Answer in One or two sentences:

Q1 What is full form of UNCITRAL? (17,12,09,08,05)

Ans. UNCITRAL full form means United Nation Commission on International Trade
Law. Its aim of promoting the harmonization and unification of international trade
law.

Q2 What is an institutional arbitration?

Ans. It is an arbitration, where the parties to a contract agree in advance that if any
dispute arises between them during their dealings in business or any commercial
transaction, then they shall refer the matter to arbitration for settlement of dispute.
Such institutions are known as arbitral institutions.

Q3 Is the validity of an arbitration agreement depend upon number of arbitrations?

Ans. No. Number of arbitrators are not necessary for the purpose of the validity of
arbitration agreement. The only requirement is that the number should not be even, it
has to be odd number. Even there can be a sole arbitrator if it is agreed between the
parties to the arbitration.

Q4 Who appoints a presiding arbitrator? (17,16,15,13)

Ans. Under S.11(3) of the Act, in an arbitration with three arbitrators, each party shall
appoint one arbitrator, and the two appointed arbitrators shall appoint the third
arbitrator, which acts s the Presiding arbitrator.

Q5 Whether the signatures of both parties are necessary for an arbitration

agreement? (17,16,15)
Ans. An arbitration agreement is in writing and signed by the parties to the
agreement. The signature of an arbitrator is not necessary to the arbitration agreement.

Q6 What is consent award? (15,17)

Ans. It is an award which is agreed by both of the parties to dispute.

Q7 When registration of an award is compulsory?

Ans. Generally speaking, registration of an award is not compulsory. The SC has
summarized the procedure to be adopted in this matter- If the document containing
the arbitration clause which is compulsory registrable, is found to be not duly
stamped, S.35 of the Stamp Act bars the said document being acted upon.
Consequently, even the arbitration clause therein cannot be acted upon. The court
should then proceed to impound the document under S.33 of the Stamp Act and
follow the procedure under S.35 and 38 of the Stamp Act.
Q8 What is lien of award? (17,16,13,11)
Ans. The Arbitral Tribunal has lien on the Arbitral Award for recovering any of the
unpaid cost of the Arbitration. It gives right to Arbitral Tribunal to retain the Arbitral
Award. (S.39 of the Act).

Q9 What is mediation? (14,15,17)

Ans. Mediation is a verbal communication with the client and the lawyer. It is a
process most commonly used by disputants to resolve a dispute.

Q10 Who is mediator?

Ans. Mediator is a neutral third party (usually a retired judge or an experienced
lawyer) who acts to facilitate the settlement of dispute between the two contending
parties.

Q11 Why Lok adalats are constituted or object of Lok Adalat? (14,17)
Ans. The object of Lok Adalat is to mobilize and involve the people in non-judicial
process at the grass-root level, and promote an atmosphere of mutual satisfaction and
goodwill. It is a voluntary and conciliatory agency which operates on the principle
that, a settlement or compromise is to be preferred between the parties.

Q12 How many Arbitrators can be appointed according to the Arbitration &
Conciliation Act, 1996? (05,09,11,15,18)
Ans. Only odd number of Arbitrators can be appointed under the Act. According to
S.10 of the Act, the Parties are free to determine the number of Arbitrators provided
that such number shall not be even number, failing which the Arbitral Tribunal shall
consists of sole Arbitrator.

Q13 Name the two statutes dealing with ADR.

Ans. The Legal Services Authorities Act, 1987 and The Arbitration and Conciliation
Act, 1996.

Q14 Which are the two international conventions dealt by A&C Act, 1996?
(05,10,16,18)
Ans. New York Convention and Geneva Convention.

Q15 Is the Arbitrator required to be an Indian under the A & C Act? (16,17,18)
Ans. Acc. to S.11(1), a person of any nationality can be appointed as an Arbitrator, if
the parties to agreement have not agreed upon the nationality of the Arbitrators.

Q16 What is the legal effect of an award made by a Lok Adalat? (07, 09,10,11,16,18)
Ans. S.21(2) of the Legal Services Authorities Act, 1987 lays down that- “Every
award of Lok Adalat shall be final and binding on all parties and no appeal shall lie to
any court against such award.
Q17 What is statement of claim and Defense in Arbitration?
Ans. Statement of claim of Plaintiff- Within the period of time agreed upon by the
parties or determined by the arbitral Tribunal, the claimant shall state the facts
supporting his claim, the points at issue and the relief or remedy sought.
Defense of Defendant- the respondent/defendant shall state his defence in respect of
these particulars stated by the plaintiff. [S.23(1)].

Q18 What is a Lien on Arbitral Award? (11,13,16,17,18)

Ans. Under S.39 of the Arbitration and Conciliation Act, 1996, the Arbitral Tribunal
has liean on the Arbitral Award for recovering any of the unpaid cost of the
Arbitration. It gives right to Arbitral Tribunal to retain the Arbitral Award.

Q19 What is Fast track procedure in Arbitration?

Ans. Under S.29B of the Arbitration and Conciliation (Amendment) Act, 2015, the
concept of Fast Track procedure was introduced in order to expedite the arbitration
proceeding. According to this Section, the Arbitration Tribunal shall have to make an
Award within 6 months from the date of reference of the dispute to the Arbitral
Tribunal.

Q20 Within how many days an Additional Award can be given by an Arbitrator.
Ans. A party with notice given to other party may make a request, within 30 days
from the receipt of the Arbitral Award, to the Arbitral Tribunal to make an Additional
Arbitral Award after correcting any error therein [S.33(4)]; and if the Arbitral
Tribunal considers the request made under Sub-Section (4) to be justified, it shall
make the Additional Arbitral Award within 60 days from the receipt of such request.
[S.33(5)].

Q21 Is the Limitation Act applicable to Arbitration Proceedings?

Ans. Yes, the Indian Limitation Act, 1963 is applicable to the Arbitration
proceedings.

Q22 Explain the term “Arbitration Agreement”. (05,14,15,17,19)

Ans. Acc. to S.7(1), an arbitration agreement means an agreement between the parties
to submit all or certain disputes which have arisen or which may arise (between them,
to arbitration, in respect of a defined legal relationship, whether contractual or not.

Q23 What is “Foreign Award”? (11,12,13,16,19)

Ans. It means a 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 – S.44.

Q24 What is “Interim Award”? (15,19)

Ans. Acc. to S.2(1) (c), an arbitral award includes an interim award, it can be made at
various stages of the arbitral proceedings. An interim award is always made before a
final award.

Q25 Define Lien on award? (11,13,16,17,18,19)

Ans. Under S.39 of the Arbitration and Conciliation Act, 1996, the Arbitral Tribunal
has lien on the arbitral award for recovering any of the unpaid cost of the Arbitration.
It gives right to Arbitral Tribunal to retain the Arbitral Award.

Q26 What is non-speaking award? (13,16,19)

Ans. An arbitral award shall state reasons upon which it is based, unless the parties
have agreed that no reasons are to be given or the Award is on agreed terms. S.31(3)

Q27 Who is Presiding Arbitrator? (13,15,16,17)

Ans. Under S. 11(3) of the Act, in an arbitration with three arbitrators, each party
shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third
arbitrator, he acts as the presiding arbitrator.

Q28 What should be the nationality of an Arbitrator? (16,17,19)

Ans. Acc. to S.11(1), a person of any nationality can be appointed as an Arbitrator, if
the parties to Arbitration Agreement have not agreed upon the nationality of the
Arbitrators.

Q29 How many number of conciliators can be appointed by the parties? (16,19)
Ans. There shall be one Conciliator unless the parties agree that there shall be two or
three conciliators. Where there is more than one conciliator, they ought, as a general
rule, to act jointly – S.63(1) & (2).

Q30 Whether Res-Judicata is applicable to award of Lok-Adalat?

Ans. Yes, the principle of Res Judicata is applicable to the award passed by the Lok
Adalat. S.21 of the Legal Services Authority, 1987 states that – (1) Every award of
Lok adalat shall be deemed to be te Decree of the Civil Court or Tribunal; (2) Every
award ,ade by a Lok Adalat shall be final and binding on all the parties to the dispute,
and no appeal shall lie to any court against the award .

Q31 What is status of Arbitration clauses in a void agreement? (05,06,10,11,12,19)

Ans. Arbitration agreement is an independent agreement, hence, even if agreement is
void, the arbitration clause cannot become void/invalid

Q32 Can a couple appoint Arbitrator on wife’s application for divorce?(11)

Ans. No. Family court where the divorce petition is filed has no jurisdiction to allow
the appointment of the arbitrator.
Q33 What should be the number of arbitrators In Tribunal? (05,09,11,12,15,18,19)
Ans. Only odd numbers of Arbitrators can be appointed under the Act. According to
S.10 of the Act, the parties are free to determine the number of arbitrators provided
that such number shall not be even number, failing which the Arbitral Tribunal shall
consist of sole Arbitrator.

Q34 Define Arbitration Award. (10,13,19)

Ans. The Arbitral Tribunal has lien on the Arbitral Award for recovering any of the
unpaid cost of the Arbitration. It gives right to Arbitral Tribunal to retain the Arbitral
Award.(S.39 of the Act). Arbitral award includes an interim award – [S.2(1)(c). An
award means a decision of the arbitrator or on the reference of a dispute made to it for
adjudication. [S.2(1)(b)]

Q35 Lok Adalat is also called as People’s Court.

Q36 What is settlement agreement? (13,15,16)

Ans. When it appears to the Conciliator that there exist elements of a settlement
which may be accepted by the parties, he shall formulate the terms of a possible
settlement and submit them to the parties for their observations. After receiving the
observations, the Conciliator may formulate the terms of settlement with the parties
and he may draw up and sign a written settlement agreement and authenticate it and
furnish copy to each of the parties.

Q37 What is mandate of an arbitrator? (05,18)

Ans. The term authority of the Arbitrator is also known as mandate of the Arbitrator.
Acc. to S.14 of the Act, the mandate or the authority of the arbitrator terminates if –
A) arbitrator withdraws or fails to perform his duties; B) parties to arbitration
agreement terminate the mandate of the Arbitrator.

Q38 What is meant by an arbitral tribunal?

Ans. S.2 (1)(d) defies the term ‘Arbitral Tribunal’ – “Arbitral Tribunal means a sole
Arbitrator or a panel of Arbitrators”.

Q39 What is Contractual Arbitration?

Ans. In order to seek early settlement of disputes without approaching the court, the
parties usually insert an arbitration clause as a part of contract to refer their existing or
future disputes to a named arbitrator. This is called contractual inbuilt arbitration.

Q40 What do you mean by Foreign Arbitration?

Ans. Foreign Arbitration is an arbitration conducted in a place outside India where
resulting award is sought to be enforced as a foreign award.
Q41 What is ‘waiver’ caused by party? (07,10,15)
Ans. When there is a failure to make a timely objection by a party to the arbitration
agreement against the non-compliance of or non-fulfilment of requirement under the
arbitration agreement, a waiver is caused i.e., the party shall be deemed to have
waived his right to so object. (Sec.4)

Q42 What is the limitation to file an application to set aside an arbitration award?
(08,10,11,18)
Ans. The application for setting aside the Arbitral Award must be made within 3
months from the date on which the party has received arbitral award; if any request
under S.33 has been made by the party for correction, interpretation or making of an
Additional Award, then the application for setting aside the Arbitral Award can be
made within 3 months from the date on which the request under S. 33 is disposed by
the Arbitral Tribunal

Q43 What is Conciliation? (07,09,10,12,13,16,17)

Ans. It is a process in which two parties make discussion over a dispute between them
with the help of third neutral party called Conciliator, who helps the two parties to
arrive at a mutual acceptable agreement over a dispute between them.

