must be made to be
compulsorily laid in the contract or the agreement. In case of any dispute,
----------------------
the ambiguity regarding the non-mentioning of the possible dispute
---------------------- resolution methods in any contractual agreement must be done away with.
●● There may be a master-servant kind of a situation in any ADR process
---------------------- and hence the weaker among the two would stand to lose.
---------------------- ●● People are not yet completely comfortable with the ADR processes even
though they offer much easier and cost effective solutions to the disputes
---------------------- because people still try to compare the settlement agreement of an ADR
---------------------- to that of a judgement in litigation.
●● If already there exists litigation, the complainant may come to know of
---------------------- the weaknesses of the other party through the written statement and then
---------------------- decide to go in for the ADR process.
Failure to arrive at a settlement through the ADR processes sometimes
---------------------- cannot establish and thereby recognize the title to a legal right of the
---------------------- disputants.
---------------------- Activity 6
----------------------
Interview the parties who have adopted ADR as the mechanism to solve
---------------------- their dispute and find out what are the difficulties they have come across
in the process of ADR.
----------------------

Summary Notes
●● The ADRs are statutorily recognized. ----------------------

●● The most famous form of ADR is the non-binding form of negotiation. ----------------------
●● Arbitrators give the awards whereas the other ADR systems only help
----------------------
about in bringing a settlement of sorts.
●● There has to be a consensus regarding the use of ADR for the settlement ----------------------
of the dispute.
----------------------
●● The ADR system is not adversarial. It is often a win-win situation. Each
party to the conflict takes back something or the other. ----------------------
----------------------
Keywords
----------------------
●● ICADR: The International Centre for Alternative Dispute Resolution.
●● Arbitration: It is a process of ADR where the parties to a dispute table ----------------------
their case in front of a neutral arbitrator or panel of arbitrators who provide ----------------------
a verdict called an award.
●● Hybrid Arbitration: In this type of ADR, the arbitration process is ----------------------
amalgamated along with some of the other ADR processes. ----------------------
●● Summary Jury Trial: In the US where this is practised, there is a mock
jury trial held which gives a perception as to the reaction of the real jury ----------------------
in future when later on the case is to be presented before them. ----------------------
----------------------
1. What are the various unique features of the ADRs?
2. Write a comparative note on the ADRs. ----------------------
3. What are the advantages and the difficulties of the ADR system? ----------------------
4. What are the extra judicial ADR techniques that are used worldwide? ----------------------
5. Write about the Lok Adalat and the Legal Aid program of the Indian
Government. ----------------------
6. What are the main processes of the ADRs? ----------------------

7. In what ways are the ADRs and the Indian Statutes connected? ----------------------
8. Write about the Statutory Authorities of the ADRs.
----------------------
9. Write a short note on negotiation and arbitration.
----------------------
10. Write the disadvantages of the ADR system and processes.
----------------------
----------------------
----------------------

Notes Answers to Check your Progress

1. True
----------------------
2. False
----------------------
---------------------- 1. ADR of entries to build lost relationship of the parties.
---------------------- 2. ADR is a privately and confidentially operated mechanism.

----------------------
----------------------
1. Which section of the HinduMarriageAct1955 has recognized the need for
---------------------- the ADR process?
ii. 23
----------------------
----------------------
Match the following.
----------------------
i. –c
---------------------- ii. –a
---------------------- iii. –b
---------------------- iv. –d

----------------------
1. Goldberg, Stephen B., Frank E.A. Sander, Nancy H. Rogers and Sarah
---------------------- Rudolph Cole. 2007. Dispute Resolution: Negotiation, Mediation, and
Other Processes.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Alternative Models of ADR
UNIT
4
Structure:
4.1 Gram Panchayats

4.2 Lokpal, Ombudsman and Lok Ayuktas
4.3 The Legal Services Authority Act, 1987
4.4 Main Objectives of Legal Aid
4.5 Jurisdiction, Purpose and Functioning of Lok Adalats
4.6 Powers and Award of Lok Adalats
4.7 Benefits of Lok Adalats
4.8 Limitations of Lok Adalats
4.9 International Center for ADR (ICADR)
4.10 Plea Bargaining, Compoundability of Crimes
4.11 Supreme Court’s Judgment of 2005 and ADR in Civil Litigation
4.12 Family Courts and Counselling Centres
Summary
Key Words
Suggested Reading
Alternative Models of ADR 57

Notes
Objectives
----------------------
----------------------
• Examine the alternative models of ADRs
----------------------
• Review the working, organization and characteristics of Lok
---------------------- Ayukta, Lok Adalat
• Examine the Counselor’s role in the family courts
----------------------
• Examine the role of plea bargaining
----------------------
• Enumerate the powers of the Lok Adalat
----------------------
---------------------- 4.1 GRAM PANCHAYATS

---------------------- Introduction
---------------------- In the earlier units, we have learnt about the various types of ADRs and the
main process of ADRs. We have also seen the comparative study of various
---------------------- ADR processes like - Negotiation, Mediation, Conciliation and Arbitration.
---------------------- Some of these processes are binding and some are non-binding. Now we shall
learn about the alternative modes of the ADR system. It is all about the working
---------------------- and the administration of Lok Adalat and the Gram Panchayat.
---------------------- We have seen in the earlier units regarding the ancient system of dispute
resolution in India. It was done through the Gram Panchayat Systems as
---------------------- established in those times. In ‘Ganas’ or the City States, the ‘Ganatantra
Parishads’ or the Gram Sabhas played the main role of dispute resolution.
----------------------
However as time passed by, the Gram Panchayats replaced the role of the
---------------------- Ganatantra Parishads.
In rural India, ‘Gram’ which means a small village, and ‘Panchayat’ means
----------------------
the assembly of the village elders is a respectable institution, respected by the
---------------------- villagers too. The disputes between members of a community or a tribe or race
or occupation were resolved by their ‘Kulas’, ‘Srenis’ which is an association
---------------------- of the people having the same occupation, and ‘Pugas’, the regional assemblies
of the local people, which were a sort of Panchayats. The decision given by the
----------------------
Kula could be revised by the Srenis and further the appeal could go to Puga.
---------------------- Further the decision of the Puga went to the Pradvivaka and at the final stage to
the Sovereign of the State. Orally a reference was made to the Panchayat. The
---------------------- Panchayat sat under the village tree in a Choupal. There were social sanctions
that were meted out orally. Many a times the decisions were given by agreement
----------------------
of both the parties. The parties were bound by it. The award could be impeached
---------------------- on gross misconduct or corruption or the Panchas to be partial to one of the
parties.
----------------------
It was recognised as not only an alternative mode of dispute resolution but
---------------------- also as a recognised system of administration of justice. The village Panchayat

systems were coexistent parallel to the main court system. The administration Notes
procedure was very simple, straight forward, without any hassles, inexpensive
and very quick in rendering their justice. The procedures that the Panchayats ----------------------
followed were akin to arbitration, conciliation, mediation and negotiation. But
unlike in arbitration, the decision makers or the village elders were not chosen by ----------------------
the parties. However, these traditional modes of dispute resolution were not able ----------------------
to handle the high value commercial or the contractual cases. Hence over the
years after modernization took over the village administration, the arbitral mode ----------------------
of ADR was preferred due to its binding adjudication process. As the size of the
villages grew, it became difficult for the Gana Parishads to meet and resolve ----------------------
the disputes; hence the Gram Sabhas started their functions. These days at the ----------------------
village level, Gram Sabhas also perform the legislative duties as well. Article
243A of the Constitution provides the Gram Sabhas with powers to perform, at ----------------------
the village level, as the legislative powers bestowed by the Legislature of the
State. Article 40 of the Indian Constitution states that the State shall take steps to ----------------------
organize Panchayat and empower them to function as units of self government. ----------------------
Article 243B states that Panchayat shall be constituted at the village level and
the seats are to be filled in by direct election from the territorial constituencies of ----------------------
that Panchayat area. The term of the Panchayat is to be for five years. The aim of
the Panchayats is to implement all social welfare schemes of the government for ----------------------
social development and to give social justice to all and needy. ----------------------
4.2 LOKPAL, OMBUDSMAN AND LOK AYUKTAS ----------------------
Ombudsman: ----------------------
The dictionary meaning of Ombudsman is that he is a non-governmental ----------------------

complaint investigator. He is to investigate into complaints from the public
against any public organization, public servant or any government or public ----------------------
department. He tries to bring about a fair settlement between the complainant ----------------------
and the public servant. The Government is accountable to the people or the
citizens against the various and innumerable complaints of corruption of its ----------------------
public servants in the governmental departments. It gives protection to the
citizens against the faulty administration of the Government departments. This ----------------------
type of a system is in operation in the Scandinavian countries. In India, the ----------------------
Ombudsman is not operating as there is the Lok Ayukta System in place.
----------------------
Some of the main features of the Ombudsman are:
●● To appoint an independent and non-partial officer as the administrator ----------------------
and supervisor of the Ombudsman office.
----------------------
●● He deals with the particular complaints against the administrative injustice
meted out to the public. ----------------------
●● The Ombudsman has to investigate and report the same to the legislature. ----------------------
Lokpal
----------------------
The word ‘Lokpal’ was coined by Dr L.M.Singhvi in 1963. The corruption in
the main stream of Government offices and in general everywhere else is the ----------------------

Notes main hindrance to the progressive democratic system of the country. Hence
there is strong need for the appointment of the Lokpal there being a strong
---------------------- nexus between the terrorism, smuggling, counterfeit, drugs and the politicians
of the country. Corruption is anti poor and anti democratic. There has to be
---------------------- separate law for the crimes of public servants under corruption tag. Hence the
---------------------- need of the hour is the strong empowerment of the Lokpal. It is to be established
for trying cases of corruption against the public and government servants.
----------------------
Lokpal Bill
---------------------- The concept of a constitutional ombudsman was first proposed in parliament
by Law Minister Ashoke Kumar Sen in the early 1960s. The first Jan Lokpal
----------------------
Bill was proposed by Shanti Bhushan in 1968 and passed in the 4th Lok Sabha in
---------------------- 1969, but did not pass through the Rajya Sabha. Subsequently, ‘Lokpal bills’
were introduced in 1971, 1977, 1985, again by Ashoke Kumar Sen, while
---------------------- serving as Law Minister in the Rajiv Gandhi cabinet, and again in 1989, 1996,
1998, 2001, 2005 and in 2008, yet they were never passed.
----------------------
The system of Lokpal Bill:
----------------------
●● The Lokpal Bill is to inquire into the corruption cases against the
---------------------- Prime Minister, ministers including the Judiciary, and the Members of
Parliament.
----------------------
●● The proceedings are to be in the open court.
---------------------- ●● The enquiry period is to be less than six months, extendable to over
another six months.
----------------------
●● The proceedings are to be judicial in nature with discretion to conduct in
---------------------- Camera proceedings.
---------------------- ●● The Lokpal is to be empowered with all the powers of a civil court.
●● Any person other than a public servant can file a complaint with the
----------------------
Lokpal.
---------------------- ●● The cases are to be dealt with under the Prevention of Corruption Act,
1988.
----------------------
●● The Lokpal is also known as the Watch Dog against Corruption.
---------------------- ●● To discourage frivolous complaints, the fine for a vexatious complaint is
---------------------- Rs. 50,000/-.
Lok Ayukta:
----------------------
In many states of our country, the State Governments have appointed Lok
---------------------- Ayukta to have jurisdiction over the public servants and officers concerned. In
Karnataka and Himachal Pradesh, even the Chief Minister is in the ambit of the
---------------------- powers of the Lok Ayukta. Any citizen can file a complaint to the Lok Ayukta
---------------------- against the mal-administration and sufferings at the hands of a public servant.
Some of the features of the Lok Ayukta:
----------------------
●● The Lok Ayukta is appointed by the Governor of the state concerned after
---------------------- the consultations with the Chief Justice of that High Court.

●● He then appoints the Upa Lok Ayukta. Notes
●● He should not hold any other office nor be connected to any of the political
parties of the country. ----------------------
●● He also should not hold any office of profit or practice any profession. ----------------------
●● He shall be a person who is or has been a High Court or a Supreme Court ----------------------
Judge.
●● Under the Clause 2 Article 311 of the Constitution, only the Governor has ----------------------
the power to remove him on conduct of misbehavior or incapacity after
----------------------
conducting an inquiry.
●● The inquiry is to be conducted by a Judge of the Supreme Court or the ----------------------
Chief Justice of the high Court of the State concerned.
----------------------
●● The removal has to be supported by a majority of both houses of the State
Legislature and a majority of not less than two thirds of the members ----------------------
present and voting presented to the Governor in the same session for the
----------------------
removal.
●● Any person can make a complaint to the Lok Ayukta. ----------------------
●● The Lok Ayukta shall forward the copy of the complaint to the public ----------------------
servant and the competent authority concerned.
●● The public servant in question shall be offered an opportunity to comment ----------------------
on the complaint. ----------------------
●● He shall have all the powers of a civil court.
----------------------
●● He shall present annually a consolidated report on the performance of its
function to the Governor. ----------------------
----------------------
----------------------
1. The term of the Panchayat is to be for four years.
----------------------
2. Article 40 of the Indian Constitution states that the State shall take
steps to organize Panchayat and empower them to function as units ----------------------
of self government.
----------------------
1. The concept of a constitutional ombudsman was first proposed in ----------------------
parliament by _______. ----------------------
i. Pandit Jawaharlal Nehru
----------------------
ii. Mrs. Indira Gandhi
----------------------
iii. Ashok Mehta
iv. Ashok Kumar Sen ----------------------
----------------------

Notes
Activity 1
----------------------
---------------------- 1. Try to attend the one of the session of gram panchayat.

2. What are the roles of the Ombudsman, Lok Ayukta and the Lok Pal
----------------------
Bill in the present scenario of the Indian policy?
----------------------
---------------------- 4.3 THE LEGAL SERVICES AUTHORITY ACT, 1987

---------------------- This Act was brought into force on 19th November 1995 after the first amendment
in 1994, though it received the President’s assent on 11 October 1987. The
---------------------- Lok Adalat experiment was suspended due to the ministerial staff’s strike at
Jodhpur, thus ending in settlement. The objective of the Act is to comprise and
----------------------
setup legal services authorities to provide free and proficient legal services to
---------------------- the weaker sections. Chapter IV of the Act deals with the Lok Adalat. It provides
for the setting up of the Lok Adalat to promote justice on an equal opportunity
---------------------- basis. The Act led to the creation of the Lok Adalat under the National, State
and District Legal Services Authorities. The Central Services Authority under
----------------------
the Act is known as the National Legal Services Authority (NALSA). Under the
---------------------- sections, the State and the District Services Authorities are to be setup. One of
the many important functions of the Act is to conduct the Lok Adalat for High
---------------------- Court cases.
---------------------- The Lok Adalat comprises of non-judicial members and is to be presided over
by judicial members. The award of the Lok Adalat is deemed to be a decree
---------------------- of a civil court. Its proceedings are deemed to be judicial proceedings within
the civil and the criminal courts. The NALSA shall decide the national policy
----------------------
while at the State level it is the State Legal Services Authority. The promotion
---------------------- of the Lok Adalat is to be done by the Supreme Court and the High Court
Legal Services Committee. The main purpose of the Lok Adalat is to settle the
---------------------- disputes and arrive at a compromise within the jurisdiction of the respective
courts. Certain proceedings like the defamation, malicious prosecution or a
----------------------
person charged with contempt of court or perjury are not covered under the
---------------------- Legal Services Regulations of the Supreme Court. The legal services may be
withdrawn if it is found that the person to whom it were granted had sufficient
---------------------- means or that he had obtained the legal services by misrepresentation. Thus the
committee is empowered to recover the legal aid from such a person.
----------------------
---------------------- 4.4 MAIN OBJECTIVES OF LEGAL AID

---------------------- The background of the Lok Adalat, the informal systems of adjudicating the
matters at hand for resolution by the ADR methods, is the Nyaya Panchayats,
----------------------
Mobile Courts, and Legal Aid Camps, etc. Legal Aid as a human right is inherent
---------------------- in the Articles 7, 8 and 10 of the Universal Declaration of the human rights.
----------------------

The main objectives are: To create legal awareness among the poor and Notes
illiterate class of the society, to give advice and to assist them in solving their
problems pertaining to legal disputes, and to bring about the settlement of the ----------------------
disputes if in case the litigating parties cannot reach the courts. The Supreme
Court has held that Legal Aid is the positive obligation imposed upon the State ----------------------
by the Article 21 of the Indian Constitution. Legal Aid means the lending and ----------------------
offering of the services of the Advocates to those who cannot afford their
services due to their being impoverished, poor, ignorant and illiterate. The Code ----------------------
of Civil Procedure too emphasizes the need for the rendering of the Legal Aid
to the poor and the needy by instituting the suit in pauperis without the parties ----------------------
having to pay either the court fees or the lawyer’s fees. ----------------------
----------------------
----------------------
1. Legal Aid as a human right is inherent in the Articles 7, 8 and 10 of
the Universal Declaration of the human rights. ----------------------
2. The Supreme Court has held that Legal Aid is the positive obligation ----------------------
imposed upon the State by the Article 14 of the Indian Constitution.
----------------------
4.5 JURISDICTION, PURPOSE AND FUNCTIONING OF ----------------------
LOK ADALATS ----------------------
Jurisdiction: ----------------------
Every case can be resolved by the Lok Adalat except those criminal cases that
are not compoundable. Section 19(3) of the Act states that the Lok Adalat shall ----------------------
have the jurisdiction to determine and arrive at a settlement or compromise in ----------------------
the matters falling under its jurisdiction of any civil, criminal, revenue court or
any tribunal constituted under any law for the time being in force in the area ----------------------
of the Lok Adalat. It is also expected that the Lok Adalat shall determine the
dispute as expeditiously as it is deemed fit and prescribed. Reference of any ----------------------
case to the Lok Adalat by the court can be done only after a due opportunity is ----------------------
given to the party that has not applied for reference, of being heard. The court
has to be firstly satisfied that there are chances of settlement or that the matter is ----------------------
fit for being taken cognizance of by the Lok Adalat. If in case no settlement is
arrived at, the Lok Adalat has to return the case to the court. The territorial and ----------------------
the subject matter jurisdiction of the Lok Adalat are same and similar to that of ----------------------
the court in relation to which it is organised. Lok Adalat can settle two types of
disputes, one being from a case pending before any Court of Law of the area ----------------------
to which the Lok Adalat belongs to, and the other being in respect of a dispute
arising from any matter which falls under the jurisdiction of that court but is not ----------------------
instituted before it. ----------------------
----------------------

Notes Purpose:
The main purpose of the setting up of the Lok Adalat is to bring about a
----------------------
compromise or an early settlement of the matter at hand, within the limitations
---------------------- of the court that has organised it. According to Article 39-A of the Constitution,
the Lok Adalat is empowered to settle the matter in spite of its being in the
---------------------- shape of a dispute or not.
---------------------- Functioning of Lok Adalat:
Section 19 of the Legal Services Act states that every authority is empowered to
----------------------
organize the Lok Adalat at such intervals and at such places as it deems fit for the
---------------------- purpose. The Lok Adalat shall be held at a public place preferably on a Saturday,
Sunday and the State holidays. Assigning of specific cases to each bench of the
---------------------- Lok Adalat shall be done by the secretary of the High Court Committee or the
District Authority as the case may be. The secretary shall prepare a case list for
----------------------
each of the benches of the Lok Adalat and shall intimate the same at least two
---------------------- days before the due date of the Lok Adalat. Sincere efforts are required to be
made on behalf of the Lok Adalat for the settlement of the cases by conciliation
---------------------- devoid of any pressure tactics, undue influence or coercion. The secretary of
the High Court Committee or as the case may be, shall maintain a panel or a list
----------------------
of all the retired Judges, Advocates, Social Workers, etc. having the required
---------------------- qualifications and experience. The members of the Lok Adalat are deemed to be
public servants under Section 21 of the Indian Penal Code, 1860.
----------------------
---------------------- Activity 2
----------------------
Read and comment on State of Kerala v/s Ernakulam District Legal
---------------------- Service Authority.
----------------------
4.6 POWERS AND AWARD OF LOK ADALATS
----------------------
Powers:
----------------------
Where any party makes an application to the court for referring the dispute to a
---------------------- Lok Adalat for settlement of the matter and if such court deems fit that the Lok
Adalat is fit to take cognizance of it, then the court shall refer the matter to it.
----------------------
The Lok Adalat shall expeditiously try to resolve and settle the matter referred
---------------------- to it based on the principles of fair play and natural justice.
It shall have the same powers as are vested in a civil court while trying a suit.
----------------------
●● It shall have the powers to call and summon and enforce the attendance of
---------------------- the parties or any witness and examine him on oath.
---------------------- ●● It can also call for the discovery and the production of any document.
●● Receive the evidence of the witnesses on sworn statements.
----------------------
●● It can ask for the requisition of any public records from any court or
---------------------- public office.

●● It shall also have the powers to specify its own power regarding the Notes
procedure to be followed for the determination of any dispute.
Award: ----------------------
Section 21 of the Legal Services Act accords a status of a decree to the award ----------------------
passed by the Lok Adalat. The Lok Adalat has so far resolved more than a crore
of cases. The award of the Lok Adalat is to be clear and definite in nature. It ----------------------
can be either in regional or in English language. Signatures of the panel and the ----------------------
parties are to be affixed on the award. The original award shall form part of the
judicial records and a copy of the award is to be given to each of the parties to ----------------------
the litigation or the dispute. It shall also be certified to be true by the constituent
panel of the Lok Adalat. Every award made by the Permanent Lok Adalat shall ----------------------
be final and it shall deem to be a decree of the civil court. It shall be made by ----------------------
the majority of the members of the panel of the Lok Adalat. The award shall not
be called in for any question in any suit, proceedings, original suit, application ----------------------
proceedings or execution proceedings. It shall be the duty of the Lok Adalat to
settle the dispute, under conciliation process but if it fails to settle the dispute ----------------------
then the Lok Adalat shall adjudicate upon the dispute and thus the award shall ----------------------
be binding upon the parties. No appeal shall lie against an award of the Lok
Adalat. ----------------------
----------------------
----------------------
Fill in the blanks.
----------------------
1. Article _______ of the Constitution, the Lok Adalat is empowered to
settle the matter in spite of its being in the shape of a dispute or not. ----------------------
2. Section _____ of the Legal Services Act accords a status of a decree ----------------------
to the award passed by the Lok Adalat.
----------------------
----------------------
4.7 BENEFITS OF LOK ADALATS
----------------------
The Lok Adalat is becoming more popular and are catching the imagination of
the citizens. The settlement awards of the Lok Adalat are proving to be of great ----------------------
help to the large number of litigants. The matters find an instant solution in the
Lok Adalat. Insurance claims, pensions, motor accident claims and the like are ----------------------
being settled very fast to the satisfaction of the claiming parties including but ----------------------
not limited to the cases relating to the matrimonial matters and compoundable
crimes are finding their way to the Lok Adalat. Cases settled so far tend not ----------------------
to leave any bitterness behind. There is certainly a big boost to the morale of
the warring parties and to the public in general. They can be conducted in the ----------------------
language of the locals as they desire. The awards are clear with no room for any ----------------------
ambiguity. The Lok Adalat is not here to replace the judiciary but to supplement
the efforts of the judiciary. It is a consensual process. As there are no further ----------------------
appeals, the litigants are a happy lot that their anguish has ended.
----------------------

Notes 4.8 LIMITATIONS OF LOK ADALATS
---------------------- The main object of the Lok Adalat is to dispose off the case finally as there lies no
further appeal from the award of the Lok Adalat. That is, the section 19(5) of the
---------------------- Legal Services Act limits the jurisdiction to ‘thus far’ and ‘no further’ and hence
any contravention of this limit by the Lok Adalat would make the proceedings
----------------------
a nullity as decided in a case in 2001 by the Supreme Court. As consent is the
---------------------- basis of jurisdiction, it is actually a hindrance for the Lok Adalat jurisdiction.
Cases pertaining to the non-compoundable criminal offences cannot be tried by
---------------------- the Lok Adalat. Unless all the parties consent for the settlement of the dispute,
the Lok Adalat cannot make an award on the basis of the few parties that have
----------------------
given their consent.
----------------------
Activity 3
----------------------
---------------------- Read and comment on Sreedharan T. v/s Sub. Inspector of Police,

Balussery Police.
----------------------
----------------------
4.9 INTERNATIONAL CENTER FOR ADR (ICADR)
----------------------
An International Center for ADR (ICADR) was established and registered
---------------------- to promote, to provide facilities, to bring reforms, to undertake research and
teachings, to impart training and also to appoint the arbitrators, mediators, as
----------------------
and when required by the parties. It is intended to cover almost all disputes of
---------------------- labour, family disputes, commercial and of civil nature too. It is also intended
to reform the ADR systems as they exist today. It also helps in developing
---------------------- the infrastructure for the matters related to the teaching and training of the
ADR related matters. It is headquartered in New Delhi. It is an independent
----------------------
organization working under the tutelage of the Ministry of Law & Justice. It has
---------------------- regional centers at Hyderabad and Bangalore. The Chief Justice of India is the
main mentor and a supporter of the ICADR.
----------------------
4.10 PLEA BARGAINING, COMPOUNDABILITY OF
----------------------
CRIMES
----------------------
Plea Bargaining is new to Indian Justice System. It is actually the concept of
---------------------- discounted treatment for the persons who choose to say that they are guilty of the
criminal charges. The Law Commission in its 142nd report has recommended
---------------------- certain safeguards for the protection of the accused in case of plea bargaining.
---------------------- It got its recognition in the Criminal Law (Amendment) Act, 2005. It can mean
a pre-trial negotiation as a means of an ADR. It can be of two types namely-
----------------------
1) charge bargaining and
---------------------- 2) Sentence bargaining.
----------------------

In the first type, some of the charges of the accused are dropped and in the Notes
second type, the prosecutor promises the accused for a recommendation
of a specific sentence. It aims at simplifying the procedure and the faster ----------------------
clearance of the criminal case. As it is new in its concept, it has raised many
questions in the minds of the people. Only those crimes that carry a sentence ----------------------
of imprisonment below seven years can be qualified for the plea bargaining. ----------------------
In case of the accused being convicted for the same crime, he cannot go in for
plea bargaining including for an offence being committed against a woman or ----------------------
a child who is below fourteen years of age. The accused has to be made aware
of the consequences of plea bargaining before he submits an application along ----------------------
with his affidavit for the same. Certain precautions need to be taken though. ----------------------
it offers an advantage for the State by promptly imposing the punishment and
thereby reducing the delay of justice. It is a mutually beneficial process. There ----------------------
may be pressure tactics as applied by the prosecuting system on the accused to
plead guilty. The victims get an emotional satisfaction for the crime committed ----------------------
over them. Offenders have an opportunity to face the world boldly and feel free ----------------------
of guilt for the offence committed by pleading guilty. They can learn and be an
example to others of their actions on other innocent people. ----------------------
Compound ability of an offence: ----------------------
Section 320 of the CrPc speaks about the Compound ability of the offence.
----------------------
Part one of the CrPc gives the offences that can be compounded. The second
part gives the serious offences that can be compounded with the help of the ----------------------
court. As per section 320(2) court’s permission is necessary for the offence to
be compounded. ----------------------
Some of the offences that can be compoundable are: ----------------------
Causing hurt, wrongful restraint, criminal trespass, adultery, enticing ----------------------
defamation and criminal intimidation, etc. The scope needs to be widened for
the compounding of offences. Only then can there be reduction of the cases’ ----------------------
delay, the victim’s trauma of the trial and the reduction of the burden of the
prosecution. ----------------------
----------------------
Activity 4
----------------------
Read and comment on State of Uttar Pradesh v/s Chandrika. ----------------------
----------------------
4.11 SUPREME COURT’S JUDGEMENT OF 2005 AND ADR
IN CIVIL LITIGATION ----------------------
Salem Advocate’s Bar Association, Tamil Nadu v/s Union of India: It helped ----------------------
in setting out the mode of the operating of the ADR system in India. In this
----------------------
judgement, the Supreme Court has incorporated all the three reports of Justice
Jagannadha Rao Committee appointed for the application of the amendments ----------------------
made in 1999 and 2002 to the CPC. The SC has said that the erring party needs
to pay the actual expenses incurred by the party for the delaying tactics of the ----------------------

Notes erring party or who makes an attempt to defeat the claim of the complaining party.
The SC also emphatically said that there was a need to make the government
---------------------- officers responsible and accountable for replying to the individual parties who
claim against the government thereby issuing notice under Section 80 of the
---------------------- CPC. The Committee had suggested the High Courts to examine the reports and
---------------------- implement them within four months from the date of the judgement.
Report 1: Application of the amendments made to the CPC in 1999 and 2002.
----------------------
Report 2: CPC ADR Rules.
----------------------
Report 3: Rules regarding the case flow management.
---------------------- The SC approved the Rules of the Committee and asked the HCs to exercise their
---------------------- Rule making power and thus make rules for functionalizing the amendments
and ADR measures. The SC wanted the government officers to use the two
---------------------- notice months’ period for the settlement and thereby avoid litigation. The SC
dealt about the use of ADRs as recommended in the CPC and avoids the delay
---------------------- in the dispensation of Justice.
----------------------
4.12 FAMILY COURTS AND COUNSELLING CENTRES
----------------------
Special Courts for Women:
----------------------
Twelve special courts for women have been established in Ahmednagar,
---------------------- Aurangabad, Akola, Amravati, Buldhana, Beed, Jalgaon, Nagpur, Yavatmal,
Thane, Pune, Kolhapur and Mumbai to try the cases pertaining to the Sections
---------------------- like 498-(A), 304 (B), 375 of the Indian Penal Code and also other crimes
---------------------- related to atrocities against women.
Family Courts for Women:
----------------------
Under the Family Courts Act, 1984, Family Courts were established for Women
---------------------- in the country. The first Family Court for Women in Maharashtra was set up
in Pune in 1988, and later on in 1989, a Family Court was set up in Mumbai.
---------------------- Today there are 16 Family Courts in the State of Maharashtra. Promotion of
---------------------- conciliation, settlement of disputes relating to matrimony, child custody and
family affairs is the main thrust area of these courts. Wherever the population
---------------------- of a city exceeds 10 Lakhs, these courts are to be setup there.
---------------------- The jurisdiction of the Family Courts is:
●● relief pertaining to matrimonial matters, including divorce, restitution of
----------------------
conjugal rights nullity of marriage, judicial separation, or the matrimonial
---------------------- status of any person, or the validity of marriage or
●● Pertaining to the property of the spouses or of either of them.
----------------------
●● The legitimacy of any person, including the children’s legitimacy.
---------------------- ●● Guardianship of a person or the custody of any minor.
---------------------- ●● Maintenance of the spouses, children or the parents, including proceedings
under chapter 9 of the Code of Criminal Procedure.
----------------------

Generally and normally, the conciliation proceedings being informal, the Notes
advocates are normally not allowed in the Family Court. However, in special
circumstances only if they are permitted. Appeal from the orders of the Family ----------------------
Courts lies to the High Court. Under Rule 4 of the Maharashtra Family
Court Rules 1987, ‘A party will be entitled to free advice at any stage of the ----------------------
proceedings either before the counselor or before the court, a party in indigenous ----------------------
circumstances will be entitled to free legal aid and advice’. Thus the intention
of Legislature is clear enough to exclude the professional legal practitioners in ----------------------
the working of Family Courts.
----------------------
The Counsellor’s Role in the Conciliation Proceedings:
----------------------
The Maharashtra State Commission for Women has made a novel beginning by
establishing the Counseling and Legal Advice Cell, for offering professional ----------------------
help to women, and children who are victims of domestic violence.
----------------------
First, there is the Registration of Complaints, then the problem is analyzed, and
the basic information is sought. Then along with the verbal discussions that are ----------------------
held with the parties, the counselor tries to analyze the problem and decides
on the further course of action. The counselors summon the party concerned ----------------------
against whom the complaint is made, under Sec 12(2), of the Maharashtra Act
----------------------
No. XV of 1993. Then a joint meeting of both the parties is conducted regarding
other related matters and members of the family. The Counselor tries to build ----------------------
a rapport between both the parties. He then records the statements made by the
parties, the witnesses and investigates into the matter by obtaining necessary ----------------------
documents.
----------------------
As may be required, he may take the help of the local police where generally the
parties reside and may register a criminal complaint. The complainant is given ----------------------
free legal advice in the related matter and offered help in drafting and filing of ----------------------
the petition.
Some of the main provisions of the Family Courts Act 1984 are: ----------------------
Section 9 “Duty of Family Courts to make efforts for settlement”. ----------------------

Section 13 further talks about the Right to Legal Representation, and it states ----------------------
that “Provided that if the Family Court considers it necessary in the interest
of justice it may seek the assistance of a legal expert as Amicus Curiae”. As ----------------------
the lawyers are known to take more time and dates for delay in replying the
----------------------
complaint or the written statement, the need for the lawyer’s representation
is done away with. Because the aim of speeding up the process of providing ----------------------
expedite proceeding for immediate relief of the welfare of aggrieved wife or
husband, children or parents will fail if the family courts’ proceedings are not ----------------------
speeded up in time.
----------------------
----------------------
----------------------
----------------------

Notes
----------------------

1. ________ special courts for women have been established
----------------------
i. Ten
----------------------
ii. Twelve
---------------------- iii. Twenty
---------------------- iv. Thirteen
---------------------- 2. _______ Report has recommended certain safe guards for the
protection of the accused in case of plea bargaining.
----------------------
i. 142
---------------------- ii. 140
---------------------- iii. 141
---------------------- iv. 14
----------------------
Activity 5
----------------------
---------------------- Identify the role played by counselor in the Family Courts. And analyze
the importance of him in the said process.
----------------------
---------------------- Summary
---------------------- • The Lok Pal Bill, the Lok Ayukta and the Lok Adalat work towards the
---------------------- speedy rendering of justice in the Indian context.
• There is a Constitutional as well as statutory recognition of the ADR
---------------------- systems and hence morale of the general public gets boosted. They have
---------------------- started trusting the ADRs.
• The Lok Adalats are becoming more popular and are catching the
----------------------
imagination of the citizens.
---------------------- • The main object of the Lok Adalat is to dispose off the case finally as
there lies no further appeal from the award of the Lok Adalat.
----------------------
• Every case can be resolved by the Lok Adalats except those criminal
---------------------- cases that are not compoundable.
---------------------- • The main purpose of the setting up of the Lok Adalats is to bring about
a compromise or an early settlement of the matter at hand, within the
---------------------- limitations of the court that has organized it.
----------------------

• According to Article 39-A of the Constitution, the Lok Adalat is empowered Notes
to settle the matter inspite of its being in the shape of a dispute or not.
----------------------
• Family Courts were established for women in the Country, under the
Family Courts Act, 1984 and promotion of conciliation, settlement of ----------------------
disputes relating to matrimony, child custody and family affairs is the
main thrust area of these courts. ----------------------
----------------------
Keywords
----------------------
• ADR: Alternative dispute resolution mechanisms.
----------------------
• ICADR: International Center for ADR.
• Plea Bargaining: The accused applies for the plea bargaining in the form ----------------------
of pleading guilty for the exchange of reduced sentence or the reduction ----------------------
of charges against him.
----------------------
1. Write a note on the working of the Gram Sabhas. ----------------------
2. Write about the jurisdiction of the Lok Ayukta and the Lok Adalat. ----------------------
3. What do you know about the term Plea bargaining and how is it useful in
the Indian scenario? ----------------------
4. Write about the counselor’s role in the Family Courts. ----------------------

5. In Maharashtra, where have the special courts for women been established? ----------------------
6. Write about the jurisdiction of the family courts.
----------------------
7. Write how an award of the Lok Adalat is passed?
----------------------
8. Write about the powers of the Lok Adalat.
9. What are the benefits and limitations of the Lok Adalat? ----------------------
10. Write about the main features of the Legal Services Authority Act 1987. ----------------------
----------------------
----------------------
----------------------
1. False ----------------------
2. True ----------------------
1. The concept of a constitutional ombudsman was first proposed in
parliament by _______. ----------------------
iv. Ashok Kumar Sen ----------------------

Notes Check your Progress 2
----------------------
1. True
----------------------
2. False
---------------------- 1. Article 39A of the Constitution, the Lok Adalat is empowered to settle the
matter in spite of its being in the shape of a dispute or not.
----------------------
2. Section 21 of the Legal Services Act accords a status of a decree to the
---------------------- award passed by the Lok Adalat.
----------------------
----------------------
1. ________ special courts for women have been established
---------------------- ii. Twelve
---------------------- 2. _______ Report has recommended certain safe guards for the protection
of the accused in case of plea bargaining.
----------------------
i. 142
----------------------

---------------------- 1. Goldberg, Stephen B., Frank E.A. Sander, Nancy H. Rogers and Sarah
Rudolph Cole. 2007. Dispute Resolution: Negotiation, Mediation, and
---------------------- Other Processes.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Arbitration
UNIT
5
Structure:
5.1 History of Arbitration System in India

5.2 The Arbitration and Conciliation Act, 1996 (Salient Features and Scope)
5.3 Types of Arbitration
5.4 Agreement of Arbitration
5.5 Beneficial Aspects of Arbitration
Summary
Key Words
Suggested Reading
Arbitration 73
Notes
Objectives
----------------------
----------------------
• Examine the history of arbitration in India
----------------------
• Review the salient features of the Arbitration and Conciliation Act,
---------------------- 1996
• Classify the different types of arbitration
----------------------
---------------------- 5.1 HISTORY OF ARBITRATION SYSTEM IN INDIA

---------------------- Introduction
---------------------- In the previous units we have learnt about Gram Sabhas, Nyaya Panchayats,
Panchayats and the various models of ADRs including the Lokpal Bill, the Lok
---------------------- Adalat, Lok Ayuktas, Ombudsman and the Legal Aid programs. We have also
seen the functioning, administrative features and the benefits of the same. Now
----------------------
in this unit we shall deal with one of the most sought after modes of ADRs, the
---------------------- Arbitration. We shall see its history and the salient features of the Arbitration
and Conciliation Act, 1996.
----------------------
Arbitration has evolved into an alternative dispute resolution system in India
---------------------- and the world over. It is a voluntary agreement entered into among the parties
to a dispute either before or after the dispute has arisen and the choice of the
----------------------
Arbitrator(s) is also done at the same time. There can be a separate Arbitration
---------------------- Agreement or it can be added as a clause for dispute resolution in the contractual
Agreement that has been entered into, between the parties, for the transaction of
---------------------- their business. They have to decide that they are bound to abide by the verdict
---------------------- of the Arbitrator. The award of the arbitrator is binding on all parties and it
cannot be set aside by any other authority except on certain grounds.
----------------------
History in the Indian Tradition
---------------------- The system of dispute resolution through the community elders has been in
---------------------- existence since time immemorial. Several villages had Gana Parishads or
the Nyaya Panchayats constituted through the village elders for the purposes
---------------------- of dispute resolution. Hence an Agreement to abide by the decision of the
Panchayats can be termed as an Agreement of Arbitration. There are several
---------------------- records to show that these village level awards could be taken to the higher
---------------------- bodies for references. Ancient history shows that there were ‘Pugas ‘or a
‘Community Board’ at the village level, ‘Srenis’ at the territorial level for the
---------------------- traders, artisans and village craftsmen and the ‘Kulas’ for the dispute resolution
of the family members. These awards were enforceable by the community.
----------------------
British Era: In 1781, the British Crown issued Regulations through the
---------------------- Directors of the East India Company, stating that justice be delivered and
---------------------- administered through the established courts. These Regulations asked the Judges

to recommend the other alternative mode of dispute resolution by prevailing Notes
upon the parties to the litigation. The parties were without any compulsion
asked to consent for Arbitration. The arbitration award was made to be the ----------------------
final settlement award as far as possible, though it could be set aside except on
oath of convincing witnesses proving that the Arbitrators were guilty of gross ----------------------
corruption, negligence and/or bias. This was applied in cases of debt or property ----------------------
value not exceeding rupees two hundred. Further under Regulation VII of 1833,
which was issued by the Governor of Bombay, it was stated that the Arbitration ----------------------
Agreement must be in writing. There was also a time limit prescribed for the
Arbitrator to make the award. In 1857, the Civil Procedure Act was enacted ----------------------
which laid emphasis on the Arbitration process. It recommended two types of ----------------------
Arbitrations, namely, one with the intervention of the court and the other without
the intervention of the court. Both the procedures were totally different. In 1882, ----------------------
the Act was amended and revised. It stated that the parties were to submit their
present and future differences to Arbitration. That means the Arbitration clause ----------------------
was to be incorporated in the contractual obligation itself. ----------------------
The CPC of 1882, the Indian Contract Act, 1872 and the Specific Relief Act,
----------------------
1877 prohibitively stated that the contract could not be referred to Arbitration
which had any present or future differences. The Code of Civil Procedure 1882 ----------------------
was replaced by the present CPC of 1908. The second schedule of this CPC
consists of the law regarding the Arbitration. ----------------------
The Indian Arbitration Act, 1899 was the first Indian Enactment on Arbitration ----------------------
which was based on the English Arbitration Act, 1899. Thus the matters relating
to Arbitration were taken care of by both the Arbitration Act, 1899 as well as the ----------------------
CPC, 1908. The Indian Arbitration Act, 1940 catered to the domestic arbitration
----------------------
alone and it remained in force till it was repealed in 1996. The Arbitration
(Protocol and Convention) Act, 1937 was enacted for the enforcement of ----------------------
foreign awards made under the Geneva Convention, 1927.
----------------------
It contained 49 sections including four schedules that spoke about the Arbitration
Agreement’s implied conditions and the court’s powers. However, the Act of ----------------------
1940 suffered too much from the court’s interference. There was a need to
reduce the time consumed for the making of the award and streamlining the ----------------------
arbitral proceedings in case of international commercial transactions. Hence
----------------------
based on the law commission’s recommendations, the Act of 1940 was repealed
and thereby a new Arbitration Law, namely The Arbitration and Conciliation ----------------------
Act of 1996, was enacted based on the UNCITRAL Model Law and Rules. This
Act can be applied to resolve any dispute of civil nature, be it real property, ----------------------
conveyances, inheritance of property, succession, etc. by Arbitration. Under the
----------------------
Act of 1996, the Arbitrator is not under any obligation within which he is to
make the award. ----------------------
GATT and Arbitration: In the present International scenario, it was decided ----------------------
under the General Agreement on Trade and Tariffs (GATT) Treaty that all
international commercial or otherwise, any disputes arising between one ----------------------
Member State and another are required to be settled through the ADRs. It was
decided that the Arbitration award is executable by the whole member States of ----------------------
Arbitration 75
Notes GATT and sanctions are to be imposed upon the disobedient State. This award
is executable as if it is a civil court decree and shall be treated as the final
---------------------- settlement of dispute.
---------------------- 5.2 THE ARBITRATION AND CONCILIATION ACT, 1996
---------------------- (SALIENT FEATURES AND SCOPE)
---------------------- There is now a greater weightage given to the fact that all judicial officers shall
pro-actively promote reconciliation, ADRs and Arbitration. Under the CPC’s
---------------------- Section 89, the courts are entitled to decide whether a case having come before
---------------------- it is fit for settlement by arbitration. Then the court can compel the parties to the
litigation to go in for the Arbitration process for the settlement of their dispute.
---------------------- The Arbitrator has to follow the simple rules of natural justice and not the
cumbersome procedures as laid down in the CPC for any adjudication process.
---------------------- The costs of the arbitration can also be mutually decided upon by the parties
---------------------- themselves thereby lessening the burden of exorbitant court costs. Arbitration
can cover all legal and contractual relationships. Though the omission to
---------------------- specify the time within which an arbitrator is to make the award is seen as a
hindrance for the smooth running of the Arbitration process in general. The new
---------------------- Act of 1996 recognizes and gives importance to the pre-arbitral proceedings.
---------------------- The WTO also insists on the fulfillment of these pre-arbitral proceedings. This
works out to be beneficial to both the parties.
---------------------- Scope of the Act
---------------------- It is applicable to the whole of India.
---------------------- 1. It is an Act to merge, strengthen and amend the law relating to domestic
arbitration, international arbitration either commercial or not, where the
---------------------- place of arbitration is inside or outside of India and is not specified in the
Agreement and enforcement of foreign arbitral awards.
----------------------
2. It also defines the law relating to conciliation and for matters connected
---------------------- thereto.
---------------------- The main objects of the Arbitration and Conciliation Act, 1996
●● To methodically cover and bring under its ambit the international
----------------------
commercial as well as the domestic arbitration and conciliation.
---------------------- ●● To make provision for the just, competent and proficient arbitral procedure.
---------------------- ●● To make provisions for the reasonable award of arbitration.
●● To make sure that the arbitral tribunal remains within its own jurisdiction
---------------------- and does not go ultra virus, that is out of its given ambit.
---------------------- ●● To minimize the managerial role of the courts or the intervention of the
courts in the functioning, process or the award of the arbitral tribunals.
----------------------
●● To permit the arbitral tribunal to use other methods of ADRs for the
---------------------- amicable settlement of the disputes.
●● To enforce the final award of the arbitral tribunal as if it were a court’s
---------------------- decree.

