Arbitration - I - Lecture Notes 10 For The Arbitration

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Arbitration- I - Lecture notes 10 for the Arbitration
LL.B (Savitribai Phule Pune University)
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SYNOPSIS
Sr. particulars
No.
1 Introduction
2 What is Arbitration ( Sec. 2 (a)) and categories of Arbitration
3 The objectives of Arbitration
4 International perspective of Arbitration ( UNCITRAL MODEL 1985)
A) Constitutional perspective ( Art. 51,255)
5 Jurisdiction of Arbitration
6 Historical background of Act of 1996. ( Reference act of 1940)
7 New Amendment 2015 under Act of 1996
8 Salient features of Arbitration, conciliator Act 1996 ( 86 section, 7
schedule
9 Essential element of Arbitration agreement ( sec. 7 to 8 )
10 Interim measurement by court in arbitration proceedings (sec. 9)
11 Composition of Arbitration Tribunal (sec. 1 to 11)
12 Grounds for challenge of Arbitration in composition of tribunal
(sec.13)
13 Challenge procedure of composition of tribunal (sec.13)
14 Jurisdiction of arbitration tribunals (sec.16)
15 Interim measures by court in arbitral tribunal (sec.17)
16 Conduct of Arbitral proceeding (sec.18 to 27)
17 Making of arbitration award – 28, 29A, 29B, 30, 31, 32, 33
18 Termination of proceeding of arbitration award
19 Recourse against arbitral award (sec.34)
20 Enforcement of award (sec.34,36)
21 Appeal against award for court (sec.37)
22 Deposit for tribunal (sec.38)
23 Enforcement of foreign award (sec.44 to 58)
24 Appeal
25 Scope of Arbitration (ADR vs. Litigation)
26 Judicial approach
27 Conclusion

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Arbitration (1to 37)

Conciliation (61 to 81)
Negotiation (sec.30 of arbitration act 1996)
Mini trial (sec.30)

Nature of act
Fast tract arbitration

Administrative tribunal (Art.323A and 323B)
Family court (1984)
Consumer protection act (1986)
Lokadalat
Legal aid
Mediation (sec. 30 of act of 1996)
Panchayat
Introduction:
Speedy justice has become the need of the hour, as
delay is not suitable to the investors as well as to the general
people. The demand for speed, inexpensive (कमी खर्चिक), substantial
(मल
ु भतू ) justice has been raised at all level.
International trade and investment resulting from
globalization in world economy and emergence of new economic
order (अर्िव्यवस्र्ा) call for adoption of effective, powerful and speeder
alternatives for settlement of commercial disputes.
A large number of foreign investors time to time
expressed their unsatisfactory views regarding the dispute
settlement mechanism in India.

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On the occasion of the 22nd National Convention of the

Institute of company Secretaries of India at Goa in 1994, Hon. Justice
A. M. Ahmadi pointed out that ‘Judiciary is sensitive to the need for
early resolution of dispute for successful implementation of the
economic reforms.’
The code of civil procedure 1908 sec. 89 (2) deal with the
application of specific legislation is respect of arbitration, conciliation,
mediation or other modes of settlement 124th law commission report
(1988).
Recommended that court empowered to compel parties a
private litigation to resolve the dispute by way of arbitration or
mediation.
Arbitration is an alternative means for dispute resolution. It
is one of the modern method.
N. A. Palkhivala said that “A court of law is like an ancient
castle, constantly under repair…….”
Only civil dispute of a civil nature can be placed before an
arbitral tribunal for resolution, the state alone is vested with the
power to try criminal offences. Crime have public significance
because they affect the safely of public at large.
Public dispute cannot be the subject matter of arbitration
proceedings.
126th law commission report on litigation policy (1988)

(malimath committee)
Report recommend that a central government should
issue a binding directives to the public sector undertaking to
introduce conciliation procedure in write matters (यार्चका) service
matters referred the compulsory arbitration.

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Malimath committee report (129th report) on A. D. R.

system
Hon. Justice Malimath committee Report on alternative
dispute resolution system recommended that It is needful to provide
powers to court to compel the parties to a private litigation (खाजगी दावे)
to resort support (आधार) to arbitration or mediation, requires to be
filled up by necessary amendment, it reducing the burden of trial
courts and revisional and appellate courts.
It is needful to amendment as per this guidelines new sec.
89 of civil procedure code- 1908 (र्दवाणी प्रर्िया सर्ं िता) providing for
settlement of dispute outside the court. As per this provision, court
shall formulate the terms of settlement under the court observation.
law of commission (176th law commission report)

Arbitration is method of dispute resolution that aim to
provide an effective and efficient alternative to traditional dispute
resolution through court. It is need to establish separate arbitration
centres for important trade bodies and commerce chambers and
business community.
129th law commission report on urban litigation mediation
(Justice malimath)
The report pointed out huge number of pending cases in
court specially in urban areas issue like house rent or possession.
Court recommends to establish of nagar/ gram nyayalaya’s like gram
nyayalaya with decide proper jurisdiction, for hearing cases of rent
on mostly district level, conciliation court must for settlement. (nagar
nyayalaya with professional judge appeal to district judge).

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Judicial views on Arbitration

• Market vamaspati and allied industries vs. union of India AIR.
2007, SCC 679
Hon. Dr. Dalveer Bhandari justice held that
Arbitration macharism or a method of resolution of dispute by
the agreement between dispute parties. The parties agree to
be bound by the decision of arbitrator
• Food corporation of India vs. Joginderpal mohinderpal AIR
1989, SCC 347
Hon. S. Mukharjee J. held that- Arbitration as a
mode for settlement of dispute between the parties. It has
great social purpose () to fulfil today. It has great urgency for
proper resolution of dispute and create confidence of people
resolution of dispute and create confidence of people for
benefit. We should make the law of arbitration simple, less
technical and more responsible to the actual realities of the
situation with role of justice and fair play and create the
confidence between the parties for justice and creating a sense
of justice.
• Ramji Dayawala vs. Invest Import AIR 1981
Hon. A. R. Desai J. held- Alternative dispute
resolution system is alternative to time consuming
troublesome expensive, disinterestive court trial arbitration is
made of resolution of dispute by a judge of the choice of the
parties.
In existing civil court system, there is provision that

person should be given proper opportunity of being heard.
Litigating in court in India is time consuming and expensive
exercise. Its great injustice due to pending cases.
Arbitration is one of the important model
alternative dispute resolution system. Today A. D. R. system

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increasing infield of law as well as commercial sector. Growth

of science and technology made a great impact on commercial
life by increasing competition throughout the world.
A.D.R. emerged as a powerful weapon for resolution
of dispute at domestic (national) as well international level.
Today A.D.R. developing as a separate and independent
branch of legal discipline
Arbitration traced back in system of village panchayat.
First arbitration act, governed in 1859
2) What is Arbitration
In general sense, an arbitration is an agreement
between the parties to a dispute to refer the matter to arbitration.
Arbitration is particular method of settlement of dispute.
Arbitration is considered to be an important alternative
dispute redressal process which is to encourage because of high
pendency of case in the courts and cost of litigation. In arbitration
agreement there shall be legal relationship whether contractual or
not. It includes relations as certain rights and liabilities () the subject
matter should be civil nature. So it is settlement of dispute through
interfere of a third person.
Arbitration has great social purpose in current situation.
It has great urgently today when there has been an explosion of
litigation in the court of law established by the soverign, power (Ref.
Food Corporation of India vs. Joginderpal Mohinderpal AIR 1989 SCC
347)
As per arbitration and conciliation Act 1996, sec 2A
defined- “Arbitration means any arbitration whether or not
administered by permeant arbitral institution.”
Categories of arbitration- Arbitration are broadly three categories
a) Ad- hoc and institutional arbitration

