1.

Discuss the salient features of the

Arbitration and Conciliation Act. 1996?
Salient Features of the Arbitration and,
Conciliation Act, 1996
The Arbitration and Conciliation Act, 1996
contained the following salient features:
I. A Comprehensive Statute - The Arbitration
and Conciliation Act, 1996, is fully related to
the domestic, international and inter-state
arbitrations and understanding point of view.
This Act provides importance of enforcement
of international arbitral awards and also
conciliation
matters
as
well.
The
Comprehensive nature of this Act is the result
of the United Nations Commission on
International Commercial Arbitration, 1985
because the Geneva Assembly of the United
Nations
had
emphasized
and
also
recommended
uniform
model
law
on
arbitration among the countries.
II. An Explanatory Code - The old Act of 1940
had no scope for international arbitration
whereas this Act of 1996 is an explanatory
and a complete code in itself, rather an
exhaustive Code. For the first time a
procedure for Arbitral Tribunals is provided in
this statute, it also gives status of tribunal to
1

the Arbitrators or Board of Arbitrations or

statutory Arbitrations.
III. Curtailment of the Courts Powers - The
Act has limited the powers of court rather
restricted the exercise of judicial power, in
other words confined the extent of judicial
intervention as provided under Section 5 of
the Act 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. Finality of arbitral
awards under Section 35 is subject to this part
according to which an arbitral award shall be
final and binding on the parties and persons
claiming under them respectively. Thus, the
Act itself provides finality of arbitral awards
and its enforcement (Section 36) without
intervention of the Court.
IV. Procedure for Conduct of Arbitration and
Awards in detail Chapter V of the
Arbitration and Conciliation Act, 1996 from
Section 18 to Section 27 provides detailed
procedure, practice whether in hearings or
statements of claim and defence. The Arbitral
Tribunals are empowered to settle any
objections raised in respect of jurisdiction or
scope of authority of the arbitrators.
2

V. Precised Powers of the Court - The Act of

1996 has prcised the powers of the court by
taking assistance only in certain specific
matters. The Court's assistance can be sought
in taking evidence only with the prior approval
of the arbitral tribunals, as under Section
27(1): The arbitral tribunal or a party with the
approval of the arbitral tribunal, may apply to
the court for assistance in taking evidence. In
the matter of jurisdiction Section 42 of the Act
of 1996 states that:
Notwithstanding
anything contained elsewhere in this part or
in any other law for the time being in force,
where with respect to an. arbitration
agreement any application under this part has
been made in a court, that court alone shall
have jurisdiction over the arbitral proceedings
and all subsequent applications arising out of
that agreement and the arbitral proceedings
shall be made in that court and in no other
court.
VI. Powers of the Arbitrators enhanced - In
comparison with the old Act, the new Act has
enhanced the powers of the arbitrators in
respect of jurisdiction of Arbitral Tribunals and
also improved the competency of the
arbitrators to rule. Chapter IV, Section 16 and
Section 17 of the Act 1996 provide these
measures.
3

VII. A new form of Conciliation - Part III of the

Act, 1996 deals with new internationalized
conciliation approach and explains the
application and scope of conciliation. The Act
under Section 63 intends to prescribe number
of conciliators and in case of more than one
conciliator, it should be by the agreement of
the parties. Section 63(2) States: Where
there is more than one conciliator, they ought,
as a general rule, to act jointly. Thus, the new
Act contains object of conciliation' more wide,
and much emphasis has been provided on
mutual rather consented conciliation in every
respect.
VIII. International applicability - Under the old
Act of 1940, there was no provision for
applicability of any interim award made by
the Foreign Arbitral Tribunal i.e., an Arbitral
Tribunal Constituted by the ICC Court
Arbitration at London. But, the new Act of
1996, has provisions for applicability of
Foreign Arbitral Tribunal's awards.

