ADR- RK

10/7

- Settling the dispute in an amicable manner

- How do you define a dispute: disagreement with respect to certain entitlements, dispute
happens when a party makes a legal claim against another party who denies this legal claim
o The term “entitlement” is crucial
o Procedural law and dispute resolution process- there is an importance to this
 When there is injustice, there is problem to the state
- Dispute resolution in 3 categories/ approaches [focused, rights, and interest-based
approaches]
o Forced based approach to settle a dispute
 What are the dangers of this method?
 There must be efforts to reduce the disputes but they are bound to happen-
how are we trying to settle the disputes? – war is a method to settle
disputes- there may be questions whether it is a legitimate or illegitimate
means
 But war cannot be fully eliminated, it must be the last resort. The
underlying factor is force
 From force we move to rights-based approach (litigation)
o Rights based approach- deciding disputes on this basis
 In this approach there is a burden on litigants, you go to courts and it takes
many years to solve the dispute- what is the utility of this decision?
 The timely settlements of disputes is important
 As a modern-day approach- litigation is exorbitantly expensive, exorbitantly
expensive – it settles disputes to everyone’s dissatisfaction
o Important that we have methods of DR –
 Alternative systems should not have the problems of the previous system
 You have to create a system which is not slow, costly. The
alternatives should not be expensive – that is why they are created
 Reason for delay in litigation- appellate mechanism – there is a system of
appeals – two main reasons for delay in litigation – appeals; it is a formal
system – there are many procedures to be in place
 In ADR there is no appeal available
 Systems were created – no appeals, no formalism
 What is the importance of procedure? – procedure is a tool to know/ extract
the truth – hence there is so much weightage on evidence – you have to be
pragmatic
 For litigation a correct settlement of dispute is important – correctness of
the decision is of utmost importance hence the focus is on procedure  for
proper outcome
 Arbitration- right from the beginning you take a risk to settle. It is not
necessary that the decision has to be right. You are sacrificing the
correctness of the decision.
 Even if the decision is wrong- you have to abide by it, the court will
not look into the merits of the dispute
 o What is the underlying philosophy of the DR processes? ADR- interest based
approach – the interest of both the parties are considered. Forms of ADR-
negotiation, mediation, conciliation, arbitration. Preserve the outcome that
maximises the interest of both the parties- amicable dispute resolution process.
Litigation is an adversarial system- the best interest is not looked at, it is a contest
b/w the parties- the whole approach is proving the other party wrong, the process
will have stress on the party.
 Minimum stress – settle disputes within shortest possible time with
minimum expenses - this is what justice is about.
 Litigation – adversarial- you have to look into the past; ADR- concerned with
preservation of interest which look into the future, forward looking approach
(progressive approach)
 ADR approach – not relevant for all approach. If correctness is important
then look at litigation. There is not much insistence of law in arbitration
o Arbitration and conciliation act, 1996-
 What is arbitration – S.21 A – means arbitration whether or not registered by
any arbitral institutions
 Arbitration means the settlement of the question at issue by one to
whom the parties agree to refer their claims in order to obtain an
equitable decision – oxford dictionary definition ~ element of equity
is important to arbitration.
 French scholars- a device whereby the settlement of a question,
which is of interest for two or more persons is entrusted to one or
more persons, the arbitrator/ arbitrators, who denied their powers
from a private agreement not from the authorities of a state and
decide a dispute on the basis of such an agreement. – it is an
autonomous system of arrangement. It comes form a private
agreement. But in other jurisdictions this is not the case.
 Other methods are non-binding processes. Arbitration is binding on
the parties. When you are negotiating it is on the parties when they
want to stop negotiating, they are very facile mechanisms- they
depend heavily on the concept of other parties. Once you refer the
decision is referred to the arbitrator, you are bound by it and have to
follow it. – this does not happen in other DR mechanisms
 To be considered as Decree of conditional court- the value of arbitral
award; you cannot challenge it on the merits. You have to settle
through arbitration only. You cannot change the mechanism and
have to abide by the final decision.
 Arbitration Act – based on the early 1940 act. New act in 1996. This
act is divided into four parts, the division is usually important
o Part I- S2-S43 (when seat of arbitration is in India) ; Part II-
S44-S60 [44-52 NY Convention] [53-60 Geneva Convention];
Part III-S61-S81; Part IV- S82-S86

