VISWAKARMA UNIVERSITY

NAME PRAVEEN TIWARI SRN 202000959

Department Law Course Name

Alternative Dispute
Resolution

Course Code LLB503 Programme LL.B

Semester V Division A Course Teacher (s) Prof. Shruti Das

Write a research paper of 1500 words. Sources should be mentioned clearly in the paper.

Topics as per the list provided on the attached document :

Arbitrable disputes and non Arbitrable disputes

1. ALTERNATIVE DISPUTE RESOLUTION (ADR)
Arbitration is One of the methods of dispute resolution where parties are ready to end
their disputes through an arbitral tribunal. It is an alternative to the legal process of resolving a
dispute or deciding a case by the courts established by law. The Arbitration and Conciliation
Act, 1996 governs the law related to domestic arbitration, international commercial arbitration,
enforcement of foreign awards and conciliation.

Actually ,Arbitration helps in the creating of an agreement between all parties to appoint an
arbitrator who :are selected by consent of the parties for resolution of their dispute.

Common ADR processes include :-

(i) Mediation : In mediation, an impartial person called a "mediator" helps the parties
try to reach a mutually acceptable resolution of the dispute. The mediator does not decide
the dispute but helps the parties communicate so they can try to settle the dispute
themselves. Mediation leaves control of the outcome with the parties.
(ii) Arbitration : In arbitration, a neutral person called an "arbitrator" hears arguments
and evidence from each side and then decides the outcome of the dispute. Arbitration is
less formal than a trial, and the rules of evidence are often relaxed. Arbitration may be
either "binding" or "nonbinding." Binding arbitration means that the parties waive their
right to a trial and agree to accept the arbitrator's decision as final. Generally, there is no
right to appeal an arbitrator's decision. Nonbinding arbitration means that the parties are
 free to request a trial if they do not accept the arbitrator's decision. Click on the video to
the left to see a demonstration of the arbitration process.
(iii) Neutral evaluation : In neutral evaluation, each party gets a chance to present
the case to a neutral person called an "evaluator." The evaluator then gives an opinion on
the strengths and weaknesses of each party's evidence and arguments and about how the
dispute could be resolved. The evaluator is often an expert in the subject matter of the
dispute. Although the evaluator's opinion is not binding, the parties typically use it as a
basis for trying to negotiate a resolution of the dispute.
(iv) Settlement conferences : Settlement conferences may be either mandatory or
voluntary. In both types of settlement conferences, the parties and their attorneys meet
with a judge or a neutral person called a "settlement officer" to discuss possible
settlement of their dispute. The judge or settlement officer does not make a decision in
the case but assists the parties in evaluating the strengths and weaknesses of the case and
in negotiating a settlement. Settlement conferences are appropriate in any case where
settlement is an option. Mandatory settlement conferences are often held close to the date
a case is set for trial.
These processes are confidential, less formal, and less tensionful than traditional court
proceedings.Not only ADR often saves money but also speeds settlement. In mediation, parties
play an important role in resolving their own disputes. This often results in creative solutions,
longer-lasting outcomes, greater satisfaction, and improved relationships.

2. Why SOMEONE GO FOR ADR ?

Some of the reasons for opting ADR are as follows:

(a) Cheaper
(b) Quicker
(c) Not adversarial
(d) Flexibility
(e) Longer lasting

3. .RISK IN USING ADR

There are some situations when ADR may not be appropriate, and may even be risky for one of
the parties.

(a) Power differences

(b) Urgency
(c) Reluctant opponent
(d) No precedent
(e) No ruling on legal rights and entitlements
(f) Can take a long time
(g) Lower compensation amounts
(h) Binding decisions
(i) Quality control
4. Arbitrable disputes and non Arbitrable disputes

Nowadays it has become a preferred mode for companies and parties in order to resolve business
disputes because the process of litigation takes much time. According to 2019 amendment done
to the Arbitration and Conciliation Act, 1996, within 12 months from the date pleadings
completes , an award is supposed to be made by the arbitral tribunal. However ,as according to
Section 29A of the Act, this period of 12 months may be extended by by another 6 months with
the consent of the parties.

According to Section 23(4) of the Arbitration Act , the statement of claim and statement
of defence supposed to be completed within the period of 6 months from the date , notice is
received by arbitrator’s for his appointment. These provisions have been made in order to speed
up the arbitration process.

