Q N A - ADR

Alternate Dispute Resolution + Arbitration Act
Important Case Laws

In Renusagar Power Co Ltd vs. General Electric, AIR 1985 SC 1156
the Supreme Court said that the object of this legislation was to facilitate and promote international trade by
providing for speedy settlement of disputes arising in trade through arbitration. It was stated that ordinarily, as a
rule, an arbitrator had no authority to clothe himself with power to decide the question of his own jurisdiction unless
parties expressly conferred such a power on him. ‘
Further the Court held that the question as to the validity of the contract was also for the court to decide under
Section 33 and not for the arbitrator. If there was no arbitration clause at the time of entry of the arbitrators on their
duties, the whole proceedings would be without jurisdiction.
Case- Bhatia International v Bulk Trading SA, AIR 2002 SC 1432,
The Supreme Court of India interpreted the scope of Part I of the Act to apply to arbitrations held outside India and
in turn applied Section 9 in support of arbitrations seated outside India. The said Act does not say that its provisions
will not apply to international commercial arbitrations which take place in a non- convention country. Part II of the
Act only applies to arbitrations which take place in a convention country.
The court held that where such arbitration is held in India the provisions of Part I would compulsorily apply.
However, in cases of international commercial arbitrations held outside India, the provisions of Part I would apply
unless the Parties by agreement, express or implied, excluded all or any of its provisions.
In that case, the laws or rules chosen by the Parties would prevail. Any provision of Part I specifically excluded will
not apply. The present judgment enabled the aggrieved parties in foreign arbitrations to apply for interim relief in
India.
Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., [(2012) 9 SCC 552]
In the landmark cases of Bhatia International and Venture Global Engineering, the Supreme Court had held that Part
I of the Arbitration and Conciliation Act, 1996 set out the procedures, award, interim relief and appeal provisions
with respect to an arbitration award and held that it would apply to all arbitrations held out of India, unless the
parties by agreement, express or implied, exclude all or any of its provisions. The Supreme Court held that there is a
clear distinction between Part I and Part II which apply to completely different fields and with no overlapping
provisions.
The Court in this case also drew a distinction between a ‘seat’ and ‘venue’. The arbitration agreement designates a
foreign country as the seat/place of the arbitration and also selects the Act as the law governing the arbitration
proceedings. The Court also clarified that the choice of another country as the seat of arbitration inevitably imports
an acceptance that the law of that country relating to the conduct and supervision of arbitrations will apply to
the proceedings. Therefore, it can be understood that Part I applies only to arbitrations having their seat / place in
India.
The Court disagreed with the observations made in Bhatia International case and further observed on a logical
construction of the Act, that the Indian Courts do not have the power to grant interim measures when the seat of
arbitration is outside India. Therefore, the arbitral proceedings prior to the award contemplated under Section 36 can
only relate to arbitrations which take place in India. The Court further held that in foreign related international
commercial arbitration, no application for interim relief will be maintainable in India, either by arbitration or by
filing a suit.
Case- K.K Modi v K.N Modi AIR 1998 SC 1297
This case talks about the attributes that make an agreement, an arbitration agreement. According to the Court, a
clause will amount to an arbitration clause only if it contemplates that the decision of the tribunal will be binding on
the parties to the agreement. The Court further went on to say that only if the parties consent to going with the
procedure of arbitration for dispute resolution or if the Court or a statute enables the tribunal to conduct the
arbitration process, only then must the jurisdiction of the arbitration tribunal may be exercised.
The agreement must also agree to it that the substantive rights of the parties will be determined by the agreed
tribunal. To be enforceable in law, the agreement of the parties to refer their disputes to the decision of the tribunal
must be intended. The agreement must also contemplate that the tribunal will make a decision upon a dispute which
is already formulated at the time when a reference is made to the tribunal.
Other important factors include whether the agreement contemplates that that tribunal will receive evidence from
both sides and give the parties opportunity to put forth their issues and hear their contentions; whether the wording
of the agreement is consistent with the view that the process was intended to be an arbitration; and whether the
agreement requires the tribunal to decide the dispute according to law.
Case- J&K State Forest Conservation vs. Abdul Karim Wani, AIR 1989 SC 1498
The Supreme Court held that the interim measures can be granted to aid the arbitration proceedings and not to
frustrate them. The court further held that in the guise of granting an interim measure, the Court cannot resolve the
substance of the dispute – that task belongs to the arbitral tribunal and not the Court.
The issues, in this case, were that how should an arbitration clause construed in a Contract and whether a dispute
between parties can be referred to arbitration or not? The Supreme Court, in this case, held that the Court should
refrain from expressing opinion on merits of the dispute. The Court should find out the intention of the parties, and
that intention has to be found out by reading the terms broadly, clearly, without being circumscribed.
It was further held in this case that the jurisdiction of Court to make interim order is only ‘for the purpose’ of
arbitration proceedings and a court should not to frustrate the same.
Case- National Thermal Power Corporation vs. Singer company, 1992 SCR (3) 106.
In this case, it was held that the Judge has to apply the proper law for the parties by putting himself in the place of a
“reasonable man”. He has to determine the intention of the parties by asking himself “how a just and a reasonable
person would have regarded the problem”. It has been held that where the parties have not expressly or impliedly
selected the proper law, the courts impute an intention by applying the objective test to determine. The judge has to
apply the proper law for the parties by putting himself in the place of a reasonable man.
Case- Puri Construction Company v Union Of India, AIR 1986 SC 777
It was held by the SC that when the court is called upon to decide the objections raised by a party against an award,
the jurisdiction of the court is limited, as expressly indicated in the act and it has no jurisdiction to sit in appeal and
examine the correctness of the award on merits.
The Court also held that if there is no legal proposition either in the award or in any document annexed with the
award which is erroneous and the alleged mistakes or alleged errors, are only mistakes of fact and if the award is
made fairly, after giving adequate opportunity to the parties to place their grievances in the manner provided by the
arbitration agreement, the award is not amenable to corrections of the Court.
Case- Venture Global Engineering v Satyam Computer Services Ltd (2008) 4 SCC 190
The SC held that the enforcement of foreign awards need not be restricted to grounds under Section 45 (which were
narrower), but can also be challenged on the grounds of domestic public policy in India (under Section 34 of the
Act). Prior to this judgment the judicial position was that Part I of the Act applies only to domestic awards and Part
II applies to foreign awards.
The SC held that the Indian courts have the power to intervene in foreign awards issued in international arbitrations
held outside India. According to the Court the award was issued outside India; the parties had not expressly
excluded the application of Part I of the Act in its contract; and in view of the non-obstante provision of the
shareholder’s agreement, Indian law is applicable.
This means that the parties have a right to go to court in India seeking an injunction against the enforcement of a
foreign award. It was held by the SC that if the new facts are relevant and material, the concealment of which
opposes fraud, it opposes general public policy principles and a party attempting to set aside the arbitral award, will
be allowed to introduce the new facts and materials.
Satish Kumar vs. Surinder Kumar, AIR 1970 SC 833
This case talked about Section 35 that contemplates the finality of arbitral awards. The Supreme Court has held that
after the award becomes final, the rights and liabilities of the parties in respect of said claims can be determined only
on the basis of the said award, thereafter, no action can be started on the original claim which had been the subject
matter of the arbitral proceedings.
It was held by the Supreme Court, that the award is in fact, a final adjudication of a court of the rights and liabilities
of the parties, which on the face of it is conclusive upon the merits of the controversy submitted. It was further held
that, an award given under the Arbitration Act requires registration under section 17(1) (b) of the Registration Act if
the award affects partition of an immovable property exceeding the value of Rs, 100/-.
ONGC vs. Saw Pipes, AIR 2003 SC 2629
Section 34 spells out the grounds for setting aside the award. The idea of patent illegality was discussed at length in
this case. The Supreme Court held that an award shown to be suffering from ‘patent error of law’ could also be
challenged under the head “award being in conflict with public policy of India” thereby expanding the grounds for
setting aside of a foreign award. In ONGC, the Supreme Court interpreted ‘patent illegality’ to be under the scope of
‘public policy’ under Section 34.
The Court had relied significantly on the distinction between enforcement of foreign awards and domestic awards to
give an expansionary ambit to public policy in case of the latter. When the award is erroneous on the basis of record
with regard to the propositions of law or its application, the court will have jurisdiction to interfere in the award.
However, such failure of procedure should be patent, thereby affecting the rights of the parties.
Datar Switchgears Ltd vs. Tata Finance Ltd., 2000 (3) RAJ 181 (SC)
What is the role of the Chief Justice if a party does not act as per the arbitration clause? The issue in this case was
about the appointment of an arbitrator under Section 11(6). It was held that Section 11(5) can be invoked by a party
who has requested the other party to appoint an arbitrator and the latter fails to make any appointment within 30
days from the receipt of the notice. An application u/s 11 (6) can be filed when there is a failure of procedure for
appointment of arbitrator. This failure can arise under different circumstances.
It can be a case where a party who is bound to appoint an arbitrator refuses to do so or where the 2 appointed
arbitrators fail to appoint the 3rd arbitrator. If the appointment of an arbitrator is entrusted to any person or
institution and such person or institution fails to discharge such function, the aggrieved party can approach the Chief
Justice for appointment of arbitrator. In this case, it cannot be said that there was a failure of procedure as prescribed
by the Act.
Sundaram Finance Ltd. v. N.E.P.C. India Ltd., AIR 1999 SC 565.
Can interim orders be passed before commencement of arbitral proceedings (i.e. before issue of notice of
commencement of arbitration) as well? The issue in this case was whether under Section 9 of the 1996 Act, the court
has jurisdiction to pass interim orders even before arbitral proceedings have commenced and before an Arbitrator is
appointed. The Indian Arbitration Act borrows heavily from the UNCITRAL Model Law.
Therefore it is important to know that Article 9 of the Model law states that: “It is not incompatible with an
arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure
of protection and for a court to grant such measure”.
Article 9 seeks to clarify that merely because a party to an arbitration agreement requests the court for an interim
measure “before or during arbitration proceedings”, such recourse would not be regarded as being incompatible with
an arbitration agreement. Arbitration may commence and continue notwithstanding a party having approached the
court for interim protection. The expression “before or during arbitration proceedings” used in Section 9 seems to
have been inserted with a view to give it the same meaning as those words in Article 9 of UNCITRAL Model Law.
Olympus Super Structures Pvt. Ltd. v. Meena Vijay Khetan, AIR 1999 SC 2102.
The issue in this case was whether questions regarding jurisdiction of Arbitrator and scope of reference to Arbitrator
under Section 16 of the 1996 Act can be raised at a subsequent stage when the award is challenged under Section 34.
In this case the Court also looked into the issue whether the disputes relating to specific performance of contract can
be referred to arbitration.
The Supreme Court observed that if the parties before the arbitrator had any objection to the Arbitrator’s jurisdiction
the same should be raised before the Arbitrator as provided in Section 16 (2) and (3) of the Act (this is the
competence-competence doctrine). Section 16(5) requires the Arbitral Tribunal to decide on the plea referred to in
Section 16(2) or (3) at the initial stage itself and if the pleas are rejected by the Arbitral Tribunal, it will continue
with the arbitral proceedings and make the arbitral award. However the party aggrieved by such an arbitral award
may make an application to set aside the arbitral award under Section 34 of the Act of 1996.
Further the Court in this case decided that the right to specific performance deals with contractual rights and it is
open to the parties to agree to refer the issues relating to specific performance to arbitration. There is no prohibition
in the Specific Relief Act, 1963 that issues relating to specific performance of contract relating to immovable
property cannot be referred to arbitration. Nor is there such a prohibition in the Act of 1996.
Narayan Prasad Lohia vs. Nikunj Kumar Lohia, 2002(1) RAJ 381 (SC)
The Court in this case discussed whether an arbitration agreement becomes invalid on the ground that it provided for
appointment of only two arbitrators, considering that the act requires an odd number of arbitrators. It was held that
even if the parties provided for appointment of 2 arbitrators, the agreement does not become invalid. Under Section
11(3) the two arbitrators should then appoint a third arbitrator who shall act as presiding arbitrator.
However, such an appointment should preferably be made in the beginning, even though the two arbitrators may
also appoint a third arbitrator at a later stage, if such a situation arises when the two arbitrators differ in opinion.
This ensures that on a difference of opinion the arbitration proceedings do not reach a stalemate. However there
would be no need of a third arbitrator when both the arbitrator so appointed agree and give a common award.
National Aluminium Company Ltd vs. Metalimpex Ltd, 2001(1) RAJ 548 (SC), Appointment of arbitrator
contrary to agreement
The arbitration agreement in this case envisaged that two arbitrators would in turn appoint an umpire. One arbitrator
was appointed by the petitioner who requested the respondent to appoint the other. On the failure of the respondent
to do so, the petitioner approached the Chief Justice for appointment of sole arbitrator.
It was held that a sole arbitrator cannot be appointed in such circumstances in the absence of an agreement between
the parties in this regard. Since the arbitration agreement envisages two arbitrators who in turn would appoint the
presiding arbitrator, it will not be legal to appoint the sole arbitrator, unless both parties agree to it before the court.
In this regard, see the note on Datar Switchgears above.
P. Anand Gajapathi Raju and others vs. P.V.G. Raju and others, (2000) 4 SCC 539
Can an arbitration agreement be entered into after a suit is filed? The issue in this case was whether an “arbitration
agreement” mentioned in Section 8 includes an arbitration agreement entered into during the pendency of a suit
before a court. The parties entered into an arbitration agreement during the pendency of the appeal in the court and
agreed to refer their disputes to an arbitrator. If the party who wants the matter to be referred to arbitration applies to
the court after submission of his statement and the party who has brought the action does not object, as it was in the
present case, there is no bar on the court referring the parties to the arbitration.
It was held that the phrase “which is the subject of an arbitration agreement” does not, in the context, necessarily
require that the agreement must be already in existence before the action is brought in the court. The phrase also
connotes an arbitration agreement being brought into existence while the action is pending.
Skypak Couriers Ltd vs. Tata Chemicals Ltd, (2000) 5 SCC 294
Availability of consumer forum remedies where there is an arbitration clause This case discussed if the existence of
an arbitration agreement was a bar to seek remedy under the Consumer Protection Act. If there is an arbitration
clause in an agreement, and a complaint is made by a consumer regarding a certain deficiency of service, the
redressal agency constituted under the Consumer Protection Act can still entertain such a complaint. The Supreme
Court found fault with the procedure followed by the National Consumer Disputes Redressal Commission in
referring a complaint received by a consumer to a third party for consensual adjudication.
The Court stated that it did not find any provision in the Consumer Protection Act which authorizes the Commission
to refer a pending proceeding before it to a third party for consensual adjudication and later make the decision of the
so-called consensual arbitrator, an order of the Commission itself.
Even if there exists an arbitration clause in an agreement and a complaint is made by the consumer, in relation to a
certain deficiency of service, then the existence of an arbitration clause will not be a bar to the entertainment of the
complaint by the Redressal Agency constituted under the Consumer Protection Act, since the remedy provided
under the Act is in addition to the provisions of any other law for the time being in force.
M.V.Baltic Confidence and another vs. State Trading Corporation of India Ltd. and another, (2001) 7 SCC
473,
A standard arbitration clause contained in a Charter Party Agreement was incorporated in a Bill of Lading.
However, the expression “Charter Party” was not changed to “Bill of Lading” while incorporating the arbitration
clause in the Bill of Lading. The question here arises whether the arbitration clause can be still held to be valid.
The Supreme Court observed that the issue to be considered in this case was “what was the intention of the parties to
the Bill of Lading while incorporating the Arbitration Clause”. The court further said that while incorporating the
conditions of the Charter Party Agreement in the Bill of Lading, specific reference has to be made to the arbitration
clause by use of the expression: “including the law and arbitration clause”.
The Supreme Court also observed that while ascertaining the intention of the parties, attempt should be made to give
meaning to the incorporating clause and to give effect to it and not to invalidate or frustrate it by giving a literal,
pedantic and technical reading of the clause.
In Konkan Railways Corp Ltd Vs Mehul Construction Co, AIR 2000 SC 2821,
It was held by a three judge bench of the Supreme Court, that the order of the Chief Justice in case of appointment
of arbitrators in case of domestic arbitrations and that of the Chief Justice of India in an International commercial
arbitrations (this is made under Section 11 of the Arbitration and Conciliation Act), shall be deemed to have been
made in his administrative capacity and the aggrieved party could approach the arbitral tribunal under Section 16 for
challenging the jurisdiction of the tribunal.
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Arbitration and Conciliation Act, 1996
Arbitration defined
The dictionary meaning of the term ‘arbitration’ states that, ‘the process by which the parties to a dispute
submit their differences to the judgment of an impartial person or group appointed by mutual consent or
statutory provision’.
Arbitration is a form of ADR in which an arbitrator, rather than a judge or jury, applies the law to the facts
of a dispute to resolve the dispute. There are two forms of arbitration: binding and nonbinding. Under
binding arbitration, the parties agree to accept the arbitrator’s decision as final, limiting their right to seek
resolution of the dispute by a court. But under nonbinding arbitration, if either party rejects the arbitrator’s
decision, the parties are generally free to go to court in the regular way. The arbitrator's final decision on the
case is called the “award.” This is like a judge's or jury's decision in a court case.
What does arbitration mean?
Arbitration is the use of an arbitrator to settle a dispute. Arbitration is a procedure in which a dispute is
submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the
dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to
court.
The object of arbitration is to obtain a fair resolution of disputes by an impartial third party without
unnecessary expense or delay. Parties should be free to agree how their disputes are resolved, subject only to
such safeguards as are necessary in the public interest. Courts should not interfere.
Advantages of Arbitration
1. The decision (i.e., award) of arbitral tribunal is final and binding on the parties, arbitral tribunals are not
subject to appeal. Arbitral awards may be challenged only on a very few limited grounds. They may be
enforced like a decree of a Civil Court.
2. Arbitral awards enjoy much greater international recognition than judgments of national Courts.
3. The parties can place themselves on equal footing in matters such as
 Place of arbitration
 Language to be used
 Procedure or rules to be applied
 Nationality of arbitration(in case of international arbitration)
 Legal representation
4. Arbitration is faster and less expensive than litigation in courts.
5. The element of confidentiality which is wanting in judicial proceedings is an attribute of arbitration system.
Arbitration hearings are not public and only the parties receive the copies of the arbitral award.
6. Arbitration offers parties a unique opportunity to designate persons of their choice as arbitrators, which is
not possible in case of courts. This enables the parties to have their disputes resolved by people who have
specialised competence and expertise in the relevant field.
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Contents for file of Sessional work

