Table of Contents hide

1) Number of Arbitrators
2) Appointment of Arbitrator
2.1) Nationality of Arbitrators:
2.2) Jurisdiction of the Courts:
2.3) Procedure of Appointment:
2.4) Fee Structure:
3) Qualifications of the Arbitrator
4) Independence and Impartiality of the Arbitrator
5) Arbitrator’s relationship with the parties or counsel
5.1) Relationship of the arbitrator to the dispute
5.2) Arbitrator’s direct or indirect interest in the dispute
6) Challenge to the Arbitrator’s Appointment
7) Conclusion

Arbitration is a process of alternate dispute resolution in which any dispute between the
parties is submitted willingly to one or more arbitrators, who then make a binding award in
the dispute. Such arbitrators are selected by the parties themselves in most cases. The
Arbitration act has provided for an exhaustive procedure for the appointment of the arbitrator.
Chapter III of Part I of the act deals with the composition of the arbitral tribunal.

Number of Arbitrators

Section 10, which corresponds to Article 10 of the UNCITRAL Model Law provides that the
parties shall be free to determine the number of the arbitrators, making sure that they are odd
in number. This has been done so as to avoid any deadlock in the arbitration award which can
be a possibility in case of even number of arbitrators. However, the Supreme Court in N. P.
Lohia case stated that any agreement that allows for the parties to select even number of
arbitrators will not be invalid or void and cannot be the sole ground for rendering arbitration
agreement invalid. The section further clarifies that in absence of the number of arbitrators in
the agreement, only a sole arbitrator shall be appointed.

Appointment of Arbitrator
Section 11 provides for the detailed procedure for the appointment of arbitrator in case the
parties fail to appoint arbitrators for any reason.

Nationality of Arbitrators:
As far as the nationality of the arbitrator is concerned, section 11(1) provides that a person of
any nationality can be appointed as an arbitrator. Here too, if the parties have provided for the
nationality of the arbitrators in their arbitration agreement, then the provisions of the
agreement shall hold precedence. Further, in section 11(9), the Act provides that in any
international commercial arbitration, the supreme court, or any person/institution designated
by it, may appoint sole or third arbitrator of a nationality that is different from the
nationalities of the parties. This provision provides a discretionary power to the Supreme
Court. In Malaysian Airlines case[4] the court held that according to section 11(9) the word
‘may’ must not be interpreted as shall.

Jurisdiction of the Courts:

Section 11(10), which was inserted in the 2015 amendment, provides that with respect to the
provisions of subsections (4), (5), or (6), powers to make appropriate rules to deal with these
matters have been entrusted to the Supreme Court or the High Courts. Thus, the respective
High Courts or the Supreme Court can make their own schemes as per their requirements.
With regard to the jurisdictions, in the 2015 amendment, it was provided that where ever the
arbitration proceedings is an international commercial arbitration, with respect to the
provisions of this section 11, the Supreme Court will have jurisdiction. In all other arbitration
proceedings, other than international commercial arbitration, the respective High Court will
have jurisdiction. Further, section 11(11) provides that where the request under subsection
(4), (5) or (6) has been made in more than one High Courts, the High Court to whom the
request was made the first will be the competent court to adjudicate upon that request.

Procedure of Appointment:
For the procedure of appointment, Section 11(2) provides that, subject to subsection (6), if the
parties have agreed upon the procedure for appointment of the arbitrator in their agreement,
then that procedure shall have precedence over the remaining provisions of the section. This
shall be the recurring theme of the section. The agreement executed by the parties has to be
given prime importance in case of any arbitration proceedings[5]. Only when the agreement
is silent over any provision or the parties are not in consensus regarding the same, then shall
the provisions of section 11 take preference. It should be noted that there are two
prerequisites[6] to the appointment of the arbitrators stated by the court, that is, firstly, there
should be a dispute existing between the parties to the agreement and secondly, that the
arbitrator should be appointed as per the needs of the dispute.