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b) Domestic and International arbitration

c) Foreign arbitration
Ad- hoc Arbitration:-
It is arbitration agreed and arranged by parties themselves
without help of any arbitral institution.
If parties not able to nominate arbitrator by consent of
each other, the appointment of arbitrator is made by Hon. Chief
Justice of High Court. In case of domestic arbitration (national level)
In case of International arbitration, arbitrator appointed
by Hon. Supreme court of India or their disgnate authority.
The fees to be paid to the arbitration is agreed by the
parties.
Institutional Arbitration:-
Both parties referred a dispute or difference before
particular arbitration – institution such as –
• Indian Council of Arbitration (ICA)
• International Chamber of Commerce (ICC)
• Federation of Indian Chamber of Commerce (FICCI)
• World Intellectual Property Organisation.
All these institutions framed their own rules of
arbitration for proceedings.
Domestic Arbitration:-
When cause of action for the dispute arise wholly in India,
then matter governed by the Indian law, means it is subject of Indian
jurisdiction.
International Arbitration:
International arbitration can take place either India or outside
India on the element of foreign parties subject matter of the dispute.

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The applicable to the International arbitration may be Indian

law or foreign law depending on agreement between parties.
(Goneva – 1949, Newyork – 1958)
Foreign Arbitration:
A foreign arbitration is an arbitration which conducted in a
place as a foreign award.
Difference between A.D.R and Litigation/ adjudication :
Sr. A.D.R Litigation (Adjudication)
No.
1 Equal participation friendly Establish on base of fault and
relationship – sensible liability – reserve mindness loser
manner and winner role of parties
2 Less expensive- save time, High expensive- time,
money (more money,(more expensive than
expeditiously) ADR) ( delay the justice- denied
the justice)
3 Trustful, transparent easy Distrustful environment, rigid
manner (place, time, technical manner complexity.
language, number etc.), Confidence and trust on judicial
flexible collapse
4 Expenses paid by both Expenses depend upon nature
(help to reduce workload of suit, advocate fee or
of court) (help to solution government statutes courtful
over burden of judiciary)
5 Need not apply rigid Court system always regulate
formula of rules and functions as per law, rules,
regulations for example – regulation etc.
the code of civil procedure Govern by rigid of rules and
– 1908, procedures.
Indian Evidence Act 1872
6 More importance to actual Equal importance to the law and
circumstance as compare evidence

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law (democratic – freeness

in justice)
7 Appoint by parties Judicial machinery (bureaucratic
maximum advantages to model)
parties
8 Basic object is resolution of Object is secure the legal rights
dispute
9 Can be used with our Lawyer is must to express
without lawyer before court
10 Available experts in specific Certain limitations of expert
subject matter. guidelines
11 Apply the principles of Always based on common law
natural justice equity and system of natural justice
good conscience
The basic object of Arbitration:

• Dispute settlement by alternative of courts system.
• Speedy justice.
• Not bound by technical and strict rules of law and its procedure
(CPC- Evidence Act).
• Assistance can take from court.
• Apply principles of natural justice, equity and conscience.
• Based on principles of equality, liberty, fraternity.
• Save time, money
• Available domestic and international level.
• Expert guidelines in dispute resolution.
• Less interference of court system.
Matters to Arbitration:
a) All matters shall be civil nature, affecting private rigid
b) Civil matter involving question of fact or question of law.
Following kinds of matters cannot be referred to arbitration:

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• Criminal proceeding
• Illegal transaction, if subject matter illegal, award cannot
binding
• Matrimonial matters- a suit for divorce cannot referred to
arbitration
• Testamentary matters ( Saudamini vs. Gopal Chandra )
Importance /nature and scope of Arbitration:
• This process having great scope of speedy justice, provide
privacy of proceedings
• It is voice of people, act giving liberty to choose arbitrator
• This process is less expensive
• No court fees
• Resolve dispute freely, fairly, and speedily
• Proper communicating or opportunity of hearing
• No ideology of winner or loser, mutuality in both parties.
• Easy, transparent, understandable
• Maximum advantage to parties
• No rigidly
• Proceeding may be without lawyer
• Availability of expert
• Dispute resolve without stress.
International Perspective on Arbitration (UNCITRA MODEL – 1985):

United Nation Commission on International Trade Law
(UNCITRAL) has adopted the UNICITRAL model law on International
commercial Arbitration in 1985. Which comprehensively cover
international commercial arbitration.
As per recommendation, all countries give due
consideration to the said model law in view of the desirability of

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uniformity of the law of arbitral procedures and the specific neds of

international commercial arbitration practice.
Model law make significant contribution to the
establishment of unified legal framework for the fair and efficient
settlement of disputes arising in international commercial relations
Model law helpful for amicable settlement in domestic or
international disputes. It is one of the harmonious concept.
Main objectives of the Bill (1996) are as under:
1) To, comprehensively ( सर्वसमार्ेशक ) cover international and
domesh commercial arbitration and conciliation
2) It also applicable to domestic arbitration and conciliation
3) To make provision for an arbitral procedure which is fair
efficient and capable of meeting the needs of specific
arbitration.
4) To provide that the arbitral tribunal gives reasons for its
arbitral award
5) To ensure that the arbitral tribunal remains within the limits of
its jurisdiction
6) To minimize the supervisory role of courts in the arbitral
process
7) To permit an arbitral tribunal to use mediation, conciliation or
other procedures during the arbitral proceedings to encourage
the settlement of disputes ( sec. 30)
8) To provide that every final arbitral award is enforced in the
same manner as decree of the civil court
9) To provide settlement agreement status as a result of
conciliation proceedings
10) To provide procedure to enforcement of foreign award as
Geneva and Newyork convention
Constitutional perspective ( Art- 51 & 253):

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UNCITRAL model – 1985 recognized for settlement of

dispute on international level.
• Art – 51 said that
1) The state shall take efforts to promote international peace
2) Security and maintain just and honourable relations between
nations
3) Respect for international law and encourage settlement of
international disputes by arbitration.
• Art – 253 confers power on parliament to make any law for
implement any treaty, agreement or convention or any
decision made by international commercial arbitration for
other body.
Jurisdiction of Arbitration:
In general sense, arbitration model is available in case of
civil nature. Certain matters cannot referred to arbitration that is –
a) Matrimonial matters (र्ैर्ाहिक वर्षय) (divorce, succession, will
guardian)
b) Insolvency proceedings (हिर्ाळखोरी िार्े )
c) Criminal proceedings(गुन्िे गारी िार्े)
d) Matters relating charitable trusts (वर्श्र्स्त संस्था)
e) Illegal contracts
f) Winding up
In Booz Allen Hamilton vs. S.B.I. Home finance AIR 2011,
5 scale 147 Hon S.C. held that subject matter must proper before
arbitration.
Historical Background of Arbitration and Conciliation Act- 1996:
Arbitration is a process of setting disputes is an old practice
that panchayats in village would settle dispute between the parties.

