Arbitration and Conciliation

Act, 1996
 PART-I
CHAPTER-1
 Section 2- Definitions
S. 2 (1) unless the context otherwise requires,-
(a) “arbitration” means any arbitration whether
or not administered by permanent arbitral
institution;
(b) “Arb agreement” means an agreement
referred to in section 7;
(c) “Arbitral Award” includes an interim award
(d) “arbitral tribunal” means a sole
arbitrator or a panel of arbitrators;
(e) “court” means the principal civil
court of original jurisdiction in a district,
and includes the High Court in exercise
of its ordinary original civil jurisdiction…
but not civil court of a grade inferior to
such principal civil court…
(f) “international commercial
arbitration” means an arbitration
relating to disputes arising out of
legal relationships, whether
contractual or not, considered as
commercial under the law in force
in India and where at least one of
the parties is-
(i) An individual who is a national of, or
habitually resident in country other than
India; or
(ii) a body corporate which is incorporated
in any country other than India; or
(iii) a company or an association or a body
of individuals whose central management
and control is exercised in any country
other than India; or
(iv) government of a foreign country.
(g)…
(h) “party” means a party to an
arbitration agreement
Section 2 (1) In this part, unless the
context otherwise requires,-
(a)…
(b)…

meaning of ‘unless the context

otherwise requires’?
When an act defines a term, it is that
definition that has to be taken
whenever the term occurs in the act.

But where the context in which the

term is used makes the definition
inappropriate, the ordinary meaning
should be given to the term.
Section 2 (1) (a) Arbitration means
any arbitration whether or not
administered by permanent
arbitral institution;
O P Malhotra on law and practice of
arbitration and conciliation provides
that there are 4 core requirements of
accepted arbitration:
1. An Arb. Agreement
2. a dispute
3. reference to a neutral independent
party for its determination
4. award must be binding
 UNCITRAL Model Law:
Article 2 (a) defines arbitration as
‘any arbitration whether or not
administered by a permanent
arbitral institution’
Indian Act through sec 2 (1)(a)
verbatim reproduces the language
of the model law.
The object here is to allow parties
to resort to any type of arbitration
be it ad hoc arbitration or
institutional arbitration or
statutory arbitration.
 Sec 2 (1)(b) "arbitration
agreement" means an agreement
referred to in section 7;
Sec 7. Arbitration agreement.-
(1) In this Part, "arbitration agreement"
means an agreement by the parties to
submit to arbitration all or certain disputes
which have arisen or which may arise
between them in respect of a defined legal
relationship, whether contractual or not.
(2) An arbitration agreement may be in the
form of an arbitration clause in a contract
or in the form of a separate agreement.
(3) An arbitration agreement shall be in
writing.
(4) An arbitration agreement is in writing if
it is contained in-
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams
or other means of telecommunication
which provide a record of the agreement;
or
(c) an exchange of statements of claim and
defence in which the existence of the
agreement is alleged by one party and not
denied by the other.
(5) The reference in a contract to a
document containing an
arbitration clause constitutes an
arbitration agreement if the
contract is in writing and the
reference is such as to make that
arbitration clause part of the
contract.
K K Modi Vs K N Modi Ors (1998) 3 SCC 573
arbitration agreement----

1. The arbitration agreement must contemplate that the

decision of the tribunal will be binding on the parties to the
agreement, 
 
2. that the jurisdiction of the
tribunal to decide the rights of
parties must be derived either from
the consent of the parties or from
an order of the Court or from a
statute, the terms of which make it
clear that the process is to be an
arbitration,
3. the agreement must contemplate
that substantive rights of parties will
be determined by the agreed tribunal, 

4. that the tribunal will determine the

rights of the parties in an impartial and
judicial manner with the tribunal
owing an equal obligation of fairness
towards both sides,
5. that the agreement of the parties to
refer their disputes to the decision of the
tribunal must be intended to be
enforceable in law and lastly, 

