KRISHNA INSTITUTE OF LAW

(Approved by BCI affiliated to CCSU, Meerut)

NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

LL.B. – 4th Sem

Arbitration
Arbitration is a settlement of a dispute by the decision, not of a regular
and ordinary court of Law but of one or more persons called arbitral
tribunal. Considering the delay, inconvenience, and expenses involved
through regular courts, arbitration is an efficient and economical
substitute to litigation. However, as the arbitrators are not always
beneficiary of legal training, legal principles may be over-looked, rules of
evidence may be waived and miscarriage of justice may entail. Therefore,
court may have to intervene to regulate arbitral proceedings, to set aside
the award or to give the legal sanction to the award the arbitrator.
Advantages of Arbitration :
1. avoidance of publicity, as the proceedings are held in private.
2. simplicity of procedure as proceedings are held more informally.
3. avoidance of delay and uncertainty involved in appeals. as the award,
assuming it to be valid is final.
4. reduction of expenses in most cases.
5. saving of time as proceedings are quicker than a trial in a Court.
6. appointment of a person having appropriate technical qualification as
arbitrator, should the matter be of a technical nature.
7. social efficacy, the award of the arbitrator being the decision by the
consent of parties.
8. candour in presenting facts and figures knowing that trade
competitors are not present to gain knowledge to the detriment of the
person giving the evidence.

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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

Disadvantages of Arbitration :
1. The arbitrator may be incompetent (both in the trade and in the
legal aspects of the matter) or biased.
2. injustice may result from the informality of the procedure.
3. proceedings under the Arbitration Act generally suffer from
infirmities and mostly challenged in Courts has declined the
overall utility of the provision.
4. proceedings under the Act could become highly technical
accompanied by unending prolixity at every stage providing a
legal trap to the unwary.
5. informal forum chosen by the parties for expeditious disposal of
their disputes by the decisions of the C7rts gets clothed with
legalese of unforeseeable complexity .
Types of Arbitration
1. Ad-hoc Arbitration : When a dispute or difference arose between
the parties in course of commercial transaction and the same could
not be settled friendly by negotiation in form of conciliation or
mediation, in such ease ad-hoc arbitration may be sought by the
conflicting parties.
2. Institutional Arbitration : This kind of arbitration is a prior
agreement between the parties that in case of future differences or
disputes arising between the parties during their commercial
transactions, such differences or disputes will be settled by
arbitration, it will be referred to the named institution of which one
or more of them are members.
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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

3. Contractual Arbitration : Due to growth of commercial activities

rather commercial transactions in modern time there are frequent
occasions for differences and disputes between the parties which is
required to be settled amicably. Thus, to seek early settlement of
differences and disputes without taking recourse to the court of law,
the parties involved in commercial transactions choose to
incorporate and arbitration clause as a part of the agreement to
refer their future or existing differences or disputes to a named
arbitrator/arbitrators to be appointed by a designated authority.
This is known as contractual arbitration.
4. Statutory Arbitration : It is mandatory arbitration which is
imposed on the parties by operation of law. In such a case the
parties have no option as such but to abide by the law of land. It is
apparent that statutory arbitration differs from the above three
arbitration because :
(i) the consent of parties is not necessary,
(ii) it is a compulsory arbitration,
(iii) it is binding on the parties as the law of land.
5. Domestic Arbitration : The term "Domestic Arbitration" denotes
arbitration which occurs in India. This is when the subject-matter
rather scope of the agreement, the merits of the dispute and the
procedure for arbitration are all governed by Indian law or when
the cause of action for the dispute has arisen wholly in India or
where the parties of commercial transaction are otherwise subject
to Indian jurisdiction.

