Negotiation, Conciliation and

Arbitration Aspects: Role of

Company Secretary in the said
process

Ms.Ms.
Kavita
Jha, Jha,
Kavita
Principal Associate, Vaish Associates
Advocate,
Vaish
Associates
Advocates

Advocates

Mediation and Conciliation

and
Companies Act, 2013

COMPANIES ACT, 2013:

Section 442
The Central Gov. shall maintain a panel of
experts to be called as Mediation and
Conciliation Panel for mediation between
parties during the pendency of any
proceedings before the Central Govt. or the
Tribunal or the Appellate Tribunal under the
new law.

The Panel shall dispose of the matter

referred to it within a period of 3 months
from the date of reference.

I. ALTERNATIVE
DISPUTE
RESOLUTION

Introduction
ADR refers to the other ways that the parties
can use to settle civil disputes with the help of
an independent third party and without the
need for a formal court hearing.

The main types of ADRs are:

a. Arbitration
b. Negotiations
b. Mediation
c. Conciliation

Salem Bar Association v. Union of India

(AIR 2005 SC 3353)
If the Court for one reason or the other cannot itself effect a
compromise, the only option it would have is to refer the
parties to conciliation etc.
In the historic judgement in Salem Bar Association v. Union of
India, the Supreme Court has directed the constitution of a
committee to frame draft rules for mediation under S. 89(2)(d)
of the CPC. Consequently, the Committee presided over by Mr
Justice M. Jagannadha Rao, Chairman of the Law Commission
of India has prepared a comprehensive code for the regulation
of ADR process initiated under S 89 of CPC. which consists of
two parts---Part I: ADR Rules 2003 consisting of the procedure
to be followed by the parties and the Court in the matter of
choosing the particular method of ADR and Part II: Mediation
Rules, 2003 consisting of draft rules of mediation under
section 89(2)(d) of the Code of Civil Procedure.

NEGOTIATION
Negotiations occur when two parties set
forth the type of remedy each desires, and try
to reach some sort of an agreement that
satisfies everyone involved. In the best-case
scenario, negotiations are done between the
parties and both come to a happy agreement.
Once agreement has been reached, the parties
will create a written statement to reflect the
terms of the negotiated assets.

CONCILIATION
Conciliation is limited to encouraging the
parties to discuss their differences and to help
them develop their own proposed solutions.
It is voluntary, flexible, confidential and
interest based process. the parties seek to
reach an amicable dispute settlement with the
assistance of the conciliator, who acts as a
neutral third party.

CONCILIATION
Section related to conciliation:
i. Commencement of conciliation proceeding u/s 62 of the Act.
ii. After proceedings S.71 cooperation of parties with conciliator.
iii. S.76 termination of conciliation proceeding.

What cannot be referred to conciliation:

i. Matters of Criminal nature
ii. Illegal transactions
iii. Matrimonial matters like divorce suit etc.

What can be referred to conciliation?

i. Matters of Civil Nature
ii. Breach of Contract
iii. Dispute of Movable or Immovable Property

Mediation
The term mediation broadly refers to any
instance in which a third party helps others reach
agreement. more specifically, mediation has a
structure, timetable and dynamics that
ordinary negotiation lacks.

The process is private and confidential, possibly

enforced by law. participation is typically
voluntary. the mediator acts as a neutral third
party and facilitates rather than directs the
process.

TYPES OF DISPUTE SUITABLE FOR

MEDIATION
Mediation is suitable for resolving a wide range of
disputes including:

Business and Commercial

Partnership
Family
Workplace
Personal injury
Industrial and Construction

COMPANIES ACT, 2013: Need for Mediation

and Conciliation
Mediation is assisted negotiation. It is a flexible process
conducted confidentially in which a neutral party i.e. the
mediator, manages the interaction between disputing
parties to help them come to a negotiated settlement of
the dispute. The disputants and not the mediator have
ultimate control over the decision to settle and terms of
resolution. The final terms of settlement are recorded in
the form of a binding agreement.
The process is time bound and cost effective.

Confidentiality of the entire process and all concessions

made by parties during negotiation is maintained. Since the
parties mutually agree to the settlement terms, probability
of litigation over settlement is also low.

