Mumbai University

3 Years LLB- Semester VI (April 2024),

Alternate Dispute Resolution (ADR)
Questions & Answers.

Q1) What is an Alternate Dispute Resolution?

Ans) ADR is the collective term of methods such as arbitration, conciliation,
mediation, and other tools which facilitate dispute settlement outside the
formal judicial process. The process is mutual and voluntarily, and involves
the appointment of a third party who will try and solve the dispute through
the selected approach.

Q2) What is Arbitration?

Ans) Arbitration is settlement of a question or dispute (whether of fact, law,
or procedure) between parties to a contract by a neutral third party (who is
known as the arbitrator), without going through the rigours of the formal
court process. Arbitration is a voluntary process, which starts only if all
parties to a dispute agree to it. In the Indian context, the scope of the
rules for the arbitration process are set out broadly by the provisions of the
Arbitration and Conciliation Act 1998. The parties are however free to design
an appropriate arbitration process themselves, relevant to their disputes,
within this broad framework. The decision of the arbitrator is binding on all
parties.

Q3) Define Arbitration Agreement?

Ans) As per Section 7(1) of Arbitration & Conciliation Act, 1996, an
Arbitration Agreement is typically a clause in a broader contract in which the
parties involved agree to settle any dispute that arises out of the contract,
out of court, through arbitration. The arbitration agreement mandates,
guides, and establishes the arbitration proceedings at the time of dispute.
The arbitration process starts when the parties enter into an arbitration
agreement.
In arbitration, a trained, professional, and neutral arbitrator acts as a judge
who will render a decision to end the dispute.

Q4) What is foreign award?

Ans) A Foreign Award in the context of Alternate Dispute Resolution (ADR)
refers to an arbitral award that is made in a country other than the one
Alternate Dispute Resolution (ADR)

where enforcement is sought. Section 44 of Arbitration and Conciliation

Act,1996 defines "foreign award" as an arbitral award on differences
between persons arising out of legal relationships, whether contractual or
not, considered as commercial under the law in force in India. The
enforcement of foreign arbitral awards is governed by international
conventions like the New York Convention 1958, or Geneva Convention. The
enforcement of these awards is considered one of the main factors in the
success of International Commercial Arbitration.
However, it’s important to note that while a foreign award cannot be disputed,
its enforcement can be opposed on the same grounds that are available for a
domestic award. This means that while the award itself is final and binding,
its enforcement in a particular jurisdiction can be challenged under certain
circumstances.

Q5) What is consent award?

Ans) A Consent Award is a type of arbitral award that reflects the mutually
agreed settlement terms of the parties involved in a dispute.
Consent Awards are settlement agreements recorded between the parties
after they have invoked arbitration to settle disputes. The consent award is
non-adjudicatory in nature, meaning it does not involve a decision on the
merits of the dispute. In rendering a consent award, the arbitral tribunal
does not entertain the dispute on its merits, but only records the settlement
agreement of both parties for the purpose of formality.

Q6) What is Lok Adalat?

Ans) A Lok Adalat is a statutory body created under Section 19 of the Legal
Services Authorities Act, 1987. It is an alternative dispute resolution
mechanism in India, where disputes that are pending in a court of law, or at
any pre-litigation stage, can be settled amicably. Lok Adalats have the
authority to settle a wide range of civil and criminal cases, except those that
are non-compoundable under the law.

Q7) What is the date of commencement of Arbitral Proceedings?

Ans) The date of commencement of arbitral proceedings is typically the date
on which a request for that dispute to be referred to arbitration is received
by the respondent. This is unless otherwise agreed by the parties. In other
words, a party can commence arbitration by issuing a notice in writing to the
other party of its intention to refer the dispute to arbitration. The

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arbitration proceedings are deemed to have commenced on the date on which

the respondent receives such notice from the claimant.

Q8) What is the Full form of UNICITRAL?

Ans) UNICITRAL stands for United Nations Convention on International
Trade Law.

Q9) Who is mediator?

Ans) A mediator is a neutral third party who assists two or more parties in
resolving a dispute. The mediator’s role is to facilitate communication,
promote understanding, and help the parties reach a mutually acceptable
resolution. Unlike a judge or an arbitrator, a mediator does not make a
decision or impose a solution on the dispute. Instead, the mediator helps the
parties to create their own solution. Mediation is a method of alternative
dispute resolution (ADR) and is an alternative to litigation.

Q10) What is Lien of Award?

Ans) A Lien of Award refers to the right of an arbitrator to retain the
arbitral award until the payment of the fees and expenses due to them is
made. This right is similar to a lien in general legal terms, which is a claim
or legal right against assets that are typically used as collateral to satisfy a
debt.
In the context of arbitration, if the parties refuse to pay the arbitrator’s
fees, the arbitrator may exercise their lien over the award. This means they
may refuse to release the final award to the parties until their fees are
paid.

Q11) Who is presiding Arbitrator?

Ans) A Presiding Arbitrator is typically the arbitrator who is appointed by
the other arbitrators or designated in the arbitration agreement as the
presiding arbitrator or chairman of the arbitral tribunal.
The Presiding Arbitrator often plays a crucial role in the arbitration process,
including dictating the pace and tone of the arbitration, conducting the
hearings, and drafting the award. They are often given considerable
discretion in making procedural decisions.

Q12) Name two statutes dealing with ADR?

Ans) Two statutes dealing with Alternative Dispute Resolution (ADR) are:

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i) Arbitration and Conciliation Act, 1996: This Act provides a framework for
the arbitration process, including the appointment of arbitrators, the
conduct of arbitral proceedings, the making of an arbitral award, and the
enforcement of arbitral awards.
ii) The Legal Services Authority Act, 1987: This Act provides for the
constitution of legal services authorities to provide free and competent
legal services to the weaker sections of the society to ensure that
opportunities for securing justice are not denied to any citizen by reason
of economic or other disabilities.

Q13) What are the different mechanisms of ADR?

Ans) ADR mechanism of dispute resolution in India, mainly comprise of
Arbitration, Mediation, Conciliation and Negotiation.

Q14) In which of the landmark judgement, it was decided by the Supreme

Court that Part I and Part II of the Arbitration & Conciliation Act 1996,
are mutually exclusive of each other?
Ans) In the case of Bharat Aluminium Co V Kaiser Aluminium Technical
Services Inc, it was decided by the Supreme Court that Part I and Part II
of the 1996 Act, are mutually exclusive of each other.

Q15) What is arbitral tribunal?

Ans) An Arbitral Tribunal is a panel of unbiased adjudicators which is
convened 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.

Q16) What is the legal effect of award by Lok Adalat?

Ans) Under the Legal Services Authorities Act, 1987, an award (decision)
made by a Lok Adalat is deemed to be a decree of a civil court. This means
that the award is final and binding on all parties involved, and no appeal
against such an award lies before any court of law. However, if the parties
are not satisfied with the award of the Lok Adalat, they are free to initiate
litigation by approaching the court of appropriate jurisdiction by filing a case,
as they retain the right to litigate.

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Q17) What is statement of claim and defense in arbitration

Ans) In arbitration, the Statement of Claim and Statement of Defense are
crucial documents that outline the respective positions of the parties involved
in the dispute.
➢ Statement of Claim: This is a document submitted by the claimant that
sets out the facts of the case, the legal issues in dispute, and the specific
relief or remedy sought from the arbitral tribunal1. It essentially initiates
the arbitration proceedings and lays down the foundation for the claimant’s
case.
➢ Statement of Defense: In response to the Statement of Claim, the
respondent submits the Statement of Defense. This document addresses
the points raised in the Statement of Claim and presents the respondent’s
counterarguments1. It includes the respondent’s version of the facts, any
legal defenses, and may also contain counterclaims against the claimant.
Both documents must be comprehensive and include all relevant facts, legal
arguments, and evidence that the parties wish to rely on during the
arbitration proceedings. They form the basis for the subsequent hearings and
the final award of the arbitral tribunal.

Q18) What is de jure and de facto impossibility to act for an arbitrator?

Ans) The arbitrator becomes de jure unable to perform his functions, if he
does not remain independent and impartial, or if he does not possess adequate
qualification as agreed between the parties to arbitration agreement; The
arbitrator is said to be de facto unable to perform his function if he has
become ill or insane or any other cause likely to affect his function as an
arbitrator.

Q19) What is institutional Arbitration?

Ans) Institutional arbitration refers to the process of resolving disputes under
the backings of an established arbitral institution, according to its set rules
and procedures. These institutions provide a framework for the arbitration
process, including the appointment of arbitrators, case management services,
and administrative support. The main features of institutional arbitration are:
➢ Arbitral Institutions: These are permanent organizations that offer a set
of arbitration rules and oversee various aspects of the arbitration process,
such as constituting the arbitral tribunal and handling administrative and
financial matters.

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➢ Rules and Procedures: Institutional arbitration is conducted pursuant to

the rules of the institution, which provide a structured process and often
include standard rules to cover various procedural aspects.
➢ Administrative Support: The institution typically assists with the practical
aspects of conducting an arbitration, such as arranging venues for hearings
and managing the financial aspects of the process.
➢ Certainty and Efficiency: One of the main advantages of institutional
arbitration is the higher degree of certainty and efficiency in procedural
matters, compared to ad hoc arbitration, which is conducted without the
support of an institution.
➢ Institutions like the International Chamber of Commerce (ICC), the London
Court of International Arbitration (LCIA), and the Singapore International
Arbitration Centre (SIAC) are examples of prominent arbitral institutions
that facilitate institutional arbitrations globally.

Q20) is arbitration discharged by death of either party?

Ans) No, arbitration is not discharged by the death of either party.
According to Section 40 of the Arbitration and Conciliation Act, 1996, an
arbitration agreement shall not be terminated by the death of any party
involved. It remains enforceable by or against the legal representatives of
the deceased.
This means that the arbitration process can continue with the legal heirs or
representatives of the deceased party taking their place in the proceedings.
The mandate of an arbitrator is also not terminated by the death of the
party who appointed them. However, it’s important to note that this does not
affect any law that extinguishes a right of action by the death of a person.

Q21) What is the date of commencement of arbitral proceedings?

Ans) The date of commencement of arbitral proceedings is a crucial aspect
in arbitration. According to Section 21 of the Arbitration and Conciliation
Act, 1996, the arbitral proceedings are deemed to commence on the date on
which a request for that dispute to be referred to arbitration is received by
the respondent. This request is typically made through a notice in writing
from the claimant to the respondent, indicating the intention to refer the
dispute to arbitration.
It’s important to note that the commencement date is significant because it
often determines the applicability of certain rules and laws, and it may also
affect the calculation of limitation periods for the claims made in the
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arbitration. The parties may agree on a different date for the commencement
of proceedings, but unless such an agreement is made, the default position
under the law is as stated above.