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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

Examine the capacities of various persons to submit disputes to

Arbitration.
The arbitration agreement is a contract. The parties thereto must be
competent to enter into a contract so that they can be bound by the
award of the arbitrator. The capacity to submit disputes to arbitration is
co-extensive with the capacity to contract. The capacities of various
persons to submit disputes to arbitration are as under :
1. Minor or lunatic : A minor or a lunatic cannot refer disputes to
arbitration. But a natural guardian can enter into an arbitration
agreement on behalf of a minor provided it is for the benefit of the
minor or it is reasonable and proper for the protection of the minor.
2. Manager of a Joint Hindu family : He can submit to arbitration the
partition of the joint family property provided he is acting bona fide
for the benefit of the family.
3. Agent : An agent duly authorised has power to refer the matter in
dispute to arbitration.
4. Attorneys and Counsels : They have a general authority over the suit,
the mode of conducting it, and all that is incidental to it. They have,
therefore, implied authority to submit to arbitration on behalf of their
clients provided it is in the best interest of the clients and tH.tre is no
express direction not to submit.
5. Persons jointly interested : Where a person submits on behalf of
himself and others jointly interested in the matter in dispute, without
authority from others, he will be hound though the others will not be.
But with an express authority he may submit on behalf of others in
which case they will also be liable.

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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

6. Partner : A partner can refer a dispute to arbitration only when

express authority is given to him by the partnership agreement or by
custom or usage of trade. Ile has no implied authority to refer a dispute
relating to the business of the firm to arbitration [Sec. 19 (2) of the
Indian Partnership Act, 1932].
7. Trustee : A trustee can submit to arbitration.
8. Insolvent : An insolvent cannot submit disputes to arbitration so as to
bind his estate or the Official Receiver or Assignee but the Official
Receiver or Assignee may do so with the leave of the court.
Distinguish between Arbitrator and Mediator

Arbitrator Mediator
1. An arbitrator is a legally 1. mediator acts only to submit the
authorised person to determine will of the parties and his
the difference or dispute suggestion are not deemed final.
between the parties to such
dispute according to the terms of
arbitration agreement
2. An arbitrator gives award on the 2. his statement is not held binding
dispute and such award is held on the parties. He can merely
legally final and binding on the persuade the points to follow the
parties, same.
3. The mediator presuades parties
3. an arbitrator hears the case to dispute for compromise,
before giving his final decision
on the dispute.

5
KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

Distinguish between Conciliation and Arbitration.

Conciliation Arbitration
1. conciliation may be resorted to 1. In case of arbitration, a prior
without the existence of such 'agreement in writing' to submit
prior agreement and it generally to arbitration disputes which
relates to disputes which have have arisen or which may arise in
already arisen. future, is necessary.
2. the role of conciliator is to help 2. the arbitrator does not merely
and assist the parties to reach an assist the parties but he also
amicable settlement of their actively arbitrates and resolves
dispute, the dispute by making an arbitral
award.
3. In case of conciliation a party 3. it is not so in arbitration as the
may require the conciliator to information given by a party is
keep the 'factual information subjected to scrutiny by the other
confidential and not to disclose it party. Thus, there is no question
to the other party, of confidentiality in case of
arbitration awards.
4. A settlement agreement may be 4. An arbitration award on the
made by the parties themselves other hand, is not merely a
and the conciliator shall settlement agreement but it is a
authenticate the same. judgment duly signed by the
arbitrator.
5. The conciliation proceedings 5. Arbitration proceedings cannot
may be unilaterally terminated be so terminated.
by a written declaration by a
party to the other party
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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

6. Conciliator is subjected to 6. There are no such disabilities

certain disabilities under S. 80 of imposed on an arbitrator or
the Act and he cannot act as parties to arbitral proceedings.
arbitrator or as council
7. The conciliation proceedings 7. The arbitration proceedings or
cannot be used as evidence in awards may be used as evidence
any arbitral or judicial in any judicial proceedings
proceedings.
8. A conciliator can conciliate 8. An arbitrator has to decide
irrespective of law. according law,

Arbitration Agreement
“Arbitration Agreement” means an agreement by the parties to submit to
arbitration all or certain disputes which have arisen or which may arise
between them in respect of a defined legal relationship, whether
contractual or not.
An arbitration agreement may be in the form of an arbitration clause in a
contract or in the form of a separate agreement. An arbitration agreement
shall be in writing.
Essentials of arbitration agreement
1. There is no particular form of agreement - arbitration agreement
to be made in specific clauses, but no particular from of arbitration
agreement is prescribed under the act.
2. Agreement must be in writing – S.7(3) makes it necessary that an
arbitration agreement must be in writing and so it does not
recognise oral or verbal agreement .
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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