In case of appointment of sole arbitrator, section 11(5) provides that subject to the provisions
of subsection (2), the parties have to appoint the arbitrator within 30 days from the receipt of
request by one party. Where the parties fail to appoint arbitrator within 30 days from the
request of the party, the Supreme Court or the High Court or person designated by them can
appoint the sole arbitrator upon the request of the party. In Iron and Steel Co. case[7], the
court stated that section 11(5) will only come into force when there is no agreement between
the parties as per section 11(2) of the act and if such an agreement has been made then
section 11(5) will not be applicable.

When there are more than one arbitrators to be appointed, the sections 11(3) and 11(4) come
into precedence. Section 11(3) provides that in case there are three arbitrators, each party
shall appoint one arbitrator and the two appointed arbitrators shall then appoint a third
arbitrator. This third arbitrator shall be the presiding arbitrator. There is no compulsion that
this appointment of the third arbitrator shall be made by the two arbitrators in writing[8]
Section 11(4) furthers this provision by stating that in case the parties fail to appoint the two
arbitrators or the two arbitrators fail to appoint the third arbitrator within 30 days
respectively, then the appointment shall be made by the Supreme Court or the High Court on
request of the parties. This part had been amended[9] where the expression ‘Chief Justice of
India’ and ‘Chief Justice of High Court’ used in earlier provision has been replaced with
Supreme Court or High Court, respectively. As far as the appointment procedure is
concerned, section 11(6) provides for the contingencies for the appointment procedure,
giving powers to the Supreme Court or the High Court to take necessary measures, when the
parties or the two arbitrators fail to act as per the required procedure as mentioned in section
11(2). The term ‘necessary’ includes those things that are reasonably required to be done for
the intended task. Subsection (6) provides for three conditions for the applicability of this
section which are:

When a party fails to act as required under that procedure; or

When the parties, or the two appointed arbitrators, fail to reach an agreement expected of
them under that procedure; or
When a person, including an institution, fails to perform any function entrusted to him or it
under that procedure.
To give a sense of finality to the provisions of the subsections (4), (5) and (6) mentioned
above, the act provides for Section 11(7) which renders the appointment decision made by the
respective court final and non-appealable. Thus, the decision made by the courts or person
designated by them has been made final and only an appeal to Supreme Court by way of
Special Leave Petition can lie from such an order for appointment of arbitrator as stated in
section 11(7). Further, section 11(13) made it incumbent upon the Supreme Court or the High
Court or person designated by them to dispute of the application for appointment of arbitrator
within 60 days from the date of service of notice on the opposite party.

Fee Structure:
Section 11(14), as inserted by the 2015 amendment[10] attempts to fix limits on the fee
payable to the arbitrator and empowers the high court to frame such rule as may be necessary
considering the rates specified in Fourth Schedule to the act. The 2015 amendment to the act
also brought in section 11A which accords the power to amend the Fourth Schedule to the
Central Government, by notification in the Official Gazette, whenever it is necessary and
expedient
Qualifications of the Arbitrator

As far as the question of the qualifications of the arbitrator is concerned, section 11(8)
provides that respective court shall give due regards to the qualifications of the arbitrator as
per the agreement of the parties. It also provides for the power to the court to seek written
disclosure from the arbitrator regarding his qualifications as per the provisions of section
12(1) and in the manner mentioned in the Sixth Schedule.

