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An Act to consolidate and amend the law relating to
½Ê momestic arbitration,
½Ê pnternational commercial arbitration and
½Ê nforcement of foreign arbitral awards
½Ê Also to define the law relating to conciliation and for matters connected therewith or
incidental thereto.
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½Ê che United Nations Commission on pnternational crade Law (UNCpc AL) has adopted
the UNCpc AL Model Law on pnternational Commercial Arbitration in 1985
½Ê che 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;Ê
½Ê General Assembly of the United Nations has recommended the use of the said ules 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 conciliationÊ
½Ê And Where Model Law and ules make significant contribution to the establishment of a
unified legal framework for the fair and efficient settlement of disputes arising in
international commercial relationsÊ
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che Act is based on the Model Law (a set of 36 Articles) which was drafted to govern all
international arbitrations by a working group of the UN and was finally adopted by the U.N.
Commission on pnternational crade Law (UNCpc AL) on June 21, 1985. che esolution of the
UN General Assembly envisages that all countries should give due consideration to the Model
Law, in view of the desirability of uniformity of the law on arbitral procedures and the specific
needs of international commercial practice. pt is also stated in the Preamble of Act of 1996: ³it is
expedient to make law respecting arbitration and conciliation, taking into account the aforesaid
Model Law «´.

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be unreasonably delayed.
pt is, therefore, necessary to emphasize that the proposed amendments do not result
in permitting parties to prolong the arbitration proceedings unnecessarily. While
considering the need for amendments, the Commission has, therefore, not deviated
from this main objective of the Act. che Commission has rejected quite a lot of
proposals that have been made before it as it felt that the said proposals would
certainly contribute to the delay in arbitration proceedings.
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%&' ()$$!"$ * $ &Notwithstanding anything contained in any other law for the
time being in force, in matter governed by this Part, no judicial authority shall intervene except
where so provided in this Part.
chis basic provision is found in the laws of all the countries which have adopted
the UNCpc AL Model. che provisions as to waiving objections etc. contained in
Sections 4, 12, 14(4), 16(5), 19(1) and 25 amply demonstrate that the objective is
to see that the disputes are not unduly prolonged. pn fact, the UNpCc AL Model,
wherever it permitted intervention by court, by way of appeal, before the passing
of the award, left it to the arbitrator, to proceed or not to proceed further pending
the appeal. chis was intended to see that the appeal proceedings are not allowed to
be unreasonably delayed.
pt is, therefore, necessary to emphasize that the proposed amendments do not result
in permitting parties to prolong the arbitration proceedings unnecessarily. While
considering the need for amendments, the Commission has, therefore, not deviated
from this main objective of the Act. che Commission has rejected quite a lot of
proposals that have been made before it as it felt that the said proposals would
certainly contribute to the delay in arbitration proceedings.
Section 5 corresponds to Art. 5 of the Model Law but has a non-obstante clause
added at the beginning of the section. pt is to be noted that the important purpose of
Art. 5, according to the UN Commission, was not to negate court intervention
altogether or cut down the proper role of courts but to list out, in the national law,
all the situations which permit court intervention and exclude any plea based on a
remedy outside the Act or based on a residual power of the national courts. (See
paras 62 and 63 of the UN Commission¶s eport (1985) on the Adaptation of
Model Law). chese paragraphs are worth quoting and read as follows:
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Arbitration agreement: Section 7
Sec.7 defines µarbitration agreement¶ and is almost a verbatim reproduction of
Art.7 of the Model Law except that a single paragraph in the Model Law is split up
into different clauses. pt has been suggested that the definition of µarbitration
agreement¶ in sec.5 of the nglish Act of 1996 is wider than sec. 7 of the pndian
Act of 1996 and can be adopted under sub-section (4) of Section 7 of our Act
because the term includes, under sub-section (4) of section 5 that ³an agreement
which is endorsed in writing if an agreement made otherwise than in writing is
recorded by one of parties or by a third party, with the authority of the parties to
the agreement.´
che Commission is of the view that it is not necessary to amend sec.7 of the Act by
bringing into it the provision of sec.5(4) of the nglish Act, 1996 in as much it is
likely to result in unnecessary litigation if the clause is to be based only on a record
of one of the parties or of a third party.
pt has been suggested that sec.5(2)(a) of the nglish Act says in brackets ³whether
or not it is signed by the parties´ and those words should be introduced in section 7
of 1996 Act. Now sec.7(3) says that an arbitration agreement shall be in writing.
Sec.7(4)(a) suggests that an arbitration agreement is in writing if it is contained in a
document signed by the parties. pn as much as sec.7(4)(a) does not use the word
µonly¶, it does not appear that it is a mandatory requirement that the agreement
must be signed. pn fact, the Supreme Court has held under the 1940 Act in Jugal
Kishore ameshwardes vs. Mrs. Gorbbi Ap 1955 SC, Banardas vs. Carve
Commission Ap 1963 SC 1417 (1425) and Satish Chandra vs. State of UP
Ap 1983 SC 347: 1983(2)SCC 141 that a submission must no doubt be made in
writing but need not be signed. All that is necessary is that there should be a formal
written agreement and the parties should agree to submit present and future
disputes to arbitration. chis legal position was declared under sec.2(a) of the 1940
Act which used the words µwritten agreement¶ and did not refer to any requirement
of signature of the parties. pn view of the law declared by the Supreme Court, and
the specific language of section 7(4) it is considered not necessary to use the words
³whether signed or not´ as used in sec.5 of the nglish Act.
2.3.2 pt has been suggested that ³share brokers´ use certain documents which
contain an arbitration clause and these documents are received by other parties
without demur, that is to say, accepting the clause by conduct. pn the Bombay
seminar, it was suggested that this contingency is to be provided for in section
7(4)(b). chis suggestion is accepted. Hence certain other words are required to be
added in sec. 7(4)(b).
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(1) A judicial authority before which an action is brought in a matter, which is
the subject of an arbitration agreement, shall, if a party so applies not later
than when submitting his first statement on the substance of the dispute,
refer the parties to arbitration.
(2) che application referred to in sub-section (1) shall not be entertained
unless it is accompanied by the original arbitration agreement or a duly
certified copy thereof.
(3) Notwithstanding that an application has been made under sub-section (1)
and that the issue is pending before the judicial authority, an arbitration
may be commenced or continued and an arbitrat award made.
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pn this context, we have also to refer to a latter three judge judgment of the
Supreme Court in Skypack Couriers Ltd. vs. N.K. Modi (200(5) SCC 294),
wherein the Court set aside an award made by a third party to whom the National
Consumer Commission referred the dispute for final adjudication without any
further scope for filing objections. pn the order of the National Commission making
the reference, it was stated that they were not invoking the provisions of the
Arbitration Act but were referring the matter to a third party for consensual
adjudication. che Supreme Court set aside the award and held that the Commission
could not have adopted the above procedure of reference to a third party, for final
decision without a right to file objections thereto. At the same time, the Supreme
Court stated that it was not deciding whether the consumer courts could refer
matters to arbitration under the Arbitration laws. We are referring to this case only
to highlight that the earlier decision in M/s. Fair Air ngineers Ltd. vs. M.K. Modi
was neither referred to nor overruled in the Skypack Courier case. pn the
Consultation Paper (Annexure pp), it was proposed that the words µjudicial
authority¶ be dropped and the words µCourts¶ substituted instead. chis proposal
was made keeping in view that the remedies that may be resorted to for
questioning orders passed by different µjudicial authorities¶ may not be uniform.
But in view of the subsequent discussion in various seminars, it was pointed out
that it would be better if quasi judicial authorities before whom some actions are
pending, are in a position to refer matters to arbitrators, wherever reliance is placed
upon an arbitration clause. che Commission is of the view that the words µjudicial
authority¶ can be retained to enable easy reference to arbitration under section 8
itself by the judicial authority concerned, (as held in Fair Air ngineers case)
before whom the matter may be pending rather than drive the party who is relying
on the arbitration clause to a separate application under sec.11. pt is true that
remedies against an order passed by different judicial bodies under sec.8 may
normally be different. But because of sec. 5, remedy under sec.115 Code of Civil
Procedure is barred and the remedy may be only under Art.227 of the Constitution
of pndia. pf it is an order passed by any quasi-judicial statutory authority, then
because of sec. 5, the remedy under the special Act applicable to the tribunal is
barred and remedy may be only under Art.227. cherefore, there is no scope for
different remedies becoming available under different special statutes applicable to
different quasi-judicial authorities. chus the remedies are perhaps restricted to Art.
227. cherefore the word µjudicial authority¶ will remain and will, therefore, cover
quasi-judicial tribunals also as per the law declared by the Supreme Court in Fair
Air ngineers case. We have already referred to the proposal to add a definition of
'judicial authority' in section 2(1) as follows:
Section 2(1)(fa): µjudicial authority¶ includes any quasi-judicial statutory authority.
D et er certain preliminary issues at t e stage of section 8 could be decided

