NAME S.

MANEESH REDDY

ROLL NO. 1582

ROLL NO. (IN WORDS) FIFTEEN HUNDRED AND EIGHTY-TWO

SEMESTER IX

SUBJECT ALTERNATIVE DISPUTE RESOLUTION

NO. OF PAGES 16 (EXCLUDING THIS PAGE)

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QUESTIONS ANSWERED ARE 1,2,3,4 AND 6

ANSWER 1

For the case before us we should refer to the limitation clause provided under Section 34 and
also refer to the Suo Moto taken by the Supreme court for extenstion of Limtiations and its
application in the tie -period before us.

Section 34 of the Arbitration and Conciliation Act, 1996 stipulates grounds to challenge the
arbitral award made under Section 31. However, the challenge to the award can only be made
within limitation period of three months from the date of receipt of the award. This period of
limitation can be further extended by 30 days in cases where the applicant is able to show
sufficient cause for delay in filing petition under Section 34.

Limitation of Time under Section 34:

Section 34(3) provides that an application for setting aside an award shall not be entertained
by the Court if it is made after three months have elapsed from the date on which the
applicant had received the arbitral award. The proviso to this Section further provides that if
the Court is satisfied that the applicant was prevented by sufficient cause from making the
application within the prescribed time; it may entertain the application within a further period
of 30 days but not thereafter.

The importance of period fixed under Section 34 is highlighted under the 1996 Act by
Section 36 which stipulates that where the time for making an application to set aside the
arbitral award under Section 34 has expired, the award shall be enforced under the Code of
Civil Procedure, 1908 in the same manner as it was a decree of the Court.

Recently, in Chintels India Ltd. v. Bhayana Builders Pvt. Ltd., wherein it has been observed
that an application filed beyond 120 days of the delivery of the award cannot be accepted
regardless of the applicant’s difficulties behind filing the Section 34 application within 120
days

In Dakshin Haryana Bijli Vitran Nigam Ltd. vs. M/S Navigant Technologies Pvt. Ltd.
The period of limitation for filing the Petition under Section 34 of the Arbitration and
Conciliation Act would commence from the date on which the signed copy of the award
was made available to the parties.

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The last day

In State v. Himachal Techno, the determination of the time period of three months as
prescribed under Section 34(3) was made. The rule of construction of this period would be to
not treat this period as 90 days, but actual period of calendar month. Thus, the period would
expire in the third month on the date corresponding to the date upon which the period starts.
In days it may mean “90 days or 91 days or 92 days or 89 days”.

However, the Supreme Court in Assam Urban Water v. Subhash Projects & Marketing has
held that the benefit of this rule cannot be taken to prefer an application under section 34 after
the expiry of the time period.

The proviso to section 34(3): Additional 30 days

Section 34(3) proviso enables the party to make an application after the expiry of three
months upon demonstrating that the applicant was “prevented by sufficient cause” from doing
so. In such cases, the statute has conferred upon the court discretion to entertain the
application within a period of 30 days “but not thereafter”.

To “prevent” means to thwart; to hinder or to stop. Thus, while ‘time period’ would never
stop under any circumstances but certain circumstances may stop an applicant from making
the application. If the court found those circumstances constituted “sufficient cause” it would
permit the party to make the application.

In Union of India v. Popular Construction it was observed that it is beyond cavil that the
discretion of the court to permit an application beyond the original period cannot extend
beyond 30 days being the statutory outer limit for exercise of discretion.

Whether Refusal of Condonation of Delay further appealable?

The Hon'ble Supreme Court in its recent judgment Chintels India Ltd. v. Bhayana Builders
Pvt. Ltd noted that the ultimate effect of refusing to condone delay is a refusal to set aside the
award, thereby making it an appealable order as per the scope of Section 37.