ROLE OF MEDIATOR/ CONCILIATOR

UNDER SECTION 442
The mediator/conciliator shall attempt to facilitate the
following:
voluntary resolution of the dispute(s) by the parties,
communicate the view of each party to the other,
assist them in identifying issues,
reducing misunderstandings,
clarifying priorities,
exploring areas of compromise and generating options in
an attempt to resolve the dispute(s), emphasizing that it is
the responsibility of the parties to take decision which
affect them.
He shall not impose any terms of settlement on the parties.
However, if both the parties consent, he may impose such
terms and conditions on the parties for early settlement of
the dispute.

An ounce of mediation is worth

a pound of arbitration and a ton
of litigation! Joseph
Grynbaum

II. ARBITRATION

Introduction
Arbitration: As per Halsbury s Laws of England
It means reference of a dispute between not less
than two parties, for determination, after hearing
both sides in a judicial manner, by a person or
persons other than a court of competent
jurisdiction.
Object of Arbitration
Settlement of dispute in an expeditious,
convenient, inexpensive and private manner to
prevent it fro, becoming a subject of future
litigation.

Types of Arbitration Practice - Institutional

Arbitration and Ad Hoc Arbitration
AD HOC ARBITRATION

INSTITUTIONAL ARBITRATION

A. The procedures have to be agreed upon by

the parties and the arbitrator. This requires cooperation between the parties and involves a
lot of time

A. In institutional arbitration, the procedural

rules are already established by the institution.
The fees are also fixed and regulated under
rules of the institution.

B. Infrastructure facilities for conducting

arbitration pose a problem and parties are
often compelled to resort to hiring facilities of
expensive hotels, which increase the cost of
arbitration. Other problems include getting
trained staff and library facilities for ready
reference.

B. In contrast, the institution will have ready

facilities to conduct arbitration, trained
secretarial/administrative staff, as well as
library facilities.

C. No such panel per se is available here.

C. The arbitral institutions maintain a panel of

arbitrators along with their profile. The parties
can choose the arbitrators from the panel.
Such arbitral institutions also provide for
specialized arbitrators.

Inspite of the numerous advantages of institutional arbitration over ad hoc arbitration, there is
currently an overwhelming tendency in India to resort to ad hoc arbitration mechanisms.

Evolution of Arbitration Act

The Pre-1996 Position (1940 Act): This Act was largely premised on
mistrust of the arbitral process and afforded multiple opportunities
to litigants to approach the court for intervention. Coupled with a
sluggish judicial system, this led to delays rendering arbitrations
inefficient and unattractive.

The 1996 Act: The 1996 Arbitration Act based on the UNCITRAL on
International Commercial Arbitration and the Arbitration Rules of
the United Nations Commission on International Trade Law 1976
was enacted.
The Statement of Objects and Reasons to the Act said that the old
Act had become outdated and there was need to have an Act
more responsive to contemporary requirements. Amongst the
main objectives of the 1996 Act were to minimize the supervisory
role of courts in the arbitral process and to provide that every
final arbitral award is enforced in the same manner as if it were a
decree of the Court.

Arbitration and Conciliation Act, 1996

Part I Domestic Arbitration

Part II Enforcement of foreign
awards
Part III Conciliation Procedures
Part IV Supplementary
Provisions

In spite of Arbitration being an

effective tool of dispute
resolution, there were various
shortcomings which were
required to be resolved.

Issues faced under 1996 Act

High costs and delays: Thus, making it no better than either
the earlier regime which it was intended to replace.
After the award, a challenge under section 34 makes the
award in executable and such petitions remain pending for
several years.

Proceedings in arbitrations are becoming a replica of court

proceedings.
Appointment and independence of Arbitrators.

Arbitration and Conciliation

(Amendment) Act, 2015
In an attempt to make arbitration a preferred mode of
settlement of commercial disputes and making India a
hub of international commercial arbitration, the
President of India on 23rd October 2015 promulgated an
Ordinance ("Arbitration and Conciliation (Amendment)
Ordinance, 2015) amending the Arbitration and
Conciliation Act, 1996.
Prior to the amendment of the Indian Arbitration and
Conciliation Act 1996 (the Act), Indias journey towards
becoming an international commercial hub that could
rival Singapore and London was hampered by a largely
ineffective Act and an arbitration regime that was
afflicted with various problems including those of high
costs and delays.
To address these issues the Arbitration and Conciliation
Act, 2015 was introduced.