2. Whether arbitration agreement is to

be signed by the parties?
In Union of India v. Railia Ram, AIR 1963 SC1685,
it is held that it is not a condition of effective
4

arbitration agreement in writing that it must be

incorporated in a formal agreement executed by
both the parties thereto, not is it required to be
signed by the parties.
In Smt. Rukmanibai Gupta v. Collector of
Jabalpur AIR 1981 SC 479, it is held, Arbitration
agreement is not required to be in a particular
form. What is required to ascertain is whether the
parties have agreed that is the dispute arises
between them in respect of subject matter of
contract such dispute shall be referred to
arbitration, and then such an agreement would
spell out an arbitration agreement.
Also in M. Dayanand Reddy v. A.P. Indus
Infrastructure Corp. Ltd, (1993) SCC 137 their
landlord observes!
An arbitration agreement need not be signed
and does not require to be stated in a particular
form. Such terms may be ascertained from the
correspondence consisting of number of letters. It
is immaterial whether or not the expression
arbitration or arbitrator has been used in the
agreement.
Arbitration clause may be incorporated by
reference to a specific document which is in
existence
and
whose
terms
are
easily
ascertainable. The intention to refer to arbitration
by such incorporation must be clear and specific.
The question whether or not the arbitrator clause
5

contained in another document is incorporated in

the contract is always a question to construction.
This depend on the interaction of the parties to
be gathered from the relevant documents and
surrounding circumstances. In the absence of it
clear intention of both the parties, agreement for
arbitration cannot and should not be inferred.

3. Describe the meaning of court as

provided
in
the
Arbitration
and
Conciliation Act. 1996?
According to Section 2(1) (c) of the Arbitration
and Conciliation Act, 1996- "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;
Civil Court does not include Revenue Court.
The word court has to be interpreted in the
technical sense throughout the act. It can mean
only Court having civil jurisdiction over the
subject-matter of reference.
6

4. Who can
Arbitrator?

be

appointed

as

an

Section 11 of the Arbitration and Conciliation Act,

1996 provides the appointment of Arbitrators.
It states as follow:(1) A person of any nationality may be an
arbitrator, unless otherwise agreed by the
parties.
(2) Subject to sub-section (6), the parties are free
to agree on a procedure for appointing the
arbitrator or arbitrators.
(3) Failing any agreement referred to in subsection (2), in an 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.
(4) If the appointment procedure in sub-section
(3) applies and(a) a party fails to appoint an arbitrator within
thirty days from the receipt of a request to do
so from the other party; or
7

(b) the two appointed arbitrators fail to agree

on the third arbitrator within thirty days from
the
date
of
their
appointment,
the
appointment shall be made, upon request of a
party, by the Chief Justice or any person or
institution designated by him.
(5) Failing any agreement referred to in subsection (2), in an arbitration with a sole arbitrator,
if the parties fail to agree on the arbitrator within
thirty days from receipt of a request by one party
from the other party to so agree the appointment
shall be made, upon request of a party, by the
Chief Justice or any person or institution
designated by him.
(6) Where, under an appointment procedure
agreed upon by the parties,(a) a party fails to act as required under that
procedure; or
(b) the parties, or the two appointed
arbitrators, fail to reach an agreement
expected of them under that procedure; or
(c) a person, including an institution, fails to
perform any function entrusted to him or it
under that procedure, a party may request
the Chief Justice or any person or institution
designated by him to take the necessary
measure, unless the
8

agreement on the appointment procedure

provides other means for securing the
appointment.
(7) A decision on a matter entrusted by subsection (4) or sub-section (5) or sub-section (6) to
the Chief Justice or the person or institution
designated by him is final.
(8) The Chief Justice or the person or institution
designated by him, in appointing an arbitrator,
shall have due regard to(a) any qualifications required of the arbitrator
by the agreement of the parties and
(b) other considerations as are likely to secure
the appointment of an independent and
impartial arbitrator.
(9) In the case of appointment of sole or third
arbitrator
in
an
international
commercial
arbitration, the Chief Justice of India or the person
or institution designated by him may appoint an
arbitrator of a nationality other than the
nationalities of the parties where the parties
belong to different nationalities.
(10) The Chief Justice may make such scheme as
he may deem appropriate for dealing with
matters entrusted by sub-section (4) or subsection (5) or sub-section (6) to him.
9

(11) Where more than one request has been

made under sub-section (4) or sub-section (5) or
sub-section (6) to the Chief Justices of different
High Courts or their designates, the Chief Justice
or his designate to whom the request has been
first made under the relevant sub-section shall
alone be competent to decide on the request.
(12) (a) Where the matters referred to in subsections (4), (5), (6), (7), (8) and (10) arise in an
international commercial arbitration the reference
to "Chief Justice" in those sub-sections shall be
construed as a reference to the "Chief Justice of
India". (b) Where the matters referred to in subsections (4), (5), (6), (7), (8) and (10) arise in any
other arbitration, the reference to "Chief Justice"
in those sub-section shall be construed as a
reference to, the Chief Justice of the High Court
within whose local limits the principal Civil Court
referred to in clause (e) of sub-section (1) of
section 2 is situate and, where the High Court
itself is the "Court referred to in that clause, to
the Chief Justice of that High Court.