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Descriptive Questions/ Short Notes

Q1) State any three reasons for emergence of Alternate Dispute Resolution
(ADR)?
Ans) The reasons for emergence of ADR are:
➢ High Cost of Litigation: The cost of litigation consist of court fees, fees
paid for summons and other processes, advocates fees etc. The costly
nature of litigation compels parties to abandon claims and defences in
court of law and look for alternate dispute resolution mechanism.
➢ Efficiency and Speed: ADR provides a faster method to resolve disputes
compared to traditional court proceedings. The number of cases pending
in courts and the lengthy time taken to resolve disputes have contributed
to the development of ADR.
➢ Confidentiality and Control: Parties often prefer ADR because it offers
greater confidentiality than court proceedings. It also allows parties to
have more control over the selection of the individual or individuals who
will decide their dispute. Furthermore, companies that do not want to
make their disputes public, which could potentially harm their reputation,
support alternative ways to resolve disputes privately.

Q2) Discuss the features of Arbitration and Conciliation Act 1996.

Ans) The Arbitration and Conciliation Act, 1996 aims in facilitating quick
resolution of commercial disputes. Some of the salient features of the Act
are as follows:
i) Comprehensive Framework: The Act provides a comprehensive framework
for domestic arbitration, international commercial arbitration, and
enforcement of foreign arbitral awards. It is considered a self-
contained code, which means it is the complete and exclusive set of rules
for matters it covers.
ii) Based on UN Model Law: The Act is based on the UN Model Law on
International Commercial Arbitration, which was recommended by the
United Nations Commission on International Trade Law (UNCITRAL). This
alignment with international standards helps facilitate international trade
and commerce.
iii) Consolidation of Laws: It consolidates and amends the law relating to
arbitration contained in previous enactments, such as the Arbitration
Act of 1940 and the Foreign Awards (Recognition and Enforcement) Act
of 1961.
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iv) Autonomy of Arbitral Process: The Act minimizes the supervisory role
of courts in the arbitral process, granting more autonomy to the arbitral
tribunals. This is intended to make the arbitration process less formal,
more flexible, and faster.
v) Enforcement of Awards: It ensures that every final arbitral award is
enforced in the same manner as if it were a decree of the court. This
feature underscores the binding nature of arbitral awards.
vi) Conciliation Proceedings: The Act also defines the law relating to
conciliation and provides that a settlement agreement reached by the
parties as a result of conciliation proceedings will have the same status
and effect as an arbitral award.
vii) Procedural Efficiency: The Act aims to provide an arbitral procedure
that is fair, efficient, and capable of meeting the needs of specific
arbitrations. It also allows the arbitral tribunal to use mediation,
conciliation, or other procedures during the arbitral proceedings to
encourage settlement of disputes.
viii) Qualifications for Arbitrators: The Act prescribes qualifications for
arbitrators, ensuring that the individuals who arbitrate disputes have
the necessary expertise and integrity.
These features make the Arbitration and Conciliation Act, 1996 a pivotal
tool for resolving disputes outside the traditional court system, thereby
reducing the burden on courts and providing a more efficient mechanism for
dispute resolution.

Q3) What are the essential elements of arbitration agreement?

Ans) The essential elements of an arbitration agreement crucial for its
validity and effectiveness are as under:
a) Presence of a Dispute: There must be a genuine dispute between the
parties for the arbitration agreement to be applicable.
b) Written Agreement: The agreement must be documented in writing.
c) Intention of the Parties: The parties involved must have a clear intention
to resolve disputes through arbitration.
d) Signatures of the Parties: All parties must sign the agreement, indicating
their consent and understanding.
e) Contract: Since Arbitration Agreement is a valid contract, it should fulfil
all the essential ingredients of valid contract as per Indian Contract Act
1872.
Additionally, the agreement may specify:
f) Seat of Arbitration: The location where the arbitration is to be held.
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g) Procedure for Appointing Arbitrators: How arbitrators will be chosen.

h) Language: The language in which the arbitration will be conducted.
i) Number and Qualifications of Arbitrators: Details about the arbitrators,
including their number and qualifications.
j) Type of Arbitration: The form of arbitration to be used.
k) Governing Law: The legal framework governing the arbitration process.
These above elements ensure that the arbitration process is agreed upon by
all parties and that it serves as a fair and efficient alternative to traditional
court litigation.

Q4) Write the provisions of Section 26 regarding power of arbitral

tribunal for appointment of expert?
Ans) Under the Arbitration and Conciliation Act, 1996, an expert in
arbitration typically refers to a professional with specialized knowledge
relevant to the dispute, who may be appointed to assist the arbitral tribunal.
The Act allows for the involvement of subject matter experts by the disputing
parties or the tribunal itself. The tribunal has the discretion to appoint
experts unless the parties agree otherwise.
Experts can provide opinions on technical, scientific, or financial matters that
are beyond the general knowledge of the arbitrators. Their role is to support
the tribunal in understanding the nuances of the subject matter of the
dispute, which can be crucial for the resolution of complex issues.
Section 26 empowers the arbitral tribunal to appoint experts to report to it
on specific issues to be determined by the tribunal.
➢ Section 26(1): This subsection allows the arbitral tribunal to appoint one
or more experts to report on specific issues, unless the parties have
agreed otherwise. The experts are tasked with reporting to the tribunal
on particular aspects that require specialized knowledge.
➢ Section 26(1)(a): It specifies that the tribunal may appoint experts to
report on specific issues that the tribunal determines.
➢ Section 26(1)(b): This clause requires a party to provide the expert with
any relevant information or to produce, or provide access to, any relevant
documents, goods, or other property for inspection.
➢ Section 26(2): Unless the parties have agreed otherwise, if a party
requests or the tribunal considers it necessary, the expert must
participate in an oral hearing after delivering their report. During this
hearing, the parties have the opportunity to ask questions to the expert
and to present their own expert witnesses to testify on the points at
issue.
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➢ Section 26(3): This subsection states that, unless the parties have agreed
otherwise, the expert must make available to the party requesting it all
documents, goods, or other property in the expert’s possession that were
provided to prepare the report.
This section ensures that the arbitral tribunal has the necessary tools and
procedures to effectively utilize expert knowledge in the arbitration process.

Q5) Write a note on role/duties of conciliator?

Ans) As per part 3 of the Arbitration & Conciliation Act, 1996/2015,
Conciliation is a process by which settlement of disputes is encouraged through
a process of continuous discussion, facilitated by the conciliator. (Sec. 61).
In other words, Conciliation is a voluntary and confidential method of
alternative dispute resolution (ADR), where the conciliator facilitates
communication, encourages negotiation, and helps the parties reach a mutually
acceptable settlement. A conciliator is a neutral third party appointed to
assist parties in resolving their disputes through the process of conciliation.
The main roles and responsibilities of a conciliator:
i) Assisting Parties in Reaching an Amicable Settlement: The primary role of
a conciliator, as stated in Section 67, is to assist the parties in reaching
a mutually acceptable resolution to their dispute. This involves facilitating
communication, encouraging dialogue, and exploring possible solutions.
ii) Guided by Principles of Objectivity, Fairness, and Justice: The conciliator
is guided by principles of objectivity, fairness, and justice. They maintain
a neutral position within a meeting to ensure both parties receive fair
considerations.
iii) Conducting the Conciliation Proceedings Appropriately: The conciliator is
responsible for conducting the conciliation proceedings appropriately. They
hold meetings with each individual party to discuss how the meeting will go
and review relevant documents and information to help reach conclusions.
iv) Making Proposals for Settlement: Unlike a mediator, who typically focuses
on guiding the parties towards a mutually agreeable solution, a conciliator
may actively propose settlement options or suggestions for resolving the
dispute.
v) Maintaining Confidentiality: Confidentiality is an essential aspect of
conciliation. The discussions and information shared during the conciliation
process are usually protected by confidentiality provisions, allowing parties
to speak openly without fear of their statements being used against them
in any subsequent legal proceedings.

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Thus, the role of a conciliator is crucial in assisting parties to resolve their

disputes amicably and avoid lengthy and costly litigation. They play a
significant role in alternative dispute resolution by facilitating communication,
encouraging negotiation, and helping the parties reach a mutually acceptable
settlement.

Q6) What are three advantages of Conciliation?

Ans) Conciliation under the Arbitration Act offers several advantages:
i) Flexibility: Conciliation is a flexible process that can be tailored to the
needs of the parties involved. It can be used for a wide variety of
disputes, both small and large.
ii) Preservation of Relationships: As the parties are directly engaged in
negotiating a settlement, conciliation enhances the likelihood of the parties
continuing their amicable business relationship during and after the
proceedings.
iii) Confidentiality: The conciliation process is committed to maintaining
confidentiality throughout the proceedings and thereafter. This includes
the dispute, the information exchanged, the offers and counter-offers
made, and the settlement arrived at.
These advantages make conciliation an attractive alternative to traditional
court proceedings.

Q7) Explain in detail Conciliation procedure.

Ans) The procedure for commencement of conciliation is very simple. A party
may, (at any time even if the arbitration is pending) make an offer of
conciliation to other, by an invitation in writing to conciliate under provisions
of Part III of the Act. However, the party making the proposal shall briefly
identify the subject of the dispute. If the other party accepts in writing the
invitation to conciliate, conciliation proceedings shall be commenced. However,
if the other party rejects the invitation, there will be no conciliation
proceedings. In case no reply is received within 30 days of invitation, the
party who makes an offer, may elect to treat this as a rejection of the
invitation to conciliate and if he so elects, he shall inform in writing the other
party accordingly. It must be noted that any oral acceptance of an offer of
conciliation shall not be considered sufficient under the provision of the Act.

Q8) Write a note on appointment of Conciliator?