Amendments made in
2015
The Law Commission of India had brought
out Report No. 246 in August 2014,
recommending various amendments to the
Arbitration & Conciliation Act, 1996, which
have been incorporated vide Arbitration
and Conciliation (Amendment) Act, 2015

Issues resolved by
Arbitration and Conciliation
(Amendment) Act, 2015

1. Appointment of Arbitratoradministrative power

Section 11 of Arbitration and Conciliation Act, 1996 provided for
appointment of Arbitrator by Chief Justice or any person or institution
designated by him. Now, the powers are with High Court or Supreme
Court. Thus, now, any bench of High Court/ Supreme Court can appoint
Arbitrator.
Section 11(6A) has been inserted to provide that the Supreme Court or
High Court, while considering application for appointment of arbitrator,
shall examine only existence of arbitration agreement (and not merits of
the case).
Section 11(6B) has been inserted to clarify that appointment of
Arbitrator by any person or institution nominated by Supreme Court or
High Court will not be considered as delegation of judicial powers.
Thus, appointment of Arbitrator is only an administrative matter.

2. Independence of Arbitrator
Neutrality of arbitrators, viz. their independence and
impartiality, is critical to the entire process.
Test for neutrality is set out in section 12(3) which provides
An arbitrator may be challenged only if (a) circumstances exist
that give rise to justifiable doubts as to his independence or
impartiality
The balance between procedural fairness and binding nature of
these contracts, appears to have been tilted in favour.
Large scale amendments were suggested to address this
fundamental issue of neutrality of arbitrators particularly to
sections 11, 12 and 14 of the Act.
Further, the Commission had proposed the requirement of
having specific disclosures by the arbitrator.

Independence of Arbitrator
Section 12(1) of Arbitration and Conciliation Act, 1996 expected Arbitrator
to make disclosure of his possible connection or interest
However, the section did not specify any criteria.
Now, fifth schedule has been inserted specifying grounds to guide on which
independence and impartiality of Arbitrator can be doubted.
Section 12(5) also inserted by Amendment Act, 2015, which provides that if
arbitrator has interest ( direct or indirect) as specified in schedule seven of
the Arbitration and Conciliation Act, 1996, he cannot be appointed as
Arbitrator, unless both parties agree in writing, after dispute has arisen.
Thus, a mere clause in Arbitration Agreement about appointment of
arbitrator of choice of one of the parties is not sufficient.
This is a very good provision. The reason is that, at the time of contract,
one of the parties is usually in dictating position and other party has
practically no option to sign on dotted lines.

3. FEES OF
ARBITRATORS
Unilateral and disproportionate fixation of fees by
several arbitrators.

The subject of fees of arbitrators has been the subject

of the lament of the Supreme Court in Union of India v.
Singh Builders Syndicate, (2009) 4 SCC 523.
Commission had recommended a model schedule of
fees and has empowered the High Court to frame
appropriate rules for fixation of fees for arbitrators and
for which purpose it may take the said model schedule
of fees into account.

 The model fees payable to Arbitrator have been

specified in Fourth Schedule inserted to Arbitration and
Conciliation Act, 1996 vide 2015 amendment. The fee
varies between Rs. 45,000 to Rs. 30 lakhs depending on
the sums in dispute.
Section 11(14) inserted by Amendment Act, 2015: For
the purpose of determination of the fees of arbitral
Tribunal, the High Court may frame such rules as may
be necessary, after taking into consideration the rates
specified in the Fourth Schedule.

4. CONDUCT OF ARBITRAL
PROCEEDINGS
Commission had proposed addition of the second proviso to
section 24 (1) to the Act, which is intended to discourage the
practice of frequent and baseless adjournments, and to
ensure continuous sittings of the arbitral tribunal for the
purposes of recording evidence and for argument.

Proviso to section 24(1) of Arbitration and Conciliation Act,

1996 inserted by Amendment act, 2015.
Hearing of Arbitrator Tribunal should be on day to day basis
without adjournment.
If any party seeks adjournment without sufficient cause,
costs including exemplary costs can be imposed on him - proviso to section 24(1) of Arbitration and Conciliation Act,
1996 inserted by Amendment act, 2015.

