Shree P.M.

Patel College of Law and Human Rights,

Anand
LL. B(CBCS) SEMESTER: V
Subject: Alternative Dispute Resolution (A.D.R)
Subject Code: UL05ELLB21

(Paper Solution-2020)

Submitted by:
Hiral K. Panchal

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(PAPER SOLUTION)

Q:1 Define thew term “ADR” (Alternative Dispute Resolution). Discuss its history and
importance in India.
Q:2 Role of Legislative Council and Indian Judiciary for sanctioning ADR.
Q:3 Explain the meaning of arbitration agreement. What are the essentials of arbitration
agreement? (March-2017)
OR
Q:3 Discuss the essential elements of Arbitral Agreement
(March-2019)
Q: 3 what is the meaning of Arbitration Agreement? Discuss its characteristics in details.
(March-2018)
Q:4 Discuss the powers and duties of Arbitrator. (March-2018)
OR
Q:4 Discuss in detail the powers of Arbitrators. (March-2017)
Q:5 Discuss in detail about the Composition of Arbitration Tribunal. (March-2017)
Q:6 Discuss briefly the provisions governing conduct of arbitral proceeding under Arbitration
and Conciliation Act. (March-2017)
Q:7 Discuss the essential elements of Arbitral Award. (March-2019)
OR
Q:7 Explain the meaning of Arbitral Award and discuss its characteristics. (March-2018)

Q:7 what is an arbitral award? What are the pre-requisites of a valid arbitral award?
(March-2017)
Q:8 Discuss in detail concept of Negotiation and its essentials.
Q:9 State the difference between Arbitration Proceeding and Conciliation Proceedings.
(March- 2019)

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Q:9 Explain the meaning of Conciliation and state the difference between the conciliation
proceeding and arbitration proceeding.
(March-2017)
Q:9 Explain the meaning of Conciliation and explain the difference between Conciliation and
Arbitration.
(March-2018)
Q:10 Define the term Mediation and Conciliation and explain the difference between them.
Q:11 Write Short Notes on:
a. Organization of Lok Adalat
b. Award of Lok Adalat
(March-2017)
Q: 11 “The Lok Adalat provide quick justice at less expense.” Comment.
(March-2017)
OR
Q:11 Discuss the merits and demerits of Lok Adalat.
(March-2018)
(March-2019)
Q: 11 State the powers of Lok-Adalat.
(March-2019)
(March-2018)
(March-2019)
Q:12 Short Notes:
a. Forms of ADR
b. New York Convention
c. Geneva Convention Award
d. Powers and duties of Mediator
e. Appointment of Conciliator
(March-2017)
(March-2018)

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Table of content

No. Page No.

Topics
1 Define thew term “ADR” (Alternative Dispute Resolution). 5
Discuss its history and importance in India.
2 Role of Legislative Council and Indian Judiciary for sanctioning 9
ADR.
3 Explain the meaning of arbitration agreement. What are the 11
essentials of arbitration agreement?

4 Discuss the powers and duties of Arbitrator. 15

5 Discuss in detail about the Composition of Arbitration Tribunal. 18

6 Discuss briefly the provisions governing conduct of arbitral 21

proceeding under Arbitration and Conciliation Act.

7 Discuss the essential elements of Arbitral Award. 23

8 Discuss in detail concept of Negotiation and its essentials. 29

9 Explain the meaning of Conciliation and state the difference 31

between the conciliation proceeding and arbitration proceeding.
10 Define the term Mediation and Conciliation and explain the 33
difference between them.

11 Lok Adalat 34

12 Short Notes:
1) Powers and Duties of Mediator 38
2) Appointment of Conciliation 40
3) Foreign Award 42
4) Forms of ADR 45
13 References 50

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Q.1 Define the term “ADR” (Alternative Dispute Resolution). Discuss the history and important
in India.
Synopsis:
- Introduction
- Meaning of ADR
- Definition of ADR
- Need of ADR
- History of ADR in India
- Importance of ADR in India.
- Advantages of ADR

Introduction:
ADR is an abbreviation that stands for “Alternative Dispute Resolution”. ADR refers to all those methods of
solving disputes which are alternatives for litigation in the courts. ADR processes are decision making process
through which litigants or potential litigants may resolve their disputes. These procedures are usually less costly
and more expeditious. This method can be used in commercial and labour disputes, divorce actions, in resolving
tax-claims and in other disputes that would likely otherwise involve court litigation.

Meaning of ADR:
ADR (Alternative Dispute Resolution) usually describes dispute resolution where an independent person (an
ADR practitioner, such as a mediator) helps people in dispute to try to sort out the issues between them. ADR
can help people people to resolve a dispute before it becomes so big that a court or tribunal becomes involved.
ADR can be very flexible and can be used for almost any kind of dispute.
Alternative Dispute Resolution (ADR) Mechanisms

• ADR is a mechanism of dispute resolution that is non adversarial, i.e. working together co-operatively to
reach the best resolution for everyone.
• ADR can be instrumental in reducing the burden of litigation on courts, while delivering a well-rounded
and satisfying experience for the parties involved.
• It provides the opportunity to "expand the pie" through creative, collaborative bargaining, and fulfill the
interests driving their demands.

Definition of ADR:
➢ Alternative dispute resolution (ADR) refers to a variety of processes that help parties resolve disputes
without a trial. Typical ADR processes include mediation, arbitration,
neutral evaluation, and collaborative law. These processes are generally confidential, less formal, and
less stressful than traditional court proceedings.
➢ The National Alternative Dispute Resolution Advisory Council (“NADRAC”) of Australia has
defined ADR as “an umbrella term for processes, other than judicial determination, in which an
impartial person assists those in a dispute to resolve the issues between them.” In fact, ADR is
increasingly referred to as ‘appropriate dispute resolution’, in recognition of the fact that such
approaches are often not just an alternative to litigation, but may be the most optimum way to resolve a
dispute.

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Need of ADR:
On account of arrears of pending cases and experience litigations compel to search for alternative
means. The present days crumbling administration of justice is also a factor which makes alternative dispute
resolution acceptable. At present, there are over 2.5 crore cases pending in various courts all over the country.
In a democracy, this situation may lead to the failure of the administration of justice. Justice delayed is justice
denied; this legal maxim speaks for itself in the context of clogging the judicial system. The judicial system
today lacks judicial officers, staff and proper infrastructure to deal with the backlog cases which is being
stretched for years and decades without reaching a final decision. Such situations call for ADR to step in where
the justice system fails.
Thus, to sum it up we can say that ADR is needed to counter the following situations:
Arrears of pending cases
As stated earlier a load of pending cases is way too much for the present justice delivery system to handle. This
makes the justice system sluggish and technically dead. Overpopulation and modern complications of human
life make the judicial system prone to collapse in future if there are no alternative and effective means to be
adopted. This is why ADR steps in to efficiently resolve disputes harmoniously.
Repeated Adjournments
The practice of seeking adjournments is prevalent specifically in our country. It is a true fact that unwarranted
adjournment makes the life of litigation, it is, however, being prolonged than being extended due to repeated
adjournments granted.
Sluggish Government Machinery
It is to be noted that the ‘State’ is the major litigant because in most of the litigations the State is an essential
party. It has been seen that the Government machinery specifically the Judiciary is not well equipped. A number
of vacant posts of judges are lying vacant on account of the governmental heedlessness. Lack of required
infrastructure is further aggravating the course of litigation. On account of overpopulation and a tremendous
increase in commercial activities, it is quite natural that the number of litigations also increase resulting in a
massive backlog of cases.
Concentration of Litigation
The concentration of cases on a particular advocate badly affects his/her functioning and he/she finds
himself/herself in such a demanding position that he/she is expected to make an effective presentation of the
case. To avoid such problems, it is most desirable to pursue alternative resolution in the form of ADR.
History of ADR:
The history of ADR can be divided in different stages, which are as follows:
Ancient India
In ancient India when there was Kulas, people used to live in joint families with their clans and when there was
caste system prevalent in the society. The disputes among the kulas were resolved by the head of the of the
family, clan or Kula. Likewise, when there was common trade, corporations or Shrenis among the people, they
used to appoint person to resolve the disputes within the Shrenis.
Pre- Independence: British rule
During the British rule in India, many legislations were introduced and a drastic change came in the
administration of India. In 1772, the courts were empowered to refer disputes to arbitration either at the request

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of the parties or by its own discretion. Then after a decade, in 1859 The Code of Civil Procedure was enacted,
sections 312 to 327 of the act mentioned arbitration but in 1882 the sections relating to arbitration was repealed.
In 1899 The Indian Arbitration Act, 1899 was enacted to give effect to alternate dispute mechanism in India.
The act was based on the English legislation.
Then in 1908, CPC was again amended and section 89 with second schedule gave wide powers to the courts to
refer the disputes to ADR mechanism. Then, The Indian Arbitration Act, 1899 and section 89 read with second
schedule of Code of Civil Procedure, 1908 were two effective legislation to deal with arbitration.
Thereafter, in 1937 Geneva Convention was signed and adopted by India and a parallel legislation was
introduced in the form of The Arbitration (Protocol and Convention) Act, 1937. In 1940, The Indian Arbitration
Act, 1899 and section 89 with second schedule of CPC was repealed and replaced by The Arbitration Act, 1940.
In local levels Panchayats were very effective in resolving the disputes in villages in India
Post- Independence Era
The Arbitration (Protocol and Convention) Act, 1937 for the enforcement of foreign awards and The Arbitration
Act, 1940 for referring disputes to ADR mechanism were presently in force in India. Then in 1961, India
became signatory to the New York Convention and The Foreign Award (Recognition and Convention) Act,
1961 was enacted.
In 1981, in M/S Guru Nanak Foundation vs. Rattan Singh & Sons, the Supreme Court described the Arbitration
Act, 1940 in off- quoted passage. It observed that “the way in which the proceedings under the act are
conducted and without an exception challenged in courts, has made lawyers laugh and legal philosophers weep.
Experience shows and law reports bear ample testimony that the proceedings under the act have become highly
technical and accompanied by unending prolixity, at every stage providing a legal trap to the unwary.”
In 1985, the UNCITRAL model law was adopted and signed by India on International commercial arbitration.
In 1996, finally The Arbitration (Protocol and Convention) Act, 1937; The Arbitration Act, 1940 and The
Foreign Award (Recognition and Convention) Act, 1961 was repealed and consolidated in a single piece of
legislation following the UNCITRAL model law, the act was called the Arbitration and Conciliation Act,
1996. to make the act more effective and efficient Section- 89 with Order- X (Rule- 1A to 1C) was re-
introduced in CPC in 2002. The act of 1966 was amended twice in 2015 and 2019. However, to deal with ADR
mechanism we have a consolidated, single, effective, efficient and a good piece of legislation.
Importance of ADR:
• To deal with the situation of pendency of cases in courts of India, ADR plays a significant role in India by
its diverse techniques.
• Alternative Dispute Resolution mechanism provides scientifically developed techniques to Indian judiciary
which helps in reducing the burden on the courts.
• ADR provides various modes of settlement including, arbitration, conciliation, mediation, negotiation and
Lok Adalat. Here, negotiation means self-counseling between the parties to resolve their dispute but it does
not have any statutory recognition in India.
• ADR is also founded on such fundamental rights, article 14 and 21 which deals with equality before law and
right to life and personal liberty respectively.
• ADR’s motive is to provide social-economic and political justice and maintain integrity in the society
enshrined in the preamble.
• ADR also strive to achieve equal justice and free legal aid provided under Article 39-A relating to Directive
Principle of State Policy (DPSP).

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• ADR has proven successful in clearing the backlog of cases in various levels of the judiciary. “Lok Adalat
alone have disposed more than 50 lakh cases every year on average in the last three years.”
• But there seems to be a lack of awareness about the availability of these mechanisms.

Advantages to Arbitration:

1. More flexibility:

In the case of arbitration, the parties have far more flexibility to select what procedural and discovery rules will
apply to their dispute (they can choose to apply relevant industry standards, domestic law, the law of a foreign
country, etc.).

2. Select your own Arbitrator or Mediator.

The parties can often select the arbitrator or mediator that will hear their case, typically selecting someone with
expertise in the substantive field involved in the dispute. The arbitrator (or panel members) need not even be an
attorney. In this way the focus can be on the substantive issues involved rather than on technical procedural
rules. In normal litigation, the parties cannot select the judge, and the judge and/or jury may often need expert
witnesses to explain extremely complex issues. The greater the expertise of the arbitrator, the less time that
needs to be spent bringing him up to speed.