The 2019 amendment has provided for the detailed qualifications of the persons who can be
appointed as arbitrators in the Eight Schedule. It states that a person will not be qualified to
be an arbitrator unless has been:
an advocate within the meaning of the Advocates Act, 1961 having ten years of practice
experience as an advocate;
a chartered accountant within the meaning of the Chartered Accountants Act, 1949 having ten
years of experience;
a cost accountant within the meaning of the Cost and Works Accountants Act, 1959 having
ten years of experience;
a company secretary within the meaning of the Company Secretaries Act,1980 having ten
years of experience;
an officer of the Indian Legal Service;
an officer with law degree having ten years of experience in the legal matters in the
Government, autonomous body, public sector undertaking or at a senior level managerial
position in private sector;
an officer with engineering degree having ten years of experience as an engineer in the
Government, autonomous body, public sector undertaking or at a senior level managerial
position in the private sector or self-employed;
an officer having senior level experience of administration in the Central Government or
State Government or having experience of senior level management of a public sector
undertaking or a Government company or a private company of repute;
a person having educational qualification at degree level with ten years of experience in a
scientific or technical stream in the fields of telecom, information technology, intellectual
property rights or other specialized areas in the Government, autonomous body, public sector
undertaking or a senior level managerial position in a private sector, as the case may be.
The schedule also prescribes general norms applicable to arbitrators such as that the arbitrator
must be impartial and neutral and avoid entering into any financial business or other
relationship that is likely to affect impartiality or might reasonably create an appearance of
partiality or bias amongst the parties and the arbitrator must be conversant with the
Constitution of India, principles of natural justice, equity, common and customary laws,
commercial laws, labour laws, law of torts, making and enforcing the arbitral awards,
domestic and international legal system on arbitration and international best practices and that
the arbitrator should be capable of suggesting, recommending or writing a reasoned and
enforceable arbitral award in any dispute which comes before him for adjudication.
Independence and Impartiality of the Arbitrator

Section 12 makes the declaration on the part of the arbitration about his independence and
impartiality more exhaustive. Ideally, an arbitrator is supposed to be independent and
impartial in the interests of justice. This section casts a duty on the parties to make sure that
the arbitrator which has to be appointed is willing to be appointed and does not have any
disqualification that might hamper their independence and impartiality. In Keshav Singh
case[12], the court stated that independence and impartiality are two different things. “The
test for independence is an objective one as the relations are easy to determine. The test for
impartiality, however, is a subjective one as it is rather a mental attitude which is not easily
determinable. An arbitrator may be independent in the sense that he might not have any
relations with the parties but may not be impartial as he might have bias in favour of or
against any party.”

The circumstances which the potential arbitrator has to disclose in writing are:

Existence of any relationship or interest with the parties or the subject matter of dispute
which is likely to give justifiable doubts as to the independence and impartiality.
Any circumstances that may affect his ability to devote sufficient time and complete the
proceedings within 12 months.
A Fifth schedule, listing the grounds that give rise to justifiable doubt to independence and
impartiality of arbitrator has been inserted by the 2015 amendment.[13] A person falling
under any of the grounds mentioned in the schedule is unlikely to be independent and
impartial in all respects. The amendment also alters section 12(5) stating that if the
arbitrator’s relationship with the parties or the counsel or the subject matter of dispute falls in
any of the categories mentioned in the Seventh schedule, the person would be ineligible to act
as an arbitrator.