“Arbitration Agreement”
Write short notes on “Arbitration Agreement.”
Section 7 of The Arbitration and Conciliation Act, 1996 —(1) “arbitration agreement” means an agreement
by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between
them in respect of a defined legal relationship, whether contractual or not.
(2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a
separate agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is contained in—
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of telecommunication including communication
through electronic means which provide a record of the agreement; or
(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one
party and not denied by the other.
(5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration
agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the
contract.
Arbitration agreement is only enforceable in case there arises a dispute between the parties.
Essentials of Arbitration Agreement
 Written Agreement
 Intention
Intention of the parties is of prime importance, the intention of the parties to refer their dispute to arbitration
should be clearly discernible from the arbitration agreement.
 Signature
An arbitration agreement needs to be signed by the parties. The agreement may be in the form of a signed
document by both the parties containing all the terms or it may also be a signed document by one party which
contains the terms and an acceptance signed by the other party. It will suffice if one party puts his signature
in the written submission and the other party accepts it.
Attributes of an Arbitration Agreement
The Hon’ble Supreme Court in a judgment in a landmark case held that the following attributes must be
present in an arbitration agreement:
1. The arbitration agreement must contemplate that the decision of the tribunal will be binding on
the parties to the agreement.
2. That the jurisdiction of the tribunal to decide the rights of the parties must derive from their
consent, or from an order of the Court or from a statute, the terms of which make it clear that
the process is to be arbitration.
3. The agreement must contemplate that substantive rights of the parties will be determined by the
arbitration tribunal.
4. That the tribunal will determine the rights of the parties in an impartial and judicial manner
with the tribunal being fair and equal to both sides.
5. The agreement of the parties to refer their disputes to the decision of the tribunal must be
intended to be enforceable in law.
6. The agreement must contemplate that the tribunal will make a decision upon a dispute which is
already formulated at the time when a reference is made to the tribunal.
Points To Remember While Drafting Arbitration Agreement
1. Seat of Arbitration –The seat of arbitration determines the procedural laws that govern the
arbitration procedure. Seat of arbitration is considered to be a place where arbitrations are held
even if the place of hearings differ. Place of hearings don’t by any means affect the chosen seat of
arbitration.
2. Procedure for Appointing Arbitrators – Section 11 of the Arbitration and Conciliation Act talks
about the appointment of arbitrators. It provides that a person of any nationality may be
appointed as an arbitrator, unless otherwise agreed by the parties. The parties are free to agree
on a procedure for appointing the arbitrator(s). If the parties fail to reach an agreement, in an
arbitration with 3 arbitrators, each party shall appoint one arbitrator, and the two arbitrators
shall thereafter appoint a third arbitrator, who shall be the presiding arbitrator. The
appointment of an arbitrator may be by the parties themselves, or by the designated authority or
by the arbitral institutions. In places where the dispute involves international commercial
transaction, then the arbitrator to be appointed shall not be of the same nationality as the parties
to the dispute.
3. Language of Arbitration – It is important to mention the language of arbitration in the
agreement itself. Especially, in a country like ours, where Hindi and English aren’t the only two
languages spoken, it would get very difficult to decide and settle the disputes. Choosing the
language of arbitration is also very cost effective, because it would save you from paying
exorbitant fees to the translators.
4. Number and Qualifications of Arbitrators – According to Section 10 of the Arbitration and
Conciliation Act of 1996, parties can determine the number of arbitrators, provided that the
number is an odd number. Failing to determine the number of arbitrators, the arbitral tribunal
shall consist of a sole arbitrator.
5. Type of Arbitration – Parties can choose between Institutional or Ad-hoc arbitrations. If the
parties choose the former, then they have to be bound by the rules of the arbitration institutions.
All these institutions have their own set of rules for arbitration and these rules would be
applicable to arbitral proceedings conducted by them. Whereas, in case of Ad-hoc arbitrations,
arbitrations are both agreed to and arranged by the parties themselves. No help is sought from
the arbitral institutions in Ad-hoc arbitrations.
6. Governing Law – This is the law that governs the main point of contention between the parties to
a dispute. It is even known as the substantive law. The parties should mention the law they want
to be governed by, failing which may give way to disputes in the future.
7. Name and Address of the Arbitration Institution – If the parties to the dispute are referring their
disputes to an arbitration centre, then it is pertinent that they mention the name and address of
the arbitration facility in clear and unambiguous words. Inadvertent mistakes can lead to the
nullification of the arbitration clause.
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Arbitral Award
1. In Arbitration proceedings, disputes are settled by an impartial neutral who is a private person, who
is a third party to the dispute, whose decision the parties to the dispute have agreed.
2. Arbitration is not the same as judicial proceedings as it is basically an out of court settlement
process.
3. Arbitration only deals with disputes which are civil in nature.
4. The person by whom the disputes are settled is known as arbitrator or arbiter .
5. The arbitral award or arbitration award refers to an arbitration hearing decision made by an
arbitration tribunal. It is the decision given by the Arbitrator that is known as the Arbitral Award.
6. An arbitral award is equal to a court judgment.
7. The Arbitral Award is final and binding on the parties to the dispute and for the enforcement of such
award the party has to move to the court.
8. Arbitration allows the parties to have a private dispute resolution procedure and avoid national
courts.
9. An arbitral award can never be determined as a contract, it should be determined as a decision out of
a contract.
10. The consent of the parties is not necessarily to be present in a decision.
11. The arbitral award can be final as well as an interim award.
12. The arbitral award can be a ‘domestic award’ or ‘foreign award’.
13. An award by the arbitrator must always be in writing and signed by the arbitrator.
14. An arbitral award may be non-monetary in nature where the claims of the claimant fail and there is
no need for any party to pay any money.
15. An arbitration award may be given for
 payment of a sum of money,
 judgment of any matter to be decided in the arbitration proceedings,
 injunctive relief,
 substantive fulfilment of a contract and rectification,
 setting aside or cancelling an act or other document.
The arbitral award shall be defined as any arbitral tribunal’s judgment on the nature of the dispute referred
to it and shall include a temporary, interlocutory or partial arbitral award.
The arbitral tribunal may grant an interim arbitral award on any matter for which it will make a final
arbitral award at any time during the arbitral proceedings. The interim award may be applied in the same
way as a final award of arbitration. Unless otherwise decided by the parties, a party may ask the arbitral
tribunal to make an additional arbitral award in respect of the claims raised in the arbitral proceedings but
omitted from the arbitral award within 30 days of receipt of the arbitral award.
An arbitral award can be categorised into:

 Domestic Award: Domestic awards are those awards which are the outcomes of domestic arbitration.
It is confined to the territory of India, the parties should have a nexus or birth of Indian origin, the
territory essentially comes into play for domestic arbitration purposes. The award given by an
arbitral tribunal in India or an award, even if it is given by a foreign state for a dispute in which both
parties are of Indian origin and the nationality is also regulated by Indian law, also falls within the
scope of domestic arbitration.
Domestic awards are governed by Part I of the Arbitration and Conciliation Act, 1996. A domestic award is
an award granted pursuant to Section 2 to 43 of the Act.
 Foreign Award: Foreign Award is the outcome of Foreign Arbitration. If the parties choose a foreign
arbitration institution or agree to an ad-hoc arbitration overseas, the award granted after such
proceedings shall be referred to as foreign award.
Part II of the Arbitration and Conciliation Act of 1996 deals with International Arbitration or Foreign
Arbitration. Section 44 of the Act defines with Foreign Award.
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Arbitrator - Qualifications and Capacities

