ADR

The Arbitration and Conciliation Act 1996 is the key law governing arbitration in India. The
act has four parts:
Part I sets out general provisions on domestic arbitration;
Part II addresses the enforcement of foreign awards (Chapter 1 deals with New York
Convention awards and Chapter II with awards under the 1927 Geneva Convention);
Part III deals with conciliation; and
Part IV sets out certain supplementary provisions.
Parts I and II are the most significant and are based on the UNCITRAL Model Law and
the New York Convention respectively.
The Arbitration and Conciliation Act is broadly based on the UNCITRAL Model Law and
was enacted to consolidate, define and amend the law relation to domestic arbitration,
international commercial arbitration and the enforcement of foreign arbitral awards.
Disputes that are non-arbitral include: -
 disputes relating to rights and liabilities which arise out of criminal offences;
 matrimonial disputes;
 guardianship matters;
 insolvency and winding-up matters;
 testamentary matters; and
 tenancy matters.

Procedure
The parties can agree on the procedure for conducting the arbitration proceedings. If no such
procedure is agreed by the parties, the tribunal is authorised to conduct the proceedings in
such manner as it considers appropriate. The tribunal is expressly exempt from applying the
provisions of the Civil Procedure Code 1908 and the Evidence Act 1872. If, under the
arbitration agreement, the arbitration is to be administered by an arbitration institution, the
rules of that institution become a part of the arbitration clause by implication.

The Arbitration and Conciliation (Amendment) Act inserted amendments into the Arbitration
Act that require the tribunal to, as far as possible, hold oral hearings for the presentation of
evidence or for oral argument on a day-to-day basis, and not grant adjournments unless
sufficient cause is provided. The tribunal may impose exemplary costs on the party seeking
frivolous adjournments.
What is the applicable law (and prevailing practice) where a respondent fails to
participate in an arbitration? Can the courts compel parties to arbitrate? Can they
issue subpoenas to third parties?
Ans. If a respondent fail to participate in arbitration without sufficient cause, the tribunal may
proceed ex parte.
While arbitrators cannot compel third parties to appear before them, the tribunal or a party,
with the tribunal’s approval, may apply to the court for assistance in taking evidence. The
court may make an order requiring third parties to provide evidence directly to the
tribunal. If a person fails to attend in accordance with such order of the court, it is subject to
the same penalties and punishments as it may have incurred during court proceedings.

24/8/2017
Forum shopping – what is it? – Is a major problem in Indian Arbitration.
Ameel lal Chand vs Rishabh Enterprises
Competitive International Arbitration – Julian Dien lew, Mistelis and & Kroll (book to
refer)

Is the power of appointing an arbitrator administrative or judicial?

Administrative.

SBP vs Patel Engineering

- Was the first judgment that stated appointment of arbitrators is an administrative power
rather than judicial.
- Judgement by PS Balabrahmian.
- Because there is no application of judicial mind in the process.

Out of 100 matters which were referred for removing arbitrator on grounds of partiality only
3 have been successful.
Neutrality and impartiality
Schedule V of the ADR
Grounds of removal of an arbitrator
 Incapacity
 Bias
 Lack of Technical knowhow
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31/8/2017
Challenges to remove arbitrator: -
First appeal goes to the arbitrator.
If refused, you would appeal under Section 13 of the Arbitration and Conciliation Act 1996
Pathological clauses – very common in Indian practice.
They are clauses which usually contradict each other in the same agreement which cause
problems in the implementation of the agreement.

Section 13 – Procedure for Removal of Arbitrator.

1. Party Autonomy
2. 15 days after arbitrator constitutes the seat.
3. Reasons for Challenge have to been shown
4. Tribunal to decide on challenge of the withdrawal
5. Challenge only after award is rewarded.

Real damage theory – Section 13,34 and 37

Justifiable grounds – If you want to question the award of the arbitration, you can do it
between 15 days of receiving the award.