Q44 Which is a place of an arbitration? (05, 12,13,17)

Ans. The parties are free to agree on the place of Arbitration including convenience of
the parties.

Q45 What is the nationality of an arbitrator? (16)

Ans. According to S.11(1), a person of any nationality can be appointed as an
arbitrator. If the parties to arbitration agreement have not agreed upon the nationality
of the arbitrators.

Q46 What is arbitrable dispute? (16)

Ans. The disputes which arise out of legal relationship between the parties to an
arbitration agreement are arbitrable dispute.

Q47 What is a status of award of Lok Adalat? (16)

Ans. An award made by a Lok-Adalat is final and binding on all the parties to the
dispute. No appeal lies against any such award in any court.

Q48 When an arbitral award becomes final award? (16)

Ans. Under S.35 of the Act- Subject to the Part I provided, an arbitral award shall
become final and binding on the parties and persons claiming under them,
respectively.
Q49 What is the status of an oral arbitration agreement? (16)
Ans. One of the essentials of an arbitration agreement is that it must be in writing. If
valid arbitral agreement is not there, arbitral proceedings cannot be conducted.

Q50 What is ad-hoc arbitration? (16)

Ans. If a dispute arises between the Parties in relation to a business transaction, and
such a dispute is not settled by negotiations, then the parties may refer the dispute to
Arbitration, as and when it arises in their business transaction. Such an Arbitration is
Known as Ad-hoc Arbitration.

Q51 Which cases are submitted to Lok-Adalat? (16)

Ans. All cases – where the value of the property does not exceed 10 lakh rupees; and
the offences which are compoundable under any law, can be submitted to Lok.Adalat.

Q52 With What Section 23 deals under the Arbitration and Conciliation Act,1996?
Ans. It deals with the statement of Claim and Defence.

Q53 Explain the maxim “Nemo Judex Causa Sua”.

Ans. It means “no one can be a judge in his own cause”. Because, it is fundamental
rule of administration of justice that the person cannot be a judge in a cause wherein
he has an interest or wherein he is interested.

Q54 What is the meaning of the ‘Ex Aequo Et Bono Is’?

Ans. The legal meaning of this term is – “how to decide injustice and good faith” or
“according to what is just and good”.

Q55 Under which provision, it is now obligatory on Court to encourage settlement?

Ans. Under S.89(1)(a) of the Civil Procedure Code, it is obligatory for the courts to
encourage ‘Settlement’.

Q56 Explain the term “International Commercial Agreement”.

Ans. S.2(1)(f) defines it as an Arbitration relating to disputes arising out of legal
relationship, whether contractual or not and which are considered as Commercial
under the law in force in India. In such an Arbitration, at least one of the parties
should be corporate body, company or Association, Government are foreign country
and not national or habitual resident of India.

Q57 What is Permananet Lok Adalat?

Ans. Under the Legal Services Auhority Act, 1987, Permanent Lok Adalat means a
Permanent Lok Adalat established under Sub-Section(1) of Section 22B, which lays
down that- the central authority or, as the case may be, the state authority shall by
notification, establish Permanent Lok Adalat at such places and for exercising such
jurisdiction in respect of one or more public utility services and for such areas as may
be specified in the notification.
Q58 When an Arbitration proceeding gets terminated?
Ans. The arbitral proceedings shall be terminated by the Final Arbitral Award or by
an order of the Arbitral tribunal.

Q59 Define the term Court. (12,13)

Ans. Court means, the Principal Civil Court of Original Jurisdiction in a district, and
includes the High Court in exercise of its Ordinary Original Civil Jurisdiction
(OOCJ), having jurisdiction to decide the questions forming the subject matter of the
Arbitration if the same had been the subject matter of a suit, but does not include any
Civil court of a grade inferior to such Principal Civil Court, or any court of small
causes.

Q60 When did the A&C Act became Effective?

Ans. 25th January, 1996.

Q61 What is the role of Conciliator?

Ans. The role of conciliator is to assist the parties in an independent and impartial
manner with the principles of justice and fairness in their attempt to reach an amicable
settlement of their dispute.
Short Notes:

Q1 Foreign award
Ans. S.46 of Chapter-I of Part-II of the Arbitration and Conciliation Act, 1996,
deals with provisions relating to the Foreign Awards, when they are binding. Under
the New York Convention Award, as per S.46, the Foreign Awards are binding when
they have been made in a regular manner after complying with all the formalities that
are required to be fulfilled for making an Arbitral Award.
If the provisions of S.48, i.e., the conditions for Enforcement of Foreign
Awards are satisfied, then the Award becomes enforceable under S.58 of the Chapter-
I of Part-II of the Arbitration and Conciliation Act, 1996.
Such enforceable Foreign Awards are deemed to be the Decree of the Court.
All the foreign awards which are enforceable as per S.58 of the Arbitration and
Conciliation Act, 1996, are binding for all purposes on the persons, between whom
they were made.
It is not required to apply in writing to the competent court to make the
enforceable Foreign Awards binding or enforceable. All the enforceable Foreign
Awards can be used as a defence as a set off or in any legal proceeding in India, by all
those persons between whom such Foreign Awards was made. The term ‘Enforcing of
Foreign Award’ includes the term ‘Relying on a Foreign Award’, for the purpose of
Chapter-I of Part-II of the Arbitration and conciliation Act, 1996.
Under S.50 of the act, foreign awards are appealable before the court
authorized by law to hear the Appeals. Filing of Second Appeal is not allowed.
However, this does not affect the right to file the appeal before SC.

Q2 Appointment of arbitrator by parties

Ans.
 As per S.11(2) parties are free to determine the procedure for appointment of
arbitrators.
 According to arbitrator appointment provision of the agreement the
nationality of an arbitrator is not essential unless the parties otherwise
agree upon it.
 The parties can also form an agreement on the procedure for appointing
arbitrators.
 In case of failure to reach an agreement on the procedure of appointment, each
party appoints an arbitrator and the two arbitrators then jointly appoint the
third arbitrator, who acts as the presiding arbitrator.
 In an arbitration agreement, if one party receives a request to appoint an
arbitrator from the other party, they must appoint one within 30 days. If both
parties appoint one arbitrator each, those two arbitrators have 30 days to agree
on appointing a third arbitrator. If a party fails to appoint an arbitrator or if
the third arbitrator isn't appointed, the Chief Justice will make the
appointment upon the request of the party to the arbitration agreement.
Alternatively, the appointment can be made by any person or institution
designated by the party.
 If both parties can't decide on the appointment of an arbitrator and there's
only one arbitrator needed, one party can ask the other to agree on one within
30 days of the request. If they can't agree in that time, the chief justice will
appoint the arbitrator upon request from one party. Alternatively, the party can
designate any person or institution to make the appointment.

Q3 Appointment of an Arbitrator by the Chief Justice.

Ans. The aim of arbitration is to take dispute resolution outside the bureaucracy
of our courts with time and cost savings being added benefits. However, court
intervention cannot be fully done as at certain stages of arbitration the conflicting
parties may need the laws to help them out, which poorly constructed arbitration
agreements cannot provide.
According to the arbitrator appointment provision of the agreement there shall
be only one arbitrator jointly appointed by both parties and multiple arbitrators. Most
commonly, two would be separately appointed by each party and the third would be
jointly appointed by the two arbitrators. As if often happens sometimes, arbitrators
may not get appointed within the timeframe of 30 days.
In this case, on receiving a formal request from any party, the chief justice can
himself preside or as is common, appoint another arbitrator who is usually a retired
judge. This is the administrative function of the chief justice.

Appointment of Arbitrator by CJ
- Along with the arbitration agreement, the names and addresses of the parties and
arbitrators, the qualification of arbitrators, a general note on the dispute and the
justice/reward expected, and other relevant document as requested by the CJ have
to be submitted.
- The CJ would decide to preside over the issue or designate it to someone else.
- If the decision is to designate someone, it is forwarded in writing to that person
who later may ask advice regarding the scheme. The interpretation of the CJ
would be final.
- The appointment made or advised by CJ would be forwarded in writing to all
parties involved.
- The CJ should decide whether the conflicting parties have approached the right
HC, whether arbitration agreement was even drafted and to confirm details
according to the agreement.

The Chief Justice, under section 9 of the Arbitration Act have been conferred with the power
to pass orders for interim relief while dealing with the above mentioned scheme of
appointment of arbitration.
Q4 Appointment of an arbitrator by court
Ans.
 Where the parties have agreed that the number of arbitrators to be appointed
shall be three but no procedure is laid down or agreed upon regarding their
appointment the case shall be governed by S.11(3) which lays down that in
such an event, each party shall appoint one arbitrator and thee two appointed
arbitrators shall appoint a third arbitrator who shall act as a presiding
arbitrator. Also, as already stated by the 2019 amendment whereby the SC
of India and the HC shall have the power to designate the arbitral
institutions, which have been graded by the Arbitration Council of India
(ACI).
The underlying idea is that instead of the court stepping in to appoint
arbitrator(s) in cases where parties cannot reach an agreement, the courts will
designate graded arbitral institutions to perform that task.

 In case of HC jurisdictions, where no graded arbitral institutions are

available, the chief justice of the concerned HC may maintain a panel of
arbitrators for discharging the functions and duties of arbitral institution and
the arbitrator appointed by a party shall be entitled to such fee at the rate as
specified in the 4th schedule of the act.
 If a party fail to appoint an arbitrator within 30 days from receipt of a
request to do so on from the other party or the two appointed arbitrators fail to
agree on the third arbitrator within 30 days from the date of their appointment,
then , the appointment, shall be made, on an application of a party, by arbitral
institution designated by SC in cases of international commercial arbitrations
and by HC in matters other international commercial arbitrations, as the case
may be.
 Prior to 2019 amendment, the act required appointment of arbitrators through
Chief Justice of India, any other judge of SC or HC. However, with the
amendments of 2019 arbitral institutions have been formed and appointment
of arbitrators are now governed under amended S.11 whereby instead of the
curt stepping in to appoint arbitrator(s) in cases where parties cannot reach an
agreement, the courts will now designate graded arbitral institutions to
perform that task.

Q5 Difference between arbitration and conciliation

1. In case of conciliation, no prior arrangement is required to initiate the
conciliation proceedings as it is related to the existing dispute. But in case of
Arbitration a prior written Agreement is required to submit a dispute whether
existing or future to Arbitration.

2. To initiate conciliation proceedings, invitation may be sent from one party of

the dispute to the other party, which may either accept or reject it, since an
invitation does not have binding effect. But in case of Arbitration, the written
agreement of submission of dispute to Arbitration is binding upon the parties
of Arbitration.