3. A jury is not involved:

Juries are unpredictable and often damage awards are based solely on whether they like the parties or are upset
at one party because of some piece of evidence such as a photo that inflames the passion of the jury. Juries have
awarded claimants damages that are well above what they would have received through alternative dispute
resolution; and they have also done the opposite.

4. Expenses are reduced:

Attorneys and expert witnesses are very expensive. Litigating a case can easily run into the tens of thousands of
dollars. Alternative dispute resolution offers the benefit of getting the issue resolved quicker than would occur
at trial – and that means less fees incurred by all parties.

5. ADR is speedy:

Trials are lengthy, and in many states and counties it could take years to have a case heard by a judge or jury.
Appeals can then last months or years after that. In a matter of hours, an arbitrator often can often hear a case
that otherwise may take a week in court to try with live witnesses. With arbitration, the evidence can be
submitted by documents rather than by testimony presented through witnesses. ADR can be scheduled by the
parties and the panelist as soon as they are all able to meet together.

6. The results can be kept confidential:

The parties can agree that information disclosed during negotiations or arbitration hearings cannot be used later
even if litigation ensues. The final outcome can also be made private if the parties so stipulate and agree. On the
other hand, most trials and related proceedings are open to the public and the press.
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7. Party participation:

ADR permits more participation by the litigants. ADR allows the parties the opportunity to tell their side of the
story and have more control over the outcome than normal trials overseen by a judge. Many parties desire the
opportunity to speak their piece and tell their side of the story in their own words rather than just through
counsel.

8. Fosters cooperation:

ADR allows the parties to work together with the neutral arbitrator or mediator to resolve the dispute and come
to a mutually acceptable remedy.

9. Less stress:

ADR is often less stressful than expensive and lengthy litigation. Most people have reported a high degree of
satisfaction with ADR.

Conclusion

Because of these advantages, many parties choose ADR (either mediation or arbitration) to resolve disputes
instead of filing or even proceeding with a lawsuit after it has been filed. It is not uncommon after a lawsuit has
been filed for the court to refer the dispute to a neutral before the lawsuit becomes too costly. ADR has also
been used to resolve disputes even after trial, while an appeal is pending.

Q: 2 Role of Legislative Council and Indian Judiciary for sanctioning ADR.

Synopsis:

- Introduction
- Role of Judiciary and Legislative Council
- Amendment in the provisions
o Arbitration and Conciliation Act, 1996
o Legal Services Authorities Act, 1987
- Case Laws on Scope of ADR

Introduction

• Alternative dispute resolution was at one point of time considered to be a voluntary act on the apart of
the parties which have obtained statutory recognition in terms of Code of Civil Procedure of
Amendment Act, 1999, Arbitration and Conciliation Act, 1996, Legal Services Authorities
(Amendment) Act, 2002.
• The parliament apart from litigants and the general public as also the statutory authorities like Legal
Services Authority have now thrown the ball into the court of the judiciary. Therefore now is required
would be the implementation of the parliamentary object.
• Access to justice is a human right and a fair trial is also a human right in some countries trial within a
reasonable time is a part of the human right legislation. But in our country it is a constitutional
obligation in terms of article 14 and 21.

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Role of Judiciary and legislative Council

Arbitration and Conciliation Act, 1996:

• The government enacted the Arbitration and Conciliation Act, 1996 in an effort to modernize the 1940
Act. And this Act repealed the previous statute.
• In 1978, the UNCITRAL Secretariat, the Asian African Legal Consultative Committee (AALCC), the
International Council for Commercial Arbitration (ICCA) and the International Chamber of Commerce
(ICC) met for a consultative meeting, where the participants were of the unanimous view that it would
be in the interest of International Commercial Arbitration if UNCITRAL would initiate steps leading to
the establishment of uniform standards of arbitral procedure.
• The preparation of a Model Law on arbitration was considered the most appropriate way to achieve the
desired uniformity and its primary purpose was to encourage arbitration as a cost-effective and quick
mechanism for the settlement of commercial disputes.
• It covers both domestic arbitration and international commercial arbitration.

Legal Services Authorities Act, 1987:

• The concept has been gathered from system of Panchayats which are mainly adopted in villages.
• The Legal Services Authorities Act, 1987 was brought into force on 19 November 1995. The object of
the Act was to provide free and competent legal services to the weaker sections of the society to ensure
that opportunities for securing justice are not denied to any citizen.

• The concept of legal services which includes Lok Adalat is a revolutionary evolution of resolution of
disputes and Sections 19, 20, 21 and 22 of the Act deal with Lok Adalat. Section 20 provides for
different situations where cases can be referred for consideration of Lok Adalat.

• In the case of Abdul Hasan and National Legal Services Authority v. Delhi Vidyut Board and Others,
the court passed the order giving directions for setting up of Permanent Lok Adalat.

Abdul Hasan and National Legal Services Authority v. Delhi Vidyut Board and Others.

The petitioner filed a writ petition before Delhi High Court for restoration of electricity at his premises, which
was disconnected by the Delhi Vidyut Board (DVB) on account of non-payment of Bill. Inter alia, the
grievances of the citizens were not only confined to the DVB but also directed against the State agencies like
DDA, Municipal Corporation, MTNL, GIC and other bodies, Court notices were directed to be issued to
NALSA and Delhi State Legal Service Authority.

Judgment Held- Hon’ble Mr. Justice Anil Dev Singh passed the order giving directions for setting up of
Permanent Lok Adalat. The scholarly observations of Mr. Justice Anil Dev Singh deserve special
commendations and are worthy of note. It will be profitable to reproduce the important text and abstract from
this judgment, which should be an eye-opener for all of us. It should also steer the conscience of all, as there is
an increasing need to make the Lok Adalat movement a permanent feature.

• U/S 19 of the Legal Services Authorities Act, 1987 Lok Adalat can be organized. Matters, such as
Matrimonial/Family Disputes, Criminal (Compoundable Offences) cases, Land Acquisition Cases,
Labour Disputes, Workmen’s Compensation cases, Bank Recovery cases, Pension cases, Housing Board
and slum clearance cases.

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• These Lok Adalat courts decide the various matters right from petty cases to civil, criminal, and
commercial cases & Housing Finance cases. Consumer Grievance cases, Electricity matters, disputes
relating to Telephone Bills, Disputes with Cellular Companies etc.

Case laws on Scope of ADR

In ONGC v. Collector of Central Excise 1995 SCC 541, the dispute was between the government department
and PSU. The report was submitted by the cabinet secretary pursuant to the Supreme Court order indicating that
an instruction has been issued to all departments. It was held that public undertakings to resolve the disputes
amicably by mutual consultation in or through or good offices empowered agencies of govt. or arbitration
avoiding litigation.

In Chief Conservator of Forests v. Collector (2003) 3 SCC 472, it was said that state/union govt. must evolve
a mechanism for resolving interdepartmental controversies- disputes between the department of Government
cannot be contested in court.

In the judgment of the Supreme Court of India in Salem Bar Association vs. Union of India (2005) 6 SCC
344 the Supreme Court has requested to prepare model rules for Alternative Dispute Resolution and also draft
rules of mediation under section 89(2)(d) of Code of Civil Procedure, 1908.

In Sundaram Finance Ltd. v. NEPC India Ltd. (AIR 1999 SC 565; 1999 (1) Arb. LR 305 (SC)), the
Supreme Court explicitly made it clear that the 1996 Act is very much different from that of Act, 1940. The
provisions made in Act of 1940 lead to some misconstruction and so the Act of 1996 was enacted or rather
repealed. In order to get help in construing these provisions made in Act of 1996, it is more relevant to refer to
the UNCITRAL Model Law besides the Act of 1996 rather than following the provisions of the Act of 1940.

Q: 3 Explain the meaning of “Arbitration Agreement”. What are the essential elements of
Arbitration Agreement?

Synopsis

- Introduction
- Meaning of Arbitration Agreement
- Definition of Arbitration Agreement
- Essential elements of Arbitration Agreement
- Characteristics of Arbitration Agreement

Introduction

The concept of Alternative Dispute Resolution (ADR) mechanism is capable of providing a substitute to the
conventional methods of resolving disputes. ADR offers to resolve all type of matters including civil,
commercial, industrial and family etc., where people are not being able to start any type of negotiation and
reach the settlement. Generally, ADR uses neutral third party who helps the parties to communicate, discuss the
differences and resolve the dispute. It is a method which enables individuals and group to maintain co-
operation, social order and provides opportunity to reduce hostility.

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Meaning of Arbitration Agreement

Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more
arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private
dispute resolution procedure instead of going to court.

Definition Arbitration Agreement

The term arbitration agreement was defined in section 2(a) of the 1940 Act to mean “a written agreement to
submit present or future differences to arbitration, whether an arbitrator is named therein or not.”

The defining clause section. 2 (1) (b) merely states that it means an agreement referred to in section. 7.
According to section 7 arbitration agreement means an agreement by the parties to submit to arbitration all or
certain disputes which have arisen (presently) or which may arise (in future) between them in respect of defined
legal relationship, whether contractual or not.

An Arbitration Agreement may be in the form of an arbitration clauses in a contract or in the form of a separate
agreement or may arise where parties by reference import the arbitration clause contained in an earlier
document in to a subsequent contract so as to incorporate it.

Essential Elements of Arbitration Agreement

The essential elements of an arbitration agreement as provided by sec. 2(b)

1. Written agreement
2. Intention to submit to arbitration.
3. Disputes.
4. Parties.

1) Witten Agreement:

An arbitration agreement must be in writing. An arbitration agreement is considered to be in writing, if it is:

1. Signed by the parties and is in the nature of a document;

2. It can also be an exchange of letters, telex, telegrams or other means of telecommunication the essential
feature is that it should provide a record of the agreement; or

3. An exchange of statements of claim and defence in which the existence of the agreement is alleged by
one party and not defined by another.

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2) Intention to submit to arbitration:

Intention of the parties is of extreme importance and forms the crux of the agreement. There is no prescribed
manner of making an arbitration agreement and it has been stated that term like arbitration, arbitrator are
essential prerequisites in an arbitration agreement.

The contracting parties must agree to the same thing in the same sense, they must have the same intention
and consensus ad idem should not be a matter of mere conjecture. The words used in the agreement must
clearly spell out an intention to submit to arbitration for determination of the disputes in a quasi-judicial
manner and to attach finality to the decision thereon as final, conclusive and binding.

3) Disputes

Arbitration agreement means and agreement by the parties to submit to arbitration all or certain disputes
which have a risen or which may arise between them in respect of a defined legal relationship, whether
contractual or not. A dispute entails a positive element it is analogous to a cause of action before a civil
court. The matter in dispute must be of civil nature that can be arbitration agreement for adjudication of all
dispute of civil nature whether they be commercial or not commercial disputes

The dispute must be in respect of define legal relationship legal relationship is generally define either in a
legal document arising out of social family or neighbourly relationship are now beyond the plea of
arbitration law.

The defined legal relationship may be contractual or non-contractual. It may be termed as contractual when
it arises out of contract. The test to determine whether a given dispute fell within the scope of the phrases
such as ‘arising to’ the contract and is consequently a dispute which comes within the scope of the
arbitration clause of the contract is whether recourse to the contract was necessary for the purpose of
determining the dispute between the parties.

4) Parties

As an agreement to submit to arbitration is a contract the parties must be legally competent to contract, the
parties must be legally competent to contract. Contractual capacity of a person is governed by the ordinary rules
as under Contract Act. A person who does not possess the capacity to contract cannot enter into an arbitration
agreement.

Arbitration agreement on behalf of minor: the decision of the privy council in Mohori Bibi vs. Dharmodas
Ghose, (1993 IA 144), it is settled that a minor’s agreement is void. A minor is not competent to enter into
contract. Therefore, he cannot agree to submit to arbitration.

A natural guardian can refer to arbitration a dispute on behalf of a minor provided such reference is for the
benefit of the minor or it is reasonable and proper for protection of his property. In such case, the award is
binding on the minor. But it is necessary that the natural guardian must not have an interest adverse to that of
minor. (Kamal Singh vs Sekhar Chand AIR 1952 Cal. 447).