3. Although signing of the agreement is essential but not always –

S.7(4) affirms condition essential that it recognise the modern mode
of communication such as telex telegrams letters and also a
arbitration agreement.
4. Arbitration agreement may be in the form of an arbitration
clause or separate agreement – S.7(5) explain that a contract
agreement if the reference is made as to arbitration clause it will
amount to an arbitration agreement .thus an arbitration clause can
be a part of a contract provided it is in writing .
5. There should be intention of the parties to have their disputes or
differences referred and decided through arbitration.
Composition of Arbitral Tribunal [Section 10 to 151)
A person who is appointed to determine differences and disputes
between two or more parties by their mutual consent is called an
arbitrator. He is an extra-judicial tribunal whose decision is binding on
the parties. It is not enough that the parties appoint an arbitrator. The
person who is so appointed must also give his consent to act as an
arbitrator. His appointment is not complete till he has accepted the
reference.
1. Number of Arbitrators [Section 10]
Section 10(1) number of arbitrators for arbitral tribunal will be
determined according to the free choice of the parties to the dispute such
freedom of choice is restricted by one limitation that the number of
arbitrators, so chosen, shall not be an even number.

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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

Section 10(2) provides that in the event of failure to determine the

number of arbitrators by the parties (only uneven) the arbitral tribunal
shall be composed of a sole arbitrator.
2. Appointment of Arbitrator Section 11
The legislative scheme of section 11 is very clear. If the parties have
agreed on a "procedure for appointing the arbitrator or arbitrators as
contemplated by section 11(2), then the dispute between the parties has
to be decided in accordance with the said procedure and recourse to the
Supreme Court or, the High Court or any person or institution designated
by such court cannot be taken straightaway
1- While appointing an arbitrator under section 11 of the Arbitration
and Conciliation Act, 1996, two things must be kept in mind
 That there exists a dispute between the parties to the agreement
and that the dispute is alive.
 Secondly, an arbitrator must be appointed as per the terms and
conditions of the agreement and as per the need of the dispute
2- Failing any agreement referred to in sub-section (2), in arbitration
with three arbitrators each party shall appoint one arbitrator, and
two appointed arbitrator shall appoint the third arbitrator who shall
act as the presiding arbitrator
3- If the appointment procedure in sub-section (3) applies and—(a) a
party fails to appoint an arbitrator within thirty days from the
receipt of a request to do so from the other party; or (b) the two
appointed arbitrators fail to agree on the third arbitrator within
thirty day from the date of their appointment,

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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

4- The appointment shall be made, upon request of a party, by the

Supreme Court or as the case may be the High Court or any person
or institution designated such court
5- if the parties fail to agree on the arbitrator within thirty days from
receipt of a request by one party from the other party to so agree
the appointment shall be made, upon request of a party, by the
Supreme Court or, as the case may be, High Court or any person or
institution designated by such Court
3. Nationality of Arbitrator [section 11(1)] and [section 11(9)]
A person of any nationality may be an arbitrator (unless otherwise
agreed by the parties) [section 11(1)]. The parties can agree as to the
nationality of an arbitrator in their agreement. In case of international
commercial arbitration where sole or third arbitrator is to be appointed,
the Supreme Court or the person or institution designated by that court
may appoint an arbitrator of a nationality which is different from the
nationalities of the parties. [Section 11(9)]
In Malaysian Airlines Systems BHD v. Stic Travels P. Ltd., (2011) 1 -
Comp Li 217 (SC), the Supreme Court held that the word 'may' in section
11(9) is not intended to be read as 'must' or 'shall'. The Court held that in
case the party who belongs to a nationality other than that of the
proposed arbitrator and no objection, the Supreme Court or the person
or institution designated by that Court can appoint an arbitrator
belonging to a nationality gone of the parties.
Arbitration agreement providing for three arbitrators [Section 11(3)1
and [Section 11(4)]

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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