The Indian law does not lay down any specific qualifications for arbitrators. Every person who is of age and
of sound mind can be appointed as an arbitrator. Arbitral institutions include in their panel a wide range of
experts drawn from various professions, trade and business. Their impartiality is ensured by the Arbitration
Committee of the institution which takes care that persons are chosen for their knowledge, experience,
impartiality and integrity. Some arbitral institutions conducting international arbitration in India have
included in their panel of arbitrators foreigners also, in order to enable foreign parties to choose arbitrators
of other nationalities whom they consider more suitable.
The most common grounds to disqualify arbitrators are the lack of independence or the lack of impartiality.
An arbitrator can be removed under section 24 of the Arbitration Act 1996 if, amongst other things,
“circumstances exist that give rise to justifiable doubts as to his impartiality” and if the arbitrator has failed
“properly to conduct the proceedings”. The cases show that dismissal is a rare event.
Composition of arbitral tribunal
10. Number of arbitrators.—
(1) The parties are free to determine the number of arbitrators, provided that such number shall not be an
even number.
(2) Failing the determination referred to in sub-section (1), the arbitral tribunal shall consist of a sole
arbitrator.
11. Appointment of arbitrators.—
(1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.
(2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or
arbitrators.
(3) Failing any agreement referred to in sub-section (2), in an arbitration with three arbitrators, each party
shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall
act as the presiding arbitrator.
(4) If the appointment procedure in sub-section (3) applies and—
(a) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the
other party; or
(b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their
appointment, the appointment shall be made, upon request of a party, by the Supreme Court or, as the case
may be, the High Court or any person or institution designated by such Court;
(5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties
fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party
to so agree the appointment shall be made, upon request of a party, by the Supreme Court or, as the case may
be, the High Court or any person or institution designated by such Court.
(6) Where, under an appointment procedure agreed upon by the parties,—
(a) a party fails to act as required under that procedure; or
(b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that
procedure; or
(c) a person, including an institution, fails to perform any function entrusted to him or it under that
procedure, a party may request the Supreme Court or, as the case may be, the High Court or any person or
institution designated by such Court to take the necessary measure, unless the agreement on the appointment
procedure provides other means for securing the appointment.
(6A) The Supreme Court or, as the case may be, the High Court, while considering any application under
sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of
any Court, confine to the examination of the existence of an arbitration agreement. (6B) The designation of
any person or institution by the Supreme Court or, as the case may be, the High Court, for the purposes of
this section shall not be regarded as a delegation of judicial power by the Supreme Court or the High Court.
(7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) to the Supreme
Court or, as the case may be, the High Court or the person or institution designated by such Court is final
and no appeal including Letters Patent Appeal shall lie against such decision.
(8) The Supreme Court or, as the case may be, the High Court or the person or institution designated by such
Court, before appointing an arbitrator, shall seek a disclosure in writing from the prospective arbitrator in
terms of sub-section (1) of section 12, and have due regard to—
(a) any qualifications required for the arbitrator by the agreement of the parties; and
(b) the contents of the disclosure and other considerations as are likely to secure the appointment of an
independent and impartial arbitrator.
(9) In the case of appointment of sole or third arbitrator in an international commercial arbitration, the
Supreme Court or the person or institution designated by that Court may appoint an arbitrator of a
nationality other than the nationalities of the parties where the parties belong to different nationalities.
(10)The Supreme Court or, as the case may be, the High Court, may make such scheme as the said Court
may deem appropriate for dealing with matters entrusted by sub-section (4) or sub-section (5) or sub-section
(6), to it.] (11) Where more than one request has been made under sub-section (4) or sub-section (5) or
subsection (6) to the Chief Justices of different High Courts or their designates, different High Courts or their
designates, the High Court or its designate to whom the request has been first made under the relevant sub-
section shall alone be competent to decide on the request.
(12) (a) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and sub-section (10) arise in an
international commercial arbitration, the reference to the “Supreme Court or, as the case may be, the High
Court” in those sub-sections shall be construed as a reference to the “Supreme Court”; and
(b) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and sub-section (10) arise in any other
arbitration, the reference to “the Supreme Court or, as the case may be, the High Court” in those sub-
sections shall be construed as a reference to the “High Court” within whose local limits the principal Civil
Court referred to in clause (e) of sub-section (1) of section 2 is situate, and where the High Court itself is the
Court referred to in that clause, to that High Court.
(13) An application made under this section for appointment of an arbitrator or arbitrators shall be disposed
of by the Supreme Court or the High Court or the person or institution designated by such Court, as the case
maybe, as expeditiously as possible and an endeavour shall be made to dispose of the matter within a period
of sixty days from the date of service of notice on the opposite party.
(14) For the purpose of determination of the fees of the arbitral tribunal and the manner of its payment to the
arbitral tribunal, the High Court may frame such rules as may be necessary, after taking into consideration
the rates specified in the Fourth Schedule. Explanation.—For the removal of doubts, it is hereby clarified that
this sub-section shall not apply to international commercial arbitration and in arbitrations (other than
international commercial arbitration) in case where parties have agreed for determination of fees as per the
rules of an arbitral institution.
A Brief Overview of Conciliation

The conciliation process is often compared to mediation and involves a similar situation—two parties who
have a dispute will meet with a third-party neutral and will work together to create a solution to the dispute.
Like mediation, the parties are free to leave without an agreement and continue negotiations after
conciliation. However, unlike mediation, the conciliator has a stronger role in the process of resolution and
can actually assist the parties in coming up with solutions. It provides a place for parties to resolve their
disputes, with some guidance, outside court proceedings, and litigation. So to recap, conciliation service is an
alternative dispute process where the parties attempt to resolve their dispute through the help of a third-
party neutral. The process of conciliation aims to be conciliatory. Conciliatory means that the parties
approach the process in a way to encourages the parties to remain pleasant with each other and reduce any
hostility. It means the parties seek to resolve the dispute and view the issues in a cooperative way, rather than
an adversarial way. This also implies that the parties will seek a way to settle the issue in a way that helps all
the parties feel like they are taking something of value away from the settlement. In short, being conciliatory
means that the parties seek to find a solution that benefits all parties and restores or improves relationships
between the parties.
Conciliation is virtually a non-formal procedure in which a neutral third party called the “conciliator” assists
the disputent parties to reach a settlement of their differences or dispute. In USA, the process of conciliation
is described as “mediation.”
The Act provides that the parties may appoint one or two or three persons as conciliators. They may appoint
a common conciliator or each of the parties may appoint conciliator of their own. Alternatively, they may
appoint one each conciliator and agree on the inclusion of a third conciliator by them.
The process of conciliation as an alternative disputes redressal mechanism is advantageous to the parties in
the sense that
 It is less costly;
 It is less time consuming;
 It is relatively simple and flexible;
 It obviates cumbersome litigation procedure;
 It eliminates the scope for corruption and malpractices;
 It leaves parties free to withdraw from conciliation at any stage of the proceedings;
Like arbitration, conciliation may either be ad-hoc conciliation or institutional conciliation. In ad-hoc
conciliation, the organisation and management are defined by the parties themselves whereas in institutional
conciliation, it is organised by an institution or a specialist centre.
==============================================
Arbitration - Meaning, Types

The dictionary meaning of the term ‘arbitration’ states that, ‘the process by which the parties to a dispute
submit their differences to the judgment of an impartial person or group appointed by mutual consent or
statutory provision’.
Arbitration is a form of ADR in which an arbitrator, rather than a judge or jury, applies the law to the facts
of a dispute to resolve the dispute. There are two forms of arbitration: binding and nonbinding. Under
binding arbitration, the parties agree to accept the arbitrator’s decision as final, limiting their right to seek
resolution of the dispute by a court. But under nonbinding arbitration, if either party rejects the arbitrator’s
decision, the parties are generally free to go to court in the regular way. The arbitrator's final decision on the
case is called the “award.” This is like a judge's or jury's decision in a court case.
What does arbitration mean?
Arbitration is the use of an arbitrator to settle a dispute. Arbitration is a procedure in which a dispute is
submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the
dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to
court.
Categories of Arbitration
Adhoc Arbitration refers to an arbitration where the procedure is either agreed upon by the parties or in the
absence of an agreement the procedure is laid down by the arbitral tribunal. Thus, it is an arbitration agreed
to and arranged by the parties themselves without seeking the help of any arbitral institution. If the parties
are not able to nominate arbitrator(s) by consent, the appointment of arbitrator is made by the Chief Justice
of a High Court (in case of a domestic arbitration) and by the Supreme Court (in case of International
arbitration) or their designate. The fees to be paid to the arbitrator is agreed to by the parties and the
arbitrator concerned.
Institutional Arbitration: In an Institutional Arbitration, it may stipulate in the arbitration agreement, that
in case of dispute or differences arising between them, they will be referred to a particular institution such as
Indian Council of Arbitration (ICA) or International Chamber of Commerce (ICC), Federation of Indian
Chamber of Commerce and Industry (FICCI); World Intellectual Property Organisation (WIPO) etc. All
these institutions have framed their own rules of arbitration which would be applicable to arbitrable
proceedings conducted by these institutions.
Fast track arbitration: Fast track arbitration can be seen as an effective solution to solving the problems
faced because of delays and time-consuming proceedings in other forms of arbitration. It does not involve any
procedure that takes time and upholds the main objective or arbitration, that is, to resolve a dispute in a
short period of time. In the provision of the Act, fast-track arbitration is given a stipulated time period of six
months. The arbitrator only makes use of the written submission and unlike other forms of arbitration, one
sole arbitrator is sufficient to resolve the dispute.
Domestic arbitration: Domestic arbitration takes place in India when the arbitration proceedings, the
subject matter of the contract and the merits of the dispute are all governed by the Indian law; or when the
cause of action for the dispute arises wholly in India or where the parties are otherwise subject to Indian
Jurisdiction.
International arbitration: Inernational arbitration can take place either in India or outside India in cases
where there are ingredients of foreign origin relating to the parties or the subject-matter of the dispute. The
law applicable may be Indian law or Foreign law depending on the agreement between parties in this regard.
==============================================
Appeals and Revision
Appeal
Section 34(3) of the Arbitration Act, 1996 provides that an application for setting aside an arbitral award
must be made within 3 months from the receipt of the arbitral award. The proviso of the said Section 34(3)
confers a limited discretion on the Court to allow such application within a further period of 30 days if the
applicant has been prevented from filing such application within 3 month period due to “sufficient cause”.
Section 37. Appealable orders.—(1) Notwithstanding anything contained in any other law for the time being
in force, an appeal shall lie from the following orders (and from no others) to the Court authorised by law to
hear appeals from original decrees of the Court passing the order, namely:—
(a) refusing to refer the parties to arbitration under section 8(Power to refer parties to arbitration where
there is an arbitration agreement.);
(b) granting or refusing to grant any measure under section 9(Interim measures, etc., by Court);
(c) setting aside or refusing to set aside an arbitral award under section 34(Application for setting aside
arbitral award).
(2) Appeal shall also lie to a court from an order of the arbitral tribunal—
(a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16(Competence of arbitral
tribunal to rule on its jurisdiction); or
(b) granting or refusing to grant an interim measure under section 17(Interim measures ordered by arbitral
tribunal).
(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section
shall affect or takeaway any right to appeal to the Supreme Court.
Notably, the Supreme Court in

Union of India v. Varindera Constructions Ltd. (“Varindera Constructions”)
and
N.V. International v. State of Assam (“N.V. International”)
had held that an appeal under Section 37 cannot be filed after 120 days from the decision of the court under
Section 34 and no condonation of delay is permissible beyond this 120 day period.
Revision
The Supreme Court observed that an Arbitrator cannot modify an Arbitration award on an application
filed under Section 33 of the Arbitration and Conciliation Act.Only in a case of arithmetical and/or
clerical error, the award can be modified and such errors only can be corrected.
Section 33 - Correction and interpretation of award; additional award.—(1) Within thirty days from the
receipt of the arbitral award, unless another period of time has been agreed upon by the parties—
(a) a party, with notice to the other party, may request the arbitral tribunal to correct any computation
errors, any clerical or typographical errors or any other errors of a similar nature occurring in the
award;
(b) if so agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal
to give an interpretation of a specific point or part of the award.
(2) If the arbitral tribunal considers the request made under sub-section (1) to be justified, it shall make
the correction or give the interpretation within thirty days from the receipt of the request and the
interpretation shall form part of the arbitral award. (3) The arbitral tribunal may correct any error of
the type referred to in clause (a) of sub-section (1), on its own initiative, within thirty days from the date
of the arbitral award.
(4) Unless otherwise agreed by the parties, a party with notice to the other party, may request, within
thirty days from the receipt of the arbitral award, the arbitral tribunal to make an additional arbitral
award as to claims presented in the arbitral proceedings but omitted from the arbitral award.
(5) If the arbitral tribunal considers the request made under sub-section (4) to be justified, it shall make
the additional arbitral award within sixty days from the receipt of such request.
(6) The arbitral tribunal may extend, if necessary, the period of time within which it shall make a
correction, give an interpretation or make an additional arbitral award under sub-section (2) or sub-
section (5).
(7) Section 31 shall apply to a correction or interpretation of the arbitral award or to an additional
arbitral award made under this section.
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Conciliation – Distinction between Conciliation, Negotiation and Mediation.
Conciliation can be described as the method adopted by the parties for resolving the dispute, wherein
the parties out of their free consent appoint an unbiased and disinterested third party, who attempts to
persuade them to arrive at an agreement, by way of mutual discussion and dialogue. Any party can
request the other, for appointing the conciliation officer. The conciliation officer or conciliator can be an
individual or a group of people. There will be no conciliation if any one of the two parties rejects the
offer to conciliate. The primary duty of the conciliator is to mediate in and advocate settlement of
industrial disputes. Further, he/she is also responsible for holding conciliatory proceedings, investigating
disputes, sending the report of settlement to Appropriate Government.
Conciliation is characterised by the voluntary will of the parties who want to conciliate the dispute. Its
basic component is confidentiality in which the parties and the conciliator are not permitted to share or
disclose to the external party, anything associated with the proceedings.
Negotiation is the preeminent mode of dispute resolution. While the two most known forms of ADR are
arbitration and mediation, negotiation is almost always attempted first to resolve a dispute. Negotiation
allows the parties to meet in order to settle a dispute. The main advantage of this form of dispute
settlement is that it allows the parties themselves to control the process and the solution. Negotiation is
much less formal than other types of ADRs and allows for a lot of flexibility.
Negotiation refers to a systematic process based on bipartite dialogue between parties in conflict that
seek to reach a mutual agreement, by finding a win-win solution for both. Here, the term conflict does
not mean quarrel, unrest, or disruption, rather it implies disagreement between parties concerning their
interest and rights.
In the case of negotiation, the focus is made on the issue relating to the conflict, rather than the overall
relationship. For instance, in negotiation there is no third party who intervenes to help the parties reach
an agreement, unlike in mediation and conciliation, where the purpose of the third party is to promote
an amicable agreement between the parties.
Mediation is also an informal alternative to litigation. Mediators are individuals trained in negotiations,
who bring opposing parties together and attempt to work out a settlement or agreement that both
parties accept or reject. Mediation is not binding.
Mediation is an industrial dispute settlement system, which is non-binding in nature. In this method,
an independent and unbiased third party is called in by the parties under dispute, to assist them in
arriving at a solution that is mutually agreeable to both parties in dispute. During mediation, the
mediator appointed by the parties attempts to bring agreement between the parties concerned by
initiating communication and offering multiple solutions, to the stand-off issue. Further, it creates such
an environment that eases interaction between the parties.
BASIS FOR
MEDIATION CONCILIATION
COMPARISON
Meaning Mediation is a process of resolving Conciliation is a alternate dispute

issues between parties wherein a resolution method in which an expert is
third party assist them in arriving at appointed to settle the dispute by
an agreement. persuading parties to reach agreement.
Regulated by Code of Civil Procedure, 1908 Arbitration and Conciliation Act, 1996
Basic element Confidentiality, that depends on Confidentiality, whose extent is fixed by

trust. law.
Third Party Acts as facilitator. Acts as facilitator, evaluator and

intervener.
Result Agreement between parties Settlement agreement
Agreement It is enforceable by law. It is executable as decree of civil court.
BASIS FOR MEDIATION CONCILIATION