3. During the pendency of the conciliation proceedings, the parties to the dispute
are prohibited to initiate an Arbitral or Judicial Proceedings; whereas, in case
of Arbitration, where the parties have agreed to submit the dispute to
Arbitration by a written agreement, they are prohibited to initiate any legal
proceedings for a dispute, which is the subject matter of the Arbitral
Agreement.

4. The conciliator helps the parties in an independent and impartial manner to

reach an amicable settlement of dispute. Whereas, the Arbitrator adjudicates
on the dispute and gives decision which is known as an Arbitral Award.

5. The conciliator is not bound to disclose the information received by him

from one party on the condition that it should be kept confidential. In case of
Arbitration, all the information received by Arbitrator from one party is
accessible to other Party to the dispute.

6. The conciliator in a conciliation proceedings acts as a facilitator, whereas the

arbitrator in an arbitral proceedings acts as an adjudicator.

Q6 Forms & Contents of arbitral award

Ans. Arbitral award includes an Interim Award [S.2(1)(c)]. An award means a
decision of the Arbitrator on the reference of a dispute made to it for adjudication.

Form and content of an Award

1. The Arbitral Award shall be made in writing and should be signed by the
members of the Arbitral Tribunal. [S.31(1)]
2. If the Arbitral proceeding is conducted by more than one Arbitrator, then
Arbitral Award must be signed by the majority of all the members of the
Arbitral Tribunal. The award signed by the majority of the Arbitrators, shall be
valid, if the reason for not signing the Award by the other Arbitrator is
mentioned in the Award. [S.31(2)]
3. The Award must state the reason upon which it is based i.e., the Arbitral
Award must be a reasoned award. [S.31(3)]
4. The Arbitral Award must state the date on which it is made and the place art
which the Award is made. When the place of Arbitration is fixed under S.20,
such place should also be stated in the Award. The Award is deemed to have
been at that place. [S.31(4)]
5. After the making of an Award, a signed copy of the Award must be
delivered to each party to Arbitral Proceedings. [S.31(5)]
6. During the Arbitral proceedings, the Arbitral Tribunal may at anytime, make
an Interim award. This Interim Award must be on any matter for which, the
Arbitral Tribunal may make a final award. The interim award only deals with
some of the matters in dispute. [S.31(6)]
7. In the absence of the contrary agreement between the parties, the cost of the
arbitration shall be fixed by the Arbitral Tribunal. Also specifying the
following that the party who is entitled to the cost, party who shall pay the
costs, the amount of costs or method of determining the amount and the
manner in which the cost shall be paid.

Circumstances reason not required for Award

1. If the parties have agreed that, no reasons are to be given for an award. [S.31(3)(a)].
2. The reason for an Award is also not required if the Award can be given without
assigning any reasons. A reasoned award is also known as speaking Award.

Q7 Termination of arbitral proceeding

Ans. The Arbitral proceedings commenced under the A&C Act, 1996, comes to an
end under various circumstances.

1. S.32 of the act provides for the termination of Arbitral Proceedings as under:-
- When the final award is made by Arbitral Tribunal.
- by the order of Arbitral tribunal, where no more proceedings are required
to be conducted, the arbitral tribunal makes an award which is final, and with
making of final award, the arbitral proceedings stand terminated.

2. If the parties agree to the termination of the Arbitral Proceedings, then the
Arbitral Tribunal can issue an order for termination of Arbitral Proceedings.

3. If the arbitral tribunal finds that the continuation of the proceedings is either
unnecessary or impossible for any other reason.

4. The plaintiff withdraws their claim. However it can also be terminated if the
respondent objects to the arbitral award. Looking at which the arbitral tribunal
come to a conclusion that it has a legitimate interest in obtaining a final
settlement.

Q8 Need of alternate dispute resolution

Ans. Arbitration is an alternative mode of dispute resolution i.e. resolving the
dispute between the two parties without taking recourse to the formal court of
justice. Where a dispute is submitted to Arbitral Tribunal and the tribunal shall
adjudicate on the dispute and give its decision in the form of an ‘Award’, which is
binding upon the parties to the Arbitration and can be enforced as a decree of the
Court.
WHY NEEDED:
1. Amicable settlement of disputes: ADR provides for a friendly settlement of
disputes. In business it is a sensible approach to have a competitor not a rival.
It is clear that a healthy competition brings improvement and it’s also cost
effects cost of service or commodities in every sphere.

2. Speedy Disposal of Trial: ADR provides for speedy disposal of trials. Unlike
litigation process in ADR there is no scope of adjournment or stay order.
Courts are often overburdened with cases, leading to significant delays in
resolving disputes

3. Economical Settlement of disputes: Unlike litigation process where huge

expenses are incurred to pay the advocates and other people involved in the
trial, in ADR it is not the case and minimum amount of money is required.
ADR methods such as mediation or arbitration often prove more cost-
effective, as they are generally quicker and involve fewer procedural expenses.

4. Time Saving management: In ADR the dispute is resolved without following

the cumbersome procedure of ordinary litigation that’s why ADR is also
Known as dispute management.

5. Expertise and Specialization: In arbitration, parties have the opportunity to

select arbitrators with expertise in the subject matter of their dispute. This
allows for more informed decision-making and can lead to more satisfactory
outcomes.

6. Advent of multinational corporations: A number of multinational

corporations are coming to invest and establish their business. These business
have dynamic approach in their business activities. Therefore, in case of
disputes they should be provided with such a mechanism which can resolve
their dispute immediately and without delays.

7. Encouraging compliance: ADR processes often result in mutually agreed-

upon solutions, which parties are more likely to comply with compared to
court-imposed judgments. This can reduce the likelihood of ongoing conflicts
or appeals.

Q9 Arbitral tribunal
Ans.
 An Arbitral Tribunal is a panel of unbiased adjudicators which is arranged
and sits to resolve a dispute by way of arbitration. An arbitral tribunal can be a
sole arbitrator or a panel of arbitrators.
 The task of an arbitral tribunal is to adjudicate and resolve the dispute and
to provide an arbitral award. Arbitral Tribunal consists of sole arbitrator or an
odd number of arbitrators appointed in accordance with Section

 The parties to agree on arbitration are usually free to determine the number
and composition of the arbitral tribunal. The powers of an arbitrator in
India include the power to administer an oath to the parties and witnesses, take
interim measures, proceed ex-parte, appoint expert, and make awards.

 Arbitral tribunal consists of a chairperson who is either: A judge of the

Supreme Court, a judge of a High Court, Chief Justice of a High Court,
an eminent person with expert knowledge in the conduct of arbitration.

 A person of any nationality can be an arbitrator in a case unless specifically

provided in the agreement. In case of parties unable to appoint the arbitrator,
the SC and HC have responsibility to designate arbitral institutions as per
respective jurisdictions. However for appointment of arbitrators to decide
upon the dispute at hand.

Q10 Importance of Lok Adalat

Ans. The term Lok Adalat means, people’s Court. But, Lok Adalat is not the court of
law. Lok adalats are an alternate disputes resolution mechanism for the agreeable
settlement of the disputes. Members of the Lok Adalats are known as Conciliators and
are generally from Judicial Officers, Social Workers and Advocates.

Importance
With the judiciary being overburdened with the pending cases, especially, subordinate
courts. The status of judicial process in India certifies the phrase of, “Justice delayed
is Justice denied”. With the increasing number of pending cases, there is a need to
speed up the judicial process. The ordinary courts are not able to dispose off the cases
speedily as they have to follow strict rules of procedure and evidences. To reduce the
burden on the ordinary courts and provide the faster remedy, the concept of Lok
Adalat was evolved.
Justice through courts have become been very expensive. Justice should be
done equally to rich and poor. The socio-economic condition prohibits the access to
equal Justice for all.

Article 39A was incorporated under DPSP,1976.

This Article casts a duty on the state to ensure Justice to all by providing free legal
aid. The free legal aid can be provided by a suitable legislation or scheme to ensure
access to the Justice. Due to economic or other disabilities, opportunity for securing
justice should not be denied to any citizen. However on 24.08.1987 Lok Adalats were
given statutory powers for constituting the statutory legal services authority and to
supplement the existing judicial system.

Q11 Role of Conciliator

Ans. Conciliator is a person who assists the parties in an independent and impartial
manner with the principles of justice and fairness in their attempt to reach an amicable
settlement of their dispute.

Role:
1. The conciliator shall assist the parties in an independent and impartial
manner in their attempt to reach an amicable settlement of their dispute.

2. The conciliator shall be guided by principles of objectivity, fairness and

justice, giving consideration to, among other things, the rights and obligations
of the parties, the usages of the trade concerned and the circumstances
surrounding the dispute, including any previous business practices between the
parties.

3. The conciliator may conduct the conciliation proceedings in such a manner

as he considers appropriate, taking into account the circumstances of the
case, the wishes the parties may express, including any request by a party that
the conciliator hear oral statements, and the need for a speedy settlement of the
dispute.

4. The conciliator may, at any stage of the conciliation proceedings, make

proposals for a settlement of the dispute. Such proposals need not be in
writing and need not be accompanied by statement of the reasons thereof.

Q12 Conciliation Procedure.

Ans. Conciliation means the settling of disputes without litigation, mediating between
two disputing people or groups.

Procedure –
1. Commencement of conciliation proceedings – S.62
The conciliation proceedings are initiated by one party sending a written
invitation to the other party to conciliate. The invitation should identify the
subject of the dispute. Conciliation proceedings are commenced when the
other party accepts the invitation to conciliate in writing. If the other party
rejects the invitation, there will be no conciliation proceedings. If the party
inviting conciliation does not receive a reply within 30 days from the date he
sends the invitation, he may elect to treat this as rejection of the invitation to
conciliate. If he so elects he should inform the other party in writing.
2. Submission of statements to conciliator – S.65
The conciliator may request each party to submit to him a brief written
statement. The statement should describe the general nature of the dispute and
the points at issue. Each party should send a copy of such statement to the
other party. The conciliator may require each party to submit to him a written
statement of his position and the facts and grounds in its support. It may be
supplemented by appropriate documents and evidence. The party should send
a copy of such statements, documents and evidence to the other party.

3. Conduct of Conciliation proceedings – S.69(1), 67(3)

The conciliator may invite the parties to meet him. He may communicate with
the parties orally or in writing. He may meet or communicate with the parties
together or separately.
In the conduct of conciliation proceedings, the conciliator has some
freedom. He may conduct them in such manner as he may consider
appropriate. But he should take into account the circumstances of the case, the
express wishes of the parties, a party’s request to be heard orally and the need
of speedy settlement of dispute.

4. Administrative assistance – S. 68
It facilitates administrative assistance for the conduct of conciliation
proceedings. The parties and the conciliator may seek administrative
assistance by a suitable institution or the person with the consent of the parties.

Q13 Settlement Agreement.

Ans. When it appears to the conciliator that settlement, which can be accepted by both
the parties is possible, the conciliator may formulate the terms of the possible
settlement, and submit it to the parties for their comments and suggestions. After
receiving the comments and suggestions from both the parties, the conciliator may re-
formulate the terms of the possible Settlement Agreement as per the comments and
suggestions of both the parties.

If the parties to the dispute reach an agreement to settle the dispute, then,-
i. They make and sign the written settlement agreement, or
ii. They may request the conciliator to make or help the parties to make the
settlement agreement.

