Conduct of arbitral proceedings

Arbitration Proceedings

Section 21 of the Act provides the rules which govern the commencement of arbitral proceedings. It gives freedom to the
parties to agree and determine when the arbitration proceeding can officially commence. But in the absence of such an
agreement or where the parties fail to arrive at an agreement, the arbitral proceedings can commence when one party issues a
notice to the other party, in writing, showing its intention to refer the dispute to arbitration.

So in respect of a particular dispute, the arbitral proceeding commences on the date on which a request for that dispute to be
referred to arbitration is received by the other party. In order to determine the date of receipt, the provisions of Section 3 of
the Act must be looked into.

Limitation period

Section 43 of the Act provides that the Limitation Act, 1963 shall apply to arbitrations as it applies to civil suit proceedings
in the courts, except to the extent expressly excluded by the Arbitration and Conciliation Act. Thus, the date of
commencement of arbitral proceedings assumes relevance for calculating the time-limit for arbitral proceedings under the
Limitation Act, 1963. Any arbitration proceedings commenced after the limitation period, i.e., three years from the date on
which the cause of action arose, will be time-barred.

Equal Treatment of Parties

Section 18 of the Act has two fundamental principles. Firstly, it provides that the parties to an arbitration proceeding shall be
treated with equality and secondly, that each party shall be given a full opportunity to present their case. This section is a
mandatory provision and the arbitral tribunal has to comply with it. The tribunal has to act in an impartial manner to the
parties and no party has to be given an advantage over the other.

Procedure of Arbitral Proceedings

Section 19 of the Act recognises the right of the parties to agree on the procedural rules which are applicable in conducting
the arbitral proceedings. This provision establishes the procedural autonomy of the parties. 

When the parties fail to agree on a procedure or frame the procedure, it grants the arbitral tribunal a wide range of
discretionary powers to frame the arbitral proceedings. The Act does not prescribe any default rules regulating the arbitral
proceedings. 

This provision also provides that the application of the Code of Civil Procedure, 1908 or the Evidence Act, 1872 to the
arbitral proceeding is also at the discretion of the parties.

Place of Arbitration    

Section 20 of the Act provides that the parties are free to agree on the place of arbitration and if they fail to agree then the
arbitral tribunal has to determine the place of arbitration in a judicial manner, considering the circumstances of the case and
convenience of the parties. 

Also, the place of arbitration is of paramount importance because the laws of the place of arbitration play a fundamental role
in the arbitral proceeding. It determines the substantive laws for the time being in force in India. 

Language to be used in Arbitral Proceedings 

Section 22 of the Act deals with the language which has to be used in arbitral proceedings. The parties to the arbitration
agreement are free to choose the language or languages which have to be used in the arbitral proceedings. In cases where the
parties fail to arrive at such an agreement then it is the role of the arbitral tribunal to determine the language or languages to
be used in the arbitral proceedings. The language shall also apply to any written statement by a party, any hearing and any
arbitral award, decision or other communication by the arbitral tribunal.   

When the arbitral tribunal agrees on the language to be used in arbitral proceedings, it may order that any documentary
evidence shall be accompanied by a translation into the language agreed. The arbitral tribunal must ensure that all the parties
are able to follow and understand the proceedings. 

Statement of Claim and Defence  

Section 23 of the Act provides for pleadings of the parties before the arbitral tribunal. After the arbitral tribunal has been
established, the usual practice is to exchange and file their pleadings before the tribunal.
The claimant states the facts and other relevant matters, while the respondent opposes the facts and the averments made in
the claim statement and contests the relief claimed by the claimant. The contents of pleading may vary from case to case
depending upon the facts and circumstances of each case. 

Within six months of the appointment of the arbitral tribunal, the statement of claim and defence has to be completed under
this section.  

Hearing and written proceedings

Section 24 of the Act discusses the manner in which arbitral proceedings are to be conducted. In the absence of any prior
agreement between the parties relating to this matter, the arbitral tribunal has the power to decide whether the proceedings
shall be held orally or on the basis of documents and other materials.   

Default of Party

Section 25 of the Act deals with three situations where the parties are at default. 

Firstly, the arbitral tribunal terminates the proceedings when the claimant without showing sufficient cause, fails to
communicate his statement of claim in accordance with Section 23(1).

Secondly, the arbitral tribunal continues the proceeding when the respondent fails to communicate his statement of
defence in accordance with Section 23(1).

Thirdly, if there is sufficient cause then the termination is recalled and proceeding gets restored.      

Appointment of Experts

Section 26 of the Act gives the arbitral tribunal power to appoint one or more experts based on the requirement or request of
the parties. It requires the parties to provide relevant information to the experts.

Also, the arbitral tribunal cannot appoint experts and delegate the duty of determination of the dispute. 

Court Assistance

Section 27 of the Act provides the arbitral tribunal with the power to apply for the court assistance in taking evidence.
Persons can also be held guilty and tried before the court, if they refuse to give evidence or do not cooperate.  