The parties are given the freedom under the Act to select the arbitrators
of their own choice, but if the parties fail to do so, then in arbitration
with three arbitrators, each party shall appoint one arbitrator, and the
two appointed arbitrators shall appoint the third arbitrator, who shall
act as the presiding arbitrator
PROCEDURE FOR CHALLENGING THE APPOINTMENT OF
ARBITRATOR
a) A party may challenge an arbitrator appointed by him or in whose
appointment he has participated only for reasons of which he
becomes aware after the appointment has been made.
b) Not with standing any prior agreement to the contrary any person
whose relationship with the parties or counsel or the subject matter
of the dispute fall under any of the categories in the seventh
schedule shall be ineligible to be appointed as an arbitrator.
c) According to section 12 appointment of an arbitrator can be
challenged only if
 Circumstances exist that give rise to justifiable doubts as to his
independence or impartiality
 He does not possess the qualifications agreed upon by the
parties
d) When a person is approached for acting as an arbitrator he must
disclose in writing.
a. Any circumstances/grounds which give rise to justifiable
doubts as to his independence or impartiality or neutrality like.
b. Any circumstances/grounds which give rise to justifiable
doubts as to his independence or impartiality or neutrality.

11
KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

Russel on arbitration and conciliation has suggested the grounds for

challenge of appointment of arbitrators which are as follow:
1. Where the authority accorded to the arbitrator is not used or
misused
2. Misbehavior, no integrity, insincerity committed on the part of the
arbitrators
3. Incompetence due to lack of requisite qualification
4. Other matters of special circumstances hitting the independence
impartiality expertise and sincerity of the arbitrators
When can the mandate of an arbitrator be terminated
Before 2015 amendment it was argued that section 14 provided only for
termination of the mandate of the arbitrator and not for the appointment
of a new arbitrator. Therefore, in some cases, once the court declared that
the arbitrator mandate ought to be terminated, the party was required to
separately file an application under section 11 for appointment of a new
arbitrator. After 2015 amendment if a party files an application before
the court for termination of the mandate of an arbitrator under section
14, and the court sees it as a fit case for termination, the same court can
also appointment a new arbitrator to substitute the former.
The grounds for termination of mandate of an arbitrator or failure
or impossibility to act are
1 an arbitrator becomes de jure and de facto unable to perform his
functions or for some other reasons fails to act without undue delay
2 he withdraws from his office or the parties agree to the termination of
his mandate.

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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

Thus, the authority of an arbitrator shall be terminated, if he himself

withdraws from the office or the parties agree to do so
Substitution of arbitrator or termination of mandate [Section 15]
Section 15 of the arbitration and conciliation act, 1996 provides for
termination of mandate and substitution of arbitrator.
In Ram Pal Sharma v. Somnath Sharma, AIR 2009 NOC 1733 (HP), the
court held that where the parties agreed before sub judge that award of
arbitral tribunal be set aside another arbitrator be appointed, it amount
to termination of mandate of arbitrator by consent of parties and such
order is not improper.
ADRS
ADR is a process where disputes are settled with the assistance of a
neutral third person generally of parties own choice, where the neutral is
generally familiar with the nature of the dispute and the context in which
such disputes normally arise; where the proceedings are informal, devoid
of procedural technicalities and are conducted, by and large, in the
manner agreed by the parties;
1. In its wider sense ADR—It can include arbitration also — because
arbitration constitutes an alternative to litigation.
2. In its Narrower sense ADR—It excludes arbitration (as well as
litigation) because (like litigation) arbitration also contemplates an
imposed decision. In the narrower sense, the expression ADR' embraces
only those processes in which the decision finally arrived at is with the
consent of the parties. 'Amicable settlement' is an appropriate word to

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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

denote modes of dispute resolution in which the parties retain their

freedom to decide the outcome of their dispute.
Advantages of ADR
(1) The alternative means of dispute redressal can be invoked at
any time, even if the matter is pending in the Court of Law.
(2) The disputes can be resolved comparatively more
economically and speedily. Sometime disputes are resolved within
one or two days' time because the procedure adopted by the
mediator is controlled and consented by the parties.
(3) The system of alternative means of dispute redressal can be
followed without seeking legal assistance from the advocates-
lawyers.
(4) This system effectively reduces the work-load of the court.
(5) Finally, this system provides flexible procedure, strict
procedure of law is not applicable to alternative means of dispute
redressal.
Various ADR Techniques –
(i) Negotiation : It is the simplest means for redressal of disputes. In
this mode the parties begin their talk without interference of any third
person. The aim of negotiation is the settlement of disputes by exchange
of views and issues concerning the parties.
(ii) Conciliation and Mediation : where the parties fail to arrive at
any settlement of their dispute by negotiation, in such circumstances
the parties may take the assistance of some third person who is
independent in respect of the subject-matter of dispute. Such person