1. De jure or De facto
2. Fails to act without undue delay – Need to justify or showcase the failure
3. Resigns

Jurisdiction of the Arbital tribunal

7/9/2017

The concept of severability - Even if a company or individual is insolvent or bankrupt, the

arbitration agreement would still stand even though the original contract is void.
- Getting an office can never be argued under arbitration – But the expenses in the
materials provided within the office like chairs etc is arbitrable.
We cannot have arbitration on competition law in India.
2 types of arbitration
1) Subjective – Something that could have been arbitrated in other countries but cannot
be as the laws of the land do not allow such case to be arbitrable under its territory.
- Bar on age

2) Objective – Is where the subject matter of the dispute cannot be arbitrated – crime
against world at rem

- Inherent bar

A hearing has 3 stages: -

Post court stage
Pre court stage

Pre reward arbitration

What all things are applicable?
1. Anti-trust issues
2. Securities Market
3. Insolvency
4. IP (Intellectual Property)
5. Bribery &Fraud

8/9/2017
The competence competence allows the arbitration tribunal to decide on its own jurisdiction,
severability affects the outcome of this decision. Without the doctrine of severability, a
tribunal making use of its competence competence would potentially be obliged to deny such
act. Hence, doctrine is of severability is necessary to allow the concept of competence
competence to have a decision regarding matters of its own jurisdiction.
[ Need to add to this]
Seat and applicable law are in co relation

14/9/2017
MJAC
RC Chandel
Section 2(c) defines “award” In Arbitration and Conciliation Act 1996.
The procedural order is an order which lays down what
A party decided a substantial issue in form of a procedural order which the court had to
annul.
Seat – place where the case was arbitrated.

Q$

Types of awards:-
Para 16
The term final award is
Article 32(1)
When final award is made, the duty of arbitrators end. It finally disposes off the rights to the
arbitration commission, an arbitration award also includes an interim award.

An interim award is an award which does not necessarily decide an issue before tribunal. This
can be denoted with the use of word “interim” rather than use of word “final”
Interim awards should be settled in those awards which do not settle a separate part of the
proceeding finally. The interim award may or may not be part of the final award.

Article 34: Application for setting aside arbitral award

Lex arbitri
Eg- Seat in London (preference but not over Indian laws if contract b/w Indian) – Arbitration
agreement is Indian (governs the subject matter of the procedure itself, hence Indian law
under s.12 can be invoked if contradictory) – Procedure is ICC (It is the procedural law
which is being followed, protected by party autonomy; should not contradict Indian Law) –
contract enforced in India
Public policy becomes the biggest factor.
Law governing the procedure – internally how are things to be managed. If the main
arbitration agreement is illegal, then part of it is not correct.
Party autonomy – then Seat – Substantive law is decided by party autonomy – if conflict in
procedural law the law of the land, India is applicable. They get privacy only by ascertaining
the role they have to play
Conflict between, Law of the seat(London) and ICC (procedural law) , Law of seat will
prevail.

Challenges in order:-
Arbitral Tribunal
The arbitration authority
Internal lex arbitri – It is the procedural timetable, along with the procedural functioning is
considered internal lex arbitri

External lex arbitri -

Pathological clause – a flawed clause which cannot be implemented even if the parties agree
upon it.