12/7

- Arbitration- institutional- when there are institutions that have their own set of rules which
would vary. ICC Paris, SIARC, etc. in India, many arbitration Institutions are coming up.
- Another type of arbitration is ad-hoc arbitration. What type of arbitration depends upon the
type of dispute. Institutional arbitration is more expensive. The rules are fixed in institutional
arbitration
- In ad-hoc arbitration you can make your own set of rules. Arbitration happens within states
as well
- Institutional arbitration, advantage is if there are difficulties- the institution can help out.
Otherwise, you will have to go court. Arbitration award is a very dangerous instrument, it is
final and it is binding- right or wrong you have to bind by it
o The arbitrators must be thus very competent.
- How does ad hoc arbitration function? If a dispute occurs then arbitration happens – what is
required, the foundation of arbitration is the consent of the parties.
- Consent of the parties to refer the parties to arbitration must be clear. If there is a doubt of
the parties, then the parties will not go ahead with arbitration. When a dispute occurs, the
parties make a claim- the claim is denied by the other party- then the dispute is referred to
arbitration  a request is sent to the party for the appointment of arbitrator.
o Each party has their own arbitrator
 Both the parties have to negotiate and agree on one arbitrator
 In that situation, where no consensus on the arbitrator – the parties will
have to go to the court
 Arbitration cannot survive without the support of the courts
- Domestic & international arbitration – when both the parties are from the same jurisdiction
(domestic); when one party is from another jurisdiction (international)
o Look into the nature of the transaction
- Domestic award and foreign arbitral award- domestic award when an award is passed where
the seat of arbitration is in India; if an award is passed outside India – the award is a foreign
arbitration award
o This creates huge consequences- if award passed in India- Indian courts will have the
power to set aside the award. S34
 if award outside India, there is no jurisdiction to set aside/ vacate the award
 public policy with respect to domestic/foreign award is different
- public policy S40A- law says public policy but they operate differently
o notion of international award- it is different / narrow
o S.34 public policy is broader, more chance of broader net
- Arbitration is not the purpose of arbitration. It is not the end result. Why is arbitration there?
It is to be protected because it serves international interests
- Why is this system created? Int arb promoters has been ICC – int chambers of commerce. It
was established in 1919, when the WW1 first ended. World war played a crucial
establishment in ICC. How to ensure peace? Promote international peace through
international trade. When you promote trade, war b/w nations are reduced.
- The problem with negotiation and mediation is that they don’t have a binding effect.
- What is important is the neutrality of the process. Arbitration becomes the first choice.
o Neutrality of law
o The problem would be enforceability of the judgement
- International arbitration advantage is the international enforcement of arbitration – it is a
mechanism to ensure enforcement of the decisions.
o ICC Paris had played an important role In the NY Convention
- Seat of arbitration- what is international commercial arb? S2(1) defines what international
arbitration is. Seat determines the type of arbitral award. When one of the parties is foreign
parties then
o Why does it matter if one of the parties is domestic or international? There is a huge
consequence if arbitration is domestic. The parties don’t have the freedom to
choose the law of the disputes. Of it is international arb, the parties have the
freedom to choose the law. They can choose any law.
o When is an arbitration is international- S2(1) decides this. Disputes arising out of
legal obligations – when would arbitration be considered commercial. NY convention
allows states to make two reservations- reciprocation and commerciality. Purpose is
to promote international trade and international peace.
o India is a problematic jurisdiction with regards to arbitration – they will be enforcing
arbitral award, when there is a reciprocal award.
 Reservation of commerciality – with regards to commercial transactions
 What is commercial is determined by the states, not by the law
 You can define what is commercial in a strange manner
 Kamani Engineering v Society (Belgian company) decision of Bombay HC –
1965
 Role was to provide technical assistance
o They provided for arbitration in this respect- the Indian party
instituted a suit.
o If there is an arbitration agreement then you must not go to
the courts to settle- there has to be certainty that the
dispute will be settled by arb
o Obligation on court to refuse matter- if other party raises an
objection if there is an arb agreement
 The dispute has to be commercial in nature – the
main argument is whether the matter is commercial
or not
 The Indian company said the matter is not
commercial hence no need to refer it to arbitration
 If it is not the court can hear the matter-the
consequence id huge. The foreign party believed
that the dispute will be referred to arbitration.
 The court held that the dispute doesn’t create a
transaction that is commercial in nature, it didn’t
include any buying and selling of entity – they are
just providing technical assistance – they are not
commercial in nature, it is like a solicitor agreement-
they are providing guidance.
o Priority of the country should be to avoid two countries
going abroad.
 RN Investments v Boeing and Company (1994 SC)
o Agreement was to provide consultancy service – RN would
help in selling aircrafts in trading. A commission was to be
paid – this was the dispute b/w the companies. Dispute is
the legal claim made by the parties
 o Indian companies instituted a suit- they made air India a
party,
o Is this transaction commercial in nature? Cal HC said dispute
is not commercial and can be heard by the courts. Ultimately
the matter was referred to the SC for appeal
 What is commercial? On that the entire matter is
based.
o They referred to the case of kamani engineering – buying
and selling-
 Before in 1961, there was a decision with respect to
trade and commerce.
 The Supreme court provided a definition of what is
trade and commerce- they do not merely mean
trafficking of goods, in the complexities of modern
conditions in the wide sweep includes numerous
activities, various transactions, many more activities
too numerous to be exhaustibly mentioned as trade.
 Intl trade and commerce, broad definition is
applicable- this activity would also be regarded
commercial in nature

27/7.

- Reasons to distinguish- freedom to choose law that is not required in the lans
- When is arbitration considered as international? – arbitration to vote international trade and
business
o Recognition and enforcement of articles awards
o The arbitration agreement should be enforced – arbitration cannot function it
cannot be a success
o A model can be copied by any state, what should be the laws to govern international
commercial arb? Same regime for domestic arb and int arb. This is one of the risks.
o One of the concerns- should there be a clause governing domestic and international
arbitration.
o Sec . 2 (1)(f) – arbitration relating to disputes arising out of legal relationships. When
is an arbitration international and how do we distinguish it?
 One of the parties- resident any country other than India, a body corporate
which is incorporated in any other country other than India. Before some
amendment, a company/association, body of individuals whose
management and control is settled/ exercised other than India.
 Problem with sub cl. 2 and 3.
o TDM Infrastructure Ltd v UV Development
 The seat of arbitration was to be durained, subsequently a dispute occurred
b/w the parties.
 Problem with respect to appointment of arbitrator.
 Dispute is not internationally engaged; it is not falling in the international
definition/
 TDM is a subsidy of a Malaysian company and they incorporated themselves
in the Indian Act. Essentially, the argument it cannot be treated as a foreign
 company as it is incorporated in India, it is to be treated as domestic
arbitration, therefore the CJI is not the right forum.
o With respect to int arb- you can choose any law. If it is domestic arbitration, the law
relating to subject matter dispute has to be the domestic law. TDM argument we are
foreigners but have incorporated in India, central management is in Malaysia.
 Cl.3 – when is arb is International- control should be exercised in any place
other than India. The act is now misleading?
 The court stated- arb cannot be regarded as international, the company is
incorporated in India and can’t be considered as international.
 If it is treated as international, they will have their freedom to choose law as
your choice. It is not permissible to choose Indian companies.
o Since it is based on public policy- the dispute is subjected to law other than the land.
It is an approach