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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

induces the parties to come to an amicable settlement of their dispute

by means of conciliation and mediation. In course of conciliation and
mediation that independent person may use his goodwill and
impression in resolving disputes. He also induces the parties to
exchange their disputed points relating to the subject-matter of
dispute.
(iii) Med-Arbitration : This mode is a link between the settlement and
arbitration. In this made the conflicting parties may authorise the third
independent person to adjudicate upon the subject-matter of dispute.
Wherein the settlement by negotiation is failed, the mode of med-
arbitration can be followed. This mode is not controlled by the
Arbitration and Conciliation Act, 1996.
(iv) Medola : This process begins when the parties fail to reach at any
settlement of dispute by mediation. In this mode that person who was
doing mediation occupies the place of arbitrator. This person
impartially picks up the disputed points from the proposals, taken up
between the parties during the negotiation. Disputed points so picked
up by that third person is binding upon the parties. That person keeps
the agreed points aside and the disputed points are taken up so as to
settle the dispute by taking to a middle course to the satisfaction of the
parties in dispute.
(v) Mini trial : It is different from a formal case trial. In this mode the
parties have the freedom to select an impartial, and honest person of
undisputed integrity and the parties can present their case in a
summarised form. That person on the basis of submission of the
parties, considers the positive and negative points concerning the

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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

parties and thereafter he renders advice to the parties and

consequently the parties negotiate on such advice. In fact that person
acts as a catalyst in such mini trial.
(vi) Arbitration : According to Byrne's Law Dicti6nary—Arbitration
means the determination of disputes by the decision of one or more
persons called arbitrators. Practically, every question, which might be
determined by a civil action, may be referred to arbitration
LOK ADALAT
The Lok Adalats are an innovative form of voluntary efforts for amicable
settlement of disputes between the parties. These are not akin to
regularly constituted law courts and are to supplement and not to
supplant the existing adjudicatory machinery. One of the important
aspect of Lok Adalat is that it provides speedy and inexpensive justice at
the very door-steps of the people. It is a non judicial organized primarily
by judiciary.
The Lok Adalats are being organised by the State Legal Aid and Advice
Boards at different place in the country and have become popular for
post-litigation settlements and as a supplementary forum for resolution
of disputes.
Organisation of Lok Adalats :
1. According to S. 19 (1) of the Legal Services Authorities Act, 1987, every
State Authority or District Authority or the Supreme Court Legal
Services Committee or every High Court Legal Services Committee may
organise Lok Adalats at such intervals and places and for exercising
such jurisdiction and for such areas as it thinks fit.

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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

2. Every Lok Adalat organised for an area shall consist of such number of-
a. Serving or retired judicial officers; and
b. Other persons, of the areas as may be specified by the State
Authority or the District Authority or the Supreme Court Legal
Services Committee or the High Court Legal Services Committee,
3. The experience and qualifications of other persons referred to in Cl. (b)
of Sub-sec (2) for Lok Adalats organised by the Supreme Court Legal
Services Committee shall be such as may be prescribed by the Central
Government in consultation with the Chief Justice of India.
4. The experience and qualifications of other persons referred to in CI. (b)
of Sub-sec. (2) for Lok Adalats other then referred to in Sub-sec. (3)
shall be such as may be prescribed by the State Government in
consultation with the Chief Justice of the High Court.
5. 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 :
 Any case pending before; or
 Any matter which is falling within the jurisdiction of and is not
brought before, any court for which the Lok Adalat is organized.
Kinds of Cases Decided by Lok Adalat :
In the beginning, civil revenue and criminal disputes, which were
compoundable. were taken up by the Lok Adalats. With the success of Lok
Adalats in bringing about settlement of such disputes and the cooperation
extended by the Chairman of the General Insurance Corporation of India,
the CILAS requested the State Legal Aid and Advice Boards to take up
motor accident compensation claims cases also at the Lok Adalats. This
has resulted in settlement of a large number of long pending before Motor
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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