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Ans) The process of conciliation is a voluntary, flexible, and confidential form

of alternative dispute resolution, where the conciliator plays a crucial role in
facilitating communication and negotiation between the parties to achieve a
mutually acceptable solution. The provisions of the Arbitration and Conciliation
Act, 1996 ensure that the appointment of conciliators is a fair and
transparent process, allowing for an effective and efficient resolution of
disputes outside the formal court system. The appointment of a conciliator
under the Arbitration and Conciliation Act, 1996 in India is provided in
Section 64 of the Act.
Appointment of Conciliator:
a) Number of Conciliators: The Act allows the parties to appoint one or more
conciliators. Typically, there should be an odd number of conciliators to
avoid a deadlock in decision-making.
b) Appointment by Agreement: In a conciliation proceeding with one
conciliator, the parties may agree on the name of a sole conciliator. If
there are two conciliators, each party appoints one conciliator. In the
case of three conciliators, each party appoints one, and the parties jointly
agree on the third conciliator, who acts as the presiding conciliator.
c) Enlisting Assistance: If the parties cannot agree on a conciliator(s), they
may enlist the assistance of an institution or person, such as the court or
an arbitral institution, to help appoint the conciliator.
Role of Conciliators:
➢ The conciliator assists the parties in an independent and impartial manner
in their attempt to reach an amicable settlement of their dispute.
➢ The conciliator does not decide the dispute but facilitates the parties’ own
efforts to resolve the conflict.

Qualifications and Independence:

➢ A conciliator is typically someone with expertise and experience in dispute
resolution, negotiation, and conflict management.
➢ The conciliator must be independent and impartial, and not have any
interest in the outcome of the dispute.

Q9) Distinguish between Arbitration and Conciliation?

Ans) Meaning: Arbitration is a dispute settlement process in which an impartial
third party, known as an arbitrator, is appointed to study the dispute, hear
both parties, and arrive at a decision that is binding on both parties. On the
other hand, Conciliation is a method of resolving disputes, wherein an
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independent person, known as a conciliator, helps the parties to arrive at a

negotiated settlement.
Enforcement: An arbitrator’s decision is usually final and legally binding,
similar to a court judgment. However, a conciliator does not have the power
to enforce their decision.
Legal Proceedings: Arbitration often follows specific legal procedures and
rules, and the arbitrator’s role is similar to that of a judge. In contrast,
conciliation focuses on finding a compromise that satisfies all parties.
Prior Agreement: Arbitration requires a prior agreement between the parties
to resolve disputes through arbitration. However, such a prior agreement is
not required for conciliation.
Availability: Arbitration is available for both existing and future disputes. In
contrast, conciliation is typically used for existing disputes.

Q10) State any three grounds to challenge the Arbitral Award?

Ans) Some of the grounds on which an arbitral award can be challenged:
i) Incapacity of Parties: If the parties to the agreement were under some
incapacity at the time of entering into the agreement, the arbitral award
can be challenged.
ii) Void Agreement: If the arbitration agreement is void, i.e., it is not
enforceable by law, the arbitral award can be challenged.
iii) Beyond the Scope of Arbitration Agreement: If the award contains
decisions on matters that are beyond the scope of the arbitration
agreement, it can be challenged.
iv) Absence of Proper Notice: If there was an absence of proper notice of
the appointment of an arbitrator or of arbitral proceedings, the arbitral
award can be challenged.
v) Violation of Natural Justice: If a party was unable to present his case or
if there was a violation of natural justice, the arbitral award can be
challenged.
The specific grounds for challenging an arbitral award may vary depending
on the jurisdiction and the specific arbitration agreement.

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Q11) What is fast track arbitration?
Ans) Fast Track Arbitration is an expedited arbitration procedure designed
to yield a final award in a short period of time. It was introduced in India

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by the Arbitration and Conciliation Amendment Act 2015, to expedite the

process of arbitration.
Here are some key features of Fast Track Arbitration:
i) Time Limit: The proceedings are governed by strict time limit policies and
are expected to end within 6 months. If the time limit is not followed,
the mandate of the arbitrator may terminate.
ii) Sole Arbitrator: Unlike regular arbitration which often involves a panel of
three arbitrators, Fast Track Arbitration typically involves a sole
arbitrator appointed by the parties.
iii) Written Submissions: Fast Track Arbitration primarily relies on written
submissions and there is usually no provision for oral proceedings.
iv) Cost and Time Effective: Since speed and cost are vital elements in
commercial dispute resolution, Fast Track Arbitration has evolved into a
speedy and efficient settlement of disputes.

Q12) Whether limitation act is applicable to Arbitration Proceedings?

Ans) Yes, the Limitation Act is applicable to arbitration proceedings. Section
43 (1) of the Arbitration and Conciliation Act, 1996 states that “the
Limitation Act, 1963, shall apply to arbitrations as it applies to proceedings
in court”.
The Limitation Act is a statute in the civil law system, which prescribes a
maximum period, after the happening of an event (often called the cause of
action), in which legal action can be commenced. Therefore, an action cannot
be initiated by a party if the prescribed time has passed after the accrual
of the cause of action on the basis of which the action is to be initiated.
The Act provides for the extension of the prescribed period in certain cases
such as legal disability, sufficient cause, and acknowledgement of debt.
Acknowledgement of debt plays a significant role in extending the limitation
period under the Limitation Act, 1963. Section 18 of the Limitation Act
provides that where, before the expiry of the prescribed period of limitation,
an acknowledgement of liability is made in writing and signed by the debtor,
a fresh period of limitation starts from the time when such acknowledgement
was signed.

Q13) Short note on arbitral tribunal?

Ans) An Arbitral Tribunal is a panel of unbiased adjudicators which is
convened 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
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arbitral award. 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 an
expert, and make awards.

Q14) Write a note on Non Speaking Award?

Ans) A non-speaking award is an arbitral award where the arbitrator does
not provide the reasons for the decision. The Supreme Court of India has
observed that in a non-speaking award, it is not open for the court to probe
the mental process of the arbitrator and speculate, where no reasons have
been given by the arbitrator for arriving at a certain conclusion. An arbitral
award is not ordinarily liable to be challenged on the ground that it is
erroneous. The award of the arbitrator is final and conclusive unless it is
contrary to the terms of the contract. However, a non-speaking award can
be set aside if the arbitrator has exceeded his jurisdiction.

Q15) Discuss as to what interim reliefs can be granted by court in arbitration

proceedings ?
Ans) Section 9 of the Arbitration and Conciliation Act, 1996 lays down as
under:
A party may, before or during arbitral proceedings or at any time after the
making of the arbitral award but before it is enforced in accordance with
section 36, apply to a court -
(i) for the appointment of a guardian for a minor or a person of unsound mind
for the purposes of arbitral proceedings; or
(ii) for an interim measure of protection in respect of any of the following
matters, namely :-
(a) the preservation, interim custody or sale of any goods which are the
subject-matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which
is the subject-matter of the dispute in arbitration, or as to which any
question may arise therein and authorising for any of the aforesaid purposes
any person to enter upon any land or building in the possession of any party,
or authorising any samples to be taken or any observation to be made, or
experiment to be tried, which may be necessary or expedient for the purpose
of obtaining full information or evidence;
(d) interim injunction or the appointment of a receiver;
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(e) such other interim measure of protection as may appear to the court to
be just and convenient,
The Court under the above circumstances shall have the same power for
making orders as it has been the purpose of, and in relation to, any
proceedings before it.
Case Laws:
Sundaram Finance Ltd. v. NEPC India Ltd., AIR 1999 SC 565 has observed
that initiation of arbitration proceedings would not be pre-condition for filling
petition under section 9 of the Act. What is important is manifest intention
to have the dispute referred to an arbitral Tribunal i.e a situation may so
demand that party may choose to apply under section 9 for an interim
measures even before issuing a notice contemplated by Section 21 of the said
Act. While passing order under section 9 and in order to ensure that effective
steps are taken to commence the arbitral proceedings, the Court while
exercising jurisdiction under section 9 can pass a conditional order to put the
applicant to such terms as it may deem fit with a view to see that effective
steps are taken for commencing arbitral proceedings.

Q16) Short note on Termination of Arbitration Proceedings?

Ans) Section 32 provides that the arbitration proceedings shall stand
terminated in the following cases:
a) On making of final award: The expression final award means an award
which is effective, adjudication complete on all matters referred to
arbitration. Once the final award is made, the arbitration proceedings
come to an end and are terminated.
b) By order of arbitral tribunal: Under certain circumstances, the arbitral
tribunal may order termination of arbitration proceedings. The
circumstances under which the arbitral tribunal can order termination of
the proceeding without making a final award are:
i) Where the claimant withdraws his claim: When the claimant withdraws
his claim, the arbitral tribunal shall order termination of proceedings.
However, the termination will not be ordered if the respondent objects
to the order and the arbitral tribunal recognises a legitimate interest
on his part in obtaining a final settlement of the dispute. When the
arbitral tribunal recognises such legitimate interest, then it may,
instead of ordering termination, proceed with the arbitration and make
an award.
ii) Where the parties agree on the termination of the proceedings: The
arbitral tribunal shall issue an order of termination of proceedings when
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the parties agree on the termination of the proceedings. Such

agreement of the parties tantamount to cancelling particular reference
but the parties would be free to make another reference on the same
subject matter by reconstituting another tribunal.
iii) When the arbitral tribunal finds that the continuation of the
proceedings has for any other reason become unnecessary or impossible:
The proceedings would become unnecessary if the purpose of arbitration
is lost. Impossibility would arise from circumstances such as act of god,
terrorist attack or such force majeure situations. It might also arise
when both parties do not contribute to the proceedings and if the
claimant fails to file its statement of claim. In any case it is the
arbitral tribunal's discretion. He can order termination if satisfied that
the proceedings have either become unnecessary or impossible.

Q17) Short note on Jurisdiction of Arbitral Tribunal?

Ans) The provisions relating to Jurisdiction are given in Section 16 of
Arbitration Act.
a) The jurisdiction of an arbitral tribunal is primarily determined by the
parties’ agreement to submit their disputes to arbitration. This means
that the tribunal’s authority to hear a case is not inherent but is granted
by the parties involved.
b) In many legal systems, including India’s, the Arbitration and Conciliation
Act of 1996 allows the arbitral tribunal to rule on its own jurisdiction.
This is known as the “competence-competence” principle.
c) The arbitral tribunal may rule on its own jurisdiction, including ruling on
any objections with respect to the existence or validity of the arbitration
agreement, and for that purpose -
(i) an arbitration clause which forms part of a contract shall be treated
as an agreement independent of the other terms of contract; and
(ii) a decision by the arbitral tribunal that the contract is null and void
shall not entail ipso jure the invalidity of the arbitration clause.
d) A plea that the arbitral tribunal does not have jurisdiction shall be raised
not later than the submission of the statement of defence; however, a
party shall not be precluded from raising such a plea merely because that
he has appointed, or participated in the appointment of, an arbitrator.
e) A plea that the arbitral tribunal is exceeding the scope of its authority
shall be raised as soon as the matter alleged to be beyond the scope its
authority is raised during the arbitral proceedings.