5. State the interim measures ordered

by arbitral tribunal?

10

Section 17 of the Arbitration and Conciliation Act,

1996 provides the Interim measures ordered by
arbitral tribunal.(1) Unless otherwise agreed by the parties, the
arbitral tribunal may, at the request of a party,
order a party to take any interim measure of
protection as the arbitral tribunal may consider
necessary in respect of the subject matter of the
dispute.
(2) The arbitral tribunal may require a party to
provide appropriate security in connection with a
measure ordered under sub-section (1).
Ridley, J. in Austin and Whitley Lid. V. S. Bowley
and Son (1913, 108 LT 921 (F) observed :In my opinion what is intended by a step in the
proceedings is some step which indicates an
intention on the part of a party to the
proceedings that he desires that the action
should proceed and has no desire that the matter
should referred to arbitrator.

6.
When
arbitral-proceedings
terminated?

are

Section 32 of the Arbitration and Conciliation Act,

1996 provides the Termination of proceedings.11

(1) The arbitral proceedings shall be terminated

by the final arbitral award or by an order of the
arbitral tribunal under sub-section (2).
(2) The arbitral tribunal shall issue an order for
the termination of the arbitral proceedings
where---(a) the claimant withdraws his claim, unless
the respondent objects to the order and the
arbitral tribunal recognizes a legitimate
interest on his part in obtaining a final
settlement of the dispute,
(b) the parties agree on the termination of the
proceedings, or
(c) the arbitral tribunal finds that the
continuation of the proceedings has for any
other reason become unnecessary or
impossible.
(3) Subject to section 33 and sub-section (4) of
section 34, the mandate of the arbitral tribunal
shall terminate with the termination of the
arbitral proceedings.

7. Which orders are made appealable

under the Provisions of the Alteration
and Conciliation Act.1996?
Section 37 of the Arbitration and Conciliation Act,
1996 provides the Appealable orders.12

(1) An appeal shall lie from the following orders

(and from no others) to the Court authorized by
law to hear appeals from original decrees of the
Court passing the order, namely:--(a) granting or refusing to grant any measure
under section 9:
(b) setting aside or refusing to set aside an
arbitral award under section 34.
(2) Appeal shall also lie to a court from an order
of the arbitral tribunal---(a) accepting the plea referred to in subsection (2) or sub-section (3) of section 16; or
(b) granting or refusing to grant an interim
measure under section 17.
(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.

8. Discuss the lien on arbitral award

and deposits as to costs?
Section 39 of the Arbitration and Conciliation Act,
1996 provides the Lien on arbitral award and
deposits as to costs. It states as follow:-

13

1)
Subject to the provisions of sub-section (2)
to any provision to the contrary in the
arbitration agreement, the arbitral tribunal
shall have a lien on the arbitral award for any
unpaid costs of the arbitration.
2)
If in any case an arbitral tribunal refuses
to deliver its award except on payment of the
costs demanded by it, the Court may, on an
application in this behalf, order that the
arbitral tribunal shall deliver the arbitral
award to the applicant on payment into Court
by the applicant of the costs demanded, and
shall, after such inquiry, if any, as it thinks fit,
further order that out of the money so paid
into Court there shall be paid to the arbitral
tribunal by way of costs such sum as the
Court may consider reasonable and that the
balance of the money, if any, shall be
refunded to the applicant.
3)
An application under sub-section (2) may
be made by any party unless the fees
demanded have been fixed by written
agreement between him and the arbitral
tribunal and the arbitral tribunal shall be
entitled to appear and he heard on any such
application.
4)
The Court may make such orders as it
thinks fit respecting the costs of the
arbitration where any question arises
14

respecting such costs and the arbitral award

contains no sufficient provision concerning
them.

