A PROJECT REPORT ON ARBITRATION ACT - 1996

FOR THE PARTIAL FULFILLMENT OF DEGREE OF MASTER OF BUSINESS ADMINISTRATION

SUBMITTED TO: SUBMITTED BY:

JOSHI SR. LECTURER AIMCA NO 01 MBA- 4TH SEM, SEC-(A) ROLL MRS. JYOTI SHRIVASTAV AJAY

AMRAPALI INSTITUTE OF MANAGEMENT AND COMPUTER APPLICATION

SHIKSHA NAGAR, LAMACHAUR, HALDWANI (AFFILIATED TO UTTARAKHAND TECHNICAL UNIVERSITY) DEHRADUN

ACKNOWLEDGMENT
HARD WORK AND DEDICATION IS THE KEY TO THE SUCCESSFUL COMPLETION OF ANY JOB AND THIS PROJECT IS NO DIFFERENT. ALTHOUGH STRENUOUS, YET IT IS INTERESTING. HOW EVER, THE SUCCESS TO THIS PROJECT REPORT CANNOT BE ACCOUNTED FOR BY ONLY THESE FACTORS. DURING THE COURSE OF THIS STUDY, MANY USEFUL SUGGESTIONS AND CONSTRUCTIVE CRITICISM CAME ACROSS WHICH REALLY HELPED A LOT IN GIVING THIS PROJECT A PROFESSIONAL LOOK. WE EXTEND OUR HEARTIEST THANKS TO ALL THOSE PERSONS WHOSE WILLING COOPERATION LED TO THE TIMELY COMPLETION OF THE PROJECT. IN COMPLETING THIS STUDY, WE DID OUR LEVEL BEST IN CORRECTING SHORTCOMINGS TO POSSIBLE EXTENT. ALTHOUGH. WE ARE THANKFUL TO MRS. JYOTI SHRIVASTAV WHO HAS CONTRIBUTED TOWARDS THE COMPLETION OF THIS REPORT.

CONTENTS

ARBITRATION LAW IN INDIA INTERNATIONAL CONVENTIONS ON ARBITRATION TYPES OF ARBITRATIONS REQUIREMENTS OF AN ARBITRATION AGREEMENT VALIDITY OF AN ARBITRATION AGREEMENT PURPOSE OF ARBITRATION ACT. THE INDIAN ARBITRATION AND CONCILIATION ACT, 1996: PREAMBLE

INDIAN

SUPREME

COURT

RULING

ON

ARBITRATION

HOW TO DRAFT ARBITRATION AGREEMENTS INTERNATIONAL ARBITRATION AND LAWYERS APPOINTMENT OF ARBITRATOR CHALLENGE TO APPOINTMENT OF ARBITRATOR

ARBITRAL AWARD COST OF ARBITRATION

THE ARBITRATION LAW

THE INDIAN ARBITRATION AND CONCILIATION ACT, 1996 THE GOVERNING ARBITRATION STATUTE IN INDIA. IT IS BASED ON THE MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION ADOPTED BY THE UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW (UNCITRAL) IN 1985. PURPOSE OF ARBITRATION ACT IS TO PROVIDE QUICK REDRESSAL TO COMMERCIAL DISPUTE BY PRIVATE ARBITRATION. QUICK DECISION OF ANY COMMERCIAL DISPUTE IS NECESSARY FOR SMOOTH FUNCTIONING OF BUSINESS AND INDUSTRY. INTERNATIONALLY, IT IS ACCEPTED THAT NORMALLY COMMERCIAL DISPUTES SHOULD BE SOLVED THROUGH ARBITRATION AND NOT THROUGH NORMAL JUDICIAL SYSTEM. HENCE, THE NEED OF ALTERNATE DISPUTE RESOLUTION. (ADR). THERE ARE FOUR METHODS OF ADR - NEGOTIATION, MEDIATION, CONCILIATION AND ARBITRATION. 'NEGOTIATION' IS CHEAPEST AND SIMPLEST METHOD. IF IT DOES NOT WORK, MEDIATION THROUGH A MEDIATOR CAN BE TRIED. IF IT DOES NOT WORK, CONCILIATION AND ARBITRATION WILL BE USEFUL. AND IS OF ARBITRATION ARBITRATION A IN PARTIES. AN ACT AS MAKES ADR JUDGE OF PROVISION MECHANISMS. APPOINTED ARBITRATION FOR AN WITH IS CONCILIATION ARBITRATOR CONSENT OF SETTLEMENT

