Professional Documents
Culture Documents
ADR3
ADR3
1) Draft of a Domestic Arbitration Agreement after a Commercial Dispute has arisen between parties.
2) An Application to the Court for setting aside an Arbitration Award.
3) Draft of an Application to the Appropriate court to appoint an Arbitrator when parties have failed in
their attempts to appoint one according to the Arbitration Agreement.
4) An invitation for conciliation proceeding - Notice under Section 62 of the Arbitration And Conciliation
Act, 1996.
5) An Application for Enforcement of A Foreign Award:
6) Report on interaction sessions on Alternate Dispute Resolution system.
7) A Request by one party to the other party Requesting that their Commercial Dispute to be referred to
Arbitration.
8) Draft of an Application under Section 8 of the Arbitration And Conciliation Act, 1996.
9) Notice Under Section. 11 of Arbitration And Conciliation Act, 1996.
10) Draft of an application for interim relief under section 17 of the Arbitration and Conciliation act 1996.
01 . Draft of a Domestic Arbitration Agreement after a Commercial Dispute
has arisen between parties.
In the 1940 Act, 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 the
Arbitration and Conciliation Act, 1996 enumerates that an arbitration
agreement can be in the form of a separate agreement or in the form of
an arbitration clause in the contract.
(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.
2. The parties have agreed on the settlement of any dispute arising out
of or in connection with the …………… dated………………………….subjected
Agreement by arbitration through the Arbitration Council in
accordance with the Arbitration Rules. The parties, by reading the
Rules, shall declare that they have accepted to comply with its terms,
obligations and consequences. (It is required for the parties to clearly
state the subject and date of the agreement of which the parties
would like to seek the settlement of any dispute arose out through
the Arbitration process, within the blank spaces) . If there are more
than one commercial agreement between the parties, then they
should prepare and sign a separate arbitration agreement for each of
them.)
3. The parties have decided to have the arbitration conducted
at……………………… (The parties shall write the name of the city as the
place of arbitration in this section, if they wish. the Arbitration Council
shall determine the place of arbitration, if there is no such
determination of the parties.)
8. iii) The parties agree upon the appointment of all three arbitrators by
the Arbitration Council.
Having agreed to the above by both the parties, the said parties affix their signatures to this
agreement this…………..….…………. day of (month and year) at (place).
Signature I Signature II
2. An Application to the Court for setting aside an Arbitration Award
Introduction
The settlement of a dispute out of the court by bringing it to a third person is very
commonly known since the period of Ancient and Medieval India. So, the concept of
arbitration is a way back old phenomena. The modern law of arbitration was drafted
by the East India company which was developed in the regulatory framework through
which the courts refer the suits for the arbitration process.
Meaning of Arbitration
Arbitration is a process in which the parties resolve their dispute
out of the court through the Arbitral Tribunal.
An Arbitral Tribunal can be either appointed by parties to the
dispute or by the court sometimes at the request of the party.
We can also say that arbitration is a substitute for the litigation for
the dispute resolution.
The United Nations Commission on International Trade Law is
considered as the basis of the Indian Arbitration Law.
The decision of the arbitrator is considered to be as legally binding
and enforceable by the court unless all the parties set forth that the
arbitration process and decisions are non-binding.
Meaning
An arbitral/arbitration award is the award granted in the decision
made by the arbitration tribunal in an arbitration proceeding.
An arbitral award can be monetary or non-monetary. It can be
monetary which is made for payment of a sum of money from one
party to the other and it can be non-monetary when no money
needs to be paid but it includes decisions like stopping a certain
business practice or increasing unemployment perks and
incentives.
There are two conditions provided in the Arbitration Act, 1996 for
an award to be valid-
The award must be written and signed by the arbitrator and it must
contain the reasons for the passing of such award in the particular
case.
The arbitral award should clearly state the duties and liabilities
imposed on the parties to the dispute and it should not leave any
aspect pending of the dispute for the future discussion.
It should be very much clear and final in the context of the issues
and claims of the dispute concerned. In the case of Union of India
V. Punjab Communications, the amount which was payable by one
party to the other was not specified in the award and also the
decision was unclear and incapable of being enforced. Therefore
the arbitral award was set aside.
Grounds
Section 34 of the Arbitration and Conciliation Act provides the provisions of certain specific
grounds on the basis of which an arbitral award rendered in India can be set aside. They are-
Section 23(1) of Arbitration and Conciliation Act,1966 provides that the arbitral Tribunal has
to determine the time within which the statement must be filed. This must be timely
communicated to the parties by a proper notice and section 24(2) provides that an advance
notice shall be given to the parties regarding any hearing or meeting of the Tribunal for any
purpose of inspection of documents, goods or other property etc.
In Dulal podda V. Executive Engineer, Dona Canal Division, Court held that the appointment
of an arbitrator at the request of the appellant of the dispute without sending a notice to the
respondent and an ex-parte decree given by the arbitration Tribunal will be held illegal and
liable for setting aside.
In Rajendra Krishan Kumar V. Union of India, a matter under a writ petition was referred for
arbitration proceedings. The writ petition contains no claim of compensation for damage to
the perfectibility of the land because of the opposition party releasing effluents and slurry on
that other party’s land. The court held that the award of any such compensation would be liable
to set aside as it stands outside the scope of reference.
(5). Composition of Tribunal- Not in accordance with Agreement
Section 34(2)(a)(v) lays out that an award can be discarded or challenged if the composition
of the arbitral tribunal was not in obedience with the agreement of the parties or if the
procedure of conduct of proceedings was not followed properly. If the arbitrator passes a
decision of an award which is in deviation from the terms of reference and the arbitration
agreement, then this would lead to the award to be set aside and will amount to the misconduct
of the arbitrator.
In the case of State Trading Corporation V. Molasses Co. the Bengal Chamber of Commerce,
the Arbitral Tribunal did not allow a company who was a party to be represented by its law
officer who was a full-time employee of the company. Here, the court held that it was the
misconduct of the arbitrator as well as the violation of arbitration proceedings.
In the case of ONGC Ltd V. Saw Pipe Ltd., the Supreme Court held that the arbitral Tribunal,
while exercising its jurisdiction cannot act in breach of some provisions of substantive law or
provisions of the Arbitration and Conciliation Act, 1966.