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f) The arbitral tribunal may, in either of the cases referred to in para (c)
and (d) above, admit a later plea if it considers the delay justified.
g) The arbitral tribunal shall decide on plea referred to in in para (c) and (d)
above, and where the arbitral tribunal takes a decision rejecting the plea,
continuing with the arbitral proceedings and make an arbitral award.
h) Generally, there is no appeal against the tribunal’s decision on jurisdiction
related to the merits of the award
Case Study:
In Konkan Railway Corp. Ltd. v. Rani Construct (P) Ltd., AIR 2002 SCW
426 Supreme Court has held that Section 16 enables the arbitral tribunal to
rule on its own jurisdiction. Arbitral Tribunal can rule on any objection with
respect to existence or validity of the arbitration agreement and Arbitral
tribunal's authority under section 16 is not confined to the width of
jurisdiction but goes also to the root of its jurisdiction.

Q18) Short note on Rules applicable to substance of Dispute?

Ans) Section 28 of the Arbitration and Conciliation Act,1996 provides rules
which are applicable to the substance of disputes. It specifies the law or the
rules of law according to which the arbitral tribunal shall decide the dispute
submitted for arbitration.

➢ Section 28(1): In case the place of arbitration is India, Section

28(1) clause (a) of the Arbitration and Conciliation Act,1996 provides that
the arbitral tribunal is to decide the dispute submitted in arbitration
according to the substantive law for the time being in force in India.
Substantive law implies the set of laws that define the rights and
responsibilities in civil law, crimes and punishment in criminal law.
➢ Section 28(1)(b): In the case of international commercial arbitration, the
tribunal shall decide the dispute in accordance with the rules of law
designated by the parties as applicable to the substance of the dispute.
➢ Section 28(1)(b)(ii): If the parties have designated the law or legal system
of a given country, it is construed as referring directly to the substantive
law of that country and not to its conflict of laws rules, unless otherwise
expressed.
➢ Section 28(1)(b)(iii): If the parties have not designated any law, the
arbitral tribunal shall apply the rules of law it considers to be appropriate
given all the circumstances surrounding the dispute. These provisions
ensure that the arbitral tribunal applies the correct substantive laws to
the dispute, reflecting the parties’ agreement or, in the absence of such
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agreement, the laws that the tribunal deems appropriate. This framework
supports the autonomy of the parties in arbitration and the flexibility of
the arbitral process.
➢ The Act lays down for the Arbitral tribunal to decide according to the
terms of contract and usages of the trade which are applicable to the
transaction.
➢ Section 28(2): The arbitral tribunal can decide ex aequo et bono
(according to what is fair and good) or as amiable compositeur (according
to principles of equity), only if the parties have expressly authorized it to
do so. In the usual course of the process, the rules, which the parties to
the dispute designate, are applicable to the substance of the dispute, the
parties may also empower the arbitral tribunal to decide the cases in their
good conscience without adhering to any strict laws or rules of law. The
ambit of the specification of rules which may be applicable to the
substance of disputes is very wide owing to the fact that the legislation
uses the words law or rules of law which include transnational laws or rules
of international conventions, etc.Prior to the 2015 amendment, the powers
of the tribunal to apply its own discretion were very limited and it had to
strictly abide by the ambit that the contract and usage of trade set for
the parties. This made it difficult to render justice as one of the parties
was usually able to exploit the situation and make the other party sign
such terms which went against the basic nature of opportunity or equal
bargain power of both the parties.
➢ Section 28(3): While deciding and making an award, the arbitral tribunal
must take into account the terms of the contract and trade usages
applicable to the transaction.

In case of international arbitration

a) Where parties have designated the rules of law
In case of international arbitration, Section 28 states that the arbitral
tribunal shall decide the dispute according to the rules of law that the parties
have designated as applicable to the substance of the dispute.
Due to the use of the term ‘rules of law’, the ambit of the law has been
widened considerably. The parties are not restricted to the national
substantive laws; they may also choose transnational laws, international law
principles, or the rules of international law conventions.
Most commonly used rules are “lex mercatoria”, which incorporates
international commercial rules and general principles of law and is not based
upon a specific legal system; or the principles of the international commercial
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contract drawn up by UNCITRAL. The parties may also split the law applicable
to the substance to several issues, or empower the tribunal to render a
decision based on reasonableness and fairness.
Where parties have not designated the rules of law
Party autonomy is a fundamental principle in international arbitration. An
aspect of this principle is that the parties are free to choose the laws or
rules of law which are applicable to the substance of the dispute. However,
in case the parties do not expressly state which law governs to the substance
of the dispute, the tribunal has the authority to apply the rules of law it
considers appropriate given the circumstances.
The tribunal has the power to deviate from any strict laws or rules of law
and decide on the basis of its own good faith only in cases where the parties
expressly authorise it to do so.

Q19) What is the ground to challenge the appointment of Arbitrator? Discuss

Procedure also.
Ans) Section 12 of the Arbitration and Conciliation Act provides :-
"(1) When a person is approached in connection with his possible appointment
as an arbitrator, he shall disclose in writing any circumstances likely to give
rise to justifiable doubts as to his independence or impartiality.
(2) An arbitrator, from the time of his appointment and throughout the
arbitral proceedings, shall, without delay, disclose to the parties in writing
any circumstances referred to in sub-section (1) as mentioned above unless
they have already been informed of them by him.
(3) An arbitrator may be challenged only if -
(a) circumstances exist that give rise to justifiable doubts as to his
independence or impartiality, or
(b) he does not possess the qualifications agreed to by the parties.
(4) A party may challenge an arbitrator appointed by him, or in whose
appointment he has participated, only for reasons of which he becomes aware
after the appointment has been made."
In Jiwan Kumar Lohia v. Durga Dutt Lohia (AIR 1992 SC 188), the Supreme
Court said that "Reasonable apprehension of bias in the mind of a reasonable
man, can be a good ground for the termination of the mandate of an
arbitrator."
However, the parties shall be precluded from challenging the same if they
had the knowledge of facts affecting impartiality and continue with proceeding
on the principle of `waiver'.
Procedure for challenging the appointment of Arbitrator.
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Section 13 lays down that -

"(1) Subject to the provisions of the act, the parties are free to agree on a
procedure for challenging an arbitrator.
(2) Failing any agreement referred to in sub-section (1), a party who intends
to challenge an arbitrator shall, within fifteen days after becoming aware of
the constitution of the arbitral tribunal or after becoming aware of any
circumstances referred to in sub-section (3) of section 12, send a written
statement of the reasons for the challenge to the arbitral tribunal.
(3) Unless the arbitrator challenged under sub-section (2) withdraws from his
office or the other party agrees to the challenge, the arbitral tribunal shall
decide on the challenge.
(4) If a challenge under any procedure agreed upon by the parties or under
the procedure under sub-section (2) is not successful, the arbitral tribunal
shall continue the arbitral proceedings and make an arbitral award.
(5) Where an arbitral award is made under sub-section (4), the party
challenging the arbitrator may make an application for setting aside such an
arbitral award in accordance with section 34.
(6) Where an arbitral award is set aside on an application made, the Court
may decide as to whether the arbitrator who is challenged is entitled to any
fees.
The Act provides adequate safeguards and incentives to the Arbitrator to
proceed only if he is independent or impartial. The Act provides that
withdrawal of Arbitrator shall not imply correctness of challenge and
encourage independent person to withdraw. Further it cautions the
unscrupulous arbitrator that even if he continues as a Tribunal, the Court can
deny him the fee of arbitrator, having found him on wrong foot.

Q20) Who can be appointed as an arbitrator ? –

Ans) Section 2 (1) (d) defines the term 'Arbitral Tribunal'. Accordingly,
Arbitral Tribunal means, a sole Arbitrator or a panel of Arbitrators. Section
10 and Section 11 of the Arbitration and Conciliation Act, 1996, provides
for composition of Arbitral Tribunal.
Section 10 (1) provides 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.
According to Section 10 (2), 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
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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.
Section 11 of the Arbitration and Conciliation Act, 1996, provides for the
appointment of Arbitrators to conduct the Arbitral proceedings on reference
of a dispute for adjudication. Section 11 of the Arbitration and Conciliation
Act, 1996 lays down that -
➢ A person of any nationally may be an arbitrator, unless otherwise agreed
by the parties.
➢ Subject to the provisions of Act, the parties are free to agree on a
procedure for appointing the arbitrator or arbitrators.
➢ If the parties fail to determine the procedure of appointment of
Arbitrators, the if the arbitration is with three arbitrators, each party
shall appoint one arbitrator, and the two appointed arbitrators shall
appoint the third arbitrator who shall act as the presiding arbitrator. If
a party fails to appoint an arbitrator within thirty days from the receipt
of a request to do so from the other party; or the two appointed
arbitrators fail to agree on the third arbitrator within thirty days from
the date of their appointment. In such situations, the appointment shall
be made, upon request of a party, by the Chief Justice or any person or
institution designated by him.
➢ Where, under an appointment procedure agreed upon by the parties and
(i) a party fails to act as required under that procedure; or (ii) the parties,
or the two appointed arbitrators, fail to reach an agreement expected to
them under that procedure; or (iii) a person, including an institution, fails
to perform any function entrusted to him or it under that procedure, then
a party may request the Chief Justice or any person or institution
designated by him to take the necessary measure, unless the agreement
on the appointment procedure provides other means for securing the
appointment.
➢ A decision on a matter entrusted on the Chief Justice or the person or
institution designated by him is final.
➢ The Chief Justice or the person or institution designated by him, in
appointing an arbitrator, shall have due regard to any qualifications
required of the arbitrator by the agreement of the parties; and other
considerations as are likely to secure the appointment of an independent
and impartial arbitrator.
➢ In the case of appointment of sole or third arbitrator in an international
commercial arbitration, the Chief Justice of India or the person or
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institution designated by him may appoint an arbitrator of a nationality

other than the nationalities of the parties where the parties belong to
different nationalities.
➢ Where more than one request has been made to the Chief Justices of
different High Courts or their designates, the Chief Justice or his
designate to whom the request has been first made under the relevant
sub-section shall alone be competent to decide on the request.
➢ in an international commercial arbitration, the reference to "Chief Justice"
in those sub-sections shall be construed as a reference to the "Chief
Justice of India".