Accident Claims Tribunal cases which would have otherwise taken years
for adjudication. In addition, Lok Adalats are taking up cases involving
mutation of lands, land pattas, forest lands, bonded labour, land
acquisition cases, matrimonial and family disputes and bank loan cases.
etc.
Cognizance of Cases by Lok Adalats : S. 20 (1) of the Legal Services
Authorities Act, 1987 provides that, where in any case referred to in CI.
(i) of Sub-sec. (5) of S. 19—

 The parties thereof agree; or

 (b) One of the parties thereof makes an application to the court, for
referring the case of the Lok Adalat for settlement and if such court
is prima facie satisfied that there are chances of such settlement; or
o The court is satisfied that the matter is an appropriate one to
be taken cognizance of by the Lok Adalat, The court shall refer
the case to the Lok Adalat .
(2) the Lok Adalat under Sub-sec. (1) of S. 19 may, on receipt of an
application from any one of the parties to any matter referred to in Cl. (ii)
of Sub-sec. (5) of S. 19 that such matter needs to be determined by a Lok
.Nrialat, refer such matter to the Lok Adalat, for determination.
(3) where any case is referred to lok adalat under sub-sec.(1)or where a
reference has been made to it under sub sec.(2) the lok adalat shall
proceed to dispose of the case or matter and arrive at a compromise or
settlement between the parties.
(4) every lok adalat shall while determining any reference before it under
this act with utmost expedition to arrive at a compromise or settlement

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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

between the parties and shall be guided by the principals of justice

,equity fair play and other legal principles .
(5) where no award is made by the lok adalat on the ground that no
compromise or settlement could be arrived at between the parties ,the
record of the case shall be returned by it to the court ,from which the
reference has been received under sub-sec.(1)for disposal in accordance
with law.
(6) where no award is made by lok adalat on the ground that no
compromise or settlement could be arrived at between the parties ,in
matter referred to in sub-sec.(2),the lok adalat shall advice that parties to
seek remedy in a court.
(7) where the record of the case is returned under sub-sec.(5) to the
court .such court shall proceed to deal with such case from the stage
which was reached before such reference under sub-sec.(1).
Powers of lok adalats:
According to s.22
(1), the lok adalat shall for purposes of holding any determination under
this act ,have the same powers as are vested in a civil court under the
C.P.C. while trying a suit in respect of following matters namely:
(a)The summoning and enforcing the attendance of any witness and
examining him on oath;
(b) The reception of evidence on affidavits;
(c) The requisitioning of any public record or document or copy of such
record or document from any court or office; and
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NH-24, Jindal Nagar, Ghaziabad-201002
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(e) The reception of evidence on affidavits;

(d)Such other matters as may be prescribed .
2. every lok adalat shall have the requisite powers to specify its own
procedure for the dertemination of any disputes coming before it.
3. every Lok adalat shall be deemed to be a civil court for the purpose of S.
195.
Meaning of Fast-track Arbitration
Fast Track arbitration, a new form of arbitration, has evolved to ensure
raped and efficient settlement of disputes. Parties can, without the typical
war of attrition, resolve disputes rapidly and cost effectively by fast track
arbitration.
Main Features of Fast-track Arbitration:
I. Faster : It is pertinent to note that faster speed ensures resolution
of disputes in an agreed period. Fast-track arbitration gives Parties
a chance to secure a settlement of disputes in a given time frame by
eliminating abuses and delays of traditional arbitration. It causes
meaningful reduction in length of arbitration.
II. Economical: India is a country of poor men residing in rural and
urban areas the economical solution of thee n areas, So a poor
litigant will prefer e disputes. The costs of fast-track arbitration are
comparatively low due to reduction in the length of arbitration,
III. Final and Binding Settlement : Fast-track arbitration agreement is
binding on parties and it can be enforced by any other arbitration
agreement between parties.

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KRISHNA INSTITUTE OF LAW
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NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

Legal Aid to Poors

According to Art. 39-A of the constitution of India the state shall secure
that the operation of legal system protects justice, on the basis of equal
opportunity, and shall, in particular, provide free legal aid, by suitable
legislation or schemes or in any other way to ensure that opportunities
for securing justice are not denied to any citizen by reason of economic or
other disabilities.