BASICALLY DISPUTE

PRIVATE

BOTH THE

OBJECT

EXPEDITIOUS,

CONVENIENT,

INEXPENSIVE AND PRIVATE MANNER SO THAT THEY DO NOT BECOME THE SUBJECT OF FUTURE LITIGATION BETWEEN THE PARTIES. PREVIOUS STATUTORY PROVISIONS ON ARBITRATION WERE CONTAINED IN THREE DIFFERENT ENACTMENTS, NAMELY, THE ARBITRATION ACT, 1940, THE ARBITRATION (PROTOCOL AND CONVENTION) ACT, 1937 AND THE FOREIGN AWARDS (RECOGNITION AND ENFORCEMENT) ACT, 1961. THE ARBITRATION AND CONCILIATION ACT, 1996 HAS REPEALED THE ARBITRATION ACT, 1940 AND ALSO THE ACTS OF 1937 AND 1961.

INTERNATIONAL CONVENTIONS ON ARBITRATION:INDIA IS A PARTY TO THE FOLLOWING CONVENTIONS:

THE GENEVA PROTOCOL ON ARBITRATION CLAUSES OF 1923 THE GENEVA CONVENTION ON THE EXECUTION OF FOREIGN ARBITRAL AWARDS, 1927; AND THE NEW YORK CONVENTION OF 1958 ON THE RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS. IT BECAME A PARTY TO THE 1958 CONVENTION ON 10TH JUNE, 1958 AND RATIFIED IT ON 13TH JULY, 1961.

THERE ARE NO BILATERAL CONVENTIONS BETWEEN INDIA AND ANY OTHER COUNTRY CONCERNING ARBITRATION.

THE TYPES OF ARBITRATIONS

THE INDIAN ARBITRATION AND CONCILIATION ACT, 1996 APPLIES TO BOTH DOMESTIC ARBITRATION IN INDIA AND TO INTERNATIONAL

ARBITRATION. SECTION 2(1)(F) OF THE ACT DEFINES "INTERNATIONAL COMMERCIAL ARBITRATION" AS ARBITRATION RELATING TO DISPUTES ARISING OUT OF LEGAL RELATIONSHIPS, WHETHER CONTRACTUAL OR NOT, CONSIDERED AS COMMERCIAL UNDER THE LAW IN FORCE IN INDIA WHERE AT LEAST ONE OF THE PARTIES IS: 1) AN INDIVIDUAL WHO IS A NATIONAL OF, OR HABITUALLY RESIDENT IN ANY COUNTRY OTHER THAN INDIA; OR 2) A BODY CORPORATE WHICH IS INCORPORATED IN ANY COUNTRY OTHER THAN INDIA; OR 3) A COMPANY OR AN ASSOCIATION OR A BODY OF INDIVIDUALS WHOSE CENTRAL MANAGEMENT AND CONTROL IS EXERCISED IN ANY COUNTRY OTHER THAN INDIA; OR 4) THE GOVERNMENT OF A FOREIGN COUNTRY.

REQUIREMENTS OF AN ARBITRATION AGREEMENT:

SECTION 7(3) OF THE ACT REQUIRES THAT THE ARBITRATION AGREEMENT MUST BE IN WRITING. SECTION 7(2) PROVIDES THAT IT MAY BE IN THE FORM OF AN ARBITRATION CLAUSE IN A CONTRACT OR IT MAY BE IN THE FORM OF A SEPARATE AGREEMENT. UNDER SECTION 7(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, PROVIDING A RECORD OF AGREEMENT, (C) OR AN EXCHANGE OF CLAIMS AND DEFENSE IN WHICH THE EXISTENCE OF THE AGREEMENT IS ALLEGED BY ONE PARTY AND NOT DENIED BY THE OTHER.

IN

SECTION

7(5),

IT

IS

PROVIDED

THAT

DOCUMENT

CONTAINING AN ARBITRATION CLAUSE MAY BE ADOPTED BY "REFERENCE", BY A CONTRACT IN WRITING.

VALIDITY OF AN ARBITRATION AGREEMENT:SECTION 16 OF THE ACT EMPOWERS THE ARBITRAL TRIBUNAL TO RULE ON ITS JURISDICTION: UNDER THE ACT, THE ARBITRATION TRIBUNAL CAN RULE ON ITS OWN JURISDICTION, INCLUDING RULING ON ANY OBJECTIONS WITH RESPECT TO THE EXISTENCE OR VALIDITY OF THE ARBITRATION AGREEMENT, AND FOR THIS PURPOSE:

AN ARBITRATION CLAUSE WHICH FORMS PART OF A CONTRACT WILL BE TREATED AS AN AGREEMENT INDEPENDENT OF THE OTHER TERMS OF THE CONTRACT; AND A DECISION BY THE ARBITRAL TRIBUNAL THAT THE CONTRACT IS NULL AND VOID WILL NOT ENTAIL, IPSO JURE, THE INVALIDITY OF THE ARBITRATION CLAUSE.