20/9/2017
Judgement on Public Policies
A judgement: Renu Sagar – broad interpretation on public policy
ONGC vs Saw pipes
The arbitral tribunal did not follow the mandatory procedure under section 24-28 of
Arbitration and conciliation act.
It was argued that the award cannot be enforced as the procedure had been broken and the
court has acted beyond its jurisdiction and can hence be set aside under article 34 of
Arbitration and Conciliation Act 1996.
There are two schools of thought, the narrow scope view or the broader scope view.
The narrow view asks you to play within the laws you have.
Broader perspective would want to go beyond the wall or barriers of law for better public
policy.
It can be held that the term public policy in India can be held within the jurisdiction of the
court and article 34 will not be applicable and hence, the award will be passed.
Once the award has been rendered, the jurisdiction of any court is not to get into the merits of
the matter.
ONGC vs Saw Pipes
The court had no power to enter into the merits of the case, But here the court was concerned
to talk about such merits as it seemed necessary. The courts reached that such an act done by
the arbitral tribunal is flawed stating that the award could be contrary to public policy and if
so shall be overruled.
Rajasthan
After Saw pipes and Shree raj mehal,, there was a judgement ONGC vs Western Geco
The court said that fundamental policy of Indian law has not been elaborated by the court. 3
principles were recognized. 2 were already existing in India and one was added.
The three principals were: -
-Judicial approval
-Principles of natural justice
- Wednesburry principle of reasonableness (added)
- where a decision by a court is so perverse and irrational, that no
person would have arrived on it. Such judgement could be held
void.

General Clauses Act – important

Section 6 of General Clauses Act – read – Attorney general vs

___________________________________________________________________________
Part II

Whether a foreign arbitration or foreign parties coming to arbitrate in India, what

would be the nature of the award? Will it be considered a foreign award or national?
Bhatia vs Bulk trading was the most celebrated case answering the questions.
There was an Arbitration clause that the arbitration was to be as par the rules of International
Chamber of Commerce. The parties agreed that the arbitration would take place in Paris,
France.
Bulk Trading filed a writ petition in the HC of Madhya Pradesh under section 9.
Does section 9 get excluded from the ICC rules of Arbitration?
Hatia allows us to understand the difference between Part 1 and Part II
Section 49: Enforcement of Foreign Awards-
Section 49 states it is the judicial authority which is to decide if the arbitration award is null,
void, or incapable to be performed.
Can the judicial council decide such decisions on foreign awards in India and outside as well?
The courts stated that the Indian courts claimed to have jurisdiction as they said the said
actions are to be implemented in India only.
Part II recognises only 2 other kinds of conventions – The New York convention () and the
Geneva Convention
In Venture Global Vs Satyam
A case in which the award was rendered in London on a default payment with the remedy of
acquisition of shares and was to be enforced in USA, Michigan.
An award was directed by the ICIA to transfer shares to the respondent. The appellant filed a
petition in an Indian court and the Indian court overruled the previous record. The Judgment
of the SC stated, even though there is no provision in Part II, Section 34 of part I can be
considered of the same calibre as Section 48 and thus cases can come under the jurisdiction
of the Indian Courts.
Section 2.2 of the Arbitration and Conciliation Act, 1996 talks about “Scope”.
It clearly mentions “This Part shall apply where the place of arbitration is in India”

The court said that according to the wordings of Section 2 clause 2. Part I talks about the
arbitration in India, as It does not say that the arbitration awards can “only” be in
India or does not expressly mention that it does not have jurisdiction to render awards
on cases outside India. The court shall take it under its jurisdiction.
Hence, merely because it is not provided to not do such a thing/ merely because it has
not been written in the provision the court assumed the power to take such an action.
Hence, this judgement became one of the most Criticized judgement of the time.

Lok Adalats
Statuary status was given by Legal services authorities act 1987
Civil in nature,
No court fees are required to be payed.
Parties who have a civil suit or have a case which can go to the civil suit will come to such
courts.
The conciliators of such courts are called members of lok adalats.
The conciliators are in no means to show biased to try to coerce any side of the party into a
settlement.
They need to remain unbiased and try to reach to a settlement.
The decision of the Lok Adalat cannot be appealed but a case can be filed in the civil courts.

Agreement to arbitrate
Section 5,6,7,8
The main difference between interim award and partial award is the nomenclature and
everything can be considered similar. They are synonyms, lol.

ADR MID TERM ASSESSMENT NOTES

Q.1

Q.2
Albeit, the Apex court, recently, in the matter of Indus Mobile Distribution v. Datawind
Innovations [2017 SCC OnLine SC 442] has held that seat confers exclusive jurisdiction, it is
best to avoid giving lawyers food for thought and keep the ‘seat’ and jurisdiction consistent
in the dispute resolution clause.