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Application of In Re Cognizance For Extension of Limitation

In the case before us the arbitral award was passed on June 1, 2021, so as per Section 34(3)
the three month period of limitation would have ended on September 1,2021 and the
additional 30 days given in event of delay due to sufficient cause would have ended on
October 1,2021. But the application under Section 34 was filed on October 15,2021 which
was 45 days after the 3 month limitation and 15 days after the condonation and so as per this
it would not have been allowed during normal course of time but during the present times of
pandemic the following directions were given

The following are the directions :

I. In computing the period of limitation for any suit, appeal, application or proceeding, the
period from 15.03.2020 till 02.10.2021 shall stand excluded. Consequently, the balance
period of limitation remaining as on 15.03.2021, if any, shall become available with effect
from 03.10.2021.

II. In cases where the limitation would have expired during the period between 15.03.2020
till 02.10.2021, notwithstanding the actual balance period of limitation remaining, all persons
shall have a limitation period of 90 days from 03.10.2021. In the event the actual balance
period of limitation remaining, with effect from 03.10.2021, is greater than 90 days, that
longer period shall apply.

III. The period from 15.03.2020 till 02.10.2021 shall also stand excluded in computing the
periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act,
1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section
138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of
limitation for instituting proceedings, outer limits (within which the court or tribunal can
condone delay) and termination of proceedings.

Decision

Thus keeping in mind the abovementioned directions In Re Cognizance For Extension of

Limitation, our application can be filed as its limitation expired during the period of

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15.03.2020 – 02.10.2021 and thus, there would be an additional 90 days allowed within
which the application can be filed.

So the present application despite being filed much after the limitation and the grace period
given would be accepted due to the extension of limitation In Re Cognizance For Extension
of Limitation due to the pandemic.

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ANSWER 2

Judicial overreach can be characterized as a phenomenon where the Judiciary acts beyond the
strict interpretative role ascribed to it under the Doctrine of Separation of powers. Indeed,
views differ as to whether the doctrine ought to be interpreted strictly or whether the
Judiciary may be allowed creative license in its interpretation of the letter of the law in order
to uphold the ends of justice and equity. Judicial activism has flourished in India and acquired
enormous legitimacy with the Indian public. However, this activist approach by the judiciary
is bound to create friction and tension with the other organs of the state.

The controversy surrounding the Court’s alleged “overreach” in the Amazon case is related to
the meaning of the term ‘arbitral tribunal’ within the Arbitration and Conciliation Act, 1996,
and whether an Emergency Arbitrator could be considered to fall within the scope of the
same.

In Amazon.Com NV Investments Holding LLV v. Future Retail Ltd., the Supreme Court
upheld the validity of an award rendered by an emergency arbitrator designated by the parties
in their arbitration agreement, as well as its enforceability under Section 17 of the Act.
Earlier, the Delhi High Court had also agreed to enforce the award of the emergency
arbitrator within the four corners of the Act itself, while reasoning that Section 17 of the Act
allows for the inclusion of an emergency arbitrator.

As per the Supreme Court in Amazon v. FCR, a conjoint reading of sections 2(6), 2(8), 19(2)
and 21 of the Act reveals that parties are free to agree on the procedure to be followed by an
arbitral tribunal in conducting its proceedings. Section 21, which is expressly subject to the
arbitration agreement between the parties, provides that arbitral proceedings in respect of a
particular dispute commence on the date on which a request for that dispute to be referred to
arbitration is received by the respondent. Accordingly, the Court emphasised upon the
principle of party autonomy as being one of the pillars of the Act and held that there is
nothing in the Act that prohibits contracting parties from agreeing to a provision for an award
by an emergency arbitrator, and for such an award to be enforced under Section 17 of the
Act.