A PLEA THAT THE ARBITRAL TRIBUNAL DOES NOT HAVE JURISDICTION WILL, HOWEVER, HAVE TO BE RAISED NOT LATER THAN THE SUBMISSION OF THE STATEMENT OF DEFENSE. HOWEVER, A PARTY SHALL NOT BE PRECLUDED FROM RAISING SUCH A PLEA MERELY BECAUSE HE HAS APPOINTED, OR PARTICIPATED IN THE APPOINTMENT OF AN ARBITRATOR. A PLEA THAT THE ARBITRAL TRIBUNAL IS EXCEEDING THE SCOPE OF ITS AUTHORITY HAS TO 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 OF THE CASES REFERRED TO ABOVE, ADMIT LATER A PLEA IF IT CONSIDERS THE DELAY JUSTIFIED. THE ARBITRAL TRIBUNAL HAS TO DECIDE ON A PLEA ABOUT LACK OF JURISDICTION OR ABOUT THE TRIBUNAL EXCEEDING THE SCOPE OF ITS AUTHORITY AND WHERE THE ARBITRAL TRIBUNAL TAKES A DECISION REJECTING THE PLEA, IT SHALL CONTINUE WITH THE ARBITRAL PROCEEDINGS AND MAKE THE ARBITRAL AWARD. A PARTY AGGRIEVED BY SUCH AN ARBITRAL AWARD IS FREE TO MAKE AN APPLICATION FOR SETTING ASIDE THE AWARD UNDER SECTION 34 OF THE ACT. SECTION 34(2)(A) INTER ALIA PERMITS A CHALLENGE TO AN AWARD ON THE ABOVE GROUNDS.

PURPOSE OF ARBITRATION ACT

PURPOSE OF ARBITRATION ACT IS TO PROVIDE QUICK REDRESSAL TO COMMERCIAL DISPUTE BY PRIVATE ARBITRATION. QUICK DECISION OF ANY COMMERCIAL DISPUTE IS NECESSARY FOR SMOOTH FUNCTIONING OF BUSINESS AND INDUSTRY. INTERNATIONALLY, IT IS ACCEPTED THAT NORMALLY COMMERCIAL DISPUTES SHOULD BE SOLVED THROUGH ARBITRATION AND NOT THROUGH NORMAL JUDICIAL SYSTEM. HENCE, THE NEED OF ALTERNATE DISPUTE RESOLUTION. (ADR). THERE ARE FOUR METHODS OF ADR - NEGOTIATION, MEDIATION, CONCILIATION AND ARBITRATION. 'NEGOTIATION' IS CHEAPEST AND SIMPLEST METHOD. IF IT DOES NOT WORK, MEDIATION THROUGH A MEDIATOR CAN BE TRIED. IF IT DOES NOT WORK, CONCILIATION AND ARBITRATION WILL BE USEFUL. ARBITRATION ACT MAKES PROVISION FOR CONCILIATION AND ARBITRATION AS ADR MECHANISMS. AN