The Salient Features of the Arbitration Act Notes
●● Along with arbitration, conciliation has also been recognised as one of the
----------------------
main ADRs by the Act of 1996.
●● Section 7 of the Act defines an Arbitration Agreement as “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”. ----------------------
●● The arbitration award and the conciliation settlement agreement both
have been treated on par with the decree of a court. ----------------------
●● There is definite finality to the award. ----------------------
●● The power of the court to intervene in the procedure as laid down, for the ----------------------
arbitration, has been minimized.
●● The award compulsorily has to be a reasoned award. ----------------------
●● Under the Act, it is no longer necessary for the parties to apply to the ----------------------
court to make an award.
----------------------
●● The Act provides for the passing of interim measures and orders, on the
request and in the interests of the parties. ----------------------
●● Much importance is given to the qualification and competency of the
----------------------
arbitrators.
●● They have to be experts in the subject matter of the arbitration proceedings ----------------------
and the disputes.
----------------------
●● The relationship between the parties may or may not be contractual, but it
certainly has to be a legal relationship. ----------------------
●● The award would be null and void if it is against the public policy in India. ----------------------
●● There is a provision for the standard arbitration clause for the international
commercial transactions as a safeguard for the parties entering into the ----------------------
same. ----------------------
●● The Agreement shall be in writing and not an oral agreement.
----------------------
●● It may be in the form of a clause in the contract or in the form of a separate
agreement specifically for invoking the arbitration in case of any future ----------------------
dispute or a claim.
----------------------
●● For the assistance of the parties in the administrative proceedings of the
arbitration, either the parties themselves or the arbitral tribunal with the ----------------------
consent of the parties may arrange for administrative assistance by a
suitable institution or person. ----------------------
●● The Arbitration clause in the contractual agreement must bear reference to ----------------------
the arbitration and the arbitration clause must be a part of that contractual
agreement. ----------------------
●● The arbitration is available to all types of disputes arising between the ----------------------
parties to a contract or under any general principles of law. That is, as all
the subject matter of disputes that arise out of a civil and legal relationship ----------------------
Arbitration 77
Notes between two persons can be entertained by a civil court so also they can
be the subject matter of arbitration.
---------------------- ●● The party wanting to appoint an arbitrator by initiating the proceedings
---------------------- must first of all issue a notice stating the dispute and his claims thereby
calling upon the other party to agree with his request for the appointment
---------------------- of the arbitrator as per the terms of the agreement. That is, there is no bar
to approach the civil court.
----------------------
●● The Act has international applicability as the Act has provisions for the
---------------------- applicability of the international Foreign Tribunal’s Awards.
---------------------- ●● Failing any agreement between the parties, regarding the appointment of
arbitrators, the power to nominate the arbitrators has been given to the
---------------------- Chief Justice of High Court.
●● When there is an international arbitration as in case of an international
----------------------
commercial transaction, and when one of the parties belongs to India, the
---------------------- parties to the contract are free to assign or allocate the applicability of the
law as regards to the substance of the dispute.
----------------------
●● After the appointment of the arbitrator, there is no need for the parties
---------------------- to declare or give an undertaking that they abide by the award of the
arbitrator.
----------------------
●● After the appointment of the arbitrator, all matters and objections regarding
---------------------- his appointment or his credentials shall be raised before him only.
●● Till the arbitrator makes the award, there can be no way in which to stop
----------------------
him from making the award.
---------------------- ●● The Arbitrator has no power to issue interim orders by way of any
injunctions for the stay or appointment of commissioners or receivers
---------------------- or the suspension of any proceedings. If the parties so wish, then they
---------------------- have to approach the civil court for the same during the pendency of the
arbitral proceedings.
---------------------- ●● The arbitrator can take a security deposit for the preservation of the
---------------------- property in dispute from any one of the parties to the dispute.
●● The arbitrator is not under any obligation to follow any of the procedures
---------------------- prescribed in the CPC.
---------------------- ●● The award shall be written based on reasons to have arrived at the decision.
---------------------- ●● There is no provision for any appeal against any of the proceedings
recorded by the arbitrator.
---------------------- ●● There shall not lie any appeal against any interim or final award of the
arbitrator.
----------------------
●● An application for the setting aside of the interim or the final award can
---------------------- be made only to the civil court.
---------------------- ●● The same rules apply to the application and enforcement of the foreign
award as if it were made by a domestic arbitral tribunal.
----------------------

●● The arbitrator has powers to appoint any experts that he may deem fit for Notes
the purposes of arriving at the decision.
●● In the new enactment, the difference between the arbitration with or ----------------------
without the intervention of the court has been removed. Now there is only ----------------------
one type of arbitration which is initiated by the parties with their mutual
consent. ----------------------
Two of the most important points of the Arbitration and Conciliation Act, ----------------------
1996 are that the agreement to go in for arbitration is made irreversible
and irrevocable by the Act and the award is executable even without the ----------------------
court’s intervention as the award has a binding effect and is equivalent to
the decree of a civil court. ----------------------
The Arbitrator ----------------------

Arbitration means the settlement of a dispute by the intervention and decision ----------------------
of a third person. The dispute has to be submitted to that person by the consent
of both the parties. The Arbitrator hears both the sides in a judicial manner. ----------------------
Encyclopedia Britannica defines Arbitration as ‘a means of settlement of ----------------------
disputes of differences by the decision not of the regular and ordinary courts of
law but of a person or persons who are called as arbitrators and are appointed ----------------------
by the parties or with their actual or constructive consent’. The arbitrator is not
involved in the dispute and his decision is accepted by both the parties. Both ----------------------
are winners at the end of the settlement in one or the other ways. He should ----------------------
be a competent, knowledgeable and an experienced person. He should be a
thorough professional. He shall act with absolute neutrality. Since the new Act, ----------------------
institutions offering professional Arbitrators to the warring parties have been
established. The Arbitrators can be drawn from a pool of Arbitrators to suit the ----------------------
subject matter expertise of the case in hand. ----------------------
Several questions were raised as to the constitutionality of the Act and also while
dealing with the question if interference by any court challenging the arbitral ----------------------
tribunal during the pendency of the arbitral proceedings, here in this case, the ----------------------
Supreme Court has held that “During the proceedings the court’s interference is
done away with. Even if there is a challenge to the constitution of the tribunal, ----------------------
it is left to the arbitrator to decide the same in the first instance. If a challenge
before the arbitrator is not successful, the tribunal is permitted to continue the ----------------------
arbitral proceedings and make an award. It is later when the arbitral award ----------------------
is made that the party challenging the arbitrator may make an application for
setting aside the award on the ground regarding the constitution of the arbitral ----------------------
tribunal while challenging such an award. Thus course of action is spelt out in
the Act itself”. ----------------------
Some of the decisions that were held regarding the Arbitration and Conciliation ----------------------
Act of 1996:
----------------------
●● The understanding as to the appointment of an arbitrator later on in the
life of the contractual agreement does not amount to the application for ----------------------
the appointment of the arbitrator. It has to be expressly provided in the
agreement itself. ----------------------
Arbitration 79
Notes ●● In a case it was held that as there was no arbitration agreement within
the meaning of Section 7 of the Act, in violation to the provisions of the
---------------------- Act, the High Court cannot on its own appoint an arbitrator and refer the
matter to an arbitrator.
----------------------
●● For the Arbitration to be applicable, the contractual obligations should
---------------------- have been concluded. If in a tender document an arbitration clause is
present and the tender was rejected in spite of it being the lowest bid, the
---------------------- bidder cannot invoke the arbitration clause and present his claim, because
---------------------- there is no finality of the contract yet.
●● When in an Agreement there is a clause regarding Arbitration, and this
---------------------- was signed by both the parties but a subsequent Agreement was signed
---------------------- by only one of the parties, it was held that there is no arbitration clause as
duly accepted by both the parties; hence no reference to arbitration was
---------------------- allowed.
---------------------- ●● Blanks in the Arbitration clause cannot be filled later regarding the person
to be nominated as an arbitrator or there cannot be drawn any meaning as
---------------------- to the interpretation of the blanks.

----------------------
----------------------
1. The Arbitration and Conciliation Act of 1996, was enacted based on
---------------------- the ___________.
---------------------- i. TRIPS Agreement
ii. GATT
----------------------
iii. UNICITRAL model Laws
----------------------
iv. UDHR
---------------------- 2. Arbitration and Conciliation Act of 1996 defines Arbitration in section
---------------------- _____ of the Act.
i. 2
----------------------
ii. 3
----------------------
iii. 6
---------------------- iv. 7
----------------------
---------------------- Activity 1
---------------------- Read and comment on M.M.T.C. Limited v/s Sterlite Industries (India)
---------------------- Ltd.
----------------------

5.3 TYPES OF ARBITRATION Notes
ADR is an all inclusive term encompassing all the other dispute resolution ----------------------
methods in place and in supplemental to the adjudicative or the adversarial
processes for dispute resolution. ADRs have become a sort of a substitute method ----------------------
for the traditional methods of dispute resolution through the litigation process.
----------------------
They serve as an alternative option to litigation methods and have emerged as
an important movement in some of the developed countries of the world. These ----------------------
have immensely reduced the costs of litigation and the time consumed for the
delivery of justice. The prosperity of trade and commercial transaction depends ----------------------
on the early resolution of disputes. Re-litigation is prevented by going in for the
----------------------
Arbitration process as there is finality of the award.
The types of Arbitration are: ----------------------
●● Formal and Informal Arbitration: Where the rules of the proceedings ----------------------
of the arbitration are strictly adhered to under the provisions of the Act, it
is a formal arbitration and where it is not followed and the provisions are ----------------------
not made use of, then it is termed as an informal arbitration. ----------------------
●● Adhoc Arbitration: In India most of the arbitration is Adhoc arbitration.
It is a kind of a private proceeding in which the parties themselves choose ----------------------
the arbitrators and appoint them, and take the proceedings till the end by ----------------------
making the award. It is a process by which the parties do not take option of
appointing the arbitrators through an institution. The parties, the arbitral ----------------------
tribunal and the arbitration proceedings are to strictly adhere to the rules
as prescribed by the Act. This kind of an award is also a final award and ----------------------
it has got the finality to it. A suit is also expelled in case of an arbitration ----------------------
agreement. This type of arbitration can be sought in any domestic, foreign
or an international arbitration. There has to be a consensus regarding the ----------------------
procedures of the arbitration among the parties. Cooperation is hard to
come in this type of arbitration as the parties are at war with each other. ----------------------
Fees are not fixed, and the infrastructure too poses a problem as it has to ----------------------
be decided as to the place where the arbitration will take place. Security
and secrecy regarding the case at hand may not be maintained due to lack ----------------------
professionalism among the staff that is hired privately.
----------------------
●● Institutional Arbitration: The appointment of the arbitrators, the
proceedings and the procedure of the arbitration are done through with ----------------------
the help of an institution. In this scenario, the rules of the institution are to
be strictly adhered to. The Institution has to be named in the very contract ----------------------
or commercial Agreement that the parties have entered into thereby ----------------------
deciding in advance on the recourse to arbitration through the Institution
named. The arbitrators have to be members of that institution. Section ----------------------
6 of the Act gives a choice to the parties that they can get assistance in
the proceedings of the arbitration either from an institution or from an ----------------------
individual. The Institution fixes the fees. The place of the Institution can ----------------------
be hired for the arbitration proceedings to take place. Experts in the field
of the subject matter are also available from the arbitration panel so that ----------------------
Arbitration 81
Notes the parties are free to choose the arbitrators. The scrutiny of the award
is also available to be done by the experts and experienced committee
---------------------- in the Institutions like the International Chamber of Commerce (ICC),
The International Centre for Alternate Dispute Resolution (ICADR),
---------------------- the Federation of Indian Chamber of Commerce and Industry (FICCI),
---------------------- and the Indian Council of Arbitration (ICA), so that it can remove any
doubts as regards any legal or technical mistakes. The Indian Council of
---------------------- Arbitration (ICA) is the main body at the top of all the Institutions that has
handled the most number of arbitration cases in India.
----------------------
●● Domestic Arbitration: It is referred to the arbitration that takes place
---------------------- locally in India, the procedure applied is all Indian, the applicable laws
are also Indian, or where the parties are subject to the Indian Jurisdiction
---------------------- of the courts and/or the cause of the dispute has wholly arisen on the
Indian soil.
----------------------
●● International Arbitration: In this type of arbitration, one of the parties
---------------------- to the litigation is either an Indian resident or is domiciled in India, or that
the subject matter of the dispute may have arisen in a foreign country,
---------------------- or may be one of the parties has business interests in one of the foreign
---------------------- countries of the world, or may be the arbitration agreement has been
entered into in a foreign country and hence if any dispute arises due to the
---------------------- aforementioned causes, then it can be resolved by arbitration and that too
an international one.
----------------------
●● Foreign Arbitration: In this type of arbitration, the proceedings of the
---------------------- arbitration are held in a foreign country and the award is also treated and
is enforced as a foreign award.
---------------------- ●● Private Arbitration: This is an arbitration which is also known as the
---------------------- consensual or mutual arbitration. It is arbitration by the consent of the
parties and not by force or statutory or any mandatory pressure. It is
---------------------- because the parties have entered into a private agreement.
---------------------- ●● Statutory Arbitration: As many of the Indian Acts specifically provide
for the dispute to be resolved by arbitration, and when the two warring
---------------------- parties are directed and mandated by law to resolve their dispute by
arbitration, it is known as Statutory Arbitration. The Statute itself is
---------------------- provided for the arbitration proceedings and the arbitrators too.
---------------------- ●● General Arbitration: If the parties to a contract want to submit to
arbitration in case of any or all of the differences that arise due to any
---------------------- circumstances, then such a type of agreement is termed as a General
Agreement and the arbitration that is taken recourse to in the event of
---------------------- any dispute is known as the General Arbitration. All or any of the series
---------------------- of events leading to the disputes may be resolved by the same arbitrator.
●● Specialized: This arbitration is that which purely caters to the specific
---------------------- rules as laid down for the conduct of arbitral proceedings for specialized
---------------------- industries.
●● Contractual Arbitration: If in case of any dispute arising from a
---------------------- contractual obligation and in that agreement if the arbitrators are named,

and appointed by a chosen authority, in advance, then such an arbitration Notes
is known as the contractual arbitration. The arbitration clause forms a part
of the main contract. The arbitrators are generally paid by the disputing ----------------------
parties.
----------------------
----------------------
Match the following.
i. Ad hoc arbitration a. One foreign and one domestic party ----------------------
in the dispute ----------------------
ii. Institutional Arbitration b. Act specifically mentions that
dispute to be solved by arbitration ----------------------
iii. Statutory arbitration c. Parties themselves decides the rules ----------------------
iv. International Arbitration d. Appointment of arbitrators done
with the help of institution ----------------------
----------------------
5.4 AGREEMENT OF ARBITRATION ----------------------
Section 2(1) (b) makes a provision that the section be read and interpreted along ----------------------
with Section 7 of the Arbitration and Conciliation Act, 1996. Section 2(1) (b)
defines an arbitration agreement as an agreement referred to in Section 7. ----------------------
Section 7 (1) defines an arbitration agreement as “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”. There is a mandatory and compulsory requirement that
----------------------
the arbitrator be appointed in the Arbitration Agreement itself. The agreement
shall be in writing and shall also be signed by both the parties to the contract. ----------------------
The arbitration agreement can also be implied from the document signed by
the parties, or any exchange of letters, communications which provide for the ----------------------
record of the agreement, or any exchange of statement regarding the existence
----------------------
of an agreement and not been denied by the other party. Section 7(5) states
that “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”. ----------------------
Form of the Agreement: ----------------------
●● The intention of the parties shall be construed from the terms of the
Agreement. If so, then it is an arbitration agreement. ----------------------
●● If the parties have desired that the disputes be referred to an arbitrator ----------------------
and that is not clearly indicated in the terms of the agreement but the
intention of the parties to go in for arbitration is clear from the terms of ----------------------
the agreement, then it is an arbitration agreement.
----------------------
●● Even a willingness to go in for arbitration as indicated in the agreement
is enough proof of the intention of the parties and it is termed as an ----------------------
Arbitration 83
Notes arbitration agreement. But the same is only seen as a mere possibility, as
contrary to the belief that the parties intended to go in for arbitration, in
---------------------- such a case it shall not be construed as an arbitration agreement.
●● Even if the terms in use are not clear with regards to arbitration or arbitral
----------------------
tribunal, or if there is an ambiguity regarding the reference to arbitral
---------------------- tribunals relating to the settlement of disputes, the clause has to be
taken into consideration as an arbitration clause and the agreement as an
---------------------- arbitration agreement.
---------------------- ●● The intention of the parties should be such that they are in mutual agreement
to refer their future contractual disputes to a private tribunal for resolution.
---------------------- ●● The private tribunal shall be empowered to resolve the disputes in an
unbiased way.
----------------------
●● The arbitrator has to be a neutral person.
---------------------- ●● The parties should have expressly agreed to or that their intention must
---------------------- be such that the award of the arbitration tribunal shall be binding upon
them. All these points put together go to prove the intention of the parties
---------------------- to constitute the agreement as an arbitration agreement.
●● The agreement should have been signed by both the parties.
----------------------
●● The agreement shall be a middle path or way in such manners that it
---------------------- proves to be a provisional device for the settlement of any future disputes
or any future disagreement regarding the contractual obligations to be
---------------------- resolved by an arbitral tribunal.
---------------------- ●● There has to be made a provision for the settlement of future disputes or
any disagreements mounting as disputes that are to be resolved amicably.
---------------------- ●● The tribunal or the form of settlement of any future dispute shall be
---------------------- selected and preferred from either the order of a court or by the parties
through the agreement. Majority of the important rights of the parties
---------------------- have to be agreed to be resolved by the arbitral tribunal, in advance as a
measure to solve the dispute amicably.
----------------------
●● No specific form of the arbitration agreement is stipulated by the Act.
---------------------- ●● There is no standard form of an arbitration agreement.
---------------------- ●● There shall not be any ambiguity regarding the arbitration clause, that
is, if there is an arbitration clause, it has to be adhered to strictly and not
---------------------- loosely, by saying that the parties may go and approach the courts in case
of any disputes.
----------------------
●● If the arbitration agreement provides for the rules of the arbitration as defined
---------------------- in the arbitral institution, then it is obligatory on the part of the parties to
abide by them. Those rules then shall form the part of that agreement.
---------------------- ●● The agreement of arbitration must spell out the number of arbitrators, the
procedure of arbitration, the place of arbitration, the fees of the arbitration,
----------------------
the working of the tribunal, and the characteristics of the tribunal.
---------------------- ●● The agreement must be able to be determined precisely regarding the
conditions of arbitration. There must not be any uncertainty regarding the
---------------------- agreement.

●● There is no mandatory provision in the Act regarding the number of Notes
arbitrators on the panel of the tribunal.
●● As the arbitration agreement is a contract in itself, all the ingredients of ----------------------
an agreement and a contract do play a major role. As in a contract so in
----------------------
the arbitration agreement there has to be an offer and an acceptance and
a consideration too. ----------------------
●● The consideration is in the form of a promise to go in, mutually as agreed,
for the arbitration proceedings in case of any future disputes. There also ----------------------
has to be an assurance as regards the refraining from going to the court as ----------------------
recourse for the resolution of the dispute.
●● Both the parties to the agreement have to be legal persons and not some ----------------------
non-legal persons.
----------------------
●● They must be able to sue and be sued.
●● The subject matter of the dispute has to be a legitimate and a lawful ----------------------
subject matter. It cannot be an illegal subject matter. ----------------------
●● The arbitration application shall be accompanied with the arbitration
agreement. It is that important. Unless it is accompanied by the arbitration ----------------------
application to the court for invoking the arbitration clause, the application
cannot be taken into consideration. ----------------------
●● Even when the matter is subjudice, the arbitration process can go on and ----------------------
the award can be made during the pendency of the matter before the court.
----------------------
Thus the arbitration agreement is a very important document for the
resolution of the dispute at hand. ----------------------
The expression ‘Arbitration agreement’ under section 7 of Arbitration and
----------------------
Conciliation Act, 1996 means
a. Any agreement which have arisen under the Arbitration Act of 1940. ----------------------
b. Any agreement to submit to arbitration all or certain disputes which have ----------------------
arisen or which may arise between them in respect of a defined legal
relationship, contractual or not. ----------------------
c. Any agreement to submit to arbitration certain disputes of civil nature ----------------------
d. Any agreement to submit to arbitration certain disputes of criminal nature.
----------------------
----------------------
1. It’s not necessary to have arbitration agreement in writing. ----------------------
2. There is no mandatory provision in the Act regarding the number of ----------------------
arbitrators on the panel of the tribunal.
----------------------
3. Arbitration rules shall not formthe part of the arbitration agreement.
----------------------
4. Both the parties to the arbitration agreement have to be legal persons
and not some non-legal persons. ----------------------
Arbitration 85
Notes
Activity 2
----------------------
---------------------- Read and comment on K.K. Modi v/s K.N. Modi case.
----------------------
5.5 BENEFICIAL ASPECTS OF ARBITRATION
----------------------
Arbitrations do have an edge over the other ADRs. The grounds upon which
---------------------- an arbitration award can be challenged in a court of law have been drastically
reduced. The arbitrator’s powers have been increased under the Act of 1996.
---------------------- ●● Arbitration does not allow any issue and dispute to aggravate as there is
---------------------- finality to the arbitral award.
●● There is a huge reduction in the expenses as regards arbitration.
----------------------
●● No party is allowed to use any kind of pressure or any delaying tactics for
---------------------- the stalling of the arbitration procedure.
●● There is more elasticity in the procedural aspects of arbitration.
----------------------
●● Though the time limit for the making of the award has been deleted, the
---------------------- arbitrator is expected to make the award as expeditiously as possible.
●● There is an air of convenience regarding the process of arbitration.
----------------------
●● One can choose the arbitrator which is not the case with regards to
---------------------- litigation. One cannot choose the judge as one prefers.
---------------------- ●● The ability to negotiate is reduced though.
●● There is a secrecy that is maintained regarding the arbitration matter.
----------------------
●● The arbitrator plays a dual role, that of an expert and an arbitrator at the
---------------------- same time.
●● There is no formality of procedure.
----------------------
●● Arbitration awards are not appealable.
---------------------- ●● There is a win-win situation. There remains no resentment among the
parties to arbitration.
----------------------
●● Arbitration is a righteous and an upright way of giving a decision.
---------------------- ●● No interference for any of the courts.
---------------------- ●● The tribunal members can be chosen and appointed according to the
wishes of the parties by mutual consent.
----------------------
●● The arbitrators can be chosen by a third party or an outside party.
----------------------
----------------------

1. There is a huge ___________ in the expenses as regards arbitration.
----------------------
2. The tribunal members can be chosen and appointed according to the
---------------------- wishes of the parties by ___________ consent.

Summary Notes
●● The Arbitration and Conciliation Act, 1996 has been enacted for the ----------------------
benefit of the warring parties to settle their disputes amicably without any
----------------------
further resentment among them.
●● The Arbitration Agreement is an important document in the whole of the ----------------------
arbitration process. It has to be a written agreement either by way of a
----------------------
clause in the contract agreement or by way of a separate agreement on
arbitration. ----------------------
●● The object of the Act of 1996 is to amalgamate and consolidate all the
----------------------
other Acts
----------------------
Keywords
----------------------
●● The Act: The Arbitration and Conciliation Act, 1996.
----------------------
●● ICADR: The International Centre for Alternate Dispute Resolution.
----------------------
●● FICCI: The Federation of Indian Chamber of Commerce and Industry.
●● ICA: The Indian Council of Arbitration. ----------------------
●● CPC: Civil Procedure Code. ----------------------
●● ICC: The International Chamber of Commerce.
----------------------
1. Write a brief history of ancient Arbitration System in India. ----------------------

2. Write about the history of Arbitration system in India during the British Era. ----------------------
3. What is the scope of the Arbitration and Conciliation Act, 1996?
----------------------
4. What are the objects of the present Act on Arbitration?
----------------------
5. Write the main salient features of the Arbitration and Conciliation Act,
1996. ----------------------
6. What are the types of Arbitration? ----------------------
7. What are the ingredients of an Arbitration Agreement?
----------------------
8. What are the benefits and aspects of Arbitration?
----------------------
Answers to Check your Progress ----------------------
----------------------
1. The Arbitration and Conciliation Act of 1996, was enacted based on the
___________. ----------------------
iii. UNICITRAL model Laws ----------------------
Arbitration 87
Notes 2. Arbitration and Conciliation Act of 1996 defines Arbitration in section
________ of the Act.
----------------------
iv. 7
---------------------- Match the following.
---------------------- i. -c
ii. -d
----------------------
iii. -b
----------------------
iv. -a
---------------------- 1. False
2. True
----------------------
3. False
----------------------
4. True
---------------------- 1. There is a huge reduction in the expenses as regards arbitration.

2. The tribunal members can be chosen and appointed according to the
---------------------- wishes of the parties by mutual consent.
----------------------
Suggested Reading
----------------------
---------------------- 1. Frey, Martin A. 2002. Alternative Methods of Dispute Resolution.

---------------------- Other Processes.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Arbitral Tribunals
UNIT
6
Structure:
6.1 Arbitral Tribunals

6.2 Jurisdiction of Arbitrator
6.3 Commencement of Arbitration and Appointment of Arbitrator
6.4 Proceedings before the Arbitrator
6.5 Appointment of an Expert
6.6 Termination of the Arbitrator
6.7 Termination of the Arbitration Proceedings
6.8 Death, Insolvency and Minority of the Parties
6.9 ADR’s Unique Features
6.10 Arbitration Procedure and Widely Used Procedures
Summary
Key Words
Suggested Reading
Arbitral Tribunals 89
Notes
Objectives
----------------------
----------------------
• Explain the composition and working of Arbitration Tribunals in
---------------------- India
---------------------- 6.1 ARBITRAL TRIBUNALS
---------------------- Introduction
---------------------- In the previous unit, we have learnt about the history of Arbitration in India. It
is the most convenient of all the ADRs in India and the world over. We have
----------------------
also seen the salient features of the Arbitration and Conciliation Act of 1996.
---------------------- There are different types of Arbitration. The Agreement of Arbitration is the
most important document in the whole of the ADR process. We have also seen
---------------------- as to how a clause in a contractual agreement can be implied and taken to be an
arbitration agreement. There are many beneficial aspects of Arbitration. Now in
----------------------
this unit, we shall learn about the composition and working of the Arbitration
---------------------- tribunals. We shall also acquaint ourselves with the appointment of the arbitrator
and the expert and on what grounds the termination of the arbitrator can be
---------------------- carried out. Firstly, we shall learn about the Arbitral Tribunals.
---------------------- Section 2(1) (d) of the Arbitration and Conciliation Act, 1996 says nothing
much about the Arbitral Tribunals. It only says that the tribunal means a “Sole
---------------------- Arbitrator” or a “Panel of Arbitrators”.
---------------------- The quasi judicial body is collectively known as the “Tribunal” even if there was
a sole arbitrator. The Tribunal arbitrates and gives its decision. The definition is
---------------------- also very simple as the process of Arbitration.
---------------------- It is arbitrarily constituted by the consent of the parties; it is not a fixed body.
---------------------- Section 10 throws more light on the meaning which states that the parties are
free to determine the number of Arbitrators, provided that they need to be odd
---------------------- in numbers.
---------------------- It is not invalid if there are two arbitrators, because then they are in agreement
with the award. It creates problem when the two disagree regarding the award.
---------------------- In case where the third arbitrator resigns or ceases in any way to hold the office,
---------------------- and in case the parties do not wish to appoint any other third arbitrator, the
arbitration continues with the remaining two arbitrators.
----------------------
The Arbitrators can also be appointed with the help of the Permanent Arbitral
---------------------- Institutions.
The Arbitral institutions give only the administrative assistance for the process
----------------------
of Arbitration.
---------------------- The Arbitral Tribunals do not act in the implementation of the process under the
---------------------- judicial power of the State, though they help in the settlement of the disputes.

Section 11(9) of the Act of 1996, provides that in case of international commercial Notes
transactions, either a sole arbitrator(s) of any nationality than that of the parties,
in case where the persons or parties belonging to different nationalities, shall ----------------------
be appointed.
----------------------
The Arbitral Tribunal is created under the aegis of the Arbitration Agreement
of the disputants. ----------------------
The procedure of the Arbitral Tribunal shall be such that as decided upon by the ----------------------
arbitrators themselves, as they think fit but it shall not be opposed to law.
----------------------
The agreement between the parties must be in conformity with the law that
is brought, in force at that time, before the Arbitral Tribunal. An arbitration ----------------------
agreement can only be revoked with the consent of the parties.
----------------------
After going through the contentions or the disputable points, the Arbitral
Tribunal must act in accordance with the general law of the land to make the ----------------------
parties come to a settlement.
----------------------
The basis for the Arbitral Tribunal being the written Agreement between parties,
the proceedings can start only after it goes through the agreement. The dispute ----------------------
has to be settled based on the principles of natural justice and fairness of law.
----------------------
The settlement award also has to be made based on the equity and good
conscience as laid down in Section 28(2). Though it need not necessarily be in ----------------------
accordance with the legal requirements.
----------------------
The Tribunal deals with the same power as of the court to refer the matter to it.
----------------------
●● The Tribunal also deals with the jurisdiction of the subject matter of the
dispute. ----------------------
●● The Tribunal deals with the appointment, termination and the making of
----------------------
the award.
●● The Tribunal also takes and keeps the records for the settlement of the ----------------------
dispute.
----------------------
●● Section 15(1) (A) states that the arbitrators can withdraw or resign from
the office of Arbitral Tribunal for any reason. ----------------------
●● It has power to fix the time schedule for the parties to produce the witness ----------------------
or take oral evidence, or fix the time for the oral arguments, and also the
manner regarding the same, and also to decide whether the proceedings ----------------------
shall be conducted on the basis of the oral evidence or the production
of documents and examining them or any other material relevant to the ----------------------
matter in hand. ----------------------
6.2 JURISDICTION OF ARBITRATOR ----------------------
Section 16 deals with the jurisdiction of the Arbitral Tribunal. . Jurisdiction ----------------------
means the areas or subject matters on which a person or a court can decide
----------------------
and settle and make an award. The arbitrator can decide and settle a dispute
with the full authority as a quasi judicial person. He can decide whether the ----------------------
Notes matter is barred due to time or is presented to him within the limitation. He can
decide about the legality or the lack of it regarding a transaction. That means his
---------------------- jurisdiction’s ambits are the ‘disputes arising out of or in relation to the contract’.
He can also decide whether there exists any arbitration agreement or not in the
---------------------- first place. He can also decide whether the subject matter of dispute that is
---------------------- presented to him actually comes within his jurisdiction or not. The arbitrator
also can decide about the question of the existence of the arbitration agreement
---------------------- under section 16(a), if in a case the arbitral tribunal decides that the contract
is null and void, that does not necessarily invalidate the arbitration clause. The
---------------------- question that the tribunal is acting ultra virus its scope, shall be raised as soon
---------------------- as the matter alleged to be beyond its jurisdiction is raised during the arbitral
proceedings. Prior to the defence files its submission, the plea that the arbitral
---------------------- tribunal does not have the jurisdiction to settle the dispute in question shall be
raised. And such an objection can be raised by the party even though it was
---------------------- one of the parties to appoint the arbitrator. If this plea is rejected, then it can go
---------------------- ahead and decide the matter. The arbitral tribunal may at the request of the party
wanting it, order the other party to take any interim measures for the protection
---------------------- of the subject matter as the tribunal may deem fit in the circumstances of the
dispute in hand.
----------------------
The disputes may arise in areas of the general laws. If the contractual
---------------------- obligation is over on the part of the parties, then if an additional work is done
as a continuation, and a dispute arises, then the arbitration clause under the
----------------------
previous agreement is not applicable. The contractual obligation may be
---------------------- implied or expressly stated between the parties. And so the arbitral tribunals
have a jurisdiction to settle those disputes which are placed before them in
---------------------- the form of a written agreement. The jurisdiction of the tribunal is to settle the
disputes arising out of the contractual legal relationship, whether Statutory or
----------------------
otherwise. But it does not have the jurisdiction to settle the dispute relating to
---------------------- the subject matter that is strictly reserved for the Court, tribunals other than
arbitral, administrative bodies, or the Government. An arbitrator does not have
---------------------- jurisdiction over the private international law cases or the Public International
laws to the limits that they relate to the personal laws of the foreigners. The
----------------------
Arbitral Tribunal can settle the disputes relating to the commercial transactions
---------------------- in a foreign dispute and not the personal subject matter of the foreigners. An
arbitrator can settle a dispute relating to nature of the personal property, and
---------------------- decide whether the property belongs to a certain matter, or if there is any joint
ownership, or if the property belongs to a joint family, etc., but it cannot appoint
----------------------
any receiver or a guardian to dispose off any minor’s property as a court can do.
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
State True or False. ----------------------
1. Arbitration tribunal must consist of odd number of arbitrators. Even
----------------------
number of arbitrators renders the proceedings null and void.
1. Which section in the Arbitration and Conciliation Act, 1996 deals ----------------------
with the jurisdiction of the Arbitral Tribunal?
----------------------
i. Section 12
ii. Section 15 ----------------------
iii. Section 16 ----------------------
iv. Section 18 ----------------------
2. The definition of ‘Arbitral Tribunal’ under the Arbitration and
Conciliation Act, 1996 means ----------------------
i. Sole arbitrator or a panel of arbitrators ----------------------

ii. Sole arbitrator only ----------------------
iii. Panel of arbitrators only
----------------------
iv. Presiding officer
----------------------
3. The arbitral tribunal may arrange for administrative assistance
i. With the consent of the parties ----------------------
ii. With the consent of the claimant ----------------------
iii. Without the consent of the parties
----------------------
iv. On its own, irrespective of the consent of the parties
----------------------
6.3 COMMENCEMENT OF ARBITRATION ----------------------
AND APPOINTMENT OF ARBITRATOR
----------------------
Appointment of Arbitrators:
----------------------
Section 10 deals with the appointment of number of arbitrators.
----------------------
●● It states that the parties are free to appoint any number of arbitrators as
they think fit and proper in the given circumstances. Based on the Article ----------------------
10(1) of the Model Law of UNCITRAL, and with limitation as stated
earlier, the number of arbitrators shall not be even which means they ----------------------
have to be appointed in odd numbers. With limitation because the Model
Law of UNCITRAL gives the parties a choice to appoint an even as well ----------------------
as an odd number of arbitrators. But the Indian Arbitration Act places ----------------------
a restriction for the same because a majority opinion of the arbitrators
prevails. ----------------------
Notes ●● The parties are free to make a settlement of their dispute on the award
made by their own chosen judges.
---------------------- ●● Vacancy regarding an arbitrator can be filled in by the parties to the
---------------------- dispute.
●● If in the agreement the agreed terms show that there are three arbitrators
---------------------- to be appointed, and the party to whom the notice is given fails to comply
---------------------- then in that case the first party giving the notice cannot ask for a single
arbitrator to be appointed.
---------------------- ●● The party, who has agreed to the terms of the appointment of the arbitrators
---------------------- in the agreement, cannot at a later stage question the said appointments
made in accordance with the agreement.
---------------------- ●● There is a provision in the Act of 1996 regarding the ‘Presiding Arbitrator’.
But there is no provision regarding the appointment of an Umpire in this
----------------------
new Act. In the previous Act of 1940, he was known as the ‘Umpire’. The
---------------------- third arbitrator is known as the President of the Tribunal. He takes part
actively in the proceedings before him. The award of the Tribunal is based
---------------------- on the majority of the opinion of the panel of arbitrators. The opinion of
the majority of the arbitrators shall prevail.
----------------------
●● To act and function as an arbitrator, first the consent of the Arbitrator is
---------------------- necessary.
---------------------- ●● The nomination or the appointment procedure of the arbitrators is
completed when the party or the parties nominating or appointing them
---------------------- communicates it in writing in very clear terms to the other parties.
---------------------- ●● In case of the appointment by any institution or by any other authority, it
is complete when it is communicated to both the warring parties by such
---------------------- other third party.
---------------------- ●● If in case where a party wants to go in for a court case, by filing a suit,
then the party desiring the arbitration procedure to be carried out shall file
---------------------- his objection for filing the suit before he files his written statement. If only
a part of the suit is covered by arbitration then only that part will have an
---------------------- award and the rest of the suit can be proceeded in the court.
---------------------- ●● Under the new Act of 1996, there is no provision as regards the reference
by the Court to any other arbitrator except the one to be appointed as
---------------------- agreed under the agreement. The Court can only ask the parties to go
---------------------- in for arbitration and nothing more when the question arises during the
pendency of the suit.
---------------------- ●● As regards the objections to be filed regarding either the appointment
---------------------- of the arbitrator or the procedure adopted by the arbitral tribunal, both
shall be filed before the arbitrator himself. These objections are known as
---------------------- the Challenges under the Act of 1996. Even the objection regarding the
jurisdiction of the arbitrator can be filed before him only.
----------------------
●● The proceedings may or may not come to an end if the arbitrator either
---------------------- decides that he has jurisdiction or not.

●● According to Section 11, a person belonging to any country or nationality Notes
can be appointed as an arbitrator. Hence a foreigner can also be appointed
as an arbitrator. ----------------------
●● According to Section 11(6), the parties are free to agree and decide on the
----------------------
procedure for the appointment of the arbitrators.
●● The parties may decide that the arbitrator may be appointed by a third ----------------------
person chosen by them, or they may themselves appoint the arbitrator.
----------------------
●● As decided upon consensus, each of the parties is free to appoint a number
of arbitrators provided such appointment of the arbitrators adds up to an ----------------------
odd number.
----------------------
●● After giving notice to the other party, and where the Chief Justice is
approached, the Chief Justice may appoint the arbitrator after examining ----------------------
the arbitral clause in the agreement.
●● The Chief Justice has the jurisdiction to decide whether a particular ----------------------
person is a party to the agreement or not. The same can be answered by ----------------------
the names of the parties on the agreement.
●● The Chief Justice may refuse to appoint the arbitrator if he finds that the ----------------------
claim does not deserve to be arbitral, or if the claim does not figure in the
----------------------
arbitration clause.. The decision of the Chief Justice is final and binding
and no further appeal or any revision lies. ----------------------
●● It is not necessary that the parties do approach the Chief Justice for the
appointment of the arbitrator; they may do it on their own too. Only in ----------------------
cases of failure to agree or accept the arbitrator that they can approach the ----------------------
Chief Justice for the appointment of the arbitrator.
●● Unless all the parties agree in consonance to the appointment of the ----------------------
arbitrator only then he may proceed with the arbitration procedure,
----------------------
otherwise he may not have any legal status. In any unforeseen event
regarding the appointment, the disputing party shall approach the Chief ----------------------
Justice for the fresh appointment.
●● If the parties so fail to agree on a procedure to appoint the arbitrators, ----------------------
then each party shall appoint one arbitrator and these two arbitrators shall ----------------------
appoint the third arbitrator.
●● If within sixty days the above method and the request to appoint the ----------------------
arbitrator fails, or if the two appointed arbitrators fail to appoint the third
----------------------
arbitrator, within sixty days from the date of their appointment, the right
to make such an appointment is taken away or it is deemed to have been ----------------------
waived, then such appointment is to be made by any designated institution
or by the High Court. But this will only be done upon the request by the ----------------------
parties and not otherwise.
----------------------
●● According to Section 10(2), if there is no consensus regarding the number
of arbitrators to be appointed, then the Arbitral Tribunal shall appoint a ----------------------
sole arbitrator for the settlement of the award.
----------------------
●● If again the parties fail to appoint the arbitrator within sixty days, then it
shall be entrusted to an institution or the High Court to appoint the arbitrator. ----------------------
Notes ●● Due regard shall be had to the qualifications of the arbitrator as regards
the agreement or as decided upon in the agreement between the parties.
---------------------- ●● This is true in case of Central, State Government, Public Sector
Undertaking, or a statutory body, or a corporation as the case may be
----------------------
to appoint the above stated persons as an arbitrator. The clause shall not
---------------------- render the agreement void.
●● In case of an international commercial arbitration, either the sole arbitrator
---------------------- or a panel of three arbitrators, the appointment of the sole or the third
---------------------- arbitrator shall be from a country other than that of the nationality of the
parties.
---------------------- ●● In case of an international arbitration either commercial or not, if any
reference is made to the High Court for the appointment for the arbitrators,
---------------------- it shall be construed that the reference is made to the Supreme Court.
---------------------- ●● In case where the appointment of the arbitrator is challenged and if it fails
then the arbitrators have the power to continue the arbitration proceedings
---------------------- and make the award.
---------------------- Commencement of Arbitration:
●● Section 18 states that the parties are to be treated equally for the purposes
---------------------- of the proceedings.
---------------------- ●● Section 19(2) states that the parties are free to decide and agree on the
procedure to be followed by the tribunal and if there is no such consensus,
---------------------- then the tribunal is free to decide its own rules of procedure for the conduct
of the proceedings.
----------------------
●● Section 21 deals with the commencement of the arbitral proceedings.
---------------------- They commence on the date on which a request for a dispute is referred to
it for the settlement if already not decided by the parties.
----------------------
●● The language of the proceedings to be conducted also can be decided by
---------------------- the parties failing which the tribunal itself may decide upon the language
of the proceedings.
---------------------- ●● It can order for the translation of the documentary evidence produced
before it, in the language as decided upon by the parties and if not then as
----------------------
decided by the tribunal itself.
---------------------- ●● The Arbitral Tribunal is not bound at all by the CPC, or the Indian
Evidence Act, 1872.
----------------------
●● When the claimant presents his claim to the arbitrator, the arbitrator shall
---------------------- disclose in writing, whether he has any professional or business related
relationship with the claimant or to the subject matter of the dispute,
---------------------- either in the past or present and that he is unbiased.
---------------------- ●● Then the claimant shall state his facts, the points at issue, and the remedy, or
the relief sought within the time as agreed upon by the parties to the dispute.
---------------------- ●● Then the respondent shall submit his defence supporting the particulars
and facts that he relies upon, in the particular timeframe.
----------------------
●● The statements may be supported by the relevant documentary evidence
---------------------- of both the parties.