The settlement agreement signed by the parties to the dispute is final and binding
upon the parties and the persons claiming under them, respectively. The settlement
agreement shall be authenticated by the conciliator and the copy thereof shall be given
to each of the parties to the dispute.
Q14 Working Process of Lok Adalat.
Ans.
Procedure –
1. The Lok Adalats are generally organized by state legal aid and advice
boards or the district legal aid committees etc.

2. They have jurisdiction to determine and arrive at a compromise or settlement

between the parties to a dispute in respect of;
a) Any case pending before the court; 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.

3. The Lok Adalat shall not have jurisdiction in respect of any matter or case
relating to an offence not compoundable under any law.

4. The date and place of holding a Lok Adalat are fixed about a month in
advance by the Legal Aid Board. The date so fixed is generally a Saturday or
Sunday or some other holiday.

5. 1nformation about holding a Lok Adalat is given wide publicity through press,
posters, radio, TV, etc.

6. Before a Lok-Adalat is held, its organizers request the presiding officers of the
various local courts to examine cases pending in their courts where in their
opinion, conciliation is possible. Once the cases are identified, parties to the
dispute are motivated by the judges of the Lok Adalats to settle their cases
through Lok Adalat.

7. Generally, senior judicial officers are invited to inaugurate a Lok Adalat.

8. The team of Lok Adalat generally consist of retired judges, senior local
officers, members of the Bar, spirited public-men, active women social
worker, elders of the locality and voluntary social organizations. The
members of the Lok Adalat are called conciliators. The number of conciliators
is usually three.

9. If conciliation result in a settlement of a dispute, a compromise deed is

drawn up and after obtaining the signatures of the parties to the disputes and
their advocates, it is presented to the presiding officer of the competent court
who is normally present at the place where the Lok Adalat is organized.

10. The judge (Presiding officer) after examining the fairness and legality of
compromise and satisfying himself that the compromise has been arrived at by
the free will and mutual consent of the parties, passes a decree.
Whenever a settlement is reached, an ‘Award’ is made which is deemed to be a
‘Decree’ of a civil court. It is to be written down in simple and clear terms. No appeal
is permissible against such awards, which are deemed final. If no compromise is
reached, the same goes back to the court.

Q15 New York Convention

Ans. Convention on Recognition and Enforcement of Foreign Arbitral Awards is
popularly known as, “New York Convention Awards”. Acc. to S.44, Foreign Award
means, an Arbitral Award which is made on or after 11.10.1960, for the disputes
between the persons arising out of legal relationship, whether contractual or not,
which is considered as Commercial relationship under the law in force in India.

Thus, as per New York Convention, following conditions must be satisfied for an
Award to qualify as a Foreign Award-
 The Award must have been made on or after 11.10.1960, because, the New
York Convention came into force in India on 11.10.1960.
 The Arbitral Award must be made on a dispute between the parties arising out
of legal relationship, whether contractual or not.
 The legal relationship giving rise to dispute must be commercial under the law
in force in India.
 The arbitration agreement must be governed by the New York Convention,
1958.
 The arbitral award must have been made in one of the territories, which is
declared by the Central Government by notification in Official Gazette, as the
territory which has made the reciprocal provisions for application of the
provisions of the New York Convention, 1958

If all the above conditions are satisfied, then the Arbitral Award is a Foreign Award within
the meaning of S.44 and for the purpose of Chapter-I of Part-II of the Arbitration and
Conciliation Act, 1996.

Q16 Arbitration Agreement

Ans. Arbitration agreement as per S.7(1), means, an agreement between the parties
to submit all or certain disputes which have arisen or which may arise between
them, to Arbitration, in respect of a defined legal relationship, whether
contractual or not.

1. An arbitration agreement, including an Arbitration Clause in an Agreement, is a

contract. It must be legally valid under the Indian Contract Act, 1872. A contract to
be legally valid under Indian Contract Act, 1872, must have following essential
ingredients-
- Parties must be legally competent to enter into contract
- Consent of the parties must be free, not influenced by fraud, coercion, etc.
- The object of the contract must be lawful.
- The contract must be capable of being carried into effect. it should not be
uncertain. All the above conditions being fulfilled makes an agreement a valid
contract.
2. An arbitration agreement must be in writing.
3. There should be a clear intention on the part of the parties to dispute, to refer the
dispute to arbitration.
4. The Arbitration agreement can be in respect of present or future dispute. Such
dispute must arise out of the defined legal relationship. Dispute not arising from legal
relationship, is beyond the scope of Arbitration. The legal relationship can be-
- Contractual i.e., arising out of a contract, or
- Non-contractual i.e. arising out of a breach of a statutory obligation.

Q17 Settlement Award

Ans. An award on agreed terms, i.e., the settlement can be made, under S.30. when
the parties to dispute during the arbitral proceedings, settle the dispute, the arbitral
tribunal shall record the settlement in the form of an arbitral award on agreed terms.
An arbitral award on agreed terms should be made in accordance with the provisions
of S.31, and it should state that it is an arbitral award.
An arbitral award on agreed terms have the same status and effect as any other
arbitral award which is made on the substance of the dispute. Thus, as per S.30, an
award can be passed in terms of settlement, and accordingly, it is known as Award on
agreed terms.
- It is not incompatible with an arbitration agreement for an arbitral tribunal to
encourage settlement of the dispute and, with the agreement of the parties, the
arbitral tribunal may use mediation, conciliation or other procedures at any time
during the arbitral proceedings to encourage settlement.
- If, during arbitral proceedings, the parties settle the dispute, the arbitral tribunal
shall terminate the proceedings and if, requested by the parties and not objected to
by the arbitral tribunal, record the settlement in the form of an arbitral award on
agreed terms.
- An arbitral award on agreed terms shall be made in accordance with S.31 and
shall state that it is an arbitral award.
- An arbitral award on agreed terms shall have the same status and effect as any
other arbitral award on the substance of the dispute.

Q18 Interim Award

Ans. Acc. to S.2(1)(c), an Arbitral award includes an Interim Award. S.31(6)
empowers the Arbitral Tribunal to make an interim award on any matter on
which it may make a final arbitral award. An interim award like a final award, is
basically an award. It must have all the characteristics that a final Award has, in order
to be Valid Award. An interim award which does not relate to the facts and
circumstances of the case, is invalid. Interim award on the matter not in dispute is not
enforceable.
Depending upon the nature of the dispute, claim, counterclaim, etc. an Interim
award can be made at various stages of the Arbitral proceedings. If a dispute has
various subject matters which are independent of each other, then an Interim Award
can be made on some of these disputes, before making a final award.

A interim award is always made before a final award. There cannot be a interim
award after the final award is made.

Q19 Appointment of Conciliator.

Ans.
 In any conciliation proceedings, there shall be only one Conciliator, provided
that, if the parties agree that there shall be two or three conciliators then such
number of conciliators appointed by the parties should act jointly. (S.63)
 The parties appointing the conciliator may agree on the name of a sole
conciliator, if there is only one conciliator.
 In the conciliation proceedings with three conciliators, the third conciliator
acts as the Presiding conciliator.
 As per S.64(2), while appointing the conciliator, Parties to the proceeding can
take the help of any person or institution for the appointment of a Conciliator.
Parties may request such person or institution for the recommendation of a
suitable individual who can act as a conciliator. Alternatively, they may agree
that such person or institution should directly appoint one or more conciliators.
 While appointing or recommending one or more conciliators, such person or
institution should take into considerations, such aspects, that lead to the
appointment of an independent and impartial conciliator. Also, while
appointing a sole or the third conciliator, if such person or institution should
appoint the conciliator of a nationality, which is different from the nationality
of the parties.

Q20 International Commercial Arbitration.

Ans. Sec. 2(1)(f) of the A&C Act, 1996, defines the term of ICA. Accordingly, ICA
means, an arbitration relating to disputes arising out of legal relationship,
whether contractual or not and which are considered as Commercial under the law in
force in India. In such an Arbitration, at least one of the parties should be-
i. An individual who is either national or a habitual resident of any country other
than India, or
ii. A body corporate, which is incorporated in any country other than India, or
iii. A company or an association or a body of individuals, whose central
management and control is exercised in any country other than India, or
iv. The government of a foreign country.

According to S.2(1)(f) the International Commercial Arbitration has following ingredients-

1. The dispute to be referred to Arbitration, must arise out of legal relationship;

2. Such legal relationship can be, both, contractual, and non-contractual.
3. Such legal relationship, must be considered as “Commercial” according to the law in
force in India.
4. One of the parties to Arbitration, must be a foreign national.
5. The foreign national can be, both, a natural person, or a legal person.

So, for International Commercial Arbitration, at least one party needs to be a foreign national.
If both parties are Indian nationals, even if the issue has international aspects, it's considered
a Domestic Arbitration. The dispute must stem from commercial relationships, with
"commercial" broadly interpreted.

Q21 Conventional award

Ans.
 A conventional award refers to the decision reached by an arbitral tribunal
based on the established procedures and principles outlined in the Act. The
Arbitration and Conciliation Act provides a legal framework for the conduct
of arbitration proceedings and the enforcement of arbitral awards in India.

 Under the Act, parties involved in a dispute may choose arbitration as a means
of resolving their conflicts outside of traditional court proceedings. When
parties opt for arbitration, they agree to submit their dispute to an arbitral
tribunal, which consists of one or more arbitrators tasked with resolving the
issues in contention.

 During the arbitration process, the arbitral tribunal conducts hearings,

reviews evidence, and hears arguments from both parties. Based on the
evidence presented and the applicable law, the tribunal then renders a decision
known as the arbitral award. This award serves as the resolution of the dispute
and is binding on the parties involved.

 A conventional award under the Arbitration and Conciliation Act is one that
follows to the procedures and principles set forth in the Act. This includes
ensuring that the arbitral tribunal acts impartially and fairly, provides each
party with an opportunity to present their case, and follows the rules of natural
justice.

 Additionally, the Act sets out specific criteria for the validity and
enforceability of arbitral awards, such as being in writing and signed by the
arbitrators. A conventional award must meet these requirements to be
considered valid and enforceable under the law.
Q22 Composition of Arbitral Tribunal
Ans.
 Arbitral tribunal means a sole arbitrator or a panel of arbitrators. S.10 and S.11
of the Arbitration and Conciliation Act, 1996, provides for Composition of
Arbitral Tribunal.

 S.10(1) says that, while making an appointment of Arbitrator, parties to

dispute are free to determine the total number of Arbitrators. But such
total number of Arbitrators shall not be an even number. The total number of
arbitrators appointed by the parties, must be an odd number.

 S.10(2) says that, if the parties to Arbitral Agreement fail to determine the
total number of Arbitrators, then the Arbitral Tribunal shall consist of only
one Arbitrator or sole Arbitrator. The arbitrators to be appointed for an
arbitral proceedings, must give their free consent to act as an arbitrator, to
adjudicate upon the dispute which is the subject matter of Arbitration
agreement.

 S.11 says that, with respect to the nationality of the arbitrator the person may
be of any nationality or may as the party decide the same. The process of
appointing a arbitrator may be the decided by the parties according to Sub-
section 6.