The grounds mentioned in the Fifth and Seventh schedule are the same and are enumerated
below.
Arbitrator’s relationship with the parties or counsel
The arbitrator is an employee, consultant, advisor or has any other past or present business
relationship with a party.
The arbitrator currently represents or advises one of the parties or an affiliate of one of the
parties.
The arbitrator currently represents the lawyer or law firm acting as counsel for one of the
parties.
The arbitrator is a lawyer in the same law firm which is representing one of the parties.
The arbitrator is a manager, director or part of the management, or has a similar controlling
influence, in an affiliate of one of the parties if the affiliate is directly involved in the matters
in dispute in the arbitration.
The arbitrator’s law firm had a previous but terminated involvement in the case without the
arbitrator being involved himself or herself.
The arbitrator’s law firm currently has a significant commercial relationship with one of the
parties or an affiliate of one of the parties.
The arbitrator regularly advises the appointing party or an affiliate of the appointing party
even though neither the arbitrator nor his or her firm derives a significant financial income
therefrom.
The arbitrator has a close family relationship with one of the parties and in the case of
companies with the persons in the management and controlling the company.
A close family member of the arbitrator has a significant financial interest in one of the
parties or an affiliate of one of the parties.
The arbitrator is a legal representative of an entity that is a party in the arbitration.
The arbitrator is a manager, director or part of the management, or has a similar controlling
influence in one of the parties.
The arbitrator has a significant financial interest in one of the parties or the outcome of the
case.
The arbitrator regularly advises the appointing party or an affiliate of the appointing party,
and the arbitrator or his or her firm derives a significant financial income therefrom.
Relationship of the arbitrator to the dispute
The arbitrator has given legal advice or provided an expert opinion on the dispute to a party
or an affiliate of one of the parties.
The arbitrator has previous involvement in the case.
Arbitrator’s direct or indirect interest in the dispute
The arbitrator holds shares, either directly or indirectly, in one of the parties or an affiliate of
one of the parties that is privately held.
A close family member of the arbitrator has a significant financial interest in the outcome of
the dispute.
The arbitrator or a close family member of the arbitrator has a close relationship with a third
party who may be liable to recourse on the part of the unsuccessful party in the dispute.
Challenge to the Arbitrator’s Appointment
Once an arbitrator has been appointed, his appointment can be challenged by any of the
parties on the grounds prescribed in section 12. Section 12(3) provides for the grounds on
which the appointment may be challenged which are:

There are justifiable doubts as to his independence or impartiality, or,

The arbitrator does not possess the qualifications agreed upon by the parties.
The section 12(4) even provides that the party appointing him may challenge his appointment
in future but is limited to reasons of which the party becomes aware of after the appointment
has been made.

The procedure to make such a challenge has been enumerated in section 13 of the act. This
section 13(1) provides that the parties have the freedom to choose the procedure for
challenging an arbitrator if they want to in their own agreement. This procedure shall override
the rest of the provisions of the section. However, the section 13(4) provides that in case the
procedure mentioned in the agreement is not successful, then the arbitration proceedings will
continue on with the same arbitral tribunal. This has been incorporated to avoid frivolous use
of delay tactics by any of the parties.

If however, the arbitration agreement between the parties does not contain any provision for
the same, then the provisions of 13(2) shall come into play. According to this, any party that
is challenging the appointment of the arbitrator will have to send a written statement of
reasons for challenge to the arbitral tribunal within 15 days of being aware of the
circumstances of 12(3) or the constitution of the tribunal. This right to challenge will be
waived off if not challenge is made within 15 days. Further, 13(3) provides that once the
written statement has been presented, the tribunal shall decide on the challenge unless the
challenged arbitrator withdraws from his office, or when the other party also accepts the
challenge in which case the arbitrator has to mandatorily vacate his office. The decision made
by the tribunal will be final and not subject to any review by the courts.

When the challenge is rejected, the arbitration proceedings shall continue and the tribunal
shall make an award. This award can be applied to be set aside as per the provisions
mentioned in section 34 of the Act by the party challenging the arbitrator.
Conclusion
For the success of any arbitration proceeding, it is highly imperative that there should be
minimal disputes regarding its procedural aspects. Since the appointment of arbitrator is the
first stage of the proceedings, care should be taken during such an appointment so as to
prevent unnecessary disputes or delays. The act has provided a detailed procedure for the
appointment of the arbitrator keeping in mind all the contingencies and time limits which
might prevail during the process. Further, the act has accorded liberty to the parties to
prescribe their own procedure, which will prevail over the provisions of the act. Through
these provisions, the act has strived to make the appointment process in arbitration more
ordered and less arduous.

Table of Contents
Origin and Evolution of Lok Adalats
Jurisdiction of Lok Adalats
Civil Cases:
Criminal Cases:
Powers of Lok Adalats
Types of Lok Adalats
Effectiveness of Lok Adalats
Limitations and Challenges
Conclusion

Lok Adalats, meaning ‘People’s Court’ in Hindi, are a unique alternative dispute resolution
mechanism in India.