2/8

- Arbitration agreement – requires consent of both the parties

o It must be clear that both parties have given their consent to refer the dispute to
arbitration. An arbitration agreement is binding to the parties
o You can challenge an arbitration award
o Appeal is what is challenging the decision on the basis of the judgement of the
decision
 Consent to settle dispute must be very clear, the arbitration agreement must
be in writing
 Within the passage of time, arbitration is becoming the norm
o Arbitration agreement refers to a future dispute mechanism
o In contract law you have special provisions for the arrangements
 There is an agreement but what is the consideration of the promise
o “midnight” clauses – arbitration agreement is not properly drafted – an arbitration
clause is to be very simple
 Rules and language have to be established
 If nothing is specified- a dispute shall be referred to arbitration
 Procedures that depend upon the consent and the corporation of the parties
o Define legal relationships- you can bifurcate the disputes as well. With respect to
define legal relationships- a relationship with the parties must be defined.
Requirement of formal validity – what constitutes this? It varies from jurisdiction to
jurisdiction
o You are required
- S.8: power to refer parties to arbitration
o Problem arises at the stage of enforcement
 Effect of arbitration agreement – it has two impacts
 When parties enter into arbitration agreement, they are obligated to
refer the dispute to arbitration
 Confers jurisdiction on the arbitration tribunal
 What would be the negative effect of the arbitration agreement? Prevents
the parties to go to the court to settle the disputes. Takes away the
jurisdiction of the court
 Its not right to say that courts do not have the jurisdiction
  Object the court proceedings at the earliest S8(3)- the courts are mandated
to prima facie say that no valid agreement exists.
 Court should interfere only where it is specifically provided by the act.
o Are the arbitration proceedings supposed to stop? Can arbitration tribunal go ahead
with the arbitration proceedings.
o Time and expediousness is important in arbitration – it is supposed to be fast. There
cannot be an appeal available in arbitration
- S10 – deals with the composition of arbitration tribunal; S10 prescribes the number of
arbitrators- matter of parties to determine the arbitration proceedings. No of arbitrators is a
crucial aspect.
o On what basis do you consider the number of arbitrators
 Cost factor
o It depends upon the nature of the dispute- it shall not be an even number –
mandatory provision. What if parties constitute a 2 member arbitration tribunal
o Case: Narayan Sathgolia v Nikunj Lohia
 2 member arbitration tribunal – decision is highly advisable to
 Method of settlement in itself- if parties want to settle the dispute they can
 It must be an informed choice. Such a tribunal is allowed.
 If you specify that the tribunal should consist of two members – parties are
aware of what they are doing.
 What if parties don’t prescribe 2 arbitrators as a method of settlement?
o S11- provisions of when the courts have to intervene, the court appoints a
intervener
o 2 party appointed arbitrators -they will not have much to disagree on
- Power vest with CJI
- Create a sense of confidence- then arb will happen. Under S11 the CJI can appoint himself,
nominate another person
- The problem- you make application to the CJI. What is the nature of the power to appoint an
arbitrator. Important to determine the nature of the power- the CJI needs to know what is
the power of the arbitrator.
- Sundaram finance v NP Placey- 1999 SC
o Power of CJI under S11 is not a judicial function. The court will have to look at the
question of validity
 They said it is an administrative power and not a judicial power
o Konkan Railways v Mehul (2000 SC)
o KONKN RAILWAYS V RANI CONSTRUCTIONS
 It is not a judicial function.

7/8- Kapil

- In India multi-tier dispute resolution system. Mediation and arbitration being parallel.
Mediation and arbitration, there is no litigation involved. The other topic discussed was
principles of negotiation.

Consent in Mediation & Enforceability of agreement to mediate (both are related)

Consent in mediation
- Court annexed mediation and private mediation – the rules are completely different in both
the aspects. You cannot mix the rules, there is a lot of uncertainty in the rules of mediation.
o When can a judge refer a case to court annexed mediation and what are the chances
that the judge refers a case to private mediation?
o Pre-litigation mediation- discretionary or mandatory? If it is mandatory then there
are different rules.
o ADR processes under S89 consent is not required. Court annexed mediation to
private mediation – the consent is required.
o How will a clause be enforceable? Any legislation talking about enforceability of an
arbitration agreement? Few amendments to the ICA – S.28. exception- if parties
choose arbitration instead of litigation – this is an exception. Same sort of agreement
is not there with respect to mediation.
o Just mediation as a Dispute resolution is not there- it will always be a part of multi
dispute resolution process- it is a pre-condition to arbitration
o Arb and mediation – giving effect to mediate the enforceability issue, there is no
valid law to enforce agreement to mediate. This is with respect to private mediation.
o If agreement to mediate is not enforceable then what are the consequences – all
mediations institutions are falling into private mediations- at what particular time
are parties entering into mediation. Arbitration clause- you can enter either before
the dispute or after. You can only request conciliation after the dispute has arisen.
o Once the dispute has arisen- they will identify an institute that will resolve the
dispute through mediation. For how long will the mediation have to be tried- only
then the mediation process will go into effect – you cannot claim the enforceability
of mediation
 Certainty of a contract
 Whether party’s clause was mediation as a pre requirement for litigation or
arbitration
 It is a multi- tier clause- when mediation is there, how have courts
have seen mediation is whether the contract is certain or not
o If it is not certain the contract is treated as void
o The litmus test is certainty- if clause not certain it is not
enforceable
 In other jurisdictions they have first checked certainty
o Every mediation centre has its own rules. Clauses suggest mediation as suggestive
and optional – there will not be any issue of enforceability.
 It is enforced purely on contractual basis
o In India- no cases on enforceability of mediation agreement
 2022- case on transfer of litigation proceedings – court has not decided on
transfer of issues. The court said they can file a separate case if they have a
problem
 S28 of ICA- has not included mediation – understand the problem from a
technical perspective. Mediation is a party centric process.
o Private law and court annexed mediation – in court annexed mediation a report
needs to be given- in the particular scenario a court can impose a cost (the quantum
is decided by the court), in private mediations – there is no compulsion, there is no
point of enforcing mediation agreement
 o S.12A pre-litigation litigation? Private mediation – rules are completely different,
they are governed by the institutions. To give effect to enforceability to the
mediation settlement awards
o Consent- 2 levels
 What is the outcome of the mediation process- settlement
 Will the settlement be enforceable or not?
o How is arbitration award given?
o Why was the term mediation settlement not there? Private mediation – how is the
settlement enforceable under conciliation?
 Agreement to mediate and enforcement of mediation.
 In India, mediation has never existed separately.
o A clause can be a multi-tier clause- it can be an optional one or an amended one.
The mediation settlement is the enforceable one.
 Is mediation a pre-condition to arbitration? The mediation clause is drafted
in a way that it is mandated that there are sessions. Some mediation clauses
are optional
 Exclusive mediation clause- only allowed to mediate your dispute. You
cannot go to any other form. S28 of ICA – stopping a person to take any
other remedy