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• E.g. Arbitration agreement on behalf of minor
• By Partners of a Firm
• By an agent on behalf of his principle
• By trustees on behalf of his beneficiaries
• Legal representative
• By the executor or administrator on behalf of the estate of the deceased
• By companies and corporations
• Manager of joint family business

Characteristics of Arbitration Agreement

1. Arbitration is consensual:

Arbitration can only take place if both parties have agreed to it. In the case of future disputes arising under a
contract, the parties insert an arbitration clause in the relevant contract. An existing dispute can be referred to
arbitration by means of a submission agreement between the parties. In contrast to mediation, a party cannot
unilaterally withdraw from arbitration.

2. The parties choose the arbitrator(s):

Under the WIPO Arbitration, the parties can select a sole arbitrator together. If they choose to have a three-
member arbitral tribunal, each party appoints one of the arbitrators; those two persons then agree on the
presiding arbitrator. Alternatively, the Center can suggest potential arbitrators with relevant expertise or directly
appoint members of the arbitral tribunal. The Center maintains an extensive roster ranging from seasoned
dispute-resolution generalists to highly specialized practitioners and experts covering the entire legal and
technical spectrum of intellectual property.

3. Arbitration is neutral

In addition to their selection of neutrals of appropriate nationality, parties are able to choose such important
elements as the applicable law, language and venue of the arbitration. This allows them to ensure that no party
enjoys a home court advantage.

4. Arbitration is a confidential procedure:

The WIPO Rules specifically protect the confidentiality of the existence of the arbitration, any disclosures made
during that procedure, and the award. In certain circumstances, the WIPO Rules allow a party to restrict access
to trade secrets or other confidential information that is submitted to the arbitral tribunal or to a confidentiality
advisor to the tribunal.

5. The decision of the arbitral tribunal is final and easy to enforce:

Under the WIPO Rules, the parties agree to carry out the decision of the arbitral tribunal without delay.
International awards are enforced by national courts under the New York Convention, which permits them to be
set aside only in very limited circumstances. More than 140 states are party to this Convention.

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Q:4 Discuss the powers and duties of Arbitrator.

Synopsis

- Powers of Arbitrator
- Duties of Arbitrator

Powers of the arbitrator in an arbitration proceeding

The arbitrator is the one who will give the arbitral award, therefore, The Arbitration and Conciliation Act,
1996 provides several powers to him in order to decide the award.

1) Power to administer an oath to the parties and witnesses:

The arbitrator has the power to administer the oath to the parties and witnesses. He also could issue
interrogatories to the parties if he thought it necessary to do so. There is no express provision relating to that
power being given under The Arbitration and Conciliation Act, 1966. However, it is implicitly applied to the
fact that he acts like a quasi-judicial authority in arbitration.

2) Power to take interim measures:

According to section 17 of this Act, when any party during the arbitration proceeding or at any time after
making of the arbitral award, may seek the interim measure before the arbitration tribunal. The arbitration
tribunal has the power to take an interim measure relating to:

Appointment of guardian for minor or person of unsound mind for the protection of: -

1. Interim custody and sale of goods which are subjected to the arbitration agreement;
2. Securing amount which is disputed in the arbitration;
3. Detention, prevention or inspection of any property or thing which is subjected to arbitration;
4. Appointment of receiver;
5. Such other interim measure is necessary for the eyes of the Court.

3) Power to proceed to ex-parte:

In any arbitration proceeding, the arbitrator has the power to proceed to ex-parte i.e. in the favor of one party if
another party contravenes any provision of this Act. According to section 25 there are three conditions under
which the court may pass an ex- parte award:

1. When the claimant fails to communicate his statement of claim in accordance with section 23(1) of
the Act.
2. When the respondent fails to communicate his statement of claim in accordance with Section 23(1)
of the Act.
3. When any party fails to appear at an oral hearing or to produce the document or to produce
documentary evidence.
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The court, however, doesn’t proceed ex-parte against any party without giving him the notice regarding the
court’s intention to proceed ex parte on a specific date, time and place.

4) Power to appoint an expert:

According to section 26 of the Act, the arbitrator has the power to appoint one or more experts to report to him
on a specific issue, if he finds it necessary in any case. The arbitrator also has the power to give the expert any
relevant information or documents or property for the purpose of his inspection. If necessary, the arbitrator also
has the power to appoint the expert as a participant in a hearing but in order to appoint an expert, the expert
must have to show the parties that he has expertise in matters related to this case.

5) Power to make awards:

Power to make awards is the most important power as well as the duty of arbitrators which is given under The
Arbitration and Conciliation Act, 1996. However, the rules applicable in an arbitration proceeding is:

• In matters related to international commercial arbitration, the arbitral dispute shall be decided
according to the rules of proceeding which is decided by the parties but if they fail to decide it, then
the arbitrator himself decides the rules which are applicable.
• In other matters, the arbitral tribunal shall have to decide the rule which is in accordance with the
substantive law.

However, with such aforesaid power, at the time of making such an award, the arbitrator also has the duty to
consider the following necessary aspects:

• The party who is entitled to costs;

• The party who pays the cost;
• The amount and method of determining those costs;
• The manner in which the costs shall be payable;
• The cost of the arbitration proceeding or any other expenses fixed by the arbitration tribunal

If the number of arbitrators is more than one, then the decision must be signed either by all the arbitrators or by
the majority of them.

Duties of an arbitrator in an arbitration

In arbitration, the parties may impose specific duties on the arbitrator at the time of appointment. The general
duties which the arbitrator has to fulfill in all kinds of arbitration are-

1) Duties to be independent and impartial:

Section 12 and Section 18 of The Arbitration and Conciliation Act, 1996 imposed an important duty on the
arbitrator that in any arbitration proceeding that he must have to be independent and impartial. By being
independent it means that there is no such personal or professional relationship between the arbitrator or parties
which may affect the final judgment, however, by impartial, it means that the arbitrator should neither favor nor
oppose any party and should give equal treatment to both parties.
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2) Duty to determine time and place of arbitration:

According to Section 20 of this Act, it is the duty of the arbitrator to appoint the time and place of arbitration if
the parties have failed to decide it amongst themselves. But at the time of determination, the arbitrator must
keep in mind the circumstances including the convenience of the parties. The arbitrator unless otherwise agreed
by the parties, also has the power to decide other places to hear the witness or expert or to an inspection of
documents, goods, and other property.

3) Duty to disclosure:

According to Section 12 of this Act, there is an obligation on an arbitrator to disclose all the relevant facts
which are required to be known by both parties at the time of his first encounter with them.

In the case of Steel Authority of India vs. British Marine 2016, the Court said that the arbitrator must have to
disclose all such facts which are likely to affect impartiality or which might create an appearance of partiality or
bias.

4) Duty to effectively resolve the dispute:

The arbitrator should have to make effective decisions without doing any misconduct. However, there is no
guideline of misconduct that is given under the Act, its scope is to develop by case to case. The acts which are
generally considered as misconduct on the parts of the arbitrator are:

• Fails to comply with terms, that is expressly or impliedly given;

• Making awards that oppose public policy;
• To be bribed or corrupted;
• Breach the rule of natural justice.

5) Duty to determine the rule of procedure:

According to Section 19, the arbitration procedure is not bound by any code of procedure. Earlier parties are
free to agree on the procedure that may be followed by the arbitration tribunal, It always depends upon the will
of the parties but if they do not have any prior agreement on this, then the arbitrator has all the power to decide
the procedure for such a case. this power includes the power to determine the admissibility, relevance,
materiality or weight of any evidence.

6) Duty to interpret or correct the award:

According to Section 33 of this Act, it is a duty of the arbitrator to correct or interpret the award passed by
himself within 30 days from the date of receipt:

• A party with notice to another party may request arbitration tribunal to correct any error like any
typographical, computation, clerical, or any other error of similar nature;
• A party with a notice to another party may request to interpret any specific part or parts of the award.

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In this section, the court also may correct any error of the award on its own initiative within thirty days from the
date of the arbitration award.

Conclusion

These general powers and duties are important for an arbitrator to conduct fair arbitration proceedings, the
arbitrator must also have to draw the checklist upon his specific duties given under the agreement. These duties
differ from case to case so for every particular case so it is very impactful in every case.

Q:5 Discuss in detail about the Composition of Arbitration Tribunal.

Synopsis

- Introduction
- What is an Arbitration Tribunal?
- Composition of Arbitral Tribunal

Introduction

Litigation is considered as a tedious process. It is not only time-consuming but also costly. The reason why
private parties and institutions have come up with alternative modes of dispute resolution. Arbitration is one
such alternative mechanism that is used to resolve commercial disputes in India.

What is an Arbitration Tribunal?

Whenever a commercial dispute arises between two or parties, and they decide to resolve the dispute through
arbitration, an arbitral tribunal is to be set up. It consists of one or more arbitrators that adjudicate and resolve
the dispute and provide an arbitral award.

The Indian Council of Arbitration has provided a set of rules known as the ‘Rules of Arbitration’ that are to be
abided by the parties undergoing the arbitration process as well as the arbitrators. Rule 2 of these regulations
defines Arbitral Tribunal as “an arbitrator or arbitrators appointed for determining a particular dispute or
difference” Section 2(d) of the Arbitration and Conciliation Act, 1996 also defines an arbitral tribunal as a sole
arbitrator or panel of arbitrators.

Composition of an Arbitration Tribunal

Chapter III of the Arbitration and Conciliation Act, 1996 (herein referred to as the ‘Act’) lays down the
provisions for the Composition of an Arbitral Tribunal. Also, Rule 22 of the Rules of Arbitration laid down by
the Indian Council of Arbitration states that when an application for arbitration procedure is received, the
Council takes necessary steps for the constitution of an arbitral tribunal to adjudicate the disputes or differences
between parties. Several provisions concerning the composition of an arbitral tribunal are as follows:

• Number of arbitrators in an Arbitration Tribunal

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Section 10 of the Act mentions the number of arbitrators that shall be a part of the arbitral tribunal. According
to clause (1) of the Section, the parties to the dispute are free to mutually decide the number of arbitrators that
shall constitute the arbitral tribunal to adjudicate the dispute. It is, however, necessary that the number of
arbitrators appointed shall be an odd number and not an even one ensures that there are no ties. Furthermore,
Section 10 also states that if the parties to the dispute are unable to decide the number of arbitrators, in that case,
only one arbitrator shall be appointed.

Rule 22 of the Rules of Arbitration provides that if the value of the claim made under arbitration is One Crore
or less, a single arbitrator can resolve the dispute if the parties agree to it. In cases where the claim to the dispute
exceeds one Crore, the arbitral tribunal shall be composed of three arbitrators with the agreement of the parties.

In Narayan Prasad Lohia vs, Nikunj Kumar Lohia, the Supreme Court observed that if two arbitrators are
appointed for an Arbitral Tribunal instead of three, and they give an award through common opinion, there will
be no frustration of proceedings.

• What is the Procedure for appointment of arbitrators?

The procedure and appointment of arbitrators under the arbitral tribunal is specified under Section 11 of the
Arbitration and Conciliation Act. It states the following:

1. Nationality- The parties to the dispute may, on agreement, appoint an arbitrator belonging to any
nationality.
2. Appointment by Parties- The procedure to appoint one or more arbitrators can be decided by the
parties. If the parties fail to do so, they may individually appoint an arbitrator each, and the two
arbitrators, mutually decide the third one.
3. Appointment by Court- if the parties do not appoint an arbitrator within 30 days from the receipt of the
request, the Supreme Court, the High Court, or any other official designated by the Court may appoint
an arbitrator.

In Golden Chariot Recreations Pvt. Ltd. v Mukesh Panika & Anr., the Supreme Court held that a party to the
dispute can file an application for the appointment of an arbitrator by the Court only after the expiry of 30 days.

4. Payment of fees- the High Court has the authority to frame rules concerning the determination of fees
of the arbitral tribunal and the manner of its payment.

The Rules of Arbitration also provide the manner of the appointment of a sole arbitrator or three arbitrators
under Rule 23. According to this rule, on receipt of the application, the Registrar of the Arbitration Committee
may ask the parties to the dispute to select an arbitrator from among the Panel of Arbitrators within 30 days. In
case of failure, the Registrar himself appoints a sole arbitrator to resolve the dispute between parties. Similarly,
the Registrar can also appoint three arbitrators if the parties to the dispute do not arrive at an agreement.

In Oriental Insurance Company v M/S Narbheram Power and Steel Pvt, it was held that the arbitration clause
under an agreement is to be strictly interpreted. It expresses the intention of the parties to appoint an arbitrator
for the settlement of any dispute. This clause cannot be waived off in normal circumstances.