9. What will be
conciliators
in
proceeding?
How
appointed?

the number of
a
conciliation
Conciliators
are

Section 63 of the Arbitration and Conciliation Act,

1996 provides the Number of conciliators.
(1) There shall be one conciliator unless the
parties agree that there shall be two or
three conciliators.
(2) Where there is more than one conciliator,
they ought, as a general rule, to act jointly.
Section 64 of the Arbitration and Conciliation Act,
1996
provides
the
Appointment
of
conciliators.
(1) Subject to sub-section (2), (a) In conciliation proceedings with one
conciliator, the parties may agree on the
name of a sole conciliator;
15

(b) In conciliation proceedings with two

conciliators, each party may appoint one
conciliator;
(c) In conciliation proceedings with three
conciliators, each party may appoint one
conciliator and the parties may agree on the
name of the third conciliator who shall act as
the presiding conciliator.
(2) Parties may enlist the assistance of a
suitable institution or person in connection
with the appointment of conciliators, and in
particular, (a) A party may request such an institution or
person to recommend the names of suitable
individuals to act as conciliator; or
(b) The parties may agree that the
appointment of one or more conciliators be
made directly by such an institution or
person:
Provided that in recommending or appointing
individuals to act as conciliator, the institution or
person shall have regard to such considerations
as are likely to secure the appointment of an
16

independent and impartial conciliator and, with

respect to sole or third conciliator, shall take into
account the advisability of appointing conciliators
of a nationality other than the nationalities of the
parties.

10. Who are entrusted power to make

rules
under
the
Arbitration
and
Conciliation Act. 1996?
Section 82 and 84 of the Arbitration and
Conciliation Act, 1996 provides the rule making
power.
As per section 82- Power of High Court to make
rules. -The High Court may make rules consistent
with this Act as to all proceedings before the
court under this Act.
As per Section 84- Power to make rules.
(1) The Central Government may, by notification
in the Official Gazette, make rules for carrying out
the provisions of this Act.

17

(2) Every rule made by the Central Government

under this Act shall be laid, as soon as may be,
after it is made before each House of Parliament
while it is in session, for a total period of thirty
days which may be comprised in one session or
in two or more successive sessions, and if, before
the expiry of the session immediately following
the session or the successive sessions aforesaid,
both Houses agree in making any modification in
the rule or both Houses agree that the rule should
not be made, the rule shall thereafter have effect
only in such modified form or be of no effect, as
the case may be; so, however, that any such
modification or annulment shall be without
prejudice to the validity of anything previously
done under that rule.

11.
Discuss
Alternative
Resolution Systems?

Disputes

ADR or Alternative Dispute Resolution is an

attempt to devise machinery which should be
capable of providing an alternative to the
conventional methods of resolving disputes. ADR
offers to resolve matters of litigants, whether in
18

business causes or otherwise, who are not able to

start any process of negotiation and reach any
settlement. It has started gaining ground as
against litigation and arbitration.
ADR first started as a quest to find solutions to
the perplexing problem of the ever increasing
burden on the courts. It was an attempt made by
the legislators and judiciary alike to achieve the
Constitutional goal of achieving Complete
Justice.
Alternative Dispute Resolution in India was
founded on the Constitutional basis of Articles 14
and 21 which deal with Equality before Law and
Right to life and personal liberty respectively.
ADR also tries to achieve the Directive Principle of
State Policy relating to Equal justice and Free
Legal Aid as laid down under Article 39-A of the
Constitution.
The Acts which deal with Alternative Dispute
Resolution are Arbitration and Conciliation Act,
1996 and the Legal Services Authorities Act,
1987.
Section 89 of the Civil Procedure Code, 1908
makes it possible for Arbitration proceedings to
take place in accordance with the Acts stated
above
Advantage of Alternate Dispute Resolution:
It is less expensive.
19

It is less time consuming.

It is free from technicalities as in the case of
conducting cases in law Courts.
The parties are free to discuss their difference of
opinion without any fear of disclosure of this fact
before any law Courts.
The last but not the least is the fact that parties
are having the feeling that there is no losing or
winning feeling among the parties by at the same
time they are having the feeling that their
grievance is redressed and the relationship
between the parties is restored.

12. Describe the scope of legislation

and procedure of appointment of
Lokpals and Lokayuktas under the
Orissa Lokpal and Lokayukta Act, 1995?
The Orissa Lokpal and Lokayuktas, 1995 is an Act
to make provision for the appointment and
functions of Lokpal and Lokayuktas for the
investigation of administrative action taken by or
on behalf of the government or central local and
Public Authorities in certain cases and for the
matters connected therewith and matters
involving acts of justice.