The overstepping of Supreme Court in inclusion of Emergency Arbitration

The Supreme Court overlooked the argument of the petitioner that the inclusion of
emergency arbitrators within Section 2(1)(d) was expressly suggested by the Law

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Commission in its 246th Report, which was neglected by the Parliament in the Arbitration and
Conciliation (Amendment) Act, 2015. This brings to fore the concern that the Supreme Court
may have overstepped its jurisdiction in giving effect to the intention behind the legislation,
which the Parliament itself did not deem fit to include within the Act. It can be further
highlighted that such an inclusion in the language of Section 2(1)(d) would’ve brought the
regime of emergency arbitration in India in line with global practices wherein emergency
arbitration has been expressly recognized in several jurisdictions which also derive their
statutes from the UNCITRAL Model Law. Clearly, at the time of the 2015 Amendments, the
Parliament was not of the opinion to include emergency arbitrators within the scope of the
Act, let alone insofar the enforceability of an award rendered by an emergency arbitrator is
concerned.

Secondly, the inclusion of emergency arbitration within the framework of the Act in the
present form disturbs the complementary nature of the jurisdictions of the courts vis-a-vis the
arbitral tribunals, as far as interim relief is concerned. To explain this further, the inclusion of
Sections 9(2) and 9(3) becomes important.

This implies that the legislature intends for the jurisdictions of the court and the arbitral
tribunal to be complementary to each other, i.e., from the period of commencement of the
arbitration proceedings till the constitution of the arbitral tribunal, the courts have the
jurisdiction to grant interim reliefs under Section 9. Post the constitution of the arbitral
tribunal, till the issuance of the arbitral award, it is the tribunal that has the exclusive
jurisdiction to grant interim relief under Section 17.

Additionally, the repercussion of the Supreme Court’s assumption behind the insertion of
Section 9(2) is that parties have the option to either go to a court under Section 9 or an
emergency arbitrator and enforce its remedy under Section 17. This seems to be an untenable
position, since the Act is silent (and the Supreme Court missed to clarify) about whether only
one of the fora can be approached, and what happens in case an order of an emergency
arbitrator and a Section 9 court are contradictory in nature. Clearly, the Parliament could not
have envisaged this situation.

A likely consequence of the Supreme Court’s judgment in the Amazon case, treating an EA
on par with an arbitral tribunal, is that an EA decision will also now be appealable under
section 37 of the Act. In relation to EA decisions, the SIAC Rules provide that he parties also
irrevocably waive their rights to any form of appeal, review or recourse to any State court or

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other judicial authority with respect to such Award insofar as such waiver may be validly
made.

However, under Indian law, parties cannot by agreement override or exclude “non-
derogable” provisions of the Act and the right to appeal would likely fall within the category
of non-derogable provisions. If appeals are routinely filed before the Indian courts to
challenge the decision of an EA, the public policy premise of the judgment, i.e., that EA
decisions would serve to “decongest the civil courts” may be quite significantly undermined.
Specifically, in the Amazon case, the Biyani Group may have a second bite at the cherry to
challenge the decision of the EA before the Indian courts.

Thus, the Supreme Court overreached its jurisdiction in interpreting “the arbitral tribunal” in
Section 17 to include even emergency arbitrators, since, keeping in mind the scheme of the
Act, the same can only be the arbitral tribunal that will render the final award. Thus, the
Supreme Court also seems to have expanded the definition of an “award” under the Act to
include an award of an emergency arbitrator, without the Parliament commenting on the
same.

The overstepping of Judiciary in PASL in giving effect to principle of Party Autonomy

Similarly, even in the PASL case, the Court’s liberal interpretation of the term ‘international
commercial arbitration’ was only to give effect to the principle of party autonomy and to
protect the ability of Indian parties to resolve their disputes through foreign seated
arbitrations

In PASL Wind Solutions Pvt. Ltd. v GE Power Conversion India, the case presents another
clear example of judicial overreach in the indian arbitration law regime. This case is a first
where, albeit lacking statutory authority, the Supreme Court essentially allowed Indian
parties to derogate from the indian arbitration law in its totality. The question before the
Supreme Court was whether two Indian parties can formally opt a foreign jurisdiction as a
seat of arbitration within their arbitration agreement. However, unlike in the case of Amazon
v. FCR, the Supreme in PASL Wind Solutions seems to be technically correct in holding that
two indian parties can choose a foreign seat of arbitration. Nevertheless, the case is an
example of judicial overreach largely in terms of how the Supreme Court seems to have paid
little attention to legislative intention and the policy of the indian arbitration law.