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Section 9 Interim measures etc. by court - Ê
(1) A party may, before or during arbitral proceedings or at any time after the
making of the arbitral award but before it is enforced in accordance with section
36, apply to a court -
(i) for the appointment of a guardian for a minor or a person of unsound mind for
the purposes of arbitral proceedings; or
(ii) for an interim measure of protection in respect of any of the following matters,
namely:-
(a) the preservation, interim custody or sale of any goods which are the subject-
matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is the
subject matter of the dispute in arbitration, or as to which any question may arise
therein and authorizing for any of the aforesaid purposes any person to enter upon
any land or building in the possession of any party, or authorizing any samples to
be taken or any observation to be made, or experiment to be tried, which may be
necessary or expedient for the purpose of obtaining full information or evidence;
(d) interim injunction or the appointment of a receiver.
(e) for such other interim measure of protection as may appear to the court to be
just and convenient,
and the court shall have the same power for making orders as it has for the purpose
of and in relation to, any proceedings before it.´
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(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 sub-section (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) pf 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
(b) che two appointed arbitrators fail to agree on the third arbitrator
within thirty days from the date of their appointment,
che appointment shall be made, upon request of a party, by the Chief Justice or any
person or institution designated by him.Ê

Arbitration Notes RRRR

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c cc

ÊÊ Ê$ÊÊÊÊÊÊ9 "Ê ÊÊ Ê

2ÊÊÊ ÊÊÊ ÊÊÊÊÊ ÊÊ;?Ê

D et er certain preliminary issues at t e stage of section 8 could be decided

(b) securing the amount in dispute in the arbitration;

(d) interim injunction or the appointment of a receiver.

Vous aimerez peut-être aussi

Arbitration Notes RRRR

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Copyright

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c cc

ÊÊ Ê$ Ê ÊÊÊ Ê Ê9 "Ê  Ê Ê Ê

2ÊÊ Ê ÊÊ Ê ÊÊÊ ÊÊ  ÊÊ;?Ê

D et er certain preliminary issues at t e stage of section 8 could be decided

(b) securing the amount in dispute in the arbitration;

(d) interim injunction or the appointment of a receiver.

Vous aimerez peut-être aussi

c cc

ÊÊ Ê$ÊÊÊÊÊÊ9 "Ê ÊÊ Ê

2ÊÊÊ ÊÊÊ ÊÊÊÊÊ ÊÊ;?Ê