 S.12 says that, the grounds of challenging the arbitrators. There lie two
basis grounds on which a arbitrator can be challenged. The first remains the
doubts of been impartial or the independence of the arbitrator. If the parties or
party feels that the arbitrator is impartial or has connection to one of the
parties then the challenge can be raised. On the other side if the there is a
incapacity on the grounds of his qualification then on that ground too
disqualification process can be initiated.

 Therefore, S.10 can be interpreted in the lights of S.11. S.10 remains more
clear than S.11 in a sense that S.10 provides the number of arbitrators. On the
other hand. S.1 provides only the appointment in cases where there is one
arbitrator or three arbitrators. The SC has held that the agreement does not
becomes void just because of the fact that the parties have decided for
appointment of two arbitrators.

Q23 Role of conciliator (S.67)

Ans.
1. The conciliator shall assist the parties in an independent and impartial
manner in their attempt to reach an amicable settlement of their dispute.
2. The conciliator shall be guided by principles of objectivity, fairness and
justice, giving consideration to, among other things, the rights and obligations
of the parties, the usages of the trade concerned and the circumstances
surrounding the dispute, including any previous business practices between the
parties.

3. The conciliator may conduct the conciliation of proceedings in such a

manner as he considers appropriate, taking into account the circumstances of
the case, the wishes the parties may express, including any request by a party
that the conciliator hear oral statements, and the need for a speedy settlement
of the dispute.

4. The conciliator may, at any stage of the conciliation proceedings, make

proposals for a settlement of the dispute. Such proposals need not be in
writing and need not be accompanied by a statement of the reasons therefore.

Q24 Place of Arbitration

Ans. S.20 provides for fixing of the place where the Arbitral proceedings can be
conducted.

Acc. to S.20,
a) The parties to arbitration agreement, are free to agree on a place where the
arbitration proceedings can be conducted.

b) If the parties do not agree upon the place of arbitration under S.19(1), then the place
of arbitration shall be determined by the Arbitral tribunal. While fixing the place
of arbitration, the arbitrators shall consider- circumstances of the case, convenience of
the parties, where the place of arbitration is fixed, a notice to that effect must be given
to the parties to arbitration.

c) Even if the place of Arbitration is fixed by the Parties under S.20(1), or by the
Arbitral Tribunal under S.20(2), then also, the Arbitral Tribunal is empowered by
S.20(3), to meet at any place which it considers appropriate for the following
purposes-
- For consultation with other members of the Arbitral Tribunal.
- For hearing the parties, witnesses, etc.
- For inspection of the documents, goods or other property.

The power of the Arbitral tribunal to choose where to meet is only valid if both parties agree.
If they have already agreed on a specific place for arbitration, the tribunal must respect that
agreement. The decision on the place of arbitration itself is not considered an award under the
Arbitration and Conciliation Act, 1996.
Q25 Difference between waiver and estoppel?
Ans.
- Waiver is an intentional relinquishment of a known right. Whereas, Estoppel
prevents a person from adopting a position an action inconsistent with an earlier
position if it would result in an injury to another person.
- Waiver is contractual and may constitute a cause of action, whereas estoppel is
rule of evidence and is not a cause of action.
- Estoppel is not a cause of action, but waiver is contractual and may constitute a
cause of action.
- Waiver is an agreement to release or not to assert a right. There is no such thing as
estoppel waiver.
- Estoppel is a rule of evidence, waiver is a rule of conduct.

Brief:

Q1 State the forms and contents of arbitration agreement.

Ans. S.7(1), AA means, an agreement between the parties to submit all or certain
disputes which have arisen or which may arise between them, to Arbitration, in
respect of a defined legal relationship, whether contractual or not.

An Arbitration Agreement should be-

- Be in writing/Written Agreement.
- There must be a present or future dispute contemplated between the parties
- There must be intention of the parties to submit to arbitration
- The parties must be ad-idem.

1. Written Agreement
It is necessary that the agreement between the parties shall be a written one. It may
contained, inter alia, in
- Documents signed by the parties
- Exchange of letters, telex, telegrams or other means of telecommunication which
provide a record of agreement;
- An exchange of statement of claim and defence in which its existence is alleged
by one party and not denied by other.

To have a valid arbitration, you need a written agreement signed by legally capable
parties. This agreement can be part of a contract, a separate document, or included by
reference from an earlier document. As long as the terms are written down and both
parties agree, the arbitration is valid.

2. There must be a present or future contemplated between the parties

The parties shall submit to arbitration for all or certain disputes which have arisen or
which may arise between them in respect of a defined legal relationship, whether
contractual or not. The expression “all disputes” is a general term and applies
generally to arbitration clauses in contracts of a continuing nature. It refers to future
disputes which may arise but are not certain. The term “certain disputes” means
disputes which have arisen and are certain
The disagreement needs to involve a clear legal relationship, usually outlined
in a legal document or law. The topic of the dispute must be legal and covered by the
agreement. It should fall under the authority of the arbitrator and not involve issues
outside their jurisdiction. It must concern matters that can be referred to arbitration
and be suitable for arbitration. The dispute must be justifiable in a civil lawsuit,
involving civil rights for which civil remedies can be pursued.
Existence of dispute is essential for reference to arbitration. The arbitrator’s
jurisdiction depends upon the existence of dispute. If there is no dispute there is
nothing to arbitrate upon.

3. There must be intention of the parties to submit to arbitration

No particular form can be laid down as universal for framing an arbitration
clause/agreement. Actual use of the words, arbitrator/arbitration is not necessary.
However, it is essential that the intention of the parties to go to arbitration must be
clear, precise and unambiguous language. Words used must clearly express the
intention of the parties to have their disputes settled in a quasi-judicial manner by the
tribunal of their own constitution whose decision shall be regarded as final,
conclusive and binding upon them.
Intention of the parties to submit to arbitration has to be gathered from the
terms of the agreement. If the terms of the agreement indicate intention on the part of
the parties to refer the dispute to the arbitral tribunal for adjudication and their
willingness to be bound by the decision of such tribunal, such agreement would
amount to arbitration agreement.

4. Parties must be ad-idem

Arbitration agreement is not required to be in any particular form. What is required to
be ascertained is that whether the parties have agreed that if the dispute arises
between them in respect of subject matter of the contract such dispute shall be
referred to arbitration, then, such an agreement would spell out an arbitration
agreement. For the existence of an agreement there has to be ‘consensus ad idem’
between the parties i.e., they should agree to the same thing in the same sense.
S.7(4)(b) states that an arbitration agreement can be formed even without a
signed written document if there is evidence of agreement through means like letters
or telecommunication. This means if it's clear both parties agreed to arbitration, one
party not signing the agreement doesn't excuse them from being bound by it.
Essentially, an arbitration agreement must be grounded in a legal relationship
between the parties, requiring mutual agreement on its terms.

Q2 Explain the importance of Lok-adalat in Judicial work

Ans. Article 21 of the constitution provides that, “no person shall be deprived of his
life or personal liberty except according to procedure established by law”. Lok adalats
were formed in discharge of these obligation under the constitution. Lok adalat is also
known as people’s court. It stands for people and it is the system which has deep roots
in Indian legal history, as it is one of the very efficient and important ADR
mechanisms and most suited to the Indian environment, culture and societal interests.
Lok adalats are one of the alternative dispute redressal mechanisms; it is a forum
where disputes/cases pending in the court of law or at pre-litigation stage are settled
amicably.
The evolution of Lok Adalat was a part of the strategy to relieve heavy burden
on the courts with pending cases and to give relief to the litigants. A case pending in a
court may be referred to Lok Adalat on an agreement between parties or an
application made by one of the parties to the court for referring the case to Lok Adalat
for settlement. So also, the court can suomoto refer a case to Lok adalat. Objective of
lok adalat is to settle the disputes which are pending before the courts, be
negotiations, conciliation and by adopting persuasive common sense and human
approach to the problems of the disputants.
In Hussainara khatoon v. Home Secretary, State of Bihar (1979), the SC
held that “right to speedy trial” is a fundamental right guaranteed under Art.21 of the
Constitution, Justice delayed is justice denied. Speedy trial was held to be the essence
of criminal justice.
Under the said act, the award made by the Lok Adalats is deemed to be a
decree of Civil court and is final and binding on all parties and no appeal against such
an award lies before any court of law. The persons deciding the cases in the Lok
Adalats are called the Members of the Lok Adalats, they have the role of statutory
conciliators only and do not have any judicial role, therefore they can only persuade
and convince the parties to come to a conclusion for settling the dispute outside the
court. The members shall assist the parties in an independent and impartial manner in
their attempt to reach amicable of their dispute.

Q3 State the jurisdiction of arbitral tribunal?

Ans. S.16: Competence of arbitral tribunal to rule on its jurisdiction-
1) Basically, the arbitral tribunal can decide if it has the authority to handle a
case, which includes deciding if there are any issues with the arbitration
agreement itself.
a) An arbitration clause in a contract is seen as separate from the rest of the
contract.
b) If the tribunal decides the contract is invalid, it doesn't automatically mean
the arbitration clause is invalid too.

2) A challenge to the arbitral tribunal's jurisdiction must be made by the time the
defendant submits their defense. However, appointing or helping appoint an
arbitrator doesn't stop a party from making this challenge.

3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be
raised as soon as matter alleged to be beyond the scope of its authority is
raised during the arbitral proceedings.
4) The arbitral tribunal may, in either of the case referred to in sub-section (2) or
sub-section (3), admit a later plea if it considers the delay justified.

5) The arbitral tribunal shall decide on a plea referred to in sub-section (2) or

sub-section (3) and, where the arbitral tribunal takes a decision rejecting the
plea, continue with the arbitral proceedings and make an arbitral award.

6) A party aggrieved by such an arbitral award may make an application for

setting aside such an arbitral award in accordance with S.34

Challenge to the jurisdiction of Arbitral Tribunal

The jurisdiction of the Arbitral Tribunal can be challenged under S.16(2), the plea that
the Arbitral Tribunal does not have jurisdiction, should be raised before the
submission of the statement of defence, before the Arbitral Tribunal. A party alleging
the jurisdiction of Arbitral Tribunal shall not be stopped from challenging the
jurisdiction of Arbitral Tribunal.

Arbitral Tribunal exceeding its jurisdiction – If the arbitral tribunal exceeds its
jurisdiction, then the plea can be made to the same Arbitral Tribunal, that it is
exceeding the scope of its authority assigned to it. Such plea should be made to the
Arbitral Tribunal as soon as any matter which is beyond the scope of authority of the
Arbitral Tribunal is raised during the conduct of Arbitral Proceedings.

Condonation of delay to admit the plea- The arbitral tribunal may admit the plea as
made under S.16(2) and S.16(3), even after the delay is caused to raise such plea.
Such plea can be admitted by Arbitral Tribunal, if the Arbitral Tribunal is satisfied
that, the delay is justified on any reason.

Rejection of objections- When any objection is made to Arbitral Tribunal under

S.16(2) or S.16(3), it is the duty of the Arbitral Tribunal to decide on such objection.
If the Arbitral Tribunal rejects such objection, then, it shall continue with the Arbitral
Proceedings and make an Arbitral Award.

Q4 State the procedure and importance of settlement agreement?