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As stated above, PASL Wind Solution is not objectively, but subjectively a case of judicial
overreach. While party autonomy is a central feature of the Arbitration Act, the Supreme
Court has not sufficiently taken into account the limits of party autonomy as such a feature,
and seems to have completely ignored the public policy aspect of the issue in case.

We may recall the judgement of the Supreme Court previously in TDM Infrastrcture Private
Limited v. UE Development India Private Limited, wherein it had been noted that Section
28 of the Act, that provides that all Indian parties must have Indian law as the governing law
of their dispute, cannot be derogated from and clearly the same is a part of the public policy
of the Act. Accordingly, the question that arises is, can the Act intend to allow two Indian
parties to derogate from the lex-arbitri of India, if it does not allow the same parties to
derogate from the Indian law applicable to the substance of their dispute? The Supreme Court
in PASL, without any clear indication from the Act, has agreed to allow such a derogation,
and has even held that as a consequence, Indian parties can choose a foreign law applicable to
the substance of the dispute. The same is patently violative of Section 28 of the Act and takes
the aspect of party autonomy beyond its permissible limits.

For these reasons, it seems clear that both Amazon v. FCR and PASL v. Wind Solutions,
attempt to shaken the very structure that the Act intends to establish. On the one hand, in
Amazon v. FCR, the Supreme Court disregards the relationship between Sections 9 and 17
and on the other hand, in PASL, it takes party autonomy to such a high pedestal that Indian
parties can simply choose to not be bound by Indian law (either for the substance of their
dispute, or for their arbitration agreement), creating an untenable situation. This begs the
question, is the law not supposed to be same for all parties, or do parties now have the liberty
to choose what law they be bound by, and simply use the Indian jurisdiction for the purpose
of enforcement of an award from their favourable jurisdiction?

After all, unlike the other two branches of the constitution, the judiciary as an institution is
not directly accountable to people. This very lack of accountability requires the judiciary to
practice self-restraint, act responsibly within the ambit of its constitutional powers. Judiciary,
like all other institutions in a democracy, should know and understand its limits. Our country
cannot be run on judicial decrees.

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ANSWER 3

In the present matter, the arbitration agreement is silent about the seat of arbitration but it
confers exclusive jurisdiction to the courts of Delhi, which clearly has no connection with the
matter. So the question that arises for consideration is whether such a clause which is silent
about seat of Arbitration but yet confers exclusive jurisdiction to a court where no part of
cause of action has arisen would be a valid Arbitration Clause or not.

The Act, it is evident that parties to the contract have been given the autonomy to choose a
place of Arbitration in terms of section 20 (1) and this was the basis on which the Hon'ble
Supreme Court in the case of Indus Mobile upheld the choice of parties to decide the place of
Arbitration. However in case where there is no agreement between the parties, in terms of
Section 20, it is the Arbitral Tribunal which decides the place of Arbitration having regard to
the circumstances of the case, including the convenience of the parties – this is something
that Section 20(1) clearly provides for.

The principles enshrined under section 16 to 20 of the Civil Procedure Code would come into
play in such a situation and the Courts within whose jurisdiction part of cause of action have
arisen or the Defendant carries out its business would have jurisdiction over the matter.

In Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited, it

has bee that Section 20 of the Arbitration and Conciliation Act 1996 (The Act) recognizes
autonomy of the parties to choose a neutral seat of arbitration where no part of the cause of
action arose. The Supreme Court further held that once the seat is determined, the Court of
that place would have exclusive jurisdiction to regulate the arbitration proceedings arising out
of the agreement between the parties. The Supreme Court also held that the neutral seat
chosen by the parties may not have jurisdiction under any of the provisions of Section 16 to
21 of Code of Civil Procedure but still that court would have jurisdiction by virtue of seat of
Arbitration chosen by parties.