• What are the grounds for challenging the appointment of arbitrators and its procedure?

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When a person is nominated as an arbitrator, he is required to disclose his past or present connection to either
party or parties, whether direct or indirect. Also, he shall disclose if he has a financial, business, professional or
any other interest in any of the parties or in the subject matter of the dispute, which may prevent him from
adjudicating in an impartial manner. Therefore, as per Section 12 of the Act, either party to the dispute may
challenge the appointment of an arbitrator on the following grounds:

1. If there is a sufficient doubt that the arbitrator may act in a partial or biased manner.
2. If the nominated arbitrator does not possess the qualifications required by the parties to the dispute.

The appointment of an arbitrator can be challenged in accordance with the procedure mentioned in Section 13
of the Arbitration and Conciliation Act, 1996. Either party can challenge the appointment within 15 days after
receiving the knowledge of the constitution of the arbitral tribunal or after the knowledge of circumstances
mentioned above. The authority to decide on the challenge is vested in the hands of the arbitral tribunal.

In Antrix Corp. Ltd. v Devas Multimedia Pvt. Ltd, the Court held that if any party to the dispute disagrees or is
dissatisfied with the composition of the arbitral tribunal, it can approach the Court to challenge the appointment
of the arbitrator by way of application.

• How can an arbitrator be terminated?

Not only the appointment of the arbitrator can be challenged but also his mandate can be terminated under
Section 14 and 15 of the Act in the following cases:

1. If the arbitrator is unable to carry out his functions in an effective manner or there is an undue delay in
the performance of his duties.
2. If the arbitrator himself withdraws from his office or the parties agree to his termination.

Rule 27 of the Rules of Arbitration also states that an arbitrator can be terminated from his mandate on account
of his resignation or death, if he is negligent in performing his duties or fails to act in an expeditious manner,
and does not declare the arbitral award within a prescribed time.

In National Highways Authority of India vs Gammon Engineers and Contract[6], the Delhi High Court held
that the Arbitral Tribunal is bound by the Arbitration agreement between parties. The Arbitration agreement
cannot be rewritten and neither can the tribunal accept an appointment in part.

• Substitution of an arbitrator

If an arbitrator is terminated from his mandate, another arbitrator may be appointed as a substitute by following
the appointment procedure. In such a case, the arbitral hearings can be repeated at the discretion of the arbitral
tribunal. The provisions related to the substitution of an arbitrator are mentioned under Section 15 of the
Arbitration and Conciliation Act, 1996.

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Conclusion

The Indian Judiciary has recommended time and again that parties should take up arbitration as a dispute
settlement mechanism to reduce the burden on the courts and for a speedy resolution of disputes. Therefore,
several amendments have been proposed in the Arbitration and Conciliation Act, 1996. Sections 10-15 of this
Act and Rules 22-27 of the Rules of Arbitration, lays down provisions for the composition of an Arbitral
Tribunal. This is of utmost concern in the adoption of arbitration as a mechanism for dispute settlement. It is
important for the parties to choose the right arbitrator or arbitrators that constitute the arbitral tribunal so that the
award delivered by the tribunal is fair and just and free of any discrimination or biasness. It also ensures that the
dispute is resolved in an effective and speedy manner.

Q:6 Discuss briefly the provisions governing conduct of arbitral proceeding under Arbitration
and Conciliation Act.

Synopsis

- Procedure of Arbitral proceedings

o Place of arbitration
o Number of arbitrators
o Language
o Statement of claims and references
o Hearing and written proceedings
o Courts assistance
o Appointment of experts
o Termination
- Conclusion

Procedure of Arbitral Proceedings

Section 19 of the Act recognizes the right of the parties to agree on the procedural rules which are applicable in
conducting the arbitral proceedings. This provision establishes the procedural autonomy of the parties.

When the parties fail to agree on a procedure or frame the procedure, it grants the arbitral tribunal a wide range
of discretionary powers to frame the arbitral proceedings. The Act does not prescribe any default rules
regulating the arbitral proceedings.

This provision also provides that the application of the Code of Civil Procedure, 1908 or the Evidence Act,
1872 to the arbitral proceeding is also at the discretion of the parties.

• Place of Arbitration:

Section 20 of the Act provides that the parties are free to agree on the place of arbitration and if they fail to
agree then the arbitral tribunal has to determine the place of arbitration in a judicial manner, considering the
circumstances of the case and convenience of the parties.
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Also, the place of arbitration is of paramount importance because the laws of the place of arbitration play a
fundamental role in the arbitral proceeding. It determines the substantive laws for the time being in force in
India.

• Language to be used in Arbitral Proceedings:

Section 22 of the Act deals with the language which has to be used in arbitral proceedings. The parties to the
arbitration agreement are free to choose the language or languages which have to be used in the arbitral
proceedings. In cases where the parties fail to arrive at such an agreement then it is the role of the arbitral
tribunal to determine the language or languages to be used in the arbitral proceedings. The language shall also
apply to any written statement by a party, any hearing and any arbitral award, decision or other communication
by the arbitral tribunal.

When the arbitral tribunal agrees on the language to be used in arbitral proceedings, it may order that any
documentary evidence shall be accompanied by a translation into the language agreed. The arbitral tribunal
must ensure that all the parties are able to follow and understand the proceedings.

• Statement of Claim and Refence;

Section 23 of the Act provides for pleadings of the parties before the arbitral tribunal. After the arbitral tribunal
has been established, the usual practice is to exchange and file their pleadings before the tribunal.

The claimant states the facts and other relevant matters, while the respondent opposes the facts and the
averments made in the claim statement and contests the relief claimed by the claimant. The contents of pleading
may vary from case to case depending upon the facts and circumstances of each case.

Within six months of the appointment of the arbitral tribunal, the statement of claim and defence has to be
completed under this section.

• Hearing and written proceedings:

Section 24 of the Act discusses the manner in which arbitral proceedings are to be conducted. In the absence of
any prior agreement between the parties relating to this matter, the arbitral tribunal has the power to decide
whether the proceedings shall be held orally or on the basis of documents and other materials.

• Default of Party:

Section 25 of the Act deals with three situations where the parties are at default.

Firstly, the arbitral tribunal terminates the proceedings when the claimant without showing sufficient cause,
fails to communicate his statement of claim in accordance with Section 23(1). Secondly, the arbitral tribunal
continues the proceeding when the respondent fails to communicate his statement of defence in accordance with
Section 23(1).

Thirdly, if there is sufficient cause then the termination is recalled and proceeding gets restored.
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• Appointment of Experts:

Section 26 of the Act gives the arbitral tribunal power to appoint one or more experts based on the requirement
or request of the parties. It requires the parties to provide relevant information to the experts.

Also, the arbitral tribunal cannot appoint experts and delegate the duty of determination of the dispute.

• Court Assistance:

Section 27 of the Act provides the arbitral tribunal with the power to apply for the court assistance in taking
evidence. Persons can also be held guilty and tried before the court, if they refuse to give evidence or do not
cooperate.

• Termination:

The arbitral proceedings are terminated either by the final arbitral award or by an order of the arbitral tribunal
terminating the arbitral proceedings.

The arbitral tribunal terminates the arbitral proceedings in any of these cases where:

1. the claimant withdraws the claim and respondent does not object to it,
2. both parties are in consensus and agree to terminate the arbitral proceedings, or
3. the continuation of the arbitral proceedings has become impossible or irrelevant considering the
present facts of the case.

Also, the termination of the arbitral proceedings terminates the mandate of the arbitral tribunal and the arbitral
tribunal becomes functus officio. The term “functus officio” means no longer holding office or having official
authority once a decision is rendered.

Conclusion

The arbitral proceeding is based completely on the concept of party autonomy, where both the parties decide the
procedure as well as the circumstances under which arbitration is sought. The “rules of the game”, such as
applicable law, the seat of arbitration, the language of the proceedings, etc. are in the hands of the parties and
the arbitral proceedings are mostly conducted based on those rules. So, there are no particular set of rules and
applicable laws which govern the arbitral proceedings. However, Arbitration and Conciliation Act, 1996 limits
judicial intervention and reinforces the importance to party autonomy, confidentiality and expeditious
completion of arbitral proceedings.

Q: 7 Explain the meaning of Arbitral Award and discuss its characteristics.

Synopsis
- Introduction
- Essentials of an arbitral award
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- Correction and amendment in arbitral award
- Conclusion
Introduction
An arbitral award or arbitration award refers to a decision made by an arbitration tribunal in an arbitration
proceeding. An arbitral award is analogous to a judgment in a court of law. An arbitral award can be of a non-
monetary nature where the entire claimant's claims fail and no money needs to be paid by either party.

An arbitration award can be made for payment of a sum of money, declaration upon any matter to be
determined in the arbitration proceedings, injunctive relief, specific performance of a contract and for
rectification, setting aside or cancellation of a deed or other document.

Essentials of an arbitral award

The requirement as to forms and contents of an arbitral award as prescribed by section 31. For an arbitral award
to be valid it must contain the following essential elements:

• An award shall be made in writing.

• The award shall be signed by all the members of the arbitral tribunal.
• The award shall state the reasoning on which it is based.
• Date and place of arbitration should be mentioned on the award.
• A signed copy of the award should be sent to both the parties. It should be signed by the arbitrator or
the majority of the arbitrators of the tribunal.

1) An arbitral award shall be made in made in writing:

The function of making of an award is a judicial act and law requires that all members of the arbitral
tribunal must join and sit together, they must act together and apply their minds while arriving at a decision
which must be expressed in writing and signed. The word “made” implies that the mind of the arbitral
tribunal is declared in their decision. An arbitral award should be the result of a joint deliberation of all
members of the arbitral tribunal. Mere writing of the award does not amount to making of the award, it must
also be signed.

2) Arbitral award shall be signed:

Signing means writing one’s name on some document or paper. The function of making of an award is
distinct from signing of the award, this is best illustrated by the law which requires that all arbitrators must
join in making the award but signatures of the sole or majority shall be sufficient. The arbitral award is
required to be signed by the sole arbitrator and in proceedings with more than one arbitrator the signatures
of the majority shall suffice so long as the reason for any omitted signature is stated. Signing of the award is
not a mere formality, it is the signing of the award which authenticates it.

Signature of parties are, however, not required. The Supreme Court has held, the award does get its efficacy
because the parties agree to it. The award is valid of its own force. It is not essential for the validity of an
award that the parties should signify their consent to the award. (Prakash Chandra VS Harman Singh, AIR
1973 SC 2065 this decision may be compared with Naraindas VS Vallabhdas AIR 1972 SC 1 where an
award was made by virtue of a compromise or adjustment in a pending suit.)

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3) Date and place of making:

The arbitral award shall state its date and mention the place of arbitration as determined in accordance with
Section 20, and the award shall be deemed to have been made at that place. This deeming provision seems
to ensure that no controversy is left outstanding as regards the place where the arbitral award can be said to
have been made. No other place shall be recorded on the award than the one determined in accordance with
Section 20 of the Act.

4) Reasoned Award:

It has now been made obligatory for arbitrators o give a reasoned award. But this general rule is subject to
two exception and stating of reasons is dispensed with where the parties have agreed otherwise or where the
arbitral award is made in terms of the mutual settlement of the disputes arrived at between the parties during
arbitral proceedings. Such an award is referred to as an award on agreed terms under Section 30(2).

The provision for reasoned award has introduced grater fairness in making arbitral awards, now the arbitral
tribunal is constrained to explain how they arrived at the decision so that unnecessary attacks on charge of
misconduct may not be made against them although misconduct as such no longer figures in the list of
grounds enumerated for setting aside of an award under Section 34(2) of the Act.

In Gujrat Water Supply and Sewerage Board VS. Unique Erectors (Guj) Pvt. Ltd., (AIR 1989 SC
973), the Court observed, reasons should not only be intangible but should also deal either expressly or
impliedly with the substantial point that have been raised… The sufficiency of reasons depends on the facts
and circumstances of each individual case. But the arbitrator is not bound to give detailed reasons. The
Court does not sit in appeal over the award and review the reasons.

• There are cases where an interim award is necessary and can be provided. Section 33 plays an important
role to ensure that the parties do not suffer due to the mistakes of the arbitration tribunal. This section is
divided into two parts-

1. The first part from sub-section 1 to 3, provides from the correction and interpretation of an arbitral
award.
2. The second part from sub-section 4 to 7, provides for the granting of an additional award.