The legislaturehas reserved certain categories of proceedings for adjudication by courts

and tribunals. The Arbitration and Conciliation Act identifies certain conflicts which cannot be
resolved by this method of arbitration. The court may set aside an award when it is found that the
subject matter of the conflict is not capable of settlement by arbitration [Section 34(2) (b)(i) and
Section 48(2)]. However, the Act does not say anything as far as specifically listing which types
of matters are non-arbitrable.

The meaning of ‘arbitrability’ varies from case to case . The following are three facets of
arbitrability, relating to jurisdiction of the arbitral tribunal:

(i) whether the disputes are capable of adjudication and settlement by arbitration having regard
to their nature;

(ii) whether the disputes are covered by the arbitration agreement or fall under the ‘excepted
matters’ excluded from the scope of arbitration and

(iii) whether the parties have referred disputes to arbitration.

Some of disputes considered which are considered as non-arbitrable disputes consists of those
cases which are related to rights and liabilities arising out of criminal offences, matrimonial
disputes (divorce, judicial separation, restitution of conjugal rights), testamentary matters (grant
of probate, letters of administration and succession certificate), and tenancy matters governed by
special statutes where tenants enjoy statutory protection. The above instances pertain to actions
in rem.

In general, all disputes which are relating to rights in personam are considerable for arbitration.
While on the other hand ,all cases relating to rights in rem are treated by courts or tribunals.

5. Some of the cases of non-arbitrable disputes are :-

● Insolvency disputes,
● Internal company disputes which have to be addressed by a centralised forum,
 ● Grant and issue of patents and registration of trademarks being exclusive matters falling
within sovereign or government function,
● Criminal cases, as they are offences against the State and not just against the victim.
● Matrimonial disputes and Guardianship matters;
● Insolvency and winding up matters;
● Testamentary matters;
● Eviction or tenancy matters
● Trust Deed and the Trust Act matters
● Patent, trademarks and copyright
● Anti-trust/competition laws
● Bribery

The Supreme Court of India has listed certain disputes non-arbitrable namely:

● Disputes relating to rights and liabilities which arise out of or give rise to criminal
offences.
● Matters of guardianship.
● Matrimonial disputes such as divorce, judicial separation, restitution of conjugal rights
and child custody.
● Winding up and insolvency.
● Matters of testamentary like grant of probate, letters of administration and succession
of certificates.
● Disputes regarding trust deeds involving trust, trustees and beneficiaries.
● Matters of tenancy and eviction which are dealt with within the special provisions of a
particular statute and have exclusive jurisdiction.

6. ARBITRABLE DISPUTES

For the parties and their lawyer , the most horrible situation is to file a suit in the courts
and after that wait for years for the settlement. Because of the slow process in courts , Courts
already been burdened with a lot of new cases.

The parties are counseled to seek ADR , in order to reduce the burden of courts, because each
and every case cannot find its way to court.

I) Civil disputes

Every civil and commercial dispute is capable of being adjudicated by arbitration which is right
in personam and is arbitrable whereas non-arbitrable disputes are right in rem and fall under the
jurisdiction of the courts.
 1. Commercial disputes involving
a. business disputes,
b. consumer transactions,
c. boundary disputes and
d. tortious claims are arbitrable
e. Disputes regarding IPR matters are also arbitrable in nature, with respect to
copyright and trademark infringement which involves passing off claims.

All of these fall under the jurisdiction of the arbitration. Other than this, under
Section 8 of the Arbitration and Conciliation Act, 1996, the judicial courts have
the authority to command the parties to refer back to arbitration if their contract
has an arbitration clause and prove the contents of the agreement.

In the case of Bharat Heavy Electricals Pvt. Ltd. v. Assam State Electricity, the Court has
given the following guidelines in respect of tortious arbitrable claims:

1. Claims which are dependable on scope and subject related to the arbitration clause.
2. A claim, which lies in tort, shall be arbitrable if it arises out of, or is related to, the
contract or is consequential upon any breach thereof.
3. If within a contract the claims are connected.
4. The nature of claims depends on the arbitrability of claims.
5. Claims arising out of the contract are still subject to an arbitration agreement if there
is a close connection between claim and transaction.
6. The language of the arbitration clause is interpreted in every case to determine
whether the claims are direct and interactable.