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This Act based on English law. The English merchants,

traders refers trade and commerce by the act of 1697 which enacted
in England to resolve the dispute of personal property matters. The
act of 1697 was replaced on 1889.
In Indian first statutory act on arbitration law was the
Indian Arbitration Act – 1899 which is the model of act of England –
The first statutory enactment on arbitration law was the
Indian Arbitration Act 1899
In 1940, the act of 1899 was re-arafted in the form of
Arbitration Act 1940 for the effective implementation of economic
reforms and for smooth and prompt settlement of domestic as well
as international commercial disputes.
In act of 1940 arbitration appointed by court by
application of parties. In this act, court having wider jurisdiction to
directing arbitration agreement. So this act not given freeness to
parties, its means this act was does not deal fairly. In landmark
Gurunank Foundation vs. Ratan Singh AIR 1981 SCC 634, Hon.
Supreme Court of India held that Act of 1940 has lawyers laugh and
cry for legal philosophers
The law commission of India in its 76th Report 1978,
recommended need for updating the Act of 1940 to meet the new
challenges of modern developing economy of the country.
The United Nations commission on international Trade
Law (UNCITRAL) had been working for several years to come up with
an acceptable model law. The UNCITRAL began work on model
arbitration from 1979 and after continuous working several years on
June 21st, 1985, it proposed a model law on international commercial
arbitration. The general assembly of United Nations passed a
resolution accepted model law and India also adopted that model
and form the Arbitration and Conciliation Act 1996

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Various law commissions made recommendation relating

arbitration processing’s. The law commission 124th report 1988
recommended that court empowered to compel parties a private
litigation to resolve the dispute by the way of arbitration or
mediation
126th law commission expressed view that Writ matters,
service matters referred to arbitration
The Arbitration and conciliation Act 1996 enforceable from
16th Aug, 1996. This Act applicable to domestic as well as
International commercial Arbitration. This Act given new techniques
such as conciliation, mediation and negations. The Central
government also introduce certain suitable process of Arbitration.
Applicability:
This Act is may be called the Arbitration and conciliation act
1996. It extend to the whole of India. This Act enforceable from 18th
Aug, 1996
Arbitration & conciliation Act 1996 was comprehensive
cover domestic and international commercial arbitration and
conciliation.
Arbitration & conciliation process:
Basically arbitration process can be divided under
following heads
A) Arbitration agreement (sec.7 to 9)
B) Composition of arbitral tribunal (sec. 10 to 15)
C) Conduct of arbitral proceeding (sec. 18 to 27)
D) Making arbitral award and termination of proceedings (sec. 28
to 33)
E) Recourse against arbitral award (sec.34)
F) Finality and enforcement of Arbitral Awards (sec.35 to 36)

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G) Enforcement of certain foreign Award (sec. 44 to 52)

H) Conciliation (sec. 61 to 81)
New amendment 2016 under Arbitration, conciliation Act –
1996:
Section Particulars
7 Newly added word – ‘as electronic media’ as document of
arbitral proceedings.
8 If certify copies of arbitral award not available to parties,
party can request to court for it.
9 Arbitration proceeding shall commenced within god
11A Power of central government to amend fee structure of
tribunal (schedule IV)
Fees – 45,000/- to Rs. 30.00 lakhs. If sold arbitration he
can added plus 25% of schedule fees for his expenses.
11 If cases referred to court, speedy dispose of that cases
within 60 days.
14 Substitute arbitrator shall mandate to prior arbitrator
proceedings.
12 Tribunal shall dispose cases within 60 days.
12A Person who is relationship with parties as per VII
schedule, shall not eligible for appointment of arbitrator.
17 Tribunal order same as order of court under code of civil
procedure – 1908
23 Counter claim or set off (claim of defendant – बचावकताि )
shall be adjudicated of respondent.
24 Not grant any adjournment without sufficient cause of
hearing of arbitral proceedings by tribunal
25 Discretionary right to respondent to submit statement of
defence

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Sec – 89 of code of civil procedure 1908:

The law commission of India in its 163rd report on the code of
civil procedure (Amendment) Bill, 1997, voiced its concern on the
quality of the justice delivery system in the country. It stated that any
delay in the disposal of cases threatens justice. The lapse of time
weakness the memory of witnesses and makes the presentation of
evidence difficult. This leads to the loss of public confidence in the
juridical process in itself is a threat to the rule of law and ultimately
to democracy.
Thus sec- 89 of C.P.C. 1908 into being. The provision states
that where the court is of the opinion that it is possible to reach a
settlement of a dispute between the parties to the dispute, the court
may formulate such settlement or propose a tentative settlement
and refer the parties to an alternative means of setting the dispute,
such as arbitration, conciliation, settlement through Lok Adalat or
mediation.
It means that the court is under no compulsion to refer
the parties to alternative means of resolving their disputes.
Sec – 89 ensure the speedy delivery of justice which one of
the supporting right to fundamental right of life and personal liberty
under Art- 21 of the constitution of India.
Section Particulars
28 While deciding and making an arbitral award the arbitral
tribunal shall, in all cases take into account the terms of
the contract and trade usages applicable to the
transaction (र्िवडा सवि व्यविारात मान्यता प्राप्त )
29A The arbitral award shall be made within a period of
twelve months from the date of arbitral tribunal enter
upon the subject matter.

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29B Parties may on any stage of arbitral tribunal, agree in

writing, their dispute resolve by fast track procedure.
31A It is discretionary powers of arbitral tribunal or court to
decide amount of cost or fees and expenses (as per
schedule)
34B Arbitral award is in conflict with the public policy of in if
(i) award was induced (प्रभाव) or affected by fraud or
corruption or was violation of sec- 75 or sec- 81 or
(ii) contravention with the fundamental policy of India
law
(iii) conflict basic element of morality or justice
34(B) An arbitral award arising out of arbitration other than

2A international commercial arbitrations, may also be set
aside by the court, if the courts finds that the award is
reduced the value of quality by patent illegality appearing
on the face of the award shall not be set aside merely on
ground of application of law or evidence.
36 Arbitral award shall be enforced in accordance with code
civil procedure,1908 in the same manner as decree of
court
Distinction between the Act of 1940 & Act 1996:

Act of 1940 Act of 1996
Provide wide discretionary Limit judicial interfere broden
powers to court the scope of the power to the
arbitral tribunal
Heavy reliance on the courts to Power shifted to arbitral
ensure arbitration proceedings tribunal
Arbitrator appointed judicial Competence is basic point of
authority as umpire tribunal
better directions of ADR (sec-
30)

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Court power to modify award Tribunal or parties having

powers to modified arbitral
award
Parties shall application to court, Wide powers to tribunal for
if any differences in subject amicable settlement without
matter of arbitration agreement interfere of court in arbitral
agreement
Salient features of Arbitration & Conciliation:

Main objectives Act made as per recommendation of –
a) The judicial authorities is empowered to parties to the
Arbitration on failure of party to means co- operations between
parties.
b) The grounds of challenged the arbitral on also available in
limited purpose before court.
c) The powers of arbitrators have been increased.
d) The arbitral tribunal is competent to rule on its own jurisdiction
minimize supervisory role of court. Every final award same
status like decree of court.
e) The parties to the arbitration are not allowed to use, obstacle
tactics, to delay the arbitration proceedings, permit arbitral
tribunal to use mediation, conciliation and other procedure
f) Time limitation adjournment instructions also available under
law.
g) This Act provide made provision for enforcement of foreign
awards. (New Yark and Geneva Conventions)
h) The status of arbitration award provide equal status as decree
or order of civil courts on the level of domestic as well as
international commercial dispute.
i) Comprehensive act as compare act of 1940. The act of
amendment 2015 made for strengthen to this act with suitable
manner. (Abolished umpire system and more interfere court.