COMPARISON
BASIS FOR
NEGOTIATION MEDIATION
COMPARISON
Meaning Negotiation is a method of dispute Mediation is also a method of dispute

resolution in which parties settle their resolution in which an independent
BASIS FOR
COMPARISON
conflict and reach an agreement third party assists the parties to

through discussion. conflict in resolving their disputes.
Intervention of No Yes
third party
Meeting Representatives of the parties to A mediator meets both parties jointly

conflict meet to discuss their interests and separately, to talk about the issue.
and rights.
Representation of By the parties themselves or by their By the mediator

interest representatives.
Settlement Parties themselves reach an agreement. The mediator proposes a solution, to

resolve the issues of the parties
concerned.
Outcome Depends on the relationship between Controlled by the parties concerned

the group.
BASIS FOR NEGOTIATION MEDIATION

COMPARISON
==============================================
Arbitral Tribunal-Appointment of Arbitrator, Powers

Whenever a dispute arises between two parties and they decide to resolve the dispute through arbitration, an
arbitral tribunal is to be set up. An “arbitral tribunal” means a sole arbitrator or a panel of arbitrators.
Their task is to adjudicate and resolve the dispute and to provide an arbitral award.
Section 11 of the Arbitration and Conciliation Act, 1996 deals with the appointment of arbitrators.
Appointment of arbitrators.—
(1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.
(2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or
arbitrators.
(3) Failing any agreement referred to in sub-section (2), in an arbitration with three arbitrators, each party
shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall
act as the presiding arbitrator.
(4) If the appointment procedure in sub-section (3) applies and—
(a) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the
other party; or
(b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their
appointment, the appointment shall be made, upon request of a party, by the Supreme Court or, as the case
may be, the High Court or any person or institution designated by such Court];
(5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties
fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party
to so agree the appointment shall be made, upon request of a party, by the Supreme Court or, as the case may
be, the High Court or any person or institution designated by such Court.
(6) Where, under an appointment procedure agreed upon by the parties,—
(a) a party fails to act as required under that procedure; or
(b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that
procedure; or
(c) a person, including an institution, fails to perform any function entrusted to him or it under that
procedure, a party may request the Supreme Court or, as the case may be, the High Court or any person or
institution designated by such Court to take the necessary measure, unless the agreement on the appointment
procedure provides other means for securing the appointment.
(6A) The Supreme Court or, as the case may be, the High Court, while considering any application under
sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of
any Court, confine to the examination of the existence of an arbitration agreement.
(6B) The designation of any person or institution by the Supreme Court or, as the case may be, the High
Court, for the purposes of this section shall not be regarded as a delegation of judicial power by the Supreme
Court or the High Court.
(7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) to the Supreme
Court or, as the case may be, the High Court or the person or institution designated by such Court is final
and no appeal including Letters Patent Appeal shall lie against such decision.
Removal of arbitrators
The provisions for the removal of arbitrators are mentioned in Section 12(3). As per Section 12(3), if the
circumstances suggest that a person is either related to the parties or has a self-vested interest in the dispute
and will not be able to be impartial in the proceedings, then removal proceedings can be initiated against the
arbitrator. Also, an arbitrator can leave the case in between in case of some special circumstances in which he
is not able to act according to the needs of the case and in that case a new arbitrator is appointed. An
arbitrator can also be removed if he/she misconducts in the proceedings in any manner.
Powers of an arbitrator in India
The Arbitration and Conciliation Act, 1996 provides some powers to the arbitrator to assist him/her in
delivering the award. These measures can be taken by the tribunal to facilitate the delivery of arbitral awards
in the concerned dispute. These powers include the following provisions-
Power to administer an oath to the parties and witnesses
The Arbitration and Conciliation Act, 1996 provides arbitrators with the power to administer an oath to the
parties and all the witnesses. This function is available to the arbitrator because he/she acts as a quasi-judicial
officer.
Power to take interim measures
Section 17 of the Arbitration and Conciliation Act, 1996 provides the power to the tribunal to take an interim
measure when a party to the dispute approaches the tribunal for the same. The interim measures that can be
taken by the arbitration tribunal include the following:
1. Appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral
proceedings
2. Preservation, interim custody, or sale of any goods which is the subject-matter of the arbitration
agreement
3. Securing the amount in dispute in the arbitration
4. Interim injunction or the appointment of a receiver
5. Such other interim measures of protection as may appear to the arbitral tribunal to be just and
convenient.
Power to proceed ex-parte
The arbitration tribunal has the power to proceed ex parte (an order which is given in absence of one of the
parties caused on their own will after giving sufficient advance notice for any hearing to parties concerned) if
any of the following conditions arise-
1. In cases where the claimant fails to submit or communicate their statements as per Section 23 of the
Arbitration and Conciliation Act, 1996;
2. In cases where the respondent fails to submit or communicate their statements as per Section 23 of
the Arbitration and Conciliation Act, 1996; and
3. In cases where, any of the parties to the dispute fails to appear at an oral hearing or to produce the
document or any sort of documentary evidence asked by the tribunal.
Power to appoint an expert
Section 26 of the Arbitration and Conciliation Act, 1996 authorises the arbitral tribunal to appoint one or
more experts to assist him on a specific issue if he finds it necessary in any case.
There is only one condition to be satisfied to exercise this power, which is that the expert must have to show
the parties that he has expertise in matters related to this case.
Power to make awards
An arbitral award is based on the interpretation of the facts and evidence by the arbitral tribunal. The
decision of the tribunal is an arbitral award. However, the rules applicable in an arbitration proceeding are
to be verified on the basis of the below-mentioned provisions:
1. In an international commercial arbitration, the dispute shall be decided according to the rules of
proceedings which are decided by the parties, but if they fail to decide upon the rules, then the
arbitrator himself decides them and they become applicable.
2. In other matters, the arbitral tribunal shall have the right to decide the rules which are in
accordance with the substantive law.
Declaring an arbitral award is not only a power conferred on the arbitral tribunals but also a duty on their
part to assess all the information related to the dispute and then decide upon the same.
==============================================
Jurisdiction of arbitral tribunals:

Arbitral tribunals don’t exercise statutory jurisdiction. They define their jurisdiction as per the needs of the
parties involved in the dispute.
Section 16 of Chapter-4 of the Arbitration and Conciliation Act, 1986 talks about the provisions regarding
the jurisdiction of the arbitral tribunal. It basically says that an arbitration clause will be valid even if the
contract is held void. It is to be read as another agreement. It also provides for the provisions of interim
orders and the power of the arbitral tribunal to make them as per Section 17 of the statute.
Functions of arbitral tribunals:
As per Section 2(1)(d) of the Arbitration and Conciliation Act, 2019, an arbitration tribunal refers to a sole
arbitrator or a panel of arbitrators. These people have quasi-judicial authority because they act as private
judges in civil matters. So, under this capacity, they also have some functions to perform, which are as
follows:
To fix time and place for the arbitration proceedings
It is the duty of the tribunal so assigned to finalise the place and time for the proceedings as per the
convenience and consent of the parties to the dispute. But after the finalisation of the time and place, it is the
duty of the parties to produce themselves for the proceedings, otherwise the tribunal can give an ex
parte order.
To decide upon the liability of arbitration-related expenses
It is the duty of the tribunal to decide upon the liability of the expenses of the arbitration proceedings and
then give the verdict on the issue with valid reasoning on their part.
To manage the scope of investigation
It is one of the most critical functions of the arbitration tribunal. An arbitration tribunal should analyse all
the evidence and witnesses to be sure of the circumstances and then take a stand on the basis of which the
arbitral award is given by the tribunal.
To maintain the secrecy of the case
There is an obligation for the arbitrators in the tribunal to maintain the secrecy of all the facts in order to
maintain the trust values defined, intact.
But at the same time, as per Section 12 of the Arbitration and Conciliation Act, 1996, they have to disclose
some facts to the parties so that no sense of partiality is found in the delivery of the award.
To determine the rule of procedure
According to Section 19 of the Arbitration and Conciliation Act, 1996, the arbitration procedure is not bound
by any code of procedure. The arbitration organisation assigned the task of setting up the tribunal for a
particular arbitration case defines the rules for conducting the arbitration proceedings. Most of these rules
are pre-defined by the organisation, and some rules are interpreted during the course of the proceedings.
These have to comply with the other laws of the country.
Duty to interpret or correct the award
According to Section 33 of the Arbitration and Conciliation Act, 1996, it is the duty of the arbitral tribunal to
correct or interpret the award passed by the tribunal assigned, within 30 days from the date of receipt of the
application for the same. It can be done in the following two cases:
1. A party with the notice to the other party may request arbitration tribunal to correct any error of
the sort of typographical, computation, clerical, or any other error of similar nature;
2. A party may, with a notice to the other party, request the tribunal to interpret any specific part or
parts of the award again.
As per this section, the tribunal may correct any error of the award on its own initiative within thirty days
from the date of the arbitration award.
==============================================
==============================================
Seminar on Alternative dispute resolution (ADR) on 07/05/2022

Speaker: Shri Vinay Shrivastava, Senior Advocate, High Court in Bilaspur, Chhattisgarh State
Venue: DP Vipra Law College
Alternative dispute resolution (ADR) refers to the different ways people can resolve disputes without a trial.
Common ADR processes include mediation, arbitration, and neutral evaluation. These processes are
generally confidential, less formal, and less stressful than traditional court proceedings.
==============================================
Write short notes on the following:
Arbitration Agreement:
In short, an arbitration agreement is formed when two parties enter into a contract and agree in writing that
any disputes arising between them out of that contract will have to be resolved without going to the courts
and with the assistance of a neutral person: a third party appointed by both of the parties, known as the
Arbitrator, who would act as a judge and whose decision will be binding upon the parties.
However, the court also recognised that certain disputes shall be excluded from being adjudicated in private
fora and be reserved for their respective fora such as,
 disputes relating to rights and liabilities which give rise to or arise out of criminal offences;
 matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child
custody;
 guardianship matters;
 insolvency and winding-up matters;
 testamentary matters (grant of probate, letters of administration and succession certificate);
 eviction or tenancy matters governed by special statutes where the tenant enjoys statutory
protection against eviction and only the specified courts are conferred jurisdiction to grant
eviction or decide the disputes.
In the Arbitration Act, 1940, the Arbitration Agreement was defined under Section 2(a) as-
“A written agreement to submit present or future differences to arbitration, whether an arbitrator is named
therein or not.”
The vague definition was replaced in the 1996 Act by Section 7 which stated –
“7. Arbitration agreement. —
(1) In this Part, “arbitration agreement” means an agreement by the parties to submit to arbitration all or
certain disputes which have arisen or which may arise between them in respect of a defined legal relationship,
whether contractual or not.
(2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a
separate agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is contained in—
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of
the agreement; or
(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one
party and not denied by the other.
(5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration
agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the
contract.”
Award:
The arbitral award or arbitration award refers to an arbitration hearing decision made by an arbitration
tribunal. An arbitral award is equal to a court judgment. An arbitral award may be non-monetary in nature
where the claims of the entire claimant fail and there is no need for any party to pay any money. The award
can offer a variety of remedies to the parties depending on the issue of the dispute. These possibilities include:
Money: Many awards will decide that one party will need to pay the other party based on the contract or
dispute controlling the award.
Injunctive Remedies: When a court orders that a party must take an action or stop an action, it is called an
injunction. An arbitrator may offer a similar award in a dispute where one party needs such relief.
Incentives: An arbitrator may add incentives for certain behaviors to encourage the parties to comply with
the award.
Creative Relief: Often, the dispute between the parties will have many underlying emotions and interests that
are driving the parties. While the arbitrator will not have as much freedom as a mediator to help the parties
come to a creative agreement, an arbitrator may have one party issue an apology or provide a positive
employment reference.
How is an arbitral award given?
Section 31(1) provides in mandatory terms that an arbitral award shall be made in writing and signed by all
the members of the arbitral tribunal. An award becomes legally enforceable only after it is signed by the
arbitrators, which gives it authentication. No finality can be attached to the award unless it is signed.
Waiver of Right to Object:

The term 'Waiver' in general usage means to renounce any right or claim. It is a conscious informed decision
that a party takes with respect to the renunciation of any right or claim that some other party is obliged to
perform.
Section 4 - Waiver of right to object.—
A party who knows that— (a) any provision of this Part from which the parties may derogate, or (b) any
requirement under the arbitration agreement, has not been complied with and yet proceeds with the
arbitration without stating his objection to such non-compliance without undue delay or, if a time limit is
provided for stating that objection, within that period of time, shall be deemed to have waived his right to so
object.
WAIVER OF RIGHT TO OBJECT IN ARBITRAL PROCEEDINGS
The concept of Waiver of Right to Object can be defined with respect to a party that proceeds with the
arbitration without raising an objection, even after knowing that a requirement under the agreement has not
been complied with. Section 4 of the Arbitration and Conciliation Act, 1996 provides for circumstances under
which a party knowingly fails to comply with requirements under the arbitration agreement. If the party
does not raise any objection against the non-complying party, in the specified time, without undue delay, even
after knowing that the agreement has failed to comply with Part I or any other requirement under the
arbitration agreement, such a party is said to have waived its right to object. This concept has come about in
good faith to protect the arbitral proceedings, and this provision is based on the principle of “estoppel” or
“venire contra factum proprium“ – meaning that it is a contradiction to one’s own previous conduct.
The court, in several of its judgements, has made it clear that the parties to an arbitral proceeding cannot
raise an objection as and when they please, and if they do so, must provide a reasonable justification for the
same. In Satish Kumar v. Union of India, it was held that a party that does not object a certain fact before the
tribunal is estopped from doing so at a later stage. The silence of the party in not raising an objection even
after knowing about its non-compliance is said to be an inconsistent behaviour leading to a waiver of the
party’s right to object. For the purposes of the waiver, the time period must be reasonable, and the nature
and the circumstances of the case must be taken into consideration.
After an arbitration tribunal rules that the party has waived his right to object, the party also loses its right
to object the non-compliance in subsequent proceedings in domestic courts. Only objections against violation
of non-mandatory provisions of applicable arbitration law can be waived. However, there are exceptions to
this, and objections against violation of mandatory provisions of arbitration law can also be waived. Section
16(2) and 16(3) of the Act are the exceptions, and the former provides that a plea saying that the Arbitral
Tribunal does not have jurisdiction cannot be raised later than the submission of the statement of defence.
Section 16(3) provides that an objection can be raised for an arbitral tribunal exceeding its scope shall be
raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral
proceedings.
In the recent case of Quippo, the Supreme Court held that a party that does not dispute a legitimate fact
before the arbitral tribunal would lose its right to object with respect to all those matters. The main objective
of this is to protect arbitral proceedings and is based on the principle of estoppel, which precludes a person
from asserting something contrary to a previous action or statement of that person.
Number of Arbitrators:
Deciding the composition of the arbitrator tribunal is crucial. At times, the subject matter of the contract
may be so intricate and convoluted that it would require the expertise of multiple arbitrators. Furthermore,
in some cases, both the parties may want to exercise the right of appointing a nominee arbitrator.
The 1940 Act allowed the parties to appoint any number of arbitrators. Oftentimes in tribunals where even-
numbered arbitrators were appointed, the award faced inordinate delay due to conflicting opinions between
the arbitrators. Therefore, the 1996 Act, under Section 10, brought a welcomed change allowing the parties to
appoint as many arbitrators as they wished, as long as the number of arbitrators is odd.
Under Article 5 of the 1976 Rules, if the parties have not agreed that there shall be only one arbitrator within
15 days after the receipt by the respondent of the notice of arbitration, three arbitrators will be appointed.
Since appointing multiple arbitrators adds to the cost burden of the parties and causes difficulties in
scheduling dates, the general practice is to appoint either a sole arbitrator or three arbitrators.
Drafting an Effective Arbitration Agreement

The Hon’ble Court arrived at a list of principles that should be incorporated in an arbitration
agreement. The principles are as follows:
 The arbitration agreement must be in writing.
 The parties shall agree to refer any dispute (present or future) arising out of a contract to a private
tribunal.
 The private tribunal should be empowered to adjudicate upon the disputes in an impartial manner,
giving due opportunity to the parties to put forth their case before it.
 The parties must agree to be bound by the decision of the arbitral tribunal.
 The intention of the parties to refer the dispute to a private tribunal must be unequivocally reflected.
 There must be ‘consensus ad idem’ between the parties i.e. they should agree to the same thing in the
same sense.
 The words shall contemplate an obligation and determination on the part of the parties to invoke
arbitration and not merely a possibility. For example, use of the words such as “parties can if they so
desire, refer their dispute to arbitration” or “ in the event of any dispute, the parties may also agree
to refer the same to arbitration” shall not be construed as submission to arbitration.
 The agreement clauses shall not in any way specifically exclude any of the aforementioned essentials.
For example, a clause permitting the tribunal to decide a claim without hearing the other side.
Although it is always preferable to draft clear and unambiguous clauses, an arbitration agreement not
mentioning the words “arbitration”, “arbitration tribunal” and/or “the arbitrator” may still be considered a
valid arbitration agreement if the basic attributes of a valid arbitration agreement (as aforementioned) are
present therein.
What happens after an Award ???

There are a few different ways that the parties may proceed after an award is issued. While the award will
likely be enforced at the end, a party may put significant challenges in the way of enforcement. There are also
remedies if there was a mistake in the award or there needs to be clarification. These different post-award
decisions include:
Correction: If the award includes a minor error such as a clerical error or a computation, the parties may ask
the tribunal to correct it.
Interpretation: Occasionally, the award will not be clear, so some systems allow one or both parties to ask the
court for clarification on a point in the award.
Annulment: This can also be called a challenge or to set aside the award. This is an attack on the procedure of
the arbitration that makes the decision incredibly unjust.
Enforcement: The party that is allowed to collect the judgment or enforce the requirements of the award will
need to follow the correct procedure to gain the benefit conferred by the award.
These options are available after each arbitration; however, there are strict requirements for each action
under certain laws, so it is important to be aware of the reasons and deadlines for each post-award action.
Correction and Interpretation: Under the Federal Arbitration Act, a court in and for the district where the
award was made can make an order modifying or correcting the award if:
Miscalculation or Mistake: If there is a miscalculation of computations that is evident and material or a
mistake in the description of any person, thing, or property that is evident and material.
Not in Jurisdiction: If a tribunal issues an award on a matter that is not part of the agreement to arbitrate
before the tribunal, a court may correct it, as long as it would not affect the merits of the issue before the
arbitral tribunal.
Minor Mistake: If there is a mistake that does not affect the merits of the decision, a court can remedy it.
Alternatively, under the UNCITRAL Model Law, the arbitral tribunal may correct or interpret an award
within 30 days after the award is issued, unless another period is agreed upon. These grounds are:
Correction: A party can ask the tribunal to correct any errors in the calculations, any clerical or
typographical error, or similar errors in the ward. The moving party must give the other party notice. The
tribunal may also correct a mistake like this on its own.
Interpretation: If the parties have agreed to interpretation, a party may request that the tribunal give an
interpretation of a specific term or point in the award.
Additional Award: If a party gives the other party notice, they may request an additional award based on
what was presented to the panel but was not addressed in the award. All of these options provide a way for a
party to clarify or correct an evident or minor mistake in the award, or to get an award for an aspect that
was not included in the award. This type of post-award action is best when there is an evident mistake, a
minor mistake, or a need for further clarification. But if the award was the product of unfair proceedings in
front of the panel, then a party may need to look for annulment to provide a better outcome.
Annulment:
Annulment is the recourse when there is an incredibly unfair action that disrupts the neutrality that is at the
core of an arbitration. The actions that allow an annulment are incredibly limited, so very arbitration awards
are annulled. Under the Federal Arbitration Act, an award may be set aside by a district court if there are
issues in:
Procurement: If the award is procured by corruption, fraud, or undue means.
Partiality: If the arbitrators are partial or corrupt and this was evident in the award.
Arbitrator Conduct: If the arbitrators are guilty of misconduct by refusing to postpone the hearing when
there was cause shown, by refusing to hear evidence pertinent and material to the dispute, or by misbehavior
that has prejudiced a party.
Power: If the arbitrators exceed their power or so poorly execute their power that a mutual, final, and
definite award on the subject matter was not made.Additionally, the UNCITRAL Model Law provides
similar grounds for annulment or setting aside.
These grounds include:

Incapacity: If the agreement to arbitrate can be shown to be made when one of the parties was incapacitated,
there are grounds to set it aside.
Notice: If one of the parties was not given proper notice of the proceedings or tribunal appointment in such a
way that they were not able to prepare their case, that is ground for annulment.
Extra Decisions: If the arbitral tribunal decides on an issue that is outside the terms of the agreement or
beyond the scope, the parts that go beyond the original agreement may be set aside if they can be separated.
If they cannot be separated, the whole award may be set aside.
Tribunal Composition: If the composition of the tribunal is not what was contemplated between the parties,
the award may be set aside.
Judicial Determination: If a court finds that the subject matter of the dispute is not capable of settlement
under the laws of the country or the award is against the public policy of the country. Again, these grounds
are severely limited and often read to be fairly strict so that arbitration agreements and awards will be
upheld.
Enforcement:
Once there is an award and the parties are satisfied that nothing needs to be corrected, interpreted, or set
aside, the award will be enforced. Again, the way that an award is enforced will be dependent on the laws
applicable to the arbitration. However, the New York Convention establishes a list of countries that agree
that they will be responsible for enforcing arbitration awards rendered in other countries that are parties to
the Convention. Most countries or states will have one or many offices where arbitration awards may be
submitted and registered so that they can be enforced. While there may be certain rules depending on where
the award needs to be enforced, the awards will usually be enforced and the party who can recover should
recover.
Conclusion:
Arbitration awards are the final, binding decisions in an arbitration. They set forth the recovery that the
parties are entitled to. A variety of different laws and rules apply to arbitration and the process of awards,
but there are common themes. While there are options for recourse when an award has a mistake or is
unjust, countries and courts prefer to honor arbitration awards to encourage the use of alternative dispute
mechanisms. Awards will be enforced and ensure that a party entitled to the arbitration award receives what
is due to them.
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Explain the powers and functions of the Conciliators under Arbitration and Conciliation Act, 1966.
Part 3rd of the Act deals with conciliation. Conciliation means the settling of disputes without litigation.
Conciliation is a process by which discussion between parties is kept going through the participation of a
conciliator. The main difference between arbitration and conciliation is that in arbitration proceedings the
award is the decision of the Arbitral Tribunal while in the case of conciliation the decision is that of parties
arrived at with the assistance of the conciliator. The law relating to conciliation has been codified for the first
time in India on the pattern of UNCITRAL Conciliation Rules.
Application And Scope- Section 61
1. This part shall apply to conciliation of disputes arising out of legal relationship, whether contractual
or not and to all proceedings.
2. This part shall not apply where by virtue of any law for the time being in force certain disputes may
not be submitted to conciliation.
Section 61 points out that the process of conciliation extends, in the first place, to disputes, whether
contractual or not. But the disputes must arise out of legal relationship. It means that the dispute must be
such as to give one party the right to sue and other party the liability to be sued. The process of conciliation
extends, in the second place, to all proceedings relating to it. But Part 3rd of the Act does not apply to such
disputes as cannot be submitted to conciliation by virtue of any law for the time being in force.
Number And Qualifications of Conciliators- Section 63
Section 63 fixes the number of conciliators. There shall be one conciliator. But the parties may by their
agreement provide for two or three conciliators. Where the number of conciliators is more than one, they
should as a general rule act jointly.
Appointment of Conciliators- Section 64
1. If there is one conciliator in a conciliation proceeding, the parties may agree on the name of a sole
conciliator.
2. If there are two conciliators in a conciliation proceeding, each party may appoint one conciliator.
3. If there are three conciliators in a conciliation proceeding, each party may appoint one conciliator
and the parties may agree on the name of the third conciliator who shall act as the presiding
conciliator.
Sub- section (2) of section 64 provides for the assistance of a suitable institution or person in the appointment
of conciliators. Either a party may request such institution or person to recommend the names of suitable
individuals to act as conciliators, or the parties may agree that the appointment of one or more conciliators be
made directly by such institution or person.
Principles of Procedure
1. Independence and impartiality – Sec 67(1)
The conciliator should be independent and impartial. He should assist the parties in an independent
and impartial manner while he is attempting to reach an amicable settlement of their dispute.
2. Fairness and justice – Sec 67(2)

The conciliator should be guided by principles of objectivity, fairness and justice. He should take into
consideration, among other things, the rights and obligations of the parties, the usages of the trade
concerned, and the circumstances surrounding the dispute, including any previous business practices
between the parties.
3. Confidentiality – Sec 75, 70, proviso

The conciliator and the parties are duly bound to keep confidential all matters relating to the
conciliation proceedings. Similarly, when a party gives an information to the conciliator on the
condition that it be kept confidential, the conciliator should not disclose that information to the other
party. (Sec 70, proviso)
4. Disclosure of information – Sec 70

When the conciliator receives an information about any fact relating to the dispute from a party, he
should disclose the substance of that information to the other party. The purpose of this provision is
to enable the other party to present an explanation which he might consider appropriate.
5. Cooperation of parties with conciliator – Sec 71

The parties should in good faith cooperate with the conciliator. They should submit the written
materials, provide evidence and attend meetings when the conciliator requests them for this purpose.
6. Rules of procedure – Sec 66