Further, a recent judgement of the Delhi High Court in Aarka Sports Management Pvt. Ltd
v. Kalsi Buildcon Pvt. Ltd points out that parties do not have the right to confer jurisdiction
on a court of a place that has nothing to do with the contractual relationship between the
parties. They may choose a neutral jurisdiction as a seat of the arbitration, and accordingly
the courts of that place would have the jurisdicion to deal with the matters related to that
arbitration, such as appointment of arbitrators under Section 11.

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Similarly, in the instant case, New Delhi is a neutral jurisdiction that has no connection with
the parties. Thus, New Delhi cannot be contractually conferred jurisdiction by the parties, if
the same is not chosen as the seat of arbitration at the same time. In conclusion, the parties in
the instant case, must approach either the Courts at Jaipur or at Bangalore as the same would
have the requisite jurisdiction. The Delhi High court must reject the Section 11 application.

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Answer 4 (A)

Alternative Dispute Resolution refers to any means of settling disputes outside of the
courtroom. It typically includes early neutral evaluation, negotiation, conciliation, mediation,
and arbitration. As rising costs of litigation, time delays etc. continue to plague litigants, more
states have begun experimenting with ADR programs. Some of these programs are voluntary;
others are mandatory. While the two most common forms of ADR are arbitration and
mediation, negotiation is almost always attempted first to resolve a dispute.

UK on Mandating ADR

Recently, in UK after publication of a Civil Justice Council on Compulsory ADR there led to
shift in inclination towards mandating ADR.

The leading authority on the question of whether ADR can be compelled upon parties is
Halsey v Milton Keynes General NHS Trust in which the Court of Appeal held that the Courts
cannot compel parties to mediate against their will. However with the recent publication by
Civil Justice Council on Compulsory ADR there is now a changing inclination towards ADR
being mandated in the future.

India on Mandatory Mediation

Keeping in mind the pending clogged unheard cases in the courts of India and the years' long
litigation process which undermines the presence of the justice delivery system in India. And
considering all these circumstances. In India which is a developing country, people often
approach courts for the resolution of disputes and this opting of people for the litigation
process over-burdens the courts and subsequently increases the number of pending cases
which ultimately leads to dissatisfaction among the people of the nation for the judicial
system. It is often said that “justice delayed is justice denied”.

In the Afcons case, the court examined S. 89 of the CPC in terms of its mandatory reference
to ADR. The Section directs that where elements of a settlement exist, the case should be
referred to ADR thereunder.

Thus, cases which are not suited to ADR are not required to be referred thus under S. 89. The
court has to conduct an assessment as to whether the case is suitable for ADR. If the dispute
is not referred, the court must briefly record reasons for the same. What is mandatory is that
the court has to consider recourse to ADR process after completion of pleadings. Actual

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reference is not mandatory and requires an assessment of suitability. Except in cases of
excluded categories, the court states that a reference to ADR is a must.

While consent is required for arbitration or conciliation, it can refer parties to mediation
without parties consent. Mandatory mediation is a disputed issue, as it goes against one of the
fundamental pillars of mediation: voluntariness. Mediation was designed to be a process
shaped by party autonomy and a mutual voluntary desire to resolve the issue. Vitiation of this
principle through mandatory mediation can have serious consequences on the effectiveness of
the process.

Further, the 2018 ordinance of the Commercial Courts Act calls for mandatory mediation
under S. 12A. As per this Section, a parties must go for mandatory mediation before they can
approach a commercial court with a suit. Thus, mandatory pre-mediation mediation has been
instituted. The process is a time-bound one, whereby it must be completed with 3 months of
the application initiating mediation, which can be extended by 2 months with parties’
consent.

The rationale behind this development is to promote the use of mediation and to prevent the
judicial backlog of cases. While it has been widely hailed as a welcome move for the
promotion of mediation in particular and ADR in general in dispute resolution, it is
concerning that there is a wider shift to vitiating the voluntariness of parties in these
proceedings. If parties are unwilling to enter into and cooperate in such proceedings, they can
be rendered pointless: and could in fact lead to a rise in costs and time taken in dispute
resolution as the parties would be forced to engage in a dispute resolution process they did
not want to participate in.