Established under the Legal Services Authorities Act, 1987, Lok Adalats have gained
prominence as an efficient and cost-effective means of resolving disputes outside the
traditional court system.
Origin and Evolution of Lok Adalats
Lok Adalats in India trace their origins to the concept of “Nyaya Panchayats” or village
councils, which have been in existence for centuries.
However, the formal establishment of Lok Adalats took place with the enactment of the Legal
Services Authorities Act, 1987.
It has roots in Fundamental Rights and Free Legal Provisions of DPSP of the Indian
constitution.
This legislation aimed to provide free legal services to the weaker sections of society and
promote justice on the principle of equal opportunity.
Lok Adalats were introduced as a pivotal component of this legal services framework.

Jurisdiction of Lok Adalats

Lok Adalats have jurisdiction over a wide range of civil and criminal matters. Their
jurisdiction can be broadly classified into the following categories:

Civil Cases:
a. Motor Accident Compensation Claims: Lok Adalats play a significant role in expeditiously
settling motor accident compensation claims, providing much-needed relief to victims and
their families.
b. Family Disputes: Lok Adalats can resolve various family disputes, including divorce,
maintenance, and property disputes, as long as the parties involved are willing to participate
in the process.
c. Property Disputes: Matters related to property, such as partition, boundary disputes, and
title disputes, can be taken up by Lok Adalats.
d. Debt Recovery: Lok Adalats can facilitate the recovery of debts, making it an attractive
option for creditors seeking timely settlements.

e. Land Acquisition Disputes: Lok Adalats can address disputes arising from land acquisition,
offering a quicker resolution mechanism for affected landowners.

Criminal Cases:
a. Compoundable Offenses: Lok Adalats can settle criminal cases that involve compoundable
offenses, provided both the complainant and the accused agree to the settlement.

b. Traffic Challans: Lok Adalats have the authority to settle traffic challans and related
offenses, allowing individuals to resolve such matters swiftly.

c. Minor Offenses: Cases involving minor offenses can be taken up by Lok Adalats, reducing
the burden on the traditional court system.
Powers of Lok Adalats
Lok Adalats possess several distinctive powers and features that set them apart from
conventional courts.

These powers are instrumental in making Lok Adalats an effective mechanism for dispute
resolution.

Voluntary Participation: Lok Adalat proceedings are voluntary, and both parties must
willingly agree to participate. This ensures that the process is non-coercive and in line with
the principles of fairness and justice.
No Court Fees: One of the most significant advantages of Lok Adalats is that they do not
charge court fees or other litigation expenses. This eliminates a significant financial barrier
for many litigants, making justice more accessible.
Binding Decisions: The decisions reached in Lok Adalats are binding on the parties involved,
and they have the same legal force as decrees of a civil court. This provides finality to the
resolution process.
Settlements Based on Fairness and Equity: Lok Adalats focus on achieving settlements based
on fairness and equity rather than strictly adhering to legal procedures and technicalities. This
approach encourages amicable solutions and compromises.
Role of Legal Professionals: Lok Adalats include legal professionals, such as lawyers and
retired judges, who serve as conciliators and assist in the resolution process. Their expertise
ensures that settlements align with legal principles.
Wider Interpretation of Laws: Lok Adalats have the authority to interpret laws more liberally,
taking into consideration the interests of the parties and the principles of justice. This
flexibility allows for creative solutions to complex disputes.
Speedy Dispute Resolution: One of the primary objectives of Lok Adalats is to provide swift
justice. Cases are often resolved in a single sitting, which significantly reduces the backlog of
cases in traditional courts.
Types of Lok Adalats
Lok Adalats can be categorized into three main types, each with a specific jurisdiction and
scope:

Permanent Lok Adalats: Permanent Lok Adalats are established under the Legal Services
Authorities Act, 1987, and have a fixed jurisdiction. They primarily deal with cases related to
public utility services, such as water supply, electricity, and telecommunication.
National Lok Adalats: National Lok Adalats are organized periodically, often at the national,
state, or district level, and aim to dispose of a large number of pending and pre-litigation
cases in a single day. These mega-adalats have proven to be highly effective in reducing case
pendency.
Mobile Lok Adalats: Mobile Lok Adalats are set up in various locations, including rural areas
and remote regions, to provide access to justice for marginalized and underserved
communities. They offer a convenient platform for resolving disputes locally.
Effectiveness of Lok Adalats
Lok Adalats have made significant contributions to the Indian legal system in several ways:

Reducing Case Backlog: By swiftly resolving a vast number of cases, Lok Adalats have
played a crucial role in reducing the backlog of cases in traditional courts. This has led to a
more efficient judicial system.
Cost-Efficiency: The absence of court fees and the expedited resolution process make Lok
Adalats a cost-effective option for litigants, especially those with limited financial means.
Promotion of Mediation and Conciliation: Lok Adalats encourage parties to engage in
mediation and conciliation, fostering a culture of amicable dispute resolution rather than
adversarial litigation.
Empowerment of the Disadvantaged: Lok Adalats have empowered disadvantaged sections of
society by providing them with accessible and affordable legal recourse.
Public Awareness: The widespread adoption of Lok Adalats has raised awareness about
alternative dispute resolution mechanisms and the importance of resolving disputes through
negotiation and settlement.
Limitations and Challenges
While Lok Adalats have proven to be a valuable addition to the Indian legal system, they also
face certain limitations and challenges:

Limited Jurisdiction: Lok Adalats can only handle cases where both parties agree to
participate voluntarily. This limitation excludes certain types of cases, particularly those
involving complex legal issues or unwilling parties.
Lack of Enforcement: While Lok Adalat decisions are legally binding, enforcement can be a
challenge, especially if one of the parties fails to comply with the settlement terms. This may
necessitate further court intervention.
Inadequate Public Awareness: Many individuals, especially in rural areas, remain unaware of
the existence and benefits of Lok Adalats. Greater efforts are needed to educate the public
about this alternative dispute resolution mechanism.
Need for Skilled Mediators: The effectiveness of Lok Adalats depends on the skills and
training of the mediators and conciliators involved. Continuous training and professional
development are essential to maintain high standards.
Resource Constraints: Lok Adalats often face resource constraints, including the availability
of trained personnel, infrastructure, and funding. Adequate resources are necessary to ensure
their continued success.
Conclusion
Lok Adalats have emerged as a powerful tool for expeditious and cost-effective dispute
resolution in India.
Their jurisdiction encompasses a wide range of civil and criminal matters, making them
accessible to a broad spectrum of litigants.
The powers and features of Lok Adalats, such as voluntary participation, no court fees, and
binding decisions, contribute to their effectiveness in delivering justice.

Despite some limitations and challenges, Lok Adalats have made significant strides in
reducing case backlog, promoting mediation, and empowering marginalized communities.

Their role in providing speedy and accessible justice cannot be overstated. As India continues
to evolve its legal landscape, Lok Adalats are likely to remain a cornerstone of alternative
dispute resolution, ensuring that justice is within reach for all its citizens.
Areas for Improvement within Lok Adalats
Some areas of improvement whereby the functioning of Lok Adalats can be improved are as
follows:

Enforceability lies with Civil Court

The awards passed by the Lok Adalats are deemed equivalent to decrees of the civil
court[26]. Although, the enforcement of these decrees cannot be carried out by the Lok
Adalats. This function rests with the civil courts, therefore the parties need to apply for
enforcement to execute the award. It is the author’s recommendation that this power to
enforce needs to be provided to the Lok Adalats itself to ensure that the decisions passed are
executed to their finality.

Lack of Criminal Jurisdiction

The jurisdiction of Lok Adalats with respect to criminal disputes is limited to offences which
are compoundable under law[27]. This removes crimes such as that of petty theft other small
crimes from the purview of Lok Adalats. Hence, this should be reviewed to bring petty
crimes within the purview of Lok Adalats.