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j) No criteria of qualification or restrictions as place, time,

language, number of arbitration proceedings.
k) Court assistance also made under this act (for ex. Interim
measures)
l) Act made provisions relating jurisdiction and non- application
of subject matters (for ex. – criminal matter, matrimonial, trust
matter or fraud, illegal contractor arbitration and conciliation
Act 1996 made provision of not bound technical rules of law. Pc
or evidence Act)
m)Act includes ‘electronic mean’ as legal documents in arbitral
tribunal.
n) Order of tribunal or award of tribunal is same status live decree
of civil court.
o) Act made provision of non – granting adjournment without
sufficient cause.
p) Award applicable to all transactions.
q) Arbitral award may be set aside if it vidate public, policy,
induced, fraud, fundamental policy of law, conflict morality and
justice.
Arbitration Agreement: (sec- 7 to 9)
• Commercial document, relationship may be contractual or
separate
• Agreement is backbone of arbitral proceedings
• It is one type of compromise, integral part of proceeding
• True meeting of mind by bilateral way
• Shall observe the fundamental principles of Indian contract act
1872 – contract must valid in eyes of valid and binding
agreement
a) Capacity of parties (11,12) major age, sound mind
b) Free consent (free from coercion, under influence)
c) Lawful object (sec- 23 to 27)
d) Consideration (sec- 30)

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e) Shall not uncertain (sec – 29 of contract Act 1872)

f) Shall not against public policy
g) Not forbidden any provision of law
• In every agreement relationship between to parties and parties

and arbitrator shall be legal relationship/ shall not domestic
relations.(Act 2016 given schedule V for domestic relations and
schedule VI for other relations such as lawyer, partner,
counsellor, manager, director, employee, family relationship,
financial relationship
• The relationship must be definite and capable of being
recognised in the eyes of law
• This Provisions encourage the arbitration proceedings and
encourage the parties to settle their disputes by arbitrations.
Sec – 7 (A) – Format of Arbitration Agreement:

• Arbitration of agreement may be in form, means act of 1996
not stated particular format of arbitration agreement.
• There shall be legal relationship between the parties may or
may not contractual.
• Intention to settlement the dispute without rigidity of specific
form.
• Willingness, mutual obligation is essential to enter into
agreement.
Sec – 7 (B) – Shall be in Writing:

• Arbitration agreement shall be in writing.

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• If agreement sign by one party and other party plainly accept it,
it also arbitration agreement (is not binding, but need not
particular form in writing).
Sec – 7 (C) – Sign by Both Parties:

• Sign of arbitral proceedings sign must have authorised person.
Sec – 7 (D) – Means of Communication:

• Communication between the parties may be with letter, telex,
telegram, fax, telecommunication or any electronic mean
(electronic mean word added by Act 3 of 2016)
Sec – 7 (E) :
• Exchange the statement of claim by both parties.
• Arbitral awards applicable all transactions.
• Legal representatives bound to above transactions.
Sec – 8 – Power of party to refer arbitration agreement

before judicial authority:
• This section deals with obligation of civil courts relating to
arbitration agreement.
• Party of arbitral agreement having power to refer arbitration
agreement before judicial authority.
• The court in general plays minimal role in arbitration matters,
but when needful to protection interest and preservation rights
of parties, balance convenience or any legal injury.

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• This provision recognized doctrine of ‘severability’ means if

arbitration agreement in- consistent, that party may be
separated by court.
• The judicial authority observe the grounds of validity of
agreement, legal proceedings and statement of claims.
• The high court observe the evidences of arbitration agreement
between parties.
• It is discretionary power of court to entertain claim of parties.
For ex. – not follows the basic principles of law of contract –
1872, illegal contract, fraud, biasness, not adequate relief etc.
• Judicial authority has no power to stay the legal proceedings
suo – motu unless plaintiff or defendant (वाढी प्रर्तवादी ) have filed
an application before court.
• Normally court would not interfere or grant stay order.
• Third party () which is not party in agreement can approach to
the court for stay order with firm statement and supporting
evidences.
• Party shall apply before court with original on certified
arbitration agreement.
• Notice shall be issued to opposite party before application to
court.
• ‘Limitation of period’ is not mention in Arbitration and
Conciliation Act 1996, but court may apply it in certain
circumstances.
Amendment 2016 (Sec – 8):
Where original arbitration agreement or a certificate
copy is not available to the party, party can pray before court with
produce of original arbitration agreement duly certified copy
before court.

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Sec – 9 – Interim measures by court ( न्यायालयाचे अंतररम उपाय ) :

• Validity of arbitration agreement open for decision before
court.
• A party may approach to court at any time it means during
arbitral proceedings or after making arbitral award. (लवाद कायिवािी
वेळी र्कंवा लवादाचा र्िकाल िोत असतािा).
• A part apply to court relating certain subject matter that is
mean interim measures available to claimant (वाढी) or
respondent or both parties. That are followings –
a) Appointment of guardian for minor or unsound mind in
arbitral proceedings.
b) Preservation and custody or sale of any good.
c) Securing the amount of dispute in proceeding :
In SMS Tea Estates pvt. Ltd vs. Chandmari Tea
company pvt. Ltd 2011 (4) Arb.L.R. 265 Hon. H. that – in case
of insufficient paid instrument (court fee stamp) including
arbitration agreement, no relief granted by court document
shall be as per Maharashtra Stamp Act
In Gold Star Metal Solution vs. Dattaram Gajanan
Kavtankar, 2013 3 AIR Bombay R- 529, Hon. H. C. held that
the court is bound to decide the existence of the arbitration
agreement before proceeding with the application under sec
– 9 of Act of 1996 on merit. Court held that – discretionary
powers of court to entertain application of tribunance
In Rajesh M. Mahtani vs. R. M. Khan, 2013 (6) Bom.
S.R. 607, Hon. H.C. held that there is no provision of stay of
the arbitration proceeding. Mere allegation of fraud and
misappropriation of amount not supported by material
particulars not sufficient. The court observe only material
facts, and not order for stay. ( फक्त fraud चा आरोप म्िणजे लवादाला
स्र्र्गती िािी , त्यासाठी न्यायालयापढु े सबंर्धत परु ावे सादर करावे लागतील )