India should learn from the experience in Romania, which adopted the opt-in model of
mandatory mediation and required parties to attend an information session on mediation prior
to initiating certain kinds of civil cases. In the opt-in model, the parties interested in
mediation, after the mandatory information session, must start a separate process to actually
mediate. The Romanian law also contained a provision expressly requiring the court to
dismiss a case when the parties had not attended a mediation information meeting.

Answer 4(B)

The principle of kompetenz-kompetenz denotes the ability of arbitral tribunals to decide on

their own jurisdiction to proceed with a case. The principle indicates that an arbitral tribunal

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is empowered and has the competence to rule on its own jurisdiction, including determining
all jurisdictional issues, and the existence or validity of an arbitration agreement. The
underlying object of this doctrine is to minimize judicial intervention in order to ensure that
the arbitral process is not thwarted at the very threshold, merely because a preliminary
objection is raised by one of the parties.

It is enshrined in the Arbitration & Conciliation Act, 1996. Section 16 of the Act states that
arbitral tribunals have the ability to determine their own jurisdiction, i.e., whether they can
hear the case or not. Further, Section 11 provides the Supreme Court or High Courts with the
power to appoint arbitrators in certain situations (usually it is the parties who appoint the
arbitrator, but if some procedure is not followed, a party can go to the court and ask them to
appoint an arbitrator). However, Section 11(6A) limits this power, allowing the courts only to
look at whether an arbitration agreement between parties exists, and not whether the
agreement is actually valid or not. Essentially, if an arbitration agreement exists, the
arbitration tribunal has to be appointed and the tribunal itself will decide if it can hear the
matter.

The history of this principle in India has not been smooth. In the past, the Supreme Court has
taken a view that dilutes this principle. In 2005, in SBP & Co. v. Patel Engineering, the
Supreme Court extended its power under Section 11, while appointing an arbitrator, to look at
not only just the existence of an arbitration agreement, but also decide whether the agreement
is valid, whether the party making the request under Section 11 is a party to the agreement,
along with whether the issues can be arbitrated upon. This was against the kompetenz-
kompetenz principle as the court was doing the job of the tribunal. As stated above, the Act
was amended in 2015 to add Section 11(6A), designed to prevent this situation.

A recent landmark decision of the Supreme Court in NN Global Merchantile Ltd. v. Indo
Unique Flame Ltd., discussed whether an arbitration ceable, if the underlying contract was
not stamped as per the relevant Stamp Act. In this discussion, Kompetenz – Kompetenz
becomes a relevant concept. It is well settled in arbitration jurisprudence that an arbitration
agreement is a distinct and separate agreement, which is independent from the substantive
commercial contract in which it is embedded. This is based on the premise that when parties
enter into a commercial contract containing an arbitration clause, they are entering into two
separate agreements viz. (i) the substantive contract which contains the rights and obligations
of the parties arising from the commercial transaction; and, (ii) the arbitration agreement

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which contains the binding obligation of the parties to resolve their disputes through the
mode of arbitration.

In Uttarakhand Purv Sainik Kalyan Nigam Ltd. v. Northern Coal Field Ltd., the objective
of kompetenz-kompetenz was observed to minimise judicial intervention, so that the arbitral
process is not thwarted at the threshold, when a preliminary objection is raised by one of the
parties. The doctrine is, however, subject to the exception i.e. when the arbitration agreement
itself is impeached as being procured by fraud or deception.

The autonomy of the arbitration agreement is based on the twin concepts of separability and
kompetenz – kompetenz. The doctrines of separability and kompetenz – kompetenz though
inter-related, are distinct, and play an important role in promoting the autonomy of the
arbitral process. Kompetenz – kompetenz implies that the arbitral tribunal has the
competence to determine and rule on its own jurisdiction, including objections with respect to
the existence, validity, and scope of the arbitration agreement, in the first instance, which is
subject to judicial scrutiny by the courts at a later stage of the proceedings.