9/8

Phases and process of mediation

- Mediation has to go through six stages

- Definition of mediation
o It used to be voluntary – but now after court annexed mediations you cannot really
say this. Private mediations however are voluntary processes.
 Private mediation- voluntary – entering into agreement. Mediator will
introduce to both parties and council, the opening statement of the
mediator. You can withdraw from the entire process, if you do not want to go
ahead
 Party centred- mediation is controlled by the parties. The parties will control
the outcome, and the mediators control the process of the outcome.
Mediators give the autonomy to the parties. Parties consent is important for
the outcome of the dispute.
 Mediation is informal but structured- it has defined stages and a dispute has
to go through these stages. How the process is going on depends on it.
 It is a negotiation process- it is structured and assisted process.
 Conducted by a neutral third party- not associated with any of the counsels.
 Communication and negotiation techniques- there is a possibility of impasse.
If the parties are unwilling to communicate, the mediator has to change his
method. The mediator needs to summarize.
 To assist parties in reaching a settlement that is mutually agreeable, the
terms are dictated by the parties itself. The settlement agreements reflect
that.
 If it is a court annexed mediation – a report needs to be submitted.
- Components of mediation
o The mediator – should be welcoming.
  There should be a good environment
o Authority: disputes can be b/w two companies. Whether the mediator is authorized
or not, who has come to resolve the particular dispute? Do you have authority on
behalf of the company to represent the dispute.
- Stakeholder in mediation and their roles
o Parties
 Litigation- parties have to speak through advocates.
 There is a possibility of imposed cost if you are not attending the mediation
sessions. In mediation there cannot be any ex parte order. Voluntary process
only for private mediation.
o Lawyers
 Pre-mediation
 During mediation
 Post mediation
o Mediator

16/8 – [RK]

- S.16 up till here till mid-sem, excluding S.9, S.7 these two have to be read together.
- Autonomy of parties is very important in arbitration. One of the important factors is
arbitration should be allowed due to the autonomy of the parties.
o Autonomy is essential but it is not the object of arbitration.
- Appointment of arbitrators – S12- discussed how litigation ahs been a problem in several
cases. Power of appointment of arbitrator is matter of autonomy of the parties. The
procedure has to be provided by the parties.
- S16 deals with two doctrines- Doctrine of severability, doctrine of omnibus ominous
o After the appointment, what are the remedies that the parties have? Arbitrators
have the obligation to be independent and impartial. The arbitrator must not be
biased.
o It is a must to maintain purity in the administration, whether it is judges or
arbitrators- they must act independently and not be biased.
o How to ensure no bias? They should be independent and impartial both.
Independent is an objective test and parameter and it relates to the relationship’s
b/w the parties; whereas impartiality is a subjective test and it relates to the mental
state of the arbitrator.
o There are obligations on the arbitrators- duty to disclose – any circumstances that
may give rise to justifiable doubts/ grounds. Doubt with respect to independence
and impartiality of the arbitrator.
- S12 deals with making a recourse and challenging the appointment of an arbitrator. When
can you challenge? Therefore, duty to disclose of arbitrator. Test of reasonability. You will see
the doubts from the perspective of a reasonable person. The arbitrator may not be biased,
the test is of reasonable apprehension of doubt/bias and not actual doubt/bias.
o When proved, the arbitrator is liable to be removed and the award set by him is set
aside.
- Sch. V – there are 34 circumstances, which may give rise to justifiable doubt. This is the duty
of disclosure. Sch VII – format of disclosure of arbitrator, other circumstances which makes a
person ineligible to be appointed as an arbitrator.
- The person would be ineligible but there is a proviso- S.12(5): such a person can be
appointed as an arbitrator provided subsequent to the uprise of the dispute, the parties
agree to the appointment of the arbitrator. The problem is with the system. Accessible
justice to the parties – it is not expensive.
- There are problems like appointment from same chambers, relationships b/w counsels and
arbitrators- on a broader note bias can be 3 types: personal, pecuniary, policy/ subject
matter biases
- Bias is not relevant only for arbitration but may be defined as a pre conceived opinion or pre
disposition or a pre determination to decide a case or an issue in a particular manner so
much so that such a pre disposition does not leave the mind open to conviction. It is in fact a
condition of mind, which sways judgement and renders the judge unable to exercise
impartiality in a particular case.
- How to know when an arbitrator is biased? Reasonableness is a very vague and broad
concept. Apply other parameters- proximity of the relationship needs to be looked at. You
see the intensity of the relationship. Sourabh Kalani v Tata Finance – someone was
appointed as arbitrator and he was an employee 15 years ago in another Tata company.
Would this raise a reasonable apprehension of bias? You look at the dependence as well- this
happens in repeat appointment of arbitrators. The court will say it will not affect the material
outcome of the decision- if it affects the impartiality of the reasonable person

- If there are doubts with respect to impartiality and bias of the arbitrator then you can
challenge this before the arbitration tribunal. You are challenging the arbitrator, which needs
to be raised before the tribunal itself. During the arbitration proceedings, circumstances may
arise- duty to disclose continue throughout the arbitration proceedings.

- Under Indian Law, if the tribunal passes a decision under S16- the challenge lies in front of
the arbitration tribunal itself. You can challenge this award under S34 of the courts later on.
S14 talks about failure of impossibility to act. S15 talks about the substitution of the
arbitrator.

- Important doctrines for arbitration – they should be seen in light of S7 as well. Doctrine of
separability – legal fiction to save arbitration [s.16]- you have a contract, with regard to the
transaction, and the clauses provide if dispute arises there will be referral to arbitration. This
clause- is regarded as a separate autonomous independent agreement in itself. The
consequence of this is that you can subject both the agreements to different systems of law.
Its function is to protect arbitration law from different challenges- this doctrine provides that
if the main contract is found ineligible, it will not affect the arbitration agreement. You
challenge the validity of main contract – is to lead to arbitration.