20

According to Section 2(f) of Orissa Lokpal and

Lokayukta Act, 1995. Lokpal means a person
appointed as the Lokpal under section 3.
Section 2(g) Lokayukta means a person
appointed as a Lokayukta under section 3.
Appointment of Lokpal and Lokayuktas:Section 3 of Orissa Lokpal and Lokayukta Act,
1995 provide the appointment of Lokpal and
Lokayuktas.
(1) For
the
purpose
,of
conducting
investigations in accordance with the
provisions of this Act, the Governor shall
appoint a person to be known as the Lokpal
and one or more persons to be known as the
Lokayukta or Lokayuktas.
Provided that(a) the Lokpal shall be appointed after
consultation with the Chief Justice of the
High Court of Orissa and the Leader of the
Opposition, if there is any;
(b) The Lokayukta or Lokayuktas shall be
appointed after consultation with the Lokpal.
(2) A person shall not be qualified or
appointment as(a) Lokpal unless he is or has been a Judge of
the Supreme Court or of a High Court; and
(b) a Lokayukta unless he is qualified to be a
Judge of a High
21

Court,
(3) Every person appointed .as the Lokpal or a
Lokayukta shall,
before entering upon his office, make and
subscribe, before the Governor, or some
person appointed in that behalf by the
Governor, an oath or affirmation in the form
set out for the purpose in the First Schedule.
(4) the Lokayuktas shall be subject to the
administrative control of the Lokpal and, in
particular, for the purpose of convenient
disposal of investigations under this Act, the
Lokpal may issue such general or special
directions as he may consider necessary to
the Lokayuktas;
Provided that nothing in this sub-section
shall be construed to authorize the Lokpal to
question
any
finding,
conclusion
or
recommendation of Lokayukta.
Section 4- Lokpal or Lokayukta to hold no
other office(1) The Lokpal or a Lokayukta, shall not be a
member of.
Parliament or a member of the Legislature
of any State and shall nor hold any office
of trust or profit, (other than his office as
the Lokpal or, as the case may be, a
Lokayukta), or be connected with any
22

political party or carry on any business or

practice or any
profession.
(2) A person appointed to be the Lokpal or, as
the case may be, the Lokayukta shall,(a) if he is a member of Parliament or of the
Legislature of
any State, resign such membership;
(b) if he holds any office of trust or profit,
resign from such
office
(c) if he is connected with any political party,
sever his
connection with it;
d) if he is cawing on 'any business, sever his
connections in
the conduct and management of such
business; or
(e) if he is practicing any profession, suspend
to practice such
profession.

13. State the various provisions relating

to complaints and the procedure in
respect of investigation as provided the
Orissa Lokpal and Lokayuktas Act.
1995?
23

Section 7 of the Orissa Lokpal and Lokayuktas

Act. 1995 provide the provisions relating to
complaints.
(1) Subject to the provisions, of this Act, the
Lokpal may investigate any action which is taken
by or with the general or specific approval of,(i) a Minister or the Chief Secretary or a
Secretary; or
(ii) an other public servant being a public servant
of a class
or sub-class of public servants notified by the
State Government in consultation with the Lokpal
in this behalf;
in any case where a complaint involving a
grievance or an allegation is made in respect of
such action or such action can be or could have
been, in the opinion of the Lokpal, the subject of
a grievance or an allegation.
(2) Subject to the provisions of this Act, a
Lokayukta may investigate any action which is
taken by or with the general or specific approval
of, any public servant not being a Minister, the
Chief Secretary or a Secretary or other public
servant referred to
in sub-section (1) in any case where a complaint
involving a grievance or an allegation is made in
respect of such action or such action can be or
could have been, in the opinion of the Lokayukta,
the subject of a grievance or any allegation.
24

(3) Notwithstanding anything contained in subsection (2) the Lokpal may for reasons to be
recorded in writing, investigate any action which
may be investigated by a Lokayukta under that
sub-section whether or not a complaint has been
made to the Lokpal in respect of such action.
(4) Where two or more Lokayuktas are appointed
under this Act, the Lokpal may, by general or
special order, assign to each of them matters
which may be investigated by them under this
Act:
Provided that no investigation made by a
Lokayukta under this Act and no action taken or
thing done by, him in respect of such
investigation shall be open to question on the
ground only that such investigation relates to .a
matter which is not assigned to him by such
order.
Section 10 provides the procedure in respect of
investigation;
(1) Where the Lokpal or a Lokayukta proposes
after making such preliminary inquiry as he
deems fit to conduct any investigation
under this act, he(a) Shall forward a copy of the complaint or in the
case of any
25

investigation which he proposes to conduct on

his own motion, a statement setting out at
grounds therefore, to the public servant
concerned and the competent authority
concerned;
(b) shall provide to the public servant concerned
an opportunity to
offer his comments on such complaint or
statement; and
(c) may make such orders as to the safe custody
of documents
relevant to the investigation as he deems, fit.
(2) very such investigations shall be conducted in
private and in particular, the identity of the
complainant and of the public servant affected by
the investigation shall not be disclosed to the
public or the press whether before, during or after
the, investigation;
Provided that the Lokpal or a Lokayukta may
conduct any investigation relating to a matter of
definite public importance in public, if he, for
reasons to be recorded in writing, thinks fit to do
so.
(3) Save as aforesaid the procedure for
conducting any such investigation shall be such
as the Lokpal, or as the case may be, the
Lokayukta
considers,
appropriate
in
the
Circumstances of the case.
26