6. the agreement must contemplate that

the tribunal will make a decision upon a
dispute which is already formulated at the
time when a reference is made to the
tribunal.
Bihar State Mineral Development
Corporation v. Encon Builders
(2003) 7 SCC 418
2 judge bench enlisted following
essential elements of an arbitration
agreement:
1. there must be a present or a future
difference in connection with some
contemplated affair;
2. There must be the intention of the
parties to settle such difference by
private tribunal;

3. the party must agree in writing to

be bound by the decision of such
tribunal;

4. The parties must be ad idem.

(c) "arbitral award" includes an
interim award;
UNCITRAL Model Law does not
define an award.
During the drafting of the Model Law,
many definitions were proposed.
However none was adopted as they
wanted to encompass not only final
awards but also partial awards and
interim awards in the definition of
award.
One such proposed definition is:
“Award means a final award which
disposes of all issues submitted to the
arbitral tribunal and any other decision
of the arbitral tribunal which finally
determines any question of substance or
the question of its competence or any
other question of procedure but, in the
latter case, only if the arbitral tribunal
terms its decision an award.”
 Russell describes an ‘award’ as a
final determination of a particular
issue or claim in the arbitration.
(Russell on Arbitration, 23rd ed.,
2007)
There is no internationally accepted
definition of the term ‘award’.
Traditionally, a distinction is drawn
between an ‘interim award’ which
resolves an issue relating to
jurisdiction, and a ‘partial award’
which decides a substantive issue at
the interim stage. (O P Malhotra on
Arbitration)
 Indian Arbitration act does not
define the award by itself.
Sec. 31 of the act sets out the
requirements of an award.
Sec. 31(6) confers jurisdiction on the
arbitral tribunal to make an interim
arbitral award on any matter with
respect to which it may make a final
binding award.
 Satwant Singh Sodhi v. State of Punjab
(1999 SC)
The SC considered the question as to
whether an interim award is final to the
extent it goes, or has effect till the final
award is delivered and stated that it ‘will
depend upon the form of the award. If the
interim award is intended to have effect
only so long as the final award is not
delivered, it will have force of the interim
award and it will
cease to have effect after the final
award is made. On the other hand
if the interim award is intended to
finally determine the rights of the
parties, it will have a force of a
complete award, will effect even
after the final award is delivered’
Final Award is an award by the
arbitral tribunal which finally
determines all of the issues in
disputes between the parties.
Successive Award:
An arb agreement may provide for
reference of disputes arising out of
the contract and there may be as
many awards as there are disputes
arising out of the contract.
The tribunal can make separate
awards for separate submissions
arising out of the same contract.
Additional Award:
if on the receipt of the arbitral award, a
party finds that the tribunal has omitted
to decide certain claims which were
present in the arbitral proceedings, the
party within 30 days from the receipt of
the award, may make a request to the
arbitral tribunal to make an additional
award w.r.t. the omitted claims u/s 33
(4) of the act.
 If the tribunal considers that
request is justified, it shall make an
additional award within 60 days
from the receipt of the request u/s
33 (5).
Settlement Award:
Sec. 30 of the Act.
 Section 2 (1) (d)
Arbitral Tribunal
means a sole arbitrator or a panel
of arbitrators
 Article 2 (b) of Model law defines
an arbitral tribunal to mean ‘a sole
arbitrator or a panel of arbitrators’.
 1996 act verbatim adopts the
definition of arbitral tribunal in s.
2(1)(d)
 Article 10 of the model law
provides that parties are free to
determine the number of
arbitrators and failing such
determination, the number of
arbitrators shall be three’.
 Sec 10 of Indian arbitration act,
1996, however, deviates from the
text of article 10 of model law.
 Sec 10 (1) of act provides that the
parties are free to determine the
number of arbitrators, provided
such number shall not be an even
number; failing such
determination, as per Sec 10 (2)
the arbitral tribunal shall consist of
a sole arbitrator.
A conjoint reading of Section 2 (1)
(d) and section 10 would indicate
that the minimum number
comprising of the tribunal is one
i.e. a sole arbitrator and the panel
of arbitrators may consist of any
odd number of arbitrators.
 Jurisdiction and Function:
Section 16 gives exclusive
jurisdiction to the arbitral tribunal
to rule on its own jurisdiction.
Section 17 empowers the arbitral
tribunal to order interim measures.
Procedure to be followed by tribunal:

Section 18 provides for a fair trial by

an impartial tribunal. It ensures that
the parties are treated with equality
and each party shall be given full
opportunity to present its case.
 Section 19 gives default power to
the arbitral tribunal to conduct the
proceedings in the manner it
considers appropriate, including
determination, admissibility,
relevance, materiality and weight
of any evidence.
 Arbitral Tribunal not a ‘court’:
In Anand Prakash v. Assistant Registrar,
Cooperative Society, Allahabad HC held
that an arbitrator is not a repository of
the judicial function of the state. He
cant be compared to a court or a judge.
An analogy of the arbitrator with the
courts is neither apt nor appropriate.
Section 2 (1)(e)
"Court" means the principal Civil Court of
original jurisdiction in a district, and includes
the High Court in exercise of its ordinary
original civil jurisdiction, having jurisdiction to
decide the questions forming the subject-
matter of the arbitration if the same had been
the subject-matter of a suit, but does not
include any civil court of a grade inferior to
such principal Civil Court, or any Court of Small
Causes;
 UNCITRAL Model Law defines
‘court’ in article 2 (c) ‘a body or
organ of a judicial system of a
state’.
 Def. in 1996 act has three parts;
a. the denotation:- it means the
principal court of original jurisdiction in
a district.
b. the connotation: it includes the high
court of ordinary original civil
jurisdiction…
c. the exclusionary part: excluding ‘a
civil court of a grade inferior to such
principal court..
 ‘Means’ is a term of restriction
while the word ‘includes’ is a term
of enlargement and when both the
words ‘means’ and ‘includes’ are
used in conjunction to define a
term, the intention of the
legislature is to supply a restricted
meaning to the term.
Sundaram Finance Ltd v. M.K. Kurian (2006)
Division bench of Madras HC while interpreting
Sec 2(1)(e) stated that the definition of ‘court’
in sec. 2(1)(e) of the act is a hard and fast
definition, as legislature by using the words
‘means’ or the word ‘includes’ indicates that no
other meaning can be assigned to the
expression as defined by the statute.
The def. is intended to be exhaustive and not
extensive.
 Prinicipal civil court means the
court of the district judge in a
district. (Ankati Satyamaiah v.
Sallangula lalaiah, 2002 AP)
The expression ‘District judge’
includes additional district judge.
Subject matter of the arbitration:
Bharat Aluminium Co v. Kaiser
Aluminium Technical Services
Court held that the term ‘subject matter
of arbitration’ should not be confused
with the ‘subject-matter of the suit’. The
term subject matter in Sec 2(1)(e) has a
reference and connection with the
process of dispute resolution. Its
function is to identify the courts having
supervisory control over the arbitration
proceedings.
 Section 2 (1)(f)
International Commercial
Arbitration
"international commercial arbitration" means an
arbitration relating to disputes arising out of legal
relationships, whether contractual or not, considered
as commercial under the law in force in India and
where at least one of the parties is-
(i) an individual who is a national of, or habitually
resident in, any country other than India; or
(ii) a body corporate which is incorporated in any
country other than India; or
(iii) a company or an association or a body of
individuals whose central management and control is
exercised in any country other than India; or
(iv) the Government of a foreign country;
 ICA taking place in India will be
governed by Part-I of the act of
1996, and the award resulting from
it will be a ‘domestic’ award.

‘why’?
Because, sec. 2(2) provides for- “This Part
(Part-1) shall apply where the place of
arbitration is in India.”
and
Sec. 2(7) provides for- “An arbitral award
made under this Part shall be considered
domestic award.”