●● If agreed upon, the parties are free to amend or supplement their claim Notes
or defence, during the course of the proceedings, unless the contrary is
decided by the tribunal having regard to the delay of the same. ----------------------
●● If the claimant or the respondent fails to submit or communicate his claim
----------------------
or the defence statement respectively, the arbitral tribunal shall terminate
the proceedings. ----------------------
●● The tribunal can continue to hear the parties and make an award even if
a party fails to appear before at an oral hearing or if it fails to produce ----------------------
documentary evidence. ----------------------
●● The parties are entitled to be given sufficient notice about the hearing or
of any meeting of the tribunal. ----------------------
●● The production of any documentary evidence, any expert opinion, or ----------------------
report by any one of the parties shall be communicated to the other party
by the tribunal. ----------------------
●● According to Section 27, on an application to the court, the tribunal or
----------------------
any of the parties with the approval of the tribunal can take the assistance
of the court in taking evidence. ----------------------
●● The court can also issue the same processes (summons, commissions), to
the witnesses as it may issue in suits before it for the trial. ----------------------
●● In case of persons failing to show up as witnesses or make any default, by ----------------------
refusing to give evidence, they shall be subject to the same punishments
or penalties as though they have committed the offence of not showing ----------------------
up, before the court itself.
----------------------

----------------------
----------------------
1. Arbitral proceedings commence
----------------------
i. On the date on which a request for a dispute to be referred to
arbitration is received by the respondent. ----------------------
ii. On the date when the respondent gives consent to the
----------------------
appointment of the arbitrator.
iii. On the date when the arbitrator issues notice of the parties. ----------------------
iv. On the date when the statement of claim and written submission ----------------------
of defence is made.
2. An arbitrator is: ----------------------
i. Is chosen and paid by the disputant ----------------------
ii. Acts in accordance with privately chosen procedure so far as
that is not repugnant to public policy ----------------------
iii. Only i is correct ----------------------
iv. Both i and ii are correct.
----------------------
Notes
Activity 1
----------------------
---------------------- Read and comment on Harish Chimunbhai Shah v/s Rajesh Prabhakar
Jhaveri
----------------------
---------------------- 6.4 PROCEEDINGS BEFORE THE ARBITRATOR

----------------------
●● The party that wants to initiate the arbitration process shall issue a notice
---------------------- to the other party setting out his claim to agree with him for the terms of
appointment of the arbitrator. The existence of the clause of arbitration
---------------------- means that the Arbitration Act of 1996 will apply. It does not bar the
warring parties to go to court for the Redressal of their grievance.
----------------------
●● The Arbitration and Conciliation Act, 1996 does not prescribe any
---------------------- procedure for the conducting of the arbitration proceedings. The parties
are free to decide on the same. But in case they do not agree, then the
---------------------- Rules of the Act shall apply.
---------------------- ●● The parties are free to decide upon the place of arbitration, but if
no consensus, then the tribunal shall decide the same subject to the
---------------------- convenience of the parties.
---------------------- ●● The party which initiates the arbitration proceedings by way of issuing
a notice to the other party is known as the Claimant. The other party is
---------------------- referred to as the respondent. The arbitrator sends the claim statement to
---------------------- the Respondent for him to file his response.
●● After replying to the notice either in negative or if the Respondent agrees
---------------------- for the arbitration procedure, then the Arbitrator calls upon the parties to
---------------------- file the documents.
●● If the other party does not agree with the contents of the notice, then the
---------------------- party sending the notice may apply to the Chief Justice of High Court
---------------------- in case of a domestic arbitration and to the Supreme Court, in case of
a dispute arising out of an international commercial transaction or the
---------------------- person or the institution as designated in the agreement.
●● The bar against the interference of the Civil Court does not stop the High
----------------------
Court from exercising its revision jurisdiction against the civil court’s
---------------------- order made under the Section 37 of the Act of 1996.
●● The claim statement shall restrict itself to all the claims arising under the
----------------------
reference.
---------------------- ●● The counter filed by the respondent in response to the claim statement
of the claimant, it shall restrict itself to only the claims as stated by the
----------------------
claimant and nothing more.
---------------------- ●● There is a bar to the same subject matter dispute being taken for a number
of arbitration proceedings. All claims raised before the arbitrator shall be
----------------------

raised in one go otherwise it will be treated as the waiver of the right to Notes
arbitration. They shall not be entertained in any subsequent arbitration if
any. ----------------------
●● The arbitral tribunal may pass a peremptory order regarding the conduct ----------------------
of arbitration proceedings prescribing the time limit for the compliance of
the orders, as it deems fit. ----------------------
●● If the party fails to honour the same, then the tribunal may pass another ----------------------
order as regards the payment of costs of the arbitral proceedings so
incurred in consequence of the non-compliance of the peremptory orders. ----------------------
●● The arbitral tribunal has the power to decide the admissibility, materiality ----------------------
and the relevancy of the evidence that is produced before it.
----------------------
6.5 APPOINTMENT OF AN EXPERT
----------------------
Section 26 deals with the appointment of an expert. Unless otherwise agreed by
----------------------
the parties, which is contrary for the appointment of an expert, the tribunal may,
and it is not mandatory at all for the tribunal to appoint one or more experts. ----------------------
They have to report to the tribunal on the specific issues to be determined by
the tribunal. The tribunal may require that the expert be informed about any ----------------------
relevant information as may be needed. The expert may also participate in the
----------------------
oral hearing where the parties can put any questions to him and he can also
present the expert witnesses so that they can try to give evidence on an oath on ----------------------
the point of dispute.
----------------------
1. There is a ______ to the same subject matter dispute being taken for ----------------------
a number of arbitration proceedings.
----------------------
2. The arbitral tribunal has the power to decide the __________,
__________ and the __________ of the evidence that is produced ----------------------
before it.
----------------------
6.6 TERMINATION OF THE ARBITRATOR ----------------------
----------------------
Section 14 of the Arbitration Act of 1996 states that only when an arbitrator
by law or in fact is unable to perform his duties or functions according to law ----------------------
or for any other reason fails to act without undue delay, then consent for the
appointment as an arbitrator shall come to an end, or ----------------------
●● The consent as regards the appointment of the arbitrator also shall come ----------------------
to an end when he himself withdraws from his office or he is terminated
on agreed terms as to the termination between the parties. ----------------------
----------------------
Notes ●● If in case there is no agreement as to the consent regarding the appointment
of the arbitrator as to the term of the arbitrator between the parties, then a
---------------------- party may apply to the court to decide on the termination of the mandate.
---------------------- ●● Section 15 of the Act of 1996, states that the arbitrator’s mandate shall
terminate if he himself withdraws from the office or upon the agreement
---------------------- between the parties regarding the termination of his mandate. After such
a termination, steps are to be initiated for the appointment of a new
---------------------- arbitrator who shall enter the reference, and a substitute arbitrator is
---------------------- appointed within a period of thirty days in accordance with the rules as
applicable to the appointment of that arbitrator.
---------------------- ●● If upon the termination of the mandate of the arbitrator, the previous
---------------------- hearings or proceedings that were held by his predecessor may even be
taken afresh at his discretion, by the agreement of the parties.
---------------------- ●● If on the contrary the parties so desire and agree that the proceedings
---------------------- already taken need not be repeated, the newly appointed arbitrator will
have to continue further with the process of arbitration.
---------------------- ●● An order or a ruling passed or given by the earlier arbitrator shall not
be invalid just because there has been a new appointment or a change
----------------------
in the composition of the panel of arbitrators. This also depends on the
---------------------- agreement between the parties.
●● Upon the mandate of the arbitrator being terminated, the amount of fees
----------------------
payable to him is decided by the court.
----------------------
Activity 2
----------------------
---------------------- Read and comment on W. Wood & Sons Ltd v/s Bengal Corporation.
----------------------
6.7 TERMINATION OF THE ARBITRATION PROCEEDINGS
----------------------
The termination of the arbitration proceedings come to an end in three ways:
----------------------
●● By the expiration of the time given for the making of the final award,
---------------------- including the time taken by the arbitrator for the correction of any errors,
---------------------- or give any further clarifications, or make any additional award in case of
any lost matters.
---------------------- ●● In case the termination is due to the expiration of the time given for the
passing of final award, the court does not have the power to extend the
----------------------
time without the consent of the parties, as the time was fixed by the parties,
---------------------- by the arbitration agreement.
●● The arbitration proceedings may also come to an end where the arbitrator
----------------------
finds that the continuation of the proceedings has become impossible or
---------------------- unnecessary.
----------------------

Termination of mandate: Notes
●● If the claimant himself fails to communicate his statement of claims and
if it is so agreed as regards the consequences of the same in the arbitration ----------------------
agreement, then the arbitration proceedings come to an end, thereby ----------------------
terminating it.
●● In case of the failure of the respondent to file his response, the arbitration ----------------------
proceedings shall still continue. Then the claim will be decided on merits ----------------------
though that failure may not be treated as the admittance of the claims
against him. The arbitrator has to compulsorily record the statement of ----------------------
evidence of the claimant on an oath, in case the proceedings are carried
out without the presence of the respondent. ----------------------
●● If the respondent reappears, then he can still take part in the proceedings. ----------------------
●● In case of an arbitration clause in the agreement, the parties cannot go in
----------------------
for a writ and approach the High Court.
●● If during the arbitral process the parties decide to settle the dispute without ----------------------
going any further in the arbitration process, the tribunal shall terminate
the proceedings and record the settlement in the form of an award on the ----------------------
agreed terms and conditions. ----------------------
●● The order of the arbitrator terminating the proceedings under Section 25A
cannot be appealed against in any court of law except by a writ petition ----------------------
filed in the High Court that has jurisdiction of the case. ----------------------
----------------------
1. In case of an arbitration clause in the agreement, the parties cannot ----------------------
file a civil suit. ----------------------
2. Upon the mandate of the arbitrator being terminated, the amount of
fees payable to him is decided by the parties. ----------------------
----------------------
6.8 DEATH, INSOLVENCY AND MINORITY OF THE
----------------------
PARTIES
----------------------
Death of one or of both the parties:
●● The death of any of the parties to the arbitration will not render either the ----------------------
agreement or the proceedings as terminated. ----------------------
●● The arbitration proceedings stand in the name of the legal representatives
of the deceased person, only in the case of the cause of action legally ----------------------
surviving against the legal representatives.
----------------------
●● In case where the cause of action is entirely and absolutely personal, it
will not survive after the death of the deceased person or party so there ----------------------
is absolutely no question of the initiation of the arbitration proceedings
against the legal representatives. ----------------------

Notes ●● If the parties have agreed in the agreement that the arbitration clause will
survive even after the death of one of the parties, it continues to operate
---------------------- irrespective of whether the reference to arbitration was done before or
after the death of one of the parties or persons in the agreement.
----------------------
●● Death of one of the parties to agreement and arbitration does not result
---------------------- in the invalidation of the arbitration or the authority of the arbitrator
appointed by the deceased.
----------------------
●● If a person dies and prior to it, he has signed on behalf of the other persons
---------------------- or the company as a representative of it, the proceedings of the arbitration
will not come to an end. They will be continued against the persons whom
---------------------- the deceased had represented. The legal representatives are the people
who are either the persons who represent the estate and the interest of the
---------------------- deceased. They may be his heirs, successors, executors of the property
---------------------- under his will, etc.
●● As there is no provision for the procedure to get the legal representatives
---------------------- of the deceased on record, it is thus left to the judicial authority or the
arbitrator himself, if approached by the legal representative, to add and to
----------------------
add him as the parties representing the deceased.
---------------------- Insolvency of the parties:
---------------------- ●● Section 41 deals with the insolvency issue of the parties to the agreement
of arbitration.
---------------------- ●● When a contracting party becomes insolvent, the receiver becomes the
---------------------- party which adopts the arbitration clause along with the contract. Because
as he chooses to adopt the contract, it follows that he is bound by the
---------------------- arbitration clause too. So also if he does not wish to adopt the contract, he
is not bound by the arbitration clause. But he has to act under the direction
---------------------- of the insolvency court.
---------------------- ●● The receiver who adopts the contract has to apply to the court having
the required jurisdiction on insolvency proceedings, for reference of the
---------------------- matter in dispute for arbitration.
---------------------- ●● The court of insolvency shall make a decision regarding the reference
of arbitration and issue directions to the receiver to take further steps in
---------------------- accordance with Section 11 for the appointment of the arbitrators, if it
thinks fit that the matter in dispute be resolved through arbitration.
----------------------
Minority:
---------------------- ●● If one of the parties to the agreement is a minor, then it is the duty of all
the parties concerned including the duty of the arbitrator, to appoint one
----------------------
guardian for such a minor.
---------------------- ●● The arbitrator cannot himself directly appoint a guardian hence he may
either direct one of the parties or himself make an application to the court
---------------------- for the appointment of a guardian.
---------------------- ●● Such an application to appoint a guardian is an independent application
procedure for the sole purposes of the arbitration proceedings and nothing
---------------------- more.

●● If the court is not satisfied with the manner in which the guardian
• Notes
performs, the court may appoint another guardian for the purpose.
----------------------
6.9 ADR’S UNIQUE FEATURES
----------------------
We have already seen in Unit III -Alternative Dispute Resolution (ADR) about
----------------------
the unique features of the ADRs. Hence only the main unique features are
mentioned. ----------------------
●● The ADR cannot be invoked unless both the parties are in agreement with ----------------------
the settlement of the issues at hand.
●● They can be used as a tool for any matter in dispute which can be resolved ----------------------
under any law.
----------------------
●● ADR techniques are extrajudicial in character.
----------------------
●● They can be terminated by any one of the parties to the dispute.
●● They can be used to resolve any dispute which is lawful and legal but ----------------------
without the help of a lawyer.
----------------------
●● The ADR procedures are simple and easy to handle for the case in hand.
●● Both the parties are in a win-win situation. ----------------------
●● It is a settlement of the dispute and not something where only one party is ----------------------
benefitted and the other goes without any settlement.
----------------------
●● ADRs can be used even when the proceedings are continuing before a
court of law. ----------------------
----------------------
----------------------
1. Which Section of the Arbitration Act deals with thein solvency issue
of the parties to the agreement of arbitration? ----------------------
i. Section 14 ----------------------
ii. Section 41
----------------------
iii. Section 44
----------------------
iv. Section 15
----------------------
6.10 ARBITRATION PROCEDURE AND WIDELY USED
----------------------
PROCEDURES
----------------------
Though the styles of the arbitration may differ the world over, yet all are
supposed to comply with their own country’s rules and regulations and hence ----------------------
amicably settle the dispute. The law on International Commercial Arbitration ----------------------
which is based on the UNCITRAL Model Law caters to the international
disputes only. Now let us study the various types of characteristics of the ----------------------

Notes Arbitration Procedures first in the context of Indian Law and later on the widely
used procedures the world over.
----------------------
●● The Indian Arbitration Procedure is based on the Arbitration Agreement.
---------------------- ●● Then the Arbitrators are appointed by the mutual consent of the parties as
agreed to in the Agreement.
----------------------
●● Then the Arbitral Tribunals are constituted.
---------------------- ●● The place of arbitration is decided by the consent of both the parties.
---------------------- ●● The power possessed by the arbitrators is the main characteristic of the
Indian Arbitration Procedure.
----------------------
●● Then the Jurisdiction of the arbitrators is decided.
---------------------- ●● The extent of the court’s interference is negligible.
---------------------- ●● There is a wide transparency of all the procedure.
●● The arbitrators are under an obligation to state the reasons for the arrival
----------------------
of the settlement award.
---------------------- Arbitration procedure as adopted in various parts of the world in a nutshell.
In 1986 Canada was the first country to adopt the UNCITRAL Model Law on
----------------------
International Commercial Arbitration for the provincial and the federal levels.
---------------------- There is consolidation of the arbitral proceedings. There is a very limited scope
for the court’s intervention in case of the judicial review of the arbitral awards
---------------------- and the proceedings. There is full autonomy given to the parties and also a
freedom to enter into a contract.
----------------------
In the United States, neutrals who are experienced in their fields are appointed
---------------------- as the arbitrators. The arbitrator is expected to render justice to the best of his
abilities, be honest and impartial as well as be neutral. The US courts are highly
----------------------
sympathetic to the parties seeking to confirm their arbitral awards. In France,
---------------------- arbitration falls within the ambit of private justice. Most of the civil cases
are settled out of the court. Arbitration in England is of a very ancient origin.
---------------------- Arbitrators the world over are known as the “Agents of Healing”.
----------------------
----------------------

1. Which was the first country to adopt the UNCITRAL Model Law
---------------------- on International Commercial Arbitration for the provincial and the
---------------------- federal levels?
i. India
----------------------
ii. USA
----------------------
iii. UK
---------------------- iv. Canada
----------------------

Summary Notes
●● Arbitration depends heavily and strictly on the Arbitration Agreement and ----------------------
the clause of arbitration, regarding the matter in dispute, the appointment
----------------------
of the arbitrators and the procedure to be followed.
●● If in disagreement regarding the same, then the Chief Justice is approached ----------------------
and the appointment issue of the arbitrator is resolved.
----------------------
●● The number of arbitrators shall be odd. The appointment of the expert is
also made on the application of the parties. ----------------------
●● The final award made by the Arbitrators is binding on the parties. ----------------------
Keywords ----------------------
----------------------
●● CPC: Civil Procedure Code.
●● Expert Report: It is the report on the opinion of the expert as appointed ----------------------
by the application of one of the warring parties.
----------------------
1. What are Arbitral Tribunals? ----------------------

2. Write about the jurisdiction of the Arbitral Tribunals. ----------------------
3. How and what are the ways in which the appointment of the arbitrators is
----------------------
made?
4. How do the arbitration proceedings commence? ----------------------
5. What is the procedure to be followed for the appointment of the expert? ----------------------
6. What are the ADRs unique features? ----------------------
7. How are the arbitral proceedings terminated?
----------------------
8. How is an arbitrator terminated from his post?
9. Write about the unique features of ADRs. ----------------------
10. What are the main characteristics of the Indian Arbitration Procedure? ----------------------
----------------------
----------------------
1. False ----------------------
1. Which section in the Arbitration and Conciliation Act, 1996 deals with
----------------------
the jurisdiction of the Arbitral Tribunal?
iii. Section 16 ----------------------

Notes 2. The definition of ‘Arbitral Tribunal’ under the Arbitration and Conciliation
Act, 1996 means
---------------------- i. Sole arbitrator or a panel of arbitrators
---------------------- 3. The arbitral tribunal may arrange for administrative assistance
i. With the consent of the parties
----------------------
1. Arbitral proceedings commence
----------------------
i. On the date on which a request for a dispute to be referred to
---------------------- arbitration is received by the respondent.
2. An arbitrator is:
----------------------
iv. Both i and ii are correct.
1. There is a bar to the same subject matter dispute being taken for a number
---------------------- of arbitration proceedings.
---------------------- 2. The arbitral tribunal has the power to decide the admissibility, materiality
and the relevancy of the evidence that is produced before it.
1. True
----------------------
2. False
1. Which Section of the Arbitration Act deals with the in solvency issue of
---------------------- the parties to the agreement of arbitration?
---------------------- ii. Section 41

----------------------
1. Which was the first country to adopt the UNCITRAL Model Law on
---------------------- International Commercial Arbitration for the provincial and the federal
levels?
----------------------
i. Canada
----------------------
Suggested Reading
----------------------
---------------------- 1. Frey, Martin A. 2002. Alternative Methods of Dispute Resolution.

Other Processes.
----------------------

Arbitration Award
UNIT
7
Structure:
7.1 Definition and Components of Arbitration Award

7.2 Foreign Arbitral Awards
7.3 Form and Contents of the Award
7.4 Terms of the Award
7.5 Essentials and Attributes of the Award
7.6 Interim Award
7.7 Arbitral Award Acts as Res Judicata
7.8 Execution of an Award
Summary
Key Words
Suggested Reading
Arbitration Award 107

Notes
Objectives
----------------------
----------------------
• Analyze the domestic and the foreign Arbitration Award
----------------------
• Explain the essentials and attributes of the Award
----------------------
7.1 DEFINITION AND COMPONENTS OF ARBITRATION
---------------------- AWARD
---------------------- Introduction
---------------------- In the previous unit we have learnt about the procedure of the appointment
of the Arbitrators either by the parties themselves or by the Court or any
----------------------
arbitral institution. We have also seen how the arbitration agreement is the very
---------------------- document in the entire proceedings of the arbitration process for the settlement
of the dispute. We learnt about the termination of the arbitral tribunal as well
---------------------- as the arbitrators. Now in this unit we shall learn about the definition and the
components of the arbitration award and how it is made.
----------------------
Definition of the Award
----------------------
Arbitration & Conciliation Act, 1996 does not define the “arbitral award” but
---------------------- Section 2(1) (c) states that an arbitral award includes an interim award. An
interim award also can be a final award. It is decision based on an agreement
---------------------- which is the basic and a very important document in an arbitration process.
---------------------- Unless there is an agreement, there will not be arbitration. The award will have
a binding effect on all the parties to the dispute. The contents of the arbitration
---------------------- award must be in writing and it cannot be given orally. The award comes into
effect on and from the date on which it is signed by all the arbitrators on the
---------------------- panel of the arbitration. The rights of the parties too come into effect from
---------------------- that date inwards. There is no prescribed format of any arbitration award.
But however, Section 31 of the Act of 1996 gives certain characteristics of an
---------------------- arbitration award. These have to be followed by the arbitrators.
---------------------- An award is said to be binding when it has been regularly made and that it
complies with all the formalities that are required to be followed for the
---------------------- arbitration award. It is the only unique quasi-judicial decision in the whole
gamut of the jurisprudence against which no appeal or any revision lies to any
---------------------- court or any authority. It becomes absolute and binding after the three months
---------------------- from the date of the award, if no action or recourse is taken against the award
for setting aside the award by applying to the Civil Court, by the aggrieved
---------------------- party. The Court that has received such an application to set aside the award is
not an appellate court. Its jurisdiction to set aside the award is very limited. The
---------------------- recourse to the arbitrator to make any changes to the award is only before he has
---------------------- announced the award. Any additions, alterations, corrections or deletions are to
be made before the award is signed and announced. The award is to be signed
---------------------- and registered.

Under Sec 34(1) the parties are free to file any applications for setting aside Notes
the award or under Section 36, for enforcement of the award. The application
in both the cases requires that the copy of the arbitral award is annexed to the ----------------------
application. The Act is silent regarding the filing of the original award in the
court for the purposes of Section 34(1) or Section 36 of the Arbitration Act of ----------------------
1996. As the award is treated to be a non- testamentary document, under the ----------------------
Section 17(1) of the Registration Act, hence the award is liable to be stamped
and registered. ----------------------
Components of Arbitration Award: ----------------------
The arbitrators have to keep the following things in mind when making an
----------------------
award:
●● The facts have to be stated and taken cognizance of by the arbitrators. ----------------------
They have to be stated in the award.
----------------------
●● The submission of all the parties to the dispute.
----------------------
●● The answers or the contention of the parties to their rival’s submission or
points of discord. ----------------------
●● The Arbitrators have to state their views regarding the same in the award. ----------------------
●● And finally the delivery of the interim or the final award.
----------------------
●● The arbitrators are expected to accept all the claims as well as the counter
claims of the parties who submit their submissions, in a quasi judicial ----------------------
manner. Only then it can be said that the arbitrators have followed the
----------------------
principles of natural justice and fair play.
●● According to Section 28 of the Act of 1996, unless otherwise agreed to by ----------------------
the parties, any and every decision of the arbitrators, whether interim or ----------------------
final have to be in majority of all its members barring the sole arbitrator’s
decision. ----------------------
●● But in case where there is no majority, it has to be the Presiding Arbitrator’s ----------------------
award.
This may be the case where there are only two arbitrators on the panel of ----------------------
arbitration. ----------------------
●● The questions regarding the procedure of the arbitral proceedings shall be
----------------------
decided based on the authorization of the parties or in case of no agreement
to that effect, and then it has to be decided by the Presiding Arbitrator. ----------------------
●● The decision of the panel may be a unanimous or a majority one. In the
----------------------
case of the unanimity of the decision, and in case where it is not possible,
the procedure of the decision to be made by the arbitrators can be decided ----------------------
based on what the parties have decided.
----------------------
●● In case the agreement does not provide for the same, then it has to be the
decision of the majority of all the members of the arbitration. This means ----------------------
that the decision has to be made by all the constituting members of the
panel and not the members that are present on any given day. ----------------------

Notes Rules of the essence of dispute:
●● Section 28 also states that the decision shall be made according to the
----------------------
substantive law applicable and for the time being in force in India, when
---------------------- it is a decision to be given in a domestic arbitration.
---------------------- ●● In case of an international arbitration, whether commercial or not,

when the place of arbitration is in India, the arbitral award shall be in
---------------------- accordance with the rules of law as chosen by the parties to the dispute
and as applicable to the core of the dispute.
----------------------
●● The laws agreed and chosen by the parties for the dispute resolution, shall
---------------------- be construed in accordance with the substantive law or legal system, of
that given country and not to be implied or construed as the ‘conflict
----------------------
of laws rules’ that means the laws governing the same subject matter in
---------------------- different countries differ, or the laws of the same country on the same
subject matter are contradictory or opposite to each other.
----------------------
●● If the parties fail to choose the law that needs to be applied to the given
---------------------- dispute, the arbitral tribunal is free to apply the laws that it thinks fit and
appropriate in the circumstances of the case or the dispute at hand.
----------------------
---------------------- 7.2 FOREIGN ARBITRAL AWARDS

As a result of the foreign arbitration, an award is made and it is known as the
----------------------
‘foreign arbitral award’. It is not made as the result of a domestic arbitration
---------------------- process. The courts in India only have some restrictive power to refuse the
enforcement of the foreign arbitral award. As this award is basically made on
---------------------- the agreement between the international commercial parties, the judicial control
is kept to the barest minimum. Under Section 34(2), the foreign awards are to
----------------------
be seen under two broad categories, namely the Awards under The New York
---------------------- Convention, 1958 and The Geneva Convention or the (League of Nations),
1927. These two conventions differ on the subject of enforcement of the foreign
---------------------- award.
---------------------- Awards under the New York Convention 1958:
---------------------- ●● The written agreement is to be followed when there is an agreement

between the parties; the Convention set forth in the first schedule applies.
----------------------
●● Unless the agreement is null and void, the court can refer the dispute to
---------------------- the arbitral tribunal on the application of one of the parties to the dispute.
---------------------- ●● The foreign award is binding upon all the parties to the dispute.
---------------------- ●● The party which applies to the court for the enforcement of the foreign
award must attach the original copy of the foreign award, that is duly
---------------------- authenticated as required by the law of that country where the arbitral
proceedings were held and the award made, the original agreement on
----------------------
which the arbitration was based, and all the necessary evidence to prove
---------------------- that the award is a foreign award.

●● If the award is made in a foreign language then a copy of the translated Notes
award, which is certified to be the correct translation of it, by the diplomatic
or the consular agent of the country to which that party belongs, or certified ----------------------
in a manner as may be sufficient to prove that it is correctly translated into
English, according to the law in force for the time being in India. ----------------------
●● The foreign award can be set aside on the request of the party against ----------------------
whom it is invoked, on the basis of the proof that the party furnishes to
----------------------
the court, based on the following points only:
●● The said agreement on which the award is made is invalid under the law to ----------------------
which the parties have subjected themselves to, or the party against whom ----------------------
the award is invoked was not given a proper notice of the arbitrator’s
appointment, or he was unable to present his case to that foreign arbitration ----------------------
tribunal, or the award deals with a difference that is not a subject matter
of the dispute between the parties, or it is made beyond the scope of the ----------------------
presentation of the dispute to the arbitration tribunal, or only if there are ----------------------
allegedly any infirmities or any irregularities in making and arriving at the
said award, and this is to be done by any of the parties to the dispute by ----------------------
way of an application to the court of law in India, and
----------------------
●● on an application by one of the parties to the court that the subject matter
of the foreign arbitral proceedings was of a non-arbitral nature under the ----------------------
prevalent law, or
----------------------
●● That the award is made against and as opposed to the public policy in
----------------------
India means it was made under undue influence, fraud and under the
pressure of corruption. ----------------------
●● When the court receives an application for the setting aside the foreign ----------------------
award, it may if it considers proper and fit, suspend the decision of the
enforcement of the award, and also may ask the other party that is pursuing ----------------------
the enforcement of the award to provide an appropriate security deposit.
----------------------
●● Under Section 50 of the Act of 1996, an appeal shall lie to the court
authorised by law to hear appeals from that court’s order refusing to refer ----------------------
the parties to arbitration for international arbitration, under section 45, or
----------------------
on an order refusing to enforce the foreign award under Section 48.
●● Under Section 50, no second appeal lies to the court against the orders as ----------------------
stated herein before, but there is no restriction placed for the party to go ----------------------
in for an appeal to the Supreme Court of India.
----------------------
Awards under the Geneva Convention 1927:
●● In the Chapter II of the Act of 1996, under the heading The Geneva ----------------------
Convention Awards, under Section 53, the term ‘foreign award’ has ----------------------
been defined as the arbitral award made on the differences relating to the
matters that are thought of to be commercial in nature under the law for ----------------------
the time being in force in India made after 28th July, 1924.
----------------------

Notes ●● The Convention applies to an award made in pursuance where an
agreement for arbitration is made to which the Second Schedule applies.
---------------------- The agreement of arbitration under this Convention need not be in writing.
It is just a simple agreement that is referred.
----------------------
●● Chapter I of the Part II excludes the application of the Chapter I but
---------------------- Chapter II does not exclude the application of Chapter I. Chapter II will
not apply to the territories to which the Geneva Convention does not
----------------------
apply.
---------------------- ●● In case of the awards made under the New York Convention, Section 54
of the Act of 1996 makes it obligatory for the Court to refer the parties to
----------------------
a dispute to arbitration.
---------------------- ●● But under the Geneva Convention, the Court’s are under an obligation to
refer the matter to arbitration, when the party applies to the court for such
----------------------
reference. It is not necessary that the court also be of the same country
---------------------- where the agreement is made for the arbitration.
---------------------- ●● Under Section 55, any award made under this chapter shall be binding on
the parties between whom it was made. It shall also be enforceable in the
---------------------- country where it was made.
---------------------- ●● Under Section 56, the party applying for the enforcement of the foreign
award at the time of the application to the court, shall produce the original
---------------------- award or a copy thereof, which is authenticated as required by law of the
country that has made it, and the party also shall produce evidence that
---------------------- the award has become final.
---------------------- ●● Again where the award made is in a foreign language, then it shall be
translated into English and certified to be correct by a diplomatic or
---------------------- consular agent of the country to which the party belongs or it is sufficient
---------------------- if it is proved to be correct in the manner as required according to the
Indian law in force at that time.
----------------------
●● The burden of proof under Section 56 regarding the binding nature of the
---------------------- Award is on the party applying for the enforcement of the foreign award.
●● Section 57 lays down the conditions for the enforcement of the foreign
----------------------
award.
---------------------- ●● The conditions being that the award has been made due to the submission
---------------------- of the parties to the arbitration which is valid under the law applicable
thereto.
---------------------- ●● The subject matter of the dispute is capable of being settled by the process
---------------------- of arbitration under the Indian law.
●● The foreign award has been made by the arbitral tribunal which was
---------------------- constituted according to the agreement of the parties and in conformity
---------------------- with the law that governs the arbitration procedure.
●● The award is a final award in the country in which it was made, which
----------------------

means that no proceedings are pending before any court regarding the Notes
validity of the award in that country.
----------------------
●● The enforcement of the award is not contrary to the public policy or any
law in India, which means it, was made by fraud or under the pressure of ----------------------
corruption.
----------------------
The enforcement of the award in India may be refused on the ground that:
●● it was void in the country under which it was made, or ----------------------
●● The party, against whom it is sought to be used, was not given a notice of ----------------------
the arbitration proceedings in a sufficient time to enable it to present its
case. or ----------------------
●● That the party was not legally capable to represent itself. or ----------------------
●● That the award was not made regarding the subject matter of the dispute ----------------------
for which it was referred to the tribunal. or
----------------------
●● That the tribunal acted ultra virus.
Adjournment of the enforcement of the foreign award: ----------------------
●● The court may, if it thinks fit, refuse to enforce the foreign award or ----------------------
adjourn the consideration thereof, on the grounds other than the grounds
already mentioned above, give such party a reasonable time within which ----------------------
it can have the award declared as void by the said competent tribunal. ----------------------
Enforcement of the foreign award:
----------------------
●● According to Section 58, if the court is satisfied that the foreign award is
enforceable under Chapter II, the award shall be deemed to be decree of ----------------------
the court.
----------------------
Section 59 - Appealable Orders:
----------------------
●● Appeal lies only from the orders of the court where it has refused to refer
the matter to arbitration under Section 54, to enforce the foreign award ----------------------
under section 57 of the Arbitration and Conciliation Act, 1996, to the
court as authorised by law to hear appeals from such order. ----------------------
●● No second appeal lies from the refusal of the first appeal (from an order ----------------------
passed in the first appeal),
----------------------
●● There is again no restriction to go to the Supreme Court on an appeal.
These provisions are similar to that of the provisions regarding the New ----------------------
York Convention.
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------

1. There is no prescribed format of any arbitration award.
----------------------
2. The Arbitrators need not have to state their views regarding contentions
---------------------- and submissions in the award.
1. The party applying for the enforcement of a foreign award shall,
----------------------
produce before the court
---------------------- i. Original award or a copy thereof authenticated by law of the
country
----------------------
ii. Original agreement for arbitration or a duly certified copy
---------------------- thereof
---------------------- iii. Such evidence as may be necessary to prove that the award is a
foreign award
----------------------
iv. All of the above
---------------------- 2. To invoke international commercial arbitration it is necessary that at
---------------------- least one of the parties is:
i. A body corporate which is incorporated in any country other than
---------------------- India
---------------------- ii. Government of a foreign country
---------------------- iii. An individual who is a national of, or habitually resident in any

country other than India
---------------------- iv. All of the above
----------------------
---------------------- Activity 1
----------------------
Read and comment on Pradip Trading Co v/s State of Bihar.
----------------------
---------------------- 7.3 FORM AND CONTENTS OF THE AWARD

---------------------- Section 31 of the Arbitration and Conciliation Act, 1996, states about the form
and contents of the award:
----------------------
●● It shall be in writing though writing of the award does not make it an
---------------------- award it shall also at the same time be signed by the arbitrators.
---------------------- ●● In the case of many arbitrators the award may be signed by the majority
of the arbitrators so long as the reasons for the omission of the signature
---------------------- are stated.

●● It has also to include the date, day and the place of making the award. Notes
●● The parties shall be provided with the certified copy of the signed award.
----------------------
●● Unless otherwise agreed by the parties to the contrary, the arbitral award
may also charge an interest on any payment of money, that the party needs ----------------------
to pay to the other party, at the rate of interest as it thinks fit and deems
reasonable in the circumstances of the case, on the whole or a part of the ----------------------
payment money, for the whole of the period or a part of the period, from ----------------------
the date of the cause of action and the date of making the award.
●● If rate of interest is not stated in the award, the rate of interest shall be ----------------------
eighteen percent per annum from the date of the award to the date of the ----------------------
payment.
●● The arbitral tribunal shall also spell out the party that is entitled to costs, ----------------------
the party that has to pay the costs, the way or the method, manner and
----------------------
mode of payment, and the method of determining that amount to be paid.
●● ‘Costs’ in this case means reasonable costs and not exorbitant ones, like ----------------------
the payment of the fees of the arbitrators and the witnesses, etc.
----------------------
●● ‘Costs’ also includes the legal fees and the related expenses. It may also
include the Institution’s fees for the supervision of the entire arbitration ----------------------
process, and any other expenditure that has been incurred relating to the
----------------------
arbitration process.
----------------------
7.4 TERMS OF THE AWARD
----------------------
Section 29 of the Act of 1996, states the ways in which the award is to be made
by the arbitral tribunal. ----------------------
●● The award must be in writing and it must be a signed award. It must bear ----------------------
the signatures of all the arbitrators. It is not necessary to write the minutes
of the recordings of the evidence taken before the arbitrators. ----------------------
●● Signatures of the parties on the award are not necessary. ----------------------

●● It must be a reasoned award unless the parties have agreed that the award ----------------------
need not state the reasons.
●● The validity of the award is based on the agreement. The agreement ----------------------
normally contains the requirements of a valid award. That means the ----------------------
arbitration process is so very flexible and equity based that from the
appointment of the arbitrators to the choice of the laws, to the method of ----------------------
the arbitration procedure, to the method of making the award, everything
is mutually understood and agreed by the parties. Even the very number ----------------------
of arbitrators to the arbitrators themselves is to be chosen by the parties. ----------------------
The place of arbitration can and is also decided mutually by the parties.
●● A certified copy of the award must be delivered to all the parties to the ----------------------
dispute.
----------------------
●● It must be a speaking award which means that it must spell out the
contentions and the counter contentions of the parties and the reasons ----------------------

Notes behind coming to a conclusion of the award based on the evidence
deduced.
---------------------- ●● The arbitration costs shall be fixed by the award.
---------------------- ●● There shall be no ambiguity in the award as regards the language of the
award. It shall be plain and simple.
----------------------
●● The arbitral tribunal may during the arbitral proceedings, make an interim
---------------------- award on any matter, and further with respect to that matter make the final
award too.
----------------------

---------------------- 1. The parties shall be provided with the _____ copy of the signed
award.
----------------------
2. There shall be no ambiguity in the award as regards the ______ of the
---------------------- award.
---------------------- 3. A certified copy of the award must be delivered to _____ the parties
to the dispute.
----------------------
4. Arbitral award has also to include the _____ ,______ and the _____
---------------------- of making the award.
----------------------
---------------------- 7.5 ESSENTIALS AND ATTRIBUTES OF THE AWARD

---------------------- In the Indian context and also everywhere else, the arbitrators are referred to
as the ‘agents of healing’. The disputes are settled according to the agreement
----------------------
between the parties. They are settled at a fast pace. They have a finality of the
---------------------- awards. An arbitral award is the rendering made at the end of the arbitration
proceedings by the arbitral tribunal. It is made to settle the dispute as referred
---------------------- by the disputing parties to the arbitral tribunal. The award can be in the nature
of an interim award or a final award. It is binding on all the parties to the
----------------------
dispute. The unique feature of the arbitral award under the Act of 1996 is that
---------------------- the party need not have to wait for a formal court decree to enforce the award.
The dispute is to be settled by whichever law the parties prefer and in case of no
---------------------- understanding regarding the applicability of the laws; it is best left to the choice
of the arbitral tribunal to decide in terms of the contract and the relevant usages
----------------------
in the transactions of the agreement.
---------------------- Essentials of the Award:
---------------------- A valid, enforceable arbitration award must have the following essentials:
---------------------- ●● It must be a written award and must also be a signed award. It is a binding
award. If a receiver is appointed by the tribunal, and if he has to adopt the
---------------------- contract, then he is also bound by the award under section 41(1) of the

Act of 1996. Even an insolvent that has joined the arbitral proceedings Notes
before the insolvency proceedings have started, or any other receiver or
any party that applies for the submission to the arbitral proceedings, is ----------------------
bound by the award under section 41(2) of the Act of 1996.
----------------------
●● As per Section 31(3) of the Act of 1996, an arbitral award must be a
reasoned award. ----------------------
●● The contractual agreement must contain a clause on arbitration in case of ----------------------
any future disputes that may have arisen.
●● The award must also be made in connection with the subject matter of the ----------------------
dispute and the arbitral proceedings. ----------------------
●● The basic feature of the award is that it should have been made on the
mutual consent of the parties to the dispute. That means it should have ----------------------
been made on the Mutuality Principle.
----------------------
Attributes of the Award:
----------------------
●● The term award also includes an interim award.
●● An award is still an award though it has only approved the terms as put by ----------------------
both the parties to the agreement.
----------------------
●● The award is deemed to be held as admissible in evidence though it
may not have been signed by the other parties who are not parties to the ----------------------
arbitration agreement.
----------------------
●● The award is to be filed in the same court that made the reference to the
arbitration. ----------------------
●● The award is said to be a final award when it rests the matter in dispute to ----------------------
its completion.
●● A mere approval of the compromise that is arrived at by the parties in ----------------------
front of the arbitrator is not to be treated as an award. ----------------------
●● The controversy of the dispute has to be totally put to rest, which means
there is no further chance of any future litigation regarding the same ----------------------
subject matter. ----------------------
●● The award has to be a distinct and an exact award. It cannot be uncertain
and an ambiguous award. It has to be properly precise and a detailed ----------------------
award. ----------------------
●● There should not be any reasonable doubt that can and may arise on the
face of it as regards any duties that have been imposed due to the making ----------------------
of the award. ----------------------
●● It can not be challenged on the very ground that it has not been based on
proper evidence or that the arbitrator has not given sufficient findings on ----------------------
various issues or difficulties that were presented before the tribunal.
----------------------
●● The Act also specifically states that unless agreed to by the parties, the
arbitrators need not necessarily give the detailed reasons for arriving at ----------------------
the decisions in the award.
----------------------

Notes ●● The award is to be construed on the real intentions of the arbitrators.
●● The award should be treated as a wholesome document and no portions of
---------------------- it should be hand-picked alone and treated on their own for any meaning
---------------------- to be assigned to them without the reference to any context to the whole
award and the intention behind arriving at the same.
---------------------- ●● It is not left to the court to peek into the mind of the arbitrator unnecessarily
---------------------- when the arbitration award is a speaking award. It has to be accepted as
the award alone.
---------------------- ●● The courts are therefore to give the words their simple meanings and
---------------------- nothing more.