In the case of Venture Global Engineering V. Satyam Computer Services Ltd., the Court held
that an arbitral award could be set aside if it is conflicting with the fundamental policies of
Indian laws or the justice, morality or interest of India.
Limitation
Section 34(3) states regarding the limitation period for filing an application
that an appeal to set aside an arbitration order by an aggrieved party has
to be strictly made within the period of 3 months from the date of receipt
of the same. The importance of this is set out by Section 36 which asserts
that the award becomes enforceable as soon as the limitation period under
Section 34 expires. Under section 33, the Court may, however, allow a
delay of 30 days on request made by the aggrieved party if the court is
satisfied on the evidence of the sufficient cause. In Case of National Aluminum
Co Ltd v. Presteel Fabrication (P) Ltd, proceedings were instituted before the
Supreme Court under the disbelief that it had jurisdiction in the matter of
setting aside the arbitral award passed by Arbitral Tribunal. Time
consumed on a bona fide prosecution of an application in a wrong forum
was held by the Supreme Court to be a sufficient cause for condonation of
delay.
In Bhatia Int. V. Bulk Trading case, the Supreme Court held that even though
there was no provision in Part 2 of the act providing for the challenge to a
foreign award, a petition to set aside the same would lie under section 34
(part 1) of the act which provides provisions of the domestic award will be
applicable to the foreign awards. The court held that the property in a
dispute related to the shares in the Indian Company situated in India
necessarily needed Indian laws to be followed to execute the award. The
Court stated that in such a situation the award must be attested on the
measurement of public policy of India and the Indian public policy cannot
be affirmed through the implementation of the award on any foreign
strand/support.
Conclusion
India has a modern and efficient Arbitration Act. Section 34 and 37
provides for recourse against an arbitral award which may be set aside by
a court on certain specified grounds. All these Grounds are common to
both domestic as well as international arbitral awards. The ground of public
policy should only be interpreted as far as it aims towards broadening the
public interest and not violating the basic notions of Indian laws. The
judicial intervention should also be minimal for success and further
promotion of Arbitration in India.
3. Draft of an Application to the Appropriate court to appoint an Arbitrator
when parties have failed in their attempts to appoint one according to the
Arbitration Agreement
TO,
THE HON’BLE CHIEF JUSTICE OF _______ AND HIS LORDSHIPS OTHER COMPANION
JUSTICES OF THE HIGH COURT OF JUDICATURE FOR _______ AT __________.
1. That (explain the purpose on which applicant and respondent/s have entered
into a contract). Copy of the Agreement/Contract executed between the
applicant and respondent-___ is herewith enclosed as Annexure-1.
2. That (state the facts due to which dispute has arisen between the parties to
the contract)
3. That clause ____ of the agreement executed between __________ states to refer
any dispute between the parties to Arbitration. Clause 62(a)of the dealership
agreement states as under: WRITE DOWN THE ARBITRATION CLAUSE
4. That as per clause __ of the agreement any dispute that arose between the
parties to the dealership agreement has to be referred to sole arbitration to
some officer of the respondent. But the Arbitrator is an employee of the
respondent and have a direct relation with the respondent who is one of the
party in the present dispute matter thus it gives rise to the justifiable doubts
as to the independence or impartiality of the arbitrator in accordance to the
grounds mentioned in the Fifth Schedule of the Arbitration and Conciliation
Act, 1996.
5. That the appointment of any officer nominated by RESPONDENT as the
Arbitrator in the present dispute matter is a clear ground to challenge the
appointment of the arbitrator. As per section 12(3)(a) of the Arbitration and
Conciliation Act, 1996 which states that an arbitrator may be challenged only if
circumstances exists that give rise to justifiable doubts as to his independence
or impartiality. In the present dispute matter arbitrator as per the agreement is
an employee of the respondent and have a direct relation with one of the
parties to the dispute which makes a clear ground to challenge the arbitrator
to be appointed as per section 12(3)(a) of the Arbitration and Conciliation Act,
1996.
6. That the applicant sent a notice for invoking Arbitration in the matter of
dispute between the respondent through his advocate on 19th April 2021 but
till date no reply to the aforesaid notice has been received from the
respondents’ side. Copy of the notice sent for invoking Arbitration is herewith
enclosed as .
7. That in the aforesaid notice sent for invoking arbitration the applicant through
his advocate after becoming aware of the circumstances that the arbitration
will be referred to any officer of respondent, the applicant has clearly stated
that the arbitration cannot be referred to any officer of respondent as it raises
the justifiable doubts as to the independence or impartiality of the arbitrator
as per the the grounds mentioned in the Fifth Schedule of the Arbitration and
Conciliation Act,1996 and challenged the appointment of such Arbitrator as
per section 12(3)(a) Arbitration and Conciliation Act,1996 and challenged the
appointment of such Arbitrator in accordance to the procedure of challenge as
per section 13 of the Arbitration and Conciliation Act,1996.
8. That the respondents even after challenging the appointment of such
Arbitrator as per the rules and procedures laid down under the Arbitration and
Conciliation Act,1996 did not even bother to take a look to the assertions
made in the aforesaid notice and neither accepted/decided any point laid
down in the aforesaid notice nor they denied any of the points made in the
aforesaid notice.
9. That in view of the aforesaid facts and circumstances, it is clear that there
exists the dispute interse the applicant and the respondent and further it is
pertinent to note that the respondents have failed to appoint any learned
person who is neutral and who is not related to any party in the present
dispute matter, now it is imperative that dispute between the applicant and
respondent is to be settled through the Sole Arbitrator appointed by this
Hon’ble Court in view of the powers conferred under section 11(6) of the
Arbitration and Conciliation Act, 1996.
PRAYER
In view of the aforesaid facts and circumstances it is humbly and most respectfully
prayed that this Hon’ble Court may be pleased to:-
1. Appoint a Sole Arbitrator to decide and adjudicate upon the dispute between
the applicant and respondents arising out of __________.
2. Direct that the Sole Arbitrator so appointed with seat at __________ shall be
entitled to receive the fee and other expenses in terms of statutory provisions
in this regard.
3. Any other order/direction which this Hon’ble Court may deem just and
expedient in the facts and circumstances of the present case.
AND FOR THIS ACT OF KINDNESS AND JUSTICE, THE APPLICANT HEREIN, AS IN
DUTY BOUND SHALL EVER PRAY.