ARBITRATOR IS BASICALLY A PRIVATE JUDGE APPOINTED WITH CONSENT OF BOTH THE PARTIES. OBJECT OF ARBITRATION IS SETTLEMENT OF DISPUTE IN AN EXPEDITIOUS, CONVENIENT, INEXPENSIVE AND PRIVATE MANNER SO THAT THEY DO NOT BECOME THE SUBJECT OF FUTURE LITIGATION BETWEEN THE PARTIES. SCHEME OF THE ACT - THE ACT IS DIVIDED IN TO FOLLOWING PARTS : (A) PART I - DOMESTIC ARBITRATION. (B) PART II ENFORCEMENT OF FOREIGN AWARDS. (C) PART III - CONCILIATION PROCEDURES. (D) PART IV - SUPPLEMENTARY PROVISIONS. (E) FIRST SCHEDULE - CONVENTION ON RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARD AS PER NEW YORK CONVENTION (F) SECOND SCHEDULE - PROTOCOL ON ARBITRATION CLAUSES (G) THIRD SCHEDULE - CONVENTION ON THE EXECUTION OF FOREIGN ARBITRAL AWARDS AS PER GENEVA CONVENTION. LAW BASED ON UNCITRAL MODEL LAW - THE PRESENT ACT IS BASED ON MODEL LAW DRAFTED BY UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAWS (UNCITRAL), BOTH ON DOMESTIC ARBITRATION AS WELL AS INTERNATIONAL COMMERCIAL ARBITRATION, TO PROVIDE UNIFORMITY AND CERTAINTY TO BOTH CATEGORIES OF CASES. MATTERS NOT REFERABLE TO ARBITRATION - CERTAIN MATTERS WHICH ARE NOT ARBITRABLE ARE - * SUITS FOR DIVORCE OR RESTITUTION OF CONJUGAL RIGHTS * TAXATION * NON-PAYMENT OF ADMITTED LIABILITY * CRIMINAL MATTERS. ARBITRATION AGREEMENT - THE FOUNDATION OF AN ARBITRATION IS THE ARBITRATION AGREEMENT BETWEEN THE PARTIES TO SUBMIT TO ARBITRATION ALL ARE CERTAIN DISPUTES WHICH HAVE ARISEN OR WHICH MAY ARISE BETWEEN THEM. THUS, THE PROVISION OF

ARBITRATION CAN BE MADE AT THE TIME OF ENTERING THE CONTRACT ITSELF, SO THAT IF ANY DISPUTE ARISES IN FUTURE, THE DISPUTE CAN BE REFERRED TO ARBITRATOR AS PER THE AGREEMENT. IT IS ALSO POSSIBLE TO REFER A DISPUTE TO ARBITRATION AFTER THE DISPUTE HAS ARISEN. ARBITRATION AGREEMENT MAY BE IN THE FORM OF AN ARBITRATION CLAUSE IN A CONTRACT OR IN THE FORM OF A SEPARATE AGREEMENT. THE AGREEMENT MUST BE IN WRITING AND MUST BE SIGNED BY BOTH PARTIES. THE ARBITRATION AGREEMENT CAN BE BY EXCHANGE OF LETTERS, DOCUMENT, TELEX, TELEGRAM ETC. [SECTION 7]. COURT MUST REFER THE MATTER TO ARBITRATION IN SOME CASES - IF A PARTY APPROACHES COURT DESPITE THE ARBITRATION AGREEMENT, THE OTHER PARTY CAN RAISE OBJECTION. HOWEVER, SUCH OBJECTION MUST BE RAISED BEFORE SUBMITTING HIS FIRST STATEMENT ON THE SUBSTANCE OF DISPUTE. SUCH OBJECTION MUST BE ACCOMPANIED BY THE ORIGINAL ARBITRATION AGREEMENT OR ITS CERTIFIED COPY. ON SUCH APPLICATION THE JUDICIAL AUTHORITY SHALL REFER THE PARTIES TO ARBITRATION. SINCE THE WORD USED IS SHALL, IT IS MANDATORY FOR JUDICIAL AUTHORITY TO REFER THE MATTER TO ARBITRATION. [SECTION 8]. HOWEVER, ONCE FIRST STATEMENT TO COURT IS ALREADY MADE BY THE OPPOSITE PARTY, THE MATTER HAS TO CONTINUE IN THE COURT. ONCE AN APPLICATION IS MADE BY OTHER PARTY FOR REFERRING THE MATTER TO ARBITRATION, THE ARBITRATOR CAN CONTINUE WITH ARBITRATION AND EVEN MAKE AN ARBITRAL AWARD.

THE INDIAN ARBITRATION AND CONCILIATION ACT, 1996 (NO.26 OF

1996): PREAMBLE:- [16TH AUGUST, 1996]

AN ACT TO CONSOLIDATE AND AMEND THE LAW RELATING TO DOMESTIC ARBITRATION, INTERNATIONAL COMMERCIAL ARBITRATION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS AS ALSO TO DEFINE THE LAW RELATING TO CONCILIATION AND FOR MATTERS CONNECTED THEREWITH OR INCIDENTAL THERETO.