----------------------
---------------------- 1. After the arbitral award is made, each party shall be delivered
---------------------- i. The original award
---------------------- ii. A signed copy of the award
---------------------- iii. A photocopy of the award

iv. An unsigned copy of the award.
----------------------
2. Finality to arbitral awards within meaning of section 35 of the
---------------------- Arbitration and Conciliation Act, 1996 shall
---------------------- i. Not be binding on parties
ii. Be binding on government authority
----------------------
iii. Be binding on first party only
----------------------
iv. Be binding on the parties and person claiming under them
---------------------- respectively.
----------------------
7.6 INTERIM AWARD
----------------------
An Arbitral Award may be a final or an interim award. There has to be an
----------------------
agreement for the same. It depends upon the nature of the dispute. The Interim
---------------------- Award has the same purity as the final award. The condition for the making
of the interim award is not determined by the agreement between the parties.
---------------------- The discretion is purely that of the tribunal alone. Though the interim award
has to be made in the exact way as the final award in the sense that the parties
----------------------
are heard and the total evidence of all the parties is considered. For the interim
---------------------- award to be made, some part of the dispute has to be first determined. The
interim award must also resolve all the disputes that the parties in the agreement
---------------------- have referred to arbitration.
----------------------

Notes
Activity 2
----------------------
Read and comment on Marriat International Inc v/s Ansal Hotels Ltd. ----------------------
----------------------
7.7 ARBITRAL AWARD ACTS AS RES JUDICATA
----------------------
The arbitral award has a binding effect on the parties to the dispute. It has
got a finality quotient to it. It is also to be treated as a decree of the court. On ----------------------
the question or the basis of a dispute, that has already been decided or settled ----------------------
by the arbitral tribunal by way of an award, that award acts as a res judicata
for the purposes of that particular dispute or a difference. According to the ----------------------
Oxford dictionary, Res judicata means, ‘a matter that has been adjudicated by a
competent court and therefore may not be pursued further by the same parties’. ----------------------
It is a Latin word which literally means ‘judged matter’. Hence the same holds
----------------------
good for the arbitral award too.
Once the question of dispute or the difference has been decided and settled by ----------------------
way of an award, by the Arbitral Tribunal, according to the procedure as agreed
----------------------
to by the parties, the award acts as a res judicata for that matter. Once decided,
the same matter cannot be raised in any other manner in the court of law. But in ----------------------
case of a claim not being included in the subject matter of the difference or the
dispute, and also not included in the award, that will not act as a res judicata. ----------------------
7.8 EXECUTION OF AN AWARD ----------------------
----------------------
Execution of the award means the enforcement of the award. There are different
modes of execution of the award. Section 47 of the CPC allows the parties to ----------------------
settle the issues arising out of the execution proceedings. As the decree holder
has got all the rights to enjoy the fruits of the decree that is in his favour so ----------------------
also the judgment debtor has all the rights to oppose and raise all the lawful
objections against the decree. The executing court will object to any uncertified ----------------------
payments, it has to receive all the receipts of the payments made. ----------------------
Award is equal to the decree of a civil court; the winning party shall apply to
the court under the Order 21 of the CPC, for the execution of the award. The ----------------------
award shall be stamped in accordance with the provisions of the Stamp Act. ----------------------
If the award speaks of executing any documents, then the parties themselves
can execute the award by doing so and thereby give an effect to the award. If ----------------------
the award is not made in accordance with the provisions of the Arbitration and
Conciliation Act, 1996, then it will not be treated equivalent to a decree of a ----------------------
court and hence is not executable. The award that is made in accordance with
----------------------
the provisions of the Act of 1996 shall be treated as a final settlement of the
dispute and a decree of a civil court and is hence executable. ----------------------
The award is executable in the following manner:
----------------------
●● The award can be executed through the court if an application is filed in
the court. It can be executed in all the manners available in accordance ----------------------

Notes with the CPC, by attaching the property, or the sale of the movable and
the immovable property, by also compelling the specific performance, or
---------------------- by the arrest and detention of the parties in a civil prison.
---------------------- ●● The application for the execution shall be filed three months after the
award is made but not earlier than that because the other party or parties
---------------------- may take any steps say for the correction of the errors, for clarification on
certain matters that are ambiguous, or are not clear enough, or for making
---------------------- any additional award, or the setting aside of the award, within those three
---------------------- months after the award is made. The said applications should have been
disposed off only then can an application for the execution of the award
---------------------- be made.
---------------------- ●● Any accord or any settlement or any satisfaction, that is arrived between
the parties shall be filed in the court and brought to the notice of the court,
---------------------- after the petition for the execution of the award is made.
---------------------- ●● The executing court will not be allowed to go any beyond the execution
of the award.
---------------------- ●● It has to restrict itself strictly to the execution of the award. It cannot go
into merits or demerits of the award.
----------------------
●● The execution court does not have any powers or jurisdiction to try any
---------------------- objections to the award, if it is made in accordance with the provisions of
the Arbitration and Conciliation Act, 1996.
----------------------
●● After disposing off all the objections raised by the judgement debtor or
---------------------- the party against whom the award is passed, the Court may proceed to
execute the award.
----------------------
●● The execution Court has to follow all the directions given in the arbitration
---------------------- award.
---------------------- ●● An application for setting aside the award cannot be made after forty days
in accordance with the provisions of the Act, including the last day of
---------------------- those forty days happens to be a public holiday.
---------------------- ●● When in case the award is passed in one place and it is sought to be executed
in another place, the decree of the earlier court shall be transferred to this
---------------------- court of execution.
---------------------- ●● Only that part of the award that is objected to in the execution proceedings
for setting aside the same, is affected and not the rest of the award. It
---------------------- is executable. Any legal misconduct on the part of the arbitrator cannot
be raised in the execution proceedings. It has to be raised in the subject
---------------------- matter of setting aside of the award.
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
1. The arbitral award has a binding effect on the parties to the dispute.
----------------------
2. The execution Court does not necessarily follow all the directions
given in the arbitration award. ----------------------
1. Under section 32, the principle of res judicata is applicable in: ----------------------
i. A case having reference to an arbitral Tribunal
----------------------
ii. A suit in a court of law
----------------------
iii. Interim award made by the arbitral Tribunal
iv. Only i and ii. ----------------------
2. During the arbitral proceedings the arbitral tribunal ----------------------
i. Can make interim award ----------------------
ii. May require a party to provide appropriate security
----------------------
iii. Both(i and ii
----------------------
iv. Either i or ii.
3. The court has a jurisdiction to entertain an application for interim ----------------------
measures: ----------------------
i. Either before arbitral proceeding or after making of the arbitral
award ----------------------
ii. Before the arbitral award is enforced ----------------------

iii. Can exercise power suomotu ----------------------
iv. Both i and ii.
----------------------
----------------------
Activity 3
----------------------
Read and comment on Renusagar Power Co Ltd v/s General Electric Co ----------------------
----------------------
Summary
----------------------
●● There can be an interim and a final arbitral award.
----------------------
●● There is no prescribed format for the arbitral award.
●● As the condition for an arbitral award is that, which it has to be a written ----------------------
award, giving out the reasons for the arrival of the solutions of the dispute. ----------------------

Notes ●● The arbitral procedure has to be based on the arbitration agreement.
●● Everything in the arbitration procedure is compulsorily conducted
---------------------- according to the wishes of the parties to the arbitration.
----------------------
Keywords
----------------------
---------------------- ●● The Act of 1996 or the Act: The Arbitration and Conciliation Act of
---------------------- 1996.
●● Execution of the Award: The enforcement of the award.
----------------------
●● Res judicata: According to the Oxford Dictionary, res judicata means, ‘a
---------------------- matter that has been adjudicated by a competent court and therefore may
not be pursued further by the same parties’.
----------------------
----------------------
1. Write the definition and the components of the arbitral award.
----------------------
2. What are the essentials of an arbitration award?
----------------------
3. What are the terms of the arbitration award?
---------------------- 4. What do you mean by a foreign award?
---------------------- 5. What are the New York and the Geneva Conventions for the purposes of
the enforcement of the foreign awards?
----------------------
6. What are the attributes of an arbitration award?
----------------------
7. Write a short note on the interim award.
---------------------- 8. How does an arbitration award act as a res judicata?
---------------------- 9. What is the procedure for the execution of the arbitration award?
---------------------- Answers to Check your Progress

---------------------- 1. True
2. False
----------------------
----------------------
1. The party applying for the enforcement of a foreign award shall, produce
---------------------- before the court

2. To invoke international commercial arbitration it is necessary that at least
---------------------- one of the parties is:

Fill in the blanks.
----------------------
1. The parties shall be provided with the certified copy of the signed award.
----------------------
2. There shall be no ambiguity in the award as regards the language of the
award. ----------------------
3. A certified copy of the award must be delivered to all the parties to the ----------------------
dispute.
4. Arbitral award has also to include date, day and the place of making the ----------------------
award. ----------------------
----------------------
----------------------
1. After the arbitral award is made, each party shall be delivered
ii. A signed copy of the award ----------------------
2. Finality to arbitral awards within meaning of section 35 of the Arbitration ----------------------
and Conciliation Act, 1996 shall
----------------------
iv. Be binding on the parties and person claiming under them
respectively. ----------------------
----------------------
1. True
----------------------
2. False
1. Under section 32, the principle of res judicata is applicable in: ----------------------
iv. Only i and ii. ----------------------
2. During the arbitral proceedings the arbitral tribunal
----------------------
iii. Both i and ii
----------------------
3. The court has a jurisdiction to entertain an application for interim
measures: ----------------------
iv. Both i and ii ----------------------
----------------------
Suggested Reading
----------------------
1. Frey, Martin A. 2002. Alternative Methods of Dispute Resolution.
2. Goldberg, Stephen B., Frank E.A. Sander, Nancy H. Rogers and Sarah ----------------------
Rudolph Cole. 2007. Dispute Resolution: Negotiation, Mediation, and ----------------------
Other Processes.
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Finality of the Arbitration Award
UNIT
8
Structure:
8.1 Effect of an Arbitration Award

8.2 Recourse against an Arbitration Award
8.3 Grounds for Setting Aside an Arbitration Award
8.4 Correction of an Award
8.5 Recognition and Enforcement of an Arbitration Award
8.6 Finality of an Arbitration Award
8.7 Law of Limitation as applicable to Arbitration Award
8.8 Appealable Orders under Section 37
8.9 Unappealable Awards
8.10 Waiver as Applicable to Arbitration
Summary
Key Words
Suggested Reading
Finality of the Arbitration Award 125

Notes
Objectives
----------------------
----------------------
• Examine the process enforcement of an Arbitral Award
----------------------
• Describe the procedure of appeal
----------------------
8.1 EFFECT OF AN ARBITRATION AWARD
----------------------
Introduction
----------------------
In the earlier unit, we have learnt about the arbitration award. We have also
---------------------- seen the terms, attributes and the form and contents of the award. There is no
prescribed format for writing the award though it must be in writing. It must be a
----------------------
reasoned award. Now in this unit, we are going to learn about the enforceability
---------------------- of the award and the recourse against it. Recourse against the award means the
objections that are raised against the award by the aggrieved party against whom
---------------------- the award is passed. If there is no recourse against the award, the party in whose
favour the award is passed has to apply to the civil Court for the enforcement of
----------------------
the award. Firstly, we shall know about the effect of an arbitration award.
----------------------
●● The Arbitral award brings finality to the settlement of the dispute.
---------------------- ●● It is a binding award.
---------------------- ●● It is a speaking award. It has no ambiguity regarding the settlement of the
dispute.
----------------------
●● After an award is made, it is not open for the parties to go to the Court on
---------------------- the same subject matter or the same cause of action unless the parties have
agreed with the former state of things to be restored amongst themselves.
---------------------- That means the cause of action has been worn out and extinguished.
---------------------- ●● Rights of the parties accrue only when the award is filed and a decree is
passed there from.
----------------------
●● Insufficiently stamped awards are not admissible in the Court of law for
---------------------- the purposes of evidence. It is not open for the arbitrator to rectify the
defect of stamp on an award.
----------------------
●● When an award is made as a result of the reference under Section 21, it
---------------------- is exempt from the stamp duty under Section 12 of the Stamp Duty Act,
but all other awards made for other than a reference under Section 21 are
----------------------
chargeable under the Stamp Duty Act.
----------------------
8.2 RECOURSE AGAINST AN ARBITRATION AWARD
----------------------
Recourse against an arbitration award is not in the form of an appeal. The
---------------------- application filed for the recourse against an award is an independent procedure
---------------------- and not an appeal. That Court in which the application is filed is not an appellate

Court, which means it is not a higher Court than that of the arbitral tribunal. Notes
Generally, an appeal is filed in a higher Court in the ranks than that of the Court
that has passed a verdict or a judgment. ----------------------
The Court in which the application is filed for a recourse against the award has
----------------------
to confine and limit itself only to the extent the award is challenged and on the
grounds that are urged and nothing more than that. If on the grounds urged the ----------------------
award has exceeded its limits and if found to be liable to be set aside, the Court
will set aside the award. The Court cannot exercise its inherent powers or it ----------------------
cannot also grant any relief that is not contemplated under the Act of 1996 or
the agreement. ----------------------
The Court also does not have the powers to remand the award back to the ----------------------
arbitrator for its reconsideration.
----------------------
The Court also cannot include or exclude anything which is beyond the scope of
the subject matter of the arbitration. If the Court upholds either any or all of the ----------------------
objections raised in the application for the recourse of setting aside the award,
it may require the arbitrator to make an amended award thereby eliminating ----------------------
(allowing) the objections that the aggrieved party had, that constituted the
grounds for the setting aside of the award. ----------------------
The Court may also direct the arbitrator to hear the matter and make an appropriate ----------------------
award in compliance with the findings on the objections that were raised in the
application. In any case, the award so amended and made and accepted by the ----------------------
Court will become the final award. The whole purpose is to save the award and
give it the finality that it deserves. Eliminating the grounds of objections means ----------------------
allowing the grounds. The result being that the whole award needs to be set ----------------------
aside as a consequence of eliminating the grounds. When in cases where the
Court so finds it appropriate and if the party so requests, the Court may direct ----------------------
the arbitrator to resume the arbitration proceedings, amend the award or remake
the award, thereby allowing and considering the claims in the objections so ----------------------
raised. This award so made is again considered by the Court and suitable orders
are passed accepting the award thereby dismissing the application for setting ----------------------
aside the award. ----------------------
●● The process of disposing the application for either setting aside or
accepting the award necessitates the Court to either confirm or reject the ----------------------
award.
----------------------
●● Where in case the Court directs the arbitrator to remove the grounds for
setting aside the award and thus make a new award, the Court has to ----------------------
confirm the new award and dismiss the application for the setting aside
of the award. ----------------------
●● Whatever the matter, the Court has to necessarily put in words and say ----------------------
that it accepts and confirms the award while dismissing the application for
setting aside the award. ----------------------
●● This is to be done lest there may be something in the award by reason of ----------------------
it being certain remarks or some inconsequential findings and thereby to
put them to rest. ----------------------
----------------------

Notes Manner of final disposal of the award:
●● Situations for either accepting or rejecting the award may differ.
----------------------
●● After setting aside the award upon findings that the grounds for setting
---------------------- aside the award are valid, the Court may set aside the award, and leave
the parties to look for appropriate alternative methods of solving and
---------------------- resolving their dispute by going to the Civil Court or by a fresh arbitration
proceeding.
----------------------
●● The Court can remake the award if it finds that after allowing the grounds
---------------------- for setting aside the award, and after removing the objections raised by
the aggrieved party for the same. (In these cases, the Court can use its
----------------------
discretionary powers after consulting the parties).
---------------------- ●● The Court shall direct the resumption of the arbitration proceeding after
adjourning the case, if the Court finds that the grounds for setting aside
----------------------
the award are valid, and make appropriate final orders only when the
---------------------- arbitrator has made an award at the end of the freshly resumed arbitration
proceedings, and resends the freshly made award to the Court for
---------------------- consideration. (In this scenario, the applicant shall himself request the
Court for doing so and the Court are bound to do the same).
----------------------

----------------------
---------------------- 1. Finality to arbitral awards within the meaning of Arbitration and
---------------------- Conciliation Act, 1996 shall
i. Not be binding on parties
----------------------
ii. Be binding on government authority
----------------------
iii. Be binding on first party only
---------------------- iv. Be binding on the parties and person claiming under them
respectively.
----------------------
2. An arbitral award shall be enforced in the same manner as it were a
---------------------- decree of
---------------------- i. Local authority
---------------------- ii. The court

iii. The tribunal
----------------------
iv. Both ii and iii
----------------------
---------------------- Activity 1
----------------------
Read and Comment on Donald Grahm v/s Kewalram.
----------------------

8.3 GROUNDS FOR SETTING ASIDE AN ARBITRATION Notes
AWARD
----------------------
Section 34 - Application for setting aside the arbitral award: If an aggrieved party ----------------------
wants to set aside the arbitral award, it can do so only through an application to
a Court, under certain circumstances as mentioned under Sub Sections 2 and 3 ----------------------
of Section 34 and the additional grounds mentioned under Section 34A of the
Arbitration and Conciliation Act of 1996. These grounds are valid only in case ----------------------
of a domestic award and not applicable to any international arbitration award,
----------------------
whether commercial or not.
●● Under Subsection 2 of Section 34, the party has furnished some proof to ----------------------
prove that it was under some incapacity or
----------------------
●● the arbitration agreement is not valid under the law to which the parties
had subjected themselves to, or ----------------------
●● is not valid under any law for the time being in force, or ----------------------
●● the party that is making an application for the setting aside of the award
was not given a proper notice of the appointment of an arbitrator, or ----------------------
●● of the arbitral proceedings, or ----------------------
●● that the party was not able to present its case, or
----------------------
●● the arbitral award is dealing with a dispute that was not considered
or settled which was the subject matter as submitted to the arbitration ----------------------
proceedings, or
----------------------
●● it contains the decisions that are out of the ambit of the submission to
arbitration, or ----------------------
●● The selection of the panel of the arbitrators or the arbitration proceedings ----------------------
was not according to the terms as agreed to in the agreement. (Only that
part of the award will be set aside if it can be seen and separated from the ----------------------
award that was in line with the scope of the submission to the arbitration
proceedings), or ----------------------
●● if the Court finds out that the subject matter of the dispute in hand is not ----------------------
competent enough to be tried or settled by arbitration under the law for
the time being in force at that time, or ----------------------
●● That the award is in disparity and disagreement with the public policy of ----------------------
India, i.e., if it was made in violation to the Sections 75 or Section 81 or
it was made under the influence of fraud and/or it were brought about by ----------------------
corruption.
----------------------
●● Awards made in breach of public policy are liable to be set aside.
On the receipt of the application for setting aside of the award, under Section 34 ----------------------
Sub Section (1), if the Court feels it is appropriate to adjourn the proceedings
----------------------
under a request from the party which has made the application for the setting
aside of the award, it can do so for a period of time as determined by the Court ----------------------
in order to give the time for the arbitration tribunal to resume the arbitral
proceedings in that subject matter, or to take such other action as the arbitral ----------------------

Notes tribunal may deem fit and proper in the circumstances for eliminating the
grounds for setting aside the award. The arbitral tribunal shall pass appropriate
---------------------- orders within a span of sixty days from the receipt of the request made under
Sub Section (4) by the Court and send it to the Court for its consideration.
----------------------
The Court cannot re-appreciate and go into the reasonableness of arriving at the
---------------------- decision of the award. It cannot further interfere in the award on the grounds
that the award is erroneous if it is found that it was made properly. The Court
---------------------- is also not allowed to look into the reasonableness of the reasons for arriving at
---------------------- the decision of the award.
If an arbitrator has passed a non-speaking award thereby granting a lump sum
---------------------- amount and that it does not contain any arbitrability of such a claim, then it
---------------------- can be set aside. The High Court also cannot replace its own findings on any
of the findings of the arbitral award, as if it is looking into the matter as an
---------------------- appeal, because the impugned award has not come before it as a matter of an
appeal, when there is a consideration for the legality of the award. It is just an
---------------------- application for the setting aside of the award. There is always finality to the
---------------------- award. It cannot be appealed against. The arbitrator also cannot agree for an
amount to be awarded as compensation if it is beyond the agreed terms of the
---------------------- agreement. The right to file for the setting aside of the arbitral award under
Section 34 of the Act of 1996, is granted statutorily to the aggrieved party. It is
---------------------- a categorical and an unqualified right.
---------------------- Limitations for setting aside the award:
---------------------- ●● For setting aside the award, an application has to be made within three
months of the settlement award having been received by the aggrieved
---------------------- party, or
---------------------- ●● An application can be made and accepted by the Court, under Section
33 in a further extended period of thirty days, for the setting aside of the
---------------------- award, if the Court is satisfied that the applicant was prevented or could
not make the application within the prescribed three months’ time limit,
----------------------
for the same, and not beyond that.
---------------------- Misconduct of the arbitrator may be defined by:
---------------------- ●● Presence of partiality to one of the parties or taking sides of one of the
parties, irregularity in conducting the arbitration proceedings.
----------------------
●● Mis-application of the law or principles of law not in relation to the
---------------------- dispute in hand.
●● Concealment of evidence.
----------------------
●● Giving of irrational reasons.
---------------------- ●● Concealment of his own vested interest in the subject matter at hand by
---------------------- not revealing the relationship with either the subject matter or with one of
the parties to the dispute.
---------------------- ●● Accepting bribe.
---------------------- ●● Making an inconsistent vague and unreasonable award.

All of the above may be grounds for the applicant to set aside the award. The Notes
Court in these cases may either remove the grounds of objection or may entertain
the objection in hearing the application for the setting aside of the award. ----------------------
There cannot be any writ petition against the award made by an arbitrator, whose ----------------------
appointment is made in accordance with the parties’ wishes and the by-laws
too, as agreed between the parties, by raising an objection later after the award ----------------------
is made to the tune that the appointment of the said arbitrator was wrong. Any
----------------------
orders made by the arbitrator in the course of the arbitration proceedings cannot
be questioned later on during the pendency of the arbitration proceedings. ----------------------
Arbitration is a private hearing; it is not made and conducted publicly as it is
the private settlement of the dispute as agreed to in the agreement. The private ----------------------
settlement is recorded in the form of an award and it is recognized by law
----------------------
which forms a part of the Court records. The award shall be stamped as per the
Indian Stamp Act. The parties too can execute the award by executing necessary ----------------------
documents thereby giving effect to the award.
----------------------

1. An application for setting aside an arbitral award must be made by the ----------------------
party after receiving the award within:
----------------------
i. Three months
ii. Thirty days ----------------------
iii. Ninety days ----------------------

iv. Forty days ----------------------
1. The provision for setting aside the arbitral award is laid down under:
----------------------
i. Section 32 of the Act
----------------------
ii. Section 22 of the Act
iii. Section 23 of the Act ----------------------
iv. None of the above ----------------------
----------------------
Activity 2
----------------------
Read and Comment on Renusagar Power Co Ltd v/s General Electric Co. ----------------------
----------------------
8.4 CORRECTION OF AN AWARD
----------------------
●● The arbitrator after having made the award does not become a ‘functus
officio’, (he does not cease to be an arbitrator), and he continues to be an ----------------------
arbitrator till his term or mandate is terminated officially.
----------------------

Notes ●● He still can act upon any application that the parties have made and
presented before him.
---------------------- ●● He does not have power to review his own orders.
---------------------- ●● He can correct any typographical mistakes and errors.
●● He can act suo motto and thus correct any calculation or totaling mistakes.
----------------------
●● He can act on an application from any of the parties to the dispute; give a
---------------------- true interpretation on any specific point or any part of the award. He may
also give an additional award, on any claim in the arbitration proceedings
---------------------- that was omitted, on an application from the parties. (The applications by
---------------------- the parties have to be made within thirty days of the receipt of the award,
if the application is for making any corrections, giving interpretations and
---------------------- sixty days for the making of an additional award on any matters that were
omitted).
----------------------
●● If necessary, the arbitrator has the powers to extend the time limit for
---------------------- making of the application in the above mentioned cases, but with the
consent of both the parties.
----------------------
The award is a statutorily recognized document. It is the final adjudication of
---------------------- a dispute. It is allowed to have the same respect as that of any Court decree.
Where an award is passed at one place and is sought to be enforced at another
---------------------- place, the decree of the earlier Court shall be transferred to the other Court.
---------------------- Section 36 speaks about the enforcement of arbitral awards. Some awards are
enforceable while some are unenforceable awards. The enforcement of the
---------------------- arbitral award comes into effect when the time for making of an application to
---------------------- set aside the arbitral award under Section 34 of the Act, 1996 expires or if such
an application is refused or as if it were a decree of the Court. An arbitral award
---------------------- made on oral submission is not enforceable. The execution of an arbitration
award against the Government does not require a notice under Section 80 of the
---------------------- Civil Procedure Code because of the fact that the Government has been a party
---------------------- in the suit and it knows all the facts of the case.

----------------------
---------------------- 1. The request for the correction or interpretation of the award by the
---------------------- arbitral Tribunal has to be made by the party:
i. Within sixty days
----------------------
ii. Within thirty days
---------------------- iii. Within ninety days
---------------------- iv. None of the above
----------------------
----------------------

8.5 RECOGNITION AND ENFORCEMENT OF AN Notes
ARBITRATION AWARD
----------------------
Circumstances under which the operation of the award or its enforcement may
be stayed: ----------------------
●● Where the time for making an application to set aside the award has ----------------------
expired, the award shall be enforced under the CPC, 1908 in the same
manner as if it were the decreed of the Civil Court. ----------------------
●● Where an application for the setting aside of the award has been made ----------------------
under the Sub-Section (1) of the Section 34 of the Arbitration Act of
1996, the mere filing of the same application does not render the award ----------------------
as unenforceable or may not itself operate as a stay of the award unless
----------------------
another application is made for that specific purpose, and the granting of
the stay of the operation of the award is made by the Court. The Court ----------------------
may also as it deems fit impose certain conditions.
●● This power to impose conditions also includes the power to grant ad- ----------------------
interim measures not only against the parties to the award or in the matter ----------------------
of the property in dispute, but also against third parties or in respect of
the property which is not the subject matter of the dispute, in so far as it ----------------------
serves the purpose of safeguarding the interests of the parties in whose
favour the award is made. ----------------------
●● These measures may be modified, vacated or confirmed as the case may ----------------------
be, by the Court subject to such conditions as it may deem fit in the
circumstances of the case at hand, and after hearing the parties concerned. ----------------------
●● The reasons for the staying of the award on the application being made ----------------------
for the same must be stated in writing by the Court. But in doing so, the
Court shall not lose the sight of the grounds for the setting aside of the ----------------------
award. ----------------------
----------------------
1. Arbitration award enforced under which act? ----------------------
i. Civil Procedure Code ----------------------
ii. Criminal Procedure Code
----------------------
iii. Indian Penal Code
----------------------
iv. Indian Evidence Act
----------------------
8.6 FINALITY OF AN ARBITRATION AWARD
----------------------
●● Section 35 of the Act of 1996, says that the award shall be final and binding
on the parties and persons claiming under them respectively, since it is the ----------------------
result of a serious agreement which is binding upon the parties. The word
----------------------
‘final’ denotes that the award is not subject to appeal.

Notes ●● The award is final in the sense that there cannot be a further award on the
same subject matter, nor can there be an appeal against the finality of the
---------------------- award.
---------------------- ●● The award of the arbitrator is final both on facts and law.
●● The arbitrator’s power over the matter referred to him is complete and the
---------------------- award thus made puts an end to the proceedings of the arbitration.
---------------------- ●● The Court cannot sit on judgment over the award on its merits even though
it feels that the arbitrator should have acted in a different manner and the
---------------------- effect that it might have had upon the parties thereon.
---------------------- The award may:
●● Declare, extinguish, take away, limit, the title or interest, whether present
---------------------- or in future, whether vested or contingent rights of any of the parties to
---------------------- the dispute.
●● Under the Section 17(1) (b) of the Registration Act, 1908, the award has
---------------------- to be compulsorily registered if the value of the immovable property is
rupees one hundred or more.
----------------------
●● If not so registered, the award cannot be brought in evidence in any
---------------------- transaction affecting the said immovable property.
----------------------
----------------------
----------------------
1. The arbitration award passed under has to be compulsorily registered,
---------------------- if the value of the immovable property is more than:-
---------------------- i. One hundred rupee
---------------------- ii. One thousand rupee
iii. One thousand five hundred rupees
----------------------
iv. One lakh rupee
----------------------
---------------------- 8.7 LAW OF LIMITATION AS APPLICABLE TO

ARBITRATION AWARD
----------------------
As it is known under the provisions of the Limitation Act, the time spent for
----------------------
litigation, when bonafide, under a different statutory proceeding is saved.
---------------------- Hence when the parties have agreed to go to the arbitration proceedings, with
the permission and direction of the Court, all the period that is spent in pursuing
---------------------- the said matter under arbitration from the date of the commencement of it till
the conclusion is saved for the purposes of limitation.
----------------------
●● When the award is set aside, it may be open for the parties to seek a
---------------------- fresh arbitration or they approach the Civil Court. This depends upon
the circumstances of each individual case, and the terms on which the
---------------------- arbitration award is set aside.

●● Another round of arbitration to start afresh is permitted only when the Notes
previous award is set aside on the grounds of irretrievable lapses in
following the procedure of arbitration. For example, if the appointment of ----------------------
the arbitrator is not done according to the agreement or with the procedure
of the Arbitration Act, the parties are entitled to restart the arbitration ----------------------
proceedings or ----------------------
●● When the award is set aside on the ground that the subject matter is not
arbitrable under the terms of the contract, the parties have no other option ----------------------
but to approach the Court for an appropriate relief. ----------------------
In all these above circumstances, the provision of the Act, that the time
taken by the arbitral proceedings, shall be excluded from the computation ----------------------
of the time prescribed for limitation, is applicable. But if the award is ----------------------
not set aside and if the arbitral proceedings take a different turn, then
the question of limitation crops up and it has to be decided whether the ----------------------
time taken for pursuing the arbitration can be excluded to file a suit. In
another situation, if the award is confirmed, the question arises whether ----------------------
it is open for the parties to go in for a suit? But if the arbitration award ----------------------
is challenged on the grounds of lack of jurisdiction, or a total absence of
jurisdiction, or a lack of an opportunity of notice, then the question may ----------------------
arise as to the exclusion of the period being spent as bonafide for pursuing
the arbitration proceedings, from the period prescribed for filing the suit ----------------------
under the law of limitation. The answer is same as in the above mentioned ----------------------
scenario that means the question of limitation may not arise.
For the Limitation Act to apply for the arbitration proceedings, and the ----------------------
commencement thereof, the following points are to be considered in ----------------------
calculating the time taken under the Limitation Act to apply:
----------------------
●● In the absence of an arbitration agreement, the arbitration commences
when the notice of the arbitration is served in writing on the other party ----------------------
that requires him to agree to the appointment of the arbitrator.
●● When in a situation where both the parties have agreed and have a right to ----------------------
make an appointment of the arbitrator, the request calling upon the other ----------------------
party to make the appointment of the arbitrator of his choice as agreed to
in the agreement, shall be taken as the commencement of the arbitration ----------------------
process.
----------------------
●● The arbitration proceedings commence when the notice is served on the
other party in writing about the appointment of the arbitrator, requiring ----------------------
him to agree to the appointment made, in cases where the specific names
of the said arbitrators are agreed for the appointment as arbitrators in the ----------------------
agreement. ----------------------
●● Where in cases of the appointment of the arbitrators is agreed to being
made by a third person or an institution, the arbitration process commences ----------------------
when the application or the notice in writing is made to the authority with ----------------------
a copy to the other party.
----------------------

Notes ●● According to Section 43 of the Arbitration and Conciliation Act, 1996,
the Limitation Act, 1963 shall apply to the arbitration as it applies to
---------------------- proceedings in Court.
---------------------- ●● In computing the time prescribed by the Limitation Act, 1963 for the
commencement of the proceedings in relation to any dispute, the period
---------------------- between the commencement of the arbitration and the date of the orders
henceforth mentioned shall be excluded.
----------------------
●● Limitation also applies to a situation when the cause of action for filing a
---------------------- suit survives after the award passed by the arbitrator was set aside by the
Court and a suit is filed subsequently. In this case, the period when the
---------------------- cause for arbitration arose to the date when the award was set aside is to be
---------------------- excluded for the purposes of limitation. But if though after the exclusion
of the period is considered and after such exclusion, if the balance period
---------------------- exceeds three years, the suit filed in the Court under such circumstances
will be barred by time as governed by Section 43 of the Arbitration and
---------------------- Conciliation Act, 1996.
---------------------- ●● Under Section 43 of the Arbitration Act of 1996, the benefit of exclusion
of time taken by arbitration in computing the period of limitation for filing
---------------------- the suit is not conferred or passed on to the parties when the termination of
---------------------- the award by the parties or by the arbitrator for any reason takes place. But
this gives permission to the arbitrator or the Court to condone the delay
---------------------- in cases where the applicant was lawfully pursuing another proceeding as
permitted and authorized by law and by a contract between the parties.
----------------------
●● The Act of Limitation also applies in a situation where it is provided in
---------------------- the agreement that some steps are to be taken within a fixed time before
the commencement of the arbitration proceeding. The Court or the
---------------------- arbitrator may extend the time taken which is within their discretionary
powers for taking such agreed steps if they have not been already taken in
----------------------
time before the commencement of the arbitration proceeding, if not, then
---------------------- undue hardships may be faced by the parties.
●● When the option of arbitration is the real purpose behind the agreement
----------------------
in case of any future disputes that may arise, some unforeseen delay in
---------------------- taking the steps before the commencement of arbitration shall not result in
the cancellation or the arbitration proceedings itself shall not be shelved.
----------------------
●● The limitation period starts from the date of receipt of the duly stamped
---------------------- award.
●● After the expiry of period of limitation, an arbitral award cannot be set
----------------------
aside. It would amount to the waiver of rights by the parties.
---------------------- ●● It was held in a case that the person who is responsible for the delays
and who having allowed the proceedings to continue ex-parte cannot
---------------------- complain either about the delay or the lack of notice before pronouncing
---------------------- the award.
----------------------

8.8 APPEALABLE ORDERS UNDER SECTION 37 Notes
●● The Court is authorized by law to hear appeals from the original decree ----------------------
of the Court passing the orders from which the appeals shall lie to it, and
from no other order or orders. ----------------------
●● Appeals shall be maintainable only against the orders passed by the ----------------------
Arbitral tribunal which fall within the purview of the Section 37(2) (a)
(b). ----------------------
●● There lies a revision against the appeal order under Section 37(2) as per ----------------------
the ruling given in a Supreme Court case. Civil Court’s orders in appeals
under Section 37 are revisable. ----------------------
●● The well settled principle is that new plea cannot be raised and no second ----------------------
appeal would be allowed.
----------------------
●● Under Section 37 of the Act, an arbitral award can be appealed against
only in the following circumstances: ----------------------
●● where the arbitrator has refused to grant any interim relief under Section
9 of the Act, Or ----------------------
●● Granting or refusing to grant an interim relief or measure under Section ----------------------

17 of the Act.
----------------------
●● Setting aside or refusing to set aside an arbitral award under Section 34
of the Act. ----------------------
●● An appeal shall also lie from the order passed by the arbitral tribunal, ----------------------
accepting the plea that the arbitral tribunal does not have the jurisdiction
to make an award on the subject matter at hand, and it is also laid down ----------------------
that no appeal shall lie against the decision of the arbitrator who has
jurisdiction to decide the dispute under Section 16(5). ----------------------
●● Or the plea that the arbitral tribunal is exceeding the scope of its authority. ----------------------
●● No appeal shall lie in the form of a second appeal under this Section 37,
----------------------
but an appeal lies to the Supreme Court.
●● Section 59 Appealable Orders: An appeal also lies to the Court as ----------------------
authorized by law to hear the appeals from the order refusing to refer the
----------------------
parties to arbitration under the Section 54 and to enforce a foreign award
under the Section 57 of the Act. No second appeal shall lie from the first ----------------------
appeal.
----------------------
●● Section 50 Appealable Orders: An appeal also lies to the Court as
authorized by law to hear the appeals from the order refusing to refer the ----------------------
parties to arbitration under the Section 45 and to enforce a foreign award
under the Section 48 of the Act. No second appeal shall lie from the first ----------------------
appeal.
----------------------
●● Register of Appeals: The CPC (Amendment) Act 1999 has made it
mandatory for all the courts entertaining the memorandum of appeal and ----------------------
register it in a book of appeal kept for that purpose.
----------------------

Notes ●● The appeal shall be heard as expeditiously as possible and an Endeavour
shall be made to conclude the hearing within sixty days from the date on
---------------------- which the memorandum of appeal is filed.
----------------------
----------------------
----------------------
1. Grounds not mention in the order of the arbitral tribunal can be
---------------------- considered in appeal.
---------------------- 2. Second appeal can be filed before the High Court.

1. Appeal against order passed by the arbitral tribunal is maintainable if
---------------------- it falls within the purview of Section:
---------------------- i. 37
---------------------- ii. 38
iii. 39
----------------------
iv. 40
----------------------
---------------------- 8.9 UNAPPEALABLE AWARDS

---------------------- ●● It is a well-known fact that the arbitral award is an Unappealable award
after it attains the finality under Section 13 of the Act.
----------------------
●● Res judicata is applicable in such matters. This means that the rights and
---------------------- liabilities of the parties in respect of the claims referred to adjudication
can only be determined on the basis of the award.
----------------------
●● This also means that no claim can be agitated or fought any further in
---------------------- any legal form or in whatsoever form. But this may become a case of
unreasonable restraint of right to prosecute legal action under Section 28
---------------------- of the Indian Contract Act, if it is so agreed in the agreement to accept
---------------------- the award as final in all cases by forgoing the rights between the parties.
●● Section 17 of the Arbitration Act, 1996 gives enough clarity as to who are
---------------------- supposed to be the parties, the legal representatives, or assignees claiming
---------------------- under the parties on whom the award will be binding. Whoever is bound
by the arbitration agreement can be said to be bound by the award.
----------------------
Activity 3
----------------------
---------------------- Read and comment on Pratabmull v/s K.C. Sethia L.

----------------------
----------------------

8.10 WAIVER AS APPLICABLE TO ARBITRATION Notes
Waiver of rights of the parties to arbitration has very serious implications with ----------------------
regard to arbitration. It may under certain circumstances act as a permanent
waiver of rights. This permanency acts against the party that has waived its right ----------------------
in so far as it wants to raise the issue waived while questioning the award under
----------------------
Section 34. Hence the parties are advised to be very careful and all the more
vigilant on the matters concerning the arbitration proceedings. They have to ----------------------
raise necessary objections and complain accordingly in the matters in whatever
way they feel are against the provisions of the Act of 1996 or which run contrary ----------------------
to any requirements under the arbitration. The parties also can complain against
----------------------
any non-compliance with any rule or procedure and also raise their objections
in front of the arbitrator for ignoring the time limits so prescribed for doing ----------------------
a thing in the course of the arbitration proceeding. If these objections are not
taken up before the arbitrator by the party, then that party cannot at a later ----------------------
stage complain against such objections or defaults and claim that his case was
----------------------
prejudiced because of the same. This waiver acts against him even if he loses
and thus suffers some damage to his interests. ----------------------
●● There is no scope for retrieving the positions once lost through the waiver ----------------------
of the rights so conferred upon him by the Act of 1996.
●● The Act provides many situations and conditions in procedure against ----------------------
which a party to the arbitration may raise the objections. ----------------------
●● There are also certain time limits for the objections to be raised. For
example, the appointment of an arbitrator, the constitution of the arbitral ----------------------
panel, jurisdiction of the arbitrator, conduct of the arbitral tribunal, etc.
----------------------
●● The parties, if they want to raise the objections, in the aforementioned
cases have to raise them in writing, and if not so, then it may be recorded ----------------------
in the proceedings of the arbitral tribunal.
----------------------
●● Objections regarding the cross examination of the witnesses, or the
production of documents under evidence shall be raised within a ----------------------
reasonable time or when the events are taking place. Since a specific
----------------------
provision mentions these lapses as classified under the lapses as waivers,
the prohibition contained herein will be treated as obligatory. ----------------------
●● The main principle behind the waiver is that by agreement and participation,
----------------------
the party shall lose his right to protest, because he seems to be taking a
chance in the result of the arbitration proceeding. ----------------------
●● The waiver shall be a conscious act with the full knowledge of the impact
that it may have on the outcome of the proceedings. ----------------------
●● Waiver also applies in the case of an international arbitration. ----------------------
----------------------
Activity 4
----------------------
Read and comment on Bharati Televentures Ltd.
----------------------

Notes Summary
---------------------- ●● Enforcement of the arbitral award depends upon the recourse taken to
setting aside the arbitration award.
----------------------
●● If it is not presented before the court of law for setting aside, then it is
---------------------- supposed to be a final award within the meaning of Section 35 of the Act
of 1996.
----------------------
●● For the finality of the arbitration award, certain grounds play a major role
---------------------- for the Limitation Act to apply.
---------------------- ●● Waiver of the right to object acts against the party’s interest who wants to
raise the objection at a later stage of the proceedings.
---------------------- ●● Certain arbitral awards are appealable and others are Unappealable.
----------------------
Keywords
----------------------
●● Parties: ‘Parties’ means parties to the arbitration.
----------------------
●● Enforcement: Enforcement means execution of the award.
---------------------- ●● Ex-parte Proceedings: Ex-parte a proceeding means only one of the
---------------------- parties to the dispute is present throughout the proceedings.
●● Limitation: Limitation means certain legal compliance steps have to be
---------------------- taken within the time limit as prescribed by the statute.
---------------------- ●● Waiver: Waiver means letting go off one’s rights.
●● Appealable Order: An appealable order means those orders against
----------------------
whom an appeal lies to the higher court than the one that passed the order.
----------------------
----------------------
---------------------- 1. What are the grounds for setting aside an Arbitration Award as stated
under Section 34 of the Arbitration and Conciliation Act, 1996?
---------------------- 2. What are the circumstances under which the Limitation Act, 1963 is
---------------------- applicable to the Arbitral Award?
3. What are appealable orders under the Arbitration and Conciliation Act of
----------------------
1996?
---------------------- 4. How is the correction of an arbitration award made?
---------------------- 5. What is termed as the misconduct of the arbitrators? Please elucidate.
---------------------- 6. What are the circumstances under which the operation of the award or its
enforcement may be stayed, by a Court?
---------------------- 7. What are the effects of an arbitration award?
---------------------- 8. What is the recourse for the setting aside of the arbitral award?
---------------------- 9. What are the grounds of appeal of an arbitral award under Section 37?