o French case invented doctrine of separability- S.16 (2)- an arb clause which is a part
of contract shall be treated as independent. S16 (1)(a)(b) provide for the doctrine of
separability.
o Contract where allegation that main contract was procured through bribes.
Questioning validity of main contract and not the arbitration agreement. The arb
agreement is a separate independent agreement. If you are challenging the validity
of the arbitration agreement then separability is different -
 o Sometimes the nature of allegation is not only to the main agreement but also the
arbitration agreement – in these cases arbitration will still happen. You are
challenging the jurisdiction of the tribunal.
- Doctrine of competence competence – competence of the arb tribunal. Every arbitration
tribunal can determine the competence.
o It is the first right of the arb tribunal to decide whether it has jurisdiction or not – it
is relevant to S8 and S11. If the suit is filed before the court, it is required to refer the
case to the arbitration tribunal. They will see prima facie if there is a case. The final
say is with the court.
o Universally accepted principle- if the matter is referred to arbitration tribunal by the
court- then the jurisdiction cannot be questioned- the nature of the power of the CJ
is judicial in nature. Where is the scope of arbitration to deal with the issue. When
taking away the power of the tribunal, the doctrine of competence competence is
violated.
- Arbitration agreement contained in a document – transaction is required to be registered.
[will continue this in next class]. when you are challenging arb agreement – it is doctrine of
competence competence not the doctrine of separability.it will be determined on the
arbitrability of the dispute. If the challenge is rejected of jurisdiction – then the agreement is
not valid. The Indian position is that you can’t do anything as a party, the tribunal will see the
merits of the case. You can challenge the award under S34, this is deviation. When the
tribunal passes an award, and says there is no jurisdiction – is the tribunal required to stop
the proceedings, the answer is in advanced jurisdictions- no. there is no legal bar, and the
proceedings are parallel.
- If the arb tribunal accepts the challenge, and say they do not have the jurisdiction – it is not
treated as an award, it is treated as an order- this can be challenged under S37(2) where an
appeal is made to the court.

4/9

- Place of arbitration is the seat of arbitration

o Venue and seat of arbitration is different
o Seat of arbitration is a legal concept
- S.20 (3)- conduct the proceedings – if you have to make a recourse- you have to make it to
the party- seat is in place of the legal seat- it confers legal jurisdiction on the courts.
- NY Convention- arbitration cannot happen in the legal background- Lex Arbitrar (it remains
as a silent force) – it cannot happen with a legal background – it needs to be aligned.
o Firstly it has to be a national legal order
 It has to be a legal order of the seat of the arbitration
o You cannot choose lex arbitrai from other than the seat of the arbitration – you can
do it provided your allowed to do it by the law of the arbitration.
o The problem with this approach- the award becomes rooted in the legal order of
seat of arbitration and it has to abide by the laws of the jurisdiction – for e.g. public
policy. If an award is violative of policy of India, and one can make an application to
set it aside.
 Delocalized arbitration idea came into play- it is not rooted in any local legal
order.
 The force has to come from a legal order- it comes from the place of
enforcement- if it is enforced, then it is validated.
 o S10- parties have freedom to fix arbitrators, but this cannot be an even number. If
arbitration award is set aside on the ground- many countries allow this to happen
but what is the problem. 2 arbitrators in itself are a method for settling a dispute.
 There is a concern parties may opt for this choice and later there is a
deadlock, the parties say the arbitrators should be 2 or more – 3 member
tribunal- third member is the presiding member. If you want two- you need
to specify, saying you are well aware of what is happening. That is the
respect for the autonomy of the parties
 What will be the status of the arbitration award- it is a foreign award (award
passed outside India, enforced by the NY convention)
 International arbitration and domestic arbitration is different.
o Awards should be on the basis of the nature of the disputes- you should deal with
the two in separate acts. The problem is that there are local laws where you can set
aside awards. Parties have to fit in mandatory laws within the seat of arbitration.
o Concept of lex arbitrarai – position of international arbitration is similar, how is it
different?
o How will arbitration be validated- localized and delocalized- is it rooted in a legal
order? It gets it validity from the seat of arbitration of legal order / place of
enforcement.
- Idea of transnational arbitration- legal order of arbitration of its own.
o Arbitrator having a forum in international arbitration – it is the whole world.
 Discarding the idea of delocalized arbitration- there is no fundamental
difference between the two. First, The award is rooted in a national legal
order- in the second it is rooted in the place of enforcement. You are
restricting the scope of international dimension- international arbitration
should have international legal order
 International arbitration has become a preferred method- there is a own set
of norms that are accepted internationally- they constitute in themselves an
arbitral legal order.
 It can be called anational as well- it does not belong to a particular
nation- he prefers transnational over anational
o This legal order consists of norms which are followed by
most legal orders – that constitutes a legal order
o An arbitration is rooted in the transnational order which
tackles the problem of retrospectivity
 Putrabali v Marina Holdings
 There was an agreement b/w French and Indonesian company –
how do the transactions happen?
o There are other players involved as well- once the company
sent goods, it went to the shipping company. Once you have
assigned the goods, then you transfer it to the other party.
o The documents were transferred- few days afterwards, the
ships sunk
o Arbitration provided in London – you can make appeal to
courts if it involves a substantial question of law (provision in
UK Arb act) – to stop any legal proceedings by the other
party, they took the award. How will it be enforced?
 o The legal issue- award passed is set aside, by way of the
English courts- French courts who are English courts to deal
with the problem of arbitration.
 Award passed is an international judicial decision.
Transnational legal order has been enforced-
arbitration exists in the act.
 The French version of the convention uses the term shall. Small
things can make a big difference. The predominant approach is the
seating order.
 There is a similarity b/w transnationality approach and seat centric approach
– autonomy of the party becomes the ground for enforcement- there has to
be a law to make it enforceable. Lex arbitrarai has to be there – it is very
difficult to resist enforcement
 You cannot violate NY convention by enforcing award but by rejecting the
enforcement of the arbitral award.
 Procedural law is the law that governs the relationship b/w arbitration
tribunals and the local courts.
 Internal procedure and external procedure.
 Law governing the enforcement of arbitration – what is the
significance of the seat of arbitration.
 If parties fail to determine the seat of arbitration – then it is for the
courts to decide the seat of arbitration. Source of power is the
agreement between the parties.
 S21- commencement of arbitration proceedings: commences on the sate
dispute is to be referred to the tribunal – law of limitation applies to
arbitration also. The notice received within the respondent is within the
period. Date on which the notice is received is the commencement.
 What is the language of the arbitration – it is the autonomy of the parties.
This is important in international arbitration.
 S23- statements of defence- if party fails to file a statement of claim, the
tribunal must not terminate the proceedings in the first hearing itself- the
claimant should get the opportunity to defend himself.

6/9

Conduct of arbitration proceedings: S23- cl.4 – statement of claimant and defence should be
completed within a period of 6 months. The statement of pleading is closed. The parties have the
freedom to conduct mandator hearings. Arbitration can happen on the statements of the claims
made- It is dependent on the statements made by the parties.