If read together, these provisions will

explain the dynamics discussed above.
An ICA if takes place outside India,
the award would be a foreign
award as defined in section 44 and
section 53 of the act.
What is international arbitration?
It has been defined in article 1 (3)
of the UNCITRAL Model Law.
‘Commercial’ is explained in UNCITRAL model law as;
“The term “commercial” should be given a wide
interpretation so as to cover matters arising from all
relationships of a commercial nature, whether
contractual or not. Relationships of a commercial
nature include, but are not limited to, the following
transactions: any trade transaction for the supply or
exchange of goods or services; distribution agreement;
commercial representation or agency; factoring;
leasing; construction of works; consulting; engineering;
licensing; investment; financing; banking; insurance;
exploitation agreement or concession; joint venture
and other forms of industrial or business cooperation;
carriage of goods or passengers by air, sea, rail or road.”
‘Commercial’ under the law in
force in India
 Atiabari Tea Co. Ltd v. State of
Assam (AIR 1961 SC 232)
SC on construction of the
expression ‘trade and commerce’
held that:
“…in their (trade and commerce) wide
sweep are included carriage of persons
and goods by road, rail, air and
waterways, building contracts,
banking, insurance transactions…,
communication of information…and
many more activities-too numerous to
be exhaustively enumerated-which
may be called commercial intercourse.”
 Though this decision was not
concerned with any provision of
the arbitration act, it has been
treated as landmark case, laying
down the broad parameters of the
expression ‘trade and commerce’
used in various legislation including
arbitration law.
RM Investments v. Boeing Co. (1994)
The agreement was signed between the
parties for consultancy services from RMI to
Boeing.
SC court held that consultancy services would
fall under the relationship of commercial
nature and the expression ‘commercial’
should be construed broadly having regard to
the manifold activities which are an integral
part of the international trade.
 Section 2 (2)
This Part shall apply where the
place of arbitration is in India.
The Arbitration and Conciliation
(Amendment) Act 2015 provides that in
Sec. 2(2) the following proviso shall be
inserted, namely:-
“Provided that subject to an agreement to the
contrary, the provisions of sections 9, 27 and clause
(a) of sub-section (1) and sub-section (3) of section
37 shall also apply to international commercial
arbitration, even if the place of arbitration is outside
India, and an arbitral award made or to be made in
such place is enforceable and recognised under the
provisions of Part II of this Act.”
 Sec. 9 – Interim measures by the court.
Sec. 27 – Court assistance in taking
evidence.
Sec. 37 (1)(a) -- granting or refusing to
grant any measure under section 9.
Sec. 37 (3) -- No second appeal shall lie
from an order passed in appeal under this
section, but nothing in this section shall
affect or taken away any right to appeal to
the Supreme Court.
 Scope of section 2 (2):
Whether applicable to foreign
seated arbitrations?
 Position before Bhatia
International case:
1. In Dominant Offset Pvt Ltd v.
Adamovske Strojitrny A.S. (2000),
Delhi high court declared the scope
of section 2(2) as being wide
enough to include the arbitration
taking place outside India.
 2. The Calcutta HC in the case of
East Coast Shipping Ltd v. M.J.
Scrap Pvt. Ltd. (1997)
held that the section 2(2) of the act
restricts the applicability of Part-I
of the act to arbitrations in India.
 3. A division bench of the Delhi HC in
Marriott International v. Ansal Hotels
(2000) restricted the applicability of
Part-I to only arbitrations held in
India. It was observed that “the court
has no jurisdiction to entertain such a
petition for grant of interim measures
in relation to an arbitration being held
outside India.”
 Position laid down in Bhatia
International v. Bulk Trading (AIR
2002 SC 1432)
 SC in its 3 judge bench judgment
held that an application for interim
measures u/s 9 can be made to a
court in India even where the seat of
ICA was outside India, unless the
provisions in Part-I have been
excluded by an agreement between
the parties, either expressly or by
implication.
 In this case the contract contained an
arbitration clause providing for
arbitration as per the rules of ICC. A sole
arbitrator was appointed and venue was
decided to be Paris. The respondent filed
an application under sec. 9 in the district
court at Indore, for obtaining an order of
injunction restraining the appellant from
transferring its business assets and…
 …properties located in India. The
appellant opposed the application on
the ground of maintainability, by
contending that Part-I which contains
sec. 9 would apply to arbitrations
conducted in India. District Court
rejected the objections. MP HC also
rejected the petition filed by the
appellant. Then Appellant filed a SLP
before SC.
 Issue was- “whether an Indian
court can grant interim relief u/s 9,
in cases where ICA is held outside
India?”
 SC held that Part-I grants power
courts to order interim measures
to even ICAs taking place outside
India, except if the parties by
agreement, had expressly or
impliedly, excluded all or any of its
provisions.
 The implication of the decision in
Bhatia International case was that
all the proceedings in part-I,
including the provisions under
section 34 (2)(b)(ii) i.e. setting aside
of foreign arbitral award on the
ground of ‘conflict with public policy