Answers to Check your Progress Notes
1. Finality to arbitral awards within the meaning of Arbitration and
Conciliation Act, 1996 shall ----------------------
iv. Be binding on the parties and person claiming under them ----------------------
respectively.
----------------------
2. An arbitral award shall be enforced in the same manner as it were a decree
of ----------------------
iv. Both ii and iii ----------------------
----------------------
1. An application for setting aside an arbitral award must be made by the
party after receiving the award within: ----------------------
i. Three months ----------------------
2. The provision for setting aside the arbitral award is laid down under: ----------------------
i. Section 32 of the Act
----------------------
----------------------
1. The request for the correction or interpretation of the award by the arbitral ----------------------
Tribunal has to be made by the party:
----------------------
ii. Within thirty days
----------------------
1. Arbitration award enforced under which act? ----------------------

i. Civil Procedure Code ----------------------
----------------------
----------------------
1. The arbitration award passed under has to be compulsorily registered, if
the value of the immovable property is more than:- ----------------------
i. One hundred rupee ----------------------
----------------------
----------------------
1. False
2. False ----------------------

Notes Multiple Choice Single Response.
1. Appeal against order passed by the arbitral tribunal is maintainable if it
----------------------
falls within the purview of Section:
---------------------- i. 37
----------------------
Suggested Reading
----------------------
1. Bansal, Ashwini Kumar. 2006. Arbitration Agreements & Awards.
----------------------
2. Basu, N.D. 2012. Law of Arbitration & Conciliation.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
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----------------------
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----------------------

International Law on Arbitration Governing
International Commercial Transactions UNIT
Structure: 9
9.1 Branches of International Laws
9.2 Conflict of Laws
9.3 Definition of Commercial Transaction
9.4 Arbitration – The Only Way
9.5 Standard of Arbitration
9.6 The Law Applicable
9.7 Choice of Forum, Law and Arbitrator
9.8 Commencement of Arbitration
9.9 Execution of Awards made in India, and Outside India
Summary
Key Words
Suggested Reading
International Law on Arbitration Governing International Commercial Transactions 143

Notes
Objectives
----------------------
----------------------
• Elaborate on the branches and conflicts of International Law
----------------------
• Analyze relation between the commercial transaction and arbitration
----------------------
9.1 BRANCHES OF INTERNATIONAL LAWS
----------------------
Introduction
----------------------
In the previous unit, we have seen how the arbitral award gets its finality as
---------------------- prescribed by the Act. We have also seen as to how the parties resort to the
recourse for setting aside the arbitral award and what do we really mean by the
---------------------- Unappealable and appealable awards. Till now we have come to know that there
are two kinds of arbitrations dealt with under the Arbitration and Conciliation
----------------------
Act of 1996, namely the Domestic Arbitration and the International Arbitration.
---------------------- Now in this unit, we shall know about the International Law on Arbitration
Governing International Commercial Transactions and also the Execution of
---------------------- Awards made in India, and outside India.
---------------------- ●● International law deals with the different treaties, conventions and
agreements that the nations enter into with each other, either under some
---------------------- International Organization or among them.
---------------------- ●● It is basically the rules governing the relations between the States in the
international arena. It concerns the nations rather than its citizens.
---------------------- ●● The treaties may deal with the laws governing political situations,
---------------------- commercial transactions, extradition, Inter State Rivers, borders, ancient
monuments and the like of public importance.
---------------------- ●● It also may refer to the international arbitration.
---------------------- ●● In the international circuit, it is always open to nations either to take part
and be a signatory to the treaties and agreements or reject them. The
---------------------- nations have this exclusive discretionary power.
---------------------- ●● There are two main branches of the International Law, namely the
---------------------- 1) Public International Law and
2) Private International Law.
----------------------
●● The main source of the Public International law is the Statute of the
---------------------- International Court of Justice. This branch of law has existed even during
the middle ages.
----------------------
●● Private International law is a characteristic of municipal law that varies
---------------------- from one country to another country. It has no real connection with the
Public International law.
----------------------
●● This branch of law mainly concerns the conflicts between private persons,
---------------------- the jurisdiction to be applied, and the choice of law of both the parties.

●● It also deals with the personal laws such as matrimonial laws relating Notes
to divorce, maintenance, adoption, custody, minority, guardianship,
commercial relationships, commercial contracts and the like, which are ----------------------
to be resolved internationally involving the citizens of different States.
----------------------
9.2 CONFLICT OF LAWS
----------------------
●● This is a term originating from such situations in which the final result of
----------------------
a legal quarrel depended mostly on which law to be applied to it and thus
the common law courts resolved it. ----------------------
●● It is actually the disparity between the laws.
----------------------
●● It is irrelevant whether the laws are municipal or international. It should
not be confused with the real term of the sense, the ‘dispute’. ----------------------
●● There are two theories that incorporate the international law into the
----------------------
Municipal law.
●● They are the Monism and the Dualism. ----------------------
●● In Monism, no extra action needs to be done or required for the conversion ----------------------
of the International Law into the Municipal law of the State. In this case,
it becomes easy for the State to follow international conventions and ----------------------
treaties and thereby automatically adopting and accepting jurisdiction
depending upon the international law principles. ----------------------
●● In Dualism, there are two different branches of law, namely the international ----------------------
law and the municipal law. In this case, the principles and laws governing
the international treaties and conventions which have to be adopted and ----------------------
moulded into the municipal laws for them to be incorporated in the local
stream. ----------------------
●● It is very difficult to coordinate the activities and functions of the ----------------------
international organizations, international courts, and tribunals with those
of the national or local courts. ----------------------
●● For example if there is a concurrent jurisdiction, then it becomes very ----------------------
difficult to resolve the issue of jurisdiction. Article 34 of the Statute
of International Court of Justice (ICJ), states that only States may be ----------------------
parties in cases before the ICJ and the Article 36 states that the ICJ’s
jurisdiction covers all that which the parties (States) refer to it and all ----------------------
matters specially provided for in the Charter of the UN or in any given
----------------------
treaty or agreement. But in all these cases and circumstances, the States
have to say that they are bound by the judgment of the ICJ. Because the ----------------------
power lies with the individual States to either enforce the judgments or
not which is a discretionary power. ----------------------
●● There are different stages in a Conflict of Law case. ----------------------
●● First the court has to decide the jurisdiction in the sense of the subject
matter of the case, and also the venue chosen by the parties. Then the ----------------------
question of the choice of law arises.
----------------------
●● If there are more than one set of applicable laws to choose from, then
it becomes difficult to determine the choice of laws. Thus when the ----------------------

Notes question of applicable law is decided, it has to be applied to the case and
a judgment has to be reached.
---------------------- ●● Then stage of the enforcement of the judgement is to be dealt with.
Even in cases of conflict of laws, the judgement or the foreign awards is
----------------------
enforceable in most of the cases.
---------------------- ●● The only thing in consideration for the enforcement of the foreign
judgement is whether the foreign court had jurisdiction and whether
---------------------- principles of natural justice were adhered to.
---------------------- Choice of Law: Which law is to be applied to the dispute to resolve it?
The differences of the States have to be compliant with one another for the
---------------------- question of the choice of law to be decided. That means the court having
---------------------- one type of jurisdiction has to apply the law of a different jurisdiction.
●● The choice of law involves two different aspects, one being the procedural
---------------------- law and the other being the substantive law of the State.
---------------------- ●● Hence almost all the contracts and private agreements do decide in
the beginning itself by incorporating the jurisdictional clause thereby
---------------------- reducing and narrowing the choice of law issue. In some of the cases
where the foreign law cannot be proved as being a satisfactory standard
---------------------- of level, then the local laws are applied.
---------------------- ●● In case of an international arbitration, the arbitral award may be challenged
and may or may not be enforceable too. But in the case where the place
---------------------- of arbitration and the agreement differ, it will not pose a problem for the
---------------------- enforcement of the foreign arbitration award.
●● The parties’ interests are best protected by their own national laws.
----------------------

---------------------- 1. International law govern the relation between
---------------------- i. States
ii. Individuals
----------------------
iii. State & Corporation
----------------------
iv. Individual & Corporation
---------------------- 1. Private international law has universal characteristic.
---------------------- 2. There is a relation between Public & Private
3. According to Monism, International laws are automatically applicable
----------------------
to municipal laws.
---------------------- 4. According to Dualism international law and Municipal law are the
---------------------- branches of the same law.

Notes
Activity 1
----------------------
Read and comment on Mysore Construction Co v/s Karnataka Power ----------------------
Corporation Ltd.
----------------------
9.3 DEFINITION OF COMMERCIAL TRANSACTION ----------------------
----------------------
It is that branch of law which deals with rules governing all business and trade
dealings. It includes sale of goods, trade intercourse and all business transactions. ----------------------
The commercial transactions are involved in transmitting commercial goods,
industrial productions, persons, technology and services usually exchanged ----------------------
with money.
----------------------
In other words, it covers the whole gambit of the international commercial
trade. It also may be exchanged with a credit instrument that is transferrable. It ----------------------
involves an agreement from the vendor to the vendee.
----------------------
9.4 ARBITRATION – THE ONLY WAY ----------------------
●● Arbitration seems to be the only prudent way of settling the disputes. As ----------------------
we have seen in the earlier units regarding how the Alternative Dispute
----------------------
Resolution Systems play a major role in the dispute resolution mechanism,
we also know the advantages of Arbitration as one of the best ADRs. ----------------------
●● The Civil Courts take up a major chunk of time in a man’s life by delaying
the rendering of justice to the aggrieved party. Hence parties to a dispute ----------------------
prefer the arbitration way of settling the disputes. ----------------------
●● The Civil Court procedures of adjudicating the litigation all over the
world are known to be tedious, cumbersome, mostly time consuming and ----------------------
very expensive too. ----------------------
●● Arbitration does not involve many of these things as the process is a pre-
planned and agreed process. It is based on agreement. The UNCITRAL ----------------------
Rules that were prepared in 1985 has been accepted by almost 89 nations ----------------------
as being the best method of solving and settling the dispute regarding the
international commercial transactions. ----------------------
●● The Indian Government has also adopted these rules and has thus passed ----------------------
the Arbitration and Conciliation Act, 1996.
●● This Act governs both the domestic as well as the international arbitrations ----------------------
involving both the types of commercial and non-commercial transactions. ----------------------
●● The grounds on which an arbitration award can be challenged in a court
of law have been radically reduced. ----------------------
●● The arbitrator’s powers have been increased under the Act of 1996. ----------------------
Arbitration gives a finality to the award of the dispute.
----------------------

Notes ●● There is more flexibility as regards the procedural aspect of arbitration.
The arbitrators are nominated and appointed with the agreement of the
---------------------- parties to the dispute.
---------------------- ●● The venue of the arbitration is also pre-planned. Secrecy is maintained

throughout the arbitral process. Hence the parties feel that arbitration is
---------------------- and can only be the way out for the settlement of the dispute that may
arise during the life of their contract.
----------------------
●● The Arbitrator is not bound by the procedures of the Civil Court but
---------------------- he has to follow the principles of natural justice by providing an equal
opportunity to both the parties to a dispute.
---------------------- ●● The proceedings before an arbitrator generally continue without any
---------------------- interruption.
●● The arbitrator cannot pass any interlocutory orders except in circumstances
---------------------- having to protect the property involved in arbitration or security to be
furnished by the party.
----------------------
●● If the parties so desire to have any injunctions in the subject matter,
---------------------- they then have to approach the Civil Court for such orders. The arbitral
proceedings are not affected and the arbitrator in such circumstances has
---------------------- to continue with the proceedings and make the award.
---------------------- ●● The Courts too do not have any power to issue any order staying the
arbitral proceedings. Hence there is a great certainty that once the arbitral
---------------------- proceedings are commenced, they will be concluded.
----------------------
----------------------

1. Arbitration & Conciliation Act, 1996 applicable only for Domestic
---------------------- arbitration.
---------------------- 2. UNCITRAL rules were prepared in 1985.
----------------------
9.5 STANDARD OF ARBITRATION
----------------------
●● The Indian standard of arbitration is quite high and can stand up to the
----------------------
international standards of arbitration.
---------------------- ●● The Act of 1996 has built and given enough protections to the parties
in choosing arbitration for settling their disputes and also selecting the
---------------------- arbitrators to selecting the venue too. The parties can also choose the
---------------------- process of the arbitration.
●● In India, all the chambers of commerce are recognized as the places where
---------------------- the arbitration proceedings can take place.
---------------------- ●● The Indian Council of Arbitration and Dispute Resolution (ICADR),
functioning since 1965 specializing in conducting arbitration proceedings,
---------------------- and has a membership of almost 3000 in numbers as affiliations.

●● The ICADR maintains a list of arbitrators, having specialized knowledge Notes
and expertise in their chosen fields, and in various departments of
commercial arbitration too. ----------------------
●● For everyone’s knowledge, the judgements of the arbitrators, Superior ----------------------
Courts, and also the settlement awards of the foreign courts are published
in various journals. ----------------------
●● The journals also contain the procedures of arbitration as available in
----------------------
India and in other countries, for conducting the international arbitration.
●● Therefore it guarantees that the arbitration awards are made after giving ----------------------
due importance to the principles of natural justice and fair procedures.
----------------------
Activity 2 ----------------------
----------------------
Please go through the ICADR website and write in your own words about
the ICADR organization. ----------------------
----------------------
9.6 THE LAW APPLICABLE
----------------------
More often a question arises as to which law would be applicable to the
international arbitration procedure? ----------------------
●● Generally, the arbitrator applies the law of the land where the contract is ----------------------
entered into in respect of the business.
●● The procedure adopted is that of the country where the arbitration takes ----------------------
place. ----------------------
●● For the purposes of the dispute relating to realty or property, the arbitrator
adopts the law of the land where the property belongs to, if the arbitration ----------------------
relates to the country where the arbitration takes place.
----------------------
●● In cases of forms of the contracts etc., and the execution of the agreements,
the law of the country where such documents and agreements are executed, ----------------------
is applied.
----------------------
●● In cases where the parties have not made any choice on the law to be
applied in the agreement, or if the parties have not expressly stated ----------------------
regarding the same, nor it could be inferred directly from the clauses in
the agreement, then the arbitrator may select the venue of arbitration, after ----------------------
taking the nature of the contract into consideration, the circumstances of
the dispute, the closeness of the place selected for the proceedings to be ----------------------
conducted. ----------------------
●● For example, if two parties have entered into a contract in respect of
work to be done in Mumbai, and have chosen Bangalore as the venue for ----------------------
arbitration, then the law to be applicable shall be the substantive law in
----------------------
India because they have chosen Bangalore as the venue of the arbitration.
●● The above rules also apply in case of the currency in which the final ----------------------
calculations of the financial dispute are resolved and the language of the
arbitration. ----------------------

Notes
Activity 3
----------------------
---------------------- Read and comment on Bharat Aluminum Co v/s Aluminum Technical.
----------------------
9.7 CHOICE OF FORUM, LAW AND ARBITRATOR
----------------------
The Arbitration and Conciliation Act, 1996 provides for the choice of the law, the
----------------------
appointment of the arbitrators, the arbitral tribunal and the place of the arbitration
---------------------- to be held. It also gives the choice of the procedures for the settlement of the
dispute, namely either by arbitration, conciliation or mediation. But mediation
---------------------- and negotiation are not in the ambit of the Act. Once arbitration is chosen as
the forum for the settlement of the dispute, and if the party still approaches the
----------------------
court for litigation, then the other party can enforce the arbitration clause in the
---------------------- agreement to seek the mechanism of arbitration. Because the intention to settle
the dispute at the earliest without the hassles of approaching the Civil Court is
---------------------- already present while entering into the agreement.
----------------------
9.8 COMMENCEMENT OF ARBITRATION
----------------------
●● If the arbitration clause is present in the agreement, then the question of
---------------------- approaching the Civil Court does not arise and the jurisdiction of the Civil
Court gets excluded and the parties are bound to settle their disputes by
---------------------- the arbitration proceedings only.
---------------------- ●● As noted earlier, the intention of the parties to resort to arbitration is the
most important thing in the commencement of the arbitration proceedings.
----------------------
●● It is not necessary that the intention of the parties has to be present in
---------------------- the form of a clause in the agreement, but it can be there in the form of
communications between the parties to the dispute.
----------------------
●● If the parties agree on the mechanism of arbitration as the mode of
---------------------- settlement of dispute after having signed the agreement or the contract
or after the dispute has arisen, then the agreement to go for arbitration
---------------------- process must be in writing only. Whichever way it is agreed upon, the
---------------------- parties have to reduce the agreed terms in writing.
●● The arbitration clause must specifically mention the subject matter on
---------------------- which arbitration is sought.
---------------------- ●● It must also specify the number of arbitrators to be appointed, the names of
the arbitrators, the method of appointment of the arbitrators and the name
---------------------- of the institution, if any, that may conduct the arbitration proceedings.
---------------------- ●● Exclusion of certain subject matter from the purview of the arbitration
proceedings is also desired to be expressed in the arbitration agreement.
----------------------
●● The appointment of the subject matter expert or to take the expert’s
---------------------- opinion also has to be in writing.

●● Where the accounts are to be settled and the assessment of damages to be Notes
done and decided by the arbitrator, the agreement may specify the said
particular items only as arbitral. ----------------------
●● If any dispute arises due to the agreement itself, regarding the terms of ----------------------
agreement relating to the arbitration proceedings, the clause may also
mention this as being referable to arbitration. ----------------------
●● Thus the arbitration process that includes first of all the appointment of
----------------------
the arbitrators, the number of arbitrators to be appointed, the place of
arbitration, the language of arbitration and the procedure to be followed, ----------------------
starts as per the agreement as entered into.
----------------------
●● The party then seeking arbitration has to first issue a notice to the other
party asking him to agree to the appointment of the arbitrator(s). ----------------------
●● If there is disagreement regarding the appointment of the arbitrators, then
the party may apply to the Chief Justice of India to appoint the arbitrator. ----------------------
●● After the arbitral panel is appointed, the arbitrator will decide about the ----------------------
venue of arbitration.
----------------------
●● Then it may call upon the parties to send in their claim statements and
seek replies from both the parties. It will also seek any evidence to be ----------------------
produced that the parties want to rely upon.
----------------------
●● The parties are then heard to take necessary measures for the protection
of the property in the subject matter of the dispute. ----------------------
●● The arbitrator may also ask the parties to deposit certain amount as the
----------------------
costs of arbitration.
●● The arbitrator may also call for an expert’s opinion and evidence as ----------------------
necessary in the procedure.
----------------------
●● Hence depending on all these matters, the arbitrator finally gives his
award. ----------------------
9.9 EXECUTION OF AWARDS MADE IN INDIA AND ----------------------
OUTSIDE INDIA ----------------------
Execution of Awards made in India: ----------------------
The place of the arbitration is India, and the arbitrator’s appointment in the
----------------------
international commercial transactions is done by the Chief Justice of the
Supreme Court or by an authority designated by him, the arbitration proceedings ----------------------
have acquired a statutory status. The awards made by such arbitrators are to be
executed by the Civil Courts as if they are the Civil Court decreed. ----------------------
Execution of Awards made outside India: ----------------------
Under Section 34(2), the foreign awards are to be seen under two broad
----------------------
categories, namely the Awards under The New York Convention, 1958 and The
Geneva Convention or the (League of Nations), 1927. These two conventions ----------------------
differ on the subject of enforcement of the foreign award. The enforcement of
the award in India, may be refused on the ground that ----------------------

Notes ●● it was void in the country under which it was made,
●● or the party against whom it is sought to be used, was not given a notice
---------------------- of the arbitration proceedings in a sufficient time to enable it to present
---------------------- its case,
●● or that the party was not legally capable to represent itself,
----------------------
●● or that the award was not made regarding the subject matter of the dispute
---------------------- for which it was referred to the tribunal, or
●● The tribunal acted ultra virus.
----------------------
According to Section 58, if the court is satisfied that the foreign award is
---------------------- enforceable under the Chapter II, the award shall be deemed to be decree of the
court.
----------------------
---------------------- Activity 4
----------------------
1. Read and comment on National Thermal Power Corp v/s Singer Co.
---------------------- 2. Read and comment on Bhatia International v/s Bulk trading S.A.
----------------------
Summary
----------------------
• International commercial arbitration is 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 one of the parties
---------------------- is an individual who is national of any country other than india or a body
corporate which is incorporated in any country other than India
----------------------
● Arbitration Law anywhere in the world is governed by the rules of
---------------------- UNCITRAL, which are universally accepted.
---------------------- • The place of the arbitration is India, and the arbitrator’s appointment in
the international commercial transactions is done by the Chief Justice of
---------------------- the Supreme Court or by an authority designated by him, the arbitration
proceedings have acquired a statutory status. The awards made by such
---------------------- arbitrators are to be executed by the Civil Courts as if they are the Civil Court
decreed.
----------------------
• The foreign awards are to be seen under two broad categories, namely the
---------------------- Awards under The New York Convention, 1958 and The Geneva Convention
or the (League of Nations), 1927.
----------------------
---------------------- Keywords
---------------------- ●● ICADR: International Center for Alternative Dispute Resolution.
---------------------- ●● UNCITRAL: United Nations Commission in International Trade Law.
----------------------
●● The Act of 1996: The Arbitration and Conciliation Act, 1996.
---------------------- ●● ADRs: Alternative Dispute Resolutions.

●● onflict of Laws: This is a term originating from such situations in
C Notes
which the final result of a legal quarrel depended mostly on which law to
be applied to it and thus the common law courts resolved it. It is termed ----------------------
as the disparity of laws.
----------------------
1. What do you know about the conflict of laws? ----------------------

2. Which are the two branches of International Law? ----------------------
3. Given a choice, why do you think that arbitration can be the only way
out? State its advantages. ----------------------
4. How does an arbitration process commence? ----------------------
5. What is the mode of the execution of the awards that are made in India ----------------------
and in a foreign country?
----------------------
6. What are the general steps that are followed in the arbitration process of
the international commercial transactions? ----------------------
Answer to Check your Progress ----------------------

1. International law govern the relation between ----------------------
i. States
----------------------
----------------------
1. False
2. False ----------------------
3. False ----------------------
4. False ----------------------
----------------------
1. False
----------------------
2. True
----------------------
Suggested Reading ----------------------
1. Singh, Avtar. 2009. Law of Arbitration and Conciliation. ----------------------
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
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Conciliation
UNIT
10
Structure:
10.1 Meaning and Definition of Conciliation

10.2 Conciliation under the Arbitration and Conciliation Act, 1996
10.3 Statutory Conciliation
10.4 Application and Scope of Conciliation (Disputes to which applicable)
10.5 Conciliation under Industrial Disputes Act, 1947
10.6 Recourse to Conciliation
10.7 Initiation and Commencement of Conciliation Proceedings
10.8 Number, Appointment, Powers, Functions and Role of Conciliators
10.9 Conduct and Stages of the Conciliation Proceedings
10.10 Role of Conciliator in Subsequent Proceedings
Summary
Key Words
Suggested Reading
Conciliation 155
Notes
Objectives
----------------------
----------------------
• Elaborate Describe conciliation as a method of dispute resolution –
---------------------- its meaning, definition, scope, application
---------------------- • Explain conciliation under the Arbitration and Conciliation Act,

1996
---------------------- • Examine conciliation as known under the Industrial Disputes Act,
---------------------- 1947
• Detail out the initiation, commencement, stages of a conciliation
---------------------- proceeding
---------------------- • Discuss the role and conduct of a conciliator –number, appointment,
functions, etc.
----------------------
----------------------
10.1 MEANING AND DEFINITION OF CONCILIATION
---------------------- Conciliation is a mode of resolving disputes between parties in an amicable

and informal manner. It is one of the different modes used to solve disputes or
---------------------- resolve conflicts between individuals, business entities, governmental agencies
or even states, e.g. a family dispute between a husband and a wife, or a dispute
---------------------- between two states regarding boundary, can be amicably settled, out of the
---------------------- Court, without alleging each other or hurting each other. It usually depends on
the parties in a dispute whether to use such a mode of resolving their dispute
---------------------- or not. In conciliation, the dispute between the parties is resolved with the help
of a third person/s – known as the Conciliator. It is the conciliator who brings
---------------------- the parties together and helps them solve their dispute to arrive at a mutually
---------------------- accepted settlement. He does this by using his skills and lowering the tensions of
the parties in a dispute, improving communication between them, interpreting
---------------------- their issues, providing technical assistance, exploring potential solutions and
thus bringing about a mutually acceptable settlement between them.
----------------------
So, in a way, conciliation helps the parties in a dispute to communicate their
---------------------- views and settle their issue in a quick, mutually acceptable manner.
---------------------- 10.2 CONCILIATION UNDER THE ARBITRATION AND
---------------------- CONCILIATION ACT, 1996
---------------------- Conciliation is a means to a quick redressal of a dispute, through the intervention
of a third person - conciliator, without recourse to a Court of Law. And such
---------------------- quick redressal of the disputes have now become necessary for the smooth
---------------------- functioning of the society e.g. industrial disputes - if there is a strike or a lock
out, it becomes necessary that the problem be resolved immediately, and in
---------------------- such disputes, conciliation becomes handy. So, a legal recognition, by way of
a statute, became necessary for the use of such methods of dispute resolution.
---------------------- Hence, The Arbitration and Conciliation Act were passed in 1996. It aims at

streamlining the methods of resolving the disputes and giving it a legal sanction. Notes
The Act has been divided into 4 Parts and contains 3 Schedules. Out of this,
Part III (Sections 61 to 81) deals with conciliation. However, it does not define ----------------------
conciliation as such, but its meaning can be gathered from the Act itself.
----------------------
10.3 STATUTORY CONCILIATION ----------------------
The Act therefore provides a legal sanction to the different modes of dispute
----------------------
resolution. It consolidates and amends the law relating to domestic arbitration
(Part I Sections 2 to 43), international commercial arbitration and even enforces ----------------------
foreign arbitral awards (Part II Sections 44 to 60). Further, it also defines the law
relating to conciliation and for matters connected therewith of incidental thereto ----------------------
(Part III Sections 61 to 81). Part IV Sections 82 to 86 contains supplementary
provisions. Section 89 of the Code of Civil Procedure (Amendment) Act, 1999, ----------------------
provides for “conciliation of disputes arising out of legal relationships, whether ----------------------
contractual or not, and to all proceedings relating thereto.” Further, Order X
Rules 1A, 1B and 1C of the Code of Civil Procedure, also go along with this ----------------------
Section which permits the Court to refer a dispute for conciliation even when
the parties do not consent, provided the Court thinks that the case is one which ----------------------
is fit for conciliation. So, now, by statute we have a legal sanction to set aside a
----------------------
dispute by the method of conciliation.
----------------------
10.4 APPLICATION AND SCOPE OF CONCILIATION
----------------------
(DISPUTES TO WHICH APPLICABLE)
Section 61 of the Arbitration and Conciliation Act, 1996, gives us an idea as ----------------------
to which disputes this Act is applicable. It states as - “(1) Save as otherwise ----------------------
provided by any law for the time being in force and unless the parties have
otherwise agreed, this part shall apply to conciliation of disputes arising out ----------------------
of legal relationship, whether contractual or not and to all proceedings relating
thereto”. Which means- ----------------------
(i) the parties should have agreed for conciliation, ----------------------
(ii) The parties to the dispute should have a legal relationship between them,
----------------------
e.g. employer-employee, husband-wife, tenant-owner, licensor-licensee,
etc. whether it is contractual or not, ----------------------
(iii) It refers to all types of disputes, unless any other law states so.
----------------------
Hence, the Act gives a wide scope. It further says that - “(2) This part shall not
apply where by virtue of any law for time being in force certain disputes may ----------------------
not be submitted to conciliation” i.e. unless of course any other law being in
----------------------
force at that time inhibits the persons in dispute to reconcile under this mode of
conciliation. ----------------------
10.5 CONCILIATION UNDER THE INDUSTRIAL DISPUTES ----------------------
ACT, 1947
----------------------
The Industrial Disputes Act, 1947, was passed mainly to make a provision for
----------------------
the investigation and settlement of the industrial disputes. It became expedient
Conciliation 157
Notes to make a provision for the same, as sometimes it may be, that the dispute as
such may lead to a state or a national issue, e.g. workmen strike in an essential
---------------------- industry of public utility. And to maintain the law and order in the state or
the nation, it was necessary to resolve such issues within a certain time limit
---------------------- or a time frame. And the methods of arbitration and/or conciliation made this
---------------------- possible.
An industry, under this Act, means any business, trade, undertaking,
----------------------
manufacturing unit, service, employment, industrial occupation - be it
---------------------- handicraft, or any unit which contains avocation of workmen. And so, any
disputes or differences between them will then be an Industrial Dispute.
---------------------- Therefore, differences between an employer and employee, employer and
employer, employee and employee, between workmen, connected with the
----------------------
terms of employment or non employment, conditions of labour, between any
---------------------- persons, will then be an Industrial Dispute, e.g. in cases of retrenchment of a
workman.
----------------------
Chapter II of this Act provides the authorities for the settlement of disputes. Here
---------------------- we have, the Conciliation Officer/s - which are appointed by the appropriate
government, i.e. the concerned industry e.g. railways, ONGC, Unit Trust of
---------------------- India, LIC etc., by a notification in the official gazette, either permanently or
for a limited period, for promoting early settlement of the disputes. We also
----------------------
have the Board of Conciliation appointed by the appropriate government, by
---------------------- a notification in the official gazette. It comprises of a chairman and two or
more members as the appropriate government thinks fit. The chairman is an
---------------------- independent person while the other members represent the parties to a dispute.
---------------------- Chapter III of this Act provides for references to the Board for settlement of
disputes. If the appropriate government is of the opinion that an industrial
---------------------- dispute exists, then it may, in order of writing, refer the dispute to the Board
for promoting a settlement between them. Hence, Conciliation as a method of
----------------------
resolving disputes, has been given a legal sanction by the Industrial Disputes
---------------------- Act, 1947.

----------------------
----------------------
1. Conciliation is a method for prevention and settlement of industrial
---------------------- disputes through third party intervention.
---------------------- 2. The conciliator helps in promoting collective bargaining.
----------------------
Activity 1
----------------------
---------------------- Give few examples stating the types of disputes which could be settled by
the method of conciliation.
----------------------

10.6 RECOURSE TO CONCILIATION Notes
As said earlier, The Industrial Disputes Act gives a strong legal support, for the ----------------------
methods of conciliation and arbitration, as methods of resolving disputes in the
industrial and labour field. If the appropriate government apprehends a dispute, ----------------------
then it makes a reference in writing to the said Authorities prescribed in the Act -
----------------------
be it a Works Committee, Conciliation Officers, Board of Conciliation or Court
of Inquiry, as it deems fit. And the duty of such authorities is mainly to promote ----------------------
settlement and not to adjudicate the dispute. (The Court of Inquiry, according to
the Industrial Disputes Act, has the power to investigate the concerned dispute ----------------------
and no other thing, i.e. to mediate, negotiate, conciliate, etc.) If the dispute gets
----------------------
settled here itself, it is well and good. But if there is no settlement, then the
concerned authority will have to give a failure report of the said dispute to the ----------------------
said appropriate government from where the reference came. This report helps
the appropriate government to make up its mind whether to refer the dispute for ----------------------
compulsory adjudication or not. However, this is solely an administrative act on
----------------------
part of the appropriate government and it has to give reasons for the same (u/s.12
(5)). However, U/s.10 (2) the parties to an industrial dispute, may suo moto, ----------------------
either jointly or separately, apply in a prescribed manner, for a reference of the
dispute to the authorities stated in the Act. Then the appropriate government, ----------------------
if satisfied, in its own discretion, shall make a reference accordingly and shall
----------------------
specify a time limit for a settlement.
According to Section 11 of the Industrial Disputes Act, 1947, a conciliation ----------------------
officer or a member of the Board of Conciliation, for the purpose of inquiry ----------------------
into the existing industrial dispute, has to give a reasonable notice to enter the
premises occupied by the establishment to which the dispute relates. ----------------------
Further, the conciliation officer or a member of the Board of Conciliation, shall ----------------------
have the same powers as are vested in Civil Court under the Code of Civil
Procedure as also deemed to be a judicial proceeding within the meaning of ----------------------
Sections 193 and 228 of the Indian Penal Code, when trying a suit in respect
of - enforcing attendance, examination on oath, compelling production of ----------------------
documents, inspection of documents, examination of witnesses, etc. Thus, we ----------------------
see that The Industrial Disputes Act, 1947, gives wide powers to the authorities
enacted by it to resolve the disputes in an amicable manner. However, they ----------------------
should use this discretion to act in a judicial manner, without caprice, according
to the general principles of law and rules of natural justice. ----------------------
----------------------
----------------------
1. Conciliator is bound to follow procedure laid down under Civil
Procedure Code. ----------------------
----------------------
----------------------
Conciliation 159
Notes
Activity 2
----------------------
---------------------- Prepare a list or roles to be played by the conciliator in solving industrial

dispute.
----------------------
---------------------- 10.7 INITIATION AND COMMENCEMENT OF

---------------------- CONCILIATION PROCEEDINGS
---------------------- The procedure for initiation of a conciliation proceeding is stated in Section

62 of The Arbitration and Conciliation Act, 1996. According to it, any party
---------------------- to a dispute can initiate conciliation. The one who wants to do so, shall send
to the other party a written invitation to conciliate. He shall briefly identify
---------------------- the subject of the dispute between them therein. Conciliation Proceeding shall
---------------------- commence when the other party accepts in writing the invitation to conciliate. If
the other party rejects the invitation, there will be no Conciliation Proceeding.
---------------------- If the party initiating conciliation does not receive a reply within 30 days from
the date of which he had sent the invitation, or within such other period of time
---------------------- as specified in the invitation, he may elect to treat this as a rejection of the
---------------------- invitation to conciliate and if he so elects, he shall inform in writing to the other
party accordingly.
----------------------
---------------------- Activity 3
---------------------- Read and comment on State of Punjab v/s Geeta Iron & Brass Works Ltd.
----------------------
10.8 NUMBER, APPOINTMENT, POWERS, FUNCTIONS
----------------------
AND ROLE OF CONCILIATORS
----------------------
According to Section 63 of The Arbitration and Conciliation Act, 1996, usually
---------------------- there shall be one conciliator; unless and until the parties themselves agree that
there shall be more than one conciliator. In case where the parties agree to have
----------------------
more than one conciliator, they ought, as a general rule, to act jointly. Further,
---------------------- Section 64 states, that –
---------------------- (a) In a conciliation proceedings with one conciliator, the parties may agree
between themselves as to the name of that sole conciliator.
---------------------- (b) In a conciliation proceeding with two conciliators, each party may appoint
---------------------- one conciliator each.
(c) Whereas in a conciliation proceeding with three conciliators, each party
---------------------- may appoint one conciliator each and the parties may agree between
---------------------- themselves as to the name of the third conciliator. This third conciliator
shall act as the presiding conciliator.
----------------------

If the parties do not appoint a conciliator by themselves, by their own choice, Notes
they may enlist the assistance of a suitable institution or a person in connection
with the appointment of conciliator/s. The institution or person may appoint ----------------------
such conciliator/s directly or by recommendation to the parties. The institution
or person appointing such conciliator/s should take into account that such ----------------------
conciliator/s should be independent and impartial. Upon the appointment of ----------------------
a conciliator/s, he may request each party to submit to him a brief written
statement describing the general nature of the dispute, the points at issue, further ----------------------
written statement of his position and the facts and grounds in support thereof,
supplemented by any documents and other evidence that he deems appropriate. ----------------------
At any stage of the conciliation proceedings, the conciliator/s may request the ----------------------
parties to submit such additional information as he deems appropriate. The
Conciliator is vested with wide powers to decide the procedure to be followed to ----------------------
arrive at an amicable settlement. He is not bound by the Code of Civil Procedure,
1908 nor the Indian Evidence Act, 1872. All proceedings in conciliation are ----------------------
confidential. The conciliator/s shall assist the parties in an independent and ----------------------
impartial manner to reach an amicable settlement of their dispute. He shall be
guided by the principles of objectivity, fairness and justice giving consideration ----------------------
to the rights and obligations of the parties and the circumstances surrounding
the dispute. He may, at any stage of the conciliation proceedings make proposals ----------------------
for a settlement of the dispute. However, they need not be in writing. ----------------------
----------------------
----------------------
1. Which section in the Arbitration and Conciliation Act, 1996 deals
with the appointment of conciliator? ----------------------
i. Section 63 ----------------------
ii. Section 64
----------------------
iii. Section 65
----------------------
iv. Section 66
----------------------
10.9 CONDUCT AND STAGES OF THE CONCILIATION
----------------------
PROCEEDINGS
----------------------
As conciliation proceeding is not a judicial proceeding, it does not have definite
stages as such in which to proceed. It entirely depends on how the circumstances ----------------------
of the proceedings go on, the end result being in the satisfaction of a quick and
----------------------
amicable settlement. Unlike a judicial proceeding the conciliator/s may conduct
the conciliation proceedings in an informal manner. He may invite the parties to ----------------------
a dispute to meet him - either separately or together
----------------------
- as and when the case requires. He may communicate with them orally or in
writing. There is also no such issue regarding the place where the conciliator/s ----------------------
Conciliation 161
Notes meet the parties to a dispute. Such place shall be determined by the conciliator/s
either by himself or in discussion with the parties to a dispute. When the
---------------------- conciliator/s receives the factual information of the dispute from a party, he
discloses the substance of that information to the other party so that he may
---------------------- have the opportunity to present an explanation for it. However, it is not
---------------------- necessary that all the information be disclosed, only that which the conciliator/s
think is relevant to arrive at a settlement is disclosed, other information is kept
---------------------- confidential. The parties also shall in good faith co-operate with the conciliator/s
and shall endeavour to comply with his requests of say submission of written
---------------------- materials, providing evidence, attending meetings, etc., in order to come to
---------------------- a good settlement of the dispute. Each party may on their own initiative or
at the suggestion of the conciliator/s may give their own suggestions for the
---------------------- settlement of the dispute.
---------------------- 10.10 ROLE OF CONCILIATOR IN SUBSEQUENT
---------------------- PROCEEDINGS
---------------------- During the period of the conciliation proceedings, the parties to the proceedings
shall not initiate any other arbitral or judicial proceedings in respect of the same
---------------------- subject matter which is in conciliation. However, the parties may initiate such
---------------------- proceedings, if, in their opinion, it is necessary for preserving their rights. Further,
unless it is otherwise agreed by the parties, the conciliator/s shall not act as an
---------------------- arbitrator or a representative or a counsel to any other proceeding whose subject
matter is the same as that of the conciliation proceedings. It is also considered
---------------------- necessary that the conciliator shall not be presented by the parties as a witness
---------------------- in any other arbitral or judicial proceedings. The parties shall not introduce as
evidence, the views expressed, the suggestions, admissions, proposals made
---------------------- in the conciliation proceedings, to any other arbitral or judicial proceedings,
whether or not such proceedings relate to the subject matter of the dispute.
----------------------
---------------------- Summary
---------------------- • Conciliation is one of the methods of resolving disputes between two
or more people, industry, business entities, governmental agencies and
---------------------- even between two or more states, in a quick and amicable manner. It
usually depends on the parties to a dispute whether to use such a mode of
----------------------
resolving disputes or not.
---------------------- • The disputes are resolved with the help of a third person/s known as the
---------------------- conciliator/s. He brings the parties together and helps them to solve their
dispute by using his skills to improve communication between them.
---------------------- • Such quick redressal of solving disputes get a legal sanction by way of a
---------------------- law passed in 1996 known as The Arbitration and Conciliation Act. It aims
at streamlining the methods of resolving disputes. The Act consolidates
---------------------- and defines the law relating to conciliation and for matters connected
therewith. Part III Sections 61 to 81 deal with the same.
----------------------

• A statutory support for conciliation is also given by Section 89 of the Notes
Code of Civil Procedure (Amendment) 1999, and also Order X Rules 1A,
1B, 1C. ----------------------
• The Arbitration and Conciliation Act, 1996, gives a wide scope and covers ----------------------
all matters of civil nature, breach of contracts, disputes of moveable and
immoveable properties etc., except as to matters of criminal nature and ----------------------
illegal transactions.
----------------------
• The Industrial Disputes Act, 1947, which was passed even before The
Arbitration and Conciliation Act, 1996, provides for peaceful resolution ----------------------
of industrial disputes. It was passed for promoting harmonious relations
between the employers and workers, ensuring progress of industry and ----------------------
thus maintains national harmony. It applies to the whole of India.
----------------------
• The Industrial and Disputes Act, 1947, itself provides for authorities like
Conciliation Officers, Board of Conciliators etc., who try to solve the ----------------------
industrial disputes in a simple and informal manner.
----------------------
• In The Arbitration and Conciliation Act, 1996, the number and appointment
of the conciliator solely depends on the parties to a dispute. And the ----------------------
conciliator conducts the proceedings in an informal manner unlike a
judicial proceeding to arrive at a quick and amicable settlement between ----------------------
them.
----------------------
• The conciliation proceeding is not a judicial proceeding, so it does not
have definite stages as such. It entirely depends on how the circumstances ----------------------
of the proceedings go on.
----------------------
• During the conciliation proceeding, the conciliator shall not act as
counsel to any other proceeding which has the same subject matter as that ----------------------
of the said conciliation proceedings. Even the parties to the conciliation
proceedings shall not introduce the matter of the conciliation proceedings ----------------------
elsewhere as evidence.
----------------------
Keywords ----------------------
• Conciliation: It is a method of resolving disputes between parties in an ----------------------
amicable and informal manner.
• The Arbitration and Conciliation Act: It was passed in 1996 for quick ----------------------
redressal of disputes between the parties. ----------------------
• Conciliator: The third person who helps in resolving the dispute between
the parties in a quick, amicable and informal manner, using his own skills ----------------------
and techniques thereto.
----------------------
• Code of Civil Procedure (Amendment) Act, 1999: Section 89 of the
said Act. ----------------------
• The Old Provision of the Civil Procedure Code: Order X Rules 1A, 1B ----------------------
and 1C.
----------------------
• The Industrial Disputes Act, 1947: It made provision for the investigation
and settlement of industrial disputes. ----------------------
Conciliation 163
Notes • Conciliation Proceedings: They are those proceedings which give
remedy to the dispute between the parties. They are not judicial in
---------------------- the sense that they are conducted in an informal manner to result in a
quick and easy settlement between the parties to a dispute. However,
---------------------- the proceedings do follow certain rules of law regarding production of
documents, investigation, attendance in meetings, etc.
----------------------
---------------------- Self-Assessment Questions

---------------------- 1. What do you mean by the term “conciliation”? Discuss it with reference
to other methods of dispute resolution.
----------------------
2. What is the scope of conciliation under the Arbitration and Conciliation
---------------------- Act, 1996?
3. What is conciliation under the Industrial Disputes Act, 1947?
----------------------
4. What do you think about the role these two Acts play, in “conciliation” as
---------------------- a method of dispute resolution?
---------------------- 5. What is a conciliation proceeding? How is it different from judicial
proceedings?
----------------------
6. What is the role of a conciliator in a conciliation proceeding? Discuss his
---------------------- powers and functions.
7. According to you, is conciliation a better method of dispute resolution?
---------------------- Discuss, stating its advantages and disadvantages.
----------------------
----------------------
---------------------- 1. True
---------------------- 2. True
----------------------
----------------------
1. False
---------------------- 1. Which section in the Arbitration and Conciliation Act, 1996 deals with
the appointment of conciliator?
---------------------- i. Section 63
----------------------
Suggested Reading
----------------------
----------------------

Conciliation Proceedings and Settlement Agreement
UNIT
11
Structure:
11.1 Termination of Conciliation Proceedings