HUMBLE PETITIONER
THROUGH COUNSEL
VERIFICATION
DEPONENT
Section 11 of the Arbitration and Conciliation Act, 1996 deals with the
appointment of arbitrators. A person of any nationality may be appointed
arbitrator unless the contrary intention is expressed by the parties. The
parties are free to agree on a procedure for appointment of arbitrator or
arbitrators. Where parties fail to appoint three arbitrators, each party shall
appoint one arbitrator and the two arbitrators shall appoint the third
arbitrator. Hence, appointing three arbitrators is mandatory, with the third
one being the presiding arbitrator.
The decision of the Chief Justice of the High Court or the person or the
institution designated by him in appointing an arbitrator shall be final.
In such appointment, two considerations are to be made:
Required qualifications of the arbitrator as provided in the agreement
of the parties, and
independent and impartial person as an arbitrator.
These are the circumstances under which the Chief Justice of a High Court
can make an appointment.
Conclusion:
The arbitrator should be chosen carefully because of his special knowledge
of the subject matter which is in dispute. He should be able to keep the
atmosphere clear at the tribunal and must be free from forensic eloquence
and to see that the evidence in the manner customary in the court of law
and equity. He must give attention to the facts in dispute placed before
him and his decision should be practical and impartial and in the best
interest of justice, good conscience, and equity
4. An invitation for conciliation proceeding - Notice under Section 62 of the
Arbitration And Conciliation Act, 1996.
However, as the present report indicates, the judicial system is unable to deliver
timely justice because of huge backlog of cases for which the current judge strength
is completely inadequate. On an average a court takes more than decade to decide
a civil suit, which ultimately results in 'justice delayed is justice denied.' Since
independence, Indian judiciary has suffered from an overwhelming backlog of
cases. Further, complexities and inadequacies of court redressal mechanism leads
to zeal for Alternative Dispute Resolution Mechanism.
It is the judiciary which plays an important role besides legislative and executive
body and India is not an exception. Desire for quick and affordable justice is
universal. Justice should be speedy, simple, cheap, affective and substantial.
Conciliation is an alternative dispute resolution mechanism which has been given
statutory recognition by incorporating provisions in Sections 61 to 81 of Part III of
the Arbitration and Conciliation Act, 1996.
Meaning
Part 3rd of the Arbitration and Conciliation Act, 1996. 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.
Definition
Conciliation is an alternative dispute resolution mechanism with the help of
conciliator. Conciliator assists the disputing parties to explore potential solutions and
find a mutually acceptable solution by lowering tensions and improving
communications. Conciliation is an alternative dispute resolution mechanism which
has been given statutory recognition by incorporating provisions in Sections 61 to
81 of Part III of the Arbitration and Conciliation Act, 1996.
Historical Background
Conciliation is as old as the Indian history. In Mahabharata when both parties were
determined to resolve the conflict in battle fields, Lord Krishna made efforts to
resolve the conflict. Now also, the panchayat system works in the villages. The
Indian system places a lot of importance on resolution of disputes by negotiation
which is purely conciliatory. Conciliation is essentially a consensual process. Under
the Arbitration and Conciliation Act, 1996, it has the statutory sanction.
The best example where conciliation played an integral role is of the highly
politically sensitive case of the Beagle channel dispute over the ownership of certain
islands in the entrance to the channel between Chile and Argentina. The mediator
was the Vatican. The process was remarkable because it was flexible enough to
accommodate the changing political environments in both countries and the
mediator used a range of tools to great advantage. This process served to protect a
fragile peace between the countries and ultimately allowed them to create an
agreement that has lasted until this day.
Section 62 provides for the commencement of proceedings for conciliation. For the
purpose of settling the dispute through the process of conciliation all what is
required is a proposal in writing and its acceptance thereof. When a proposal is
made by one party the other party has the option of the acceptance of proposal or
its rejection.
Rejection does not always have to be expressed it may be implied. If the party who
sends the proposal does not receive any follow up or reply within a period of thirty
days or other stipulated period it shall amounts to rejection and hence the process
of conciliation will not commence.
Number of conciliators (Section 63)
Once the proposal is accepted by the other party the next important step is to have
a conciliator. Section 63 of the 1996 act provides that there under usual
circumstances there will be only one conciliator. And in no case the number of
conciliators shall exceed three [section 63(2)] which is the maximum limit and the
general rule is that they shall act jointly
1. First, the parties may on a mutual agreement appoint the conciliator according
to the guidelines provided in section 64 (I):
2. Second, the parties may take advice and take assistance of an institution or
person for the appointment of conciliators.
Section 66: This section provides that Conciliator is not bound by the procedures
envisaged in CPC , or Evidence Act.
Section 67: This section talks about the role of a Conciliator. These roles include
acting impartially, fairly, independently and strive towards reaching an amicable
resolution of the dispute.
Section 69: This section deals with the communication between the parties and the
conciliator.
Section 71: This section provides that that the parties should act in good faith and
co-operate with the Conciliator
Section 73: This section provides for the provision of the Settlement agreement and
its components.
Section 75: This sections deals with the important principle of Confidentiality.
Section 76: This section talks about the termination of proceedings which can be
done by the signing of the settlement agreement or by a declaration by a written
declaration of a party to other party.
Section 78: It talks about the costs that are included in the conciliation proceedings.
Section 81: This section deals with evidence and its admissibility of certain kinds of
evidence which cannot be used in other proceedings like proposals made by the
conciliator or the fact that the other party was willing to accept a proposal.
Sections 62: 81 of the Arbitration and Conciliation Act thus provide a complete and
a comprehensive procedure for Conciliation.From initiation of the process of
Conciliation to the settlement of dispute , evidence , roles of Conciliator etc. are
completely covered in the aforesaid sections.
Facts:
The petitioner has challenged an award passed by the labour court.
Issue:
When do the conciliation proceedings begin when ambiguity is there?
Held:
There are two separate procedures for conciliation proceedings. The first instance,
where a notice of strike is given by the workers. Rule 76 and 77 provide for the
same. Under Rule 76 the conciliation officer attempts to:
Facts:
The conciliation proceedings between the Union and Reliance Industries Limited did
not succeed. Then the Conciliation Officer drew a failure report. However, the report
was not submitted to the third respondent, State of Gujarat. The dispute was
pending. The statutory authority also did not act according to law. Under section
33A of the Industrial Disputes Act, the authorities refused to register the complaint.