Q21) When, on whose instance and on what grounds an arbitral award may
be set aside ?
Ans. I) Who can apply of setting aside an award:
Section 34(1) provides that recourse to a Court against an arbitral award
may be made only by an application for setting aside such award (by a party
to the award) in accordance with section 34(2) and 34(3). On receipt of an
application under sub-section (1), the Court may, where it is appropriate and
it is so requested by a party, adjourn the proceedings for a period of time
determined by it in order to give the arbitral tribunal an opportunity to
resume the arbitral proceedings or to take such other action as in the opinion
of arbitral tribunal will eliminate the grounds for setting aside the arbitral
award.
II) Grounds for setting aside an award
Section 34(2) lays down as to grounds for setting aside an award that -
An arbitral award may be set aside by the Court only if:
(a) the party making the application furnishes proves that:
(i) a party was under some incapacity; or
(ii) the arbitration agreement is not valid under the law to which the parties
have subjected it or, failing any indication thereon, under the law for the
time being in force; or
(iii) the party making the application was not given proper notice of the
appointment of an arbitrator or of the arbitral proceedings or was otherwise
unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling
within the terms of the submission to arbitration, or it contains decisions on
matters beyond the scope of the submission to arbitration. Provided that, if
the decisions on matters submitted to arbitration can be separated from
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those not so submitted, only that part of the arbitral award which contains
decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not
in accordance with the agreement of the parties.
(b) the Court finds that:
(i) the subject-matter of the dispute is not capable of settlement by
arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India
III) Period within which application for setting aside arbitration award can
be made:
Section 34(3) lays down that an application for setting aside arbitration award
may not be made after three months have elapsed from the date on which
the party making that application had received the arbitral award, or if a
request had been made under section 33, from the date on which that request
had been disposed of by the arbitral tribunal;
But if the court is satisfied that the applicant was prevented by sufficient
cause from making the application within the said period of three months it
may entertain the application within a further period of thirty days, but not
thereafter.

Q22) Write a short note on New York Convention on Arbitration.

Ans) The term “convention of arbitration” typically refers to international
treaties that establish a common framework for the recognition and
enforcement of arbitration agreements and awards. One of the most
significant of these is the Convention on the Recognition and Enforcement of
Foreign Arbitral Awards, also known as the New York Convention.
Adopted in 1958 in New York, the convention requires courts of the
contracting states to recognize and enforce international arbitration
agreements and arbitral awards issued in other contracting states. This
convention is widely regarded as a foundational element of international
arbitration, facilitating trade and investment by providing a reliable and
efficient means for resolving disputes without resorting to local courts.
The New York Convention has been ratified by a large number of countries,
making it one of the most important instruments in international trade law.
It’s managed by the United Nations Commission on International Trade Law
(UNCITRAL), which plays a crucial role in modernizing the law of international
trade.

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Under the New York Convention 1958, an award issued in a contracting state
can generally be freely enforced in any other contracting state, only subject
to certain, limited defences.
These defences are as under:
a) a party to the arbitration agreement was, under the law applicable to him,
under some incapacity;
b) the arbitration agreement was not valid under its governing law;
c) a party was not given proper notice of the appointment of the arbitrator
or of the arbitration proceedings, or was otherwise unable to present its
case;
d) the award deals with an issue not contemplated by or not falling within
the terms of the submission to arbitration, or contains matters beyond
the scope of the arbitration (subject to the proviso that an award which
contains decisions on such matters may be enforced to the extent that it
contains decisions on matters submitted to arbitration which can be
separated from those matters not so submitted);
e) the composition of the arbitral authority was not in accordance with the
agreement of the parties or with the law of the place where the hearing
took place (the "lex loci arbitri");
f) the award has not yet become binding upon the parties, or has been set
aside or suspended by a competent authority, either in the country where
the arbitration took place, or pursuant to the law of the arbitration
agreement;
g) the subject matter of the award was not capable of resolution by
arbitration;
h) enforcement would be contrary to "public policy.
The New York Convention is not actually the only treaty dealing with cross-
border enforcement of arbitration awards. The earlier Geneva Convention on
the Execution of Foreign Arbitral Awards 1927 remains in force, but the
success of the New York Convention means that the Geneva Convention is
rarely utilised in practice.

Q23) Write short note on place of arbitration?

Ans) As per Section 20(1), parties are free to agree on the place of
arbitration. In case of failure to decide, the place of arbitration shall be
determined by the arbitral tribunal having regard to the circumstances of
the case, including the convenience of the parties [Sec 20 (2)]
Notwithstanding that the place of arbitration has been determined as above,
the arbitral tribunal may, unless otherwise agreed by the parties, meet at
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any place it considers appropriate for consultation among its members, for
hearing witnesses, experts or the parties, or for inspection of documents,
goods or other property. [Sec: 20 (3)]
In domestic arbitration, the place of arbitration can be anywhere in India
according to the agreement of the parties. If arbitration is under the rules
of an institution, it is generally conducted at the place where the institution
is located, subject to agreement to the contrary.

Q24) What is foreign award? State when foreign award can become binding
and enforceable?
Ans) A Foreign Award in the context of Alternate Dispute Resolution (ADR)
refers to an arbitral award that is made in a country other than the one
where enforcement is sought. Section 44 of Arbitration and Conciliation
Act,1996 defines "foreign award" as an arbitral award on differences
between persons arising out of legal relationships, whether contractual or
not, considered as commercial under the law in force in India. The
enforcement of foreign arbitral awards is governed by international
conventions like the New York Convention 1958, or Geneva Convention. The
enforcement of these awards is considered one of the main factors in the
success of International Commercial Arbitration.
Enforceability of foreign award:
A foreign arbitral award becomes binding and enforceable under certain
conditions as per the Arbitration and Conciliation Act, 1996 in India. The
main points relating to enforceability are as under:
➢ Recognition: India is a signatory to the New York Convention and the
Geneva Convention. If a foreign award is from a country that is a signatory
to either of these conventions and the award is made in a territory notified
as a convention country by India, it is recognized.
➢ Enforceability: According to Section 46 of the Arbitration and Conciliation
Act, any foreign award that is enforceable under Chapter I of Part II
shall be treated as binding for all purposes on the persons between whom
it was made. It can be relied upon by any of those persons by way of
defence, set off, or otherwise in any legal proceedings in India.
➢ Execution (Section 56 of Act): For the execution of a foreign award, the
successful party must move an application to the court of competent
jurisdiction for the enforcement of the award. If the court is satisfied
that the award is enforceable, then the foreign award can be executed
just like a decree of the court.

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➢ It’s important to note that the enforceability of a foreign award also

depends on the award not being in conflict with the public policy of India
and meeting other criteria such as proper notification to the parties
involved and the award being final and binding.
➢ The subject matter of award is capable of settlement through arbitration
under law in India.
➢ If the award is annulled in the country in which it is made then the same
shall not even be enforceable in India.
However, it’s important to note that while a foreign award cannot be
disputed, its enforcement can be opposed on the same grounds that are
available for a domestic award. This means that while the award itself is
final and binding, its enforcement in a particular jurisdiction can be challenged
under certain circumstances.

Q25) Short note on Lok Adalat?

Ans) A Lok Adalat, which also known as “People’s Court”, is an alternative
dispute resolution mechanism used in India. It is a forum where disputes or
cases pending in the court of law or at a pre-litigation stage are settled or
compromised 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.
The first Lok Adalat was held on March 14, 1982 at Junagarh in Gujarat.
Maharashtra commenced the Lok Nyaya Laya in 1984. Gradually, the Lok
Adalats were built in every State of India. Presently, Lok Adalats have been
given statutory status by The Legal Services Authorities Act, 1987.
Features of Lok Adalat:
a) No court fee is payable. If any court fee is already paid by a party, the
same will be refunded.
b) It is based on settlement or compromise reached through regular and
structured negotiations.
c) It is one among the most effective Alternate Dispute Resolution (ADR)
systems for weaker sections of the society.
d) Code of Civil Procedure and Indian Evidence Act are not applicable to the
e) proceedings under Lok Adalat.
f) Lok Adalat is deemed to be civil court for certain purposes.
g) A Lok Adalat has certain powers of a civil court.
h) The parties to a dispute can interact directly with the presiding officer,
which is not possible in the case of a court proceeding.

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i) The award passed by the Lok Adalat is deemed to be a decree of a civil

court. An award passed by the Lok Adalat is final and no appeal is
maintainable from it.
j) An award passed by the Lok Adalat can be executed in a court of law.
k) The award can be passed by Lok Adalat, only after obtaining the
concurrence of all the parties to dispute.
l) A Permanent Lok Adalat can pass an award on merits, even without the
consent of parties. Such an award is final and binding. From that no appeal
is possible.
m) Composition: The Lok Adalat is composed of a chairman, two members,
and one social worker. The chairman must be a sitting or retired judicial
officer.

Q26) What are the advantages of Lok Adalat?

Ans) Advantages of Lok Adalat / Benefits of settling disputes by Lok Adalat:
a) It is a very speedy procedure as the parties submit to Lok Adalat with an
intention to arrive at a settlement.
b) It reduces the burden of courts and enables the litigants to arrive at a
settlement in a cost-effective manner.
c) It ensures that the cordial relations between the parties are maintained
since the main thrust is on compromise and not punishment.
d) Strict procedures under the Code of Civil Procedure and the Indian
Evidence Act are not applicable in cases before Lok Adalats.
e) Despite no strict procedure, the award under the Lok Adalat is deemed
to be a decree of a civil court.
f) There is no court fee and even if the case is already filed in the regular
court, the fee paid will be refunded if the dispute is settled at the Lok
Adalat.
g) Disputes can be brought before the Lok Adalat directly instead of going
to a regular court first and then to the Lok Adalat.
h) The decision of Lok Adalat is binding on the parties and no appeal lies
against the order of the Lok Adalat whereas, in courts of law there is
always a scope to appeal to the higher forum which cause delay in the
settlement of disputes.
i) No Fee: There is no court fee payable when a dispute is filed in a Lok
Adalat.
ii) Amicable Resolutions: The Lok Adalat shall not decide the dispute so
mentioned at its own instance (i.e there is no adjudication on the basis of
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merits), instead the same would be decided on the basis of the compromise
between the parties.

Q27) What is Jurisdiction of Lok Adalat.

Ans) A Lok Adalat shall have jurisdiction to determine and to arrive at a
compromise or settlement between the parties to a dispute in respect of:-
(i) Any case pending before or
(ii) Any matter which is falling within the jurisdiction of, and is not brought
before, any court for which the Lok Adalat is organised.
Provided that the Lok Adalat shall have no jurisdiction in respect of any case
or matter relating to an offence not compoundable under any law.