(4) The Lokpal or a Lokayukta may in his direction

refuse to investigate or cease to investigate any
complaint involving a grievance or an allegation,
if in his opinion(a) the complaint is frivolous or vexatious or'
is not made in good faith or
(b) there are no sufficient grounds for
investigating or, the case may be, for
continuing the investigation ; or
(c) other remedies are available to the
complainant and in the circumstances of the
case it would be more proper for the
complainant to avail of such remedies
Provided that the Lokpal or a Lokayukta shall not
refuse to investigate or cease to investigate any
complaint on the ground mentioned in clause (c)
without making preliminary investigation on the
complaint and in all such cases he shall furnish a
report about the preliminary investigation to the
Governor.
(5) .In any case where the Lokpal or a Lokayukta
decides not to entertain a complaint or to
discontinue any investigation in respect of a
complaint, he shall record his reasons therefore
and communicate the same to the complainant
and the public servant concerned.
(6) The conduct of an investigation under thisAct in respect of any action shall not affect such
action, or any power or duty of any public servant
27

to take further action with respect to any matter

subject to the investigation.

14. Negotiation is the best system of

alternative dispute resolution systems.
Discuss?
Negotiation has been defined as any form of
direct or indirect communication whereby parties
who have opposing interests discuss the form of
any joint action which they might take to manage
and ultimately resolve the dispute between them.
Negotiations may be used to resolve an alreadyexisting problem or to lay the groundwork for a
future relationship between two or more parties.
Negotiation has also been characterized as the
preeminent mode of dispute resolution, which is
hardly surprising given its presence in virtually all
aspects of everyday life, whether at the
individual, institutional, national or global levels.
Each negotiation is unique, differing from one
another in terms of subject matter, the number of
participants and the process used.
Negotiation is:
Voluntary: No party is forced to participate in a
negotiation. The parties are free to accept or
reject the outcome of negotiations and can
28

withdraw at any point during the process. Parties

may participate directly in the negotiations or
they may choose to be represented by someone
else, such as a family member, friend, a lawyer or
other professional.
Bilateral/Multilateral: Negotiations can involve
two, three or dozens of parties. They can range
from two individuals seeking to agree on the sale
of a house to negotiations involving diplomats
from dozens of States (e.g., World Trade
Organization (WTO)).
Non-adjudicative: Negotiation involves only the
parties. The outcome of a negotiation is reached
by the parties together without recourse to a
third-party neutral.
Informal: There are no prescribed rules in
negotiation. The parties are free to adopt
whatever rules they choose, if any. Generally they
will agree on issues such as the subject matter,
timing and location of negotiations. Further
matters such as confidentiality, the number of
negotiating sessions the parties commit to, and
which documents may be used, can also be
addressed.
Confidential: The parties have the option of
negotiating publicly or privately. In the
government context, negotiations would be
subject to the criteria governing disclosure as
29

specified in the Access to Information Act and

the Privacy Act. For general information on the
privileged nature of communications between
solicitor and client during the course of
negotiations, please refer to the Department of
Justice Civil Litigation Deskbook.
Flexible: The scope of a negotiation depends on
the choice of the parties. The parties can
determine not only the topic or the topics that
will be the subject of the negotiations, but also
whether they will adopt a positional-based
bargaining approach or an interest-based
approach.
In procedural terms, negotiation is probably
the most flexible form of dispute resolution as it
involves only those parties with an interest in the
matter and their representatives, if any. The
parties are free to shape the negotiations in
accordance with their own needs, for example,
setting the agenda, selecting the forum (public or
private) and identifying the participants. By
ensuring that all those who have an interest in
the dispute have been consulted regarding their
willingness to participate and that adequate
safeguards exist to prevent inequities in the
bargaining process (i.e., an imbalance in power
30