The Industrial Tribunal was to be notified about it. Under article 226 of the
constitution, the respondents filed a writ petition.
The appellants were dismissed from the respondent's company. They were
demanding a higher amount for signing a long-term agreement. A new executive
body was elected in 2002. The appellants did not contest the said election. Thus,
they ceased to be the member of the Executive body. They also misrepresented
themselves in court to get favourable orders.
Issue:
Case: M/S Imi Norgren Herion (Pvt.) Ltd. v. Labour Court, U.P. Noida, And
Ors.
Petitioner : M/S Imi Norgren Herion (Pvt.) Ltd.
Respondent : Labour Court, U.P. Noida
Facts:
The petitioner had terminated the respondent's contract. Both the parties agreed to
reconcile. The conciliation proceedings started in 2015. The respondent withdrew
his claim in the conciliation proceedings to avoid litigation. Both the parties settled
the matter. It was also registered. Additionally, the petitioner paid Rs. 3,45,376 to
the respondent for settlement. Thus, the petitioner contended that by entering into
an agreement the respondent could not start a conciliation case.
Issue:
Held:
The court referred to various sections of the Payment of Wages Act, 1936. Under
section 6-D of the Act, [4] the proceedings before the Labour Court or tribunal shall
be deemed to have commenced on the date of reference of the dispute to
adjudication and concluded on the date on which the award becomes enforceable
under section 6-A.[5]
The tribunal has the authority to decide the jurisdiction once the reference for
adjudication is made. Neither the conciliation officer has the authority to decide the
jurisdiction based on the merits of the case. The registered settlement between the
parties denotes that the dispute came to an end. There lies no merit in the instant
petition by the respondent. Thus, the court dismissed the petition.
Our judicial system is neither ineffective nor alone responsible for huge backlog of
pending cases. We must not forget the increased inflow of cases in all courts of the
country. Litigation is not the only means of resolving disputes. We need to re-look
and strengthen our own available alternative mechanism with positive framework.
Introduction
An arbitral award refers to the decision of an arbitral tribunal, whether in
a domestic or international arbitration, including any interim awards
thereunder. In India, enforcement and execution of arbitral awards are
governed both by the Arbitration and Conciliation Act, 1996 and the Code
of Civil Procedure, 1908. This article aims to look at the manner and
procedure by which these arbitral awards, which are passed or laid down
outside our territorial limits, are enforced in India. The process for the
same is one that is mired in complexities and takes a lot of time to be
enforced and as shall be seen below, been muddled by judicial decisions
on the matter.
The laws of India, as a result of India being a signatory to both the New
York as well as the Geneva Conventions, have primarily always provided
for enforcement, within the local territory of India, of foreign arbitral
awards. Examples of these include the laws such as the Arbitration
(Protocol and Convention) Act, 1937 and the Foreign Awards (Recognition
and Enforcement) Act, 1961 which were in tune with the Geneva and New
York Convention, in that they provided for enforcement of foreign arbitral
awards in India, provided that the parties have consented to the dispute
being settled in the as per the law of the place chosen for the
proceeding. However, today, the law that is in force is the Arbitration and
Conciliation Act of 1996, enacted both on the UNCITRAL Model Law on
Arbitration as well as to revamp and replace the 1937 and 1961 laws on
the same. Thus, today, it is the 1996 Act that provides for the enforcement
of foreign arbitral awards in India.
Further, the Code of Civil Procedure of 1908 does also play in the role in
the enforcement of foreign awards in India. The arbitral award has been
accorded the status of a decree and thus the procedure that applies to set
aside or challenging of a decree applies in equal measure to an arbitral
award.
Enforcement of awards under the Arbitration and Conciliation Act,
1996.
As the Arbitration and Conciliation Act of 1996 (hereinafter referred to as
the ‘Act’), is the prime legislation behind the enforcement of foreign
awards, it is essential to understand how the awards are enforced under
the Act. One of the declared objectives of the Arbitration and Conciliation
Act, 1996 is that every final award is to be enforced in the same manner
as the decree of the Indian court would be.
The Act has two parts- Part I and Part II, each of which deal with the
enforcement of different type of foreign arbitral awards. Part I, modelled
on the UNCITRAL Model Law, provides for the enforcement of arbitral
awards that are not covered under the ambit of either the New York or the
Geneva Conventions. As laid down by the apex Court, Part I of the Act
applies to foreign awards that are governed neither by the New York nor
the Geneva Convention. Such enforcement of awards can be challenged in
cases wherein the award is contrary to either the fundamental policy or
interest of India or is patently illegal.
Part II of the Act is in tune with the provisions of the New York Convention.
As per Section 46 of the Act, the provisions of Part II applies if the arbitral
award is in pursuance of arbitration agreement under the Convention and
the award is made in those States or in within the territorial limits of such
place that has been notified by the Government of India. Such recognition
of a foreign State is done through means of a notification by the
Government of India that arbitral awards in those places are eligible to be
enforced in India with respect to the parties to the agreement.
The different types of awards which are enforceable include Money Award,
Award Containing Injunction and a Declaratory Award.
Jurisdiction
For the purposes of the Arbitration and Conciliation Act, 1996, ‘court’
means the principal Civil Court having original jurisdiction to decide the
question forming the subject matter of the arbitration if the same were a
subject matter of a suit. The aggrieved party can, thus, bring its application
to set aside the award before the court where the successful party has its
office or where the cause of action in whole or in part arose or where the
arbitration took place.
Time limit
Any application filed under Section 34 of the Act for setting aside the award
must be made within 3 months from receipt of the same. This period can
be extended by the court by a further period of 30 days on a sufficient
cause being shown, but not thereafter. The court normally allows a wide
scope to the meaning of what constitutes ‘sufficient cause’ and if it is
convinced of the genuineness of the delay in filing an, the delay is
condoned.
To conclude, it can be stated that the Indian Legal System does indeed
have a well laid down and established the procedure for the enforcement
of foreign awards in India. However, there is a rising need to reform the
same in order to make it more business-friendly and lessen the burden on
our already overworked judiciary.
