ARBITRATION LAW IN

INDIA

J L N Murthy
International Arbitrator
Advocate

1
 Object
and
Reasons for the Enactment

• Harmonisation

• UNCITRAL Model Law

• Investment Climate

2
The Arbitration And Conciliation
Act, 1996 as amended by
(Amendment) Act, 2015 [3 of
2016]

3
 Arbitration and
Conciliation Act,1996
• Arbitration and Conciliation Act 1996 was
enacted based on UNCITRAL Model Rules

• This Act repealed the Arbitration Act 1940,

Foreign Awards (recognition and
Enforcement) Act, 1961 and Arbitration
(Protocol and convention ) Act, 1937

• The Amendment Act, 2015 has introduced

some major changes in the principal Act of
1996.

4
 Part II – Enforcement of
Part I – Arbitration
Certain Foreign Awards
10 Chapters
2 Chapters
Sections 1-43
Sections 44-60

Parts

Part III – Conciliation Part IV – Supplementary

Provisions
Sections 61-81
Sections 82-86

5
 Schedule: I
Convention on the Recognition and
Enforcement of Foreign Arbitral
Awards

Schedule: VII Schedule: II

Categories of Justifiable Protocol On Arbitration
Doubt of Arbitrator’s Clause
Relationship with Parties
or Counsel or Subject
Matter
SCHEDULES Schedule: III
Convention on the
Schedule: VI Execution of
Form of Disclosure Foreign Arbitral
by Arbitrator Awards

Schedule: V
Grounds for Determining Schedule: IV
Justifiable Doubts as to Model Fee
Independence or Impartiality of
Arbitrator
6
Departures from Arbitration Act,
1940

• Award – Unique

• Court Intervention - Minimal

7
 Important Provisions of the new
Arbitration & Conciliation Act,
1996
• Arbitration Agreement (Sec.7) • Filing of pleadings (Sec.23)
• Interim Measures by Court • Default of a party
(Sec.9) (Sec.25)
• Appointment of Arbitrator • Settlement (Sec.30)
(Sec.11) • Challenge of Award
• Arbitrators jurisdiction (Sec.34)
(Sec.16) • Enforcement (Sec.36)
• Interim measures by • Jurisdiction (Sec.42)
Arb.Tribunal (Sec.17)
• Limitation (Sec.43)
• Rules of procedure (Sec.19)

8
 SECTION 7 - Arbitration agreement
• An agreement by the parties to submit to arbitration all or certain
disputes which have arisen or which may arise between them in respect
of a defined legal relationship, whether contractual or not.

• an arbitration clause in a contract

• a separate agreement

• in writing and signed by the parties exchange of letters, telex,

telegrams or other telecommunication including communication through
electronic means.

• 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.

• The reference in a contract to a document containing an arbitration

clause constitutes an arbitration agreement if the contract is in writing
and the reference is such as to make that arbitration clause part of the
contract.

9
 SECTION 9
Interim measures by Court
• Before, or during arbitral proceedings or at any time after the
making of the arbitral award but before it is enforced

• appointment of a guardian for a minor or person of unsound mind

for the purposes of arbitral proceedings; or

• interim measure or protection:

(a) the preservation, interim custody or sale of any goods

(b) securing the amount in dispute in the arbitration

(c) the detention, preservation or inspection of any property or thing

which is the subject-matter of the dispute in arbitration

(d) interim injunction or the appointment of a receiver

10
• Where, before commencement of the arbitral
proceedings, the arbitral proceedings shall be
commenced within a period of ninety days from the
date of such order or within such further time as
the Court may determine.

• Once the arbitral tribunal has been constituted,

the Court shall not entertain application ,unless the
Court finds that circumstances exist which may
not render the remedy provided under section 17
efficacious.”.

11
 Section 11
Appointment of Arbitrators

• A person of any nationality

• Parties are free to agree on a procedure
• Arbitration with three arbitrators, each party
shall appoint one arbitrator, and the two
appointed arbitrators shall appoint the third
arbitrator who shall act as the presiding
arbitrator.
• If the Central Government is satisfied that it is
necessary or expedient so to do, it may, by
notification in the Official Gazette, amend the
Fourth Schedule.
Default Provision
Sole Arbitrator & Presiding Arbitrator 12
 SECTION 17

Interim measures ordered by arbitral tribunal

• A party may, during the arbitral proceedings or at any time

after the making of the arbitral award but before it is
enforced in accordance with section 36, apply to the arbitral
tribunal—
a. for the appointment of a guardian for a minor or person of
unsound mind for the purposes of arbitral proceedings; or
b. for an interim measure of protection
• Subject to any orders passed in an appeal under section 37,
any order issued by the arbitral tribunal under this section
shall be deemed to be an order of the Court for all purposes
and shall be enforceable under the Code of Civil
Procedure, 1908, as if it were an order of the Court.