Ans.
1. When the conciliator sees potential agreement points between the parties, they'll
outline these terms and share them for feedback. Based on the parties' input, the
conciliator may adjust the terms accordingly.

2. If the parties reach agreement on a settlement of the dispute, they may draw up and
sign a written settlement agreement. If requested by the parties, the conciliator may
draw up, or assist the parties in drawing up, the settlement agreement.
3. When the parties sign the settlement agreement, it shall be final and binding on the
parties and persons claiming under them respectively.

4. The conciliator shall authenticate the settlement agreement and furnish a copy thereof
to each of the parties.

IMPORTANCE:

The settlement agreement shall being writing and shall be signed by the parties. When the
parties sign the settlement agreement, it shall be final and binding on the parties and persons
claiming under them respectively. Once the settlement is signed by the parties, the conciliator
shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.

S.73, states that the conciliator can formulate terms of a possible settlement if he feels that
there exists elements of settlement which is acceptable to the parties. The settlement
agreement shall have the same effect as the arbitral award on agreed terms on the substance
of the dispute rendered by the arbitral tribunal under S.30.

The settlement agreement shall have the same status and effect as if it is an arbitral award on
agreed terms on the substance of the dispute rendered by an arbitral tribunal under S.30. the
award under S.30 is open to correction, interpretation and additional award under S.33 and
for setting aside under S.34 before it obtains the status of a decree under S.36.

Q5 When award is considered as final award?

Ans. Finality of the Award (S.36) – Acc. to S.36, an arbitral award made under
Part-I of the A&C Act, 1996, shall be final and binding on the parties, and the persons
claiming under them, respectively. When the parties to Arbitration Agreement submit
their dispute to Arbitration, the Arbitration Tribunal makes an Arbitral Award.
The arbitral award is final and binding upon the Parties who have submitted
the dispute to Arbitration. The award is final and binding upon the parties who have
submitted the dispute to Arbitration. The award must be made according to the law to
which the parties have subjected the Arbitral proceedings.

Under following circumstances the Award is said to be final:

- When the time period for making the request under S.33 for correction,
interpretation and making of an additional award has expired.

- When the time period for making an application to court under S.34 to set aside
the Arbitral Award, has expired.

- When any appeal cannot be filed against the Arbitral Award.

When the Award becomes final as above, then it becomes binding on
all the parties to dispute and all the persons claiming under them. Thus, when no
more objections to an Arbitral Award can be made, the Award is said to be final.
Binding of an Award means such an Award can be used by the Parties for
any of their purpose, for e.g.,
- To use as an evidence
- To use as a defence
- To use for set-off against the other party, etc.
The Award can be binding and used for above purposes by the parties,
only when it has become final. The award which is not final, cannot be binding on
the parties.

Circumstances award made cannot become a final award:

- In a domestic arbitration, an award passed is in conflict with the substantive law
which is in force in the territory of India.
- The Award which is in conflict with the public policy of India.
- The Award which is unreasonable or not possible of being performed.

Q6 Explain foreign award with help of two conventions.

Ans. A foreign arbitration is an arbitration conducted in a place outside India, and the
resulting award is sought to be enforced as a foreign award. Ad hoc Arbitration is
arbitration agreed to and arranged by the parties themselves without recourse to any
institution.
S.44 of A&C Act, 1996 defines foreign award as an arbitral award on
differences between person arising out of legal relationships, whether contractual or
not, considered as commercial under the law in force in India.

Procedure for enforcement of Foreign Awards in India- the enforcement of

foreign arbitral awards is regulated by Part II of the A&C, Act, 1996, which allows
for this enforcement under either the New York Convention or the Geneva
Convention, these applications are only presented before a HC.

Enforcement of Foreign Awards passed Under the New York Convention-

Foreign awards, as per the A&C Act, 1996, Chapter I, Part II, sections 44 to 52, are
those arbitral decisions resolving disputes between individuals stemming from a legal
relationship, whether contractual or not. To be enforceable, the dispute must be
recognized as commercial under Indian law post 11.10.1960. Additionally, the
country where the award originates must be a signatory to the New York Convention,
and the award must be issued in a state identified by the Central Government as a
reciprocating territory.
As per S.47, the party seeking enforcement of the foreign award in India must
submit the following when applying:
- The original award or an authenticated copy,
- The original arbitration award or its certified copy.
- Any evidence of the foreign nature of the award.
S.48 outlines specific grounds on which the opposing party can raise objections to such
enforcement. Finally, under S.49, if the court is satisfied with the enforceability of the foreign
award as per this chapter, the award is treated as a decree of that court.

Enforcement of Foreign Arbitral Award passed under the Geneva Convention

The enforcement of foreign arbitral awards under Geneva Convention is covered in Chapter
II, Part II of the Arbitration and Conciliation Act of 1996, with relevant provisions spanning
Sections 53 to 60.

In Section 53, a foreign award is defined as an arbitral decision on disputes related to

matters considered commercial under Indian law after July 28, 1924. The three prerequisites
for enforcement are:

- The award is in pursuance of an arbitration agreement covered by the Geneva

Protocol on Arbitration Clauses, 1923.
- The award is between parties subject to the jurisdiction of reciprocating territories,
as designated by the Central Government and where the Geneva Convention on
the Execution of Foreign Arbitral Awards, 1927 applies.
- The award is made in a territory designated as reciprocating by the Central
Government.

According to Section 56, the party seeking the enforcement of the foreign award in India
must submit the following during the application:

- The original award or an authenticated copy.

- Evidence demonstrating that the award has become final.
- Evidence proving that the award was made in accordance with a valid arbitration
agreement under applicable law.

Section 57(2) outlines conditions under which the enforcement of the award can be refused.
Finally, as per Section 58, when the Court is satisfied with the enforceability of the foreign
award under this Chapter, the award is then treated as a decree of that Court.

Q7 Explain the procedure and power of conciliator for settlement of dispute.

Ans. In any conciliation proceedings, there shall be only one conciliator, provided
that, if the parties agree that there shall be 2/3 conciliators then such number of
conciliators appointed by the parties should act jointly. (S.63)
Generally, only one conciliator is appointed to resolve the dispute between the
parties. The parties can appoint sole conciliator by mutual consent. If the parties fail
to arrive at a mutual agreement, they can enlist the support of any international or
national institution for the appointment of a conciliator
In conciliation proceedings with three conciliators, each party appoints one
conciliator. The third conciliator is appointed by the parties by mutual consent. Unlike
arbitration where the third arbitrator is called the Presiding Arbitrator, the third
conciliator is not termed as Presiding conciliator. He is just the third conciliator.
S.67 - The conciliator is supposed to be impartial and conduct the conciliation
proceedings in an impartial manner. He is guided by the principles of objectivity,
fairness and justice, and by the usage of the trade concerned and the circumstances
surrounding the dispute, including any previous business practices between the
parties. The conciliator is not bound by the rules of procedure and evidence. The
conciliator does not give any award or order. He tries to bring an acceptable
agreement as to the dispute between the parties by mutual consent.

Power and Functions of Conciliator

1) Submission of statement to conciliator (S.65)
After the Conciliator is appointed, the conciliator, may request each Party to
submit a written statement describing the general nature of the dispute
i. A written statement describing the general nature of the dispute.
ii. Issues to be considered

Each party should send a copy of such statement to other Party to the dispute.

The conciliator may request each Party to submit to him,

iii. A further written statement stating the facts of the dispute, his position
as to the dispute and grounds in support of the dispute. Such written
statement may be accompanied by any documents and other evidence,
as the party may deem fit. Each party should send a copy of such
statement, documents and other evidence to the other party.
iv. At any stage during the conciliation proceeding, the conciliator may
ask the party to submit such additional information, as he may deem
appropriate.

2) Communication between conciliator and parties:

The conciliator may invite the parties to meet him, or may communicate with
them orally or in writing. While doing so, he may meet or communicate with
the parties together or separately with each of them. If the parties have not
agreed upon the place of meeting with the conciliator, then, having regard to
the circumstances of the conciliation proceeding, the conciliator of
confidentiality, the conciliator shall fix the place of meeting after consultation
with the parties.

3) Disclosure of information (S.70):

The information regarding the facts of the dispute received by the Conciliator
from one party should be communicated to the other party, in order to enable
the other party to give any explanation, which he considers appropriate. If the
conciliator receives any information on the condition of confidentiality, the
conciliator shall not disclose such confidential information to the other party.
4) Parties to co-operate with conciliator:
The parties should co-operate with the conciliator and submit the written
materials, evidence, etc. as asked by the conciliator. Parties to conciliation
proceedings should attend the meetings as and when fixed.

Q8 Explain the procedure of appointment of an Arbitrator?

Ans.
1. As per S.11(2) parties are free to determine the procedure for appointment
the Arbitrators.

2. If the parties do not determine the procedure for appointment of Arbitrators,

then, if the Arbitration is with the three Arbitrators, each party to arbitration
can appoint one arbitrator each, and the appointed arbitrators shall appoint the
third arbitrator. The third arbitrator so appointed shall act as a presiding
arbitrator.

3. A party to arbitration agreement, should appoint an arbitrator within 30 days

after it receives a request to appoint an arbitrator from the other party. If the
party has appointed one arbitrator each, then, the two appointed arbitrators
must agree on the appointment of third arbitrator within a period of 30 days
from the date of their appointment. And if the party fails to appoint an
arbitrator or if the third arbitrator is not appointed, then, such appointment
shall be made by the Chief justice, if the request to make such appointment is
made by the party to arbitration agreement. Such appointment on the request
of the party to arbitration agreement can also be made by any person or any
institution designated by the party.

4. If the procedure of appointment of arbitrators is not agreed upon, and the

arbitration is with the sole arbitrator, then if one party to arbitration agreement
makes a request to the other party to arbitration agreement, to agree upon the
appointment of sole arbitrator, then the parties must agree within a period of
30 days from the date of receipt of request. And if they fail to agree within 30
days then such appointment shall be made by the chief justice, if the request to
make such appointment is made the party to arbitration agreement. Such
appointment on the request of the party to arbitration agreement can also be
made by any person or any institution designated by the party.

5. Where the procedure of appointment is agreed upon by the parties, then, if a

party fails to act as required under that procedure, the parties or the two
appointed arbitrators fail to reach an agreement, which they should have
reached under that procedure, or, a person including an institution fails to
perform any function entrusted to him or it under that procedure. The party to
arbitration agreement may request the chief justice or any person or institution
designated by that party to take necessary measures as per the circumstances
and this request to chief justice to take necessary measures cannot be made if
the agreement on the procedure of appointment provides for other measures
for securing he appointment.

6. The decision of the Chief justice or the person or institution so designated, is

final.

7. The chief justice or the person or institution so designated, must consider the
following, while making appointment or an arbitrator- the arbitrator must
possess such qualifications as may be provided by the Agreement between the
parties and the appointed arbitrator must be an independent and impartial
arbitrator.

8. In an International Commercial Arbitration, the Chief Justice of India or the

person or the institution designated by the party, while appointing the sole
arbitrator or third arbitrator, may appoint an arbitrator of a nationality other
than the nationalities of the parties to the dispute, if the parties belong to
different nationalities.