The conciliator is not bound by the rules contained in the Code of Civil Procedure, 1908 or the
Indian Evidence Act, 1872. Though the conciliator is not bound by the technical rules of procedure,
he should not ignore the principles of natural justice.
7. Place of meeting – Sec 69(2)
The parties have freedom to fix by their agreement the place where meetings with the conciliator are
to be held. Where there is no such agreement, the place of meeting will be fixed by the conciliator
after consultation with the parties. In doing so the circumstances of the conciliation proceedings will
have to be considered.
8. Communication between conciliator and parties - Sec 69(1)
The conciliator may invite the parties to meet him or may communicate with them orally or in
writing. He may do so with the parties together or with each of them separately.
Procedure of Conciliation
1. Commencement of conciliation proceedings – Section 62
The conciliation proceedings are initiated by one party sending a written invitation to the other party
to conciliate. The invitation should identify the subject of the dispute. Conciliation proceedings are
commenced when the other party accepts the invitation to conciliate in writing. If the other party
rejects the invitation, there will be no conciliation proceedings. If the party inviting conciliation does
not receive a reply within 30 days from the date he sends the invitation, he may elect to treat this as
rejection of the invitation to conciliate. If he so elects he should inform the other party in writing.
2. Submission of statements to conciliator – Section 65

The conciliator may request each party to submit to him a brief written statement. The statement
should describe the general nature of the dispute and the points at issue. Each party should send a
copy of such statement to the other party. The conciliator may require each party to submit to him a
written statement of his position and the facts and grounds in its support. It may be supplemented by
appropriate documents and evidence. The party should send a copy of such statements, documents
and evidence to the other party.
3. Conduct of conciliation proceedings – Section 69(1), 67(3)

The conciliator may invite the parties to meet him. He may communicate with the parties orally or in
writing. He may meet or communicate with the parties together or separately. (Sec 69(1))
In the conduct of conciliation proceedings, the conciliator has some freedom. He may conduct them
in such manner as he may consider appropriate. But he should take into account the circumstances
of the case, the express wishes of the parties, a party’s request to be heard orally and the need of
speedy settlement of dispute. (Sec 67(3))
4. Administrative assistance – Section 68

Section 68 facilitates administrative assistance for the conduct of conciliation proceedings. The
parties and the conciliator may seek administrative assistance by a suitable institution or the person
with the consent of the parties.
Settlement
1. Settlement of dispute – Sec 67(4), 72, 73
The role of the conciliator is to assist the parties to reach an amicable settlement of the dispute. He
may at any stage of the conciliation proceedings make proposals for the settlement of the dispute.
Such proposals need not be in writing and need not be accompanied by a statement of reasons. (Sec.
67(4)) Each party may, on his own initiative or at the invitation of the conciliator, submit to the
conciliator the suggestions for the settlement of the dispute. (Sec. 72)
When it appears to the conciliator that there exist elements of a settlement likely to be accepted by
the parties, he shall formulate the terms of a possible settlement and submit them to the parties for
their observations. After receiving the observations of the parties, the conciliator may reformulate
the terms of a possible settlement in the light of such observations. (Sec 73(1)) If the parties reach
agreement on the settlement of a dispute, a written settlement agreement will be drawn up and
signed by the parties.
If the parties request, the conciliator draw up or assist the parties in drawing up the settlement
agreements. (Sec 73(2)) When the parties have signed the settlement agreement, it becomes final and
binding on the parties and persons claiming under them. (Sec 73(3)) The conciliator shall
authenticate the settlement agreement and furnish its copy to each of the parties. (Sec 73(4)
2. Status and effect of settlement agreement – Sec 74

Section 74 provides that the settlement agreement shall have the same status and effect as an arbitral
award on agreed terms under Section 30. This means that it shall be treated as a decree of the court
and shall be enforceable.
Restrictions on Role of Conciliator – Section 80

Section 80 places two restrictions on the role of the conciliator in the conduct of conciliation proceedings:
1. Clause (a) of Section 80 prohibits the conciliator to act as an arbitrator or as a representative or
counsel of a party in any arbitral or judicial proceeding in respect of a dispute which is subject of the
conciliation proceedings.
2. Clause (b) of Section 80 prohibits the parties to produce the conciliator as a witness in any arbitral or
judicial proceedings.
Termination of Conciliation Proceedings – Section 76

Section 76 lays down four ways of the termination of conciliation proceedings. These are:
1. The conciliation proceedings terminate with the signing of the settlement agreement by the parties.
Here the date of termination of conciliation proceedings is the date of the settlement agreement. (Sec
76(a))
2. The conciliation proceedings stand terminated when the conciliator declares in writing that further
efforts at conciliation are no longer justified. Here the date of termination of conciliation proceedings
is the date of the declaration. (Sec 76(b))
3. The conciliation proceedings are terminated by written declaration of the parties addressed to the
conciliator to the effect that the conciliation proceedings are terminated. Here the date of termination
of conciliation proceedings is the date of the declaration. (Sec 76(c))
4. The conciliation proceedings are terminated when a party declares in writing to the other party and
the conciliator, that the conciliation proceedings are terminated. Here the date of termination of
conciliation proceedings is the date of the declaration. (Sec 76(d))
Resort To Arbitral or Judicial Proceedings – Sec 77

As a general rule, the parties cannot initiate arbitral or judicial proceedings during the conciliation
proceedings in respect of a dispute which is the subject matter of the conciliation proceedings. But in
exceptional cases a party may initiate arbitral or judicial proceedings if in his opinion such proceedings are
necessary for preserving his rights.
Costs – Sec 78
Costs means reasonable costs relating to the following:
1. The fee and expenses of the conciliator and witness requested by the conciliator with the consent of
the parties
2. Any expert advice requested by the conciliator with the consent of the parties
3. Any assistance provided to sec 64(2)(b) and sec 68
4. Any other expenses incurred in connection with the conciliation proceedings and the settlement
agreement. (Sec 78(2))
It is the conciliator who fixes the costs of the conciliation proceedings upon their termination and gives
written notice of it to the parties. (Sec78 (1)) The costs are borne by the parties in equal shares. (Sec 78(3))
Deposits – Sec 79
The conciliator may estimate the costs likely to be incurred and direct each party to deposit it in advance in
an equal amount. During the conciliation proceedings, the conciliator may demand supplementary deposits
from each party. If the require deposits are not paid in full by both parties within 30 days, the conciliator
may either suspend the proceedings or terminate the proceedings by making a written declaration to the
parties.
The termination of proceedings become effective from the date of declaration. Upon termination of the
proceedings, the conciliator shall render to the parties accounts of deposits received and return the
unexpected balance to the parties.
Case Laws Relating To Conciliation

1. Haresh Dayaram Thakur v. State of Maharashtra and Ors. AIR 2000 SC 2281
While dealing with the provisions of Sections 73 and 74 of the Arbitration and Conciliation Act of
1996 in paragraph 19 of the judgment as expressed thus the court held that-
2. From the statutory provisions noted above the position is manifest that a conciliator is a person who
is to assist the parties to settle the disputes between them amicably.
For this purpose the conciliator is vested with wide powers to decide the procedure to be followed by
him untrammelled by the procedural law like the Code of Civil Procedure or the Indian Evidence
Act, 1872.
3. When the parties are able to resolve the dispute between them by mutual agreement and it appears
to the conciliator that their exists an element of settlement which may be acceptable to the parties he
is to proceed in accordance with the procedure laid down in Section 73, formulate the terms of a
settlement and make it over to the parties for their observations; and the ultimate step to be taken by
a conciliator is to draw up a settlement in the light of the observations made by the parties to the
terms formulated by him.
4. The settlement takes shape only when the parties draw up the settlement agreement or request the
conciliator to prepare the same and affix their signatures to it. Under Sub-section (3) of Section 73
the settlement agreement signed by the parties is final and binding on the parties and persons
claiming under them.
It follows therefore that a successful conciliation proceedings comes to end only when the settlement
agreement signed by the parties comes into existence. It is such an agreement which has the status
and effect of legal sanctity of an arbitral award under Section 74.
5. Mysore Cements Ltd. V. Svedala Barmac Ltd. AIR 2003 SC 3493
It was said that Section 73 of the Act speaks of Settlement Agreement. Sub-section (1) says that when
it appears to the Conciliator that there exist elements of settlement which may be acceptable to the
parties, he shall formulate the terms of a possible settlement and submit them to the parties for their
observation. After receiving the observations of the parties, the Conciliator may reformulates the
terms of a possible settlement in the light of such observations.
In the present case, we do not find there any such formulation and reformulation by the Conciliator,
under Sub- section (2), if the parties reach a settlement agreement of the dispute on the possible
terms of settlement formulated, they may draw up and sign a written settlement agreement. As per
Sub-section
6. When the parties sign the Settlement Agreement, it shall be final and binding on the parties and
persons claiming under them respectively. Under Sub-section (4), the Conciliator shall authenticate
the Settlement Agreement and furnish a copy thereof to each of the parties. From the undisputed
facts and looking to the records, it is clear that all the requirements of Section 73 are not complied
with.
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What is the distinction between Conciliation, Negotiation and Mediation ?
The basic difference between mediation and conciliation is based on the role played by the third party who is
selected by the parties seeking a settlement, in consensus. In mediation, the mediator acts as a facilitator who
helps the parties in agreeing. Conversely, in conciliation, the conciliator is more like an interventionist who
provides probable solutions to the parties concerned, to settle disputes.
Mediation is a form of alternate dispute resolution, wherein parties mutually appoint an independent and
impartial third party, called as the mediator who helps the parties in reaching an agreement which is
mutually accepted by the parties concerned. Mediation is a systematic and interactive process, which
employs negotiation techniques to assist the parties in finding the best possible solution to their problem.
As a facilitator, mediator attempts to facilitate discussion and build an agreement between the parties with an
aim to settle the dispute. The decision made by the mediator is not binding like an arbitral award.
Conciliation can be described as the method adopted by the parties for resolving the dispute, wherein the
parties out of their free consent appoint an unbiased and disinterested third party, who attempts to persuade
them to arrive at an agreement, by way of mutual discussion and dialogue.
Conciliation is characterised by the voluntary will of the parties who want to conciliate the dispute. Its basic
component is confidentiality in which the parties and the conciliator are not permitted to share or disclose to
the external party, anything associated with the proceedings.
BASIS FOR
MEDIATION CONCILIATION
COMPARISON
Meaning Mediation is a process of resolving Conciliation is a alternate dispute resolution

issues between parties wherein a third method in which an expert is appointed to
party assist them in arriving at an settle the dispute by persuading parties to
agreement. reach agreement.
Regulated by Code of Civil Procedure, 1908 Arbitration and Conciliation Act, 1996
Basic element Confidentiality, that depends on trust. Confidentiality, whose extent is fixed by law.
Third Party Acts as facilitator. Acts as facilitator, evaluator and intervener.
Result Agreement between parties Settlement agreement
Agreement It is enforceable by law. It is executable as decree of civil court.
BASIS FOR MEDIATION CONCILIATION

COMPARISON
What is the difference between Arbitration and Conciliation ?

The primary difference between arbitration and conciliation is that arbitration is the process by which
parties select an independent person, who renders a decision regarding the case. Conversely, conciliation
attempts to make parties come to an agreement, about the problem at hand.Arbitration is a dispute
settlement process in which a impartial third party is appointed to study the dispute and hear both the party
to arrive at a decision binding on both the parties. Conciliation is a method of resolving dispute, wherein an
independent person helps the parties to arrive at negotiated settlement.
Comparison chart:
BASIS FOR
ARBITRATION CONCILIATION
COMPARISON
Meaning Arbitration is a dispute settlement process in Conciliation is a method of resolving

which a impartial third party is appointed to dispute, wherein an independent
study the dispute and hear both the party to person helps the parties to arrive at
arrive at a decision binding on both the negotiated settlement.
parties.
Enforcement An arbitrator has the power to enforce his A conciliator do not have the power
decision. to enforce his decision.
Prior Agreement Required Not Required
Available for Existing and future disputes. Existing disputes.
Legal proceeding Yes No
BASIS FOR ARBITRATION CONCILIATION

COMPARISON
Comparison Chart
BASIS FOR
COMPARISON
Meaning Negotiation is a method of dispute Mediation is also a method of dispute

resolution in which parties settle their resolution in which an independent third
conflict and reach an agreement through party assists the parties to conflict in
discussion. resolving their disputes.
Intervention of No Yes
third party
Meeting Representatives of the parties to conflict A mediator meets both parties jointly and
meet to discuss their interests and rights. separately, to talk about the issue.
Representation of By the parties themselves or by their By the mediator

interest representatives.
Settlement Parties themselves reach an agreement. The mediator proposes a solution, to

resolve the issues of the parties
concerned.
Outcome Depends on the relationship between the Controlled by the parties concerned
group.
BASIS FOR
COMPARISON
BASIS FOR NEGOTIATION MEDIATION

COMPARISON
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Discuss the objects and importance of the Lok Adalat.