- If parties have not made it clear whether they want oral hearings or not, then it is up to the
tribunal to decide whether or not there should be oral hearings. Under S24- both the parties
must be treated equally- you have to give equal chance of oral hearings to both the parties.
There should be an opportunity to plead the case, there should be a reasonable notice.
- There has to be transparency in the functioning of the arbitration tribunal. S25 deals with the
default of the party. If the claimant fails to file a statement within the time period- then the
tribunal will terminate the proceedings. You cannot terminate because on the first hearing
there was an absence.
- Default on part of the respondent- not terminate the proceedings and continue the
proceedings , if claimant is absent - required to terminate the proceedings
o No ex parte order if there is a statement of defence.
- S.26- expert appointed by arbitral tribunal- if the parties haven’t imposed restrictions-
arbitration tribunal can appoint an expert. You can call the expert to examine the other
parties.
- S.27- courts assisting in taking evidence. Arbitration is a voluntary process. It co-relates with
the issue of arbitrary as well.
- Case of allegations of fraud- can the dispute be referred to arbitration. The SC held that
matters of fraud can be entertained by the arbitration tribunals. If it involves complex issues-
then it cannot be dealt with the arbitration tribunal. Evidence can also be done by the
arbitration tribunal even if it is fraud. If you require evidence to be given- the court has the
power to ask before it. If that happens, arbitration becomes very inefficient. Courts and
arbitration tribunals- they cannot survive without each other.
- The court can direct them to appear before the arbitration tribunal- it shall be treated as
contempt of court.
- S.28: making it arbitral award and termination of arbitration proceedings: rules that applies
to the substance of the dispute – substantial and not procedural part of the dispute
o If the dispute occurs, then what law will apply? The autonomy of the parties to
choose the law governing the merits of the dispute- that autonomy is available only
in international disputes. In domestic disputes- parties don’t have the freedom to
choose the merits of the case. The substantive law of the land applies.
o S.2 (1)(f)- If it is international arbitration at least one of the parties is foreign.
- Matter of the autonomy of parties to select the law – parties select- the law refers to the
substance- the conflict of the substantive law. Arbitration dispute can decide on the basis of
equitable principle- expressly authorized by parties to do so. Parties some times fail to select
the law governing the disputes. If parties have not selected law governing the dispute- then
arbitration tribunal cannot choose on the basis of principal of equity. There is no certain
formula that can apply. Power is available to tribunal when parties have authorized the
tribunal to decide in equity- this has to be expressed by the parties.
- PASL wind energy v GE Wind
o Both were companies incorporated in India- they had provided for arbitration for a
dispute- the seat of arbitration was Geneva- outside India. A dispute happened- an
arbitration award was passed. GE objected to the enforcement of the arbitration
award on the ground of violation of public policy. Can two Indian companies be in
the foreign seat of arbitration. The arguments have been is it a violation of public
policy.
 The SC many years ago- TDM infrastructure case
 If it is international arbitration, you can choose a foreign seat
 If both the parties are Indian- and foreign seat is chosen then it is a
violation of public policy
 The SC held there is no restriction under the Indian Arbitration Act. A
foreign award is party neutral. One of the parties must be a foreign
party. Foreign arbitral award can be from 2 countries.
 Should Indian parties be allowed for the foreign seat of arbitration-
o Autonomy is not an object- international arbitration was protected to protect
international trade and commerce.
 o 29A- time limit for passing an arbitral award. Time limit introduced of 12 months.
They removed the limit in international arbitration; the domestic arbitration was still
there. The arbitration loses the power to decide the dispute If the time limit is not
adhered to. The time limit can be extended by the court as well.
o Fast track arbitration- document based arbitration, there will not be any oral hearing.
The time period for the outer limit is 6 months. It is possible to settle the dispute as
expediently as possible.
 If you fail to decide the dispute within the time period- the power to decide
goes away.
o S30- talks about incompatibility of tribunal – allows arbitrator to make the party
compromise the dispute. As a party you should settle a dispute. Arbitration tribunal
is required to convert it into an arbitration award.
 Consent award- treated like any other award
 What is the advantage- if subsequently a party changes its mind- there is a
remedy to enforce the agreement.

13/9- Kapil Sharma

- Every mediation starts with the opening statement- this sets the tone for the mediation.
Joint sessions and private sessions. There can be a difference in the approach based on the
particulars of a case.
- How well can a mediator gather information from the parties.
- Zero day sessions- giving a briefing to the parties before the mediation session.
o If not comfortable in sharing information in joint session then information can be
shared in a private session.
 Use that information only with the permission of the parties
o The first stage is to gather the information.
- How will you take the parties towards a settlement?
o Mediation is a trust building exercise
o The information must be understood in an unbiased manner
- Identify the common grounds of dispute for the parties
- What is the importance of rephrasing?
- As a mediator you are communicating the options that a party’s want- it is a party centric
process
- Every dispute will have an impasse.
- In a mediation, the entire problem is regarding the enforceability.
o How will you use a clause that talks about mediation- and is it enforceable or not

20/9

- What is the next step of mediation after the mediator collects the details
- How is private mediation conducted?
o How is the mediation
o What is the loss surrounding mediation?
- When can you invoke Art 13?
- What is meant by agreement to mediate in pre-litigation disputes:

Key elements of settlement disputes:

- You can give a brief summary of a particular dispute- there is a clause of confidentiality.
 - How was the mediator appointed and what process was followed?
- Settlement in-all or in portion. Entry in settlement- mediators have issued entry in
settlement. No settlement agreements- a mediator is putting the offers on the table – it is a
time bound process.
- Descriptive role: in a particular settlement you are identifying the problem, what needs to be
done. You are asking a responsibility on both the parties.
- Compliance and non-compliance & penalty for the delay:
- Withdrawal of legal proceedings-

Steps of writing settlement agreement: when a dispute is b/w a partnership and a company

- Undertaking to settle disputes occurring in the future.