11.2 Institutional and Administrative Assistance
11.3 Settlement of Disputes under Conciliation
11.4 Legal Effect, Status and Effect of Settlement Agreement
11.5 Disclosure and Confidentiality under Conciliation Settlement Proceedings
11.6 Costs of Conciliation
11.7 Enforceability
11.8 Advantages of Conciliation
11.9 UNCITRAL Model of Conciliation
11.10 Conciliation Under Family Courts
11.11 Conciliation as Differentiated from Other Methods of Dispute Settlement
11.12 Conciliation under Amended CPC
Summary
Key Words
Suggested Reading
Conciliation Proceedings and Settlement Agreement 165

Notes
Objectives
----------------------
----------------------
• Explain how a dispute is settled by the method of conciliation
----------------------
• nalyze the advantages of the method of conciliation are and how
A
---------------------- it differs from other methods of dispute resolution
• Understand how international commercial disputes are resolved
----------------------
through conciliation
---------------------- • Describe how conciliation works as a method of dispute resolution
---------------------- under the Family Courts Act, 1984
---------------------- 11.1 TERMINATION OF CONCILIATION PROCEEDINGS

---------------------- Conciliation proceedings end or terminate, when the dispute between the parties is
resolved. This happens when,
----------------------
(a) ither the parties end up in an amicable settlement, which is mutually accepted by
E
---------------------- both the parties, or
---------------------- (b) T
hey do not come to a mutual settlement as such. This happens when either of
the parties does not agree with the terms of a possible settlement, formulated
---------------------- by the conciliator in the conciliation proceedings. (The terms are entered into
after a discussion with the parties about their dispute.)
----------------------
When the dispute between the parties is resolved by entering into an amicable
---------------------- settlement, the conciliator puts the terms of the settlement in writing and draws up a
settlement agreement. When this settlement agreement is signed by both the parties to a
----------------------
dispute, the conciliation proceeding comes to an end, i.e. it is terminated, as on the date
---------------------- of the agreement.
Sometimes it also happens that the conciliator just cannot settle the dispute.
----------------------
This may be for various reasons – the parties may just do not agree with the terms
---------------------- of the settlement and then it becomes difficult for the conciliator to resolve their
problem/dispute. In this case, the conciliator has no other option but to end the
---------------------- proceedings by submitting a failure report in writing. In such a case, after consultation
with the parties, the conciliator terminates the conciliation proceedings, by writing a
---------------------- failure report and taking signatures thereon of both the parties to a dispute thus stating
---------------------- that further efforts of conciliation are no longer possible.
---------------------- 11.2 INSTITUTIONAL AND ADMINISTRATIVE

ASSISTANCE
----------------------
In order to facilitate the conduction of the conciliation proceedings, the parties to a
----------------------
dispute or the conciliator, with the consent of the parties, may arrange for administrative
---------------------- assistance by a suitable institution or a person. They may request such an institution
or a person to recommend the names of such person for assistance or they may
---------------------- agree with the names directly given by the institution. The conciliator may have the

need for such assistance so that he may conduct his proceedings quickly. Sometimes it Notes
so happens that such an institution or a person help him make his proceedings easy,
e.g. in a conciliation proceedings of a dispute between railway motormen and ----------------------
the management, the conciliator may ask for assistance of a third party altogether
(which may be the railway as an institution itself or any third person appointed by ----------------------
them) to help him solve the dispute. But such assistance given should be such that it ----------------------
should facilitate settlement of the dispute quickly, as here the railways are a necessity.
----------------------

1. The Conciliator may arrange for administrative assistance ----------------------
i. With the consent of the parties ----------------------
ii. With the consent of the claimant
----------------------
iii. Without the consent of the parties
----------------------
iv. On its own, irrespective of the consent of the parties.
----------------------
11.3 SETTLEMENT OF DISPUTES UNDER CONCILIATION ----------------------
First of all, as otherwise agreed by any law for time being in force, the parties ----------------------
to a dispute should agree between themselves about the need for settlement of
their dispute in a quick and amicable manner. Then comes the appointment of a ----------------------
conciliator, a third party, who helps them solve their dispute/problem together after ----------------------
discussing the issues held in it. The conciliator may take institutional or administrative
assistance as stated above. He helps to solve all types of disputes between parties ----------------------
which arise out of legal relationships – whether they are contractual or not, and
relates to all proceedings thereto. All matters of civil nature, e.g. family disputes; ----------------------
breach of contract, e.g. disputes relating to contract labourers; disputes relating to ----------------------
moveable or immoveable property, e.g. disputes of land acquisition, can be referred
to conciliation. However, matters of criminal nature, e.g. kidnapping; of illegal ----------------------
transactions, e.g. sale of property which has no clear title, etc., cannot be referred
to conciliation. The conciliator helps the parties of a dispute in arriving at a mutually ----------------------
acceptable settlement. He brings the parties together and tries to solve their dispute ----------------------
using his good offices. If he is successful in solving their dispute, they may draw and sign
a written settlement, i.e. an agreement thereof. If not, the conciliator writes a failure ----------------------
report duly signed by the parties. Hence, conciliation helps to solve certain disputes in
a quick, mutually acceptable and amicable manner. ----------------------
----------------------
----------------------
1. Conciliation is applicable to civil and criminal nature cases.
----------------------

Notes
Activity 1
----------------------
---------------------- Read and Comment on Haresh Dayaram Thakur V. State of Maharashtra.
----------------------
11.4 LEGAL EFFECT, STATUS AND EFFECT OF
---------------------- SETTLEMENT AGREEMENT
---------------------- When it appears to the conciliator, that a settlement is possible in a dispute,
he formulates the terms of a possible settlement which is then forwarded to the
---------------------- parties, in writing, for their observations. After accepting them or making/suggesting
---------------------- some changes, the conciliator may reformulate the terms of a possible settlement in
the light of such observations, if required. If such terms of a possible settlement
---------------------- are finally agreed to by the parties to a dispute, then they may, with the help of a
conciliator, draw a final agreement, in writing, stating a settlement of their dispute.
---------------------- This final agreement is a settlement agreement which determines the end of the
---------------------- conciliation proceedings. However, it should be signed by both the parties to a
dispute and the conciliator as well, only then it is authenticated. A copy thereof
---------------------- is provided to each of the parties to a dispute by the conciliator. Such an agreement
shall be final and binding on the parties and persons claiming under them respectively.
---------------------- The conciliation proceedings shall then terminate as on the date of signing of the
---------------------- settlement agreement. Such a settlement agreement shall have the same status and
legal effect as that of an arbitral award. It shall be binding upon both the parties to
---------------------- a dispute unless it is influenced by fraud, coercion or undue influence. However, if
no possible settlement is agreed to by the parties to a dispute, then the conciliator
---------------------- proceeds by giving a failure report and the matter proceeds judicially. Here, the
---------------------- failure report is duly signed by both the parties to a dispute and the conciliator, it
is then submitted and the conciliation proceedings stands terminated. The failure
---------------------- report has the same status and effect as that of the settlement agreement.
----------------------
----------------------
----------------------
1. The settlement agreement is signed by
----------------------
i. Parties and conciliator
---------------------- ii. Only parties
---------------------- iii. Only conciliator
iv. None of the above
----------------------
----------------------
1.
In case of conciliation, settlement agreement is not binding on the
---------------------- parties.
2. Appeal can be filed against final settlement agreement.
----------------------

11.5 DISCLOSURE AND CONFIDENTIALITY UNDER Notes
CONCILIATION SETTLEMENT PROCEEDINGS
----------------------
Notwithstanding anything contained in any other law for the time being
in force, the conciliator and the parties to the dispute shall keep confidential all the ----------------------
matters relating to the conciliation proceedings. Such confidentiality between the ----------------------
parties and the conciliator shall also extend to the settlement agreement. However,
disclosure can be made only where it is necessary, e.g. for purposes of implementation ----------------------
and enforcement. Now, when a conciliator receives factual information regarding the
matter relating to the dispute from one of the party, he shall disclose the substance ----------------------
of that information to the other party only for the reason that the other party may ----------------------
have the opportunity to present any explanation on that matter. Further, if a party
gives any information to the conciliator subject to a specific condition, then such ----------------------
information should be kept confidential by the conciliator. He shall then not disclose
that information to the other party without that party’s consent. Disclosure and ----------------------
confidentiality in conciliation proceedings remain till the proceedings are going on. ----------------------
Once the proceedings are terminated, then they can be disclosed as and when required,
further the settlement agreement exists, and can be produced when necessity prevails. ----------------------
----------------------
----------------------
1.
Documents produce during conciliation proceeding is a public
document. ----------------------
----------------------
Activity 2 ----------------------
----------------------
Read and Comment on Lachoomal V Radhey Shyam.
----------------------
11.6 COSTS OF CONCILIATION ----------------------
The full procedure of conciliation proceedings requires financial backing. So, the ----------------------
questions of costs of the proceedings come into being. It is the conciliator who fixes
the price/costs of the conciliation proceedings upon termination of the proceedings ----------------------
thereof. He gives a written notice regarding the costs of the proceedings to both the
----------------------
parties to the dispute.
Here, “costs” mean reasonable costs relating to ----------------------
(a) the fee and expenses of the conciliator; ----------------------

(b)
the fee and expenses of the witnesses called for during the proceedings as ----------------------
requested by the conciliator with the consent of the parties;
----------------------
(c)
the fee and expenses of any expert advice taken by the conciliator to solve the
dispute with the consent of the parties; ----------------------

Notes (d)
the fee and expenses of any institutional and administrative assistance taken
by the conciliator with the consent of the parties to help him solve the
---------------------- dispute in the proceedings;
---------------------- (e)
Any other expenses incurred in connection with the conciliation proceedings
and the settlement agreement.
----------------------
All these costs and expenses shall be borne equally by the parties unless the
---------------------- settlement agreement provides for a different clause altogether. However, there
is also an option of keeping a certain amount as a deposit with a conciliator. The
---------------------- conciliator may direct each party to deposit an equal amount as an advance for the
costs which he expects that would be incurred during the conciliation proceedings.
----------------------
The conciliator may also direct supplementary deposits in an equal amount from
---------------------- each party as and when required during the course of the proceedings. The conciliator
shall render the accounts of the deposit received to the parties and shall return the
---------------------- balance amount to them, upon termination of the conciliation proceedings. If these
deposits are not paid in full by both the parties, within 30 days, the conciliator may
----------------------
suspend the proceedings or may make a written declaration of termination of
---------------------- the proceedings to the parties, with effect from the date of that declaration. So,
there is a choice as to costs or deposits.
----------------------
---------------------- 11.7 ENFORCEABILITY
---------------------- Now, once a settlement agreement is made, it means that the parties to a
dispute have themselves with the help of the conciliator, agreed to come to a mutual
---------------------- settlement of the dispute between them. The settlement agreement is in writing
with the signatures of both the parties and the conciliator on it. Hence, it is final and
----------------------
binding on the parties and persons claiming therein. It is said to have the same status
---------------------- and effect as that of an arbitral award. To explain this let us take e.g. of an industrial
dispute – between an employee and a labourer, if a settlement is entered between
---------------------- them, the dispute is settled there and then, and the matter need not be adjudicated.
Hence, a settlement agreement has the same effect as an award and it is binding on the
----------------------
parties to a dispute. In an industrial dispute, a family dispute, conciliation takes place
---------------------- before the dispute is adjudicated and so if a dispute is settled by conciliation, the
settlement agreement is said to be binding on the parties as if judicially, with respect
---------------------- to that subject matter of the dispute. The settlement agreement is in writing with the
signatures of both the parties and the conciliator on it. Hence, it is final and binding on
----------------------
the parties and persons claiming therein. It is said to have the same status and effect as
---------------------- that of any other award.
---------------------- Activity 3
----------------------
Read and Comment on Guru Nanak Foundation V. Rattan Singh & Sons.
----------------------
----------------------
----------------------

11.8 ADVANTAGES OF CONCILIATION Notes
Conciliation is an amicable settlement of disputes between the parties, with the ----------------------
help of a third party – the conciliator. So, first and foremost, here the settlement takes
place with the consent of the parties to a dispute. It is the parties together who want/ ----------------------
agree to settle their dispute, and so appoint a conciliator to that effect. The appointment
----------------------
of a conciliator is also with the consent of the parties in dispute. The conciliator assists
the parties in an impartial, independent manner in their attempt to reach to the ----------------------
terms of a possible settlement. And once such a settlement is reached, it is final and
binding on the parties as to the subject matter of their dispute. Hence we can say ----------------------
that:
----------------------
(a)
Conciliation is a quick and easy way of solving disputes. It saves time and
effort; ----------------------
(b)
The process, the appointment of the conciliator, everything takes place with the ----------------------
consent of the parties to the dispute. It is like they want their dispute to be settled
in this way; ----------------------
(c)
The conciliation proceeding take place in an informal way unlike ----------------------
adjudication. The parties can express their concerns and feelings in the matter
----------------------
to the conciliator who could help them find a solution to their problem/
dispute after understanding their concerns; ----------------------
(d)
The conciliation proceeding saves unwarranted additional expenses unlike
----------------------
adjudication, I.e. costwise it is cheaper;
(e)
The end result in conciliation, i.e. the settlement agreement is the one ----------------------
which is acceptable to both the parties, as it is the result of their choice.
----------------------
Hence, it is more easily acceptable;
(f)
The last but not the least, conciliation does not close other options. The ----------------------
settlement is treated on par with other decrees or award and may be such ----------------------
enforced.
Thus, Conciliation brings finality to the issue in a dispute. ----------------------
----------------------
Activity 4
----------------------
Read and comment on Union of India Vs East Coast Boat Builders & ----------------------
Engineers.
----------------------
11.9 UNCITRAL MODEL OF CONCILIATION ----------------------
----------------------
Quick decision of any commercial dispute is necessary for a smooth
functioning of a business or industry of any country/nation. Hence, the need for ----------------------
quick redressal by other ways of dispute resolution came into being so that the time
consuming process of normal judicial system could be avoided. But merely having ----------------------
and using these methods of dispute resolution is of no use, unless and until it has a
----------------------
legal sanction. So efforts were being made to legalize such methods and the need for

Notes its legal sanction arose. It was then that The Arbitration and Conciliation Act, 1996,
was passed to provide quick redressal to commercial disputes by methods of arbitration
---------------------- and conciliation. It was an act to consolidate and amend the law relating to domestic
arbitration, international commercial arbitration and enforcement of foreign arbitral
---------------------- awards as also to define the law relating to conciliation and for matters connected
---------------------- therewith or incidental thereto.
The objective of the Act being the settlement of disputes in an expeditious,
----------------------
convenient, inexpensive and private manner so that they do not become the subject
---------------------- matter of future litigation. The said Act is therefore based on the model law drafted
by the United Nations Commission on International Trade Laws (UNCITRAL). The
---------------------- UNCITRAL adopted the model law on International Commercial Arbitration in 1985
and International Conciliation Rules in 1980. The General Assembly of the United
----------------------
Nations has recommended the use of the said rules in cases where a dispute arises
---------------------- in the context of international commercial relations and that the parties seek an
amicable settlement of that dispute by recourse to conciliation.
----------------------
The said model law and rules thus make a significant contribution to the establishment
---------------------- of a unified legal framework for the fair and efficient settlement of disputes arising
in the international commercial relations. Which means it helps in the settlement of
---------------------- international commercial disputes, arising out of legal relationships, whether contractual
or not, considered as commercial under the law in India and where at least one of the
----------------------
parties is?
---------------------- an individual, national or habitually resident in any country other than India;
•
---------------------- • a body corporate which is incorporated in any country other than India;
---------------------- a company or any other association whose central management and control is
•
exercised in any country other than India;
---------------------- • Government of a foreign country.
---------------------- The said Act has been divided into four Parts and contains three Schedules.
Part I deals with Arbitration. Part II (Sections 44 to 60) deals with the enforcement
----------------------
of certain Foreign Awards made under the New York Convention and Geneva
---------------------- Convention respectively. Part III (Sections 61 to 81) deals with conciliation and Part
IV contains other supplementary provisions. Similarly, Schedule I contains provisions
---------------------- relating to convention on the Recognition and Enforcement of Foreign Arbitral Awards;
Schedule II deals with Protocol on Arbitration Clauses and Schedule III contains
----------------------
provisions relating to Execution of Foreign Arbitral Awards. So, here we can say
---------------------- that the UNCITRAL model of Conciliation Rules is the basis of today’sArbitration
and Conciliation Act.
----------------------
---------------------- 11.10 CONCILIATION UNDER FAMILY COURTS
---------------------- Conciliation, as a process of dispute resolution is of great help in matters relating

to family disputes, maintenance, child custody, divorce disputes, etc. The Family
---------------------- Courts Act was passed in the year 1984. The Law Commission in its 59th report
in 1974 stressed the need of making reasonable efforts at settlement of family disputes
---------------------- before the commencement of a trial. In 1975, a Committee on the status of women

recommended that all matters concerning the family should be dealt with separately. Notes
So came the making of the Family Courts Act. It provides for the establishment of
Family Courts in every area which comprises a population of one million or any such ----------------------
area in the State as the Government may deem necessary, with a view to promote
conciliation and secure a speedy settlement of disputes relating to marriage and ----------------------
family affairs. Family Courts are established primarily for the purpose of settlement ----------------------
of family disputes through conciliation. A few features in the Act prove this point.
----------------------
(a)
No legal representative is required to plead the matter on behalf of the client
under this Act; ----------------------
(b)
Settlement by conciliation is preferred over other methods especially
----------------------
adjudication;
(c)
Less formal proceedings – litigant friendly atmosphere to facilitate conciliation. ----------------------
When family dispute arises, be it divorce, maintenance, child custody, it ----------------------
comes before the Family Court. Before the trial or adjudication of the matter, the Court
sees to it whether the dispute can be resolved through conciliation. Both the parties to ----------------------
a dispute are met with by the conciliator, either separately or together or at times both ----------------------
ways. The conciliator, in his own ways tries to resolve the dispute thus trying his
best to keep the family bond secure. If a settlement is arrived or not, either way the ----------------------
conciliator’s final report is forwarded to the Court who gives a final decision regarding
the matter. ----------------------
If the matter is adjudicated, the Court proceedings may take place “in ----------------------
camera” if the parties to a dispute so require. To facilitate conciliation, the procedure
embodies many shifts from the normal process of courts. Any report, statement, ----------------------
documents, information or matter that may facilitate the settlement of a dispute is ----------------------
allowed as evidence, even if they are inadmissible under the Evidence Act. The
family courts are free to evolve their own rules of procedure. And once a family ----------------------
court does so, the rules so framed override the rules of procedure as contemplated
under the Code of Civil Procedure. ----------------------
----------------------
Activity 5
----------------------
1. Go through the Family Court Act, 1984, and if interested, try to visit ----------------------
a nearby Family Court to actually see the process of conciliation as it
takes place within the Court premises. ----------------------
2. Read and comment on Guru Nanak Foundation Vs Rattan Singh & ----------------------
Sons.
----------------------
----------------------
----------------------
----------------------
----------------------

Notes 11.11 CONCILIATION AS DIFFERENTIATED FROM
OTHER METHODS OF DISPUTE SETTLEMENT
----------------------
Dispute Settlement/Resolution is a process of resolving disputes between parties.
---------------------- These processes fall into two major categories:
---------------------- (a)
Adjudicative processes such as litigation, arbitration, in which a judge, jury
or an arbitrator determines the outcome of the dispute;
----------------------
(b)
Extrajudicial or consensual processes such as collaborative law as in
---------------------- conciliation, mediation or negotiation in which the parties attempt to reach an
agreement.
----------------------
Our legal system provides a necessary structure for the resolution of many
---------------------- disputes. The most common form b eing litigation. Litigation is initiated when one
---------------------- party files a suit against another. The proceedings being very formal and are governed
by the rules of evidence and procedure which are established by the legislature. The
---------------------- outcomes of such proceedings are decided by an impartial judge or jury based on
factual questions of the case and the application of law. The verdict of the Court
---------------------- is binding and not advisory. Here, however both the parties have a right to appeal the
---------------------- judgment to a higher court.
The other form being arbitration, in which parties to a dispute agree among
---------------------- themselves to refer their dispute to arbitration. The matter is decided by the arbitrator
---------------------- known as the “Arbitration Tribunal”. As compared to litigation, this is an informal
procedure. The Arbitration Tribunal/Arbitrator is not bound by procedural laws and
---------------------- law of evidence. However, Limitation Act is applicable, if a claim is barred under
the Limitation Act, the arbitration procedure cannot continue. The verdict of the
---------------------- arbitration tribunal is an arbitral award which is also binding on the parties to a
---------------------- dispute. Difference between arbitration and conciliation is that the arbitrators can be
appointed even before the dispute arises while a conciliator is appointed after a dispute
---------------------- has arisen.
---------------------- Then we have mediation, which is more or less similar to conciliation. Here
also, the parties to a dispute agree to resolve their dispute with the help of a third
---------------------- person known as the mediator, while negotiation is the simplest and the cheapest
method of resolving dispute where the parties negotiate with each other and arrive
---------------------- at a settlement. Conciliation, mediation and negotiation have greater flexibility and are
---------------------- more or less cheaper in cost than litigation. They have quick and speedy ways of solving
of disputes, and are therefore increasingly acceptable nowadays. However, some have
---------------------- criticized these methods as they take away the right to seek redress of grievances in the
Courts. Sometimes, it may not offer the fairest way for parties in an equal bargaining
---------------------- relationship, e.g. in a dispute between a consumer and a large corporation. Further,
---------------------- in some circumstances it may tend to become as expensive as litigation. Another
criticism is that such dispute resolution methods have no legal standing, as they
---------------------- have no authority to seek evidence, call witnesses. A negotiator, mediator, writes no
decision and makes no award, the parties seldom face each other. All said and done,
---------------------- conciliation has one special characteristic which makes it totally different from all
---------------------- other methods of dispute resolution and that is it can go to the root of the difference,

the real problem between the parties that had led them to disagree with each other. Notes
They can express their concerns and feelings in the matter to the conciliator who
could help them find a solution to their problem. ----------------------
----------------------
11.12 CONCILIATION UNDER AMENDED CPC
----------------------
As said earlier, Part III of the Arbitration and Conciliation Act makes
provision for conciliation proceedings. But apart from this, does it have any legal ----------------------
backing? Under the old procedural law, there were no special provisions to deal
with any awards or settlements based on compromise or agreements between the ----------------------
parties to a dispute. As against this, the new law facilities, i.e. the amended Code of ----------------------
Civil Procedure, 1999, promotes the efforts made to arrive at a settlement of dispute
through conciliation. Section 30(I) of the Arbitration and Conciliation Act, provides ----------------------
that the dispute between the parties be settled by the use of conciliation, mediation or
arbitration. Section 89 of the amended Code of Civil Procedure permits the Court to ----------------------
refer a dispute for conciliation even where the parties do not consent, provided, the ----------------------
Court thinks that the case is one which is fit for conciliation, e.g. in a family dispute –
divorce proceedings, conciliation is made a compulsory aspect of litigation even if the ----------------------
parties are not ready or they have already decided as to its result. Hence, the law
gives a formal recognition to conciliation in India. ----------------------
----------------------
Summary
----------------------
1.
A Conciliation Proceedings is said to be terminated when the dispute between
the parties has been resolved, i.e. the parties accept the terms of a possible ----------------------
settlement. If the parties do not comply with the terms of a possible settlement, ----------------------
i.e. if they do not agree, then the conciliator terminates the conciliation
proceedings by a written declaration that further efforts at conciliation is not ----------------------
possible.
----------------------
2.
In order to facilitate the conciliation proceedings, the conciliator with the
consent of the parties to a dispute may opt for institutional and/or administrative ----------------------
assistance.
----------------------
3.
The conciliator helps the parties of a dispute in arriving at a mutually
acceptable settlement. He brings the parties together and tries to solve their ----------------------
dispute. If he is successful in doing so, they may end up in making a written
settlement agreement, if not they write a failure report. ----------------------
4.
The settlement agreement is binding on both the parties to a dispute as if ----------------------
judicially. It is written with the signatures of both the parties and conciliator
----------------------
on it.
5.
Any factual information received by the conciliator in the course of conciliation, ----------------------
shall not be disclosed by him, even to the other party if it may not be found
----------------------
necessary by him.
----------------------
----------------------

Notes 6.
The conciliator fixes the costs of the conciliation process by giving a written
notice thereof to both the parties. The costs shall be borne equally by both the
---------------------- parties unless any agreement provides differently. The conciliator may also
choose to keep the expenses as deposit till the proceedings go on.
----------------------
7.
The said Act – The Arbitration and Conciliation Act, is based on the
---------------------- UNCITRAL Rules of Conciliation.
---------------------- 8.
Conciliation is also used as a compulsory method of dispute resolution in
Family Courts, set up under the Family Courts Act, 1984.
----------------------
9.
Among all other methods of dispute resolution, conciliation is more
---------------------- advantageous.
---------------------- Litigation is formal, expensive and time consuming. Arbitration is less formal
than litigation but conciliation is informal and quick. In negotiation and
---------------------- mediation, they seldom make written settlements/awards.
---------------------- 10.
Under the amended Code of Civil Procedure, the Court refers the dispute
for conciliation even if the parties do not consent, provided the Court thinks
---------------------- that the dispute is one which is fit for conciliation.
----------------------
Keywords
----------------------
• Termination of Conciliation Proceedings: Conciliation proceedings are
---------------------- terminated by signing of the settlement agreement by both the parties to a
dispute and the conciliator. The proceedings stand terminated/end as on the date
----------------------
of signing of the settlement agreement.
---------------------- • Settlement Agreement: It contains written terms of a possible settlement
which are acceptable to both the parties of the dispute. If the parties reach on
----------------------
an agreement on the settlement of their dispute, they may sign the written terms
---------------------- thereby finalizing the agreement which then shall be final and binding upon
them.
----------------------
• Institutional and Administrative Assistance: Help given by any
---------------------- institution to the conciliator in arriving at a settlement of a dispute.
---------------------- • UNCITRAL: It is a commission termed as United Nations Commission on

International Trade Law which attempts to solve disputes arising in the context of
---------------------- international commercial relations by the method of conciliation.
----------------------
----------------------
1. When does a conciliation proceeding end/terminate?
----------------------
2.
How is a dispute between parties settled by the method of conciliation?
---------------------- State by giving examples.
---------------------- 3. What is a settlement agreement? What is its status?

4. How does conciliation differ from other methods of dispute resolution?
----------------------

5. Write a note of UNCITRAL model of conciliation. Notes
6. Do you think conciliation is of great help in solving family disputes? Elaborate.
----------------------
Answers to Check your Progress ----------------------

1. The Conciliator may arrange for administrative assistance
----------------------
i. With the consent of the parties
----------------------
1. False ----------------------
----------------------
1. The settlement agreement is signed by
----------------------
i. Parties and conciliator
1. False ----------------------
2. False ----------------------
----------------------
----------------------
1. False
----------------------
1. Basu, N.D. 2012. Law of Arbitration & Conciliation. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
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Negotiation
UNIT
12
Structure:
12.1 Need and Meaning of Negotiation

12.2 Essentials, Phases and Characteristics of Negotiations
12.3 Negotiation as a Compromise and Exchange of
Information
12.4 Essential Skills of a Negotiator
12.5 Negotiation Styles
12.6 Five Approaches
12.7 Strategies of Negotiation
12.8 Negotiation Power
12.9 BATNA and WATNA
12.10 Domestic Disputes and Tools of Negotiation
Summary
Key Words
Suggested Reading
Negotiation 179
Notes
Objectives
----------------------
----------------------
• Describe the method of negotiation as a mode of dispute resolution
----------------------
• Explain how negotiation works, its need, meaning and characteristics
---------------------- Specify different skills, styles, strategies and approaches of
•
negotiation
----------------------
• Explain the power and tools, types of negotiation
----------------------
---------------------- 12.1 NEED AND MEANING OF NEGOTIATION

---------------------- Negotiation is the simplest and the oldest method of resolving dispute between
two parties. In everyday life itself, we often see people negotiating with each other for
---------------------- trivial, day to day matters e.g. in purchase of vegetables, housewives often indulge in
---------------------- negotiating with the vendor, friends often negotiate with each other in order to decide
which movie to go or where to have a cup of coffee, businessmen often negotiate
---------------------- for purchase and sale of their products, nations also negotiate with other nations
regarding say border issues, etc. From these everyday examples, we have by now
---------------------- got a glimpse of the meaning of negotiation. However, there is no particular definition
---------------------- of negotiation as such, but we can say that, it is self counseling between the parties
to solve their dispute.
----------------------
Negotiation is a dialogue between two or more parties in an attempt to reach a
---------------------- compromise, an understanding, to resolve the point of difference or gain advantage
in the outcome of the dialogue and to bargain for oneself. It is a process where each
---------------------- party tries to gain an advantage for themselves intended to aim at a compromise.
The word “negotiation” comes from a Latin word “negotiatus” which means “to carry
----------------------
on business”. So we can say here that negotiation is a simplest means of redressal of
---------------------- disputes. Whenever we need the co-operation of another person to do something,
however small, we indulge in negotiation. In simple words, it is nothing but a
---------------------- discussion to arrive at a settlement.
----------------------
12.2 ESSENTIALS, PHASES AND CHARACTERISTICS OF
---------------------- NEGOTIATIONS
---------------------- The dispute resolution laws provide us many practical and innovative
ways/methods to resolve dispute between parties, one of them is negotiation. As
----------------------
seen earlier, we negotiate everyday both at work and at home. In negotiation, the
---------------------- participation is voluntary, there is no third party involved who facilitates the resolution
process or imposes a resolution. Hence we can say that negotiation is a dynamic process
---------------------- of adjustment of two or more people/parties, each having an objective, who come
together to reach a mutually satisfying agreement on the point of common interest.
----------------------
Negotiation allows one to look behind one’s position at the underlying interests and
---------------------- trying to find out a solution that is good, durable and one which maintains relationships.

The development of the process of negotiation takes place in four phases, Notes
they are – exploration, bidding, bargaining and settling. These are however very subtle
in nature, you cannot separate them in the actual process but at the same time you can ----------------------
“see” them. In the method of negotiation, two parties come together to reach to a
conclusion regarding the point of dispute between them. These two parties may ----------------------
know each other or they may be strangers also, i.e. they may be friends, family people ----------------------
or businessmen. So, without knowing/ exploring each other, negotiating would be
waste of time. They should then, together explore the issue facing them, i.e. they ----------------------
should fully understand each other’s position so that they may both move on to look
for ways of reaching to an agreement. Exploration is thus a co-operative phase in ----------------------
which each party tells one another their position. In this phase, you should listen to ----------------------
the other party carefully, asking questions to clarify but not to demand justification.
One should have a positive attitude, open mind and mostly try to see the common ----------------------
goals between each other. In the next phase, i.e. bidding, each party puts forward their
“offer” on the matter in dispute. ----------------------
Here, each of the parties makes specific proposals on the subject matter ----------------------
of the dispute between them. The presentation of the bid should be clear, firm and
----------------------
without any justification/ ambiguity or apology. When one party makes a bid, the
other should understand as to what it was and then make a counter offer, after which ----------------------
both the parties study both the bids, identify the areas of agreement and disagreement
between both the bids. ----------------------
In bargaining, one party offers to make a change in his bid in return for a ----------------------
change of bid made by the other party. In this phase also, one must have a positive
attitude, open mindedness, try to avoid aggression/confrontation and should make ----------------------
efforts to try to establish common goals. By the end of this, there comes a time when
----------------------
both the parties agree to some terms and approach settlement – which is the last phase
in negotiation – where the agreement is in sight. So, settling the matter of dispute is ----------------------
entering into agreement upon some terms which both the parties agree. They should
understand to what terms they have agreed and thus part in a friendly way. By now, we ----------------------
can bring out the characteristics of negotiation to be as under:
----------------------
(a) There should be minimum two or more people/parties for negotiation to take
place – be it individuals, groups, organizations, etc; ----------------------
(b) There should be a conflict of interest between these people, so that the ----------------------
people/ parties shall search for a way out to resolve their conflict;
----------------------
(c) Negotiation is a voluntary process, a strategy pursued by choice. The people/
parties should by themselves want/urge to take out a solution to solve their ----------------------
problem/dispute.
----------------------
(d) In negotiation, there should be a give and take i.e. both the people/parties
should modify their positions and try to move towards the other. ----------------------
(e) Negotiation involves management of tangibles as well as intangibles, i.e. price, ----------------------
terms, fear factor, emotions, etc.
----------------------
----------------------
Negotiation 181
Notes
----------------------

1. Negotiation is a process in which
----------------------
i. Two or more parties try to resolve differences
----------------------
ii. Two or more parties try to avoid differences
---------------------- iii. Two or more parties try to create differences
----------------------
---------------------- 12.3 NEGOTIATION AS A COMPROMISE AND EXCHANGE

OF INFORMATION
----------------------
As seen above, negotiation itself means an interchange between two or more
----------------------
persons in an attempt to reach a compromise. So, the aim of negotiation is a compromise
---------------------- or you can say that negotiation as a process of dispute resolution results/ends in arriving at
a compromise between the two persons. Unlike other modes, negotiation does not
---------------------- end up with one person as a winner and the other as a loser, but it allows both parties
to win ending up with a compromise. And then once the parties have decided that
----------------------
their end result should be a compromise, then there is no confrontation, no alleging, no
---------------------- challenging but working together to enter an agreement on the issue. And then when
decided to work together then there is a dialogue, interchange or exchange of views
---------------------- or information and issues. Then you do not challenge the other party, his views but
listen to what he has to say, talk to him. Hence, there is exchange of information
----------------------
involved. It is never the case that one person totally agrees with the other. There
---------------------- are some points of disagreement, which are then solved by talking, discussing
with each other, exchanging of information and then arriving at a compromise.
---------------------- It is therefore said that, “If two friends ask you to judge a dispute, do not accept
because you will lose one friend. On the other hand if two strangers come with the
----------------------
same request, accept it because you will gain one friend.”
----------------------
12.4 ESSENTIAL SKILLS OF A NEGOTIATOR
----------------------
As said earlier, negotiation occurs directly between the parties to a dispute and
---------------------- does not necessarily involve a neutral third party. However, negotiation techniques vary
---------------------- from person to person, country to country and from jurisdiction to jurisdiction. So, it is
advisable firstly to familiarize oneself with the local customs, traditions, culture, before
---------------------- engaging themselves in negotiation. If there is an understanding and an element of
patience between the parties, this mode of Redressal of a dispute is the simplest and the
---------------------- most economical one. To become a successful negotiator, there should be consistent
---------------------- practical experience and presentations of negotiations. Refinement occurs only due
to consistent practice of a particular thing. A skilled negotiator usually attempts to
---------------------- obtain the most favorable outcome possible for oneself, which one so desires.
----------------------

Negotiating mainly depends on the attitude of the person negotiating: Notes
(i) one must have a positive attitude, he/she should be open minded;
----------------------
(ii) one must be meticulously polite;
(iii) the most important skill required for a good negotiator is to refuse intimidation, ----------------------
i.e. one should not voice one’s demand but make polite requests; ----------------------
(iv) work with co-operation, not competition;
----------------------
(v) One of the golden rules is to “be silent”- i.e. “ask” only that what is wanted, not
tell”. We may feel that a job of a negotiator may be a complicated one, ----------------------
but we often find ordinary people, unlike powerful politicians, mighty business
leaders, high priced lawyers, also to be equally skilled negotiators. However, ----------------------
today negotiation is also used as a dispute resolving method to solve global ----------------------
disputes. To do so, one may need some additional skills as a negotiator apart
from those mentioned above. They are mainly: ----------------------
(i) Understand and differentiate the cultures of both the nations; ----------------------
(ii) Do not try to adjust to the cultural differences but try to exploit the
best of them; ----------------------
(iii) Design the information and process of meetings; ----------------------
(iv) Accept only creative outcomes;
----------------------
(v) Invest in personal relationships;
(vi) Persuade asking questions, and try to seek information; ----------------------
(vii) Make no concessions till the end.
----------------------
The most difficult thing for a negotiator is to strip off his emotions and deal
with the facts. And to be a skilled negotiator, one should try to attain this ----------------------
skill. Secondly, never negotiate out of fear and never fear to negotiate. So, ----------------------
even though there are skills involved to be a good negotiator, the fact remains
that negotiation as a method of dispute resolution is nothing but a discussion ----------------------
between two or more people to arrive at a settlement/compromise.
----------------------
Activity 1 ----------------------
----------------------
Read and comment on Vodafone Tax Case.
----------------------
12.5 NEGOTIATION STYLES
----------------------
To develop different skills for becoming a good and successful negotiator, one
----------------------
does not require any formal training thereof. It is plain practice and with experience
one tends to develop oneself in the art of negotiating. Further, one should always ----------------------
keep in mind that, while solving a dispute between two or more parties by the
method of negotiation, one always tends to arrive at a compromise/settlement by ----------------------
the agreement of both the parties. There is no competition to win or lose something
----------------------
in the process. So, by experience one tries to establish different styles of negotiating.
Some of these styles are: ----------------------
Negotiation 183
Notes One must always try to establish a style of negotiating that tries to pick
out common goals between the two disputing parties. In this way, you tend to
---------------------- make a more workable deal, a more closer partnership or try to make long term
goals; When two or more people are in a dispute, we find that there may be many
---------------------- points of agreement as well as disagreement between them. While negotiating,
---------------------- one must develop a style that tries to resolve the points of disagreement between
them, one may tend to use creative ways/ideas by way of exercises, e.g. by way
---------------------- of storytelling, play exercises etc; Sometimes it happens that the two parties
negotiating are from different nations and thus have diverse cultures. So one
---------------------- should develop a style that tends to establish “trust” between them which may
result in establishing long term affiliation; When the discussion or negotiation
----------------------
reaches a point where one feels that no further compromise can be made, then
---------------------- one style can be adopted. This is to take a break – be it short or long. In this
time, one should not discuss any issues regarding the dispute but just relax.
---------------------- This gives the negotiators time to collect more/other opinions, allows new kinds
of thinking. Overnight break tends to calm them. In this way better ideas can
----------------------
develop and help them to arrive at a compromise; One can at best develop a
---------------------- style in a negotiation, at your best try to be silent/quiet, try not to argue but ask;
Try working in small groups and to arrive at a compromise by working in co-
----------------------
operation. These are some of the styles of negotiation. However, there is no one
---------------------- particular style as such or these are not the only styles. One can develop other
innovative styles of their own also. After all negotiation is a process of creating
---------------------- a bond together to arrive at a compromise, creating new ways of working
together so that each party feels that something is being accomplished, they
----------------------
may feel honoured. However, the style used during negotiations often depends
---------------------- on the context and the interest of the disputing parties. So, they may not remain
the same and tend to change as the situation changes. But the fact remains that
---------------------- being open minded to everyone’s ideas results in better creativity and allows
human progress.
----------------------
---------------------- Activity 2
---------------------- Read and comment on Nokia tax case.
----------------------
12.6 FIVE APPROACHES
----------------------
Different approaches of the method of negotiation as a way of dispute
----------------------
resolution mean the different ways by which one can negotiate. Just as
---------------------- one can develop a different style of negotiating depending on one’s nature,
circumstances/situation, so also we have different approaches by which we can
---------------------- aim to resolve a dispute between parties. These approaches are:
---------------------- (i)
Distributive Approach - From the word itself one can get an idea of
this type of approach. The word distributive means to distribute what one
---------------------- has, to give away. So one can say, this type of approach is giving away/
out from what you have. But sometimes it so happens that the thing to
----------------------
be distributed is of limited nature, i.e. the proportion of the thing to be
distributed and the people to whom it is distributed may vary. For this Notes
reason, this type of approach of negotiation is often called a “fixed pie”.
This is only true however if only a single issue needs to be resolved, ----------------------
such as “price” in a simple sales negotiation. The distributive type of
approach of negotiation usually involves people who probably have never ----------------------
met before nor have any chances of meeting again in the near future. ----------------------
(ii)
Integrative Approach - Here also, from the very word integration, we
----------------------
come to know that it means joining several parts together into a whole.
The process therefore involves co-operation of people to come to a ----------------------
compromise. And co-operating with several people involves building
up of a close tie/relationship by evolving trust between each of them. ----------------------
They should feel that each one of them have achieved something from
----------------------
the process. It often results in creating long term relationships for mutual
gains. And it is often described as a “win-win” relationship, in academic ----------------------
terms a “synergy”.
----------------------
(iii)
Advocate’s Approach - In this approach, one of the parties in a dispute
takes on the role of an advocate and tries to obtain the most from the ----------------------
process of negotiation in the dispute between them. In this process, the
negotiator tries to determine the minimum possible points the other party ----------------------
is willing to accept and then adjusts his demands accordingly. In this
----------------------
type of approach lies the skill of the negotiator, where he tries to obtain
all or most of his demands without making the other party break off the ----------------------
negotiations.
----------------------
(iv)
The Mutual Gains Approach - Just as the title suggests, different issues
between the parties to a dispute are discussed and they start with making ----------------------
preferences on the point of differences between them. They thus solve the
issue by making a win-win negotiation possible. This type of negotiation ----------------------
approach is possible where multiple issues in a dispute are involved, e.g. in
----------------------
labour negotiation where the parties are employees and the management,
and multiple issues like job, wages, permanency, reinstating, etc., are ----------------------
involved. Here, the employees may prefer job security over wage gains,
while the management may prefer otherwise. Such a negotiation is made ----------------------
possible which is beneficial to both.
----------------------
(v)
The New Creative Approach - This approach of negotiation is about
“creativity” in negotiation. This can be explained by way of an example ----------------------
–A Boeing company decides to buy a composite part of wings for its ----------------------
new 787 Boeing plane from a Japanese suppliers and then sells its new
787 Boeing plane to Japanese Airlines itself – this is what is “creativity” ----------------------
in negotiations, which is now a new approach in negotiation method of
dispute resolution and is being learned in many business schools today. ----------------------
In this way, many new approaches may also be innovated. The parties ----------------------
may come together and think together planning for a negotiation to solve
their dispute/problem instead of still sticking to the old traditional method ----------------------
of competition – win lose situation – such type of problem/dispute solving ----------------------
method limits creativity according to some negotiators.
Negotiation 185
Notes
----------------------

1. In the win- lose strategy,
----------------------
i. One party is prepared to give concessions, and the result may
---------------------- go one way or the other
---------------------- ii. One party is satisfied and the other dissatisfied with a negotiated
settlement.
----------------------
iii. Both parties are dissatisfied with the negotiated result.
----------------------
---------------------- 12.7 STRATEGIES OF NEGOTIATION