Correction and Interpretation of arbitral award

Correction and interpretation of an arbitral award is a post-award process. The arbitration law is based on
the UNCITRAL model law (The United Nations Commission on International Trade Law).

Section 33 of the Arbitration and Conciliation Act, 1996 is the statutory provision that allows for correction and
interpretation of an award.

The important reason here is that human errors can occur. This means that there are situations when there are
errors in an arbitral award. These errors could be simply typing errors or something major such as a decision
missing from the proceedings in the final award. These kinds of errors put one party at a disadvantage. These
errors are unacceptable as the award, once granted, is not up for appeal.

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After paying for arbitral proceedings and investing time in it both the parties would expect a well-drafted and
considered arbitral award to be granted. A mistake in the award is disappointing; it creates problems during the
enforcement of the award.

The above-mentioned points indicate the importance of Section 33. Many other countries have a similar
provision to aid parties and to rectify any mistakes that might have occurred. For example, English Arbitration
Act 1996, Section 57, provides that a tribunal may, on its own initiative or on the application of a party, correct
an award to “remove any clerical mistake or error arising from an accidental slip or omission or clarify or
remove any ambiguity in the award”.

However, it is pertinent to note that the request for correction or interpretation of an award does not reopen the
proceedings. The evidence and arguments have already been verified, interpreted and understood. No
proceedings are repeated. Only the examination of the arbitral award takes place. No rehearing will take place.

Section 33(1) of the Arbitration and Conciliation Act

This sub-section states that:

(1) Within thirty days from the receipt of the arbitral award, unless another time period has been agreed upon by
the parties:

(a) a party, with notice to the other party, may request the arbitral tribunal to correct any computation errors,
any clerical or typographical errors or any other errors of a similar nature occurring in the award;

(b) if so, agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to give an
interpretation of a specific point or part of the award.

A limitation period of 30 days is put on the application submitted. After the completion of 30 days, no party can
request correction or interpretation.

It is also important to notice that one party who wants to move under Section 33 does not need the consent of
the other party. It is only important that the other party is notified if any such proceeding is being applied for by
the other party.

Clause (a): This clause includes any basic human error that might occur during the drafting of the award.
Drafting errors can be corrected easily. This is an important provision because if such errors are ignored then
they can lead to a change in the meaning of the ruling and can stir trouble during enforcement.

The language of the statutes uses the word ‘computational errors’. On the face of it, it can mean that errors
related to calculation and arithmetic are being considered. However, the language is such that its meaning can
be extended to include the methods that are used to carry out calculations.

This way, the scope of the statute can be expanded because calculation would be restricted to include only
numbers but computation can comprise of the methods and steps/procedure used to arrive at those numbers.

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Clause (b): This clause mentions interpretation of an arbitral award. The only problem that is faced by parties is
that there are very few situations when both parties have an issue with the meaning conveyed by the arbitral
award. It creates problems if one party agrees and the other party does not.

In cases where both the parties agree, it can be used for an interpretation conveying the clear meaning of the
arbitral award for better enforcement of the same.

Section 33(2) of the Arbitration and Conciliation Act

This sub-section puts a time cap on the passing of the interpretation by the arbitral tribunal if the request under
section 33(1) is accepted. The arbitration tribunal has to provide the interpretation within 30 days of receiving
the receipt of the request. The interpretation becomes part of the arbitral award. An additional award is not
passed in this case.

Section 33(3) of the Arbitration and Conciliation Act

This sub-section clarifies that correction and interpretation can take place if:

• It is requested by the parties; or

• The arbitral tribunal themselves correct the mistakes related to the categories mentioned under sub-
clause 1 of Section 33.

Additional award

Section 33(4) of the Arbitration and Conciliation Act

This sub-section states that:

Unless otherwise agreed by the parties, a party with notice to the other party may request, within thirty days
from the receipt of the arbitral award, the arbitral tribunal to make an additional arbitral award as to claims
presented in the arbitral proceedings but omitted from the arbitral award.

In situations where a part of the proceedings has been left out, an additional award is given by the arbitration
tribunal to make up for that loss. The additional award is supposed to have corrected the mistake by including
the missed-out part of the award.

The main difference to be noted in a correction/interpretation given and an additional award given is that:

• The correction and interpretation made, merges with the original award. This is because there are
only calculative or clerical changes to be made.
• An additional award by its name itself implies that another award is granted. This award does not
merge with the original award.

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The ambit and scope of sub-section (4) of Section 33 of the Arbitration and Conciliation Act, 1996 was
considered by the Supreme Court in Mcdermott International Inc. v. Burn Standard Co. Ltd., (2006), and it was
held as follows:

Sub-section (4) empowers the Arbitral Tribunal to make additional arbitral award in respect of claims already
presented to the Tribunal in the arbitral proceedings but omitted by the Arbitral Tribunal provided:

• There is no contrary agreement between parties to the reference;

• A party to the reference, with notice to the other party to the reference, requests the arbitral tribunal
to make the additional award;
• Such request is made within 30 days from the receipt of the arbitral award;
• The arbitral tribunal considers the request so made justifies; and
• Additional arbitral award is made within sixty days from the receipt of such request by the arbitral
tribunal (sub-section 5).

It is also possible for the tribunal to extend this time cap if it deems necessary on the basis of reasonable
grounds (sub-section 6).

Relation between Section 33 and 34

Section 34 of the Arbitration and Conciliation Act, 1996 provides for setting aside of the arbitral award.

On careful reading of both the sections together, one can say that when a party is not satisfied with the arbitral
award granted then they move to correct and interpret the award or try to acquire an additional award. However,
the party may find these means to be insufficient. In such cases, the parties move to set aside the award- which
means, to invalidate the granted award.

Under Section 34(3)- a party cannot file for setting aside of the award after 3 months have passed from the day
that a request under Section 33 was disposed of. This is subject to the satisfaction of the court- the court should
be convinced that such an application was disposed of on the basis of reasonable grounds.

Conclusion

After careful reading of the article, it is safe to conclude that Section 33 is a very important part of the
Arbitration and Conciliation Act, 1996. This is because it plays a major role in protecting the interests of the
parties and in preventing the arbitral tribunal from making mistakes. It ensures transparency in the process and
ensures that no party suffers harm due to the mistakes of the arbitration tribunal.

To further ensure that the parties are not taken advantage of, a time-cap is placed upon the proceedings so that
there is no wastage of time and money. This way the objective of choosing arbitration over traditional methods
of dispute resolution is protected.

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Q:8 Discuss in detail concept of Negotiation and its essentials.

Synopsis

- Meaning of Negotiation
- Characteristics of Negotiation
- Steps of Negotiation
- Essential elements of Negotiation

Meaning of Negotiation

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 already-existing 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”,

Characteristics of Negotiation

There are certain characteristics of the negotiation process. These are:

1. There is a minimum of two parties present in any negotiation.

2. Both parties have pre-determined goals that they wish to achieve.

3. There is a clash of pre-determined goals, that is, some of the pre-determined goals are not shared by both the
parties.

4. There is an expectation of outcome by both parties in any negotiation.

5. Both parties believe the outcome of the negotiation to be satisfactory.

6. Both parties are willing to compromise, that is, modify their position.

7. The incompatibility of goals may make the modification of positions difficult.

8. The parties understand the purpose of negotiation

Steps of the Negotiation Process

The negotiation process can essentially be understood as a four-stage process. The four stages of the negotiation
process are preparation, opening, bargaining, and closure.

Stage 1: Preparation

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Preparation is instrumental to the success of the negotiation process. Being well-prepared generates confidence
and gives an edge to the negotiator. Preparation involves the following activities:

1. Gathering Information: One needs to learn as much as one can about the problem and ascertain what
information is needed from the other side. Understanding clearly the issues involved are also needed.

2. Leverage Evaluation: Evaluation of one’s leverage and the other party’s leverage at the outset is important
because there may be a number of things one can do to improve one’s leverage or diminish the leverage of the
other side.

3. Understand the people involved: It is important to know the people with whom the negotiation is to take
place. An understanding of their objectives, roles and the issues likely to be raised by them will facilitate better
handling of the situation during the negotiation process.

4. Rapport: It is helpful to establish a rapport with the opponent during the early stages, that is, before the
bargaining process begins is helpful. This was, one can determine early on how cooperative the opponent is
going to be.

5. Know your objectives: Clarity of objectives is absolutely essential. It needs to be decided in advance how
much you are willing to concede to the opponent and what your priorities are. All arguments and justifications
should be ready.

6. Type of negotiation: Anticipate the type of negotiation expected, that is, ascertain whether it will be highly
competitive, cooperative or something unusual; whether the negotiation will be face to face, by fax, through a
mediator, or in some other manner.

7. Plan: Decide on the negotiation approach and plan accordingly.

Stage 2: Opening Phase

Here the two sides come face to face. Each party tries to make an impression on the other side and influence
their thinking at the first opportunity. Psychologically, this phase is important because it sets the tone for the
negotiation to a large extent. It involves both negotiating parties presenting their cases to each other.

Stage 3: Bargaining Phase

The bargaining phase involves coming closer to the objective you intended to achieve when you started the
negotiation. In this phase, the basic strategy is to convince the other side of the appropriateness of your demands
and then persuading the other party to concede to those demands. For this, one needs to be logical in one’s
approach and frame clearly-thought-out and planned arguments.

Stage 4: Closure Phase

The closing phase of a negotiation represents the opportunity to capitalize on all of the work done in the earlier
phases. The research that has been done in the preparation phase, combined with all of the information that has
been gained is useful in the closing phase. It also involves the sealing of the agreement in which both parties
formalize the agreement in a written contract or letter of intent. Reviewing the negotiation is as important as the
negotiation process itself. It teaches lessons on how to achieve a better outcome. Therefore, one should take the
time to review each element and find out what went well and what needs to be improved.

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Elements of Negotiation

elements are important and likely to affect the ultimate outcome of the negotiation:

1) Attitudes
2) Knowledge
3) Interpersonal Skills

1) Attitudes

All negotiation is strongly influenced by underlying attitudes to the process itself, for example attitudes to the
issues and personalities involved in the particular case or attitudes linked to personal needs for recognition.

2) Knowledge

The more knowledge you possess of the issues in question, the greater your participation in the process of
negotiation. In other words, good preparation is essential. Do your homework and gather as much information
about the issues as you can. Furthermore, the way issues are negotiated must be understood as negotiating will
require different methods in different situations.

3) Interpersonal Skills

Good interpersonal skills are essential for effective negotiations, both in formal situations and in less formal or
one-to-one negotiations. These skills include:

- Effective verbal communication.

- Listening.
- Reducing misunderstandings is a key part of effective negotiation.
- Rapport Building.
- Problem Solving.
- Decision Making.
- Assertiveness.
- Dealing with Difficult Situations.
- Conflict Resolution and Mediation
- Conflict Resolution and Mediation.

Q:9 Explain the meaning of Conciliation and state the difference between the conciliation
proceeding and arbitration proceeding.

Synopsis
- Introduction
- What is arbitration
- What is conciliation
- Main difference between arbitration and conciliation
- conclusion

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Introduction

There are various legal methods to resolving disputes that parties can access before resorting to litigation. Two
effective alternative dispute resolution processes are arbitration and conciliation.

Arbitration and conciliation can be utilised for both private and commercial disputes and both employ an
impartial person to assist the disputing parties in resolving or narrowing the issues between them.

What is arbitration?

Arbitration is a dispute settlement process in which a third party is appointed to review the facts and merits of a
dispute and reach a binding decision on the parties. In order for arbitration to be used, all parties to the dispute
must have previously consented to the process; or arbitration may be required under court order or as part of a
contract.

When the arbitration is being conducted, both parties have the ability to present evidence and argue their case.
This process is quicker than using courts and tribunals and the arbitrator, like a judge, has the power to create a
binding decision on the parties and enforce the decision called an ‘award’.

Arbitration is commonly used in employment, building and construction and family law disputes. Each party
pays their own costs respective to the arbitration.

What is conciliation?

Conciliation is a process where the parties to a dispute, with the assistance of a dispute resolution practitioner,
discuss the issues in disputes, generate ideas and options for possible terms of settlement, consider alternatives
and aim to reach a mutual agreement.

The main role of a conciliator is to facilitate the mediation and advocate for a mutual settlement of matters,
generate options and consider alternatives.