PREAMBLE:WHEREAS THE UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW (UNCITRAL) HAS ADOPTED THE UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION IN 1985; AND WHEREAS THE GENERAL ASSEMBLY OF THE UNITED NATIONS HAS RECOMMENDED THAT ALL COUNTRIES GIVE DUE CONSIDERATION TO THE SAID MODEL LAW, IN VIEW OF THE DESIRABILITY OF UNIFORMITY OF THE LAW OF ARBITRAL PROCEDURES AND THE SPECIFIC NEEDS OF INTERNATIONAL COMMERCIAL ARBITRATION PRACTICE; AND WHEREAS THE UNCITRAL HAS ADOPTED THE UNCITRAL

CONCILIATION RULES IN 1980; AND WHEREAS THE GENERAL ASSEMBLY OF THE UNITED NATIONS HAS RECOMMENDED THE USE OF THE SAID RULES IN CASES WHERE A DISPUTE ARISES IN THE CONTEXT OF INTERNATIONAL COMMERCIAL RELATIONS AND THE PARTIES SEEK AN AMICABLE SETTLEMENT OF THAT DISPUTE BY RECOURSE TO CONCILIATION; AND WHEREAS THE SAID MODEL LAW AND RULES MAKE SIGNIFICANT CONTRIBUTION TO THE ESTABLISHMENT OF A UNIFIED LEGAL

FRAMEWORK FOR THE FAIR AND EFFICIENT SETTLEMENT OF DISPUTES ARISING IN INTERNATIONAL COMMERCIAL RELATIONS; AND WHEREAS IT IS EXPEDIENT TO MAKE LAW RESPECTING THE

ARBITRATION

AND

CONCILIATION,

TAKING

INTO

ACCOUNT

AFORESAID MODEL LAW AND RULES; BE IT ENACTED BY PARLIAMENT IN THE FORTY SEVENTH YEAR OF THE REPUBLIC AS FOLLOWS:

PRELIMINARY
SHORT TITLE, EXTENT AND COMMENCEMENT.(1) THIS ACT MAY BE CALLED THE ARBITRATION AND CONCILIATION ACT, 1996. IT EXTENDS TO THE WHOLE OF INDIA: PROVIDED THAT PARTS I, III AND IV SHALL EXTEND TO THE STATE OF JAMMU AND KASHMIR ONLY IN SO FAR AS THEY RELATE TO INTERNATIONAL COMMERCIAL ARBITRATION OR, AS THE CASE MAY BE, INTERNATIONAL COMMERCIAL CONCILIATION. EXPLANATION MEANING AS IN THIS SUB-SECTION, THE EXPRESSION COMMERCIAL

INTERNATIONAL COMMERCIAL CONCILIATION SHALL HAVE THE SAME THE EXPRESSION INTERNATIONAL ARBITRATION IN CLAUSE (F) OF SUB-SECTION (1) OF SECTION 2, SUBJECT TO THE MODIFICATION THAT FOR THE WORD ARBITRATION OCCURRING SUBSTITUTED. IT SHALL BE DEEMED TO HAVE COME INTO FORCE ON THE 25TH DAY OF JANUARY, 1996. THEREIN, THE WORD CONCILIATION SHALL BE

GENERAL PROVISIONS
DEFINITIONSIN THIS PART, UNLESS THE CONTEXT OTHERWISE REQUIRES, ARBITRATION MEANS ANY ARBITRATION WHETHER OR NOT ADMINISTERED BY PERMANENT ARBITRAL INSTITUTION; ARBITRATION AGREEMENT MEANS AN AGREEMENT REFERRED TO IN SECTION 7; ARBITRAL AWARD INCLUDES AN INTERIM AWARD; ARBITRAL TRIBUNAL MEANS A SOLE ARBITRATOR OR A PANEL OF ARBITRATORS; 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 SUBJECTMATTER OF THE ARBITRATION IF THE SAME HAD BEEN THE SUBJECTMATTER 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; 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 AN INDIVIDUAL WHO IS A NATIONAL OF, OR HABITUALLY RESIDENT IN, ANY COUNTRY OTHER THAN INDIA; OR

A BODY CORPORATE WHICH IS INCORPORATED IN ANY COUNTRY OTHER THAN INDIA; OR A COMPANY OR AN ASSOCIATION OR A BODY OF INDIVIDUALS WHOSE CENTRAL MANAGEMENT AND CONTROL IS EXERCISED IN ANY COUNTRY OTHER THAN INDIA; OR

THE GOVERNMENT OF A FOREIGN COUNTRY;

LEGAL REPRESENTATIVE MEANS A PERSON WHO IN LAW REPRESENTS THE ESTATE OF A DECEASED PERSON, AND INCLUDES ANY PERSON WHO INTERMEDDLES WITH THE ESTATE OF THE DECEASED, AND, WHERE A PARTY ACTS IN A REPRESENTATIVE CHARACTER, THE PERSON ON WHOM THE ESTATE DEVOLVES ON THE DEATH OF THE PARTY SO ACTING; PARTY MEANS A PARTY TO AN ARBITRATION AGREEMENT.