Q3

The 3 conditions on which the court may refuse the award (sec 80, 81
Fraud
Confidentiality
Basic notions of justice.

Mediation in refugee disputes

Mediation is being used everywhere. In many hostage and refugee situations have been
solved by mediation.
As of 2016, 22 million refugees – Syrian crisis
Mercycorps have taken pocket of communities in Syria and Jordan to teach them about
mediation.
Mercycorps picked up the tribal leaders and taught them such districts.

Sovereign
Absolute immunity- the sovereign should have absolute immunities in accordance to the
actions they took for the state.
Restrictive immunity – Irrespective of the body you are, if you are involved in construction
and administrative abilities you shall be considered equal.

Evidence In International arbitration

Strict laws of evidence do not apply.
Compilation of rules was done on the basis of common and case law.
The priority was given to documentary evidence which is common in common law is
showcased as in comparison to the methods in civil law.

IBA (International Bar Association)

Article 1.3 of IBA shall govern the taking of governance except if any specific rules are set
out in regard to laws of the land under which such arbitration occurs.
Most evidence is allowed to be present.
Burdon of proof is on the onus of the individual who makes the claim.
There is a controversy regarding the method of cross examination as to its procedures.

Necessity for amendments in Arbitration and Conciliation Act

There were made amendments to ensure Indian arbitration comes at power with the world.
Certain provisions in Part I such as appeal to interim relied u/s 9 can be made in foreign
seated arbitrations.
The arbitral tribunal must commence within 90 days
Section 11 provided for the judicial power of appointment of arbitrators.
Section 12 was amended which deals with the ground for challenging the arbitrator. The
amendment set out a list of circumstances which gave a rise of justifiable doubts telling us
whether the arbitrator can be challenged in accordance to the list.
S. 29 talks about rendering awards in 12 days.
S.29 B is meant to fast track the arbitration and reduce delays.
Arbitral awards can be set aside if they go against public policy. Saw pipes was a case which
went against such public policy. If such a award is given out, it can be set aside.
Section 36

The time limit is not necessarily followed by the court. The main objective of the amendment
was to fast track and increase the efficiency.

The ease of business ranking 2016 -17 – from 178-172

A lot of reforms are being done with the Finance minister and 8 core members.
(Nirmala Sitaram)
The
Time- 1420 – Amendments to s9 and s17, ensure there is minimum court intervention and
alternate dispute can solve the issue.
S.9 says that before you enforce interim

When the third party funding is involved, there is loss in party autonomy

Emergency Arbitration
1) ICC
- Incorporated in Article 29 - to read with Schedule V
- The president appoints the emergency arbitrator, ASAP, usually within 2 days of the
declaration
- Independence and impartiality is necessary and has to declare any facts which may creat
justifiable doubts.
- The incentive is to be crisp and precise and hence usually articulated in points.
- Needs to ensure each party has opportunity to present their case.
- Ex party discretion is given.
- the US courts have held the award at power with a final award.

2) SIAC
- Rule 262- to be read with schedule 1
- As in haste, the rule to decide arbitrator lies on the president in a limited period of a day.
- The order of relief decided will ceasue to have effect if nothing is done in accordance in
a period of 90 days after the order being given.

3) LCIA
- Article 9B
- Given wide discretion of governance
Latest 2012 rules which brought these amendments.

Applicable laws and seat theory

1.law of the seat
2. law governing the substance
3.law governing the procedure
4.

Infrastructure
Average duration of arbitration settlement: 7 years
8% India’s GDP

Doctrine of Stare decisis does not apply in arbitration. Precedent is not binding.

The functionality of precedents matters

Psy pen and city orient limited
Must plsy fur vonfigrtinaog s gsyhry og lodinh in==j=hig
Appellate review process is either inherent in the treaty or the facts in hand