The benefits of using conciliation is that the conciliator can have input into the discussions between the parties
and make suggestions.

Either party can request for a conciliation to take place, however the other parties must consent to the
appointment of a conciliator.

Conciliation costs are apportioned between the parties equally.

Conciliations are often used in industrial disputes and family law disputes.

Main differences between arbitration and conciliation

The main differences between arbitration and conciliation are:

1. Arbitration is primarily a method used to resolve disputes where both parties present their case to a
neutral third party who reaches a decision and then enforces that decision. Conciliation, on the other
hand, involves an independent third party assisting the parties involved in the dispute to arrive at a
mutually agreeable outcome.
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2. The decision made by an arbitrator is enforceable similar to a judgement of a court. A conciliator,
however, does not have the right to enforce its decisions.

3. Arbitration is a formal process and can follow similar procedures to court proceedings where witnesses
can be called and evidence can be presented to argue the parties’ respective cases. Conciliation is an
informal process and normally involves a ‘round table’ discussion.

4. Arbitrators are not permitted to discuss the issues directly with the parties or generate options for terms
of settlement or negotiation. A conciliator is allowed to discuss issues in dispute, develop options and
consider alternatives to help the parties achieve a mutually agreeable outcome.

5. An arbitral award is final and binding and has the effect of terminating the arbitral proceedings whereas
conciliation does not always ensure a mutually agreeable outcome will arise between the parties.

Conclusion

The choice of dispute resolution method is entirely up to the parties in dispute. If there is a possibility that both
parties may agree to a mutually agreeable outcome, then conciliation could be considered. If both parties would
like an independent party to set a binding and enforceable determination then arbitration may be preferred.

Q:10 Define the term Mediation and Conciliation and explain the difference between them.
Synopsis

- What is mediation
- What is conciliation
- Difference between them

Introduction:

Mediation and Conciliation are two most common techniques adopted by parties opting for Alternative Dispute
Resolution. Mediation is a process wherein the parties to the dispute appoint a neutral third party who by the
way of negotiation and discussions help the parties to the dispute reach to a solution. Mediation is of various
types like Evaluative mediation, Online Mediation, Facilitative mediation, Mediation with Arbitration and
Transformative mediation. Mediation is different from arbitration in the aspect that the latter is binding on the
parties while mediation is not.
Conciliation is a procedure of Alternative Dispute Resolution where the parties for resolving their dispute
appoint a third party from mutual consent who then drafts an agreement of resolution after initiating
communication, discussion and negotiation between the parties for a solution. The most important element of
conciliation which has an appeal for the parties is the importance given by the procedure itself to the
confidentiality of the matters and details of the dispute and privacy of the parties.
Difference between Mediation and Conciliation

Both the process of conciliation and mediation sound very similar in their description. Thus, the question which
arises is that what are the basic difference which make these two techniques of ADR distinguishable. Some of
the key difference between mediation and conciliation are listed below:

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1. Role of the third party:
In mediation, the mediator is the neutral third party who steps in between the dispute of the parties and enables
them to communicate with one another about resolving the dispute. This means that a mediator merely provides
a ground, a neutral space where the parties can communicate and themselves reach towards a solution.
On the other hand, in conciliation, the conciliator not only make the party communicate with each other but also
help the parties in resolving their dispute by suggesting plausible solutions for the issue and making party agree
upon it.
Thus, in mediation the mediator acts as facilitator who initiates dialogue and communication between the
parties whereas the role of a conciliator goes beyond that of a facilitator as he/she not only ensure
communication between the parties but also suggest possible solution to the problem as an expert.
2. Laws relating to the process:
Mediation is governed under the Code of Civil Procedure, 1908, and has no specific or individual statute
dedicated to its regulation. On the other hand, Conciliation comes under the folds of the Arbitration and
Conciliation Act, 1996.
3. Degree of confidentiality:
One of the basic advantages of adopting ADR as against the court proceeding is the high rate of confidentiality
in the matters which ADR grants. Thus, both the procedure of Mediation and Conciliation provide a high degree
of confidentiality but the difference between them in this matter is that the confidentiality offered by the
mediation is solely based on trust but in conciliation it is law that decides to the extent of confidentiality.
4. Resolution agreement
In mediation, the third party draws an agreement in the end of the procedure whereas in the process of
conciliation, there is a settlement agreement drawn between the parties.
5. Enforcement of the agreement
The agreement drawn between the parties to the dispute in mediation has similar binding effect as any other
contract whereas in the case of Conciliation, the settlement agreement has a force of law similar to that of an
Arbitral Award.

Q:11 Lok Adalat

Synopsis

- Introduction
- Legislation pertaining to Lok Adalat
- Salient features of Lok Adalat
- Level and composition of Lok Adalat
- Jurisdiction of Lok Adalat
- Advantages and Disadvantages of Lok Adalat
- Powers of Lok Adalat

Introduction:
In every system of government, the effective justice delivery mechanism is a permanent and necessary
condition of peace, order, civilization and governance of the country.

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It is the primary duty of State to ensure equal and even-handed justice for all by regulating the dealings of
citizens with one another, by checking disorder and high handedness of one class of people over others and by
maintaining all those rights which are fundamental to the existence and upliftment of common man through
establishing the effective administration of justice.
But, in reality, the guarantee of equality before law does not provide any satisfaction to a poor man due to lack
of access to justice. The other reasons which affected badly the administration of justice are delay, corruption,
expensive litigation, non-access, less number of courts, judges and official staff, lengthy process and lack of
legal aid and legal awareness to the needy.
So, in the light of these weaknesses of the existing judicial system, Lok Adalat has been established.
Legislation pertaining to Lok Adalats
The advent of Legal Services Authorities Act, 1987 gave a statutory status to Lok Adalats, pursuant to the
constitutional mandate in Article 39-A of the Constitution of India, contains various provisions for settlement of
disputes through Lok Adalat.
It is an Act to constitute legal services authorities to provide free and competent legal services to the weaker
sections of the society to ensure that opportunities for securing justice are not denied to any citizen by reason of
economic or other disabilities, and to organize Lok Adalats to secure that the operation of the legal system
promotes justice on a basis of equal opportunity.
Salient features of Lok Adalat

• It is based on settlement or compromise reached through systematic negotiations.

• It is a win - win system where all the parties to the dispute have something to gain.
• It is one among the Alternate Dispute Resolution (ADR) systems. It is an alternative to "Judicial
Justice".
• It is economical - No court fee is payable. If any court fee is paid, it will be refunded.
• The parties to a dispute can interact directly with the presiding officer, which is not possible in the case
of a court proceeding.
• Lok Adalat is deemed to be civil court for certain purposes.
• Lok Adalat is having certain powers of a civil court.
• The award passed by the Lok Adalat is deemed to be a decree of a civil court.
• An award passed by the Lok Adalat is final and no appeal is maintainable from it.
• An award passed by the Lok Adalat can be executed in a court.
• The award can be passed by Lok Adalat, only after obtaining the assent of all the parties to dispute.
• Code of Civil Procedure and Indian Evidence Act are not applicable to the proceedings of Lok Adalat.
• A Permanent Lok Adalat can pass an award on merits, even without the consent of parties. Such an
award is final and binding. From that no appeal is possible.
• The appearance of lawyers on behalf of the parties, at the Lok Adalat is not barred. (Regulation 39 of the
Kerala State Legal Services Authority Regulations, 1998.

Levels and Composition of Lok Adalats

• At the State Authority Level

The Member Secretary of the State Legal Services Authority organizing the Lok Adalat would constitute
benches of the Lok Adalat, each bench comprising of a sitting or retired judge of the High Court or a sitting or
retired judicial officer and any one or both of- a member from the legal profession; a social worker engaged in

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the upliftment of the weaker sections and interested in the implementation of legal services schemes or
programmes.

• At High Court Level

The Secretary of the High Court Legal Services Committee would constitute benches of the Lok Adalat, each
bench comprising of a sitting or retired judge of the High Court and any one or both of- a member from the
legal profession; a social worker engaged in the upliftment of the weaker sections and interested in the
implementation of legal services schemes or programmes.

• At District Level

The Secretary of the District Legal Services Authority organizing the Lok Adalat would constitute benches of
the Lok Adalat, each bench comprising of a sitting or retired judicial officer and any one or both of either a
member from the legal profession; and/or a social worker engaged in the upliftment of the weaker sections and
interested in the implementation of legal services schemes or programmes or a person engaged in para-legal
activities of the area, preferably a woman.

• At Taluk Level

The Secretary of the Taluk Legal Services Committee organizing the Lok Adalat would constitute benches of
the Lok Adalat, each bench comprising of a sitting or retired judicial officer and any one or both of either a
member from the legal profession; and/or a social worker engaged in the upliftment of the weaker sections and
interested in the implementation of legal services schemes or programmes or a person engaged in para-legal
activities of the area, preferably a woman.

Jurisdiction of Lok Adalat

A Lok Adalat shall have jurisdiction to determine and to arrive at a compromise or settlement between the
parties to a dispute in respect of:

a. any case pending before; or

b. any matter which is falling within the jurisdiction of, and is not brought before, any court for which the
Lok Adalat is organized.

The Lok Adalat can compromise and settle even criminal cases, which are compoundable under the relevant
laws.

Lok Adalats have the competence to deal with a number of cases like:

- Compoundable civil, revenue and criminal cases

- Motor accident compensation claims cases
- Partition Claims
- Damages Cases
- Matrimonial and family disputes
- Mutation of lands case
- Land Pattas cases
- Bonded Labor cases
- Land acquisition disputes
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- Bank’s unpaid loan cases
- Arrears of retirement benefits cases
- Family Court cases
- Cases, which are not subjudice

Advantages:
1. Lok Adalats are meant for conciliated settlement of disputes outside court which is what most of our people
like if the matter allows for this kind of settlement. There is a fear among a large number of people about taking
disputes to court, not just about delay in getting justice but also for financial reasons. In fact, one of the reasons
for the formation of Lok Adalat or people’s court is to provide fair and uncomplicated justice to the financially
deprived section of our society. Though government provides legal aids to poor, there is a fear of monetary loss
during the time period which is why most people prefer Lok Adalats.

2. Family disputes like property acquisition and matrimonial issues are far better and faster solved by these Lok
Adalats in comparison to courts. Though there are family courts for these matters, people would always prefer
settlement outside court and in a fair and just manner which is delivered well by Lok Adalats. It saves time and
expenses and also is easier for parties to make their claims which is not the case when the matter is in court and
witnesses are afraid of getting involved into legal matters.

3. The number of cases that require jurisdiction is increasing at an alarming rate and let’s face it – we have far
inadequate number of courts and judges in our country than we require which leads to unnecessary delay even
in smaller cases. If more and more people could understand the significance of Lok Adalats and resort to them
for easy litigations, there would be lesser pending cases in the files gathering dust since years in courts.

4. Lok Adalats can be a decent supplement to the work of courts and could contribute to justice in a good way
only if awareness is increased and people are encouraged to opt for them. For illiterates and poor there are even
more advantages of taking matters to Lok Adalat. Proceedings are conducted faster and in simple arrangements
and even in local languages. They are not strict about procedural laws or Evidence Act and are based more on
merits which makes it “People’s Festival of Justice.”

5. There is no absolute need of advocates by the victim and the convict, who can either prefer to have their
cases pleaded by the lawyer or simply talk to the judge about the matter directly. This is not a possibility in
courts where a third person pleads the case and the people involved only get a say when their turn comes. To
explain their stand directly is an advantage that makes people’s court very accessible and easy for people.

6. Even if the case is filed in court, the expenses are refunded to the party when the case is solved by Lok
Adalat which is another reason why people should be made more aware of this litigation system where there is
no fee involved. According to justice V V Rao, it will take another 320 years to clear the pending backlogs in
India but if more and more people take their cases to Lok Adalats, there is a fair chance that this could be
achieved earlier.

Disadvantages:
1. Justice delayed is justice denied but justice hurried is also justice buried. Faster justice comes with a price of
settlement made at the cost of lesser compensation and the petitioner had no time to claim higher amount which
he justly should have got as seen in many cases after which apex court ordered Lok Adalat to be careful about
not impairing the right of any party involved in the issue. Faster and easier justice must not come with the price
of injustice which is what falls as a disadvantage of Lok Adalat.