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d) To enter, possession, observation, detention (ताबा ),

preservation (सरु क्षा ), inspection (तपासणी ) of any property or
things relating dispute of arbitration.
e) Obtaining (प्राप्त करणे ) full information or evidence (परु ावा )
regarding disputed property.
f) Interim injunction (अंतररम तात्परु ती स्र्र्गती ) :
It is golden principle to balance convenience (सर्ु वधा,
उपयक्त
ु ता ) and protection from irreparable (भरूि ि येणारे िक ु साि –
अपररर्मत िािी ) loss or injury (कायद्याची िािी ) relating to arbitral
agreement.
If arbitral proceeding not started within reasonable
time or delay in proceedings, then court may grant interim
relief.
The court can grant interim injunction for recovery of
pending amount of disputed subject matter.
Amendment 2016 :
The arbitral proceeding shall commence within period of 90
days as per order of court.
g) Appointment of receiver (न्यायालयाकडूि व्यवस्र्ा पािणारा ):
Receiver may be appointed during arbitral
proceeding upto award made by arbitral tribunal. Receiver
appointed by court.
Party may make application to court for
appointment of receiver within time means should not
delay.
Party or plaintiff (यार्चका दाखल करणारा पक्षकार ) must show,
there is issue of instant loss or damage to property and need
of appointment of receiver by court.

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The court consider the conduct of party to appoint

receiver. Court may refuse to appoint receiver if de-facto
possession.
h) To provide interim measures (अंतररम उपाय ) to protection by
court with just and convenient manner (सर्ु वधा जिक पध्दतीिे ) and
safeguard or protect the legal interest of parties.
Composition of Arbitral Tribunal ( Sec – 10 to 15)

Sec – 10 – Freeness to decide number of arbitrators:
• Parties are free to decide number of arbitrators, such number
shall not be even number.
• Arbitrator may be sole arbitrator. Law totally provides freeness
to parties to decide the number of arbitrator with their own
mind, but odd number is must to constitute arbitral tribunal.
Sec – 11 – Advantages of appointing an arbitral tribunal:
• A person of any nationality may be an arbitrator, which
agreed by the parties.
• If parties failed to appoint arbitrator, as per request of party,
the supreme court or high court can appoint arbitrator (for
International arbitration S.C., C.J.I)
• If arbitrator fails to perform his procedure, party may
request to court to appointment of arbitrator.
• If decision given by person, which is appointed by court,
such court is final and no appeal or revision shall lie against
such decision, or liable to dismissed.
• If party made application
• High court may finalised the taxes.
• The parties are free to agree on procedure for appointing
the arbitrator or arbitrators.

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• Case law Konkan railway corporation ltd vs. Rani

Construction pvt. Ltd
• Court shall have due care to appoint qualified, independent
and impartial arbitration
Amend 2016 –
If person appointed by court, he shall disclose information
regarding independent and impartial nature of work.
Sec- 11A (Amendment 2016) :
Central government can amend the fourth schedule which
is relating to fee structure or arbitration (model fee structure Rs.
45,000/- to Rs. 30.00 lacs – if sale arbitrator, free payable additional
amount of 25%)
Sec – 12 & 13 (Amendment 2016 ) :
When person appointed as arbitrator, he shall disclose
certain information as per this provision. If an arbitrator not fulfil
these conditions, the parties are free to challenge the procedure of
arbitrator as per sec. 13 of act before the court (mandatory
provision)
Section 12 Section 13
Any interest with parties or Party can challenge within
direct and indirect relationship fifteen days after aware of the
which likely to give rise constitute of arbitral tribunal if
justifiable doubts to his arbitrator not disclose essential
independence and impartially information, then can challenge
(fifth schedule) the tribunal
Issue relating ability to complete Party can challenge within
the entire arbitration which fifteen days after aware of
effect on devote sufficient time constituent arbitral tribunal
before the earth

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(sixth schedule) within period of

12 months without delay
Doubts relating independence Party can send written
and impartiality of arbitrator statement of the reasons for the
challenge of arbitral tribunal
Arbitrator does not possess Party can send written
qualifications agreed to by the statement of the reasons to
parties challenge the arbitral tribunal to
arbitration
Arbitrator aware after Party can challenge to tribunal
appointment of his role for setting aside arbitral award
court decide entitle the fees
Contrary relationship, which is Court may decide to challenge
ineligible as per VII schedule to entitled to any fees, if
necessary to recover.
Sec – 14 – Failures or impossibility to act (specific reasons of

arbitrator if fails):
This is section this will grounds for termination of
arbitral proceeding or the authority of arbitrator –
a) The arbitrator become de – jure (कायदेशीर ररत्या ) or de-facto
(subject matter destroyed) unable to performed his
functions – de- jure – loss of nationality, de- facto – due to
illness, death, accident
b) Some other reasons unable to act without undue delay
means unnecessary delay (इतर कािी करणे र्क ज्यामळ
ु े कृ ती करण्यास र्वलंब
झाला)
c) The arbitrator withdraws from his office (लवादािे त्याचे कायािलयीि
कामकाज बंद के ले)
d) The parties agreed to terminate the authority of arbitrator
or agreement terminate by parties
e) Grounds under Sec – 12 that is –

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i) Doubt regarding independence or impartiality relating

relationship matters (schedule V and VI)
ii) Disclose to the parties certain information
III) Does not possess the qualification agreed by parties
Amendment 2016- It is mandate to arbitrator shall terminate and
shall be substituted (पयाियी) by another arbitrator
Sec- 15 – Additional grounds for termination and

appointment of substitute arbitrator:
Arbitrator shall terminate:
a) Where the withdraw from his office for any reason or
b) By as per agreement of the parties
c) Substitute arbitrators shall be appointed as per rule
d) If arbitrator replaced, previous hearing can be repeated (िव्यािे
सिु ावणी)
Arbitration is the creation of agreement, the only
limitation in it is it not against the substantive (मल
ु भतू ) law of the
country
Arbitration tribunal is formulated as per the
willingness of the parties. It is not necessary for the Arbitration
Tribunal to follow the legal technicalities.
So by this section, arbitrator having mandatory duty of
termination automatically as per legal grounds.
The parties must appoint the substitute arbitrator with
the procedure of law. The status of substitute arbitrator same
like original arbitrator.
Once an arbitrator has been replaced, his appointment
may be repeated the prior hearing, because it is discretionary
Power of substitute arbitrator.

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Sec- 16 & 17 – jurisdiction of Arbitral Tribunals:

Sec- 16 - Doctrine of competence (सक्षमते बाबतचे तत्त्व)
The arbitral tribunal may rule its own jurisdiction with
basic terms of contract, but it shall not beyond the scope of
authority.
Aggrieved parties can challenge the award by
application before court as setting aside under sec – 34
Sec – 34 said that –
a) In capacity of parties
b) Agreement not valid under law
c) Was not given proper notice of appointment of arbitrator
d) Decision of matter beyond scope of arbitration
e) Subject matter of dispute not capable to settlement (defect of
composition tribunal)
f) Award conflict with public policy of India
g) Affected by fraud and corruption
h) Setting aside shall not made after three months of award
Grounds of sec – 34 available under domestic as well
as International Arbitral award.
Arbitrator must be trustful and reliance (अवलंबिू ) on the
ability of the arbitral tribunal to do justice.
This section provide right of parties to make a question
on status or role of arbitrator on grounds of competency (सक्षमता)
Sec – 17- Interim measures by arbitral tribunal: (लवाद द्वारे तात्परु ते

उपाय)
a) As per request of parties to tribunal, party can take any interim
measure for protection of arbitral tribunal
b) There is no provision of this interim measures in prior Act of
1940.