5. Time Limit for making awards

Section 29A inserted by Amendment Act, 2015.
The Arbitral tribunal shall make Arbitration Award
within 12 months from date of reference.
The period can be extended by the parties upto six
months by mutual consent.
Fees payable to Tribunal can be reduced upto 5% for
each month of delay.
If award is not made within that period, the mandate
of arbitrator terminates.
However, court can further extend the mandate on
suitable terms and conditions.
In fact, now Arbitrator, while giving declaration under
section 12(1) of the Act has to state whether he has
sufficient time to complete assignment within 12
months.

6. Fast track procedure for arbitral

award
If both parties agree in writing, the arbitral
tribunal can follow fast track procedure.
Decision will be on basis of written pleadings,
documents and submissions.
Oral hearing will be only to clarify certain
points. Technical formalities for oral hearing
may be dispensed with by arbitral tribunal.
Award shall be made within six months
section 29B of Arbitration and Conciliation
Act, 1996 inserted by Amendment Act, 2015.

7. JUDICIARY AND ARBITRATION

It is thought in some quarters that judicial intervention is
anathema to arbitration, and this view is not alien to a section
of the arbitration community even in India. The Commission
however, does not subscribe to this view. The Commission
recognizes that the judicial machinery provides essential
support for the arbitral process. The paradox of arbitration, as
noted by a leading academic on the subject, is that it seeks
the co-operation of the very public authorities from which it
wants to free itself.
The Commission has strived to adopt a middle path to find an
appropriate balance between judicial intervention and judicial
restraint.

Judicial intervention in arbitration

proceedings
Judicial intervention in arbitration proceedings adds
significantly to the delays in the arbitration process and
ultimately negates the benefits of arbitration
Dedicated benches for arbitration related cases: eg. Delhi High
Court has a separate bench.
Amendment in section 11: Delegate the power of
appointment (being a non-judicial act) to specialized, external
persons or institutions.
Amendment to section 11 (7) made providing that decisions
of the High Court/ Supreme Court (regarding existence/nullity
of the arbitration agreement) are final where an arbitrator has
been appointed, and as such are non-appealable.

Judicial intervention in arbitration proceedings

(contd..)
section 11 (13) was inserted, which requires the Court to
make an endeavor to dispose of the matter within sixty days
from the service of notice on the opposite party.

Sections 34 (6) inserted which requires that an application

under those sections shall be disposed off expeditiously and
in any event within a period of one year from the date of
service of notice
New sub-clause (2A) inserted to section 23 of the Act in order
to ensure that counter claims and set off can be adjudicated
upon by an arbitrator without seeking a separate/new
reference by the respondent, provided that the same falls
within the scope of the arbitration agreement

9. SCOPE AND NATURE OF PREARBITRAL JUDICIAL INTERVENTION

The Act recognizes situations where the intervention of the Court
is envisaged at the pre-arbitral stage, i.e. prior to the constitution
of the arbitral tribunal, which includes sections 8, 9, 11 in the
case of Part I arbitrations and section 45 in the case of Part II
arbitrations.
Supreme Court in Shin Etsu Chemicals Co. Ltd. v Aksh Optifibre,
(2005) 7 SCC 234, (in the context of section 45 of the Act) ruled in
favour of looking at the issues/controversy only prima facie.
Sections 8 and 11 has been amended restricting the scope of the
judicial intervention only to situations where the Court/Judicial
Authority finds that prima facie no valid arbitration agreement
exists.

10. SETTING ASIDE OF DOMESTIC AWARDS

AND RECOGNITION/ENFORCEMENT OF
FOREIGN AWARDS
Section 34 of the Act deals with setting aside a domestic award and a
domestic award resulting from an international commercial arbitration
whereas section 48 deals with conditions for enforcement of foreign
awards. The Act, as it is presently drafted, treats all three types of awards
as same.
The legitimacy of judicial intervention in the case of a purely domestic
award is far more than in case of other awards.
Therefore, Section 34 (2A) was added, to deal with purely domestic
awards, which may also be set aside by the Court if the Court finds that
such award is vitiated by patent illegality appearing on the face of the
award.
In order to provide a balance and to avoid excessive intervention, it is
clarified in the proposed proviso to the proposed section 34 (2A) that such
an award shall not be set aside merely on the ground of an erroneous
application of the law or by re-appreciating evidence.