6. Report on interaction sessions on Alternate Dispute Resolution system
Introduction
Indian judiciary is one of the oldest judicial system, a world-renowned fact
but nowadays it is also well-known fact that Indian judiciary is becoming
inefficient to deal with pending cases, Indian courts are clogged with long
unsettled cases. The scenario is that even after setting up more than a
thousand fast track Courts that already settled millions of cases the
problem is far from being solved as pending cases are still piling up.
Arbitration
The process of Arbitration cannot exist without valid arbitration agreement
prior to the emergence of dispute. In this technique of resolution parties
refer their dispute to one or more persons called arbitrators. Decision of
arbitrator is bound on parties and their decision is called ‘Award’. The
object of Arbitration is to obtain fair settlement of dispute outside of court
without necessary delay and expense.
Mediation
Mediation is an Alternative Dispute resolution where a third neutral party
aims to assist two or more disputants in reaching agreement. It is an easy
and uncomplicated party centered negotiation process where third party
acts as a mediator to resolve dispute amicably by using appropriate
communication and negotiation techniques. This process is totally
controlled by the parties. Mediator’s work is just to facilitate the parties to
reach settlement of their dispute. Mediator doesn’t impose his views and
make no decision about what a fair settlement should be.
It is the best possible outcome both the party come up with or has in mind.
Its suitable situation as each party thinks about their most favorable
scenario looks like.
For a successful negotiation the result always lies in the middle, mediator
after considering both the parties comes up with most likely outcome. Here
result is not always in the middle but little left or right of the center
depending on negotiation situation.
It the worst possible outcome a party has in their mind for what could
happen during negotiation.
Lok Adalat
Lok Adalat is called ‘People’s Court’ presided over by a sitting or retired
judicial officer, social activists or members of Legal profession as the
chairman. National Legal Service Authority(NALSA) along with other Legal
Services Institutions conducts Lok Adalats on regular intervals for
exercising such jurisdiction. Any case pending in regular court or any
dispute which has not been brought before any court of law can be referred
to Lok Adalat. There is no court fees and rigid procedure followed, which
makes the process fast. If any matter pending in court of referred to the
Lok Adalat and is settled subsequently, the court fee originally paid in the
court when the petition filed is also refunded back to the parties.
Parties are in direct interaction with the judge, which is not possible in
regular courts. It depends on the parties if both the parties agree on case
long pending in regular court can be transferred to Lok Adalat. The persons
deciding the cases have the role of statutory conciliators only, they can
only persuade the parties to come to a conclusion for settling the dispute
outside the regular court in the Lok Adalat. Legal Services Authorities
(State or District) as the case may be on receipt of an application from one
of the parties at a pre-litigation stage may refer such matter to the Lok
Adalat for which notice would then be issued to the other party. Lok Adalats
do not have any jurisdiction to deal with cases of non-compoundable
offenses.
7. A Request by one party to the other party Requesting that their Commercial
Dispute to be referred to Arbitration.
(1) The arbitral tribunal may rule on its own jurisdiction, including any
objections with respect to the existence or validity of the arbitration
agreement. For that purpose, an arbitration clause which forms part of a
contract shall be treated as an agreement independent of the other terms
of the contract. A decision by the arbitral tribunal that the contract is null
and void shall not entail ipso jure the invalidity of the arbitration clause.
(2) A plea that the arbitral tribunal does not have jurisdiction shall be
raised not later than the submission of the statement of defence. A party
is not precluded from raising such a plea by the fact that he has
appointed, or participated in the appointment of, an arbitrator. A plea
that the arbitral tribunal is exceeding the scope of its authority shall be
raised as soon as the matter alleged to be beyond the scope of its
authority is raised during the arbitral proceedings. The arbitral tribunal
may, in either case, admit a later plea if it considers the delay justified.
(3) The arbitral tribunal may rule on a plea referred to in paragraph (2)
of this article either as a preliminary question or in an award on the
merits. If the arbitral tribunal rules as a preliminary question that it has
jurisdiction, any party may request, within thirty days after having
received notice of that ruling, the court specified in article 6 to decide the
matter, which decision shall be subject to no appeal; while such a
request is pending, the arbitral tribunal may continue the arbitral
proceedings and make an award.
Unless otherwise agreed by the parties, the arbitral tribunal may, at the
request of a party, order any party to take such interim measure of
protection as the arbitral tribunal may consider necessary in respect of
the subject-matter of the dispute. The arbitral tribunal may require any
party to provide appropriate security in connection with such measure.
The parties shall be treated with equality and each party shall be given a
full opportunity of presenting his case.
(1) Subject to the provisions of this Law, the parties are free to agree on
the procedure to be followed by the arbitral tribunal in conducting the
proceedings.
(2) Failing such agreement, the arbitral tribunal may, subject to the
provisions of this Law, conduct the arbitration in such manner as it
considers appropriate. The power conferred upon the arbitral tribunal
includes the power to determine the admissibility, relevance, materiality
and weight of any evidence.
(1) The parties are free to agree on the place of arbitration. Failing such
agreement, the place of arbitration shall be determined by the arbitral
tribunal having regard to the circumstances of the case, including the
convenience of the parties.
(2) The arbitral tribunal may order that any documentary evidence shall
be accompanied by a translation into the language or languages agreed
upon by the parties or determined by the arbitral tribunal.
(1) Within the period of time agreed by the parties or determined by the
arbitral tribunal, the claimant shall state the facts supporting his claim,
the points at issue and the relief or remedy sought, and the respondent
shall state his defence in respect of these particulars, unless the parties
have otherwise agreed as to the required elements of such statements.
The parties may submit with their statements all documents they
consider to be relevant or may add a reference to the documents or
other evidence they will submit.
(2) Unless otherwise agreed by the parties, either party may amend or
supplement his claim or defence during the course of the arbitral
proceedings, unless the arbitral tribunal considers it inappropriate to
allow such amendment having regard to the delay in making it.
(2) 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 goods, other property or documents.
(b) may require a party to give the expert any relevant information or to
produce, or to provide access to, any relevant documents, goods or other
property for his inspection.
The arbitral tribunal or a party with the approval of the arbitral tribunal
may request from a competent court of this State assistance in taking
evidence. The court may execute the request within its competence and
according to its rules on taking evidence.