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Once the arbitral tribunal has been constituted, either

party may request the tribunal to pass interim measures to
protect the subject matter in dispute
Conduct of Arbitral Proceedings (Sec – 18 to 27 ):
Free Equal
language treatment to
parties
Conduct of
Shall not Arbitral Arbitrator
unfair/ Tribunal perform
unreasonable honestly
Equal
Natural
justice
opportunity
Conduct of arbitral proceedings (Sec – 18 to 27):

Sec – 18 Equal Treatment to parties:
The parties shall be treated with equality and each party
shall be given a full opportunity to present his case. Section provides
that –
a) Arbitrator perform his functions honestly and impartially.
b) Equal opportunity to present case without taking sides.
c) They are follow principles of natural justice (proper notice of
hearing to each party – each party chance to express news.
d) Shall not respect interest of particular party.

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e) Arbitrator must provide equal opportunity to both parties to

present himself.
f) Proceeding shall not unfair or unreasonable, or arbitrary, that is
vidate principles of natural justice. (Arbitrator should think
proper and reasonable)
g) Arbitrators need to apply their mind to reach final award
h) Reasonable opportunity to heard
i) Impartial act
j) Shall of wrong in eyes of law
One of the key features of arbitration proceedings is
the flexibility. Parties have the freedom to choose or freely
decide conduct of arbitration proceedings. This is generally
known as party autonomy
Sec – 18 provide opportunity of equal treatment. This
guarantee cannot be taken away.
Both parties are to be given a and may their case on its
merits.
Sec – 19 – Determination of rules and procedures: (र्ियम व प्रर्ियेवर
अवलंबिू असणे बाबत)
a) The arbitral tribunal shall not be bound by the code of civil
procedure 1908 or Indian Evidence Act 1872.
b) The parties are free to agree on the procedure to tribunal.
c) Conduct of proceeding consider appropriate manner.
d) Tribunal power to decide admissibility, relevance of evidence
• No bindingness of law, but conduct of proceedings shall not
appropriate
• Procedure before tribunal is quasi – judicial
• Use their own knowledge in taking decision.
• They must not ignore fundamental principles of natural justice.
• Parties can agree to settle dispute by permeant arbitral
institute

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• It is assumption (suppose) to act honestly in deciding

admissibility of evidence.
• An Arbitrator has no right to call a witness himself without the
consent of parties.
• If arbitrator amount to gross omission, it will invalidate the
proceedings and the award.
• There is not bindingness of CPC but arbitrator should apply
principles of natural justice.
• This section given certain discretionary powers to tribunal.
• Arbitrator have to natural justice.
Sec – 20 – Place of Arbitration:
a) The parties are free to agree on the place of arbitration
b) Place of arbitral tribunal decided by circumstances of case
c) Convenience or suitability is considered.
d) Parties can meet any place with appropriate consultation each
other for hearing witness.
This section recognize the principles that parties are
free to place of arbitration by mutual consent (सामर्ु िक समंती)
In Sunshine Chemicals Industry vs. Oriental Carbon & Chemicals AIR
2001 SC 1219 Hon. S.C. held that – even the parties do not agree
with regard to place of arbitration, they were free to authorise any
person including an institution for deciding the venue of the
arbitration.
The parties may choose a different office space in the same
area to hold their next meeting or may choose to change the area,
city or country also it is highly useful not only for domestic
arbitration (देशा अंतगित लवाद) but also international commercial
arbitration (आंतरराष्ट्रीय व्यापार लवाद) convenience (सुलभता) of parties, other
amenities considered under this provision.

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Sec – 21 – Commencement of Arbitral Proceedings:

(लवादाची कायिवािी सरुु करणे)
a) Date of commencement of arbitral proceedings decided by the
both parties means communication of respondent.
b) This section show the view that mutual nassent or consent of
both parties is essential to commencement of arbitral
proceedings.
The parties are free to decide the date of arbitration
proceedings with consent of claimant and respondent. It is one
of the statutory safeguard to parties. It is one of the liberty to
both parties before commence the arbitral proceedings.
Sec – 22 – Language
a) The parties are free to agree upon the language in arbitral
proceedings (भाषेची मक्त
ु ता)
b) Parties can translate any document as per requirement of
arbitral tribunal.
This section gives the parties freedom to agree upon
the language or languages to be used in arbitral proceedings.
This section incorporated in the Act with view of
increasing demand for international arbitration languages of
different countries.
This provision very much important like India, where
there are numerous (र्वर्वध) regional languages, each state
having their own official language.
Sec – 23 – Statement of claim and defence:

a) Claimant () shall shows the facts supporting by claim;

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b) Respondent () shall shows his defence () in respect of disputed

subject matter.
c) The parties may submit their statement, all documents that
may be relevant or may add reference () to the documents.
d) The parties may amend or supplement his claim or defence
during course or arbitral proceedings.
e) This section minimise the role of court relating the issues of
claim of both parties of disputed matter.
f) The respondent, may also submit his counter – claim before
arbitrator tribunal.
Amendment 2016:
Each party may allowed to amend or supplement their
statement of claim and defuse during pendency of arbitral
proceeding. Evidence shall submit to tribunal.
Sec – 24 – Hearing and Written proceeding

(तोंडी व लेखी सिु ावणी िैसर्गिक न्याय तत्वास अिसु रूि)
a) Tribunal shall hold oral hearing with consider to both parties.
b) Tribunal shall given sufficient advance notice of any hearing or
any meeting for the purpose of inspection of documents, good
or other property.
c) Tribunal shall making its decision with communication to the
parties.
This section make certain compulsion of
communication of parties before taking any decision in award.
This section given the views of transparent, independent and
neutral procedure of hearing of tribunal before making award.
This section important to the principles of natural
justice. For ex. – notice or hearing with proper communication.

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Amendment 2016
The tribunal shall, as for as possible, hold oral hearing for the
evidence on day-to-day basis, and not grant any adjournments
(स्र्र्गती) without sufficient cause.
In oral hearing all parties must send reasonable notice and act
as per principles of natural justice.
Sec – 25
a) Without showing sufficient cause, claimant fails to
communicate his statement of claim (sec -23)
b) Respondent (प्रर्तवादी) fails to communicate his statement of
defence (sec – 23)
c) A party fails to appear at an oral hearing or produce
documentary evidence.
This section contain empowers the arbitral tribunal to
dismiss for default of claim. The tribunal shall give sufficient
opportunity to parties to express themselves about claim as
claimant or defendant. It means basic principles of natural
justice should followed by tribunal.
It is the duty of arbitrator to apply his mind as per fact
and circumstances of each case and not proceed ex- party
automatically merely because such notice was given.
Arbitrators should exercise their powers very carefully while
making an ex- party award. The arbitral tribunal shall give fair
chance to both parties, send reasonable notice to parties
before declaration of ex- party award and not treat the
respondent’s absence the claim.