SCOPE:THIS PART SHALL APPLY WHERE THE PLACE OF ARBITRATION IS IN INDIA. THIS PART SHALL NOT AFFECT ANY OTHER LAW FOR THE TIME BEING IN FORCE BY VIRTUE OF WHICH CERTAIN DISPUTES MAY NOT BE SUBMITTED TO ARBITRATION. 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 PROVISIONS OF THIS PART ARE INCONSISTENT WITH THAT OTHER ENACTMENT OR WITH ANY RULES MADE THEREUNDER. 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.

CONSTRUCTION AND REFERENCES:WHERE THIS PART, EXCEPT SECTION 28, LEAVES THE PARTIES FREE TO DETERMINE A CERTAIN ISSUE, THAT FREEDOM SHALL INCLUDE THE RIGHT OF THE PARTIES TO AUTHORISE ANY PERSON INCLUDING AN INSTITUTION, TO DETERMINE THAT ISSUE. AN ARBITRAL AWARD MADE UNDER THIS PART SHALL BE CONSIDERED AS A DOMESTIC AWARD. WHERE THIS PART REFERS TO THE FACT THAT THE PARTIES HAVE AGREED OR THAT THEY MAY AGREE, OR IN ANY OTHER WAY REFERS TO AN AGREEMENT OF THE PARTIES, THAT AGREEMENT SHALL INCLUDE ANY ARBITRATION RULES REFERRED TO IN THAT AGREEMENT. WHERE THIS PART, OTHER THAN CLAUSE (A) OF SECTION 25 OR CLAUSE (A) OF SUB-SECTION (2) OF SECTION 32, REFERS TO A CLAIM, IT SHALL ALSO APPLY TO A COUNTER-CLAIM, AND WHERE IT REFERS TO A DEFENCE, IT SHALL ALSO APPLY TO A DEFENCE TO THAT COUNTER-CLAIM.

RECEIPT OF WRITTEN COMMUNICATIONS:-

UNLESS OTHERWISE AGREED BY THE PARTIES, 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 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 ADDRESSEES 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. THE COMMUNICATION IS DEEMED TO HAVE BEEN RECEIVED ON THE DAY IT IS SO DELIVERED. THIS SECTION DOES NOT APPLY TO WRITTEN COMMUNICATIONS IN RESPECT OF PROCEEDINGS OF ANY JUDICIAL AUTHORITY. WAIVER OF RIGHT TO OBJECTA PARTY WHO KNOWS THAT ANY PROVISION OF THIS PART FROM WHICH THE PARTIES MAY DEROGATE, OR ANY REQUIREMENT UNDER THE ARBITRATION AGREEMENT, HAS NOT BEEN COMPLIED WITH AND YET PROCEEDS WITH THE ARBITRATION WITHOUT STATING HIS OBJECTION TO SUCH NONCOMPLIANCE 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. 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.

ADMINISTRATIVE ASSISTANCE:IN ORDER TO FACILITATE THE CONDUCT OF THE ARBITRAL PROCEEDINGS, THE PARTIES, OR THE ARBITRAL TRIBUNAL WITH THE CONSENT OF THE PARTIES, MAY ARRANGE FOR ADMINISTRATIVE ASSISTANCE BY A SUITABLE INSTITUTION OR PERSON.

HOW TO DRAFT AN ARBITRATION AGREEMENT?

A GOOD ARBITRATION AGREEMENT IS ONE WHICH MINIMIZES COMPLICATIONS WHEN A DISPUTE ARISE. HOWEVER, MANY A TIMES PEOPLE NEGLECT TO PAY ATTENTION WHILE DRAFTING AN ARBITRATION AGREEMENT. BEFORE FINALIZING AN ARBITRATION AGREEMENT, THE TERMS SHOULD BE THOROUGHLY DISCUSSED AND NEGOTIATED TO AVOID ANY MISUNDERSTANDING AT A LATER STAGE. ARBITRATION LAWYERS FROM ALL APPLICABLE JURISDICTIONS MUST BE CONSULTED BEFORE FINALIZING ANY ARBITRATION AGREEMENT..

A bad Arbitration Agreement could result in double jeopardy: arbitration as well as litigation arising out of arbitration. Therefore, care should be taken to draft an enforceable arbitration agreement. Lawyers from all Before signing an Arbitration Agreement the following must be properly addressed: applicable jurisdictions should review the arbitration agreement before its excuted.