Q28) Which cases can be dealt with by lok adalat

Ans) Cases which can be referred to/dealt with by Lok Adalat:
Post-litigative cases: any case pending before any court for which the Lok
Adalat is organised can be referred to Lok Adalat by:
(a) Agreement between the parties thereto; or
(b) One of the parties thereof makes an application to the court, for
referring the case to the Lok Adalat for settlement and if such court is
prima facie satisfied that there are chances of such settlement; or
(c) By the Court Suo moto if the court is satisfied that the matter is an
appropriate one to be taken cognizance of by the Lok Adalat.
However, no case shall be referred to Lok Adalat by such court except after
giving reasonable opportunity of bring heard to the parties.

Q29) What is the importance of Lok Adalat to Indian Judical System?

Ans) Lok Adalats, or “People’s Courts,” play a crucial role in the Indian legal
system. They are important for several reasons:
➢ Accessibility: Lok Adalats provide a platform for the common people to
resolve their disputes without having to engage in the lengthy and
expensive court process.
➢ Efficiency: They help in reducing the burden on the regular courts by
disposing of a large number of cases, including pending and pre-litigation
matters2.
➢ Cost-Effective: The process is inexpensive, as it avoids the costs
associated with a formal court trial.
➢ Speed: Lok Adalats are known for their quick resolution of disputes,
providing prompt justice to the parties involved.

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➢ Legal Aid: They support the constitutional mandate of providing free legal
aid to those who cannot afford legal representation, ensuring fair
treatment under the legal system.
➢ Alternative Dispute Resolution: They embody the principles of conciliation,
mediation, and compromise, offering an alternative to the traditional legal
framework.
Overall, Lok Adalats contribute significantly to the broader goals of justice
delivery by embodying principles of accessibility, fairness, and efficiency.
They are a testament to the Indian judiciary’s efforts to ensure that justice
is not denied to any citizen due to economic or other disabilities.

Q30) Write a note on working process of lok Adalat?

Ans) The working process of a Lok Adalat involves several steps designed to
facilitate the amicable settlement of disputes. The overview of the procedure
is given below:
a) Suitability of the Case: The first step is to determine whether a case is
suitable for resolution in a Lok Adalat. This typically includes cases that
are not highly complex and where parties are open to compromise.
b) Consent of Parties: Both parties involved must consent to have their case
referred to a Lok Adalat. Without mutual consent, the case cannot
proceed in this forum.
c) Application for Referral: If a case is pending in a court, an application
for referral to the Lok Adalat can be made by either party or by the
court itself.
d) Evaluation by the Court: The court evaluates the case to determine if it
is fit for settlement in a Lok Adalat.
e) Lok Adalat Proceedings: The Lok Adalat schedules a hearing where both
parties present their case. The proceedings are informal and do not adhere
to strict legal procedures.
f) Conciliation and Mediation: The members of the Lok Adalat, who act as
conciliators, facilitate discussions between the parties to help them reach
a settlement.
g) Settlement and Award: If a settlement is reached, the Lok Adalat passes
an award, which has the same legal status as a civil court decree.
h) Implementation of Settlement: The terms of the settlement are
implemented as per the award passed by the Lok Adalat.
i) Enforceability: The award is final and binding on the parties, and
enforceable as a decree of a civil court.

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Alternate Dispute Resolution (ADR)

j) Non-Settlement Cases: If the parties do not reach a settlement, they

are free to pursue litigation in the appropriate court.
Lok Adalats are known for their cost-effectiveness, speed, and the finality
of their awards, making them a popular alternative dispute resolution
mechanism in India.

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Alternate Dispute Resolution (ADR)

Situational Problems:

Q1) Mr. A, Mr. B and Mr. C are the three Arbitrators appointed by parties
in a dispute, sign an Award and demand for cost of Arbitration
Proceedings.
i) How many Arbitrators should sign the Award? Why?
➢ The requirement for the arbitrators to sign the award is specified in
Section 31(1) of the Arbitration and Conciliation Act, 1996. This section
mandates that an arbitral award shall be made in writing and signed by
the members of the arbitral tribunal. It’s important for the award to be
signed to give it legal enforceability and authenticity.
➢ In an arbitration proceeding, the award should be signed by the arbitrator
or the majority of the arbitrators of the tribunal. This is because it’s
possible that not all arbitrators agree with the contents of the award.
Therefore, the law requires that a majority of the arbitrators must sign
the award to validate it.
➢ In the case of Mr. A, Mr. B, and Mr. C, at least two of them must sign
the award for it to be considered valid. This ensures that the decision is
representative of the tribunal’s majority view and maintains the integrity
of the arbitration process.
(ii) what are the powers of arbitral tribunal to fix the arbitration cost and
what does the cost include.
➢ The powers of the arbitral tribunal to fix the costs of arbitration are
primarily outlined in Section 31(8) of the Arbitration and Conciliation Act,
1996. Further, Section 31-A(1) vests the arbitral tribunal with the
discretion to determine:
a) Whether costs are payable by a party
b) The amount(s) of such costs
c) The time of payment
➢ It’s important to note that the term “costs” includes the fees and expenses
of the arbitrators, among other things. Additionally, Section 38(1)
specifies that the arbitral tribunal has the discretion in fixing the amount
of fee for costs that might be incurred. The tribunal’s decision on costs
will take into account factors such as the nature of the dispute, the
process followed, and the conduct of the parties during the proceedings.
➢ The Act also includes a model schedule of fees in the Fourth Schedule,
which was incorporated through the 2015 Amendment to provide a guideline
for arbitrator fees. However, this schedule is not binding, and the High
Courts are empowered under Section 11(14) to frame rules regarding the
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Alternate Dispute Resolution (ADR)

fees, taking the Fourth Schedule into account. In practice, the parties
may agree to a fee structure, which would then be binding upon the
tribunal as per the Supreme Court’s decision in Gammon Engineers v.
NHAI.

Q2) Mr. Ram filed a suit in a Court against Mr. Shyam, but the Court has
referred it to Lok Adalat. However, Mr. Ram doesn't want to settle it in
Lok Aalat.
i) Can Court refer a case for settlement in Lok Adalat ?
Ans) Yes, a court can refer a case for settlement in a Lok Adalat. According
to the Legal Services Authorities Act, 1987, under certain circumstances,
cases pending before a court can be referred to a Lok Adalat for settlement.
This is typically done with the consent of both parties, but there are
instances where the court can refer a case to a Lok Adalat without the
consent of the parties involved.
However, it’s important to note that if a party does not wish to settle the
matter in Lok Adalat, they cannot be compelled to do so. The Lok Adalat
primarily functions on the principle of mutual consent and attempts to reach
an amicable settlement. If a settlement is not reached, the case is returned
to the court for formal adjudication. In the scenario described above, if Mr.
Ram does not wish to settle the dispute in Lok Adalat, he has the right to
have his case heard in the regular court proceedings.
ii) Can Mr. Ram challenge Court's decision about reference to Lok Adalat?
Why?
Ans) Yes, Mr. Ram can challenge the court’s decision to refer a case to Lok
Adalat. The Supreme Court of India has held in various cases that if there
is no agreement between the parties, the Lok Adalat award is not effective.
Even if the parties do not agree to settle the conflict through Lok Adalat,
the normal litigation process remains open to the contesting parties. This
means that while courts can refer cases to Lok Adalat, the parties retain
the right to refuse settlement through this mechanism and insist on
adjudication through the formal court system. If Mr. Ram does not wish to
participate in the Lok Adalat proceedings, he can express his dissent and
seek redress through the regular judicial process. The principle behind this
is to ensure that no party is compelled to settle disputes outside the formal
court system against their will.
iii) what is the procedure for settlement of dispute outside court
Ans) The procedure for the settlement of disputes outside of court is
primarily governed by Section 89 of the Code of Civil Procedure (CPC), which
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Alternate Dispute Resolution (ADR)

encourages parties to resolve disputes amicably through alternative dispute

resolution (ADR) mechanisms. Here’s a brief overview of the process:
a) Court’s Assessment: If the court believes there are elements of a
settlement that may be acceptable to the parties, it formulates the terms
of settlement and gives them to the parties for their observations.
b) Parties’ Observations: After receiving the observations of the parties, the
court may reformulate the terms of a possible settlement.
c) Referral to ADR: The court may then refer the case for:
➢ Arbitration: A private dispute resolution process where an arbitrator
makes a decision.
➢ Conciliation: A process where parties seek to reach an amicable agreement
with the help of a conciliator.
➢ Judicial Settlement: Including settlement through Lok Adalat, where a
judicial authority helps the parties reach a settlement.
➢ Mediation: A neutral mediator assists the parties in negotiating a mutually
acceptable settlement.
d) Applicable Laws: If a dispute is referred for arbitration or conciliation,
the provisions of the Arbitration and Conciliation Act, 1996 apply as if
the proceedings were referred under that Act. If referred to Lok Adalat,
the provisions of the Legal Services Authority Act, 1987 apply.
e) Outcome: If the parties reach a settlement, it can be recorded as a
compromise decree by the court. If no settlement is reached, the case
goes back to trial.
f) The Supreme Court of India has also provided guidelines for the application
of Section 89 CPC, emphasizing the importance of ADR in the Indian
judicial system to ensure swifter and more efficient justice. The intention
is to reduce the burden on courts and provide a more cost-effective and
timely resolution of disputes.

Q3) One party in Arbitration desires to examine a rationing officer and

engineer of the Municipal Corporation, therefore, has made an application
before the Arbitrator.
i) Can the Arbitrator require them to come and give evidence?
Ans) In an arbitration proceeding, the arbitrator has the authority to manage
the evidentiary aspects of the case, including the calling of witnesses.
However, arbitrators do not have the power to compel witnesses to appear
or give evidence in the same way that courts do. If a party wishes to examine
a witness such as a rationing officer or an engineer from the Municipal

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Alternate Dispute Resolution (ADR)

Corporation, they can request the arbitrator to call them. The arbitrator
can then invite these individuals to appear voluntarily.
If the witnesses are unwilling to appear voluntarily, the party requesting their
testimony may need to seek assistance from the court to compel their
attendance. This is because the enforcement power of an arbitrator is limited
compared to that of a judge in a court of law. The arbitrator can manage
the proceedings and request the presence of witnesses, but ultimately, it
may require a court order to enforce such a request.
As per provisions of Section 27 of Arbitration Act, 1996:
a) The party with the approval of the arbitral tribunal, may apply to the
Court for assistance in taking evidence.
b) The application shall specify, amongst other things, the evidence to be
obtained, in particular,(i) the name and address of any person to be heard
as witness or expert witness and a statement of the subject-matter of
the testimony required; (ii) the description of any document to be produced
or property to be inspected.
c) The Court may, within its competence and according to its rules on taking
evidence, execute the request by ordering that the evidence/witness be
provided directly to the arbitral tribunal.