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Sec – 26 – Expert appointment by arbitral tribunal:

a) Arbitral tribunal may one or more experts on specific issues
in tribunal.
b) Tribunal shall provide to the expert all relevant information
or any other documents goods or other property for his
inspection.
c) Parties or any other person shall present before experts as
witness.
This section permits tribunal to take assistance of
experts, who having adequate technological knowledge.
The arbitrators function does not end up with the
appointment of an expert in technical matters, but must
form his own judgement as per the information or opinion
received from the experts.
Expert evidence submit his written or oral report to
the arbitral tribunal, or participate in the oral hearing. The
expert may also be requested to provide any documents,
goods or other property in his possession for necessary
conclusion.
Sec – 27 – Court assistance in taking evidence:

a) A party or arbitral tribunal may apply to the court with
consideration for assistance in taking evidence.
b) The court may execute the request of tribunal or a party for
support of evidence.
c) Any person failing to attend the process of tribunal or default
or refusing give evidence court can issue the order of penalties
or punishment.
d) The court can provide assistance relating process of summons,
commission () for the examination of witnesses and
summonses to produce documents.

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This section given opportunity to a party or tribunal to

take help of court if necessary in certain subject matters.
Evidences should be proper for fair and just decision of award.
If any gross misconduct, pre-judice matter, the court
having discretionary powers for fair justice.
The tribunal request to court for assistance. The court
shall take evidence in the same manner as like civil suit under
the code of civil procedure 1908 and Indian Evidence Act 1872.
Making of Arbitral Award and Termination of proceedings

(sec – 28 to 33)
Sec – 28 – Rule Applicable in Dispute:
a) This section permits to choose any law to govern their arbitral
procedure. They may even choose the national law of any other
state.
b) In International commercial arbitration, rule of law decide by
parties
This section permits to choose any law to govern their
arbitral procedure. They may even choose the nation law any
other state.
This section avoid the conflict of laws relating
international commercial arbitration.
This section having total freedom choice to choose
national laws of different states in process of arbitral tribunal.
So in International commercial arbitration, laws of
procedures chosen by the parties of any country. Common
intention of parties having more importance in International
commercial arbitration.

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Amendment 2016:
While deciding and making on award the arbitral tribunal shall, in all
cases, take into account the terms of contract and trade usages
applicable to the transactions.
Sec – 29 Decision making by power of Arbitration:

a) When arbitral proceedings with more than one arbitrator,
decision of arbitral tribunal shall be made by a majority
decision of majority shall prevail.
b) An award by majority of arbitrators is legally valid. Arbitrators
shall jointly handling of arbitral proceeding to control the
substantial () miscarriage of justice in the arbitral proceedings.
c) All arbitrators must act together with equal manner and must
present in every meeting for mutual discussion and assist each
other in reaching a just and reasonable awards and avoid the
differences between arbitral tribunal.
Decision must be made by the majority of all
members.
Sec - 29A time limit for arbitral award. The award shall be made
within a period of twelve months from the date the arbitral tribunal
enter upon the reference.
Sec- 30 – Settlement:
a) To encourage settlement of the dispute, the arbitral tribunal
may use mediation, conciliation or other procedures at any
time during the arbitral proceedings to encourage settlement.
b) If parties requested to terminate tribunal, it shall be terminate
The arbitral tribunal may use model of mediation,
conciliation or any other procedure at any time during the

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arbitral proceedings to encourage a settlement between

parties.
Sec- 31 – Form and contact of arbitral award:

a) An arbitral award shall be in writing,
b) Shall be signed by the members of arbitral tribunal
c) If more number of arbitrators, signature of the majority of all
members shall be sufficient (so consent is basic factor)
d) The arbitral award shall mention reasons of award
e) The arbitral award shall state its date and place of arbitration
f) Sign copy of arbitral award shall be delivered to each party.
g) Tribunal may be make interim and later on final arbitral award.
h) Cost of arbitral tribunal shall be fixed
i) Cost should be reasonable relating to fees and expenses, legal
fees, administrative fees etc.
j) Expenses shall be connecting with arbitral proceeding and the
arbitral award.
k) Cost includes fees and expenses of arbitrators and witness and
administrative expenses.
Arbitrator is not bound to give detailed reasons of
arbitral award (Gujrat W.S & D. Board vs. Unique Erectors AIR
1989 SC 973). Reasons depends on facts and circumstance.
It is mutual agreement of parties, when arbitration
proceeding provide settlement.
Arbitration proceedings will terminate by mutual
agreement of the parties.
Municipal Corporation, Delhi vs. M/S Jagannath Ashok
Kumar AIR 1987, Hon S.C. held that the reasonableness (योग्यता )
of the reasons given by an arbitrator in making his award
cannot be challenged.

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Dansi Sahu vs. State of Orissa AIR 1990, Hon. S. C. held

that arbitrator is only required to mention in the award the
reference was made to him, no matter whether he relies on
them or discards him.
Sec – 31(7) – Interest can be granted by tribunal
Sec- 32 – Termination of proceedings:

a) The existence of arbitral tribunal comes an end with
termination of the proceedings and making of an award by it.
b) An arbitral proceedings must provide an opportunity to the
both sides for their claim or counter claims.
c) The parties shall be mutually agree to terminate the arbitral
proceedings.
d) The principle of Res Judicata also applicable in case of arbitral
proceedings.
This section provides for the manner (पद्धती) in which
arbitration proceeding may be terminated (रद्द).
Proceeding or award may be terminated.
Sec – 33 – correction award and additional award:

a) Within 30 days from receipt of the arbitral award, a party, with
notice to other party, may request the arbitral tribunal to
correct any computation errors, any clerical or typographical
errors.
b) The tribunal having powers to make additional award with
agreed by parties, within 60 days of receipt of the arbitral
award.
c) The arbitral tribunal has also power to modify the award.

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Where modification is not possible, a party may apply to

the court under sec – 34 of the act to stay the proceedings and
court at it discretion may return the award to the arbitral
tribunal for rectifying the defects or it may set aside the award.
Sec- 34 – recourse against Arbitral Award application for setting

aside arbitral tribunal:
The arbitral tribunal may be set aside by the court only if,
a) A party was under some incapacity
b) The arbitration agreement is not valid under law
c) The party making application before court about not given
proper notice of the appointment of arbitrator.
d) Submission of award beyond the scope of arbitration
e) The composition of the arbitral tribunal or arbitral procedure
was not in accordance with the agreement of the parties.
f) Subject matter of the dispute is not capable of settlement by
arbitration under the law
g) The arbitral award is in conflict (र्वसंगत) with the public policy
(साविजर्िक धोरण) of India.
The parties shall requested to court for set aside of
arbitral tribunal or award.
In oil and Natural Gas Corporation Ltd vs. Saw pipes Ltd, (AIR 2003),
Hon. S.C. observed that the term ‘public policy’ has wider scope and
ward could be set aside if it is –
a) Contrary to fundamental policy of Indian law,
b) Interest of India
c) Justice or morality
d) Patently illegal
e) Unfair and unreasonable, that it shocks the conscience of the
conscience of the court.