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ANSWER 6

A settlement agreement is an agreement drawn out by a conciliator, when he sees that there is
possibility of amicable compromise between the parties. A conciliator assists the parties to
amicably settle the disputes between them.

The Arbitration and Conciliation Act, 1996, as the name itself suggests, deals with two types
of proceeding: arbitration proceedings and conciliation proceedings. While provisions
relating to arbitration proceedings are contained in part-I in which are included Chapters 1 to
X, the conciliation proceedings are dealt with in part-Ill which includes sections 61 to 81.

As per s.73, when it appears to the conciliator that there exists elements of a settlement which
may be acceptable to the parties, he shall formulate a possible settlement and submit to the
parties for their observations. According to s.73(3), when parties sign settlement agreement, it
shall be final and binding on the parties and persons claiming under them respectively.

S.74 provides that the settlement agreement shall have the same status and effect as if it is an
arbitral award.

The approach of the Court in ensuring that settlement agreements have adhered to the
procedure

In the judgment of Haresh Dayaram Thakur v. State of Maharashtra, the issue before
Apex Court was whether the agreement drawn by the conciliator himself and not signed by
the parties can be final and binding on the parties. The Apex Court held when the parties are
able to resolve the dispute, between them by mutual agreement and it appears to the
conciliator that there exists an element of settlement which may be acceptable to the parties
he is to proceed in accordance with the procedure laid down in section 73, formulate the
terms of a settlement and make it over to the parties for their observations; and the ultimate
step to be taken by a conciliator is to draw up a settlement in the light of the observations
made by the parties to the terms formulated by him. The settlement takes shape only when
the parties draw up the settlement agreement or request the conciliator to prepare the same
and affix their signatures to it. As it is a well-settled position that if the statute prescribes a
procedure for doing a thing, that thing has to be done according to that procedure.

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So the agreement that has been arrived in conformity with the form and due stipulation that
has been envisaged in accordance with s.73 that can be assigned the status of settlement
agreement as per the Act.

In Anuradha SA Investments v. Parsvnath Developers Ltd., it was held that a settlement

agreement would have the status and effect “as if it is an arbitral award” by legal fiction. The
purpose is to clearly enable the enforcement of such agreements as an arbitral award without
further adjudicatory process. It was also noted that settlement agreement does not cease to be
an agreement voluntarily entered into between the parties and becomes an arbitral award.

In Surender Kumar Beri v. Deepak Beri, it was also held by the Court that the settlement
agreement elevated to the status of an arbitral award to such an extent it is in terms of the
aforesaid agreements entered into by the parties is as per the procedure stated in the
Arbitration Act and cannot be faulted with.

In the case of Mysore Cements Limited v Svedala Barmac Limited, the Supreme Court
refused to enforce the said settlement on the ground that there is not any formulation and
reformulation by the Conciliator as provided in section 73 of the said Act of 1996 i.e
procedure contemplated under the said Act of 1996 is not followed strictly. The Apex Court
has held that it is not every agreement or arrangement between the parties to the disputes,
arrived at in whatever manner or form, during the pendency of conciliation proceedings that
automatically acquires the status of a ‘settlement agreement’ within the meaning of section
73 of the Act so as to have the same status and effect as if it is an arbitral award, for being
enforced as if it were a decree of the court. It is only that agreement which has been
arrived at in conformity with the manner stipulated and form envisaged and got duly
authenticated with section 73 of the Act, alone can be assigned the status of a settlement
agreement, within the meaning of and for effective purpose of the Act and not otherwise.

It is clear from the judgments and provisions mentioned above that it is not only that
settlement agreements have to comply with the procedure laid down in Part III of the 1996
Act, but a settlement award shall also have the same status and effect of an arbitral ward, if
all the compliances laid down under s.73 are followed. When settlement agreement is
voluntarily arrived at between the parties, duly authenticated by the conciliator will have the
same effect of an arbitral ward on the agreed terms.

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