Q4) Mr. Ram and Mr. Shyam had appointed an Arbitrator for their present
dispute.
i) What will happen if Mr. Ram dies during procedure ?
ii) What will be the effect if appointed Arbitrator dies during Arbitration
process.
Ans) i) If Mr. Ram dies during the arbitration procedure, the arbitration
agreement will not be discharged. As per Section 40(1) of the Arbitration
and Conciliation Act, 1996, the arbitration agreement shall continue to be
enforceable by or against the legal representatives of the deceased. This
means that Mr. Ram’s legal heirs or representatives would step into his shoes
and the arbitration can proceed with them.
ii) If the appointed arbitrator dies during the arbitration process, the
arbitration does not automatically terminate. The Supreme Court of India
has held that the death of a named arbitrator does not result in the
termination of an arbitration agreement. The parties can take recourse to
Section 11 of the Arbitration and Conciliation Act, 1996 to appoint a new
arbitrator unless the agreement explicitly states that the arbitrator cannot
be replaced. The arbitration process can continue with the newly appointed

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Alternate Dispute Resolution (ADR)

arbitrator. The intention behind these provisions is to ensure the continuity

of the arbitration process and to avoid unnecessary delays.

Q5) Parties make two separate contracts for two businesses, as in one of
that contract, parties add an arbitration clause for future dispute.
i)) What is effect on arbitration clause if contract itself is void ?
ii) Whether same arbitration clause is applicable for both the contracts?
Why?
Ans) i) The effect of an arbitration clause when the contract itself is void is
governed by the principle of separability. This principle, recognized under
Indian law, asserts that an arbitration clause is treated as an agreement
independent of the terms of the main contract. Therefore, even if the main
contract is declared void, the arbitration clause may still be valid and
enforceable. The Supreme Court of India has upheld this concept, indicating
that an arbitration agreement can stand independent of the main contract.
ii) The applicability of the same arbitration clause to both contracts depends
on the intention of the parties and the specific terms of the contracts. An
arbitration clause in one contract does not automatically apply to another
contract unless there is a clear intention or provision that the arbitration
clause should govern disputes arising from both contracts. The Supreme Court
of India has clarified that for an arbitration clause to apply across multiple
contracts, there must be a conscious and clear acceptance of the clause from
one document as part of the other contract. Without such explicit intention
or reference, the arbitration clause is typically only applicable to the contract
in which it is contained.

Q6) After receiving an award copy, party wants to make addition in award.
i) Advice party for the procedure and reasons of additional award.
ii) Can an arbitration take suo moto action for additional award? How?
Ans) i) If a party wishes to make an addition to an arbitral award after
receiving a copy, they can request the arbitral tribunal to make an additional
award. This is covered under Section 33 of the Arbitration and Conciliation
Act, 1996. The party must give notice to the other party and make the
request within 30 days from receiving the arbitral award. The reasons for
requesting an additional award could be that the tribunal omitted to decide
on certain claims presented during the arbitral proceedings. The tribunal then
has 60 days from receiving the request to make the additional award, which
can be extended if necessary.

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ii) An arbitral tribunal cannot take suo moto action for an additional award.
The initiative must come from a party to the arbitration proceedings. The
tribunal can only act upon a party’s request, provided the request fulfils the
notice and consent requirements as prescribed under Section 33(1)(b) of the
Arbitration Act. The tribunal does not have the authority to initiate this
process on its own.

Q7) Mr. K submitted a statement of claim and Mr. Z submitted a statement

of defense to an arbitrator. Mr. K withdraws his statement during arbitral
procedure.
i) Can Mr. K do so? What will be the effect?
ii) Can Mr. Z insist for arbitration after withdrawal of statement of claim ?
iii) Can arbitral tribunal terminate the procedure without declaration of an
award?
Ans) i) Mr. K can withdraw his statement of claim during the arbitral
procedure. The effect of such a withdrawal depends on the rules of the
arbitration and any agreement between the parties. Generally, if a claimant
withdraws their claim, the arbitral tribunal may terminate the proceedings
unless the respondent requests the tribunal to continue and render an award.
ii) Mr. Z can insist on continuing the arbitration after the withdrawal of the
statement of claim if he has a legitimate interest in obtaining a final
settlement of the dispute. The arbitral tribunal will consider Mr. Z’s request
and decide whether to continue with the proceedings and potentially issue an
award.
iii) Yes, the arbitral tribunal can terminate the procedure without declaring
an award. According to Section 32(2)(c) of the Arbitration and Conciliation
Act, 1996, the tribunal can terminate the arbitration proceedings if it finds
that the continuation of the proceedings has become unnecessary or
impossible. This could occur if the claimant withdraws their claim and no
party requests the tribunal to issue an award to resolve the dispute
definitively. However, if the respondent objects to the termination and the
tribunal recognizes a legitimate interest in obtaining a final settlement, the
proceedings may continue.
Q8) Parties in a dispute willing to appoint a conciliator for settlement of
dispute but they have some queries. Advise them.
a) Who is conciliator?
b) What is settlement agreement ?
c) What is judicial status of settlement agreement?

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Ans) The resolution to the queries in the given situational problem are as
under:
a) Who is a conciliator? A conciliator is a neutral third party who assists the
disputing parties in reaching an amicable settlement. They facilitate
communication, encourage understanding, and help the parties find common
ground to resolve their dispute outside of court proceedings.
b) What is a settlement agreement? A settlement agreement is a legally
binding contract that outlines the terms of resolution agreed upon by the
parties involved in a dispute. It typically includes details such as any
compensation, actions to be taken by the parties, or cessation of legal
proceedings. The agreement is reached either through direct negotiation
between the parties or with the assistance of a mediator or conciliator.
c) What is the judicial status of a settlement agreement? The judicial status
of a settlement agreement is that it has the same status and effect as
an arbitral award on agreed terms under Section 30 of the Arbitration
and Conciliation Act. This means it is enforceable as if it is a decree of
the court. The settlement agreement, once signed by all parties, becomes
a final and binding resolution of the dispute, and its terms can be enforced
by the courts if necessary.
These answers should provide a clear understanding of the role of a
conciliator, the nature of a settlement agreement, and its enforceability
within the judicial system.

Q9) As the dispute arises, Mr. B requests Mr. A for an appointment of an

arbitrator, but an arbitration agreement fails to make provision for the
number of arbitrator.
1) How many number of arbitrators can be presumed in the above case?
2) State remedy to Mr. B if Mr. A fails to appoint an arbitrator.
3) If Mr. A and B agree to appoint 3 arbitrators, but fail to agree on
procedure for appointing the arbitrator. Advise Mr. A and B.
Ans)
a) If an arbitration agreement does not specify the number of
arbitrators, it is presumed that a single arbitrator will be appointed. This is
in accordance with Section 10(2) of the Arbitration and Conciliation Act,
1996, which states that if the agreement does not determine the number of
arbitrators, the arbitral tribunal shall consist of a sole arbitrator.
b) If Mr. A fails to appoint an arbitrator, Mr. B has the remedy to
approach the court to appoint an arbitrator. As per Section 11(6) of the
Arbitration and Conciliation Act, 1996, if a party fails to appoint an
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Alternate Dispute Resolution (ADR)

arbitrator within 30 days from the receipt of a request to do so from the

other party, the party can request the Chief Justice of the High Court or
any person or institution designated by him to appoint an arbitrator.
c) If Mr. A and Mr. B agree to appoint three arbitrators but fail to
agree on the procedure for appointing them, they can follow the default
procedure provided under Section 11(3) of the Act. Each party shall appoint
one arbitrator, and the two appointed arbitrators shall appoint the third
arbitrator, who shall act as the presiding arbitrator. If they cannot agree
on this procedure, either party can approach the Chief Justice of the High
Court or any person or institution designated by him to take the necessary
measures to secure the appointment. The decision of the Chief Justice or
the person or institution designated by him in appointing an arbitrator shall
be final.

Q10) On 1st of June, Mr. P in order to initiate conciliation proceeding, sent

a written invitation to Mr. Q. But Mr. P does not receive a reply till 10th of
June. So he elected to treat it as rejection of conciliation and decided to go
to court. On 20th June Mr. Q sends his assent for conciliation.
A) What is the date of commencement of conciliation proceeding in the above
case?
B) According to Arbitration and Conciliation Act, 1996, how many days Mr.
P should wait for reply ?
C) Can Mr. P deny conciliation after receiving assent from Mr. Q?
Ans)
Ans) A) The date of commencement of conciliation proceedings would be the
date on which Mr. P receives Mr. Q’s assent to conciliate. Since Mr. P
received the assent on 20th June, that would be the commencement date,
provided Mr. P has not initiated any other legal proceedings and is still willing
to proceed with conciliation.
B) According to the Arbitration and Conciliation Act, 1996, Mr. P should wait
for a reply for 30 days from the date of sending the invitation to conciliate.
If Mr. P does not receive any reply within this period, he may elect to treat
the invitation as rejected.
C) Yes, Mr. P can deny conciliation after receiving assent from Mr. Q if he
has already elected to treat Mr. Q’s lack of response as a rejection and
decided to go to court. Once Mr. P has elected to treat the lack of response
as a rejection and initiated court proceedings, the conciliation process cannot
be commenced or revived without mutual agreement. However, if Mr. P has

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not initiated any legal proceedings, he may choose to proceed with conciliation
upon receiving Mr. Q’s late assent.