Applicable law to arbitration Location of Arbitration Number of Arbitrators LANGUAGE OF ARBITRATION DISCOVERY PROCEDURE LIMITATION TO ARBITRATION POWERS INTERIM MEASURES/PROVISIONAL REMEDIES PRIVACY RULES APPLICABLE APPEAL & ENFORCEMENT BE AWARE OF LOCAL PECULIARITIES SURVIVAL AFTER TERMINATION OF THE MAIN AGREEMENT.

THE ARBITRATION AGREEMENT SHOULD BE MODIFIED AS APPLICABLE UNDER DIFFERENT CIRCUMSTANCES. ONE BRUSH SHOULD NOT PAINT ALL THE PAINTING.

ARBITRATION LAWYERS
OUR ARBITRATION LAWYERS AND ARBITRATORS INCLUDE THOSE WHO HAVE UNDERTAKEN ARBITRATION IN THE USA, EUROPE, AND ASIA. THEY UNDERSTAND THE MULTI-CULTURAL AND THE MULTIJURISDICTIONAL ASPECTS OF INTERNATIONAL BUSINESS IN THIS AGE OF GLOBALIZATION. THEY THOSE EDUCATED AT HARVARD LAW SCHOOL, HARVARD UNIVERSITY IN THE USA. THEY BELIEVE IN HIGH MORAL AND LEGAL ETHICS. WE ASSIST OUR CLIENTS WITH RESOLUTION OF DISPUTES IN ALL AREAS OF GENERAL AND SPECIAL PRACTICES, INCLUDING COMMERCE, FINANCE AND INDUSTRY. OUR HIGHLY TRAINED & EXPERIENCED ATTORNEYS ENDEAVOR TO PREVENT DISPUTES BY ENSURING PROPER DOCUMENTATION AND BY TACTFULLY HANDLING THE MATTER. HOWEVER, IN CASES WHERE DISPUTES CANNOT BE PREVENTED, WE TAKE UTMOST CARE IN PREPARATION OF OUR CLIENT'S CASE AND ENSURE THAT THE CLIENT GETS THE BEST ADVICE AND SUPPORT IN RESOLVING THEIR DISPUTES. OUR ATTORNEYS ARE HIGHLY EXPERIENCE AND HAS DEALT WITH HUNDREDS OF ARBITRATIONS & CONCILIATION IN INDIA AND OVERSEAS, INCLUDING:

NEGOTIATIONS CONCILIATION PREPARING AND PRESENTING THE CASE BEFORE ARBITRATOR DOMESTIC AND INTERNATIONAL ARBITRATION INTERNATIONAL CHAMBER OF COMMERCE, PARIS ARBITRATION (ICC) AMERICAN ARBITRATION ASSOCIATION (AAA)

ENFORCEMENT OF AWARDS

APPOINTMENT OF ARBITRATOR
THE PARTIES CAN AGREE ON A PROCEDURE FOR APPOINTING THE ARBITRATOR OR ARBITRATORS. IF THEY ARE UNABLE TO AGREE, EACH PARTY WILL APPOINT ONE ARBITRATOR AND THE TWO APPOINTED ARBITRATORS WILL APPOINT THE THIRD ARBITRATOR WHO WILL ACT AS A PRESIDING ARBITRATOR. [SECTION 11(3)]. IF ONE OF THE PARTY DOES NOT APPOINT AN ARBITRATOR WITHIN 30 DAYS, OR IF TWO APPOINTED ARBITRATORS DO NOT APPOINT THIRD ARBITRATOR WITHIN 30 DAYS, THE PARTY CAN REQUEST CHIEF JUSTICE TO APPOINT AN ARBITRATOR. [SECTION 11(4)]. THE CHIEF JUSTICE CAN AUTHORISE ANY PERSON OR INSTITUTION TO APPOINT AN ARBITRATOR. [SOME HIGH

COURTS

HAVE

AUTHORISED

DISTRICT

JUDGE

TO

APPOINT

AN

ARBITRATOR]. IN CASE OF INTERNATIONAL COMMERCIAL DISPUTE, THE APPLICATION FOR APPOINTMENT OF ARBITRATOR HAS TO BE MADE TO CHIEF JUSTICE OF INDIA. IN CASE OF OTHER DOMESTIC DISPUTES, APPLICATION HAS TO BE MADE TO CHIEF JUSTICE OF HIGH COURT WITHIN WHOSE JURISDICTION THE PARTIES ARE SITUATED. [SECTION 11(12)]