The Constitution of India calls upon the state to provide free legal aid to
ensure that opportunities for securing justice are not denied to any
Citizen by reason of economic or other disabilities. It was in discharge of
this obligation that the Committee for Implementing Legal Aid
Schemes (CILAS) was established in 1980. The CILAS had initiated
non-formal forum known as Lok Adalats.

Criteria for Giving Legal Services Under the Legal Services

Authorities Act, 1987 :
It provides that every person who has to file or defend a case shall be
entitled to legal services under this ACT it that person, is :
(a) A member of a Scheduled Caste or Scheduled Tribe;
(b) A victim of trafficking in human beings or beggar as referred to in
Art. 23 of the Constitution;
(c) A women or a child;
(d) A mentally ill or otherwise disabled person;
(e) A person under circumstances of undeserved want, such as being a
victim' of a mass disaster, ethnic violence, caste atrocity, flood,
drought. earthquake or industrial disaster; or
(f) An industrial workman; or
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KRISHNA INSTITUTE OF LAW
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NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

(g) In custody including custody in a protective home, in a juvenile

home in a psychiatric hospital or phychiatric nursing home
(h) In receipt of annual income less than rupees nine thousand or such
other higher amount as may be prescribed by the State Government,
The National Legal Services Authority
Section 3(1) of Legal Services Authorities Act provides that the Central
Government shall constitute a body known as the National Legal Services
Authority to exercise the powers and perform the functions conferred on:
Sub-section (2) of Section 3 of this Act.
Organisation of NLSA
It provides that the Central Authority shall consist of :
(a) The Chief Justice of India who shall be Patron-in-Chief.
(b) A serving or retired Judge of the Supreme Court to be nominated by
the President, in consultation with the Chief Justice of India, who shall
be the Executive Chairman.
(c) Such number of other members, possessing such experience and
qualification as may be prescribes by the Central Government, to be
nominated by that Government in consultation with the Chief Justice
of India.

According to Rule 3 of National Legal Services Authority Rules the

Central Authority shall consist of not more than twelve members and
further it provides that the following shall be the ex-officio members of
the Central Authority:

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NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

(i) Secretary, Department of Legal Affairs, Ministry of Law, Justice and

Company Affairs, Government of India or any of his nominee;
(j) Secretary. Department of Expenditure in the Ministry of Finance,
Government of India or any of his nominee;
(k) Two Chairmen of the State Legal Services Authority as may be
nominated by the Central Government in consultation with the Chief
Justice of India.
Qualification to be a Member
A person shall not be qualified for nomination as a member of the
Central Authority unless he is:
(a) an eminent person in the field of law, or
(b) a person of repute who is especially interested in implementation of
the legal services scheme, or
(c) an eminent social worker who is engaged in the upliftment of the
weaker sections of the people which includes the Scheduled Castes,
Scheduled 'Tribes, women, children, rural and urban labours.

Qualification to be a Member-Secretary
Rule 5 provides that for a person to be the Member-Secretary of Central
Authority he must be :
(l) an officer of Indian legal service who has held a post not below
the rank of Additional Secretary to the Government of India, or
(ii) a member of the State Higher Judicial Service who has held the post
of the District Judge atleast for three years, or.
(iii) an officer of other organised Central services who has held a post of
Joint-Secretary to the Government of Indian or equivalent for a minimum
period of three years, or

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KRISHNA INSTITUTE OF LAW
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NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

(i) an officer of the organised State services who has held a post
equivalent to the Joint-Secretary to the Government of India for a
minimum period of 5 years.