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2. Not all cases are suitable for Lok Adalat jurisdiction. Lok Adalat is all about settlement and compromise
which is not what every case requires. Most cases in India require punishment and correctional methods which
is not under the dealing of Lok Adalat. These cases would usually fail here and would then be recommended to
courts. This would only create superfluous deferral in the legal proceedings, sometimes which could be required
as early as possible.
Powers of Lok Adalats

The Lok Adalat shall have the powers of a civil court under the Code of Civil Procedure 1908, while trying a
suit, in respect of the following matters:

1) Power to summon and enforce the attendance of any witness and to examine him/her on oath.
2) Power to enforce the discovery and production of any document.
3) Power to receive evidence on affidavits,
4) Power for requisitioning of any public record or document or copy thereof or from any court.
Such other matters as may be prescribed
5) Every Lok Adalat shall have the power to specify its own procedure for the determination of any
dispute coming before it.
6) All proceedings before a Lok Adalat shall be deemed to be judicial proceedings within the
meaning of Sections 193, 219 and 228 of IPC.
7) Every Lok Adalat shall be deemed to be a Civil Court for the purpose of Sec 195 and Chapter
XXVI of Cr.P.C.

Conclusion

Objective of Lok Adalat is to settle the disputes which are pending before the courts, by negotiations,
conciliation and by adopting persuasive common sense and human approach to the problems of the
disputants. The system has received laurels from the parties involved in particular and the public and the
legal functionaries, in general. It also helps in emergence of jurisprudence of peace in the larger interest of
justice and wider sections of society. Its process is voluntary and works on the principle that both parties to
the disputes are willing to sort out their disputes by amicable solutions. Through this mechanism, disputes
can be settled in a simpler, quicker and cost-effective way at all the three stages i.e. pre-litigation, pending-
litigation and post-litigation.
Short Notes:
1) Powers and Duties of Mediator

Role of Mediator

The principal role of the mediator is to facilitate communication between the parties in conflict with a view to
helping them reach a voluntary resolution to their dispute that is timely, fair and cost-effective. Although the
mediator manages the meeting and is in charge of the proceedings, he/she should not impose solutions or
decisions and has no power to force a settlement. A solution should only be reached by agreement between the
parties. They are responsible for the ultimate resolution of the dispute. Furthermore, a mediator has no right or
duty to provide legal advice to the parties even if he/she happens to be a lawyer. The parties should seek legal
advice solely from their legal counsel. The mediator, however, may raise issues and help parties explore
options.

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Setting up the first meeting

Following his/her appointment, the mediator will contact the parties or their counsel to fix a date for the holding
of the first meeting.

Mediation parties may be assisted by an advocate, legal procurator or any individual designated by them
whether before or during the mediation proceedings.

First meeting and review of mediation procedures

At the first meeting, the mediator will:

• request the parties to sign, jointly with him, the Centre’s Model Mediation Agreement setting out the terms and
framework for the conduct of the mediation process;
• give a brief description of his role and that of the parties and explain the mediation process with particular
reference to the statutory provisions regulating confidentiality;
• discuss with the parties whether they agree to give their consent in writing authorising him/her to hold separate
meetings with each of them on an individual basis;
• invite the parties to give a brief account of the facts of the dispute from his/her perspective. This may be done
either in joint session or it may be done privately with the mediator provided the parties would have agreed to
hold separate meetings;
• ask questions to clarify certain matters for the purpose of assisting the parties overcome any obstacle and
explore options for settlement.

Duties of Mediator

A mediator has the following duties to observe: -

• Code of Conduct

Mediator are required by the Act to follow the Centre’s Code of Conduct for Mediators in the performance of
their duties as mediators.

• Impartiality

A mediator shall mediate only those matters in which he/she can remain impartial. Impartiality means freedom
from favouritism, bias or prejudice both in conduct and appearance

If at any time the mediator is unable to conduct the process in an impartial manner, or the parties, or any one of
them, express doubt on any circumstance concerning the mediator’s impartiality the mediator should withdraw
and the Mediation Centre would appoint another mediator in his stead.

• Impartiality and Challenge of Mediator

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A mediator may be challenged on grounds of impartiality by any mediation party. When a mediator is
challenged, he/she should withdraw and be substituted by a new mediator. However, if the challenged mediator
does not withdraw, the chairman of the Board of Governors of the Centre will decide on the challenge and his
decision will be final and binding. If the Chairman sustains the challenge, a substitute mediator will be
appointed by the Centre.

• Notification of Challenge

The party who intends to challenge a mediator should send a notice of his challenge in writing, stating the
reasons for such challenge, to the Registrar, the other party or parties and the mediator challenged within 15
days after the party making the challenge has become, or could have become, aware that circumstances exist
that give rise to justifiable doubt as to the mediator’s impartiality

• Conflict of Interest.

A mediator has the duty and obligation to disclose to the parties any actual or perceived conflict of interest as
soon as he/she becomes aware of it whether prior to accepting to act or at any time during the mediation
process.

If a mediator has a conflict of interest he/she may only accept or continue the mediation if the parties explicitly
consent in writing, provided, however, that if the mediator deems that the conflict of interest gives rise to the
slightest reasonable doubt as to the integrity of the process he/she should decline to proceed regardless of the
consent of the parties to the contrary.

• Confidentiality

Confidentiality is the cornerstone of the mediation process. The Act stipulates that everything said during the
course of mediation, including all communications between the parties and the mediator are confidential and no
evidence of anything said or documents produced during the mediation process are admissible in any litigation
proceedings. Moreover, the mediator cannot be summoned as a witness on what took place and on what came to
his/her knowledge during mediation.

The mediator may, however, disclose to the Court any information obtained during the mediation process
provided all the parties to the mediation give their written consent. Furthermore, the disclosure of the content of
the agreement reached between the parties is also permitted when required to prevent harm to the physical or
psychological integrity of a person or where the disclosure is necessary in order to implement or enforce the
agreement reached between the parties.

2) APPOINTMENT OF CONCILIATION:

Selection and Appointment of Conciliators - ICSID Convention Conciliation

Once the number of conciliators and the method of their appointment have been determined, the conciliator(s)
may be appointed. If the parties are unable to appoint all members of the Commission pursuant to the
established method of appointment, the ICSID default mechanism may apply.

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Parties are not required to select conciliators from the ICSID Panel of Conciliators, although they are welcome
to do so.

The Convention sets forth certain requirements regarding the qualifications of appointees to ICSID conciliation
Commissions, but the parties are otherwise free to choose whomever they wish.

Requirements for Appointees

All ICSID conciliators must be persons:

• of high moral character;

• of recognized competence in the fields of law, commerce, industry or finance; and
• who may be relied upon to exercise independent judgment (Article 14(1) and Article 31(2) of the
Convention).

There is no nationality requirement in conciliation cases.

Additional Considerations for Selecting Conciliators

In addition to the requirements established by the Convention, there are several practical considerations that
parties should reflect upon when selecting a conciliator. Although these may vary depending on the specific
characteristics and demands of each case, the following factors are generally among the most important:

• Knowledge of the relevant law(s)

• Absence of conflict of interest
• Experience as a conciliator
• Language proficiency
• Availability of conciliator / manageability of current caseload
• Timeliness
• Cohesiveness of the Commission
• Other areas of expertise

Appointing a Conciliator

The parties should provide ICSID with the following information in respect of a conciliator appointment:

• complete name;
• contact information (i.e., mailing address, telephone and fax numbers, email); and
• a current curriculum vitae.

Once a conciliator is appointed, ICSID seeks the appointee’s acceptance of the nomination. The Secretary-
General then notifies the parties of the appointee’s acceptance or refusal.

If a conciliator refuses or fails to accept the appointment within 15 days, ICSID will invite the appointing party
to nominate another conciliator.

Default Mechanism for Appointing a Conciliator

If the parties are unable to appoint all members of the Commission within 90 days of the registration of the
request for conciliation, either party may request that the Chairman of the ICSID Administrative Council
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appoint the conciliator(s) not yet appointed (Article 30 of the ICSID Convention).

When a party makes such a request in respect of the Sole Conciliator or President of the Commission, ICSID
first conducts a ballot procedure:

• ICSID provides the parties with a ballot form containing the names of several candidates, who may or
may not be members of the ICSID Panel of Conciliators.
• Each party is given a short time limit to return its completed ballot form, indicating the candidates it
accepts or rejects.
• A party is not required to share its ballot with the other party.
• If the parties agree on a candidate from the ballot, that person will be deemed to have been appointed by
agreement of the parties.
• If the parties agree on more than one proposed candidate, ICSID selects one of them and informs the
parties of the selection.

A successful ballot is considered an appointment by agreement of the parties under the established method of
constituting the Commission.

If there is no agreement by the parties, ICSID names a person from the Panel of Conciliators, pursuant
to Article 30 of the Convention. Before the person is appointed, the parties are given the opportunity to raise
any circumstance showing that the person lacks the required qualities under the ICSID Convention (Article
14(1) of the Convention).

Until the process is completed, the parties may appoint conciliators under the established method of constitution
or by agreement.

The Centre endeavors to complete the appointment process within 30 days of the request for appointment.

3) Foreign Award
The New York Convention Awards

Chapter I of Part II of the Arbitration and Conciliation Act, 1996 lays down the provisions with regard to
enforcement of New York Convention Awards. “Foreign award” under New York Convention means

‘an arbitral award on differences between persons arising out of legal

relationships, whether contractual or not, considered as commercial under the
law in force in India, made on or after the 11th day of October, 1960

1. In pursuance of an agreement in writing for arbitration to which the convention applies

2. In such territories which the Central Government may by notification declare to be territories to which
the said convention applies.

While dealing with this part the Supreme Court has categorically stated that any award made on an arbitration
agreement governed by law of India although rendered outside India would not be a foreign award. Moreover as
far as the meaning and extent of the term ‘commercial’ goes, the expression ‘commercial’ is to be construed
literally in the light of its literal and grammatical sense keeping in mind that the purpose is to facilitate
international trade by speedy dispute resolution. Also, while interpreting ‘commercial relationship’, aid can be
taken of the UNCETRAL model laws. Commercial as a term is also given the widest possible interpretation by

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the Supreme Court. Therefore, includes relationship that takes within its ambit all relationships which arise out
of or are ancillary and incidental to the business dealings between citizens of the two states.

The Geneva Convention on Awards

Prior to 1937, foreign awards and foreign judgments based on awards were enforceable in British India on the
same grounds and in the same circumstances as they were in England under the common law, on the grounds of
justice, equity and good conscience. In 1937 the Arbitration (Protocol and Convention) Act 1937 was enacted to
give effect to the Geneva Protocol on Arbitration Clauses 1923 and the convention on the execution of foreign
Arbitral awards 1927 enabling them to become operative in India.

The Geneva Convention Awards is incorporated under the 1996 Act in s. 53; section 57 lays down the
conditions for enforcement of award. Accordingly, a foreign award may be enforceable under Chapter II Part II
of the Act, if it satisfies the following conditions:

Non-Convention Awards – Can They Be Enforced?

It’s clear from the above paragraphs that foreign awards passed by countries that are signatory to the above two
conventions are clearly enforceable under Part II of the Arbitration and Conciliation Act. But the enforceability
with respect to foreign arbitral awards from non-convention countries was a bit unclear. In the year 2002, the
Supreme Court in Bhatia International v. Bulk Trading S.A finally cleared the air by stating that

Section 2(f) that defines International Commercial Arbitration makes no distinction between arbitrations held in
India or outside India. An international commercial arbitration may be held in a country which is a signatory to
either the New York Convention or the Geneva Convention. An international commercial arbitration may (also)
be held in a non-convention country.

The reason for this being, since Part II does not specifically exclude the enforceability of non-convention
awards therefore even non convention awards are enforceable in India.

The court, in this case further went on to say that even Part I will be applicable to arbitrations which take place
outside India. The court reasoned it by saying that

If Part I was to only apply to arbitrations which take place in India the term “Court” would have been used in
Sections 5 and 8 of the said Act. The Legislature was aware that, in international commercial arbitrations, a
matter may be taken before a judicial authority outside India. As Part I was also to apply to international
commercial arbitrations held outside India the term “judicial authority” has been used in Sections 5 and 8.

Secondly, the specific mention of non-obstante clause in Sections 45 and 54(Part II) of the act which reads as
“notwithstanding anything contained in Part I” proves that Part I is otherwise generally applicable to Part II of
the Act as well.

This observation also becomes quite significant in that case because we can use the same corollary to apply
section 34 and 37 of the Arbitration Act to foreign Arbitral awards also.