CHALLENGE TO APPOINTMENT OF ARBITRATOR

AN ARBITRATOR IS EXPECTED TO BE INDEPENDENT AND IMPARTIAL. IF THERE ARE SOME CIRCUMSTANCES DUE TO WHICH HIS INDEPENDENCE OR IMPARTIALITY CAN BE CHALLENGED, HE MUST DISCLOSE THE CIRCUMSTANCES BEFORE HIS APPOINTMENT. [SECTION 12(1)]. APPOINTMENT OF ARBITRATOR CAN BE CHALLENGED ONLY IF (A) CIRCUMSTANCES EXIST THAT GIVE RISE TO JUSTIFIABLE DOUBTS AS TO HIS INDEPENDENCE OR IMPARTIALITY (B) HE DOES NOT POSSESS THE QUALIFICATIONS AGREED TO BY THE PARTIES. [SECTION 12(3)]. APPOINTMENT OF ARBITRATOR CANNOT BE CHALLENGED ON ANY OTHER GROUND.. THE CHALLENGE TO APPOINTMENT HAS TO BE DECIDED BY THE ARBITRATOR HIMSELF. IF HE DOES NOT ACCEPT THE CHALLENGE, THE PROCEEDINGS CAN CONTINUE AND THE ARBITRATOR CAN MAKE THE ARBITRAL AWARD. HOWEVER, IN SUCH CASE, APPLICATION FOR SETTING ASIDE ARBITRAL AWARD CAN BE MADE TO COURT. IF THE COURT AGREES TO THE CHALLENGE, THE ARBITRAL AWARD CAN BE SET ASIDE. [SECTION 13(6)]. THUS, EVEN IF THE ARBITRATOR DOES NOT ACCEPT THE CHALLENGE TO HIS APPOINTMENT, THE OTHER PARTY BY CANNOT TO STALL COURT. FURTHER THE ARBITRATION CAN PROCEEDINGS RUSHING ARBITRATION

CONTINUE AND CHALLENGE CAN BE MADE IN COURT ONLY AFTER ARBITRAL AWARD IS MADE.

ARBITRAL AWARD
DECISION OF ARBITRAL TRIBUNAL IS TERMED AS 'ARBITRAL AWARD'. ARBITRATOR CAN DECIDE THE DISPUTE EX AEQUO ET BONO (IN JUSTICE AND IN GOOD FAITH) IF BOTH THE PARTIES EXPRESSLY AUTHORISE HIM TO DO SO. [SECTION 28(2)]. THE DECISION OF ARBITRAL TRIBUNAL WILL BE BY MAJORITY. THE ARBITRAL AWARD SHALL BE IN WRITING AND SIGNED BY THE MEMBERS OF THE TRIBUNAL. [SECTION 29]. THE AWARD MUST BE IN WRITING AND SIGNED BY THE MEMBERS OF ARBITRAL TRIBUNAL. [SECTION 31(1)].. IT MUST STATE THE REASONS FOR THE AWARD UNLESS THE PARTIES HAVE AGREED THAT NO REASON FOR THE AWARD IS TO BE GIVEN. [SECTION 31(3)]. THE AWARD SHOULD BE DATED AND PLACE WHERE IT IS MADE SHOULD BE MENTIONED. COPY OF AWARD SHOULD BE GIVEN TO EACH PARTY. TRIBUNAL CAN MAKE INTERIM AWARD ALSO. [SECTION 31(6)].

COST OF ARBITRATION

COST OF ARBITRATION MEANS REASONABLE COST RELATING TO FEES AND EXPENSES OF ARBITRATORS AND WITNESSES, LEGAL FEES AND EXPENSES, ADMINISTRATION FEES OF THE INSTITUTION SUPERVISING THE ARBITRATION AND OTHER EXPENSES IN CONNECTION WITH ARBITRAL PROCEEDINGS. THE TRIBUNAL CAN DECIDE THE COST AND SHARE OF EACH PARTY. [SECTION 31(8)]. IF THE PARTIES REFUSE TO PAY THE COSTS, THE ARBITRAL TRIBUNAL MAY REFUSE TO DELIVER ITS AWARD. IN SUCH CASE, ANY PARTY CAN APPROACH COURT. THE COURT WILL ASK FOR DEPOSIT FROM THE PARTIES AND ON SUCH DEPOSIT, THE AWARD WILL BE DELIVERED BY THE TRIBUNAL. THEN COURT WILL DECIDE THE COSTS OF ARBITRATION AND SHALL PAY THE SAME TO ARBITRATORS. BALANCE, IF ANY, WILL BE REFUNDED TO THE PARTY. [SECTION 39].

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