Public Policy- Section 34

Object of the Act: Ensure speedy disposal with minimum

court intervention.
Section 34(2)(b)(ii) provides that court can set aside an
arbitral award if the court finds that the arbitral award is in
conflict with the public policy of India. Similarly, section
48(2)(b) provides same in case of foreign arbitral awards.
Challenge: The term public policy is not defined and under
UNCITRAL Model (from where sec. 34 is derived), the courts
were supposed to act as Courts of Review and not Courts of
Appeal.
However, over the period a very wide interpretation has been
given to the above term.

Public Policy- Judicial Interpretation

Supreme Court in Renusagar Power Co. Ltd. vs. General Electric Co.
[(1994 SCC supp. (1) 644] gave narrow interpretation to term
public policy.
Subsequently, SC in ONGC Ltd. vs. Saw Pipes Ltd. (2003 5 SCC 705)
expanded its definition to include cases of patent illegality.
Criticism: Eminent jurist/ Advocate Fali Nariman adversely
commented on above judgment.
International view: Enforcement of foreign awards is regulated by
New York Convention (article V(2)(b) and same was incorporated in
section 48 of the Act and so Act should be interpreted in
consonance with the objectives of NYC that is that the term public
policy must be construed narrowly.

Public Policy- Judicial Interpretation (contd..)

This international view was reflected in Delhi HC decision in
Glencore Grain Rotterdam BV vs. Shivnath Rai Harnarain
(India) Co. [2008] 94 ARB LR 497 (Delhi)].
However, SC in Phulchand exports Ltd. v OOO Patriot (2011 11
SCALE 475) followed the Saw Pipes view of expanded
interpretation.
Thereafter, SC overruled above decision in Sgri Lal Mahal Ltd.
vs. Progetto Grano Spa (2014) 2 SCC 433 following the narrow
interpretation in Renusagar decision.
Accordingly, 246th report provided for the same narrow
approach by inserting an explanation to section 23((2)(b)(ii)
and inserting new provision section 34(2A).

Public Policy- The Problem

SC in ONGC Ltd. vs. Western Geco International Ltd. (2014) 9
SCC 263 in para 39 construed the term fundamental policy of
India very widely incorporating the Wednesbury principle of
reasonableness.
Same was followed in Associates Builder vs. DDA (2014) 4
ARBLR 307 SC.
Such power of review of award on merits is against the
international practice and the Statement of object of 1996 Act
which says minimization of judicial intervention.
This would lead to disastrous effect as:
i. Erosion of faith in arbitration proceedings
ii.Reduction of popularity of India as arbitration
destination
iii.Increase in judicial backlog
iv.Increased Investor concern

Public Policy: Solution- 2015

Amendment
Practically, the Court had become appellate authority over
the arbitral tribunal.
This was not the intention of Arbitration and Conciliation
act, 1996 at all.

Hence, explanations have been added by Amendment act,

2015 to section 34(2)(b) of Arbitration and Conciliation
act, 1996 restricting the scope of public policy.
Thus, now, Courts cannot go into merits of the arbitral
award.

Public Policy: Solution- 2015

Amendment
34(2)(b)(ii) : The arbitral award is in conflict with public policy of India.
Explanation 1: For the avoidance of any doubt, it is clarified that an award is in
conflict with the public policy of India only if:
a. making of award was induced or affected by fraud or corruption or was
in violation of section 75 or 81;
b.It is in contravention with the fundamental policy of Indian Law; or
c.It is in conflict with most basic notions of morality or justice.
Explanation 2: For avoidance of doubt, the test as to whether there is a
contravention with the fundamental policy of Indian law shall not entail a
review on merits of dispute.

Public Policy: Solution- 2015

Amendment
Further, following sub-clause was inserted:
Section 34(2A): An arbitral award arising out of arbitrations other
than international commercial arbitrations, may also be set aside
by the Court if the Court finds that the award is vitiated by patent
illegality appearing on the face of the award.
Provided that an award shall not be set aside merely on the
ground of an erroneous application of law or re-appreciation of
evidence.