Lok Adalat is a system of conciliation or negotiation. It is also known as ‘people’s court’. This system is
based on Gandhian principles. Lok Adalat is a forum where the cases (or disputes) which are pending in a
court or which are at the pre-litigation stage are compromised or settled in an amicable manner. As the Indian
courts are overburdened with the backlog of cases involving lengthy, expensive and tedious procedures. The
court takes years together to settle even petty cases. Lok Adalat, therefore, provides alternative resolution or
devise for expeditious and inexpensive justice. It has proved to be a very effective alternative to litigation.
These are subordinate courts at the village level which provide a system for alternate dispute resolution in
villages. In the olden times, this system was also known as the Panchayat system. This concept of the
settlement of disputes through mediation, negotiation or arbitration is conceptualized from the philosophy of
Lok Adalat. The awards passed by a Lok Adalat are considered to be a decree of a Civil Court and shall be
final and binding on all the parties of the dispute (there shall also be no appeal against the award).
Origin of Lok Adalats
The concept of Lok Adalat goes back to the pre-independence or the British period. It served as an effective
system amongst the litigants. This was one of the most suitable methods for the Indian environment, culture
and social interest. The Lok Adalat was first started in Gujarat in March 1982 and slowly spread across the
country. The advent of Legal Services Authorities Act, 1987 gave a statutory authority to Lok Adalats,
pursuant to the constitutional mandate in Article 39-A of the Indian Constitution. The act mandates to provide
free legal services to the weaker sections of the society and ensure that justice is not denied to any of the
citizens.
Objectives of Lok Adalat
The Lok Adalat was organised with the following objectives amongst others:
 To provide speedy justice.
 To generate awareness amongst the public regarding the conciliatory mode of dispute settlement and
legal sanctity of Lok Adalat.
 To gear up the process of organising Lok Adalat.
 To provide a supplementary to the mainstream legal system.
 To encourage the public to settle their cases outside the formal set-up.
 To empower the public to participate in the justice delivery system.
Powers of Lok Adalat
 The Lok Adalat will have similar powers of a Civil Court and is governed under the Code of Civil
Procedure.
 It has the power to summon and enforce the attendance of a witness.
 Power to receive evidence regarding a particular case.
 The Lok Adalat has the power to follow its own procedure for determining any dispute.
 The proceeding of a Lok Adalat is considered to be judicial proceedings.
Procedure at Lok Adalat
 The parties must first file the dispute or at least verbally mention the matter before the court.
 Any one of the party may also file an application for referring the dispute to Lok Adalat and court
after hearing all the parties, if the basic requirement is fulfilled and if there is any chance of
settlement, then parties may refer the dispute to Lok Adalat.
 The Lok Adalat then sits and tries to come to a proper settlement which is in accordance with the
principles of justice and equality.
 If they are unable to settle the dispute, the dispute is returned to the court.
Recently, the first National Lok Adalat organised in seven months disposed off nearly 3 lakh cases through
1,318 benches across Maharashtra, with a total settlement amount of Rs 1313.34 crores. In this context, let us
look at the importance of Lok Adalats in India.
Who organises Lok Adalats ? Lok Adalats can be organised in any area by:
 District Legal Services Authority
 State Legal Services Authority
 Taluk Legal Services Committee
 High Court Legal Services Committee
 Supreme Court Legal Services Committee
Every Lok Adalat consists of serving or retired judicial officers, and other people of the concerned area, as
specified by the organising Authority/Committee.
What cases can a Lok Adalat look into?
 A Lok Adalat can decide disputes where the law permits a compromise or settlement between
individuals. It can take up cases at the pre-litigation stage as well as pending court cases. However, a
Lok Adalat organised for a specific area can only look into cases applicable for the court having
judicial authority over the area.
When can a Lok Adalat take up a case?
A Lok Adalat can take notice of a case in the following circumstances:
 If both the disputing parties agree to refer a dispute to the Lok Adalat.
 If one of the parties requests the concerned court to refer the case to the Lok Adalat, and the court
thinks that there are chances of settlement at the Lok Adalat. Before transferring the case, the court
needs to hear out the other party.
 If one of the parties makes an application to the Authority or Committee organising the Lok Adalat,
and they refer it to the Lok Adalat.
 If the concerned court believes that the matter is appropriate for the Lok Adalat and refers the case.
Before transferring the case, the court needs to hear out both parties.
How does the Lok Adalat resolve disputes?
 When any case is referred to a Lok Adalat, it will proceed to speedily dispose off the case and arrive at
a settlement between the parties. While doing so, the Adalat should follow the principles of natural
justice.
 In a court-referred case, if the Adalat does not make a decision because the parties refuse to
compromise, it will return the case record to the concerned court. The court will then proceed to deal
with the case from the stage which was reached before it was referred to the Adalat.
 If the case has been referred by the Authority or Committee organising the Lok Adalat, and the Adalat
does not make a decision because the parties refuse to compromise, it will advise the parties to seek
remedy in a court.
==============================================
Under what circumstances may Court remit an award to the Arbitrator for reconsideration ? Explain.
Grounds allied to setting aside of Arbitration Awards
Sec. 34 of the Arbitration and Conciliation Act 1996 deals with the setting aside of the arbitral award. In order to set aside
an arbitral award, individual needs to file an application in the court. Such an application by the party may be
acknowledged or discarded by the court. This provision of challenging is diverse than the procedure of appeal. When the
arbitral tribunal gives an award, it is diverse from the judgment which a court usually gives. The court in general accepts
an application of challenge only if it comes under ambit of Sec. 34 (Recourse against arbitral award)only. Therefore, in
this scheme of the new law, there is no scope for remission(cancel or refrain from exacting or inflicting a debt or
punishment. This law deals with grounds for setting aside the award.
Under Section 34 an aggrieved party may apply to the court within three months of receipt of the award, for setting aside
the award. The grounds are set out in Section 34(2)(a) and Section 34(2)(b), at great length. They may be stated in brief as
below :-
1. Incapacity of a party.
2. Agreement not valid.
3. No notice to the other party.
4. Subject matter extent to the scope of the arbitration agreement.
5. Formation of Tribunal not as per the agreement.
6. Subject matter not under the arbitration law.
7. Award in conflict with the public policy of India.
Prior to filing an application in the court to set aside the award, the party filing the application has to hand over a notice of
such filing to the opposite party.
Incapacity of the parties
In case, any of the parties is of unsound mind or is minor, then such persons are not bound to act in harmony with any
agreement or contract. Therefore, the agreement itself becomes null and void and passing any award in such case can be
set aside by the court.
Agreement not valid
If the contract is unlawful, then the arbitration agreement will also be held to be invalid. All the essential elements of a
contract have to accomplish in order for it to become enforceable.
No notice to the other party
Sec. 24(2) of the Act on Hearings and written proceedings says - The parties shall be given sufficient advance notice of
any hearing and of any meeting of the arbitral tribunal for the purposes of inspection of documents, goods or other
property.
Subject matter extent to the scope of Arbitration Agreement
While formulating an agreement, the parties describe as to what all can be enclosed in the subject matter and what are the
disputes that are enclosed under the arbitration agreement. Consequently, only those subject matters can be referred to an
arbitral tribunal to resolve the dispute, not any other. If the tribunal acts ultra vires to the agreement, the party affected
may file an application in the court and challenge such award.
Formation of the Tribunal not as per the Agreement
In case the Arbitrator is not appointed as per the agreed terms of the agreement or by the parties which has not been
followed or any other bureaucratic aspect that was decided earlier in the agreement by the parties has not been followed all
the way through, then such affected party may challenge the award in the court to set aside the award.
Subject matter not under the ambit of Arbitration law
There are certain types of matters that are not arbitral in nature like criminal, insolvency or any other public matters. These
matters have been unambiguously barred under the purview of arbitration.
Award in conflict with the Public Policy of India
This ground has additional three more explanations, which was added in the 2015 amendment.
 Award through deception or dishonesty.
 In contravention to fundamental policy of India.
 In disagreement with ethics or integrity.
These explanations were further added to reduce the bogus filings in the court. Parties who could not file an application to
set aside under any of the above grounds would file under this ground and the court would accept. Further, the court also
accepts those applications if it finds out that the award is vitiated by patent illegality, i.e., the award appears wrong on the
face of it. This is only applicable for domestic awards and not to foreign awards.
Combined effect of sections 33 to 36 of the new law is as under :-
a. On application made to the arbitrator within 30 days of making of the award, the arbitrator can -
 correct clerical errors etc. in the award; or
 interpret the award.
b. Court has no power, as such, under the new law to "modify" an award, but it can set it aside on specified grounds, under
the relevant provisions of the new law.
c. Subject to the above provisions, the award is final.
Conclusion
The ADR mechanism saves time as well as saves a lot of money too. In India however, only Arbitration proceedings and
Conciliation proceedings are codified. Other methods like Mediation and Negotiation have not yet been codified, although
India has recently become a signatory to the Singapore Convention on Mediation, which means that India will soon have
a binding law on mediation too. The President of India has also recently assented to the Arbitration Amendment Bill of
2019. This will bring major changes to the Act, making it more effective and reducing the bogus filing of cases in the
court.
Furthermore, Sec. 34 of the Act emphasizes that there should be a minimal judicial intervention in the arbitral proceedings.
The main motive of arbitration is the speedy disposal of cases. And filing an application or asking for judicial intervention
at every stage of the arbitral proceeding diminishes that very objective. This was also stated in the case of M/S Emkay
Global Financial Services Ltd. v. Girdhar Sondhi.
The court does not take into account any other reasons or grounds other than the ones mentioned in Sec. 34 while
accepting or rejecting an application to set aside an arbitral award.
Hence, these grounds serve the objective of arbitration in the best possible way.
==============================================
How the Conciliators are appointed ? Whether the statement has to be submitted to Conciliators ? Discuss.
Conciliation is an out of court dispute resolution instrument, through which parties under dispute can seek to an
amicable dispute resolution with the assistance of a third party who acts as a neutral party. Conciliation is a voluntary,
flexible, confidential and internet based project. The third party is sought for the conciliation proceedings are known as a
conciliator. The decision whether to settle disputes depends on the parties involved.
The main object of conciliation is to help parties reach to a settlement without going to the court. The process of
conciliation is comparatively cheaper than going to the court of law and fighting cases for years.
Disputes which can be settled by Conciliation:
The disputes arising out of legal relationship, whether contractual or not and to all proceedings relating thereto. Thus all
relationships arising out of law can be brought for conciliation in case of a dispute.
Part 3 of the Arbitration and Conciliation act, 1996 speaks about Conciliation. According to Wharton’s Law Lexicon,
conciliation is a non-adjudicatory alternative dispute resolution process which is governed by the conditions of the
Arbitration and Conciliation act, 1996 (26 of 1996).
61. Application and scope.—(1) Save as otherwise provided by any law for the time being in force and unless the parties
have otherwise agreed, this Part shall apply to conciliation of disputes arising out of legal relationship, whether contractual
or not and to all proceedings relating thereto.
(2) This Part shall not apply where by virtue of any law for the time being in force certain disputes may not be submitted
to conciliation.
62. Commencement of conciliation proceedings.—(1) The party initiating conciliation shall send to the other party a
written invitation to conciliate under this Part, briefly identifying the subject of the dispute.
(2) Conciliation proceedings, shall commence when the other party accepts in writing the invitation to conciliate.
(3) If the other party rejects the invitation, there will be no conciliation proceedings.
(4) If the party initiating conciliation does not receive a reply within thirty days from the date on which he sends the
invitation, or within such other period of time as specified in the invitation, he may elect to treat this as a rejection of the
invitation to conciliate and if he so elects, he shall inform in writing the other party accordingly.
63.Number of conciliators.—(1) There shall be one conciliator unless the parties agree that there shall be two or three
conciliators.
(2) Where there is more than one conciliator, they ought, as a general rule, to act jointly. 64.Appointment of conciliators.
—(1) Subject to sub-section (2)—
(a) in conciliation proceedings, with one conciliator, the parties may agree on the name of a sole conciliator;
(b) in conciliation proceedings with two conciliators, each party may appoint one conciliator;
(c) in conciliation proceedings with three conciliators, each party may appoint one conciliator and the parties may agree on
the name of the third conciliator who shall act as the presiding conciliator.
(2) Parties may enlist the assistance of a suitable institution or person in connection with the appointment of conciliators,
and in particular,—
(a) a party may request such an institution or person to recommend the names of suitable individuals to act as conciliator;
or
(b) the parties may agree that the appointment of one or more conciliators be made directly by such an institution or
person: Provided that in recommending or appointing individuals to act as conciliator, the institution or person shall have
regard to such considerations as are likely to secure the appointment of an independent and impartial conciliator and, with
respect to a sole or third conciliator, shall take into account the advisability of appointing a conciliator of a nationality
other than the nationalities of the parties.
65.Submission of statements to conciliator.—(1) The conciliator, upon his appointment, may request each party to
submit to him a brief written statement describing the general nature of the dispute and the points at issue. Each party shall
send a copy of such statement to the other party.
(2) The conciliator may request each party to submit to him a further written statement of his position and the facts and
grounds in support thereof, supplemented by any documents and other evidence that such party deems appropriate. The
party shall send a copy of such statement, documents and other evidence to the other party.
(3) At any stage of the conciliation proceedings, the conciliator may request a party to submit to him such additional
information as he deems appropriate.
66.Conciliator not bound by certain enactments.—The conciliator is not bound by the Code of Civil Procedure, 1908 (5
of 1908)or the Indian Evidence Act, 1872 (1 of 1872).
==============================================
Explain the powers and functions of the Conciliators under the Arbitration and Conciliation Act, 1996.
The powers and functions of the conciliators has been laid down under section 67 of the act. 67. Role of conciliator
—
1. The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an
amicable settlement of their dispute.
2. The conciliator shall be guided by principles of objectivity, fairness and justice, giving consideration to, among
other things, the rights and obligations of the parties, the usages of the trade concerned and the circumstances
surrounding the dispute, including any previous business practices between the parties.
3. The conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate, taking
into account the circumstances of the case, the wishes the parties may express, including any request by a party
that the conciliator hear oral statements, and the need for a speedy settlement of the dispute.
4. The conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of the dispute.
Such proposals need not be in writing and need not be accompanied by a statement of the reasons.
5. The conciliator has a duty to disclose all information received from one party to the other party so as to give the
other party an opportunity to present their side of the case.
6. Section 75 of the Act says, the conciliator has a duty to keep all matters relating to the proceedings confidential.
68.Administrative assistance.—In order to facilitate the conduct of the conciliation proceedings, the parties, or the
conciliator with the consent of the parties, may arrange for administrative assistance by a suitable institution or person.
69.Communication between conciliator and parties.—(1) The conciliator may invite the parties to meet him or may
communicate with them orally or in writing. He may meet or communicate with the parties together or with each of them
separately.
(2) Unless the parties have agreed upon the place where meetings with the conciliator are to be held, such place shall be
determined by the conciliator, after consultation with the parties, having regard to the circumstances of the conciliation
proceedings.
70.Disclosure of information.—When the conciliator receives factual information concerning the dispute from a party, he
shall disclose the substance of that information to the other party in order that the other party may have the opportunity to
present any explanation which he considers appropriate:
Provided that when a party gives any information to the conciliator subject to a specific condition that it be kept
confidential, the conciliator shall not disclose that information to the other party.
71.Co-operation of parties with conciliator.—The parties shall in good faith co-operate with the conciliator and, in
particular, shall endeavour to comply with requests by the conciliator to submit written materials, provide evidence and
attend meetings.
72.Suggestions by parties for settlement of dispute.—Each party may, on his own initiative or at the invitation of the
conciliator, submit to the conciliator suggestions for the settlement of the dispute.
73.Settlement agreement.—(1) When it appears to the conciliator that there exist a scope for settlement which may be
acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to the parties for their
views. After receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in
the light of such observations.
(2) If the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement
agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement
agreement.
(3) When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under
them respectively.
(4) The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.
74.Status and effect of settlement agreement.—The settlement agreement shall have the same status and effect as if it is
an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal under section 30.
78.Costs.—(1) Upon termination of the conciliation proceedings, the conciliator shall fix the costs of the conciliation and
give written notice thereof to the parties.
(2) For the purpose of sub-section (1), “costs” means reasonable costs relating to—
(a) the fee and expenses of the conciliator and witnesses requested by the conciliator with the consent of the parties;
(b) any expert advice requested by the conciliator with the consent of the parties;
(c) any assistance provided pursuant to clause (b) of sub-section (2) of section 64 and section 68.
(d) any other expenses incurred in connection with the conciliation proceedings and the settlement agreement.
(3) The costs shall be borne equally by the parties unless the settlement agreement provides for a different apportionment.
All other expenses incurred by a party shall be borne by that party. 79.Deposits.—(1) The conciliator may direct each
party to deposit an equal amount as an advance for the costs referred to in sub-section(2) of section 78 which he expects
will be incurred.
(2) During the course of the conciliation proceedings, the conciliator may direct supplementary deposits in an equal
amount from each party.
(3) If the required deposits under sub-sections (1) and (2) are not paid in full by both parties within thirty days, the
conciliator may suspend the proceedings or may make a written declaration of termination of the proceedings to the
parties, effective on the date of that declaration.
(4) Upon termination of the conciliation proceedings, the conciliator shall render an accounting to the parties of the
deposits received and shall return any unexpended balance to the parties.
80.Role of conciliator in other proceedings.—Unless otherwise agreed by the parties,
(a) the conciliator shall not act as an arbitrator or as a representative or counsel of a party in any arbitral or judicial
proceeding in respect of a dispute that is the subject of the conciliation proceedings;
(b) the conciliator shall not be presented by the parties as a witness in any arbitral or judicial proceedings.
==============================================
Describe the reasons for passing The Arbitration and Conciliation Act, 1996.
In the past, even before courts were established, people used to settle their problems with the help of a third party if they
had a dispute. Courts are then established, and adequate dispute resolution procedures are in place. Eventually, the
population increased, and many cases were kept pending in courts, and after days of litigation, justice was served. This has
slowed down speedy justice for the people.
Due to population growth, the industry also developed rapidly, and as a result, trade disputes have increased. To
compensate for this, various out-of-court dispute resolution procedures have been developed. This method of resolving
disputes outside the court or without involving the court is known as Alternative Dispute Resolution (ADR). There are
several techniques in Alternative Dispute Resolution. They are:
1. Arbitration
2. Mediation
3. Conciliation
4. Mini trial
5. Mediation-arbitration etc.
Due to delays in court decisions, some of these techniques have evolved significantly. The main purpose of arbitration is
to bring the parties to justice quickly. This led to the popularity of arbitration, as a method of Alternate Dispute Resolution
(ADR), but there was a disparity between states and countries regarding the rules regulating the process and the standards
that parties could expect. As a response to this, the United Nations Commission on International Trade Law (UNCITRAL)
adopted the Model Law on International Commercial Arbitration on 21st June 1985. The Model Law was adopted with the
plea that all states, while setting up their own domestic legislation on arbitration, give due consideration to the Model Law
in order to preserve uniformity in the law of arbitral proceedings and to keep in mind the specific needs of international
commercial arbitration.
Some features of the Model Law are:
1. the Model Law lays down certain rules and provisions aimed at creating uniformity in international commercial
arbitration.
2. The Model Law defines the substantive aspects of international commercial arbitration by defining
“international” – when parties to an agreement have different places of business.
3. The Model Law also addresses the territorial scope of an arbitral tribunal and the enforceability of an arbitral
award. However, keeping in mind ‘party autonomy’ in arbitration, the Model Law allows for parties to choose
the procedural law applicable to govern their dispute.
4. The Model Law also limits the interference of the court, in the spirit of arbitration, allowing judicial intervention
only for appointment of arbitrators, challenge and termination of an arbitrator, jurisdiction of an arbitral tribunal,
and the setting aside of an arbitral award. It also allows court assistance in taking evidence, recognition of the
arbitration agreement, and enforcement of arbitral awards.
5. The Model Law emphasizes the importance of the arbitration clause or agreement which must be present if
parties to a dispute want to proceed with arbitration as a means of resolution.
6. With regard to the arbitral tribunals, the Model Law states rules on their composition, jurisdiction and conduct of
proceedings by the tribunals.
7. When it comes to awards, the Model Law sets out rules to be followed for the pronouncement of award, the
enforcement of award and setting aside or challenge of the award.
The Model Law was enacted keeping in mind the necessary features in order to eliminate difficulties in regulating
international arbitration by providing uniformity in some procedural and substantive practices of arbitration.
While enacting the Arbitration and Conciliation Act, 1996, the lawmakers in India took into consideration the UNCITRAL
Model Law and this can be seen in the Preamble to the Act which specifies that the provisions of the Act are in
consonance to and in furtherance of the UNCITRAL Model Law. As a result of this adherence to the Model Law, many of
the provisions in the Act of 1996 are in line with the Model Law.
Arbitration and Conciliation Act, 1996: An Act to consolidate and amend the law relating to domestic arbitration,
international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to
conciliation and for matters connected therewith or incidental thereto.
This law came into force on January 25, 1996. This act contains provisions regarding international commercial arbitration,
domestic arbitration and enforcement of foreign arbitral awards. The preamble to the law is defined as follows:
1. Domestic arbitration.
2. International Commercial Arbitration.
3. Enforcement of foreign arbitral awards.
4. Law on reconciliation and related issues.
The various objectives of the Act are:
1. To minimize the supervisory role of courts in the arbitral process
2. Cover international and domestic commercial arbitration and conciliation comprehensively.
3. Make a procedure which is fair, efficient and capable of meeting the needs of the society for arbitration and
conciliation.
4. Provides reasons by the tribunal for granting any arbitral award.
==============================================
BASIS FOR
ARBITRATION LITIGATION
COMPARISON
Meaning Arbitration implies a non-judicial process in Litigation refers to a formal judicial