Thus, where the procedure to appoint an arbitrator has been agreed between the parties, the
only function of the court is to implement the procedure so agreed. If the agreement specifies
the name of the arbitrator is to be appointed, the court cannot appoint any other arbitrator.
Only if the named arbitrator refuses to act, then the court is entitled to appoint the arbitrator.

Q9 What are contents of an Arbitral Award?

Ans.
1. An arbitral award shall be made in writing and shall be signed by the members of the
arbitral tribunal.
2. In arbitral proceedings with more than one arbitrator, the signature of the majority of
all the members of the arbitral tribunal shall be sufficient so long as the reason for
any omitted signature is stated.
3. The arbitral award shall state the reasons upon which it is based, unless the parties
have agreed that no reasons are to be given or the award is an arbitral award on
agreed terms under S.30
4. The arbitral award shall state its date and the place of arbitration as determined in
accordance with S.20 and the award shall be deemed to have been made at that place.
5. After the arbitral award is made, a signed copy shall be delivered to each party.
6. The arbitral tribunal may, at any time during the arbitral proceedings, make an
interim arbitral award on any matter with respect of which it may make a final
arbitral award.
7. Unless otherwise agreed by the parties where and in so far as an arbitral award is for
the payment of money, the arbitral tribunal may include in the sum for which the
award is made, interest at such rate as it deems reasonable, on the whole or any part
of the money, for the whole or any part of the period between the date on which the
cause of action arose and the date on which the award is made.

Q10 What is setting aside of an arbitral award?

Ans. According to Section 2(1)(c) of the 1996 Act an arbitral award includes an
interim award. Interim orders are orders that are valid only during the arbitration
process, mandating the party to refrain from doing some actions that may fall counter
to or harm the other party’s interest. Such an order is passed in the form of an interim
injunction. Unlike a usual interim measure, an interim award under the 1996 Act
forms a part of the final award, that is binding on the parties involved. An interim
award is granted after a thorough hearing, encompassing the accepted interim
measures.
However, once the arbitration proceedings have been completed, the arbitral
tribunal grants an arbitral award, as the final award. An arbitral award can be
monetary or non-monetary. It can be monetary which is made for payment of a sum of
money from one party to the other and it can be non-monetary when no money needs
to be paid, but it includes decisions like stopping a certain business practice or
increasing unemployment perks and incentives.
For an award to be held valid, it must fulfil two conditions. Firstly it should be
certain, meaning that it should be clear, definite, and unambiguous in terms of the
decision made with regard to the rights of the parties. Secondly, it must contain a
decision. An award without a valid decision or unclear decision on every issue raised
before the arbitral tribunal shall be considered invalid. In addition to fulfilling these
conditions, an award must bear the signature of an arbitrator. It must also contain
specific reasons for the decision made in an award regarding the particular case. The
award should not leave any room for confusion and must clearly outline the duties and
liabilities imposed on the parties. An award must deal with every aspect of the issue
that is a matter of concern between the parties, giving a clear and final decision on
every such aspect of the issue.

Setting aside of arbitral award:

An application for setting aside an arbitral award has to be made in an appropriate
court having jurisdiction on such matters. An application for setting aside an arbitral
award rendered in arbitration must be submitted to either a District Court, specifically
the principal Civil Court of original jurisdiction, or to the High Court with ordinary
original civil jurisdiction. This High Court should have the authority to adjudicate on
the issues central to the arbitration proceedings.

Grounds of setting aside:

Two parties that sign up to an arbitration agreement are mutually bound by the
agreement in line with Section 7 of the 1996 Act. It means that the parties have a
contractual obligation to resolve any future controversies by means of arbitration.
This initial agreement sets the stage for the arbitration process and establishes a legal
obligation for the parties to abide by the terms specified in the agreement.
When the dispute between the parties arises and they resolve such dispute through
arbitration, an award is rendered which becomes legally binding on both parties. This
means that the award passed by the adjudicating authority obligates the parties to
adhere to the decision and terms outlined in the arbitration award. The finality of the
award provides for the complete resolution of the dispute by the arbitrator.

However, there may arise some instances where one or both parties are not satisfied
with the arbitral award, in such circumstances, the 1996 Act provides a recourse
mechanism. Section 34 of the 1996 Act provides for specific grounds available to the
parties on the basis of which they can apply for setting aside an award, while Section
37 establishes the provisions of appeal regarding certain orders.

Section 34 of the 1996 Act provides the provisions of certain specific grounds on
the basis of which an arbitral award rendered in India can be set aside. They
are-

i. Incapacity of a party while making an application to enter the agreement.

ii. Arbitration agreement not being valid under the law.
iii. Parties were not given proper notice of the appointed Arbitrators or the
Arbitral Tribunal.
iv. Nature of dispute not capable of settlement by arbitration.
v. The composition of the arbitral award was not in accordance with the
agreement of the parties.
vi. The arbitral award is in violation of the public policy of a state.
vii. The arbitral award deals with a dispute not falling within the terms of
submissions to an arbitration.

Q11 Explain the procedure of Lok adalat.

Ans. Refer to SN

Q12 Explain in detail conciliation procedure.

Ans. Refer to SN

Q13 What are the powers of Arbitral tribunal to proceed Ex Parte? Discuss with the
help of decided cases.
Ans. The arbitration tribunal has the power to proceed ex parte if any of the following
conditions arise-
- the claimant fails to communicate his statement of claim in accordance with
section 23, the arbitral tribunal shall terminate the proceedings;
- the respondent fails to communicate his statement of defence in accordance with
section 23, the arbitral tribunal shall continue the proceedings without treating that
failure in itself as an admission of the allegations by the claimant;
- a party fails to appear at an oral hearing or to produce documentary evidence, the
arbitral tribunal may continue the proceedings and make the arbitral award on the
evidence before it.

Ex parte evidence means only one party's evidence is collected and examined by the
authority, excluding the other party from presenting evidence. Judicial decisions can also be
made based on ex parte evidence. Section 25 allows arbitrators to make decisions in the
absence of any party. However, before doing so, arbitrators must inform the involved parties
of their intention to proceed without them.

In Juggilal Kamlapat v/s General Fibre Dealers Ltd., the Calcutta High Court outlined
principles for arbitrators proceeding ex parte:

- If a party misses a hearing due to accident or oversight, the arbitrator should

schedule another hearing and wait to see if the behaviour of the absent party
changes.

- If the absence seems deliberate to obstruct justice, the arbitrator should notify the
party of the intent to proceed without them. If the party still doesn't attend, the
arbitrator may proceed ex parte, but must issue a similar notice for any subsequent
hearings.

- Failing to issue such notices for subsequent hearings may render the award liable
to be set aside, unless it's clear no prejudice occurred to the absent party.

- If a party openly refuses to participate in the arbitration, arbitrators aren't required

to issue notices but may still choose to do so.

- After an ex parte award is made without prior notice, it may be upheld if it's
evident the absent party would not have participated regardless, thus not
prejudicing them.

Q14 What are the provisions relating to correction, interpretation & additional
award?
Ans. An arbitral award made by the arbitral tribunal, may suffer from the defects.
Such defects can be in the form of mistakes or ambiguous language of the Award. The
award may not be complete in the sense that, it may not cover all the matters in
dispute and few matters are skipped while making an award.

CORRECTION: Under S.33, the arbitral tribunal is empowered to make correction

in the arbitral award-
1. If parties have not agreed for another period of time, then the party within a
period of 30 days from the date on which he receives the award, may request
the Arbitral Tribunal to correct computational errors, clerical errors,
typographical errors or any other errors of similar nature occurring in the
Award. A notice should be sent to the other party informing him that a request
for correction has been made to the Arbitral Tribunal.

2. If the arbitral tribunal is satisfied that, the request made is justified, then it
shall make the necessary correction in the Arbitral award within a period of
30 days from the date on which the arbitral tribunal receives such request for
correction.

3. The arbitral tribunal suo moto, on its own initiative, may make the
correction in the error. Such correction by the tribunal should be made
within a period of 30 days from the date on which an arbitral award is made.

4. The arbitral tribunal may extend the statutory time period of 30 days, within
which it has to make correction in the arbitral award.

INTERPRETATION: Under S.33, the Arbitral Tribunal empowered to give

interpretation on a specific point or the part of the Arbitral award-

1. If the parties have not agreed for another period of time, then the party within
period of 30 days from the date on which he receives the award, may request
the tribunal to give an interpretation on a specific point or part of award.

2. If the tribunal is satisfied that, the request made is justified, then it shall give
interpretation on that specific point or part of award, within a period of 30
days from the date on which the tribunal receives such request for
interpretation. The interpretation so given by the tribunal shall form part of the
arbitral award.

3. The tribunal may extend the statutory time period of 30 days, within which it
has to give interpretation of the arbitral award.

ADDITIONAL AWARD: An additional award can be made by the arbitral tribunal

under S. 33 of the arbitration and conciliation act, 1996-

1. In the absence of any contrary agreement between the parties, a party within a
period of 30 days from the date on which he receives the arbitral award, may
request the arbitral tribunal to make an additional award for the claims made
by him in the arbitral proceedings, if such claims were omitted in the arbitral
award by the arbitral tribunal. A notice should be sent to the other party
informing him that, a request to make an additional award has been made to
the arbitral tribunal.

2. If the arbitral tribunal is satisfied that, the request made is justified, then it
shall make an additional award within a period of 60 days, from the date on
which the arbitral tribunal receives such request to make an additional award.
3. The arbitral tribunal may extend the statutory time period of 60 days within
which it has to make an additional award.

Q15 Explain in detail about Lok Adalat vis-à-vis Permanent Lok Adalat.
Ans.

Q16 Discuss briefly the provisions governing conduct of arbitral proceedings?

Ans. The Arbitral Proceedings are conducted as under-

COMMENCEMENT: The arbitral proceedings commence on the date on which, a

request by one of the party to the dispute to refer the dispute to arbitration is received
by the other party to the dispute. But the parties to the dispute may agree on the
particular date on which the arbitral proceedings will commence. The purpose of
determining the date of commencement of the arbitral proceedings is for the
provisions of limitations.

RULES OF PROCEDURE:
1) Acc. to S.19, which provides for the determination of Rules of procedure, the Arbitral
tribunal is not bound by-
- The CPC, 1908,
- The Indian Evidence Act, 1873.

Thus, it is not necessary for an Arbitrator to follow strict and technical Rules of
evidence and procedure of CPC. Since, the arbitration proceedings are non-judicial
proceedings, the Indian Evidence Act does not apply to the arbitral proceedings.

2) The parties to arbitration agreement are free to agree on the procedure to be followed
by the tribunal for conducting the proceedings before it. But, such procedure must not
be contrary.

3) If the parties do not agree to any procedures, the tribunal may conduct the arbitral
proceedings in the manner it deems appropriate. But, such procedure must not be
contrary to the provisions of A&C Act.

PLACE OF ARBITRATION: S.20 provides for fixing of the place where the arbitral
proceedings can be conducted.