13
 SECTION 19
Determination of rules of procedure

• Not bound by the Code of Civil Procedure,

1908 or the Indian Evidence Act, 1872.

• Parties are free to agree on the procedure

• The power of the arbitral tribunal includes

the power to determine the admissibility ,
relevance, materiality and weight of any
evidence

14
 SECTION 23
Statements of claim and defence

• Statement of Claim and defence with

documents

• Parties may amend or supplement

their claim or defence

15
 Section 25
Default of a Party
• Claimant fails to communicate his statement of
claim, the arbitral tribunal shall terminate the
proceedings;

• Respondent fails to communicate his statement of

defence, the arbitral tribunal shall continue the
proceedings without treating that failure in itself
as an admission of the allegations by the claimant.

• A party fails to appear at an oral hearing or to

produce documentary evidence, the arbitral
tribunal may continue the proceedings and make
the arbitral award on the evidence before it.

16
 SECTION 16
Competence of arbitral tribunal to rule on
its jurisdiction
• The arbitral tribunal may rule on its own
jurisdiction

• Plea – before filing defence statement

• Rejection of plea – Proceedings continue

• A party aggrieved by such an arbitral award

may make an application for setting aside such
an arbitral award in accordance with section
34.

17
 SECTION 30
Settlement

• Encourage settlement of the dispute and

use mediation, conciliation or other
procedures

• Record the settlement in the form of an

arbitral award on agreed terms in
accordance with section 31

18
 SECTION 34
Application for setting aside arbitral award
Arbitral award may be set aside by the Court only
if the party making the application furnishes
proof that-

• a party was under some incapacity, or

• the arbitration agreement is not valid under the

law; or

• the party making the application was not given

proper notice of the appointment of an arbitrator
or of the arbitral proceedings or was otherwise
unable to present his case; or

19
…
• the arbitral award deals with a dispute not contemplated by
or not falling within the terms of the submission to arbitration,
or it contains decisions on matter beyond the scope of the
submission to arbitration; or the composition of the arbitral
tribunal or the arbitral procedure was not in accordance with
the agreement of the parties; or
• If the Court finds that
a. the subject-matter of the dispute is not capable of settlement
by arbitration under the law for the time being in force, or
b. the arbitral award is in conflict with the public policy of India.
• An arbitral award arising out of arbitrations other than
international commercial arbitrations, may be set aside by the
Court, if the it finds that the award is vitiated by patent
illegality appearing on the face of the award
• Setting aside application – within three months
• An application under this section shall be filed by a party only
after issuing a prior notice to the other party.
• An application under shall be disposed of expeditiously, within a
period of one year from the date on which the notice is served
upon the other party.
20
 SECTION 36
Enforcement
• Where the time for making an application to set
aside the arbitral award under section 34 has
expired, then, subject to the provisions of sub-
section (2), such award shall be enforced in
accordance with the provisions of the Code of
Civil Procedure, 1908, in the same manner as if it
were a decree of the court.
• Upon filing of an application for stay of the
operation of the arbitral award, the Court may,
subject to such conditions as it may deem fit,
grant stay of the operation of such award for
reasons to be recorded in writing

21
 SECTION 42
Jurisdiction

Any application under this Part has been

made in a Court, that Court alone shall
have jurisdiction over the arbitration
proceedings and all subsequent
applications

22
 Section 43
Limitation
• Limitation Act, 1963 (36 of 1963), shall, apply to
arbitrations as it applies to proceedings in court.

• An arbitration shall be deemed to have

commenced on the date referred in section 21.

• Where the Court orders that an arbitral award

be set aside, the period between the
commencement of the arbitration and the date
of the order of the Court shall be excluded in
computing the time prescribed by the Limitation
Act, 1963 (36 of 1963), for the commencement
of the proceedings (including arbitration) with
respect to the dispute so submitted.

23