Module 3 assignment 3

Ans 1:

In India, the courts have identified certain categories of disputes that are considered non-arbitrable,
meaning they cannot be resolved through arbitration. These categories are based on public policy,
statutory provisions, and judicial precedents. Some of the key categories of non-arbitrable disputes
in India include:

a) Criminal Offenses: Disputes involving criminal offenses are generally non-arbitrable. Criminal matters
fall under the jurisdiction of criminal courts, and arbitration is not a suitable forum for adjudicating
criminal liability.
b) Matrimonial and Family Disputes: Matters related to divorce, alimony, child custody, and other
family law issues are typically non-arbitrable due to their sensitive nature and the need for specific
legal procedures.
c) Insolvency and Winding Up: Disputes related to insolvency proceedings and winding up of companies
are subject to specialized legal processes and are typically not arbitrable.
d) Tortious Claims: Claims arising from civil wrongs or torts, such as defamation, personal injury, or
negligence, may be non-arbitrable, especially if they involve a larger public interest.
e) Criminal and Civil Fraud: Cases involving allegations of fraud, whether criminal or civil, may be non-
arbitrable because of their serious nature.
f) Antitrust and Competition Law: Disputes involving violations of antitrust and competition laws may
be considered non-arbitrable due to the public interest involved.
g) Environmental and Public Policy Matters: Disputes related to environmental protection and matters
of significant public policy concern are often considered non-arbitrable.
h) Matters of Public Interest: Cases involving issues of public interest or public policy, such as
constitutional matters, may be non-arbitrable.

Ans 2:

When determining the arbitrability of disputes in the future, Indian courts are likely to consider
several public policy considerations and other factors in accordance with the principles of ADR
(Alternative Dispute Resolution) law in India:

a) Statutory Framework: Courts will assess whether the dispute falls within the framework of the
Arbitration and Conciliation Act, 1996, and complies with statutory requirements, as deviations from
statutory provisions may affect arbitrability.
b) Violation of Fundamental Rights: Matters that involve a potential violation of fundamental rights or
constitutional issues may be considered non-arbitrable due to the fundamental nature of these
rights.
c) Mandatory Legal Regimes: Disputes subject to mandatory legal regimes or specialized tribunals,
such as competition law, insolvency, and family law, may be deemed non-arbitrable to ensure
consistency with the relevant legal framework.
d) Public Interest: Issues that impact public interest or the welfare of society may be kept out of
arbitration to maintain public control, such as environmental protection, consumer rights, and public
health.
e) Criminal Offenses: Disputes with criminal aspects are generally non-arbitrable, as criminal liability
and punishment are typically within the purview of criminal courts.
f) Fraud and Misrepresentation: Courts may be cautious about allowing arbitration for disputes
involving allegations of fraud or misrepresentation, particularly when they affect the integrity of the
arbitration process itself.
g) Dispute Specifics: The specifics of each dispute will be considered, including the nature and
complexity of the issues, to determine whether arbitration is an appropriate and effective means of
resolution.
h) Balance between Judicial and Arbitral Forums: Courts will strive to maintain a balance between
judicial oversight and the autonomy of arbitral tribunals, ensuring that arbitration remains a viable
alternative for dispute resolution.

Ans 3:

Two-tier appellate arbitration clauses, also known as "two-tier arbitration clauses," have been a
subject of debate in India, and their validity has been considered by the courts. These clauses
typically involve two stages of arbitration: the first arbitration for the initial dispute, followed by a
second arbitration for appeals. The validity of such clauses depends on their specific structure and
compliance with Indian law:

a) Validity: Two-tier appellate arbitration clauses are generally considered valid in India, provided they
are not inconsistent with the provisions of the Arbitration and Conciliation Act, 1996, and do not
undermine the basic principles of fairness and due process.
b) Rationale for Validity: Courts in India have recognized the importance of party autonomy in
arbitration. If parties willingly agree to a two-tier appellate arbitration process as part of their
contract, it is seen as a valid exercise of their freedom to choose their dispute resolution mechanism.
c) Compliance with Statutory Provisions: For these clauses to be valid, they must comply with the
statutory requirements of the Arbitration and Conciliation Act. This includes ensuring that the
arbitration process remains fair, impartial, and within the statutory framework.
d) Judicial Oversight: Courts may intervene if they find that the two-tier arbitration clause unduly
restricts access to justice or unfairly favors one party. The clauses must be balanced and reasonable.