1) The parties to arbitration agreement, are free to agree on a place where the arbitration
proceedings can be conducted.
2) If the parties do not agree upon the place of arbitration, then the place of arbitration
shall be determined by the tribunal. While fixing the place of arbitration, the
arbitrators shall consider circumstances of the case and convenience of the parties.
Where the place of arbitration is fixed, a notice to that effect must be given to the
parties to arbitration.
3) Even if the place of arbitration is fixed by the parties, or by the arbitral tribunal, then
also, the tribunal is empowered to meet at any place which it considers appropriate for
consultation with other members of the tribunal, for hearing the parties-witnesses,
etc., and for inspection of the documents, goods or other property.

Such power of the tribunal to meet at any place, is subject to the agreement between the
parties to the contrary. If any restriction is placed by an agreement between the parties,
regarding the place of arbitration, the arbitration tribunal will be bound by such agreement.

Q17 When and how arbitration proceedings gets terminated?

Ans. S.32 of the A&C act, 1996, provides for the termination of arbitral proceedings.

1) The arbitration proceedings stand terminated, when the final award is made
by arbitral tribunal and by the order of tribunal when the tribunal adjudicates
on the dispute referred to it by the parties to the arbitration and no more
proceedings are required to be conducted, the tribunal makes an award. This
award is the final award, and with the making of this final award, the arbitral
proceedings stand terminated.

2) If the arbitral tribunal makes an order for the termination of the arbitral
proceedings, then the arbitral proceedings stand terminated. But if the claimant
withdraws his claim, the arbitral tribunal can order for the termination of
arbitral proceedings. But the arbitral tribunal shall not pass such order if the
respondent objects to order of arbitral tribunal for termination of arbitral
proceedings and the tribunal is satisfied that the respondent has a legitimate
interest in obtaining the final settlement of the dispute.

3) If the parties agree to the termination of the arbitral proceedings, then the
arbitral tribunal can issue an order for termination of arbitral proceedings.

4) The arbitral tribunal shall issue an order on termination of arbitral

proceedings, if the arbitral tribunal is satisfied that, it is no more necessary to
continue with the arbitral proceedings. Also, if for any reason it becomes
impossible to continue with the arbitral proceedings, then also, the arbitral
tribunal may issue an order for the termination of arbitral proceedings.

5) When the arbitral proceedings stand terminated, then the mandate or the
authority of the tribunal also stands terminated. With the termination of
authority of arbitral tribunal, the tribunal becomes “functus officio”.

6) If the parties have not agreed to the contrary and there is no sufficient cause,
and the statement of claim has not been submitted, then the arbitral tribunal
shall terminate the arbitral proceedings.
7) If the parties to the arbitral proceedings settle the dispute, then the arbitral
tribunal shall terminate the arbitral proceedings.

Thus, the arbitral proceeding is automatically terminated where the final award is passed. An
order of arbitral tribunal which terminates the arbitral proceedings in not an award. The
proceedings against the order of termination cannot be initiated because an order of arbitral
tribunal is not an award.

The Arbitral tribunal Shall not stand terminated in the following circumstances-

When the proceedings have been initiated for the purpose of-

- correction of errors in arbitration agreement; or

- interpretation of the arbitral award; or
- making an additional award.

Q18 Explain the provisions relating to appointment of conciliator and role of

conciliator in settlement of dispute.
Ans. Conciliator is a person who assists the parties in an independent and impartial
manner with the principles of justice and fairness in their attempt to reach an amicable
settlement of their dispute.

Appointment
 In any conciliation proceedings, there shall be only one Conciliator, provided
that, if the parties agree that there shall be two or three conciliators then such
number of conciliators appointed by the parties should act jointly. (S.63)

 The parties appointing the conciliator may agree on the name of a sole
conciliator, if there is only one conciliator.

 In the conciliation proceedings with three conciliators, the third conciliator

acts as the Presiding conciliator.

 According to Section 64(2), when appointing a conciliator, parties involved

can seek assistance from any person or institution. They can ask for
recommendations for a suitable individual to act as a conciliator. Or, they can
agree for the person or institution to directly appoint one or more conciliators.

 While appointing or recommending one or more conciliators, such person or

institution should take into considerations, such aspects, that lead to the
appointment of an independent and impartial conciliator. Also, while
appointing a sole or the third conciliator, if such person or institution should
appoint the conciliator of a nationality, which is different from the nationality
of the parties.
Role:
1. The conciliator shall assist the parties in an independent and impartial manner
in their attempt to reach an amicable settlement of their dispute.

2. The conciliator shall be guided by principles of objectivity, fairness and

justice, giving consideration to, among other things, the rights and obligations
of the parties, the usages of the trade concerned and the circumstances
surrounding the dispute, including any previous business practices between the
parties.

3. The conciliator may conduct the conciliation proceedings in such a manner as

he considers appropriate, taking into account the circumstances of the case, the
wishes the parties may express, including any request by a party that the
conciliator hear oral statements, and the need for a speedy settlement of the
dispute.

4. The conciliator may, at any stage of the conciliation proceedings, make

proposals for a settlement of the dispute. Such proposals need not be in writing
and need not be accompanied by statement of the reasons thereof.

Q19 State the salient features of the Arbitration and Conciliation Act, 1996.
Ans. In the present time, the arbitration is governed by the law of arbitration which is
provided under the Arbitration and conciliation act, 1996. Earlier to this act, there
were 3 acts that governed the law of arbitration in India that are as follows:
- The Arbitration (Protocol and convention) Act, 1937.
- The Arbitration Act, 1940
- The foreign Awards (Recognition and Enforcement) Act 1961.

The Arbitration and Conciliation Act, 1996 came in order to consolidate and amend the
already existing laws relating to domestic arbitration. The act came in to force on 25.01.1996.

Salient Features:

1. A more comprehensive statute: The A&C Act, 1996 is more comprehensive than
the earlier act of 1940. It consists of 86 sections divided into 4 parts.

2. Arbitral Award treated at per with a decree: In 1996, an important aspect of the
law is that arbitration awards and settlements from conciliation proceedings hold the
same weight as court decrees. This means that an arbitration award can be enforced
just like a court decree.

3. Curtailment of the courts process: The 1996 act limits the court's authority
compared to the 1940 act, giving arbitrators more power. They can operate
independently during arbitration, free from court intervention.
4. Abolition of the Umpire system: The 1996 act got rid of the umpire system, which
was a part of the 1940 act. In the 1940 act, if an even number of arbitrators couldn't
reach a decision on time or if there was disagreement between two arbitrators, an
umpire would step in to make the decision instead of the arbitrators.

5. Qualification of the arbitrator: In the past, the Arbitration Act of 1940 didn't
specify any requirements for arbitrator appointments, but the 1996 Act does.
Nowadays, many disputes involve technical aspects, so it's important for arbitrators to
have expertise in those areas to make fair decisions.

6. Assistance of court in certain matters: In 1996, a law was enacted allowing courts
to help in specific situations. Tribunals or parties involved can ask the court for help
in gathering evidence. The court can then order witnesses to provide evidence directly
to the tribunal. However, the law doesn't give tribunals the authority to summon
witnesses. So, the tribunal or a party, with the tribunal's approval, can request court
assistance in gathering evidence.

7. Empower to pass interim orders: the provision relating to interim measures,

empower the arbitrator or arbitral tribunal to pass interim orders in respect of the
subject matter of the dispute at the request of the party.

8. Enforcement of foreign awards: The 1996 act enforces foreign awards from the
New York Convention and Geneva Convention as court decrees. However, countries
not in these conventions can't enforce their awards in India under Part II of the act.

Q20 State the composition, power and duties of an Arbitral Tribunal.

Ans.
COMPOSITION:
 Arbitral tribunal means a sole arbitrator or a panel of arbitrators. S.10 and S.11
of the Arbitration and Conciliation Act, 1996, provides for Composition of
Arbitral Tribunal.
 S.10(1) says that, while making an appointment of Arbitrator, parties to
dispute are free to determine the total number of Arbitrators. But such total
number of Arbitrators shall not be an even number. The total number of
arbitrators appointed by the parties, must be an odd number.
 S.10(2) says that, if the parties to Arbitral Agreement fail to determine the
total number of Arbitrators, then the Arbitral Tribunal shall consist of only one
Arbitrator or sole Arbitrator. The arbitrators to be appointed for an arbitral
proceedings, must give their free consent to act as an arbitrator, to adjudicate
upon the dispute which is the subject matter of Arbitration agreement.
 S.11 says that, with respect to the nationality of the arbitrator the person may
be of any nationality or may as the party decide the same. The process of
appointing a arbitrator may be the decided by the parties according to Sub-
section 6.
 S.12 says that, the grounds of challenging the arbitrators. There lie two basis
grounds on which a arbitrator can be challenged. The first remains the doubts
of been impartial or the independence of the arbitrator. If the parties or party
feels that the arbitrator is impartial or has connection to one of the parties then
the challenge can be raised. On the other side if the there is a incapacity on the
grounds of his qualification then on that ground too disqualification process
can be initiated.
 Therefore, S.10 can be interpreted in the lights of S.11. S.10 remains more
clear than S.11 in a sense that S.10 provides the number of arbitrators. On the
other hand. S.1 provides only the appointment in cases where there is one
arbitrator or three arbitrators. The SC has held that the agreement does not
becomes void just because of the fact that the parties have decided for
appointment of two arbitrators.

Power
 To rule on its own jurisdiction - Section 16 of the Act talks about the power
of an arbitral tribunal to decide if there's a problem with the arbitration
agreement. Even if the tribunal decides that the main contract is invalid, the
arbitration clause, which is treated as a separate agreement, still stands.

 To make Interim Measures – a party during the arbitral proceedings apply to

the arbitral tribunal for the appointment of guardian for minor and person of
unsound mind for arbitration proceedings; or interim measures for
preservation, interim custody or sale of any goods which are the subject matter
of the arbitration agreement; or securing the amount in dispute or appointment
of receiver and interim injunction.

 To Hold Oral Hearing - The arbitration panel can choose to either review
documents only or hold oral hearings for presenting evidence or arguments.
Both parties must be notified in advance of any hearings, and any submissions
from one party must be shared with the other.

 To proceed Ex-Parte- If the claimant or respondent doesn't explain why they

couldn't present their case, the arbitrator will make decisions without hearing
from them.

 To Appoint an Expert - The Act allows the arbitration panel to hire experts
to investigate certain matters. These experts provide reports and answer
questions from both parties during a hearing. If requested, they must also share
any relevant documents or items they have with the parties.
Duties

 To be Impartial - act says that it is the duty of an arbitral tribunal to be

impartial, that means the arbitral tribunal shall treat each party equally and
each party shall be given full opportunity to present his case.

 To choose time, place and language of arbitration - parties are free to

choose the place of arbitration according to their convenience but if they fail
to do so then it is the duty of the arbitral tribunal to determine such place
regarding circumstances of the case.

 To correct the award - if the a party within thirty (30) days from the receipt
of the arbitral award, with a notice to other party, request the arbitral tribunal
to correct any computational, clerical or typographical error in the award or
request the arbitral tribunal to give an interpretation of a specific point of the
award then it is the duty of the arbitral tribunal to make the correction or give
the interpretation which shall form the part of the arbitral award.

 To avoid misconduct- It is the duty of the arbitral tribunal to avoid passing

any award which is opposed to public policy. It must not engage in bribery
and corruption also it must not break the rule of natural justice.