11. Enforcement of arbitral awards

Under Section 1996 Act, pendency of a section 34 petition
renders an arbitral award unenforceable i.e. automatic stay
of enforcement of the award upon admission of challenge.
The Supreme Court, National Aluminum Co. Ltd. v. Pressteel
& Fabrications, (2004) 1 SCC 540 had criticized this.
In order to rectify this mischief, certain amendments have
been suggested by the Commission to section 36 of the Act,
which provide that the award will not become
unenforceable merely upon the making of an application
under section 34.

Enforcement of arbitral awards

Section 36 of arbitration and Conciliation act, 1996, as
amended by the Amendment Act, 2015 specifically
provides that the award can be enforced even if one of the
parties has approached Court for setting aside the arbitral
award, unless specific stay has been granted by the
competent court.
Thus, mere application to Court for setting aside the
arbitral award would not result in stay for enforcement of
the arbitral award. This is a very good provision to avoid
delay in enforcement of arbitral award.

12. JUDICIAL INTERVENTIONS IN

FOREIGN SEATED ARBITRATIONS
Section 2(2) of the Arbitration and Conciliation Act, 1996 (the Act),
contained in Part I of the Act, states that This Part shall apply where
the place of arbitration is in India.
Article 1(2) of the UNCITRAL Model Law provides: The provisions of this
Law, except articles 8, 9, 35 and 36, apply only if the place of
arbitration is in the territory of this State
Supreme Court in Bhatia International vs. Interbulk Trading SA, (2002) 4
SCC 105, and before the five-judge Bench in Bharat Aluminum and Co.
vs. Kaiser Aluminium and Co., (2012) 9 SCC 552 (hereinafter called
BALCO) was whether the exclusion of the word only from the
Indian statute gave rise to the implication that Part I of the Act would
apply even in some situations where the arbitration was conducted
outside India.
The Supreme Court in BALCO decided that Parts I and II of the Act are
mutually exclusive of each other.

JUDICIAL INTERVENTIONS IN FOREIGN

SEATED ARBITRATIONS (contd.)
The above issues have been addressed by way of
adding a proviso to sections 2(2) of the Act:
Provided that subject to an agreement to the contrary,
the provisions of sections 9, 27, and 37(3)(1)(a) 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 recognize under the provisions of Part
II of this Act.

13. POWERS OF TRIBUNAL TO ORDER

INTERIM MEASURES
Under section 17, the arbitral tribunal has the power to order interim
measures of protection, unless the parties have excluded such power
by agreement.
However, its efficacy is seriously compromised given the lack of any
suitable statutory mechanism for the enforcement of such interim
orders of the arbitral tribunal.
Delhi High Court attempted to find a suitable legislative basis for
enforcing the orders of the arbitral tribunal under section 17 in the
case of Sri Krishan v. Anand, (2009) 3 Arb LR 447 (Del).
However, above is not suffice and therefore the Commission has
recommended amendments to section 17 of the Act which would give
teeth to the orders of the Arbitral Tribunal and the same would be
statutorily enforceable in the same manner as the Orders of a Court.

14. Other Amendments

Arbitration agreement through emails
Section 7 has been amended to make specific provision that
arbitration agreement can be made through electronic
communications.
Interim measures by Court
Section 9 has been amended to provide that if Court grants
interim relief, Arbitration should commence within 90 days.
Further, once arbitration tribunal has been constituted, the
Court shall grant interim relief only if the Arbitral Tribunal
itself cannot grant relief under section 17 of Arbitration and
Conciliation Act, 1996.
Section 17 of Arbitration and Conciliation Act, 1996 as
amended by Amendment Act, 2015 gives wide powers to
Arbitral tribunal to grant interim reliefs.
Thus, normally, it may not be necessary to approach Court for
interim reliefs and such orders are enforceable under CPC.

Other Amendments
Interest on amount payable under arbitration award
Interest at the rate of 2% higher than the current rate of interest
prevalent on the date of award, from the date of award to the date of
payment. The expression current rate of interest shall have the same
meaning as assigned to it under section 2(b) of the Interest Act, 1978.
The earlier provision was for payment of interest @18%.