in India’ would now applicable to
foreign seated ICAs.
 Venture Global Engineering v.
Satyam Computers Services Ltd.
 A two judge bench of SC followed
the judgement in Bhatia
International case and ruled that a
foreign award was amenable to
challenge u/s 34 , on the
construction that Part-I of the act
applies to foreign awards.
Criticism Of Bhatia International
and Venture Global
 Effect of these judgements was
such that it subjected even foreign
seated ICAs to Part-I of the act.
This gave Indian Courts the power
to even set aside foreign seated
ICA u/s 34 of the act.
 However, the legislature has not
conferred any power in part-II of the
act, to the Indian courts to annul or
set aside a foreign award.
The courts have only been conferred
with power to enforce or refuse
enforcement of a NYC award u/s 48
and Geneva Convention award u/s 57
of the act.
The reasoning in Bhatia was clearly
erroneous. It failed to understand
the scheme of the act while
interpreting sec. 2(2), where the
act through its no provision
provides for setting aside foreign
award passed in a foreign seated
arbitration.
 According to O P Malhotra on Law and
Practice of Arbitration and Conciliation,
Bhatia International decision purports to
rewrite the statute under the thin
disguise of interpretation. It is contrary to
the mandatory provisions of sec. 5 which
provides that “…in matters governed
under this part, no judicial authority shall
intervene, except where so provided in
this act.”
Evidently, there is no provision in
this part which permits judicial
intervention with foreign seated
arbitrations.
Cases of Implied Exclusion:
 Videocon Industry Ltd. v. UOI (2011)
The parties agreed that arb agreement would
be governed by the laws of the England, seat
was chosen as Kuala Lumpur, and the
governing law of the contract was Indian Law.
SC held that since the parties had agreed that
the arb agreement shall be governed by the
Laws of the England...
 …this necessarily imply that parties
had agreed to exclude the provisions
of Part-I of the act. It was held that an
Indian court did not have the
jurisdiction to entertain such a
challenge, as the parties had
“impliedly excluded” the provisions of
part-I of the act from being applicable
to foreign seated arbitration.
Post Bhatia Decisions:
 The position laid down in Bhatia
international and then expanded in
venture global case was put to test
before constitution bench of the SC
in Bharat Aluminium Company v.
Kaiser Aluminium Technical
Services Inc. (BALCO).
 The court was called upon to
decide whether part-I of the act
would apply to foreign seated
international commercial
arbitrations.
 The constitution bench overruled
Bhatia international and held that
a plain reading of sec. 2(2) makes it
clear that part-I is limited in its
application to arbitrations which
takes place in India.
Further, parliament by limiting the
applicability of Part-I to arbitrations
in India had clearly given
recognition to the principle of
territoriality.
 Principle of territoriality in
arbitration: The seat of arbitration
determines the jurisdiction of the
relevant courts.
In Sum the court in BALCO held that:
1. Part-I applies only when arbitration
is in India;
2. Part-I would not apply to
arbitrations held outside India;
3. The ruling in BALCO would apply
only to arb agreements entered into
from the date of the judgment, 6
Sept, 2012.
Section 2 (4)
Section 2 (4) This Part except sub-section
(1) of section 40, sections 41 and 43 shall
apply to every arbitration under any other
enactment for the time being in force, as if
the arbitration were pursuant to an
arbitration agreement and as if that other
enactment were an arbitration agreement,
except in so far as the provision of this Part
are inconsistent with that other enactment
or with any rules made thereunder;
Statutory Arbitration (hereinafter
SA)
 In cases of SA, the statute controls
the procedure and appointment of
arbitral tribunal.
It is distinct from consensual form of
arbitration.
A statute may provide for disputes
of a particular class shall be
determined by the procedure
prescribed in the act.
 The arbitral tribunal constituted
under the act, shall have exclusive
jurisdiction over such disputes.
SA is imposed upon the parties by
virtue of the provision contained in
a particular statute.
Here the source of arbitration does
not emanate from an agreement
between the parties, but the
statutory provisions applicable to
the contractual relationship
between the parties.
Examples of Acts having provisions
relating to SA:
1. Electricity Act, 2003;
2. Telegraphs Act, 1885;
3. Small Scale and Ancillary
Industrial Undertakings Act, 1993
etc.
Section 2 (5)
 Subject to the provisions of sub-
section (4), and save in so far as is
otherwise provided by any law for the
time being in force or in any
agreement in force between India
and any other country or countries,
this Part shall apply to all arbitrations
and to all proceedings relating
thereto.
Sec 2(2) says this part shall apply
where the place of arbitration is in
India.
And
Sec 2 (5) says this part shall apply
to all arbitrations..
 Reading sec. 2(2) with Sec. 2(5)
tells us that this part applies to ‘all
arbitrations’ in India.
 Sec 2 (5) does not mean all
arbitrations wherever held in the
world. It only implies all types of
arbitration such as ad-hoc arbitration,
institutional arbitrations, statutory
arbitration, domestic arbitration and
international commercial arbitration
where the place of arbitration is in
India.
 Section 3
Receipt of written
communications
3.Receipt of written communications.-
(1) Unless otherwise agreed by the parties,-