II) Employer-employee disputes in India

The industrial sector in India goes through dynamic changes and to decide the future recourse of
solving the disputes becomes necessary and vital in the corporates. The provisions of Section
10A of the Industrial Disputes Act 1947 (ID), mentions the clause that the employers and
workmen can voluntarily agree to enter into the arbitration agreement to solve their disputes
through the process of arbitration. However, if any employee does not fall under the category of
workmen, then he can, through the agreement of arbitration, can refer to the arbitral proceeding
between employer and employees.

It is advisable that in cases where employer-employee disputes arise, the case should be
referred to either mediation or tribunals (labour courts) as the employer has a strong footing over
the employee which affects the balance of the natural justice and harms the arbitral proceeding.
In cases involving non-workmen, it shall be governed by the arbitration agreement.

III ) Neighbour disputes

“Neighbor Disputes” requires one to take considerable steps towards settling the issue through
way of arbitration rather than pushing the dispute in the trajectory of litigation. The first step to
be taken is to open discussions with your neighbour regarding the issue which can be best
resolved through a way of agreement. Often there is a misunderstanding which can be cleared as
running to the courts is always not the best option. If the first step does not give the desired
results, one can always hire an attorney and do proper research on the title of the land, appraisal
value, or whether the property deeds have been assigned to the other party.

IV) IPR disputes

Whether IPR disputes can be solved through methodology using arbitration or not is still in
question various aspects of the law. It has been decided in several cases that where there is an
infringement of the right of copyright and trademark and involves a passing off, claim can be
adjudicated by the process of arbitration. It is argued by many that the arbitration tribunals are
not competent enough and do not have the jurisdiction for the trial of IPR matters while on the
other hand, people have submitted a strong view that IPR matters can be dealt with by arbitration
and there is no hindrance.

The Courts must practice extreme causation on the powers of their delegation of authority and to
what extent the power can be delegated to the tribunals keeping in mind the statutory provisions
of law and the test of arbitrability decided by the courts while adjudicating upon a matter in
litigation.

V) Frauds

Unless the fraud in question is of a serious and complicated nature, the jurisdiction of the
arbitrator would not be ousted. Mere allegations of a simplicitor fraud would not take away
arbitrability of a dispute where a valid arbitration agreement was in existence.

VI) Intellectual Property Disputes:

The Court applied the Booz Allen caveat and held that disputes relating to patent use and
infringement concern ‘rights in personam’, and therefore, are arbitrable. However, the larger
question of arbitrability of IP Disputes as a class has been left open without any conclusive
jurisprudence.

Evolving Global and Domestic Regime

There has been growing acceptance of arbitration, at least in the international circuit with
commercial interest taking precedence over public policy limitations. As India grows into an
economic powerhouse, with the ever-increasing inflow of capital and investments, there is need
for efficient, autonomous and effective arbitrability of disputes, especially prominent in
commercial spheres, in line with the view of foreign jurisdictions like the US, Singapore, EU and
Australia. With questions on ‘subject-matter arbitrability’ pending before the Apex Court and
various High Courts, India certainly is at the crossroads of determining an arbitration-friendly
regime. It remains to be seen, which side would India’s dream of an arbitration hub flip, in the
near future.

7. Conclusion

The growing trend of arbitration, while dealing with disputes, has made the judicial authorities
realize that it is essential for the governance of law to follow a systematic approach and well-
structured reforms in order to ensure the functioning and implementation of laws in the country.
With the commercialization of business and industry, it is very important to follow a flexible
approach while dealing with private as well as civil suits maintaining the balance between the
statutory and contractual provisions in an agreement. Every matter cannot be given a
straightjacket solution, every aspect and clause of the case must be scrutinized to tailor fit the
arbitral provisions of law.

“Modern times bring modern solutions” is now the approach followed by the interpreters of law
for the quick disposal of a dispute while ensuring the effective and efficient working of the said
tribunals and courts. The uniformity of the arbitral laws in the judicial functioning has set afoot
to the cultural and judicial changes over the period of time. There have been some decisions that
are not in tune or the spirit of the act but it was expressly addressed by the judiciary and the
continuing popularity of the ADR mechanisms.