Powers and Functions of NLSA

(1) to work out modalities of the legal services, schemes and
programmes approved by the Central Authority and ensure their effective
monitoring and implementation throughout the country;
(ii) to exercise the powers related to administrative, finance and budget
matters as that of the Head of the Department in the Central Government:
(iv) to manage the funds, records and properties of the Central
Authority;
(v) to maintain true and proper accounts of the Central Authority
including checking and auditing in respect thereof periodically;
(vi) to draft and prepare Annual Income and Expenditure Accounts
and balance-sheet of the Central Authority;
(vii) to liaise with the social action groups land the State Legal
Services Authority;
(viii) to prepare and maintain up-to-date and complete statistical
information, including process made in the implementation of
various legal services programmes from time to time;
(ix) to process project proposal for financial assistance and issue
utilisation certificates thereof;
(x) to convene meetings/seminars and workshops
(xi) to produce video and documentary films and publish material,
literature and publications to inform general public about the
various aspect of the legal services programme, and

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KRISHNA INSTITUTE OF LAW
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NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

(xii) to perform such other functions as may be required for

effective functioning of the Central Authority.
High Court Legal Services Committee
Section 8-A of the Legal Service Authorities Act, 1987 provides that the
State Authority shall constitute a committee to be called the High Court
Legal Services Committee for every High Court, for the purpose of
exercising such powers and performing such functions as may he
determined by regulations made by the State Authority.
The High Court Legal Services Committee shall consist of—
(a) sitting Judge of the High Court who shall he Chairman; and
(b) such number of other members possessing such experience and
qualifications as may be determined by regulations made by the State
Authority, to be nominated by the Chief Justice of the concerned High
Court.

Functions of the High Court Legal Services Committee

The main functions of the High Court Legal Services Committee may be
stated as follows :—
(1) to implement the policies, programmes and scheme of legal aid,
legal advice and legal services as may be formulated by the State
Authority under the Legal Services Authorities Act, 1987;
(2) to provide free legal aid, legal advice and legal services to persons
who are eligible for the purpose under the Act or Rules framed there
under;
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KRISHNA INSTITUTE OF LAW
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NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

(3) to organise Lok Adalats for cases pending before the High Court;
and
(4) to encourage settlement of cases by negotiations, conciliation and
arbitration.
Mediation
Mediation is the most frequently adopted ADR technique. It contemplates
the appointment and intervention of neutral third person who helps the
parties to reach a negotiated settlement. He does not have the powers to
adjudicate or impose an award. It is conducted on a confidential basis and
without prejudice to the legal rights and remedies of the parties.
Benefits of Mediation
1. informality : no courts rules or legal precedents are involved
mediation. The mediator does not impose a decision upon the
parties. Parties can look to developing creative solutions to resolve
matters and the solution rests with the parties them selves.
2. Privacy and Confidentially : the mediation conferences takes place
in a private setting such as a conference room at any of the
Arbitration Associations. Mediation is not a matter of public record.
Its confidentially is maintained.
3. Time and Cost Savings : mediation generally lasts a day Complex
matters may require more time due to highly technical issues and
/or multiple parties. Without the formalities found in litigation
mediation usually results in substantial costs savings.
4. Control : parties have control over their participation in mediation.
A party can decide to terminate their participation at any point in

26
KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

mediation. Mediators help parties maintain control over the

negotiate that takes place.
A mediator’s limitations
(1) He cannot compel attendance of any person or production of any
document.
(2) He can only act upon the disputed point raised by the parties and
induce them to resolve disputed by exchanging views.
(3) He remains as a mediator till the consent of the parties exists.
(4) Mediation is a non-statutory function thus it lacks enforceability
in respect of settlement arrived .
(5) He no power to penalize the non-cooperating party.
(6) He cannot seek expert assistance without the prior consent of the
parties .
(7) He has no power to seek the court`s intervention on his own .
(8) He cannot modify the subject matter of disputes .
(9) A mediator can be removed at any time by the party.
CONCILIATION
Conciliation is consensual and helps the parties in settling their dispute
mutually albeit with the aid of neutral third person but settlement is of
the parties themselves.
The parties are at liberty to evolve their own procedure of conciliation for
negotiating and arriving at a settlement of disputes.
Even some non-arbitrable matters such as matrimonial, testimentory etc.
may be resolved by conciliation. It must be stated that the law does not
provide for any statutory prohibition against conciliation.

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KRISHNA INSTITUTE OF LAW
(Approved by BCI affiliated to CCSU, Meerut)
NH-24, Jindal Nagar, Ghaziabad-201002
Phone no- +9643031960, 9643028427

For Example – Although conciliation is not generally resorted to in

taxation matters but there is no specific provision in the Income Tax Law
which prohibits conciliation as a means of resolving disputes relating to
taxation.

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