---------------------- In negotiation, participation is voluntary. There is no participation of a
third party to facilitate the resolution process. Today we often find negotiation as
---------------------- a method of dispute resolution occurring in business organizations, government
---------------------- offices, union categories, states and even in international levels between nations/
countries. People/party to negotiation often study the situation carefully before
---------------------- actually negotiating and thus develop the necessary skills, styles and approach
required for the same. So, the use of different strategies in the negotiation process
---------------------- comes into being. Before one starts the process of negotiation, one first explores
---------------------- the situation, i.e. tries to develop a “clear picture” of the situation or of the things
you really require to achieve in the process by prioritizing them according to
---------------------- its necessity, i.e. what things one wants and what things one is ready to bargain
with. Then, one tries to explore the situation which includes the other party,
---------------------- place, etc. involved in negotiation process and tries to analyze the situation one
---------------------- is in. Some of the questions one asks for this type of study in negotiation are –
How is the other party? What is his position? How is his personality? Thirdly,
---------------------- the manner in which one takes part in the negotiation process is important and
that tells the success in the process, e.g. if one is timid by nature, he/she tends
---------------------- to give in too quickly and thus ends up making an unfair deal for oneself – here
---------------------- the other party may believe that they may “walk over” very easily. On the other
hand, if one is too stubborn and unwilling to compromise, the other party may
---------------------- just break up the discussion and walk away. Skilled negotiators may use variety
of strategies; some may come very straight forward with their demands while
---------------------- some may use deceptive techniques like they may suppress evidence and not
---------------------- come forward with clean hands.
In recent studies made, one may see that emotions play an important role
----------------------
in the process of negotiation. They have the potential to play either a positive
---------------------- or a negative role i.e. they may settle the dispute or not. Negative emotions
like anger, stubbornness, and competitive nature can cause conflicts and may
---------------------- break the discussions/negotiations while positive emotions like understanding,
consideration, co-operation may help in reaching a settlement. These can be
----------------------
strategically displayed as under:

Table 12.1: Outcomes of Negotiation Notes
B Co-operates B Competes
A Co-operates Both co-operate; A co-operates; B competes; A ----------------------
Both have a good outcome. has a terrible outcome;
----------------------
B has a great outcome.
A Competes A competes; B co-operates; Both compete; ----------------------
A has a great outcome; B has a Both have mediocre outcome.
terrible outcome. ----------------------
Another negotiation strategy, where we see the role of emotions, is ----------------------
a bad guy/good guy (or bad cop/good cop). A bad guy/cop is one who uses
his negative emotion of anger, threat, stubbornness, to get concessions in the ----------------------
process of negotiation, while good guy/cop is one who uses positive emotions
----------------------
like co-operation, understanding, and consideration of the other party. We also
find the strategy of “bad faith” mainly in the field of politics. This merely means ----------------------
that one of the parties has actually no intention of making any concessions
in negotiation, he/she only just pretends to negotiate that means that party is ----------------------
negotiating in bad faith. So we can see how the negotiation process proceeds
----------------------
and which strategies need to be planned to be chosen to get our required effect.
One tends to actually “choose” the strategy to arrive at a settlement one has ----------------------
already chosen.
----------------------
1. Success of negotiation may be fairly judged by which of the following ----------------------

criteria?
----------------------
i. It should produce a wise agreement if agreement is possible
----------------------
ii. It should be efficient
iii.
It should improve or at least not damage the relationship ----------------------
between the parties
----------------------
iv. All of the above
----------------------
12.8 NEGOTIATION POWER ----------------------
----------------------
After going through all the stages of negotiation, acquiring the required
skills, styles and the correct approach to negotiation and gaining the required ----------------------
knowledge of the strategies of negotiation, one tries to attain a favorable outcome
in the process of dispute resolution. Experience in this process gains knowledge ----------------------
and sharpens the skills of negotiating thus gaining power in the process. Here, by
----------------------
the term power we may not mean domination or overpowering the other party,
but it may mean one’s ability to influence other people. This may be gained ----------------------
over through experience in negotiating in good faith. By taking this meaning of
power in mind, having/gaining power may not be good or bad, but it is abuse of ----------------------
Negotiation 187
Notes power which is definitely bad. Influencing the other party/people in the process
of negotiation definitely increases the capacity to have a positive end in the
---------------------- matter. Such influence/power, unless one uses it, is of no value. A person may
have power of different kinds – power of one’s position, knowledge, character,
---------------------- behaviour, etc. And one can use these powers in the process of negotiation
---------------------- to solve the dispute in a satisfactory manner. The abovementioned types of
power can be significant in the process of negotiation to achieve a satisfactory
---------------------- settlement of the dispute. Power of one’s position in an organization definitely
influences the other party in negotiation, e.g. in a sales negotiation, if one has a
---------------------- position of a marketing manager, one is definitely in a position to influence the
---------------------- other person.
As stated earlier, in the process of negotiation, one first tries to explore the
----------------------
facts of the dispute, i.e. one tries to gain knowledge about the facts in a dispute
---------------------- which one is involved – here facts may involve everything from the subject
matter, personality, situation, etc. of the other person involved – and thus gain
---------------------- knowledge. But more than gaining knowledge what is important here is the
application of that knowledge which is more powerful.
----------------------
We also see that people of character have position and thus power. This
---------------------- means people who are trustworthy – one has a reputation for doing as one says,
have flexible thinking, respect for the perspective of other people and willing to
----------------------
take higher risks – are perceived as trustworthy, have a great deal of power in
---------------------- the process of negotiation. Then we see that most people have different styles of
behaviour – like some people are very methodical, some are task/goal oriented,
---------------------- others give more importance to feelings, relationship, etc. But one gains power
only when one uses that behavioral style according to the required situation,
----------------------
e.g. if two people were negotiating on the issue of divorce, then if one wants to
---------------------- maintain good relationship with one’s spouse, he/she should give importance to
feelings than any other thing.
----------------------
Apart from all these, one should often keep in mind that, power may not
---------------------- always be one sided, the other party also may have some power of which he is
not aware of, e.g. in the negotiation of loan, the party asking for one also has the
---------------------- power to choose the bank, accept the interest rate, etc. Secondly, power exists
only to the point, at which it is accepted, E.g. the power of the party asking for
----------------------
loan exists only to the point he accepts the interest rate and chooses the bank.
---------------------- Then, the person having power need not have it with him/her till the end,
---------------------- i.e. it may change as the circumstances change. Lastly, we may say that power
may be real or apparent, i.e. you seem to have power but you do not actually
---------------------- have it. So, unless and until one knows what power one has and then uses it
according to the situation required, it is of no value. Hence, in the process of
---------------------- negotiation, one should be willing to use the power to influence the other party
---------------------- to get/achieve a positive outcome of a good settlement.
----------------------
----------------------

12.9 BATNA AND WATNA Notes
Whenever there is a dispute/problem, there are some “issues” which need ----------------------
to be “tackled” or solved. These may be more in number or less. Once it is
decided that the dispute/ problem has to be solved by coming to a compromise ----------------------
by negotiation, then one tries to settle the issues according to one’s need of
----------------------
priority. We cannot negotiate solutions to all our problems at one time itself.
There are some needs which have to be solved on priority basis and there are ----------------------
other needs that one can do without and can think of settling them. Once the
parties sit for negotiating, the most common thing that comes to their mind ----------------------
is – What if we do not arrive at a settlement/compromise? – What would be
----------------------
the result of this negotiation. And then, if there is no settlement, then what
other alternatives do I have? This question clarifies the situation and explains ----------------------
the above two concepts. Here, one asks – what is the best possible alternative
I have, if this negotiation fails? – This is BATNA, i.e. the Best Alternative to ----------------------
a Negotiated Agreement. Similarly, if one asks – what is the worst possible
----------------------
outcome/alternative I have, if this negotiation fails? – Then we have WATNA,
i.e. Worst Alternative to a Negotiated Agreement. ----------------------
By thinking on these terms before the negotiation process, we can ----------------------
understand how to go about in the process and which is a better alternative -
the solution to the dispute/problem or the alternative thereof. Here, one thinks ----------------------
of the result and its further alternatives even before the process starts. So one
is prepared for the outcome beforehand. The most common alternative the ----------------------
parties have is litigation and they balance the effects of the two. This can be ----------------------
best explained by giving an example – negotiation process is going on between
a husband and wife, their matter for divorce is under litigation. They then see ----------------------
to it the “best” and “worst” possible alternatives they have before going for
negotiation, weigh and balance the two and try to settle to a compromise if ----------------------
they feel so - here, if the matter in litigation proceeds along, they will have ----------------------
to undergo enough stress, mental tension and is expensive, time consuming
process. So, one may feel it is best to settle the dispute by negotiation even ----------------------
if one or two issues are waived, say maintenance amount given may be less,
etc. Other examples may be seeking a new job or up gradation in job with an ----------------------
organization. So, each dispute may have its best or worst outcome, it is its ----------------------
analysis that helps one decides whether to pursue the negotiation in the matter.
----------------------
12.10 DOMESTIC DISPUTES AND TOOLS OF
----------------------
NEGOTIATION
----------------------
Domestic disputes mean disputes regarding one’s family. It may be
broadly defined as abusive behaviour by one or both partners in an intimate ----------------------
relationship such as marriage, family, friends, etc. Abusive behaviour on the
other hand includes physical abuse such as hitting, kicking, slapping, throwing ----------------------
objects on the person, etc. emotional or mental abuse means when one mentally ----------------------
harasses the other person by controlling or dominating him/her; sexual abuse –
meaning forced, undesired sexual behaviour of one person over another; some ----------------------
Negotiation 189
Notes even include passive abuse as an abusive behaviour – this includes neglect,
mental illness, alcoholic partner, economic deprivation etc. Today, the term
---------------------- domestic dispute is used in a broader sense, which includes the whole family
as such and is not only restricted to the husband and wife – so, it now involves
---------------------- issues regarding child abuse, parents or elder abuse, etc. Domestic disputes
---------------------- mainly arise because one person wants dominance or control over the other.
But such dominance/control for a longer time may lead to long lasting effects
---------------------- on one and on children if any.
---------------------- Due to such violence and long lasting after effects of domestic disputes,
counseling therapy by negotiation becomes a necessity. Here, one tries to confer
---------------------- or talk with the other person involved and tries to arrive at a compromise/
settlement in the dispute. As in the negotiation process, one uses the skill,
----------------------
strategies and approaches suitable to him/her to resolve the dispute and with
---------------------- every experience; one sharpens/broadens one’s vision, perspective in the matter.
However, there are certain effective tools of negotiation which have evolved
---------------------- through experience of skilled negotiators, they are:
---------------------- (i) Avoid attaching ‘labels’ to the other person like good, bad, right, wrong,
co-operative, shrewd, etc. before the process of negotiation;
----------------------
(ii) Do not prejudge the person or the problem before ‘exploring’ the situation;
---------------------- (iii) Do not spend lot of time discussing about the ‘past issues’ – this is very
---------------------- true in domestic disputes, the parties spend more time abusing each other
about past issues rather than making a way out and solving the dispute.
---------------------- One should always remember that negotiation is always future oriented,
hence one should always think of a reliable solution to the dispute rather
---------------------- than digging the past;
---------------------- (iv) Always think of what outcome can be achieved where both the parties
will be satisfied;
----------------------
(v) If one of the parties does not respond to the other’s suggestion, do not
---------------------- withdraw from the negotiation;
---------------------- (vi) If the negotiation process becomes tensed or stressed, try to relax the
situation;
----------------------
One should always remember here that both the parties have come
---------------------- together to solve their dispute. And a successful negotiation is not about
getting the solution as one wants or even surrendering to the other person, but
---------------------- about obtaining a positive conclusion where both parties feel satisfied with
the solution/settlement they have together arrived at. Hence, with the correct
----------------------
knowledge, skills and with practice and experience, negotiating can become a
---------------------- truly enjoyable and a winning experience.
----------------------
----------------------
----------------------

Summary Notes
Negotiation is an interchange or a dialogue between two or more people

• ----------------------
in an attempt to reach a compromise. It occurs directly between the parties
----------------------
and does not involve a neutral third party to resolve their dispute.
In negotiation, participation is voluntary. It is more of an informal process
• ----------------------
than any other method of dispute resolution. ----------------------
Negotiation as a process of dispute resolution proceeds through basic
•
four phases, exploration, bidding, bargaining and settling – where one ----------------------
first explores the situation, i.e. one gains knowledge of the situation; then ----------------------
makes an offer. After seeing the points of agreement and disagreement
between them, they try to bridge the gap between the two by bargaining ----------------------
and thus settle the dispute by arriving at a compromise.
----------------------
So, negotiation is arriving at a compromise or a settlement with the
•
agreement of both the parties. There is no winning and losing, no ----------------------
competition but working together with co-operation to settle the dispute.
So, you end the dispute with a compromise being satisfied. ----------------------
Negotiation skills vary from person to person, country to country, culture

• ----------------------
to culture.
----------------------
We have five approaches of negotiation - distributive, integrative,
•
mutual gains approach, advocate’s approach and new creative approach. ----------------------
However, by practice and experience, one can have one’s own approach;
----------------------
there is no written way/approach of negotiation as such.
Negotiation power means one’s ability to influence the other party.
• ----------------------
BATNA and WATNA are the best and worst alternatives to negotiated
• ----------------------
agreements respectively. Each dispute may have its best and worst
outcome. ----------------------
----------------------
Keywords
----------------------
• Negotiation: It is the simplest and the oldest method of solving a dispute.
----------------------
It occurs without the intervention of any third party or judiciary. In fact, in
India, negotiation does not have any statutory recognition, i.e. there is no ----------------------
law/legislation for negotiation. So, it is an interchange/dialogue between
two or more parties in an attempt to reach a compromise or settlement. ----------------------
• Bad Guy/Cop: A bad guy or cop is one who uses his negative emotions ----------------------
like anger, pride, guilt, threat, etc. in order to get concessions in the
process of negotiation. ----------------------
• Good Guy/Cop: A good guy or cop is one who uses his positive emotions ----------------------
like trust, understanding, co-operation, etc. in order to get concessions in
negotiation. ----------------------
----------------------
Negotiation 191
Notes • Negotiation in Bad Faith: It means that one of the parties has actually no
intention of making any concessions in the process of negotiation but he
---------------------- only pretends to do so.
---------------------- • Negotiation Power: It does not mean domination or control but it means
one’s ability to influence the other party. This ability may be gained
---------------------- through experience and practice.
---------------------- • BATNA and WATNA: They are Best and Worst possible Alternatives
to Negotiated Agreements, i.e. if in a negotiation, there is no settlement
---------------------- or compromise, then what is the best and the worst possible alternative
available to the parties involved in a dispute.
----------------------
• Domestic Dispute: It means abusive behaviour by one person on another
---------------------- in an intimate relationship like marriage, friendship, etc.
---------------------- • Abusive Behaviour: It includes physical, emotional, sexual and passive
abuse of one person on another in an intimate relationship.
----------------------
---------------------- Self-Assessment Questions
---------------------- 1. Bring out the meaning of negotiation taking into account its phases and
characteristics.
----------------------
2. Write a short note on the need of negotiation as a compromise and
---------------------- exchange of information.
---------------------- 3. What are the essential skills of a negotiator?
---------------------- 4. What are the five approaches of negotiation as a process of dispute

resolution?
---------------------- 5. What are the styles and strategies of negotiation?
---------------------- 6. What do you mean by negotiation power?
---------------------- 7. What is BATNA and WATNA? State its meaning by giving examples.
---------------------- 8. Does negotiation help in solving domestic disputes? Explain by giving

reference of tools of negotiation.
---------------------- 9. Do you feel negotiation is of real help in solving disputes? Elaborate by
---------------------- giving examples.

---------------------- 1. Negotiation is a process in which

i. Two or more parties try to resolve differences
----------------------
----------------------

----------------------
1. In the win- lose strategy
----------------------
i. One party is prepared to give concessions, and the result may go
one way or the other ----------------------
----------------------
1. Success of negotiation may be fairly judged by which of the following
criteria? ----------------------
iv. All of the above ----------------------
----------------------
Suggested Reading
----------------------
Rudolph Cole. 2007. Dispute Resolution: Negotiation, Mediation, and ----------------------
Other Processes.
----------------------
2. Sammartano, Mauro Rubino. 2007. International Arbitration, Law &
Practice. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
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----------------------
----------------------
----------------------
----------------------
Negotiation 193
Notes
----------------------
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----------------------
----------------------
----------------------
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Mediation
UNIT
13
Structure:
13.1 Introduction and Ethics of Mediation

13.2 Meaning of Mediation
13.3 Techniques as Applied in Different Countries
13.4 Essential Characteristics and Attitudes of a Mediator
13.5 Skills of a Mediator
13.6 Duties and Responsibilities of a Mediator
13.7 The Mediation Process and its Essential Characteristics
13.8 Initial Steps and Stages of Mediation
13.9 Models and Styles of Mediation
Summary
Key Words
Suggested Reading
Mediation 195
Notes
Objectives
----------------------
----------------------
• State the meaning of mediation as a mode of dispute resolution
----------------------
• List the techniques of mediation as applied in other countries
---------------------- • Elaborate on the essential characteristics, attitude, skills, duties and
responsibilities of the mediator
----------------------
• Analyse the mediation process– its characteristics, stages, styles,
---------------------- etc.
----------------------
13.1 INTRODUCTION AND ETHICS OF MEDIATION
----------------------
Mediation is another method of dispute resolution apart from Litigation,
---------------------- Arbitration, Conciliation and Negotiation. It is a process which helps in solving
disputes between two or more parties by the help of a third, neutral person
----------------------
called as a “mediator”. Here, we deliberately use the word ‘neutral’ because
---------------------- the role of the mediator is so – i.e. he acts as a neutral person in the discussion
with the parties, bringing forth the merits of the case and helps them to bridge
---------------------- the gap between them to arrive at a desirable solution. He may even suggest a
resolution but cannot impose it on the parties. Mediation helps the parties in a
----------------------
dispute to re-establish trust and respect between them and thus helps to prevent
---------------------- unnecessary damage to relationships.
Mediation has a definite procedure, layout according to which it proceeds.
----------------------
The process is private and confidential. The Mediator uses his own skills and
---------------------- techniques to help improve the conversation between the parties and assists
them to settle their dispute. Here, much depends on the skill and training the
---------------------- mediator receives/has. Mediation as a process of solving disputes can be used
in various fields such as – legal matters, family disputes, disputes between
----------------------
workers and employers, union and management, commercial disputes, business
---------------------- disputes, etc. As the process of mediation develops worldwide in resolving
disputes internationally, the need for a professional code of conduct or ethics
---------------------- for mediation has developed. Further, mediation is a process where the mediator
‘facilitates the resolution of a dispute by promoting voluntary agreement or self
----------------------
determination between the parties’, i.e. he facilitates them to arrive at a resolution
---------------------- by bringing out their own strengths and weaknesses. And therefore, the need for
a definite code of conduct becomes necessary. Such ethics in mediation tends
---------------------- to serve three main purposes - it tends to serve as a guide for the mediators; it
tends to inform the parties in mediation if the mediator is waiving; and thirdly,
----------------------
it tends to promote public confidence in the process of mediation. The code of
---------------------- conduct brings forth the underlying principles of the process of mediation; it
often serves as a guideline to the mediators. The ethics of any profession brings
---------------------- out its underlying principles; hence, we put forth some common aspects of the
code of conduct for mediators, which form the ethics of mediation. They are:
----------------------

(i) As said earlier, meditation is based on the principle of ‘self-determination’, Notes
i.e. in this process, the parties decide whether and under what conditions
they would resolve their dispute or terminate it. ----------------------
(ii) The process of mediation should be held in an impartial manner. So, it ----------------------
is the duty of the mediator to see if the process is so conducted. The
main purpose behind mediation is to facilitate voluntary resolution. So, it ----------------------
becomes necessary that the process be held impartially. The parties to a
----------------------
dispute should have confidence in the impartiality of the process;
(iii) T
here should be no conflict of interests between the mediator and the ----------------------
parties to a dispute. Here, the mediator should suo moto disclose all
----------------------
the actual and potential conflict of interests reasonably known to him.
Here, potential conflicts include any question of doubt in the mind of ----------------------
the parties to a dispute which may create the impression of impartiality
of the procedure. If the parties agree thereafter, he may proceed with the ----------------------
mediation process. If they still have any serious doubts, the mediator may
----------------------
however terminate the process;
(iv) The process of mediation should be conducted by a competent mediator. ----------------------
By competent we mean that he should have the necessary education,
----------------------
training and experience in mediation and that he should satisfy the
reasonable expectations of the parties. ----------------------
(v) T
here should be confidentiality involved in the whole process of ----------------------
mediation, i.e. the information received by the mediators regarding the
matter/issue of the dispute should be treated as confidential. He should ----------------------
not disclose the information anywhere, even if it facilitates settlement,
if the parties to a dispute expects it to be confidential - he can do so only ----------------------
with their permission, otherwise it may lead to conflict of interests; ----------------------
(vi) T
he process of mediation should have and maintain its specific ‘quality’
and this remains in the hands of the mediator. The parties to a dispute ----------------------
should be given fair opportunity to participate in the discussions of the ----------------------
process and it is they who will decide to continue the process or terminate
it; ----------------------
(vii) There should be truthfulness in advertising about the mediation process as ----------------------
such. This means - advertising to the public at large and soliciting them or
encouraging them to use their services of mediation to solve their dispute/ ----------------------
problem - this should be done truthfully. The mediators should refrain
from promises and should not guarantee them any particular results; ----------------------
(viii) And last but not the least, mediation is a co-operative effort to resolve the ----------------------
dispute and not an adversarial one, hence, the mediators should use their
----------------------
knowledge and skills to improve the practice of mediation. He should
maintain the quality and standards of the process. ----------------------
----------------------
----------------------
Mediation 197
Notes 13.2 MEANING OF MEDIATION
---------------------- Mediation is used in the field of law as a form of dispute resolution between
two or more parties. However, there is no statutory law or it is not backed by
---------------------- any statute as such. The dispute between the parties is solved by a neutral third
person known as the mediator. Here, the word ‘neutral’ plays an important role
----------------------
in the sense that, the mediator is said to be a neutral person - he can only aim to
---------------------- help the parties in solving their dispute and cannot advice or suggest them any
solution. The process of mediation is fully private and confidential. It is solely
---------------------- the decision of the parties whether to go in for mediation or not. Mediation
is a technique to help the parties to come to a settlement of their dispute; it is
---------------------- the skill of the mediator to do so. Today, this process of mediation is used in
---------------------- various fields/ matters in law to solve disputes, e.g. family disputes, labour and
industrial field, corporate sector, banking, etc. Apart from mediation, we also
---------------------- have other modes of dispute resolution like - litigation, where the proceedings
are very formal and are governed by statutory laws of evidence and procedural
---------------------- laws made by the legislation. Here, the dispute between the parties is decided
---------------------- impartially by the jury or judge appointed by the judiciary and whose final
decision is binding upon the parties. However, they do have a right to appeal to
---------------------- higher Courts.
---------------------- Mediation as a mode of dispute resolution, the result/solution to the

dispute is made to arise from the parties itself by the help of the mediator. The
---------------------- mediators with their due skills and techniques, help the parties to bridge the gap
between them to arrive at a most acceptable solution to their problem/dispute.
---------------------- And because of this reason, the use of this method is increasing. In addition to
this, mediation as a process is less expensive and its agreement is binding and
----------------------
enforceable in the Court of law.
----------------------
----------------------
---------------------- 1. Which of the following best describes mediation?

i. An agreement between the parties to refer a dispute between
---------------------- them for final and binding resolution to an independent third
party, a mediator
----------------------
ii. An agreement between the parties to refer a dispute between
---------------------- them to a mediator to attempt to bring about a settlement
between the parties. The settlement is only binding if both
----------------------
parties agree.
---------------------- iii. An agreement between the parties to refer a dispute between
them to a mediator to attempt to bring about a settlement
---------------------- between the parties. The decision of the mediator is binding.
---------------------- iv. An agreement between the parties to refer a dispute between
them for final and binding resolution to an independent third
---------------------- party, an arbitrator.

State True or False. Notes
1. ediation is private and confidential but arbitration must be held in

M ----------------------
public.
----------------------
13.3 TECHNIQUES AS APPLIED IN DIFFERENT ----------------------

COUNTRIES ----------------------
Today, mediation among other methods is used worldwide to resolve ----------------------

international disputes in various fields, between two or more countries or in
different countries amongst themselves. And solving such issues becomes a ----------------------
bit complicated in the sense that in any international dispute, there are many ----------------------
hurdles/barriers for its resolution - the main being language barrier, then we have
cultural barrier - here e.g. if one has to solve any issue, be it a family problem ----------------------
or a workers dispute, unless and until one has full knowledge of their culture,
work place, laws of their country, one cannot mediate, and finally one needs to ----------------------
know their language in order to communicate. So here the mediators are given ----------------------
adequate training on the principles of mediation, education of the personal
skills required for him to carry out his functions properly. The education and ----------------------
training given also differs from country to country like many US universities
offer graduation and even post-graduation studies in mediation; while in ----------------------
Australia not all fields in mediation give an academic qualification – for some, ----------------------
even training skills for a few days is enough to educate the mediator if he/she
has the basic degree in that field, e.g. if one wants to mediate in the area/field of ----------------------
family law or industrial disputes, then one should have the basic qualification of
law, social sciences in the required field, then a few days of training monthly or ----------------------
yearly is necessary. Some fields may require more practical skills than academic ----------------------
knowledge; Germany advocates a higher level of educational qualification for
a mediator to practice the ‘art’ of mediation. However, there is no one specific ----------------------
national or international standard set up for the practice of mediation.
----------------------
In May 2006, the National Mediation Conference has recognized the need
for accreditations for mediators, but even these standards will vary according ----------------------
to the type and level of mediation required for a specific field. Due to these
----------------------
variations, it is difficult to set a specific set of standards for mediation though
such standards may enhance the quality, clarity, consistency and ethics of ----------------------
mediation. We may now see the different techniques of mediation in different
countries across the world: ----------------------
Mediation in Australia: Australia is a country which has wide cultural ----------------------
differences. Here, the mediator should take into consideration the role of
‘culture’ in a dispute. Cultural differences arise due to various reasons – ----------------------
race, religion, language, age, gender, any disabilities people have, etc. These
----------------------
differences may further lead to communication difficulties, misconceptions,
behavioral differences, etc. Such differences may hinder the process of ----------------------
mediation, so mediators should study the culture of that country to maintain
the standard of mediation process. However, in Australia, we have Native ----------------------
Mediation 199
Notes Title Mediation where instead of the parties going in for mediation, sometimes
the Federal Court of Australia determines whether the National Native Title
---------------------- Tribunal (NNTT) should mediate the matter. This is more widely used in cases
of land tenure to determine the native title rights of the aborigines as against the
---------------------- local government, mining industrialists, etc. The NNTT does not decide the title
---------------------- of the land in question but rather mediates the contested claim applications for
compensation which originated in the Federal Court. This seems to have a long
---------------------- time success and mediation seems to provide a flexible solution to the native
title of land tenure in Australia.
----------------------
Mediation in (South) Africa: Africa is seen to have mixed results in
---------------------- the use of mediation process in dispute resolution. This is mainly due to the
immense political changes which took place in the country. This is further
----------------------
reflected in the fields of employment relations where again we have cultural
---------------------- differences, i.e. racial discrimination, class differences, etc. which resulted in
the gain of ‘power’ in a few hands. From the early 1980s, tremendous change in
---------------------- the employment field is seen in Africa - employees, trade unions, management
came together to build a new democracy, a new labour movement – the apartheid.
----------------------
The Independent Mediation Service of South Africa (IMSSA) was established
---------------------- to train mediators in all potential areas.
Mediation in Germany: Methods of dispute resolution was very rare
----------------------
until the late 1990s in Germany. The role of mediation in dispute resolution was
---------------------- again rare and confined only to certain environmental issues. The first German
initiative for mediation was made in 1983 in the field of legal sociology but
---------------------- the interest was aroused only when the President of the Federal Constitutional
Court (FCC) pointed out the limited resources of the legal system and the need
----------------------
for more efficiency in the dispute resolution methods especially mediation. And
---------------------- finally, in 1999, the Federal Parliament introduced a legislation permitting all
German states to introduce compulsory court connected mediation. However,
---------------------- this is only limited to certain kinds of civil disputes – like financial disputes
before the Magistrate Court; certain neighborhood disputes and certain
----------------------
defamation disputes. However, in Germany mediation is still in its infancy.
---------------------- Mediation in Japan: As against Germany, mediation in Japan is highly
developed. Till lately, Japan was considered to be a non-litigious country. To
----------------------
understand the Japanese technique of mediation, it is necessary to analyze
---------------------- the cultural background of the country. Historically seen, Japan was divided
into four social classes – the bureaucrats, the peasants, the artisans and the
---------------------- merchants. The bureaucrats were the masters of the latter three, and it was their
duty to maintain the social harmony or harmonious relationships in the society.
----------------------
This was mainly done by conciliation and mediation rather than litigation.
---------------------- Today, we have court connected mediation in Japan which is a pre-litigation
procedure conducted through summary and district courts; here they are helped
---------------------- by mediators who discuss the conflict and devise their solution to it. Mediation
mainly covers family and civil disputes and has a statutory base or a legal
----------------------
sanction.
----------------------

Mediation in the United States: Compared to the other states, mediation Notes
in the United States is said to be more professionalized one. However, the state
laws regarding the mediators in the dispute may widely differ in each state. Some ----------------------
states may have more clear laws regarding the ethical standards, protection of
the mediators (say regarding their insurance, etc.). While some states may not ----------------------
have such standards, some may have such sophisticated laws related only to ----------------------
those mediators who work within the court system and not for those who work
for the community or commercially. Hence we see here a wide variation of laws ----------------------
governing mediation.
----------------------
----------------------
1. ediation is private and confidential but arbitration must be held in
M ----------------------
public. ----------------------
2.
Mediation among other methods is used worldwide to resolve
international disputes in various fields, between two or more countries ----------------------
or in different countries amongst themselves. ----------------------
3. Compared to the other states, mediation in the Japan is said to be
more professionalized one. ----------------------
----------------------
13.4 ESSENTIAL CHARACTERISTICS AND ATTITUDES ----------------------
OF A MEDIATOR
----------------------
As seen above, mediation is one of the methods of dispute resolution
where a third neutral party known as the mediator helps the parties to arrive at ----------------------
a voluntary settlement of their dispute. The mediator does this by using various ----------------------
skills and techniques which he develops but the characteristics and attitudes
are such that the mediator possesses – they are generally difficult to learn or ----------------------
develop. In this context, we can state some characteristics and attitudes that the
parties to a dispute should at least try to look/find in a mediator, they are: ----------------------
(i) First of all a mediator should be a good listener i.e. he should have ----------------------
empathy with the parties concerned;
----------------------
(ii) He should be patient enough to tolerate the disputants;
----------------------
(iii) He should have good interpersonal skills, i.e. he should always remember
that he is the one who bridges the differences between the disputants to ----------------------
bring about a voluntary settlement;
----------------------
(iv) So he should be optimistic for the same, i.e. he should have a positive
attitude, it is only then that he can bring about a settlement; ----------------------
(v) T
his follows that the mediator should be flexible enough to settle the ----------------------
dispute and should not be stubborn to stick to his point only;
----------------------
Mediation 201
Notes (vi) The mediator should be independent and neutral. His role is only to bring
out the points of similarity and differences between the parties to a dispute
---------------------- with a view to help them settle the dispute;
---------------------- (vii) The mediator should be trustworthy, i.e. the parties to a dispute should
‘feel’ like conversing with him, they should trust him;
---------------------- (viii) The mediator should have a good sense of fairness and should be intelligent
---------------------- enough to understand the issues of the dispute clearly;
(ix) He should be well organized and calm enough to settle the emotional
---------------------- outbursts if any made by the parties to a dispute;
---------------------- (x) He should have a creative attitude to present the options for voluntary
settlement of the dispute and have the ability to articulate certain solutions
---------------------- to the dispute;
---------------------- (xi) He should be persistent enough and not give up if there is a breakthrough
in the process of mediation;
----------------------
(xii) He should have the ability or attitude to cover up the point of differences
---------------------- between the parties to a dispute and come to a positive conclusion;
(xiii) He should be non-judgmental, i.e. not commit anything and should have
----------------------
an appropriate attitude of commitment towards the ethics of mediation.
---------------------- These are some of the inherent characteristics and attitudes which a mediator
should possess or rather the parties to a dispute try to see in a mediator. However,
---------------------- in some specific contexts, the qualifications, experience and background of the
---------------------- mediator matters. These usually revolve around their knowledge of the matter
in dispute and practice in the process of mediation in solving disputes in various
---------------------- fields. These usually form the character of the mediator.
----------------------
----------------------
Fill in the blanks.
----------------------
1. First of all a mediator should be a good ___________, i.e. he should
---------------------- have _________ with the parties concerned.
---------------------- 2. He should be __________, i.e. not commit anything and should
have an appropriate attitude of commitment towards the ethics of
---------------------- mediation.
----------------------
----------------------
13.5 SKILLS OF A MEDIATOR
---------------------- 1. To be a successful mediator, one must have a number of skills, and the
most important of these is the ability to ‘listen’ carefully to what the
---------------------- parties to a dispute has to say. Usually what happens is that we often
hear what ‘we expect’ the other person should say. So a skilled mediator
---------------------- should not prejudge what the other person wants to say but should listen
---------------------- carefully to what he ‘actually’ has to say by giving full attention to that
person, understanding his points, asking appropriate questions, etc.
2. Secondly, a skilled mediator should have the ability to ‘think’ critically Notes
by the use of logic and reasoning skills. He/she should know the strengths
and weaknesses of the parties to a dispute because by knowing these ----------------------
things, a mediator tries to bridge the gap between them. This may be done
by acquiring the necessary knowledge before the process of mediation ----------------------
actually starts. He/she should then think of alternative solutions, ----------------------
conclusions or any other approaches to the dispute/problem and find out
a suitable solution for it. ----------------------
3. A mediator should have a skill or ability to communicate his ideas or ----------------------
information he gathered in such a way that the others can well understand
it, i.e. his skill lies in the fact that he/she should be able to communicate ----------------------
his ideas to others to reach a suitable solution.
----------------------
4. skilled mediator should be efficient in the process of judgment or
A
decision making, i.e. he/she should be able to choose the most appropriate ----------------------
solution in the given situation which is best suited for the parties to a
----------------------
dispute.
5. Another necessary skill of a mediator for becoming a successful one is ----------------------
having good communication skills which include reading - having wide
----------------------
knowledge of all the facts and situation, writing – noting the information
received, memorizing – ability to remember the information received, and ----------------------
last but not the least is speaking – he/she should have clarity of speech so
much so that other people should be able to understand what the mediator ----------------------
has/wants to say.
----------------------
6. One of the important skills is that of reasoning, i.e. a mediator should
be able to identify complex problems and should be able to relate such ----------------------
information to evaluate further options or solutions. He/she should have ----------------------
the ability to combine and/or apply such information to form certain
conclusions to the problems/disputes on hand. ----------------------
7. A mediator should be ‘perceptive’ enough of other’s reactions, i.e. he/ ----------------------
she should have the vision or the ability to ‘see’ the details and be able to
understand them. ----------------------
8. And last but not the least, a mediator should have the skill to bring the ----------------------
parties to a dispute together for the process of mediation, i.e. he/she
should be able to bring the parties together and be able to effectively ----------------------
communicate with them to end with a suitable solution to their problem/
dispute. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Mediation 203
Notes
----------------------

1. A mediator must not have ability
----------------------
i. To think
----------------------
ii. To communicate
---------------------- iii. To listen
---------------------- iv. To judge people
----------------------
13.6 DUTIES AND RESPONSIBILITIES OF A MEDIATOR
----------------------
A mediator is a neutral third person who facilitates the resolution of a
----------------------
dispute by bringing the disputant parties together to enter into a voluntary
---------------------- agreement. For doing such work, he has certain duties and responsibilities in
the process. Some of the common duties are as under:
----------------------
1. First of all, the mediator should meet the parties to a dispute and inform
---------------------- them about the process as such, i.e. he/she should keep in mind that he/
she has some commitment towards them, they are there to guide them to
---------------------- solve their dispute.
---------------------- 2. Secondly, the mediator should always keep in mind to be neutral in the
process. He/ she should be only a helping hand to arrive at a solution and
---------------------- let the parties voluntarily find a solution.
---------------------- 3. It is the duty of the mediator to conduct the process of mediation in an
impartial manner. If he/she is unable to do so, they should withdraw from
---------------------- the same, because here the parties should themselves have confidence in
---------------------- the mediator and then in the process of mediation. It is only then that they
can arrive at a solution.
---------------------- 4. I t is the duty of the mediator to promote public confidence in the process
---------------------- of mediation.
5. They should therefore engage themselves in the work of public awareness
----------------------
– to educate the public about the value and use of mediation as a process
---------------------- of dispute resolution.
6. In this issue, they should therefore keep an update of their knowledge and
----------------------
polish their skills thereto by attaining various training programmes for
---------------------- mediation process.
7. The role of a mediator is not advisory, i.e. he cannot give any legal advice
----------------------
on the issue concerned. If necessary, he/she should direct the parties to a
---------------------- legal expert/appropriate source.
----------------------