(1) The arbitral tribunal shall decide the dispute in accordance with such
rules of law as are chosen by the parties as applicable to the substance
of the dispute. Any designation of the law or legal system of a given
State shall be construed, unless otherwise expressed, as directly
referring to the substantive law of that State and not to its conflict of
laws rules.
(2) Failing any designation by the parties, the arbitral tribunal shall apply
the law determined by the conflict of laws rules which it considers
applicable.
(4) In all cases, the arbitral tribunal shall decide in accordance with the
terms of the contract and shall take into account the usages of the trade
applicable to the transaction.
In arbitral proceedings with more than one arbitrator, any decision of the
arbitral tribunal shall be made, unless otherwise agreed by the parties,
by a majority of all its members. However, questions of procedure may
be decided by a presiding arbitrator, if so authorized by the parties or all
members of the arbitral tribunal.
(1) If, during arbitral proceedings, the parties settle the dispute, the
arbitral tribunal shall terminate the proceedings and, if requested by the
parties and not objected to by the arbitral tribunal, record the settlement
in the form of an arbitral award on agreed terms.
(1) The award shall be made in writing and shall be signed by the
arbitrator or arbitrators. In arbitral proceedings with more than one
arbitrator, the signatures of the majority of all members of the arbitral
tribunal shall suffice, provided that the reason for any omitted signature
is stated.
(2) The award shall state the reasons upon which it is based, unless the
parties have agreed that no reasons are to be given or the award is an
award on agreed terms under article 30.
(3) The award shall state its date and the place of arbitration as
determined in accordance with article 20(1). The award shall be deemed
to have been made at that place.
(2) The arbitral tribunal shall issue an order for the termination of the
arbitral proceedings when:
(a) the claimant withdraws his claim, unless the respondent objects
thereto and the arbitral tribunal recognizes a legitimate interest on his
part in obtaining a final settlement of the dispute;
(c) the arbitral tribunal finds that the continuation of the proceedings has
for any other reason become unnecessary or impossible.
(3) The mandate of the arbitral tribunal terminates with the termination
of the arbitral proceedings, subject to the provisions of articles 33 and
34(4).
8. Draft of an Application under Section 8 of the Arbitration And
Conciliation Act, 1996
Before the Court of Civil Judge, (Place)
AND
In the matter of the Arbitration Agreement dated the ……………ay of………20 …..
BETWEEN
1. The plaintiff A has filed the above suit against this defendant
for…………………………The said dispute is, subject of an arbitration, agreement
dated…………………………
3. This defendant has not filed his first statement before this court in the matter.
Your petitioner, therefore, prays for an order staying the proceeding of the suit and direct
the plaintiff to get the matter settled by arbitration in accordance with the arbitration
agreement.
Defendant’s Advocate
Introduction
Section 8 of the Arbitration and Conciliation Act, 1996 deals with the
power of the judicial authority to refer the parties to arbitration. The crux
of the provision is that if there is an arbitration agreement between the
parties and a dispute arises between the parties which is a subject
matter of arbitration, then the judicial authority before whom either of
the parties has brought the case is obligated under Section 8 of the
Arbitration and Conciliation Act, 1996 to direct the parties to resolve their
dispute through arbitration. To amplify the scope of arbitration, the 2015
Amendment to Section 8 of the said Act mandates the judicial authority
to refer the parties to arbitration irrespective of any decree/court
order/judgment. This section is based on Section 34 of the
erstwhile Arbitration Act, 1940.
Meaning of ‘Party’
Section 2(1)(h) of the Arbitration and Conciliation Act, 1996 defines the
term “party” as a party to an arbitration agreement. These parties can
also be bodies of persons or incorporated persons like a company. For
the purpose of Section 8 of the said Act, the party should be the
disputing party/parties who have submitted their dispute for resolution
before the judicial authority.
In the case of Garware Wall Ropes Ltd vs. Coastal Marine Construction
and Engineering Ltd. (2019) the court iterated that to examine the prima
facie validity of an arbitration agreement, the judicial authority needs to
determine the following:
Whereas the High Court of Delhi in the case of Sharad P. Jagtiani vs.
Edelweiss Securities Limited(2014) held that in a suit generally the first
statement on the substance of the dispute is the ‘written statement’ filed
by the defendant in reply to the plaint and therefore, the written
statement could be regarded as the first statement on the substance of
the dispute.
Further, in the case of Greaves Cotton Ltd. vs. United Machinery and
Appliances (2016), the Apex Court held that an application for seeking an
extension of time for filing the written statement would not amount to
the ‘ First statement of the substance of dispute’.
In MI2C Security Facilities Pvt. Ltd. vs. North Delhi Municipal
Corporation (2018) the Delhi High Court adjudicated that if the party has
filed its first statement without any intimation of the arbitration clause
before the judicial authority then it would be presumed that the party has
waived off its right to invoke the arbitration clause as per Section 8 of the
Arbitration and Conciliation Act, 1996. In this case, the defendant had
filed a short affidavit as a reply to the writ petition filed, the court held
that since the affidavit filed was a reply, therefore it was the first
statement.
In the matter of SSIPL Lifestyle Pvt. Ltd. vs. Vama Apparels (India) Pvt.
Ltd(2020), the Delhi High Court decided on the issues related to the time
limit for filing an application under Section 8. The court clarified that the
‘written statement required to be filed by the defendant party according
to Order VIII Rule 1 of the CPC would be the first statement on the
substance of the dispute, and the court further proceeded to state that
that limitation for filing of the written statement under CPC for non-
commercial suits, and for commercial suits under the Commercial Courts
Act, 2015 would be 90 days and 120 days respectively from the date of
summons. In that matter, the party intimated the court about the
arbitration clause after the expiry of 120 days. Hence, the court rejected
the reference to arbitration.
Previously the Supreme Court of India had iterated in M/s SCG Contracts
India Pvt. Ltd. vs. K.S. Chamankar Infrastructure Pvt. Ltd. & Ors (2019)
that in commercial suits the limit of 120 days is mandatory in nature and
not discretionary.
Conclusively, Section 8 fixes a time limit for the parties to file the first
statement, which is 90 days for civil original suits and 120 days for
commercial suits. It is during this period that the parties need to apply
for arbitration before the court, and if the parties fail to do so, it will be
deemed that they have waived off their right to arbitration. The intention
behind fixing the limit is to avoid unnecessary delay in commencing the
arbitral proceedings because the sole purpose of arbitration is to provide
a swift resolution of a dispute.