(a) any written communication is deemed to have been

received if it is delivered to the addressee personally or at
his place of business, habitual residence or mailing address,
and
(b) if none of the places referred to in clause (a) can be
found after making a reasonable inquiry, a written
communication is deemed to have been received if it is sent
to the addressee's last known place of business, habitual
residence or mailing address by registered letter or by any
other means which provides a record of the attempt to
deliver it.
 (2) The communication is deemed
to have been received on the day it
is so delivered.
(3) This section does not apply to
written communications in respect
of proceedings of any judicial
authority.
 Section 3 starts with the phrase
“unless agreed by the parties”

This phrase indicates that it is open

to the parties to decide their own
procedure.
Section 3 has relevance more for
ad-hoc arbitrations because
arbitral institutions usually prefer
their own procedural rules over
non-mandatory provisions of this
section.
 Sec. 3(1)(a) provides for any written
communication is deemed to have
been received if it is delivered to the
addressee personally or at his place
of business, habitual residence or
mailing address..
It is therefore crucial that the
delivery of the written
communication must be established.
 Section 3 (1)(a) uses the word
“delivered” while presuming the
receipt of the communication.
Also the expression ‘delivered to the
addressee personally’, does not mean
that the arbitrator or his clerk are
required to personally hand over the
award to the parties.
An award may be sent by the post.
Section 3 (1)(b) uses the expression
‘after making an reasonable
enquiry’.
Act does not define what is
‘reasonable enquiry’?
It simple means a reasonable effort
should have been made to inform
the addressee, so that he’s given
an opportunity to exercise his
rights.
Section 3 (2) says a communication
is deemed to have been received
by the addressee, on the day it is
delivered…
There is a presumption under
section 114 of the evidence act
that the notice was duly served
upon the addressee.
 Section 114 of evidence act:
Court may presume existence of certain
facts. —
The Court may presume the existence of
any fact which it thinks likely to have
happened, regard being had to the
common course of natural events, human
conduct and public and private business, in
their relation to the facts of the particular
case. 
 Section 4
Waiver of right to object
 4.Waiver of right to object.- A party who knows
that-
(a) any provision of this Part from which the
parties may derogate, or
(b) any requirement under the arbitration
agreement,
has not been complied with and yet proceeds
with the arbitration without stating his objection
to such non-compliance without undue delay or,
if a time limit is provided for stating that
objection, within that period of time, shall be
deemed to have waived his right to so object.
 What constitutes waiver:
Waiver is constituted by the
deliberate, intentional and
unequivocal release or
abandonment of a right under the
contract or a derogable provisions
of the statute.
In principle, waiver would need to
be intentional. There can be no
waiver of a non-derogable or
mandatory provision of the
statute. A mandatory requirement
of a statute cannot be waived by
consent, or acquiescence.
 Basheshar Nath v. CIT (1999)
S.K. Das, J., said, “the generally
accepted connotation is that to
constitute ‘waiver’, there must be
an intentional relinquishment of a
known right…”
Russell on Arbitration, (23rd ed. 2007)
explains the term as, “lose of right to
object – A party who objects to the
award on the ground that the
tribunal lacks substantive jurisdiction,
should not only act promptly but
should also take care not to lose his
right to object…”
 Difference between waiver and
estoppel:

‘Estoppel’ is a rule of evidence, while

‘waiver’ is contractual and is an
agreement to release or not to assert a
right.
‘Estoppel’ is not cause of action;
‘waiver’ may constitute a cause of
action.
Section 4 postulates the following
pre-conditions for waiver of the
right to object:
1. Non-compliance with the
derogable or non-mandatory
provision
 In ONGC v. Saw Pipes (2003):
The question before SC was
whether the arbitral award could
be set aside if the arbitral tribunal
has not followed the mandatory
procedure u/s 24, 28 or 31(3).
 The SC held that if the arbitral
tribunal has not followed the
mandatory procedure prescribed
under the act, it would mean that
it had acted beyond its jurisdiction
and thereby the award would be
patently illegal which could be set
aside u/s 34.
 2. Knowledge of non-compliance
The party against whom the plea of
waiver is raised, must have the
knowledge of such non-compliance
of a non-mandatory provision,
before it can be deemed to have
waived its right to object.
3. Objections to be raised without
delay
 Section 5
Extent of judicial Intervention
 Extent of judicial intervention.-
Notwithstanding anything
contained in any other law for the
time being in force, in matters
governed by this Part, no judicial
authority shall intervene except
where so provided in this Part.
Object of the section is to minimize
the supervisory role of courts in
the arbitral process.
It embodies the legislative policy of
party autonomy and judicial
minimalism.
Permissible Judicial Intervention in
Part-I:
Part-I provides judicial intervention
by the ‘courts’ in the following
provisions;
1. Section 8: Power to refer parties
to arbitration where there is an
arbitration agreement.
2. Section 9: Interim measures etc.
by Court
3. Section 11: Appointment of
arbitrators
4. Section 13 (5): Challenge
procedure
5. Section 14 (2): Failure or
impossibility to act.
6. Section 16 (6): challenge to the
jurisdiction of the arbitral tribunal
7. Section 27: Court assistance in
taking evidence.
8. Section 34: Application for
setting aside arbitral award
9. Section 36: Enforcement of the
arbitral award
 10. Section 37: Appealable orders
11. Section 39 (2) and (4): Lien on
arbitral award and deposits as to
costs
12. Section 43 (3): Power of court to
extend time to submit future
disputes to arbitration, which might
become time barred under
arbitration agreement.
 Meaning of ‘Judicial Authority’:
Judicial authority has not been
defined in the act, while the term
‘court’ has been defined in sec 2(1)
(e).
 In Morgan Securities and Credit
Pvt. Ltd. v. Modi Rubber Ltd. (2006)
SC held that “judicial authority” in
its ordinary parlance would
comprehend a court defined under
the act, but also courts which
would either be a civil court or
other authorities which perform..
…judicial functions or quasi-judicial
functions.
 Section 7
Arbitration Agreement