8. he mediator should only help them; finally it is the parties themselves
T Notes
who arrive at a conclusion.
----------------------
The key factor of the mediation process is its ‘confidentiality’. And
therefore it becomes the main and only responsibility of the mediator to keep ----------------------
the whole process confidential. He/she should first and foremost inform the
parties to a dispute that the communications between them, the discussions held ----------------------
during the mediation process should be strictly ‘private and confidential’, i.e.
----------------------
the information discussed during the process of mediation can never be used as
an evidence in any court of law even if the dispute does not settle in mediation. ----------------------
It is therefore so said that “Confidentiality lies at the heart of mediation”
----------------------
to such an extent that at times in some countries there is a written agreement
duly signed by the parties before entering into mediation so that they then come ----------------------
to know that it is imperative for them to trust their mediator and indirectly the
mediation process. It is only then that the parties can communicate freely and ----------------------
openly without any fear of compromising. And for this he/she may - conduct the
----------------------
mediation process privately where outsiders can attend only with their consent;
no record of the process be kept; and there should be no outside publicity of the ----------------------
matter in process.
----------------------
13.7 THE MEDIATION PROCESS AND ITS ESSENTIAL ----------------------
CHARACTERISTICS
----------------------
The Mediation process is often defined as “an intervention into a dispute
by an acceptable, impartial and neutral third party, to assist the disputing parties ----------------------
in voluntary reaching their own mutually acceptable settlement of issues in ----------------------
disputes.” Here, the “acceptable, impartial, neutral third party” or the mediator
has no decision making power. The “acceptable settlement of issues in dispute” ----------------------
is only made to arrive at or helped by the mediator.
----------------------
The process as such is very simple and easy to go along. The mediation
process may be initiated by the parties amongst themselves either orally or by ----------------------
making an agreement/contract; it may be a statutory obligation as in family or
industrial disputes; or an order of a court of law may initiate the dispute for ----------------------
mediation. Once the process is initiated, the mediator is chosen by the parties ----------------------
amongst themselves or they may contact an organization or an institution who
suggests them one or more potential candidates amongst who one is selected as ----------------------
a mediator by them jointly. Once a mediator is appointed, they meet together in
a joint session, at any place suitable to all of them, where the mediator firstly ----------------------
explains to them the mediation process. He/she then invites them to talk freely ----------------------
about their issues in dispute and assists them to identify and discuss their views
on the points in dispute. He/she helps them to explore other options and seek ----------------------
solutions which suit their interest and needs. The sessions may be held jointly
or separately and so discussed. ----------------------
The whole process has total privacy and confidentiality. The mediator ----------------------
slowly and steadily enables the parties to achieve a final solution in the matter.
The process of mediation is more flexible one in the sense that sometimes it ----------------------
Mediation 205
Notes often happens that the parties have strong negative feelings towards each other
and are very adamant to come to any conclusion. At this stage, the mediator,
---------------------- through his/her skills and techniques, moulds and guides them to come to a
certain decision. However, the mediator has no authority to make any decisions
---------------------- in the matter; he may take the help of any expert advice if necessary. Through
---------------------- the process of mediation, if the parties come to a suitable solution of their
dispute, i.e. if mediation succeeds, then the terms of the settlement are written
---------------------- and duly signed by the parties to a dispute. If for some reason or the other they
do not come to definite solution, then the parties are free to withdraw from the
---------------------- mediation process simply by announcing so - this need not have any adverse
---------------------- effects on the decisions in the discussions so far. The main characteristics of the
mediation process are:
----------------------
1) It involves two or more parties who are in a dispute over certain issues;
---------------------- 2) The full process of mediation is voluntary – decided by the parties itself,
non-coercive;
----------------------
3) Mediation is an impartial process in the sense that the mediator remains
---------------------- neutral, i.e. they do not make any decisions but helps the parties
communicate effectively and arrive at a solution in the dispute;
----------------------
4) he Mediation process is a very informal one - it is more friendly, flexible
T
---------------------- than that of litigation and arbitration. The rules that are followed are those
---------------------- which are agreed to by the parties itself;
5) onfidentiality is another important characteristic of the mediation
C
---------------------- process. All discussions, communications, agreements used in the process
---------------------- cannot be used as evidence in any subsequent matter. The information
received in the process is also not disclosed elsewhere by anyone;
---------------------- 6) Last but not the least, in this process, the parties to a dispute have full/
---------------------- ultimate control and the decision making power. It is they who decide the
conclusion/resolve the dispute with the help of the mediator.
----------------------
---------------------- Activity 1
---------------------- Read and comment on Salem Advocate Bar V/s Union of India.
----------------------
---------------------- 13.8 INITIAL STEPS AND STAGES OF MEDIATION
---------------------- Taking initial steps towards mediation means preparing oneself for
mediation. And it depends on the parties to a dispute whether to prepare
---------------------- themselves for mediation or not – unless a court requires the disputants to prepare
themselves for mediation. Initial steps include firstly, making a summary or
----------------------
stating in brief the issues in dispute, getting acquainted with the mediator, asking
---------------------- oneself whether one is ‘ready’ to settle the dispute – sometimes it so happens
that the disputant is ‘ready’ to settle only part of the dispute. This can be well
---------------------- explained by giving an example - suppose there is a dispute between a husband

and wife; it may have gone in for litigation and is contested for a divorce; and Notes
it is through court that the parties have gone in for mediation; their initial steps
include briefing the mediator about the issues of their dispute, which points ----------------------
they can talk/communicate; they may however may not be ‘ready’ to settle the
dispute as the mental injury occurred may be recent and so while mediating ----------------------
overwhelming emotions may make settling of the dispute a little difficult; hence ----------------------
they may settle for an interim solution and later settle the dispute completely.
----------------------
Another initial step is to prepare a list other persons required to attend the
process of mediation, i.e. whether any expertise or people for moral support are ----------------------
required to be present for the process. The parties need to make such list and
discuss it with the mediator. In fact, at times the parties even have a choice of ----------------------
selecting their mediator. Here, they should consider their requirements or needs
----------------------
in selecting the mediator, e.g. if theirs is a family dispute, they should select a
mediator having enough knowledge of family laws prevalent in that country. ----------------------
Next step is to select the location for the mediation process. This is also
----------------------
important if one considers the mind set in which the parties are – a cool and
caring atmosphere may be of help to settle the issue – the location should give ----------------------
privacy for the mediation process; there should be availability of food and
beverages, natural light, etc. Then fix the day, date and time for the mediation ----------------------
process taking into consideration the availability of all the people required for
----------------------
the process. Mediation process involves good communication skills to settle
the dispute. If one is not well versed, then one can tone up one’s skills in ----------------------
order to communicate better. Developing good communication skills helps in
expressing themselves more clearly. And when one communicates respectfully, ----------------------
he/she increases the opportunity for early settlement.
----------------------
Another important initial step is that the disputants should think beforehand
of all the creative ways, the possible outcomes to achieve their objectives. ----------------------
They should be well prepared for the mediation process and collect/have all
----------------------
the information necessary for them. With such preparation, one minimizes the
longevity of the process. ----------------------
Mediation process itself is the choice of the parties to a dispute, i.e. it ----------------------
is they who decide whether to go in for mediation or not; they select their
mediator; they decide as to settling of the dispute and the issue therein, etc. ----------------------
unless the dispute goes judicially to the mediator. So, all other issues regarding
expenses, fees of the mediator, sharing of information can be written down by ----------------------
the parties in the form of a contract or an agreement so that they are well aware ----------------------
of all these things beforehand. However, such initial preparation of the process
is of great help as the parties tend to be less anxious and they have more chances ----------------------
of a positive settlement. Initial meetings with the mediator also help in building
trust which results in focusing on the resolution of their dispute. However, these ----------------------
initial steps are just an outline, as each dispute is a unique one with its unique ----------------------
steps.
----------------------
----------------------
Mediation 207
Notes A mediation process commonly includes the following stages:
1. irst of all, there should be a conflict, controversy or a dispute between
F
----------------------
two or more people;
---------------------- 2. here should be a ‘need’ for solving such a conflict or a need for decision
T
making;
----------------------
3. The parties to a dispute should be ‘willing’ to resolve the dispute, they
---------------------- should be ready for having discussions;
---------------------- 4. The parties should have an ‘intention’ or an ‘urge’ to settle the dispute
positively taking the help of a neutral third party or the mediator.
----------------------
---------------------- Activity 2
----------------------
Read and comment on Md. Zafar Aquil v/s State of West Bengal.
----------------------
---------------------- 13.9 MODELS AND STYLES OF MEDIATION
---------------------- The main objective of the mediation process is to settle the dispute. The
mediator therefore works to bring the parties to a compromise by developing
---------------------- and using several models and styles. Way back, there was only one style or
---------------------- model of mediation that was practiced – which is now known as ‘Facilitative’
mediation – here the primary focus of the mediator is the problem itself. The
---------------------- mediator guides and encourages the parties to focus on their problem, explore
their issues, data and experiences. The approach is very practical; it focuses on
---------------------- the basic needs, problems of the parties. The mediator assists the parties to arrive
---------------------- at a mutually agreeable solution by asking questions, analyzing the options for
a positive solution. Here, the mediator does not make any recommendations
---------------------- or give any advice or opinion as to the outcome/solution of the problem or
even predicts what advice the court would give. In this style of mediation,
---------------------- the mediator ensures that the parties come to an agreement with the mediator
---------------------- helping them to understand their information.. This model is used even today;
only thing is that today we have more professional and expertise mediators to
---------------------- conduct the process.
---------------------- In the evaluative model or style of mediation, the mediator assists the
parties to a dispute to come to a conclusion by bringing forth the weaknesses of
---------------------- their dispute. They may in between put forth formal or informal recommendations
as to the outcome of their problem. Here, the mediators are mainly concerned
---------------------- with the legal rights of the parties rather than their needs and interests and so
---------------------- they evaluate their views on the basis of the legal rights of the parties. This style
of mediation mainly emerged in court referred disputes and hence the mediator
---------------------- here may mainly be a legal expertise.
---------------------- Transformative mediation is one of the latest model or style of mediation.
It is based on the values of recognition of each other’s needs, interests, point
---------------------- of view, values, etc. Here the mediator helps the parties to see, recognize and

understand the other person’s point of view. It so happens that such recognition Notes
gives way to a mutually acceptable solution. Hence, this style or model of
mediation is based on the values of ‘empowerment’ and ‘recognition’ of each ----------------------
other’s needs. In this way, the parties structure both the process and outcome of
mediation. ----------------------
Each of these styles or models of mediation has its own place and ----------------------
usefulness in the process of mediation. And it is not necessary that a mediator
----------------------
should use one of these only. He/she may combine them and use it together
or even develop a style of his/her own depending upon the dispute/problem ----------------------
and the parties thereof. Only thing is that the parties should be satisfied in the
end and public awareness or confidence on the process of mediation should ----------------------
develop.
----------------------
Summary ----------------------
• Mediation is a method of dispute resolution where the dispute is resolved ----------------------

with the help of a neutral third party known as the mediator. He/she is said
to be neutral because he/she only helps, guides the parties to a dispute to ----------------------
arrive at a suitable resolution of their dispute. He/she can only suggest a ----------------------
solution but cannot impose it on the parties;
----------------------
• There is no written code of conduct for the mediation process as when
it comes to national and international disputes, the laws and modes vary ----------------------
from country to country and nation to nation;
----------------------
• Mediation process is a voluntary, impartial, uncoerced and a confidential
one. But it does not have any legal sanction like Arbitration and ----------------------
Conciliation.
----------------------
• Today mediation as a process of dispute resolution is used to solve
international disputes - between two or more countries. Hence, when ----------------------
mediation is used to solve such disputes, there are many barriers. The
code of conduct also differs from country to country. So it becomes ----------------------
necessary at times to have a knowledge of the ‘cultures’ and language of
----------------------
that country to make mediation easier;
• A skilled mediator should have the ability to ‘listen’ carefully what ----------------------
the parties to a dispute have to say, critical thinking, good reasoning ----------------------
skills, perceptiveness, communication skills, decision making and good
interpersonal skills; ----------------------
• The main objective of the mediation process is to arrive at an acceptable ----------------------
solution of the dispute. The mediator achieves this by various models
and styles. Some of them are – facilitative, evaluative, transformative – ----------------------
however, the mediator may use this in combination or else develop his/
her own style of mediation, his only responsibility being that the parties ----------------------
should be satisfied and that he/she should promote public awareness and ----------------------
confidence in the process of mediation.
----------------------
Mediation 209
Notes Keywords
----------------------
• Mediation: It is one of the methods of dispute resolution. Here, the
---------------------- dispute between two or more parties is resolved by the help of a third,
neutral person known as the mediator
----------------------
• Neutral Third Party: It is a very special characteristic of the mediator
---------------------- – it describes his role in the process wherein he only helps the parties
to arrive at a satisfying solution and cannot advice them but only guide
---------------------- them.
----------------------
----------------------
1. Explain the meaning of “mediation” with the help of an example.
----------------------
2. What is its code of conduct? Is it required?
----------------------
3. What are the techniques of mediation used in different countries? Can
---------------------- you add any other country apart from those stated above?
4. What are the essential characteristics of a mediator? What role does he
----------------------
play in the process?
---------------------- 5. What skills and techniques should a mediator have according to you, in
---------------------- order to be an efficient mediator?
6. What are the duties and responsibilities of a mediator?
----------------------
7. State how the mediation process is initiated bringing about its essential
---------------------- characteristics.
---------------------- 8. What are the initial steps and stages of the mediation process?
9. What are the different models and styles of mediation?
----------------------
10. According to you, is mediation sufficient/appropriate in dispute resolution?
----------------------

----------------------
1. Which of the following best describes mediation?
----------------------
ii. An agreement between the parties to refer a dispute between them
---------------------- to a mediator to attempt to bring about a settlement between the
parties. The settlement is only binding if both parties agree.
----------------------
----------------------
1. False
----------------------
----------------------

----------------------
1. False
----------------------
2. True
3. False ----------------------
1. First of all a mediator should be a good listener, i.e. he should have
----------------------
empathy with the parties concerned.
2. He should be non-judgemental, i.e. not commit anything and should have ----------------------
an appropriate attitude of commitment towards the ethics of mediation.
----------------------
----------------------
1. A mediator must not have ability ----------------------
iv. To judge people ----------------------
----------------------
Suggested Reading
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Mediation 211
Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
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----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Civil Procedure Mediation Rules
UNIT
14
Structure:
14.1 Advantages and Disadvantages of Mediation

14.2 Court Annexed Mediation in India
14.3 CPC and Mediation Rules
14.4 Appointment of a Mediator
14.5 Qualifications of Panel of Mediators
14.6 Procedure for Mediation
14.7 Limitations and Role of a Mediator
14.8 Confidentiality and Disclosure of Information
14.9 Essentials of Mediation Agreements
14.10 Enforceability of Settlement Agreement
14.11 Difference between Mediation and Conciliation
Summary
Key Words
Suggested Reading
Civil Procedure Mediation Rules 213

Notes
Objectives
----------------------
----------------------
• Describe the legal procedure/position for the Mediation process in
---------------------- Indian accordance to the Code of Civil Procedure
---------------------- • Explain the advantages and disadvantages of mediation
• ist the appointment, qualifications, limitation and role of the
L
----------------------
mediator in the mediation process legally in accordance to the
---------------------- Mediation Rules drafted by the High Court, Delhi, in 2004
---------------------- • Differentiate between Mediation and Conciliation
---------------------- 14.1 ADVANTAGES AND DISADVANTAGES OF MEDIATION

---------------------- Mediation is a most convenient method of resolving disputes in an informal
manner. And there are various reasons for its success all over the world. The
----------------------
process is successful because it has many advantages which are as under:
---------------------- 1) ediation is an informal, non-controversial process where the solutions
M
---------------------- to the dispute are not imposed on the parties (like in litigation) but are a
result of their voluntary agreement to it, i.e. the solutions are not imposed
---------------------- upon the parties but are controlled by them. They resolve the dispute on
their own terms and if they wish, they may withdraw from the process
---------------------- also – because of this flexibility of mediation process, the parties feel
---------------------- satisfied with the result they achieved. The compliance for mediation as a
method for dispute resolution therefore turns out to be high.
---------------------- 2) I t is an easy, fast procedure which consumes less time. The sessions
---------------------- here are well scheduled as to the time, place which is convenient to all
participants involved in the process.
---------------------- 3) arties choose the method of mediation to solve their dispute mainly
P
---------------------- because it is less expensive (unlike litigation and arbitration). It gives
them an opportunity to participate in the process.
----------------------
4) he process provides full confidentiality unlike litigation where the court
T
---------------------- cases are made public. In fact, confidentiality in mediation has such
importance that the issues therein cannot be strictly used as evidence in
---------------------- any court of law. Many mediators usually destroy the notes and written
work after the session is done with.
----------------------
5) I t helps maintain relationships with others especially with international
---------------------- disputes. It helps to bridge the cultural gaps between countries, improving
the understanding between parties and eliminating the conflicts and
----------------------
hostility. It provides them with an opportunity to rebuild the strained
---------------------- relationships by arriving at a lasting resolution to their dispute.
----------------------

6) I t focuses on the actual emotional, psychological needs, the business Notes
requirements, the commercial interests of the parties involved and does
not just stress on the legal rights and contractual needs of the parties in ----------------------
dispute.
----------------------
7) Mediation leaves other options open – it does not stop the parties from
initiating other methods of resolution like litigation, arbitration, etc. ----------------------
8) I t involves least risk as it does not waiver any right of a party to a dispute, ----------------------
be it legal or otherwise.
----------------------
9) The solutions arrived at in the mediation are then written into agreements
which are final and binding on the parties to a dispute. They are fully ----------------------
enforceable in the court of law.
----------------------
Disadvantages of Mediation
1. owever, sometimes the term ‘mediation ‘is used very loosely meaning
H ----------------------
thereby that any incident which is helped by the third party is loosely ----------------------
called mediation – which is incorrect – as in mediation the mediator is
thoroughly trained for the work he/she has to do, they are educated and ----------------------
made competent for the work as any other professionals are.
----------------------
2. Another thought that comes in is that according to some people, mediation
agreements are not binding on the parties unless they agree to it, i.e. they ----------------------
are not enforced in court if one of the parties does not comply with it after
it is made - this is unlike litigation where the judgments are binding on the ----------------------
parties whether they like it or not and if they do not comply with it, then ----------------------
it is contempt of court.
----------------------
3. ometimes the ‘competency’ of the mediator is understood with reference
S
only to the process of mediation, i.e. the mediators seem to be process ----------------------
experts, only they cannot personally advice them as lawyers do.
----------------------
4. I n the process of mediation, if one party dominates, the other does not
feel capable of expressing his concerns. The whole process would then be ----------------------
one-sided if one of the parties is weak or passive unless the mediator is
competent enough to understand it. ----------------------
5. ome people are of the view that in mediation there is no guarantee that
S ----------------------
an agreement will be reached as in litigation we are sure that a judgment
will be pronounced one way or the other. Here it all depends on whether ----------------------
the parties will agree to an agreement or not. So its strength may turn out ----------------------
to be its weakness also, as one is not sure whether one is definite as to its
result. ----------------------
6. I f mediation does not succeed, then one wastes one’s time, money on ----------------------
the process and still goes on to face the trial further, so it becomes an
additional work. ----------------------
7. ometimes mediation can be used to gain or acquire sensitive information
S ----------------------
from the other party.
----------------------

Notes 8.
Mediation can be a problem if one of the parties withholds some
information, i.e. he/ she does not come out with clean hands, e.g. if there
---------------------- is a dispute regarding financial issue, then one of the parties may hide his/
her assets or full income. We can say here that in the process of mediation,
---------------------- there is lack of force, no legal angle to look for such hidden information.
----------------------
14.2 COURT ANNEXED MEDIATION IN INDIA
----------------------
Court annexed mediation means, the mediation services are provided by
---------------------- the court as a part of the judicial system. Here, the judges, lawyers and the
---------------------- litigants with the help of the mediator become a part of the mediation process
thereby giving a feeling of some psychological satisfaction. They feel that the
---------------------- mediation process is a part of the judicial process and the judge; lawyers play a
supervisory role and help the mediator. They would in turn also feel themselves
---------------------- as a part of the process as they to some extent also represent the case. This sort
---------------------- of court annexed mediation will give large public acceptance, confidence in the
process of mediation as the court plays the role of a parental institution for the
---------------------- resolution of a dispute.
---------------------- However, the concept of mediation in the dispute resolution methods is

itself a recent idea introduced in India though it is not a totally new one. If we go
---------------------- to see the journey of mediation in India way back, we may find that mediation
was very popular between businessmen during the period of pre-independence
---------------------- in India. Family disputes were also settled by mediation of elders. At that time
---------------------- also, mediation was a very informal process which had no legal sanction in
spite of its varied acceptance.
----------------------
Mediation got its first legislative sanction by The Industrial Disputes
---------------------- Act, 1947. The conciliators appointed herein were charged with the duty of
mediating and promoting settlement of industrial disputes. The introduction of
---------------------- The Family Courts Act, 1984, by the Indian Legislature also facilitated court
annexed mediation in the field of family disputes which are of immense help for
----------------------
the Indian Judiciary. The amendment in the Code of Civil Procedure made in
---------------------- 1999 by enacting Section 89, Order X, Rules 1A, 1B and 1C is another radical
step taken by the Indian Legislature to facilitate court annexed mediation.
----------------------
The introduction of court annexed mediation in India has raised great
---------------------- expectations and hope in the minds of the litigants for an early, acceptable
and satisfying settlement/resolution of their disputes. However, such services
---------------------- should be made available to the public at large and for this they need to be
educated and informed of the availability of such court annexed mediation, the
----------------------
mediators should be well trained to handle complex civil, commercial, family
---------------------- disputes. They should feel that mediation is complimentary and not competitive
with the judicial system of India, only then it will have some authenticity and
---------------------- smooth acceptance to produce satisfactory and faster settlements.
----------------------
----------------------

Notes
----------------------
1. Under which act mediation got first legislative sanction?
----------------------
i. Industrial Dispute Act, 1947
----------------------
ii. Workmen Compensation Act, 1923
iii. Factories Act, 1956 ----------------------
iv. Industrial Dispute Act, 1908 ----------------------
----------------------
Activity 1 ----------------------
Read and comment on Moti Ram (D) Tr. LRs and other. Vs. Ashok Kumar ----------------------
and other case. ----------------------
----------------------
14.3 CPC AND MEDIATION RULES
----------------------
The recognition of the methods of dispute resolution was made as early as
1879 when the Civil Procedure Code (CPC) was codified and later in 1882 and ----------------------
1908 when it was further amended. But an actual revolution came when it was ----------------------
further amended in 1999 effective from 2002 wherein it (Section 89) attempted
to blend the judicial system with the dispute resolution methods. It states as ----------------------
under:
----------------------
Section 89 (1) - Where it appears to the Court that there exists elements of
a settlement which may be acceptable to the parties, the Court shall formulate ----------------------
the terms of settlement and give them to the parties for their observations
and after receiving the observations of the parties, the Court may reformulate ----------------------
the terms of a possible settlement and refer the same for - (a) Arbitration (b) ----------------------
Conciliation (c) Judicial Settlement (d) Mediation
Section 89 (2) (d) - of the same states – “For mediation, the Court shall ----------------------
effect a compromise between the parties and shall follow such procedure as may ----------------------
be prescribed.” Here, the Court refers the matter for mediation if it is of such
opinion that the matter/dispute may be solved by mediation and which is so ----------------------
acceptable by the parties to a dispute. The role of the court by this amendment
is to ‘effect’ a compromise not to ‘arrive’ at a compromise – this is done by the ----------------------
usual process of mediation. ----------------------
In accordance to the section, Mediation Rules, 2004, were formulated
----------------------
by the High Court, according to which the settlement terms arrived at by the
process of mediation, have to be ‘effected’ by the court. In these terms, the ----------------------
role of the court and mediation are well defined in CPC. It also prescribes the
procedure for the same in the “mediation and conciliation rules, 2004.” ----------------------

Notes It is said that ‘all are equal in the eyes of law’, everyone has equal rights
but unfortunately they cannot ‘enjoy’ their rights because their enforcement is
---------------------- through courts which is a very complex and a costly procedure. It is the duty
of every state, nation to provide its entire citizens equal access for resolution
---------------------- of their legal disputes and enforcement of their fundamental and legal rights.
---------------------- And so the need of the hour is to reduce the lengthy, expensive procedure of the
courts and to ensure speedy, satisfactory, less expensive and effective justice,
---------------------- which is provided by the dispute resolution methods in combination with the
judiciary by this amendment of CPC.
----------------------

----------------------
---------------------- 1. Which section in the Civil Procedure Code deals with the mediation?
---------------------- i. Section 89
---------------------- ii. Section 90
iii. Section 91
----------------------
iv. Section 92
----------------------
---------------------- 14.4 APPOINTMENT OF A MEDIATOR

----------------------
1. ccording to Rule 2 of the Mediation Rules, 2004, formulated by the
A
---------------------- High Court, the parties to a dispute may by themselves agree on the name
of the mediator for mediating their dispute. OR
----------------------
2. I f there are two or more parties to a dispute and they do not agree on the
---------------------- name of the mediator, then the Court may ask each of them to nominate a
mediator or may by itself nominate or appoint a mediator as it deems fit.
----------------------
3. here the parties agree on the appointment of a mediator as in (a) above
W
---------------------- or where the mediator is appointed by the Court as in (b) above, the
mediator need not necessarily be from the panel of mediators as stated in
---------------------- rule 3 nor need to have the qualifications as stated in Rule 4 but should
---------------------- definitely not be a person with disqualification as stated in Rule 5 of the
Mediation Rules, 2004.
---------------------- 4. hen a person is appointed as a mediator, he/she shall disclose to the
W
---------------------- parties and the court, without delay, any circumstance/information which
is likely to raise a reasonable doubt or question as to his impartiality or
---------------------- independence, e.g. his/her involvement/ relation with the matter/dispute/
parties in any manner. And if the court (in which the proceeding is
---------------------- pending) is satisfied about the said information received, then it may in its
---------------------- discretion withdraw such appointment and replace him/her by appointing
another mediator.
----------------------

The above are the rules stated for the appointment of mediators in court Notes
annexed mediation by the Mediation Rules of 2004. However, Rule 28 of these
rules provides a transitory provision for appointment of a mediator in court ----------------------
annexed mediation procedure. It says that until a panel of mediators is prepared
by the High Court and the District and Sessions Court, the Courts may nominate ----------------------
a mediator of their choice taking into account his/her qualifications, suitability ----------------------
for resolving the particular dispute.
----------------------
14.5 QUALIFICATIONS OF PANEL OF MEDIATORS ----------------------
According to Rule 3 of the Mediation Rules, 2004, the High Court ----------------------
prepares a panel of mediators for the purpose of appointing mediators to help
them solve disputes between parties and puts the same on the notice board, ----------------------
within 30 days of the commencement of these rules, with a copy of the same to
the Bar Association of the High Court. ----------------------
The District and the Sessions Judge prepares a panel of mediators within ----------------------
30 days of the commencement of these rules and submits the same to the High
Court for its approval. On its approval, with or without modifications, within ----------------------
30 days, the same shall be put on the notice board and its copies forwarded to ----------------------
all the subordinate courts and the District Bar Association, by the District and
Sessions Judge. ----------------------
The consent of the persons whose names are put on the panel as mediators ----------------------
should be taken before hand. Further, the panel shall contain an annexure giving
details of the qualifications and professional and technical experience in various ----------------------
fields, of the mediators therein.
----------------------
The panel of mediators appointed therein in accordance with the Mediation
Rules, 2004, shall be for a period of 3 years from the date of its appointment ----------------------
and its further extension shall be at the discretion of the High Court and/or the
----------------------
District and Sessions Court with prior approval of the High Court.
In accordance to Rule 4 of the Mediation Rules, 2004, retired judges of ----------------------
the Supreme Court of India, High Courts, District and Sessions Courts or retired
----------------------
officers of the Delhi Higher Judicial Service; Legal practitioners with at least 10
years of practice at the level of the Supreme Court, High Court or the District and ----------------------
Sessions Court; Experts or other professionals with at least 15 years of experience
in their field of practice; or persons who are themselves experts in mediation. ----------------------
However, any person who has been judged as insolvent, or any person ----------------------
against whom criminal charges involving moral turpitude are framed by the
criminal court and are pending; persons who have been convicted by a criminal ----------------------
court for any offence involving moral turpitude; any person against whom ----------------------
disciplinary proceedings have been initiated by the appropriate authority and/
or they are pending; any person who is interested or connected with the subject ----------------------
matter of the dispute or any person who is related to any of the parties to a
dispute (unless the parties waive the objection in writing); any legal practitioner ----------------------
who has/ is contested/ing on behalf of any of the parties - cannot be qualified as ----------------------
panel of mediators.

Notes The High Court and the District and Sessions Court (with prior approval of
the High Court), may in its discretion, from time to time, add or delete the name
---------------------- of any people from the panel of mediators. While nominating any person on the
panel of mediators, the Court shall give preference to those people who have
---------------------- proved themselves as successful mediators or have any special qualification or
---------------------- experience as mediators.

----------------------
Fill in the blanks.
----------------------
1.
According to ______ of the Mediation Rules, 2004, formulated by
---------------------- the High Court, the parties to a dispute may by themselves agree on
the name of the mediator for mediating their dispute.
----------------------
----------------------
14.6 PROCEDURE FOR MEDIATION
----------------------
Rule 10 of the Mediation Rules, 2004, lays down the procedure for
---------------------- mediation in court annexed disputes. According to it, the parties have to agree
as to the procedure followed by the mediator in the mediation proceedings.
---------------------- If they do not agree with the procedure which the mediator follows, then the
mediator shall follow the procedure as laid down by the Mediation Rules, 2004.
----------------------
After consulting the parties to the dispute thereof, the mediator shall fix a time
---------------------- schedule for the mediation process. The date and time of each mediation session,
wherein all the parties to the dispute should be present, shall be fixed by the
---------------------- mediator in consultation with the parties to a dispute. The place of mediation
process shall be decided by the High Court or the District and Sessions Judge
----------------------
or where the parties and the mediator jointly agree with. The mediator may
---------------------- conduct such sessions with the parties to a dispute either jointly or separately.
---------------------- Each party shall provide to the mediator, 10 days before the session
of mediation, a brief memorandum stating the issues which need to be
---------------------- resolved, the position with respect to those issues and all such information as
is reasonably required by the mediator to solve and understand those issues.
---------------------- Such a memorandum shall also be exchanged between the parties also for their
---------------------- information. However, the 10 days period can be curtailed or extended by the
mediator at his/her discretion. Each party shall furnish the mediator with any
---------------------- other information required by him/her to solve the issues in dispute.
---------------------- In case there is more than one mediator (one nominated by each party)
then each mediator should first confirm the facts and issues with the party which
---------------------- nominated him/her and then consult or interact with the other mediator with a
view to solving the issues in dispute. The parties to the dispute shall have to be
---------------------- personally present at all the sessions of mediation. They may be represented by
---------------------- their counsel at the sessions only with prior permission of the mediator. If the
party is not residing in India, he/she may be represented by a counsel but the
---------------------- permission of the mediator therein has to be taken before the mediation process
begins.
If the party to a dispute deliberately or willfully fails to attend the sessions Notes
of mediation, the other party or the mediator can apply to the Court (where the
suit is pending) who may in turn issue appropriate directions with regard to the ----------------------
matter therein.
----------------------
In order to facilitate the mediation process, the parties or the mediator
with their consent, may arrange for administrative or institutional assistance in ----------------------
the matter. The procedure of mediation shall be completed within a period of
----------------------
90 days from the date of the first appearance of the parties before the mediator.
On the expiry of 90 days, the mediation shall stand terminated, unless the court ----------------------
(which referred the matter for mediation) either by itself or on request of the
parties after ‘hearing’ them is of the view that extension of time is necessary. ----------------------
However, such extension shall not be beyond a further period of 30 days. ----------------------
The procedure can be best explained by way of an example - Family disputes
in India are generally court annexed proceedings especially after the enactment ----------------------
of the Family Courts Act, 1984. Any family dispute coming to the family court
----------------------
mandatorily requires mediation or conciliation. And there are such mediators,
conciliators or counselors appointed by the Court (by the said procedure of ----------------------
appointment as stated above). The process of mediation may take place in the
Court premises or any other place as decided by the parties and the mediator. ----------------------
The issues of settlement are drafted by the Court, parties and mediators and the
----------------------
sessions for mediation follow. If disputes are resolved through mediation the
matter ends, if not trial follows. ----------------------
----------------------
----------------------
1. he District and the Sessions Judge prepares a panel of mediators
T
within how many days? ----------------------
i. 30 ----------------------
ii. 10
----------------------
iii. 20
----------------------
iv. 60
----------------------
Activity 2 ----------------------
----------------------
Read and comment on Salem Advocate Bar Association, Tamil Nadu v.
Union of India. ----------------------
----------------------
----------------------
----------------------

Notes 14.7 LIMITATIONS AND ROLE OF A MEDIATOR
---------------------- According to Rule 11 of the Mediation Rules, 2004, the mediator is not
bound by the Code of Civil Procedure, 1908, or the Indian Evidence Act, 1872,
---------------------- i.e. it is not necessary for the mediator to follow the procedure laid down in CPC
and the evidence act - like examination and cross of witnesses, circumstantial
----------------------
evidence, etc., but he/she shall be guided or shall follow the principles of fairness
---------------------- and justice. The mediator shall take into consideration the rights and obligations
of the parties to a dispute, their usages of trade and the circumstances of the
---------------------- dispute in question.
---------------------- The mediator shall:
---------------------- 1. a ttempt to facilitate voluntary resolution of the dispute by the parties

itself;
----------------------
2. he/she shall communicate the view of one party to another;
---------------------- 3. assist the parties in identifying their issues;
---------------------- 4. help to reduce the misunderstandings between the parties;
---------------------- 5. clarify their priorities before them;

6. explore the areas of compromise and generate different options to help
---------------------- them solve their dispute;
---------------------- 7. emphasize their responsibility to take decision in the matter;
---------------------- 8. The mediator should not impose any terms of settlement on the parties.
The parties to a dispute should be made to understand that the role of the
----------------------
mediator is only to facilitate them to arrive at a decision to resolve a dispute and
---------------------- that the mediator cannot impose any settlement nor can he/she give any kind of
assurance that the mediation shall positively result in a settlement. The mediator
---------------------- ‘shall not’ impose any decisions on the parties. All the parties to mediation shall
commit to participate in ‘good faith’ with the intention to settle the dispute if
----------------------
possible.
----------------------
14.8 CONFIDENTIALITY AND DISCLOSURE OF
----------------------
INFORMATION
----------------------
According to Rule 20 of the Mediation Rules, 2004, when the mediator
---------------------- receives any factual information from any one of the parties to a dispute, he/
she shall disclose that information to the other party so that the other party
---------------------- may have an opportunity to give an explanation on that particular information
---------------------- received. But, if the party giving information gives it on a specific condition
of not disclosing that information, then the mediator shall keep that piece of
---------------------- information in confidence to oneself and shall not disclose it to the other party.
---------------------- The records, receipts, reports and other important documents shall be
kept confidential by the mediator while serving in that capacity. The mediator
---------------------- shall not be compelled to divulge any such important information or anything

that transpired between them during the mediation process before any court, Notes
tribunal, authority or any person or any group of persons.
----------------------
The parties also should maintain confidentiality with respect to the events
that transpired in the mediation process. They should not produce the said ----------------------
information in any other proceedings as to -
----------------------
1. The views expressed by a party during the mediation process;
2. he documents, notes, drafts obtained by the parties during mediation
T ----------------------
process;
----------------------
3. ny other information given by the parties or the mediator during the
A
process; ----------------------
4. ny proposals or admissions made or any views expressed by the parties

A ----------------------
or the mediator during the process;
----------------------
5. he fact that the party had or had not expressed their willingness to accept
T
the proposal for settlement of the issues. ----------------------
There shall be no audio or video recording of the mediation process. ----------------------
Similarly, no statements of the parties or witnesses shall be recorded by the
mediator. The mediation process should be conducted in full privacy and no ----------------------
other person shall attend the session except with the permission of the mediator
----------------------
and the consent of the parties thereof. The mediator shall not be held liable for
anything done bonafide by him/her or anything omitted to be done by him/her. ----------------------
Nor shall he/she be summoned to appear in any court of law to testify in regard
to any information received by him/her or any action taken by him/her during ----------------------
the mediation process.
----------------------
In order to preserve the confidentiality of the parties and the neutrality of
the mediator, there shall be no communication between the mediator and the ----------------------
court. If necessary, it shall be in writing, the copies of which shall be submitted
----------------------
to the parties or to their attorneys. Further, this communication shall only be in
regard to the - ----------------------
i) failure of the party to attend the sessions; ----------------------
ii) consent of the parties;
----------------------
iii) the mediators assessment that the case is not suited for settlement;
----------------------
iv) That the parties have settled the dispute.
By such confidentiality, the ‘neutrality’ of the mediator and independence of ----------------------
mediation process is preserved.
----------------------
14.9 ESSENTIALS OF MEDIATION AGREEMENTS ----------------------
i) ccording to Rule 24 of the Mediation Rules, 2004, if any settlement is

A ----------------------
reached between the parties in the process of mediation, with reference to
all or some of the issues in dispute, then the same shall be written down ----------------------
and duly signed by the parties to a dispute or their attorney if assigned. ----------------------

Notes ii) he mediation agreement so signed by the parties shall be submitted to
T
the mediator by the parties who shall then forward it with a covering letter
---------------------- duly signed by him to the court where their suit or proceeding is pending.
---------------------- iii) W
here no agreement is arrived at between the parties, before the time
limit stated, or
----------------------
iv) here the mediator is of the view that no settlement is possible between
W
---------------------- the parties, then he/she shall report the same in writing to the court where
the suit or proceeding is pending.
----------------------
----------------------
14.10 ENFORCEABILITY OF SETTLEMENT
AGREEMENTS
----------------------
Such a settlement arrived at by the mediator is then enforced in the court in
---------------------- which the suit or proceeding is pending. According to Rule 25 of the Mediation
Rules, 2004, on receipt of the settlement agreement, by the court, it shall fix a
----------------------
date of hearing of the matter within 7 to 14 days.
---------------------- On which, if satisfied that the parties have really settled their dispute, the
court shall pass a decree in accordance with the terms of settlement thereof.
----------------------
If only some of the issues are settled in the mediation process, then the court
---------------------- passes a decree as to those issues which have been settled by the process of
mediation. While it proceeds with the matter to settle the remaining issues.
----------------------
---------------------- 14.11 DIFFERENCE BETWEEN MEDIATION AND

CONCILIATION
----------------------
The two words – mediation and conciliation – are sometimes unknowingly
---------------------- used synonymously. Commonly, they may be understood to mean one and the
same thing but if you minutely observe and understand the two processes, you
----------------------
may come to know the slight and important differences between the two. On the
---------------------- face of it, one may find many similarities like both are flexible processes, both
try to reach an acceptable solution for the dispute of the parties, they are helped
---------------------- by a third person to reach a settlement, etc. This is so because conciliation often
covers up mediation in its purview. However, even if both processes help in
----------------------
dispute resolution by a third party there is a big difference in the two.
---------------------- In mediation, this third party is ‘neutral’, i.e. the mediator does not have
an advisory power like a conciliator. Conciliator can make suggestions for
----------------------
settlement terms, he/she can give advice on the subject matter, and they can
---------------------- actively encourage the parties to come to a solution. In certain types of disputes,
the conciliator even provides legal information to help the parties to comply
---------------------- with the points of issue and to come to an agreeable solution of their dispute.
In contrast to this, a mediator has no advisory role to play; he/she is a neutral
----------------------
person who helps the parties to arrive at an acceptable solution. Mediators can
---------------------- take help of experts in case they need any expert opinion in the process but he/
she on their own cannot advice the parties. Evaluative mediation has somewhat
---------------------- advisory role to play in the sense that they evaluate the strengths and weaknesses

of the parties if they would have gone in for litigation; but even then they do not Notes
advice anything but just evaluate the end result.
----------------------
Though both mediation and conciliation, serve to identify the disputed issues,
to generate options, help the parties to reach to a mutually satisfying solution ----------------------
to their dispute, their ways of achieving the goal are different. They are two
different methods of dispute resolution. ----------------------
----------------------
Summary
----------------------
• Mediation is the most convenient method of dispute resolution with some
advantages like it is an informal and non-controversial process. It is an ----------------------
easy, fast and less expensive one. It is a process which helps maintain
relationships between people, where the parties in a dispute themselves ----------------------
come out with the required solution to their dispute. The full process is ----------------------
private and confidential one but yet leaves other options open for the
parties. The solution arrived at is final and binding on the parties. ----------------------
• I t is a neutral process and does not give any advice, it may be one sided ----------------------
if the other party is weak or passive, lack of a definite result, mediated
agreements cannot be enforced if they are not complied with by the other ----------------------
party after they are made. It does not have a legal perspective. If it does
----------------------
not succeed, the procedure of trial follows – so there is waste of time,
money, energy. ----------------------
• Court annexed mediation means that the mediation process is used as a
----------------------
part of the judicial system. Here, the judges, lawyers and litigants with
the help of the mediator come together to solve the dispute and reach a ----------------------
solution to it.
----------------------
Keywords ----------------------
• Court Annexed Mediation: It means where the mediation services ----------------------
are provided by the court as a part of the judicial system. The court by
itself refers the matter/dispute for mediation, if it feels the need to do ----------------------
so. In some fields such court annexed mediation is made compulsory ----------------------
as in family, industrial labour, etc. by certain acts drafted therein. The
amendment made in the Civil Procedure Code, in 1999, further helped ----------------------
to make court annexed mediation possible in India. In accordance with
this amendment, the Mediation Rules were framed by the High Court of ----------------------
Delhi, in 2004, and the procedure of court annexed mediation was well ----------------------
defined. It brought the judges, lawyers, litigants and mediators together to
help solve the disputes. ----------------------
----------------------
----------------------
----------------------

Notes
----------------------
1. What are the advantages and disadvantages of mediation?
---------------------- 2. ccording to you, is mediation a better method of dispute resolution?
A
State reasons.
----------------------
3. hat do you mean by ‘court annexed mediation’? Is it necessary in India,
W
---------------------- give reasons?
---------------------- 4. The amendment in CPC and the mediation rules formed thereof helped
solve disputes of the litigants and are a boon to Indian Judiciary. Comment.
----------------------
5. What is the procedure of mediation according to the mediation rules?
----------------------
6. rite short notes on: a) Appointment of mediator b) Limitations and role
W
---------------------- of mediator c) Confidentiality and disclosure of information d) Essentials
and enforceability of mediation agreements
----------------------
7. What are the qualifications of the panel of mediators?
---------------------- 8. What is the difference between mediation and conciliation?
---------------------- 9. Which according to you is a better method of dispute resolution?
---------------------- 10. Are dispute resolution methods necessary? Comment.

---------------------- 1. Under which act mediation got first legislative sanction?
i. Industrial Dispute Act, 1947
----------------------
----------------------
---------------------- 1. Which section in the Civil Procedure Code deals with the mediation?
---------------------- i. Section 89
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Fill in the blanks.
----------------------
1. According to Rule 2 of the Mediation Rules, 2004, formulated by the
High Court, the parties to a dispute may by themselves agree on the name ----------------------
of the mediator for mediating their dispute.
----------------------
----------------------
1. he District and the Sessions Judge prepares a panel of mediators within
T ----------------------
how many days? ----------------------
i. 30
----------------------
1. anchu, Sriram. 2011. Mediation Practice and Law– The path to successful
P ----------------------
dispute resolution. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
References 227
Notes References
1. Arbitration and ADR by Dr. U Pattabhi Ramiah
----------------------
2. lternative Dispute Resolution Negotiation and Mediation by Madabhushi
A
---------------------- Sridhar
---------------------- 3. rbitration, Conciliation and Alternative Dispute Resolution Systems by
A
Dr. S.R. Myneni
----------------------
4. Law relating to Arbitration and ADR by N.K. Acharya.
---------------------- 5. Civil Procedure Code, 1908
---------------------- 6. ediation and Conciliation Rules, 2004, published by notification by
M
Delhi gazette.
----------------------
7. Alternative Methods of Dispute Resolution by Martin A. Frey
----------------------
8. Arbitration Agreements & Awards, by Ashwini Kumar Bansal
---------------------- 9. Law of Arbitration & Conciliation, by N. D. Basu
---------------------- 10. Law of Arbitration and Conciliation by Avtar Singh)
---------------------- 11. Internatinal Arbitration, Law & Pratice by Mauro Rubino Sammartano

12.
Mediation Practice and Law – The path to successful dispute
----------------------
resolution by Sriram Panchu
---------------------- 13. Alternative Dispute Resolution by Madabhushi Sridhar
---------------------- Websites
---------------------- 1. http://lawcafe.in/?p=366
2. http://www.lexisnexis.in/psa-pillais-criminal-law.htm
----------------------
3. http://www.img.kerala.gov.in/docs/downloads/court.pdf
----------------------
4. http://en.wikipedia.org/wiki/Criminal_law
---------------------- 5. http://cgat.gov.in/intro.htm
---------------------- 6. http://business.gov.in/consumer_rights/consumer_protection.php
---------------------- 7. h ttp://www.consumerdaddy.com/a-14-consumer-protection-law-in-
india.htm#consumerprotectioncouncil
---------------------- 8. h ttp://fcamin.nic.in/Events/EventDetails.
---------------------- asp?EventId=597&Section=Acts%20 and%20Rules&ParentID=0&Pare
nt=1&check=0
----------------------
9. http://icadr.ap.nic.in/menbehind/menbehind.html
---------------------- 10. http://mahilaayog.maharashtra.gov.in/new/spl_court.php
---------------------- 11. http://icadr.ap.nic.in/
---------------------- 12. http://www.mightylaws.in/139/plea-bargaining-india-basics

13. h ttp://iis-db.stanford.edu/pubs/22693/No_103_Sarma_India_
---------------------- Arbitration_India_ 509.pdf

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DISPUTE

(FOR PRIVATE CIRCULATION ONLY)

COURSE DESIGN AND REVIEW COMMITTEE

Published by Symbiosis Centre for Distance Learning (SCDL), Pune

Copyright © 2018 Symbiosis Open Education Society

Unit No. TITLE Page No.

1.1 Meaning and Characteristics of Judicial Dispute Resolution

Judicial/Basic Dispute Resolution 1

---------------------- Meaning of Judicial Dispute Resolution:

2 Dispute Resolution Law

●● If a duty is omitted or is not performed according to the legal duty of ----------------------

3) Court not of Record: A court of limited and inferior jurisdiction. ----------------------

Judicial/Basic Dispute Resolution 3

Judicial/Basic Dispute Resolution 5

6 Dispute Resolution Law

Judicial/Basic Dispute Resolution 7

---------------------- Multiple Choice Single Response.

---------------------- 1.3 CIVIL AND CRIMINAL LAW

8 Dispute Resolution Law

viii. Hierarchy of Civil Courts in India: ----------------------

The Apex Court is the Supreme Court ----------------------

Courts of Small Causes Courts or Sub Courts (Sub-Judge) ----------------------

District Munsiff Court ----------------------

Judicial/Basic Dispute Resolution 9

---------------------- High Court

---------------------- Sessions Courts (District Level)

---------------------- Metropolitan Magistrates’ Courts (Metropolitan City Level) and Judicial

10 Dispute Resolution Law

1.4 DIFFERENT METHODS OF DISPUTE RESOLUTION ----------------------

UNDER SECTION 89 OF CODE OF CIVIL PROCEDURE ----------------------

Judicial/Basic Dispute Resolution 11

12 Dispute Resolution Law

Judicial/Basic Dispute Resolution 13

14 Dispute Resolution Law

●● ispute: It refers to a quarrel between a party asserting a right and the

Judicial/Basic Dispute Resolution 15

---------------------- Multiple Choice Single Response.

---------------------- Suggested Reading

16 Dispute Resolution Law

2.1 Theories and Stages of Litigation

---------------------- ●● There has to be a deliberate desertion of subtle issues by the parties.

18 Dispute Resolution Law

The adversarial character of litigation in combination with the requirement ----------------------

20 Dispute Resolution Law

22 Dispute Resolution Law

Multiple Choice Single Response. ----------------------

---------------------- 2.3 HIERARCHY OF COURTS IN INDIA

24 Dispute Resolution Law

---------------------- ●● he competent legislature can bar jurisdiction of civil courts with

26 Dispute Resolution Law

---------------------- 2.4 CONFLICT RESOLUTION INITIATIVES OF THE SC

28 Dispute Resolution Law

Check your Progress 2 ----------------------

2.5 TRIBUNALS – MEANING AND CHARACTERISTICS ----------------------

---------------------- Multiple Choice Multiple Response.

30 Dispute Resolution Law

---------------------- ●● entral Information Commission (CIC), a newly established commission,

---------------------- State True or False.

32 Dispute Resolution Law

---------------------- ●● At least two meetings shall be held every year.

34 Dispute Resolution Law

●● CPC: Civil Procedure Code. ----------------------

Self-Assessment Questions ----------------------

---------------------- iii. 313