Obligation of the Judicial Authority to refer
the parties to arbitration
The words in Section 8-“Judicial authority… notwithstanding any
judgment, decree or order of the Supreme Court or any court, refer the
parties to arbitration unless it finds that prima facie no valid agreement
exists.” indicate that if all the conditions precedent are satisfied, then the
judicial authority is obligated to refer the parties to arbitration, and
subsequently ceasing the jurisdiction of the civil court in action brought
before it.
The same was iterated in the case of Agri Gold Exims Ltd. vs. Sri Lakshmi
Knits & Wovens Ltd (2007).
The proviso to the above clause provides that when the party applying
for arbitration does not have the original agreement or the certified copy
thereof, but the other party has retained the agreement, then the onus
falls on the arbitration seeking party to file a petition before the court to
make the other party produce the original agreement.
P. Anand Gajapathi Raju & Ors. vs. P.V.G. Raju (Died) & Ors (2000):
Another factor that the judicial authority might want to look into
would be whether the validity of the arbitration clause can be
challenged before the Court:
The aforesaid issue was raised before the Supreme Court in Hindustan
Petroleum Corpn. Ltd. vs. Pinkcity Midway Petroleums(2003). The Court
held that if the existence of the arbitration clause is notified to the court
then, the courts ought to refer the dispute to arbitration.
1. When it appears that the party has waived his right to invoke the
arbitration clause before submission of the first statement on the
substance of the dispute.
2. When the Judicial authority is of the view that no adequate relief
would be available to the party.
3. When the Court or the Judicial authority is satisfied that no
contract has been concluded between the parties.
4. When the contract itself is fraudulent in nature.
5. When the main contract is void ab initio or illegal or non-existent.
6. Where the suits or claim is based on Hundies or on Negotiable
Instruments
The Delhi High Court in the case of Parasramka Holdings (P) Ltd. vs.
Ambience (P) Ltd. & Anr. (2018) analyzed in detail the difference
between the pre-amended provision and the post amended provision and
stated that although the pre-amendment act did have a limit for the
parties seeking arbitration, the limit was not certain and created a lot of
confusion. After the 2015 amendment, a definite time limit was set and
within that stipulated time limit, the parties need to apply for Section 8 of
the Arbitration and Conciliation Act, 1996.
Conclusion
Section 8 of the 1996 Act demonstrates a provision that limits judicial
intervention in the arbitration process. Through various judicial
precedents, it is clear that where there is a valid arbitration clause or
agreement between the parties and a party to the dispute notifies the
judicial authority regarding the same, then nobody can stop the party
from taking their matter to arbitration. The intent of the legislature
behind framing this statute is to encourage more and more parties to
resolve their disputes by way of arbitration.
9. Notice Under Section. 11 of Arbitration And Conciliation Act, 1996
Introduction
Section 11 of the Arbitration and Conciliation Act, 1996, deals with the provision of
appointment of arbitrators in an arbitration settlement. It provides for different
courses of action that parties to a dispute can take in order to appoint arbitrators.
Section 11 allows the parties to choose arbitrators by themselves by agreeing upon a
procedure for appointment. In case the parties cannot appoint arbitrators by
themselves, they can get arbitrators appointed through any one of the procedures
prescribed in Section 11. Over the years, the section has gone through several
changes via amendments in the years 2015 and 2019, substantially reducing the
influence of the judiciary in arbitration.
What is arbitration
Arbitration is essentially one of the methods of Alternative Dispute
Resolution (ADR) whereby a dispute between two parties is heard and
determined by a third party without involving the court. It allows parties
to seek an expeditious settlement of disputes in a manner similar to that
of litigation. However, unlike litigation, it takes place outside of the court
and the decision is final and cannot be reexamined. It results in the
declaration of an award which is similar to an order given by the court.
Matters concerning arbitration are governed by the Arbitration and
Conciliation Act, 1996.
Clauses
1. The nationality of an arbitrator is not essential unless the parties
otherwise agree upon it.
2. The parties can also form an agreement on the procedure for
appointing arbitrators.
3. In case of failure to reach an agreement on the procedure of
appointment, clause (3) prescribes the following procedure for the
appointment of three arbitrators:
1. Each party appoints an arbitrator.
2. The two arbitrators then jointly appoint the third arbitrator, who
acts as the presiding arbitrator.
4. The Supreme Court and high courts have the power to designate
arbitral institutions. The arbitral institutions are graded by the
Arbitration Council of India under Section 43-I of the Act. If a high
court has no graded arbitral institution, the Chief Justice of the
concerned high court may maintain a panel of arbitrators and also
review it from time to time.
5. Clause 4 states that when the procedure mentioned in clause (3) is
applied, there are two conditions, which are the following:
1. Each party must appoint an arbitrator within thirty days of
receiving the request from the other party to do so.
2. The two arbitrators must reach an agreement on appointing
the third arbitrator within thirty days from the date of their
appointment.
In case of failure of either of the two conditions, the
appointment shall be made by the arbitral institution
designated by the Supreme Court or a high court upon the
application or request of a party.
In situations where the parties did not make the appointment, it was made
by the Chief Justices of high courts or their designates. In matters of
international commercial arbitration, it was the Chief Justice of India who
made the appointments.
The amendment struck down the word “Chief Justice” with “Supreme Court
or high court”.
By inserting Clause 6A and 6B, the role of judicial involvement was reduced
at the pre-arbitration stage. As per the new clause 6A, the Chief Justices had
to reduce their role to the examination of the existence of an arbitration
agreement. Clause 6B clarifies that designation does not amount to
delegation of judicial capacity.
Through an amendment of Clause 7, it was added that it is not possible to
appeal against the decision of the court or its designate in any form. The
section had only stated that the decision is “final”, prior to this amendment.
The amendment made the finality of the orders more rigid compared to the
section prior to the amendment.
The amendment specifically expressed contents of disclosure as a
requirement while appointing an arbitrator.
Two new clauses were also added. Clause 13 provides for the expeditious
settlement of the application within sixty days, and Clause 14 provides that
the concerned high court has the power to determine the fees.