between the parties), the chances of reaching an

agreement satisfactory to all are enhanced.
Like any method of dispute resolution,
negotiation cannot guarantee that a party will be
successful. However, many commentators feel
that negotiations have a greater possibility of a
successful outcome when the parties adopt an
interest-based approach as opposed to a
positional-based approach. By focusing on their
mutual needs and interests and the use of
mechanisms such as objective standards, there is
a greater chance of reaching an agreement that
meets the needs of the parties. This is sometimes
referred to as a win-win approach.
Negotiation is a voluntary process. No one is
required to participate in negotiations should they
not wish to do so.
There is no need for recourse to a third-party
neutral. This is important when none of the
parties wants to involve outside parties in the
process, e.g., the matter to be discussed or the
dispute to be resolved may be highly sensitive in
nature.
Unlike the outcomes of certain adjudicative
processes, e.g., the courts, the outcome of a
negotiation only binds those parties who were
involved in the negotiation. The agreement must
not, of course, be contrary to Canadian law (e.g.,
31

an agreement to commit a crime would be illegal

and thus void for public policy reasons).
Assuming that the parties are negotiating in
good faith, negotiation will provide the parties
with the opportunity to design an agreement
which reflects their interests.
Negotiations may preserve and in some cases
even enhance the relationship between the
parties once an agreement has been reached
between them.
Opting for negotiation instead of litigation
may be less expensive for the parties and may
reduce delays.

15. Explain the function of Central Legal

Services Authority?
Constitution of the National Legal Services
Authority
(1) The Central Government shall constitute a
body to be called the National Legal Services
Authority to exercise the powers and perform the
functions conferred on or assigned to the Central
Authority under this Act.
The Central Authority shall consist of:
(a) the Chief Justice of India who shall be the
Patron-in Chief ;
32

(b) a serving or retired Judge of the Supreme

Court to be nominated by the President in
consultation with the Chief Justice of India, who
shall be the Executive Chairman; and
(c) such number of other members, possessing
such experience and
qualifications, as may be prescribed by the
Central Government to be nominated by that
Government in consultation with the Chief Justice
of India.
(3) The Central Government shall, in consultation
with the Chief Justice of India, appoint a person to
be the Member Secretary of the Central
Authority, possessing such experience and
qualifications as may be prescribed by that
Government, to exercise such powers and
perform such duties under the Executive
Chairman of the Central Authority as may be
prescribed by that Government or as may be
assigned to him by the Executive Chairman of
that Authority.
(4) The term of office and other conditions
relating thereto of members and the MemberSecretary of the Central Authority shall be such
as may be prescribed by the Central Government
in consultation with the Chief Justice of India.
(5) The Central Authority may appoint such
number of officers and other employees as may
be prescribed by the Central Government, in
33

consultation with the Chief Justice of India, for the

efficient discharge of its functions under this Act.
(6) The officers and other employees of the
Central Authority shall be entitled to such salary
and allowances and shall be subject to such other
conditions of service as may be prescribed by the
Central Government in consultation with the Chief
Justice of India.
(7) The administrative expenses of the Central
Authority, including the salaries, allowances and
pensions payable to the Member-Secretary,
officers and other employees of the Central
Authority, shall be defrayed out of the
Consolidated Fund of India.
(8) All orders and decisions of the Central
Authority shall be, authenticated by the Member
Secretary or any other officer of the central
Authority duly authorised by the Executive
Chairman of that
Authority.
(9) No act or proceeding of the Central Authority
shall be invalid merely on the ground of the
existence of any vacancy in, or any defect in the
constitution of, the Central Authority.
Functions of the Central Authority
The Central Authority shall perform all or any of
the following functions, namely; 34

(a) lay down policies and principles for making

legal services available under the provisions of
this Act;
(b) frame the most effective and economical
schemes for the purpose of making legal services
available under the provisions of this Act ;
(c) utilise the funds at its disposal and make
appropriate allocations of funds to the State
Authorities and District Authorities:
(d) take necessary steps by way of social justice
litigation with regard to consumer protection,
environmental protection. or any other matter of
special concern to the weaker sections of the
society and for this purpose, give training to
social workers in legal skills;
(e) organise legal aid camps, especially in rural
areas, slums or labour colonies with the dual
purpose of educating the weaker sections of the
society as to their rights as well as encouraging
the settlement of disputes through Lok Adalats;
(f) encourage the settlement of disputes by way
of negotiations, arbitration and conciliation;
(g) undertake and promote research in the field of
legal services with special reference to the need
for such services among the poor;
(h) to do all things necessary for the purpose of
ensuring commitment to the fundamental duties
of citizens under Part IVA of the Constitution;
35