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The court can take cognizance (दखल) of challenge to an

arbitral award only when an application is made by an
aggrieved party (अन्यायग्रस्त)
In Associated Engineers vs. Government of Andhra
Pradesh AIR 1991, Hon. S.C. held that the arbitral award can be set
aside on the ground of misconduct of arbitrators as also the
misconduct of arbitral proceedings by the arbitrator.
In K.V. George vs. Secretary to Government AIR 1990
Hon. S.C. held that where the arbitrator failed to take into
consideration the counter – claim () of the respondent () while
arbitral proceeding, the award was liable to be set-aside on the
grounds of misconduct.
In M/S Space & Co. vs. National Building Construction
Corporation Ltd AIR 1988, Hon. S.C. held that legal misconduct
includes breach and neglect of duties by arbitrator, which is resulting
to miscarriage of justice. If there has been mishandling the
arbitration proceedings or serious neglect of duties on the part of
arbitrator, that subject would be justified in setting aside the award.
In Sulekha Clay Mines vs. M/S Alpha Clay and Other
AIR 2005, in this case there is allengation on arbitrator that oral
hearing were granted at the premises of parties without notice of
both parties, mean not given intimation of hearing to parties.
Therefore Hon. S.C. set aside the arbitral tribunal vidating the Sec –
18, 19, 20, 24, of the Act of 1996.
In Ravindra and Associates vs. Union Of India AIR 2010
I. SCC 80, Hon, Supreme court that court cannot interfere with
finding of fact of arbitrator. But if clause in the contract or any issue
is outside the purview of arbitration. An arbitrator cannot decide
contrary to the terms of the contract. (Arbitrator shall follow
principles of contract in tribunal)

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In Numaligarh Refinary ltd. vs. Daelim Industrial Co.

Ltd. AIR 2007, 8 SCC 466, Hon. S.C. held this in case it is found that
the arbitrator has acted without jurisdiction or acted contrary to law,
then in that case, there is no prohibition for the court to set things
right.
In Global Engineering vs. Satyam Computer Services Ltd.
& Anr. AIR 2010 S.C. 3371 Hon. S.C. held that award induced or
affected by fraud or corruption or excess of jurisdiction or lack of due
process, concealment of facts, can be set aside.
In Siddhivinayak Reality Pvt. Ltd. vs. V. Hotel Ltd 2013
4LJ, Hon. Court held that the terms of contract or violation of
statutory provision can be set aside.
In B.M.A. Commodities Pvt. Ltd. vs. Kaberi Mondal &
Anr. AIR 2015, 2 Bom. C.R 457 Hon. S.C. held that the court cannot
correct the errors of the arbitral tribunal under sec – 34 of the Act of
1996. It can set aside the award wholly or partly.
In N. Radhakrishna vs. Maestro Engineers AIR 2010 I SCC
72; issue relating whether the allegation of fraud, fabrication,
malpractices etc. can be referred to arbitration.
Hon. S.C. held that these cases can be settled in court with
detailed evidence. Arbitrator cannot property gone in these issues.
Such allegation should be tried in court of law, which is more
competent.
Above iudicial overruled in next H.S.B.C. Holding Case.
In H.S.B.C.P.I Holding (Ma4ritius) Ltd vs. Avitel Post.
Studioz Ltd ors. AIR 2014, Hon. S.C. held that it is at the discretion of
court to refer the matter to arbitration where there are allegation of
fraud, fabrication or malpractices. It is held that there is no bar (प्रर्तबंध
िािी) to arbitrator from entertaining decide issue of fraud, forgery,
malpractices etc.

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In O.N.G.C. vs. Western Geco. International Ltd AIR 2014

Hon S.C. held that in every case of arbitration, whether by a court or
tribunal or other authority adopt judicial approach, cannot act in an
arbitrary (त्रासदायक) carpricious (सिकीपणा) or whimsical manner.
In Sachin Gupta vs. K.S. Forge Matel Pvt Ltd AIR 2013
Hon. S.C. Held that an award rewarded without notice and without
hearing the party is illegal and liable to be set aside.
Sec – 35:– The Arbitral award is final and binding between the
parties.
Sec – 36:-
Arbitral award having same status like order of civil court and
enforced under code of civil procedure – 1908.
Sec – 37:-
Appeal shall lie to court, but no second appeal shall lie from an
order passed by appeal. No review or revision is permitted against
the order made by court.
Sec – 38 :- Miscellaneous Deposits:-
Deposit payable with equal manner by parties.
Sec – 39 :- Lien on arbitral award and deposit as to cost:
Cost of tribunal shall be paid to arbitrator. If failed to paid, lien
raised on award or deposit as cost of tribunal proceedings.
Sec – 40:- Arbitration award not discharge by death of any party:
Legal represent actives of deceased party can appear as party, if
any death of a party. If party is minor, court can appoint guardian, so
award shall binding to legal representation.

lOMoARcPSD|15339461
Sec – 41:- Case of insolvency:

If any party declared insolvent court can appoint receiver
after request of parties of arbitral tribunal. So it is discretionary
power of court.
Sec – 42:- Court alone having jurisdiction regarding proceedings.
Sec – 43:- The Indian limitation Act 1963 shall apply to arbitrators as
like apply in the civil courts.

Arbitration - I - Lecture Notes 10 For The Arbitration

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Arbitration- I - Lecture notes 10 for the Arbitration

LL.B (Savitribai Phule Pune University)

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Arbitration (1to 37)

Negotiation (sec.30 of arbitration act 1996)

Mini trial (sec.30)

Fast tract arbitration

Consumer protection act (1986)

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On the occasion of the 22nd National Convention of the

126th law commission report on litigation policy (1988)

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Malimath committee report (129th report) on A. D. R.

law of commission (176th law commission report)

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Judicial views on Arbitration

In existing civil court system, there is provision that

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increasing infield of law as well as commercial sector. Growth

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b) Domestic and International arbitration

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The applicable to the International arbitration may be Indian

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law (democratic – freeness

The basic object of Arbitration:

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International Perspective on Arbitration (UNCITRA MODEL – 1985):

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uniformity of the law of arbitral procedures and the specific neds of

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UNCITRAL model – 1985 recognized for settlement of

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This Act based on English law. The English merchants,

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Various law commissions made recommendation relating

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G) Enforcement of certain foreign Award (sec. 44 to 52)

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Sec – 89 of code of civil procedure 1908:

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29B Parties may on any stage of arbitral tribunal, agree in

34(B) An arbitral award arising out of arbitration other than

Distinction between the Act of 1940 & Act 1996:

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Court power to modify award Tribunal or parties having

Salient features of Arbitration & Conciliation:

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j) No criteria of qualification or restrictions as place, time,

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e) Shall not uncertain (sec – 29 of contract Act 1872)

• In every agreement relationship between to parties and parties

Sec – 7 (A) – Format of Arbitration Agreement:

Sec – 7 (B) – Shall be in Writing:

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Sec – 7 (C) – Sign by Both Parties:

Sec – 7 (D) – Means of Communication:

Sec – 8 – Power of party to refer arbitration agreement

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• This provision recognized doctrine of ‘severability’ means if

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