In the case of National Insurance Co. Ltd. v. Boghara Polyfab (2008), the
Supreme Court categorised issues pertaining to arbitration into what the court
can interfere in and what the court may interfere in. The judgement also
specified the third category of issues that can only be decided by the arbitral
tribunal, which is essentially the sole arbitrator or panel of arbitrators appointed
as per Section 11. The categories of issues are listed below:
2. Whether an arbitration agreement exists and whether the party making the application
is a party to the agreement.
2. Issues that may or may not be decided upon by the Chief Justice or his
designate:
1. Whether the claim is long barred or alive.
2. Whether the parties have concluded the transaction by recording their satisfaction or
receiving payment with no objection.
In the cases of Deepak Galvanising & Engg Industries (P) Ltd v. Government of
India, (1997) and Continental Constructions Ltd v. National Hydroelectric Power
Corpn Ltd, (1998), it was held that once the parties fail to appoint arbitrators by
themselves, it leads to the forfeiture of their right to appoint. This gives the
right of appointment to the Chief Justice or his designate.
Judicial intervention was reduced by the insertion of 6A, whereby the courts had
to confine their role to the examination of the existence of an arbitration
agreement. The new section does not allow the court to conduct an examination
of its validity. This provision helps to avoid delays in the proceedings.
In the case of Duro Felguera, S.A. v. Gangavaram Port Limited (2017), the
literal interpretation of Clause 6A was adopted, restricting the judicial
examination to the existence of an agreement. Additionally, the judgement laid
down the key to the determination of its existence, which is to examine whether
the agreement contains a clause providing for arbitration in case of dispute on
the agreement.
Despite the restrictive nature of Clause 6A, the courts seem to have ignored it in
several judgements.
In Garware Wall Ropes Ltd. v. Coastal Marine Constructions & Engg. Ltd. (2019),
the Supreme Court held that the agreement must be sufficiently stamped.
In the case of Prime Market Reach Pvt. Ltd. v. Supreme Advertising Ltd. (2019),
the Delhi High Court refused to refer the parties to arbitration after finding that
the agreement was invalid as it did not abide by the requirements laid down in
Section 7 of the Act.
3. Post-2019 amendment
Conclusion
The appointment of arbitrators under Section 11 started with significant
involvement from the judiciary. However, it has now become the
responsibility of the arbitral institutions. It is evident that the 2019
Amendment Act has been a milestone in the evolution of Section 11,
which institutionalised the system of arbitration and which helped in truly
achieving the objective of reducing judicial intervention. However, the
drafting of the Act suffers from a few flaws. The amendments in 2015
and 2019 could be clearer in their wording, as the ambiguity leaves room
for more judicial intervention
10. Draft of an application for interim relief under section 17 of the Arbitration and
Conciliation act 1996
Vs.
(Name of Place)
Dated:
ADVOCATE
1. Introduction
Section 17 of the Arbitration and Conciliation Act, 1996 ("the Act") prescribes a
mechanism for parties to an arbitration, to seek interim reliefs from the arbitral tribunal
during the pendency of the arbitral proceedings.1 Parties to an arbitration may seek
the said reliefs after invocation of the arbitration proceedings till the passing of the
award. The present article discusses the applicability, principles for seeking interim
reliefs and enforceability of orders under Section 17 of the Act, pursuant to the
amendments to the Act in 2015 and subsequently in 2019.
Section 17 of the Act was amended vide the 2015 Amendment Act and implemented
on 23 October 2015. The amended Section 17 of the Act specified the types of reliefs
which a party could seek, inter alia, appointment of a guardian, securing the amount
of dispute in the arbitration, preservation, interim custody or sale of any goods or
property which are the subject matter of the arbitration agreement.3 The objective of
amending Section 17 of the Act was to empower the tribunal with the same powers
as a civil court under Section 9 of the Act in relation to the grant of interim measures.
In this regard, the High Court of Judicature at Madras ("MHC") in the matter decided
on 17 September 2019, observed that the power to pass interim measures imposes
a discretion vested in the tribunal which has to be exercised in consonance with the
well settled principles governing the grant of such reliefs by the civil court. 4
The 2015 Amendment Act further provides that an order passed by the arbitral
tribunal under Section 17 of the Act would be deemed to be an order of the court
and is enforceable under the provisions of the Code of Civil Procedure, 1908
("CPC").5
It may also be noted that Section 17(1) of the Act empowered the arbitral tribunal to
pass an interim order even after it has made the award but before it is enforced
under Section 36 of the Act. However, upon passing of the award, the tribunal would
become functus officio, and cannot pass an interim order.6
Noticing this incongruity, the High Level Committee to Review the Institutionalisation
of Arbitration Mechanism in India under the chairmanship of Justice B.N. Srikrishna
in 2018, recommended the deletion of the expression "or at any time after making of
the arbitral award but before it is enforced in accordance with Section 36" from the
text of Section 17(1). This recommendation was implemented vide the Arbitration
and Conciliation (Amendment) Act, 2019 ("2019 Amendment Act") with effect from
30 August 2019.
Thus, the position post the 2019 Amendment is that the power under Section 17(1)
of the Act, though identical to Section 9(1) of the Act in content, is subject to the
restriction that it can be exercised by a tribunal only during the pendency of
proceedings before it.
a. The plaintiff has a strong case for trial. That is, it shall be of a higher
standard than a prima facie case that is normally required for a
prohibition injunction.
b. It is necessary to prevent irreparable or serious injury which normally
cannot be compensated in terms of money.
c. The balance of convenience is in favour of the one seeking such relief.
The MHC observed that these principles are law under Article 141 of the
Indian constitution and the arbitral tribunal as well as the courts would be duty
bound to follow them in letter and spirit.
5. Conclusion
In the author's opinion, the evolution of Section 17 of the Act makes it evident that the
arbitral tribunals are now empowered to deal with interim measures independently
without any intervention of the courts. This allows the parties to divulge in a pro-
arbitration stance rather than referring their disputes and then seeking interim orders
before the courts. Further, the interplay of provisions of the CPC show that while the
arbitral tribunal has adequate power to operate independently, it may follow the
underlying principles which would provide assistance to it for passing a decision.
Considering the above, a sub-provision maybe inserted to Section 17 of the Act which
shall allow the Tribunal to adjudicate the contempt thereby increasing the flexibility of
the arbitrators and reducing the burden from the courts.