Cost of Arbitration
Section 31A of Arbitration and Conciliation Act, 1996 as inserted by
Amendment Act, 2015 contains detailed guidelines on determination
and award of costs to the successful parties.
As per provisions of section 31A(5), an agreement to pay whole or
part of costs of arbitration in any even shall be valid only if such
agreement is made after dispute has arisen.
Thus, a mere clause in Arbitration Agreement about payment of cost
by one of the parties is not sufficient.
This is a very good provision. The reason is that, at the time of
contract, one of the parties is usually in dictating position and other
party has practically no option to sign on dotted lines.

Other Amendments
Appeal if Court refuses to refer parties to arbitration
Section 37(1)(a) of Arbitration and Conciliation Act, 1996 as
inserted by the Amendment Act, 2015 now provides that
appeal can be filed before appellate Court if the Court refuses
to refer parties to arbitration.
There was no parallel provision earlier.
Enforcement of foreign awards and Geneva convention awards
Explanation to Section 47 inserted by the Amendment Act, 2015
now provides that only High Court can be approached for
enforcement of foreign award.
Explanation to Section 48(2)(b) inserted by the Amendment Act,
2015 now provides that enforcement of foreign awards can be
refused if it is contrary to public policy (restricted as in part I)
and therefore debars the court from going into merits of the
case.

III.
Company Secretary
&
ADR

ROLE OF A COMPANY SECRETARY

The Companies Act, 2013 has considerably enhanced the role
and responsibilities of company secretaries both in
employment and in practice.
Company secretary is a key managerial person in a company,
responsible to ensure the effective and efficient
administration of the company and certifying the companys
compliance with the provision of the Act.
Section 205 has also been added in the Companies Act, 2013.
According to Section 205 of the Companies Act, 2013 the
Company Secretary shall discharge following functions and
duties, this is the first time that the duties of the company
secretary have been specified in the company law.

New Horizons for CS in Practice under

The Companies Act, 2013
Corporate Restructuring & Insolvency
Company Liquidators & Professional assistance
to them [Sec.275] [Sec.291]
Appointment as an Administrator [ Sec.259]
Technical member of NCLT [Sec.409]
E- Filing
Voting through electronic means [Sec.108]
Adjudication of penalties [Sec.454]
Mediation & conciliation Panel [Sec.442]

Role Of a Company Secretary As a

Mediator or Conciliator
The Central Government is to maintain a panel of
experts to be called as Mediation and Conciliation
Panel for mediation between parties during the
pendency of any proceedings before the Central
Government or the Tribunal or the Appellate Tribunal
under the new law.
Rules in respect of Section 442 provide for
qualifications for being appointed in the Mediation and
Conciliation Panel and states: Rule 28.1(g): Professionals with at least fifteen years
of continuous practice as Chartered Accountant or
Cost Accountant or Company Secretary can be
appointed
in
the
panel.

Role Of a Company Secretary As a

Mediator or Conciliator
The Company Secretaries are authorized to
advise on arbitration, negotiation and conciliation
in commercial disputes between the parties.
A Company Secretary is trained to Act as
arbitrator / conciliator in domestic and
international commercial disputes.
Company Secretaries are also qualified to Draft
arbitration / conciliation agreement/ clause.

Advantages of a Company Secretary

in the Arbitration process
Company secretaries are not only corporate legal
experts but due to the very nature of profession, their
knowledge is far superior in respect of commercial
understanding. They have an edge in the sense that
they understand the underlying commercial
transaction or the legal framework in a more effective
manner.
Since they are exposed to various facets of law and the
management, they can formulate a better strategy in
arbitral proceedings while advising to the client. Thus
company secretaries in practice can act as strategist
and authorized representative in arbitral proceedings.

CONCLUSION
Thus, CS can act as arbitrators and the society can get the
benefit of their knowledge and expertise in commercial and
legal matters.
The Institute can also make representations to the
Government through proper channels so as to encourage
appointment of company secretaries as arbitrators.
This is possible only after an awareness is created among the
society about this new role of company secretaries. Apart
from the Institute, even the company secretaries in practice
can help in creating this awareness in the society. If this
happens, the day is not far when even the Chief Justices of the
various High Courts will appoint company secretaries as
arbitrators under the powers vested in them under the Act.

THANK YOU