Termination 

The arbitral proceedings are terminated either by the final arbitral award or by an order of the arbitral tribunal terminating
the arbitral proceedings. 

The arbitral tribunal terminates the arbitral proceedings in any of these cases where:

the claimant withdraws the claim and respondent does not object to it,

both parties are in consensus and agree to terminate the arbitral proceedings, or

the continuation of the arbitral proceedings has become impossible or irrelevant considering the present facts of the case.

Also, the termination of the arbitral proceedings terminates the mandate of the arbitral tribunal and the arbitral tribunal
becomes functus officio. The term “functus officio” means no longer holding office or having official authority once a
decision is rendered.
Making of arbitral award

The passing of decisive reasoning to the questions, issues, and disputes that are brought before the arbitral
tribunal to be resolved is known as an award. After all parties have had a reasonable opportunity to state their
case and exhibit evidence, the award is made. The form and content of arbitral awards are governed by Section
31 of the Arbitration and Conciliation Act which was enacted in 1996. The following are the fundamental parts
of a legitimate Award, as determined by a cursory perusal of this Section: –

The award shall be made in writing. [Section 31(1)]

Subject to the exclusions set forth in Section, it must be signed by all members of the panel.

Subject to the exceptions set forth in Section 31(3), the award should describe the reasons for its existence.

The date of the award should be stated. [Section 31(4)] 

The award shall identify its location; [Section 31(4)]

An interim award can also be given under Section 17; and

After the award is made, each party should receive a signed copy. [Section 31(5)]

In the case of a Tribunal with more than one Arbitrator, Section 31(2) states that signing the Award by the
majority of the Arbitrators is sufficient as long as the Award reflects the reasons for any of the Arbitrators’
refusal to sign the Award.

The Award may be made without stating any grounds if the parties agree. Giving reasons for the award is not
required in the case of a settlement [Section 30].

Arbitration proceedings are stopped after the final award is made, as per Section 32 of the Arbitration and
Conciliation Act, 1996. The Parties may, however, approach the Arbitral Tribunal for rectification and/or
interpretation of the judgement and/or additional award under Section 33 of the Arbitration and Conciliation
Act, 1996. Upon receiving such a request, the arbitral tribunal may analyse it, and if it considers the request to
be reasonable, it may make any necessary corrections or interpret the request as it sees fit. It may also pass any
Additional Award that is warranted. Any such corrections, award interpretations, and/or additional Awards will
be included in the final Award.

Award as may be justified. Any such correction, interpretation of award and/or additional award shall form as a
part of the final Award.

An Award becomes final either upon expiry of the period provided under the statute to challenge the Award or if
challenged, after the final decisions on such challenges.

As may be justifiable. Any such corrections, award interpretations, and/or additional awards will be included in
the final Award. An Award becomes final either when the statute’s challenge time expires or, if challenged when
the final decisions on the challenges are made.

It is important to note that, in addition to the above applicable statute requirements, there are a number of
guiding best practises supported by judicial precedents and provisions in the Arbitration and Conciliation
Act,1996 that must be observed in order for the Award to be valid in law. Here are a few examples:

The Award must be rendered within the provisions of the reference, and the Arbitral Tribunal’s jurisdiction
should not be exceeded while passing the award.

The Award should not be in violation of public decency or the law of the state.

An Award cannot compel the parties to undertake something that is impossible or illegal in and of itself.

The Award must resolve all pertinent and substantial questions addressed and implicated in the Arbitration.

The Tribunal must provide the parties with the opportunity for fair hearings when adjudicating the issues, and
The Award should not be arbitrary or contrary to the evidence on the record, and it should not be based on
assumptions or speculations.

Stamp duty payable on the Final Award must be paid so as to make it enforceable in the eyes of the laws.

Termination of arbitral proceedings

1. By final order of arbitral tribunal

2. Arbitral tribunal order for termination:
a. Claimant withdraws his claim
b. Parties agree on termination
c. Acc to arbitral tri. Proceeding become unnecessary
3. Mandate of arbitral tri. Shall terminate with termination of arbitral proceedings

Correction and interpretation of award, additional award.

1. Within 30 days from receipt of award, unless other period agreed:

a. A party—notice---- other party ---request--- arbitral trib.---- correct any
Computation error
Clerical error
Typographical errors
b. Same a) wali line, ask A.T to interpretation of specific part
2. Within 30 days receipt of request, A,T make correction or interpretation
3. A.T own initiative correct any error from date of arbitral award
4. A party---notice === other party--- may reques---- within 30 days receipt of arbitral award--- to A.T to make
additional awrd
5. If A.T is justified then additional arbitral award within 60 days
6. Extention of time by A.T to correct , give an interpretation

Set aside award

New York convention

June 1958 me aaya hai,,

Oct 1960 me indida member bana

Geneva convention