25/9

Enforcement of mediation settlement agreements

- Under private mediation if there is no mediation agreement- the clause is referring to

conciliation. The intention is to resolve a dispute through mediation but there may be issues
with regards to enforcement of the mediation agreement.
- The enforcement lies under S34.
- The court has recognized the difference- when it comes to enforceability you are
differentiating b/w two different modes of dispute settlement process.
- Conciliation is an arbitral award- there is S34. The court recognized the processes are
different.
- Question is whether you have followed all the processes under S30.
- The issues is whether a clause is very specific in nature? What is the intention- do they want
to enter mediation or conciliation- based on this the enforceability is decided.
- S.498 case of cruelty- HC said refer the dispute to mediation. Court will decide whether the
disputes are suitable for mediation or not. The wife wanted a property. The court will
distinguish that there are different processes to resolve mediation. They talk about court
annexed and institutional annexed mediations.
o There are three types of mediations: private mediation, institutional and court
annexed – these can be pre- litigation mediations as well
- When enforceability is seen- S89- is it a court annexed mediation? Why is a problem not
there – it is a decree of the court- as per CPC It will be enforced. The entire process is about
the recording of the settlement. If a mediator comes into the mediation, they need to submit
a statement- recording of the settlement agreement
- What is the purpose of recording? Making sure there is evidence- and what were the
intentions in settling.
- Under private mediation: there are no clauses refereed to part III of the act. It will be
enforced through Indian contract act only. All the provisions of the ICA will be applicable.
o You have to ensure whether the agreement can be enforced or not- ask whether
there can be further litigation in the dispute.
- Under private mediation: what are the issues that come up? Under which law can they get
valid remedy. They are claiming enforceability under Part iii of the mediation and conciliation
act. Private mediation is ICA.
- S30 provides you an opportunity – party realises there is scope for mediation, under that
process the settlement agreement- how will it be enforceable?
 o Multi-tier dispute resolution clause: the clause says first you need to initiate
arbitration, and then mediation. At the time of drafting you are clear on how you
want to settle your agreement
o You need to take recourse for arbitration for this clause to take place.
- One issue is with regards to confidentiality: you sign a clause where parties have given their
consent to resolve a dispute beyond mediation. It is drawing the scope of a particular
dispute.
- Conciliation under S30- 2 possibilities. There is no distinction b/w mediation and conciliation.
They have given their own interpretation as per the conciliation. The court has to decide
whether mediation or conciliation
o Court says if your agreement is conciliation- then you have to refer to part III
- Under court mediation there is a simple issue of enforceability of decree or order. What are
the intention of the parties in private mediation- the enforceability is in ICA. Under
commercial court act they have defined the disputes.
- Under commercial court act there is S12a- they will be referred to prelitigation mediation,
there is a provision with regards to enforceability – all mediation settlements will be known
as arbitral awards. Under S12a you cannot use private mediation- they have referred to
statutes that will solve the commercial disputes.
- As a mediator how will you bring finality to a dispute- how will you use S30- this depends on
the discretion of the mediator and the parties.
o Every mediator will bring in S30. Can you call the settlement agreement as mediation
agreement. It will be known as a conciliation agreement. The amount of dispute
needs to be more than 3L.
- Pre litigation mediation: the only point is the commercial court act. The dispute must fall into
the category of commercial in nature. For disputes that need immediate relief- you have to
use S12a first, which is a time bound process. You have to perform your mediation within a
time period. You have to narrow the scope of a private mediation.
o Legal services authority act, private mediation is outside the scope of this act. Every
settlement will be known as the award. Issue of enforceability is not there- what is
the status of the settlement agreements, they will be the awards. These awards can
also be challenged. There are various provisions. Scope for what can be challenged in
an arbitral award (this is a problem)- court annexed mediation S89
- Issue of enforceability is not coming up under S12a- majority of the issues are coming up
under the arbitration and conciliation act. Some issues are in terms of private settlement.
The issue of enforceability is not there because the language is very clear.
o Whether mediation is talking only about pre litigation mediation. In a dispute if pre
litigation is not successful, and parties realise there is still a scope for mediation.
Parties can refer to mediation at any given time.
- Every settlement agreement needs to be signed by the parties and authenticated by the
mediator. The question of stamp duty comes up.
- To govern all these things, you need one particular body. If central government
- S27- How are the agreements enforced. What is the judgement or decree passed by the
court. All interpretations are seen through this act.
- There are grounds where a mediation settlement can be challenged:
o Fraud, corruption, impersonation
o What all grounds can you challenge an arbitration. In few cases court has recognized
you can challenge your mediation settlement agreement – fraud corruption etc
  The provisions and language in arb and mediation are quite similar.
- Rohit Ahuja v additional principal judge
o What are the requirements for a mediation settlement agreement. What is the
requirement for binding?
o The court is providing a clarity- your intention should be very clear.
- Angle infrastructure v Ashok Manchanda
o Confidentiality of mediation
 Issue: rules of conduct- the entire process is a confidential one.