OP Malhotra, notes that

Though an arbitral award does not have the status of a court judgment, it will be enforceable under the law of
contract in the country where it was made. It is also enforceable in other countries on the principle of comity if
it possesses the essential judicial attribute of a judgment – that is finality.
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In Order for A Convention or A Non-Convention Award to Be Enforced the Award Must Attain Finality

In Badat & Co. v. East India Trading Co the question before the Apex Court was whether a foreign award
followed by another judgment from that jurisdiction recognizing that award makes it final for the purpose of
enforcement. Supreme Court was divided in this respect the minority judgment given by Subba Rao J said that
the position was same both in England and India which is that where the award is followed by a judgment in a
proceedings which is not merely formal but which permits of objections being taken to the validity of the award
by the party against whom judgment is sought, the judgment will be enforceable.

As a justification for enforcing foreign awards, court held that,

“It would be impossible to carry on the business of the world if courts refused to act upon what has been done
by other courts of competent jurisdiction.”

The only precondition that the court added while enforcing an award is that of finality. Where an award has no
finality till the entire procedure is gone through such an award cannot be enforced.

While comparing between a judgment on an award and an enforcement order he observed that:

On principle I cannot see why a distinction should be made between the two categories of cases. An
enforcement order as well as a judgment on an award serves the same purpose: they are two different
procedures prescribed for enforcing an award. In the case of an enforcement order a party applies to a court for
leave, the award; and on the granting of such leave, the award can be enforced as if it were a decree of a court

But the majority (MC Mudholkar and Raghubar Dayal JJ) differed from Subba Rao J, on the technical ground
that the cause of action for the suit that was based in New York must be said to have arisen at that place. Hence,
the cause of action, in so far as it rested on the judgment, did not arise within the limits of the High Court and a
suit for execution of such a judgment before the High Court was therefore beyond the jurisdiction of the High
Court. The majority further said the claim that award itself be enforced must also fail because according to the
New York law, an award does not become final until a judgment has been obtained on the basis of the award.

Thus, even in case of Non-conventional awards, the Supreme Court has upheld that such Non-conventional
award will be enforceable in India under the common law on grounds of justice, equity and good conscience

It is submitted that the dissenting view of Subba Rao J upholding the decision of the High Court, reflects the
correct law.

Relevant Court

In Brace Transport corporation case, the Indian Supreme Court has accepted the principle that enforcement
proceedings can be carried out wherever the property of the losing party is situated. The Court quotes a passage
from Hunter on Law of International Commercial Arbitration inter alia as follows.

A party seeking to enforce an award in an international commercial arbitration may have a choice of country in
which to do so; as it is sometimes expressed, the party may be able to go forum shopping. This depends upon
the location of the assets of the losing party.

Statistics

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Lastly, one may examine the enforcement statistics (including grounds for challenge) in relation to foreign
awards. Here one would notice that the courts have distinctly leaned in favour of enforcement and save for a
lone case, foreign awards have invariably been upheld and enforced. The statistics (on the basis of reported
cases) are as follows:

Conclusion
Viewed in its totality, India does not come across as a jurisdiction which carries an anti-arbitration bias or more
significantly which carries an antiforeigner bias. The figures show that notwithstanding the interventionist
instincts and expanded judicial review, Indian courts do restrain themselves from interfering with arbitral
awards. Judged on this touchstone, India qualities as an arbitration-friendly jurisdiction.

4) Various modes of Alternative Dispute Resolution (Forms of ADR)

Arbitration

The process of Arbitration cannot exist without valid arbitration agreement prior to the emergence of dispute. In
this technique of resolution parties refer their dispute to one or more persons called arbitrators. Decision of
arbitrator is bound on parties and their decision is called ‘Award’. The object of Arbitration is to obtain fair
settlement of dispute outside of court without necessary delay and expense.

Any party to a contract where arbitration clause is there, can invoke arbitration clause either himself or through
their authorized agent which refer the dispute directly to the arbitration as per the Arbitration clause. Here,
arbitration clause means a clause that mention the course of actions, language, number of arbitrators, seat or
legal place of the arbitration to be taken place in the event of dispute arising out between the parties.

What is the procedure to be followed once the arbitration clause is invoked?

• Initially, applicant initiates an arbitration by filing a statement of claim that specifies the relevant
facts and remedies. The application must include the certified copy of arbitration agreement.
• Statement of claim is a written document filed in the court or tribunal for judicial determination and a
copy also send to the defendant in which claimant described the facts in support of his case and the
relief he seeks from the defendant.
• The respondent reply to the arbitration by filing an answer against the arbitration claim of claimant
that specifies the relevant facts and available defenses to the statement of claim.
• Arbitrators selection is the process in which the parties receive lists of potential arbitrators and select
the panel to hear their case.

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• Then there is the exchange of documents and information in preparation for the hearing called
‘Discovery’.
• The parties meet in persons to conduct the hearing in which the parties present the arguments and
evidences in support of their respective cases.
• After the witnesses examined and evidences are presented, then there in conclusion arbitrator gives
an ‘Award’ which is binding on the parties.

Now the intricacies of the proceedings vary with the arbitration agreement. For example, there could be a
timeline which must be followed. This timeline would be stipulated in the agreement.

Section 8 of Arbitration and Conciliation Act, 1996 provides if any party disrespects the arbitral agreement and
instead of moving to arbitration, moves that suit to civil court, other party can apply the court for referring the
matter to arbitration tribunal as per the agreement but not later the submission of the first statement. The
application must include a certified copy of arbitration agreement and if courts satisfy with it, the matter will be
referred to arbitration.

Mediation

Mediation is an Alternative Dispute resolution where a third neutral party aims to assist two or more disputants
in reaching agreement. It is an easy and uncomplicated party centered negotiation process where third party acts
as a mediator to resolve dispute amicably by using appropriate communication and negotiation techniques. This
process is totally controlled by the parties. Mediator’s work is just to facilitate the parties to reach settlement of
their dispute. Mediator doesn’t impose his views and make no decision about what a fair settlement should be.

THE PROCESS OF MEDIATION WORKS IN VARIOUS STAGES. THESE ARE,

• Opening statement
• Joint session
• Separate session and,
• Closing

At the commencement of mediation process, the mediator shall ensure the parties and their counsels should be
present. Initially in the opening statement he furnishes all the information about his appointment and declares he
does not have any connection with either of parties and has no interest in the dispute.

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• In the joint session, he gathers all the information, understand the fact and issues about the dispute by
inviting both the parties to present their case and put forward their perspective without any
interruption. In this session, mediator tries to encourage and promote communication and manage
interruption and outbursts by the parties.
• Next is separate session, where he tries to understand the dispute at a deeper level, gathers specific
information by taking both the parties in confidence separately.
• Mediator asks frequent questions on facts and discusses strengths and weaknesses to the parties of
their respective cases.
• After hearing both the sides, mediator starts formulating issues for resolution and creating options for
settlement.
• In the case of failure to reach any agreement through negotiation in mediation, mediator uses
different Reality check technique like:

Best Alternative to Negotiated Agreement (BATNA)

It is the best possible outcome both the party come up with or has in mind. Its suitable situation as each party
thinks about their most favorable scenario looks like.

Most Likely Alternative to Negotiated Agreement (MLATNA)

For a successful negotiation the result always lies in the middle, mediator after considering both the parties
comes up with most likely outcome. Here result is not always in the middle but little left or right of the center
depending on negotiation situation.

Worst Alternative to Negotiated Agreement (WATNA)

It the worst possible outcome a party has in their mind for what could happen during negotiation.

It may be helpful to the parties and mediator to examine the alternative outside the mediation(specifically
litigation) and discusses the consequences of failing to reach agreement like: effect on the relationship of the
parties or effect on the business of the parties. It is always important to consider and discuss the worst and most
probable outcomes, it’s not always people get the best outcome.

Mediator discusses the perspective of the parties about the possible outcome at litigation. It is also helpful for
the mediator to work with parties and their advocates to come to a proper understanding of the best, worst and

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most probable outcome to the dispute through litigation as that would help the parties to acknowledge the
reality and prepare realistic, logical and workable proposals.

Conciliation

Conciliation is a form of arbitration but it is less formal in nature. It is the process of facilitating an amicable
resolution between the parties, whereby the parties to the dispute use conciliator who meets with the parties
separately to settle their dispute. Conciliator meet separately to lower the tension between parties, improving
communication, interpreting issue to bring about a negotiated settlement. There is no need of prior agreement
and cannot be forced on party who is not intending for conciliation. It is different from arbitration in that way.

Actually, it is not possible for the parties to enter into conciliation agreement before the dispute has arisen. It is
clear in Section 62 of The Arbitration and Conciliation Act, 1996 which provides,

• The party initiating conciliation shall send to the other party a written invitation to conciliate under
this part, briefly identifying the subject of the dispute.
• Conciliation proceedings shall commence when the other party accepts in writing the invitation to
conciliate.
• If the other rejects the invitation, there will be no conciliation proceedings.

Above provision clearly states conciliation agreement should be an extemporary agreement entered into after
the dispute has but not before. Parties are also permitted to engage in conciliation process even while the
arbitral proceedings are on (section 30).

Lok Adalat

Lok Adalat is called ‘People’s Court’ presided over by a sitting or retired judicial officer, social activists or
members of Legal profession as the chairman. National Legal Service Authority(NALSA) along with other
Legal Services Institutions conducts Lok Adalats on regular intervals for exercising such jurisdiction. Any case
pending in regular court or any dispute which has not been brought before any court of law can be referred to
Lok Adalat. There is no court fees and rigid procedure followed, which makes the process fast. If any matter
pending in court of referred to the Lok Adalat and is settled subsequently, the court fee originally paid in the
court when the petition filed is also refunded back to the parties.

Parties are in direct interaction with the judge, which is not possible in regular courts. It depends on the parties
if both the parties agree on case long pending in regular court can be transferred to Lok Adalat. The persons
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deciding the cases have the role of statutory conciliators only, they can only persuade the parties to come to a
conclusion for settling the dispute outside the regular court in the Lok Adalat. Legal Services Authorities (State
or District) as the case may be on receipt of an application from one of the parties at a pre-litigation stage may
refer such matter to the Lok Adalat for which notice would then be issued to the other party. Lok Adalats do not
have any jurisdiction to deal with cases of non-compoundable offenses.

*********************

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References:

- https://researchersclub.wordpress.com/2014/11/24/nature-and-scope-of-arbitration-in-india/
- https://www.lawteacher.net/free-law-essays/foreign/foreign-awards-and-foreign-
judgments.php#:~:text=The%20Geneva%20Convention%20On%20Awards&text=and%20good%20con
science.-
,In%201937%20the%20Arbitration%20(Protocol%20and%20Convention)%20Act%201937%20was,to
%20become%20operative%20in%20India.
- https://icsid.worldbank.org/services/mediation-conciliation/convention/process/selection-
conciliators#:~:text=When%20a%20party%20makes%20such,first%20conducts%20a%20ballot%20pro
cedure%3A&text=If%20the%20parties%20agree%20on,by%20agreement%20of%20the%20parties.
- https://viamediationcentre.org/readnews/MzEx/Evolution-and-Codification-of-ADR-mechanism-in-
India
- https://indianlegalsolution.com/composition-of-an-arbitration-tribunal/

- https://dsslaw.com.au/differences-between-arbitration-
conciliation/#:~:text=Arbitration%20is%20a%20formal%20process,a%20'round%20table'%20discussio
n.
- https://www.expertwitnessjournal.co.uk/images/MediationandArbitration.jpg
- https://www.latestlaws.com/media/2019/06/Mediation.jpg
- https://d2r2ijn7njrktv.cloudfront.net/IL/uploads/2020/06/20182137/50877.jpg
- https://www.lawnn.com/wp-content/uploads/2017/05/conciliation-proceedings.jpg
- https://blog.ipleaders.in/adr-alternative-dispute-resolution/https://legaldesk.com/documents/arbitration-
agreement
- https://www.uniassignment.com/essay-samples/law/the-effect-of-an-arbitration-agreement-law-
commercial-essay.php
- Book:
- Arbitration, conciliation and alternative dispute resolution, by C. P. VEENA, C. JAMNADAS & CO.,
Educational & Law Publishers
- લવાદીઅને સમાધાન અધધધનયમ, 1996, પ્રા. એન. સી.જાની,સી. જમનદાસ કંપની

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