which a neutral third party is appointed for process wherein the parties under dispute
the resolving disputes between parties. go to the court for its settlement.
Nature Civil Civil or criminal
Proceeding Private Public
Place Decided by the parties Court
Decided by An arbitrator who is chosen by the parties A judge who is appointed by the court.
mutually.
Cost Low Comparatively high
Appeal Not possible Possible
BASIS FOR
ARBITRATION LITIGATION
COMPARISON
==============================================
Difference between Arbitration and Conciliation:

1. Arbitration is a method where an impartial third party hears to the parties and settles their dispute and such
settlement is binding on the parties, whereas, conciliation is a process whereby the conciliator negotiates between
the parties and settlement is done. Such settlement is not binding on the parties.
2. An arbitrator can enforce his decision; however, a conciliator does not have the power to enforce his decision.
3. An agreement between the parties is required to be in existence before seeking the help of the arbitrator. In
conciliation, no prior agreement is required.
4. The proceedings of arbitration are legal, however, it is not the case in conciliation.
Basis Arbitation Conciliation
Meaning Arbitration is a dispute settlement process in which a Conciliation is a method of resolving
impartial third party is appointed to study the dispute dispute, wherein an independent person
and hear both the party to arrive at a decision binding helps the parties to arrive at negotiated
on both the parties. settlement.
Enforcement An arbitrator has the power to enforce his decision. A conciliator do not have the power to
enforce his decision.
Prior Agreement Required Not Required
Available for Existing and future disputes. Existing disputes.
Legal Yes No
proceeding
Basis Arbitation Conciliation
==============================================
Difference between Mediation and Arbitration:
BASIS FOR
MEDIATION ARBITRATION
COMPARISON
Meaning Mediation refers to a process of resolving Arbitration is a substitute of public trial, with no
disputes wherein an independent third need of going court, wherein an independent third
party, assist the parties involved in arriving party analyses the entire situation and makes a
at solution, agreeable to all. decision binding on the parties.
Nature Collaborative Adversarial
Process Informal Formal
Role of expert Facilitator Judge
Number of experts One One or more
Private Meeting between the parties concerned and Only evidentiary hearings, no private meetings
communication the counsel takes place jointly and with the arbitrator.
separately.
Control over Parties Arbitrator

outcome
Basis of outcome Needs, rights and interest of parties Facts and evidences
Outcome May or may not be reached. Definitely reached.

BASIS FOR
MEDIATION ARBITRATION
COMPARISON
Decision The mediator does not pass any judgement, The decision of the arbitrator is final and binding
but makes settlement only with the upon the parties.
approval of parties.
Conclusion When the agreement is reached or parties When the decision is handed down.
are deadlocked.
==============================================
==============================================

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Q N A - ADR

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Alternate Dispute Resolution + Arbitration Act

Important Case Laws

Contents for file of Sessional work

Contents for file of Sessional work

An arbitral award can be categorised into:

Arbitrator - Qualifications and Capacities

A Brief Overview of Conciliation

Arbitration - Meaning, Types

Notably, the Supreme Court in

Conciliation – Distinction between Conciliation, Negotiation and Mediation.

Meaning Mediation is a process of resolving Conciliation is a alternate dispute

Basic element Confidentiality, that depends on Confidentiality, whose extent is fixed by

Third Party Acts as facilitator. Acts as facilitator, evaluator and

Result Agreement between parties Settlement agreement

Agreement It is enforceable by law. It is executable as decree of civil court.

BASIS FOR MEDIATION CONCILIATION

Meaning Negotiation is a method of dispute Mediation is also a method of dispute

conflict and reach an agreement third party assists the parties to

Meeting Representatives of the parties to A mediator meets both parties jointly

Representation of By the parties themselves or by their By the mediator

Settlement Parties themselves reach an agreement. The mediator proposes a solution, to

Outcome Depends on the relationship between Controlled by the parties concerned

BASIS FOR NEGOTIATION MEDIATION

Contents for file of Sessional work

Arbitral Tribunal-Appointment of Arbitrator, Powers

Jurisdiction of arbitral tribunals:

Seminar on Alternative dispute resolution (ADR) on 07/05/2022

Waiver of Right to Object:

Drafting an Effective Arbitration Agreement

What happens after an Award ???

These grounds include:

2. Fairness and justice – Sec 67(2)

3. Confidentiality – Sec 75, 70, proviso

4. Disclosure of information – Sec 70

5. Cooperation of parties with conciliator – Sec 71

6. Rules of procedure – Sec 66

2. Submission of statements to conciliator – Section 65

3. Conduct of conciliation proceedings – Section 69(1), 67(3)

4. Administrative assistance – Section 68

2. Status and effect of settlement agreement – Sec 74

Restrictions on Role of Conciliator – Section 80

Termination of Conciliation Proceedings – Section 76

Resort To Arbitral or Judicial Proceedings – Sec 77

Case Laws Relating To Conciliation

Meaning Mediation is a process of resolving Conciliation is a alternate dispute resolution

Third Party Acts as facilitator. Acts as facilitator, evaluator and intervener.

Result Agreement between parties Settlement agreement

Agreement It is enforceable by law. It is executable as decree of civil court.

BASIS FOR MEDIATION CONCILIATION

What is the difference between Arbitration and Conciliation ?

Meaning Arbitration is a dispute settlement process in Conciliation is a method of resolving

Prior Agreement Required Not Required

Available for Existing and future disputes. Existing disputes.

Legal proceeding Yes No

BASIS FOR ARBITRATION CONCILIATION

Meaning Negotiation is a method of dispute Mediation is also a method of dispute

Representation of By the parties themselves or by their By the mediator

Settlement Parties themselves reach an agreement. The mediator proposes a solution, to

BASIS FOR NEGOTIATION MEDIATION

Discuss the objects and importance of the Lok Adalat.

Meaning Arbitration implies a non-judicial process in Litigation refers to a formal judicial

Nature Civil Civil or criminal

Proceeding Private Public