(i) monitor and evaluate implementation of the

legal aid programmes at periodic intervals and
provide
for
independent
evaluation
of
programmes and schemes implemented in whole
or in part by funds
provided under this Act;
(j) provide grants-in-aid for specific schemes to
various voluntary social service institutions and
the State and District Authorities from out of the
amounts placed at its disposal for the
implementation of legal services schemes under
the provisions of this Act;
(k) develop, in consultation with the Bar Council
of India, programmes for clinical legal education
and promote guidance an d supervise the
establishment and working of legal services
clinics in universities, law colleges, and other
institutions;
(l) take appropriate measures for spreading legal
literacy and legal
awareness amongst the people and, in particular
to educate weaker
sections of the society about the rights, benefits
and privileges guaranteed by social welfare
legislations and other enactments as well as
administrative programmes and measures;
(m) makes special efforts to enlist the support of
voluntary social welfare institutions working at
the grass-root level, particularly among the
36

Scheduled Castes and the Scheduled Tribes,

women and rural and urban labour; and
(n) co-ordinate and monitor the functioning of
State Authorities, District Authorities, Supreme
Court Legal Services Committee, High Court Legal
Services Committees, Taluka Legal Services
Committee
and
voluntary
social
service
institutions and other legal services organisations
and give general directions for the proper
implementation of the legal service programmes.

16. Explain the function of State Level

Services Authority?
Constitution of State Legal Services Authority
(1) Every State Government shall constitute a
body to be called the Legal Services Authority for
the State to exercise the powers and perform the
functions conferred on or assigned to a State
Authority under this Act.
(2) A State Authority shall consist of;
(a) the Chief Justice of the High Court who
shall be the patron-in-Chief;
(b) a serving or retired Judge of the High
Court, to be nominated by the Governor in
consultation with the Chief Justice of the High
37

Court, who shall be the Executive Chairman;

and (c) such number of other members,
possessing such experience and qualifications
as may be prescribed by the State
Government, to be nominated by that
Government in consultation with the Chief
Justice of the High Court.
(3) The State Government shall, in consultation
with the Chief Justice of the High Court appoint a
person belonging to State Higher Judicial Service,
not lower in rank than that than that of a District
Judge, as the Member Secretary of the State
Authority, to exercise such powers, and perform
such duties under the Executive Chairman of the
State Authority as may be prescribed by that
Government or as may be assigned to him by the
Executive Chairman of that
Authority.
(4) The terms of office and other conditions
relating thereto of members and the Member
Secretary of the State Authority shall be such as
may be prescribed by the State Government in
consultation
with the Chief Justice of the High Court.
(5) The State Authority may appoint such number
of officers and other employees as may be
prescribed by State Government, in consultation
with the Chief Justice of the High Court, for the
efficient discharge of its functions under this Act.
38

(6) The officers and other employees of the State

Authority shall be entitled to such salary and
allowances and shall be subject to such other
conditions of service as may be prescribed by the
State Government in consultation with the Chief
Justice of the High Court.
(7) The administrative expenses of the State
Authority, including the salaries, allowances and
pensions payable to the Member-Secretary,
officers and other employees of the State
Authority shall be defrayed out of the
Consolidated fund of the State.
(8) All orders and decisions of the State Authority
shall be authenticated by the Member Secretary
or any officer of the State Authority duly
authorised by the Executive Chairman of the
State Authority.
(9) No act or proceedings of a State Authority
shall be invalid merely on the ground of the
existence of any vacancy in or any defect in the
constitution, of the State Authority.
Functions of the State Legal Services Authority
(1) It shall be the duty of the State Authority to
give effect to the policy and directions of the
Central Authority.
(2) Without prejudice to the generality of the
functions referred to in sub-section (1) the State
39

Authority shall perform all or any of the following

functions, namely :(a) give legal service to persons who satisfy
the criteria laid down under this Act;
(b) conduct Lok Adalats, including Lok Adalats
for High Court cases.;
(c) undertake preventive and strategic legal
aid programmes;
(d) perform such other functions as the State
Authority may, in consultation with the
Central Authority fix by regulations.
In the discharge of its functions the State
Authority shall appropriately act in coordination
with
other
governmental
agencies,
nongovernmental
voluntary
social
service
institutions; universities
and other bodies engaged in the work of
promoting the cause of legal services to the poor
and shall also be guided by such directions as the
Central Authority may give to it in writing.

40