27/9 – RK

- What is the significant difference in rights based and interest-based approach? Interest
based approach- this lies in the future
o How to maximise the interest of the parties- what is the difference in these
grievance redressal mechanisms. Dispute should be resolved with minimum stress
on the parties
o What are the methods used to solve the disputes. There is criticism in arbitration, it
does not fit into ADR.
 If there is an attempt to settle a dispute, it does not mean it is no longer
arbitration. The award has to be a judicial application of the mind. Parties
can also settle the dispute themselves. If it is not converted into arbitration
award- if one party later changes their mind what is the remedy that is
available.
 The remedy available is to institute a suit.
o When you reach a settlement- it is important to settle an arbitration award. Consent
award in arbitration: the problem with this award, in certain jurisdictions it is not
enforceable as an arbitration award. NY convention doesn’t define what an
arbitration award.
o Small convention- made international arbitration what it is today
 Each country may define what is an arbitration through a category of
decisions.
o S.2(1)c- what is an arbitration award. There is hardly any definition as to what is an
award.
 Arb tribunal passes various types of decisions- and not all are awards some
are orders. The NY distinction is important.
 The NY convention only applies to awards. There is uncertainty of awards
and orders- this make arbitration inefficient.
o S31- arbitration awards; the forms and contents of an arbitration award. An arbitral
award shall be made in writing. Forms and contents of an arbitral award.
- What is an arbitration award: they are decisions made by the arbitrators which resolve in
definitive manner all or part of the dispute then to submit it to them, on the merits,
jurisdiction or procedural matter which leads them to put an end to the proceedings.
o It has to be a decision by the arbitrator.
o Award decides the dispute in a definitive manner- there is a resjudicata effect ; if it
does not have this effect- it cannot be an award. There are various types of
arbitration awards- differences in the approaches by various jurisdictions. Some
jurisdictions do not accept consent awards. Final award is the last award that is
passed in an arbitration.
  An award includes interim award- arbitration award gives a final
determination. The proper term is partial award this is referred in S2.
Interim means it can be changed later, but this is not the understanding of
an arbitral award. Partial award- dispute referred in arbitration has multiple
disputes. The partial award cannot be changed. Final award is that award
which is passed last in the sequence.
 Emergency arbitration tribunal decision is interim in nature and not
definitive- and this is the problem. They cannot be enforced in India as
awards. What is an award will affect the efficacy or arbitration.
o What is an order and what is an award? There cannot be an oral arbitration award, it
has to be in writing. It has to be signed by all the arbitrators. For the purposes of S1,
the signature of majority of the arbitration tribunal is sufficient. An arbitration award
must contain reasons- what is the basis of the decision.
 S31. Arbitration tribunal may provide for interest.
 S.31a- regime of cost. Arbitration tribunal has the power to make
arrangements for the cost.
- Provision where certain situations allow arbitration to function. Provision that provides for
equality. S34- recourse against an arbitral award. What is the recourse against the arbitral
award. Arbitration is a private mechanism. What remedies are there? Application for set a
certain arbitration award. Award ceases to exist- this has consequences. National courts have
an important role to play in arbitration. S5 of the Indian arbitration act- objective is to
minimize the judicial interference. Support of the courts is very important to arbitration. An
arbitration award is to be treated as a decree of a national court. Therefore, you do not see
the merits of an arbitration award.
o The court cannot revoke an arbitration on the merits of the decision. There is no
appeal. If a decision is wrong- the court should not be entitled to set a aside an
arbitration award.
o Grounds on which enforcement of arbitral awards can be set aside is there in the NY
convention. Procedural grounds, there is no capacity to enter into an agreement.
o If both the parties lack the capacity, the parties must be competent to enter into a
contract. It does not depend on the merits.
- A swamy v A Shivam
o If arbitration award is against the public policy of India- this is a hugely contentious
issue. Vague and abstract to define public policy. S34-violation of public policy
 Public policy varies from country to country
 There should be a threshold on which the ground of public policy is invoked
and enforceability – at what level is the public policy invoked? What are the
parameters. There are different variants of public policy.
 International enforcement of public policy where it sought???
 S34 and S48- 48 has similar grounds to S34- but the difference is 48 is in part
ii – which deals with recognition and enforcement of NY convention awards
 S34 allows patent illegality
o Renu Sagar Case – 1994 SC
 Progressive judgement in consonance with international trends
 There was a broad interpretation of violation of public policy- when the new
act came ONGC v
  SC held an award can refuse award if patent illegality [this was not a
ground mentioned in the act] public policy was the expression used-
it refers to the fundamental public policy of the country and not the
violation of the amendment of an statute. There was a new ground
of parent illegality that was added. Sau pipes
 Parties have opted for arbitration because they want a fast
settlement of the dispute.
 Problem- ONGC receipt of arbitration was in india
o Bhatia international v trading in 2002- bifurcation is not
absolute- part I can apply to part ii- it was criticised. They
were concerned there was a lacuna. S2(2)- provision shall
apply when the arbitration is in India.
o Later in 2007- satyam enginnering v global venture- award
passed in favour of Indian company, the enforcement was in
US. Big blow to the nature of Indian arbitration. Protecting
illegality was a ground.
o BALCO case – it was to rectify the mistakes that were
commited so far. Provisions of part I cannot apply part ii.
Another problem with this decision was that it would apply
prospectively. Retrospectively it cannot apply.
 Renu Sagar Case: What is violative of public policy – an award is violative of
public policy if it is contrary to fundamental policy of law, contrary to interest
of India, contrary to justice or morality

4/10 – RK

- S.34- recourse against an arbitral award. Arbitration is a manner to resolve the dispute. At
the end of the day, it is a private mechanism of the settlement of the disputes. Job of the
state to the administration. Arbitration is required to be supervised by national courts.
o Objective minimize the judicial interference- but it cannot survive without the
support of the court. A mechanism is provided in S34- when the seat of arbitration
happens in India- the crucial factor to determine arbitration is the seat of arbitration.
o Public policy is the most frequent ground that is taken.
o You cannot make an appeal against the arbitration award. You cannot look at the
merits. It is the arbitrator who is the final decision of the grounds
 These grounds are procedural in nature- and not looked at on the merits
 Public policy in a way is a substantive ground. Most often arbitration is a
successful intention, nevertheless the ground is invoked. In contrast- in
England, there is not even one case where a foreign award has been set
aside. The courts in England, have unlimited power in an arbitration awards.
 Where would it result in violation of public policy? Violation of
public policy is violation of certain provisions of the law
 STRTA Del HC decision – fundamental public policy decision- violation of
public policy does not mean violation of fundamental provisions of the law
[this started with ONGC case]
 Patent illegality- it was extended for arbitral awards. Whether the award is
domestic or international does not depend who the parties are, but it
 depends on where is the arbitration. Foreign/ domestic- depends on the seat
of arbitration.
 Venture case- Satyam global computers
o An exception has been carved out in S.9. in 2011 the mistake was rectified in the
BALCO case. Phulchand Exports v OOO 2011 decision – just before the BALCO
decisions. They had given the reasoning of the ONGC case. The patent illegality
ground in S34 is applicable in part II proceedings as well. In 2013 came another
decision- shri ram mahal v potrato 0f the SC. Public policy challenge was raised- the
reasoning given in Phulchand was wrong. Patent illegality cannot apply to foreign
awards.
o Daiieechi sangio v singh case- dispute
 Investigations against the drugs supplied by the US.
 Allegation was that losses were suffered. The enforceemtn was resisted by
the Indian company.
 The arbitration awards cannot be enforced against the minors. The court
said the protection of minors is a public policy. It would be against the
fundamental principles of Indian law. The court imposed a penalty of 5M Rs.
 Step to deter unprovoked/ frivolous public policy. The arbitration was
initiated. There could be a violation of statutory principle this does not
amount to a violation of public policy.
 The problem with the approach is not only with enforcement of the
arbitration award that the foreign company would not want to enter into a
business. Arbitration is final and binding.
o S35 makes the arbitration final – the recourse is setting aside the arbitral award. S36
talks about the enforcement. Within 3 months the arbitration award can be
challenged. If you do not challenge the award within 3 months- then it is
enforceable.
o You have to make an application for seeking stay order- enforcement. Arbitration
award can be challenged within 3 months.