Q11) Mr. Z appointed as an arbitrator by Mr. C and Mr. D for the

settlement of dispute. Mr. Z has some personal relations with Mr. C. An
award was declared by Mr. Z on the basis of some personal information which
he got it from Mr. C.
A) Can Mr. Z declare an award on the basis of personal information ?
B) Whether there is any breach of duty from Mr. Z?
C) What are remedies available to Mr. D?.
Ans) A) Mr. Z, as an arbitrator, should not declare an award based on
personal information obtained outside the arbitration proceedings. An
arbitrator is expected to maintain impartiality and rely solely on the evidence
presented during the arbitration process. Deciding an award based on personal
information could be seen as a violation of the principles of natural justice
and impartiality required of arbitrators. There is a breach of duty on the
part of Z under Section 12 (1), a duty is imposed on the person who is to be
appointed as an arbitrator, to disclose in writing existence of circumstances
which may raise justifiable doubts against his independency and impartiality.
B) If Mr. Z has declared an award based on personal information from Mr.
C, this could constitute a breach of duty. An arbitrator’s duties include being
impartial and independent, and making decisions based on the evidence
presented during the arbitration proceedings. Using personal information not
presented in the proceedings could be a breach of these duties.
C) Mr. D has several remedies available if there is a breach of duty by the
arbitrator:
➢ Application to Set Aside the Award: Mr. D can file an application under
Section 34 of the Arbitration and Conciliation Act, 1996, to set aside the
arbitral award if it is found that the arbitrator has breached their duty.
➢ Replacement of the Arbitrator: If the arbitrator’s conduct raises
justifiable doubts regarding their impartiality or independence, Mr. D can
request the replacement of the arbitrator under Section 12 of the Act.
➢ Legal Action: In some cases, arbitrators may be sued for breach of
contract, subject to the immunities provided to arbitrators in the
jurisdiction. Serious breaches may also entail setting aside or annulling the
award.

Q12) Mr. Prabhu's name was mentioned as an arbitrator in the arbitration

agreement between the parties. After having dispute, parties appointed Mr.
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Alternate Dispute Resolution (ADR)

Arun as an arbitrator. After few months Arun shows his unwillingness to

work, so both the parties appointed Mr. Shukla as an arbitrator.
A) Can Mr. Prabhu take any action against parties? Why?
B) Can Mr. Arun submit his resignation during arbitration procedure ?
C) Whether Mr. Shukla has to work from initial stage of arbitration ?
Ans) A) Mr. Prabhu, whose name was mentioned in the arbitration agreement,
cannot take legal action against the parties for not being appointed as an
arbitrator. The Arbitration and Conciliation Act 1996 does not provide a
named arbitrator with the right to enforce their appointment if the parties
decide to appoint someone else. The parties are free to choose an arbitrator
by mutual agreement, even if someone else is named in the arbitration
agreement.
B) Mr. Arun can submit his resignation during the arbitration procedure. An
arbitrator may withdraw from their office for any reason, and if they become
de jure or de facto unable to perform their functions, they can be replaced.
The Act provides for the procedure to deal with the situation where an
arbitrator is unable to perform their duties, which includes their withdrawal
or resignation.
C) If Mr. Shukla is appointed as a replacement arbitrator, he does not
necessarily have to start the arbitration process from the beginning. The Act
does not explicitly require a newly appointed arbitrator to restart the
proceedings. However, the specifics would depend on the circumstances of
the case, the stage at which the previous arbitrator withdrew, and the
agreement between the parties. Mr. Shukla may continue from where Mr.
Arun left off, provided that the parties agree and it does not violate any
procedural fairness or the parties’ rights.

Q13) After having an arbitration agreement between Ajay and Atul, Mr. Atul
appoints an arbitrator and informs Ajay accordingly. Many disputes were
settled by an arbitrator and awarded according to that.
After declaration of an award, Ajay raises an objection and makes an
application for setting aside an award for (on the ground that) -
1) Few disputes were not mentioned in arbitration agreement.
2) Valid notice of appointment of an arbitrator was not issued to him.
i) Can whole award be set aside ?
ii) Can Ajay raise an objection of appointment of an arbitrator at the stage
of execution of an award?
iii) What is waiver?
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Alternate Dispute Resolution (ADR)

Ans) i) According to Section 34(2)(iv) of the Arbitration and Conciliation Act,

1996, an arbitral award may be set aside by the court if it deals with
disputes not contemplated by or not falling within the terms of the submission
to arbitration. Thus, the whole award can potentially be set aside if the
arbitral tribunal has rendered a decision on disputes not mentioned in the
arbitration agreement, as this would be beyond the scope of its authority.
However, if only few of disputes were beyond the scope of arbitration
agreement, then only those awards can be set aside.
ii) Ajay can raise an objection to the appointment of an arbitrator at the
stage of execution of an award, but it is generally expected that such
objections should be raised promptly during the arbitral proceedings.
However, If Ajay participated in the arbitration without raising this
objection, he may be deemed to have waived his right to object. However,
if he can demonstrate that he was not given proper notice of the appointment,
he may have grounds to challenge the award.
iii) Waiver in the context of arbitration refers to the voluntary and intentional
relinquishment of a known right, claim, or privilege. If a party, knowing of a
right to object, does not do so at the appropriate time, they are considered
to have waived that right. This is outlined in Section 4 of the Arbitration
and Conciliation Act, which states that a party who knows that any provision
of Part I of the Act from which the parties may derogate, or any requirement
under the arbitration agreement, has not been complied with and yet proceeds
with the arbitration without stating their objection promptly, or if a time
limit is prescribed, within such period of time, shall be deemed to have waived
their right to object.

Q14) Because of the request of one party, suit was referred to Lok Adalat
without giving an opportunity of being heard to the other party, the matter
was referred to Lok Adalat. As settlement was not taken place between
parties, no Award was made by the Lok Adalat.
i) Can court refer the matter to the Lok Adalat without giving an opportunity
of being heard to the other party? Under which Section ?
ii) What is the remedy available to parties if there is no Settlement of
dispute in Lok Adalat ?
iii) Is the Order appealable?
Ans) i) As per Section 20(i) of the Legal Services Authorities Act, 1987, a
court can refer a matter to Lok Adalat, if such court is prima facie satisfied
that there are chances of such settlement. However, a court cannot refer a
matter to the Lok Adalat without giving both parties a reasonable opportunity
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to be heard. This is in accordance with the principles of natural justice and

is supported by legal provisions that require such an opportunity to be
provided.
ii) If there is no settlement of the dispute in the Lok Adalat, the parties
are free to initiate litigation by approaching the court of appropriate
jurisdiction. They can file a case by following the required procedure,
exercising their right to litigate.
iii) The order of the Lok Adalat is not appealable. Once an award is made by
the Lok Adalat, it is deemed to be a decree of a civil court and is final and
binding on all parties. No appeal against such an award lies before any court
of law. However, if no award is made because a settlement could not be
reached, the parties retain the right to approach the court for litigation.

Q15) Dispute between X and Y was pending before the Court. By the request
of both the parties, Court referred the matter to Lok Adalat. But the person
presiding over was friend of Mr. X where Y came to know this fact after
declaration of an award.
i) Can Y make an appeal against the award?
ii) As the application for referring matter to Lok-Adalat is made by both the
parties can Court compel them for settlement ?
iii) Which method is applied in Lok Adalat for declaration of an Award ?
Ans) i) Generally, the award passed by a Lok Adalat is final and binding on
the parties, and no appeal lies against it in any court. However, if there is
evidence of bias or lack of impartiality, as in the case where the presiding
person is a friend of one of the parties, it may be possible to challenge the
award on these grounds. The challenge would not be in the form of an appeal
but rather a petition to set aside the award due to the compromised
impartiality of the Lok Adalat.
ii) The court cannot compel the parties to settle in the Lok Adalat. The Lok
Adalat functions on the principle of consent, and both parties must voluntarily
agree to the settlement. If the parties do not reach a settlement, the
matter is returned to the court for formal adjudication.
iii) The method applied in Lok Adalat for the declaration of an award is based
on the principle of conciliation and compromise. The members of the Lok
Adalat facilitate a discussion between the parties to help them reach an
amicable settlement. If a settlement is reached, the Lok Adalat passes an
award, which has the same status as a civil court decree. The award is based
on the mutual agreement of the parties and not on a judicial decision imposed
by the Lok Adalat. While determining any matter referred before it, the Lok
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Adalat acts expeditiously/speedily to arrive at a settlement between the

parties, and shall be guided by the principles of justice, equity, and fair
play.

*****

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Alternate Dispute Resolution (ADR)

Particulars Remarks
Section 32 Termination of Arbitration
Proceedings.
Kifayatullah Haji Gulam Rasool v. Section 32 makes provision for the
Bilkish Ismail Mehsania termination of the arbitral
proceedings
Section 28(2) ex aequo et bono’ decision
Section 7(1) Meaning of Arbitration Agreement
Section 44 defines "foreign award"
Section 19 of the Legal Services Creation of Lok Adalat.
Authorities Act, 1987
UNICITRAL United Nations Convention on
International Trade Law
Two statutes dealing with Arbitration and Conciliation Act,
Alternative Dispute Resolution (ADR) 1996.
The Legal Services Authority Act,
1987
Section 40 arbitration is not discharged by the
death of either party
Section 21 arbitral proceedings are deemed to
commence on the date on which a
request for that dispute to be
referred to arbitration is received
by the respondent
Section 26 empowers the arbitral tribunal to
appoint experts.
Sec. 61 Conciliation is a process by which
settlement of disputes is encouraged
through a process of continuous
discussion, facilitated by the
conciliator
Section 64 appointment of a conciliator under
the Arbitration and Conciliation Act,
1996
Section 43 (1) the Limitation Act, 1963, shall apply
to arbitrations as it applies to
proceedings in court.
Section 32 Termination of Arbitration
Proceedings
Section 16 provisions relating to Jurisdiction of
arbitral tribunal

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Alternate Dispute Resolution (ADR)

Section 28 Rules applicable to substance of

Dispute
Section 2 (1) (d) 'Arbitral Tribunal'
Section 10 Appointment of Arbitrator
Section 34 Setting aside of arbitral award.
Section 20 Place of Arbitration.
Section 44 foreign award
Section 31(1) requirement for the arbitrators to
sign the award
Section 31(8) powers of the arbitral tribunal to fix
the costs of arbitration
Section 89 procedure for the settlement of
disputes outside of court
Section 40(1) the arbitration agreement shall
continue to be enforceable by or
against the legal representatives of
the deceased
Section 33 an addition to an arbitral award
Section 32(2)(c) the tribunal can terminate the
arbitration proceedings if it finds
that the continuation of the
proceedings has become unnecessary
or impossible.
Section 10(2) If an arbitration agreement does not
specify the number of arbitrators, it
is presumed that a single arbitrator
will be appointed
Section 11(3) In case of 3 arbitrators, each party
shall appoint one arbitrator, and the
two appointed arbitrators shall
appoint the third arbitrator, who
shall act as the presiding arbitrator.
Section 12 (1) a duty is imposed on the person who
is to be appointed as an arbitrator,
to disclose in writing existence of
circumstances which may raise
justifiable doubts against his
independency and impartiality.
Section 20(i) of the Legal Services a court can refer a matter to Lok
Authorities Act, 1987 Adalat, if such court is prima facie
satisfied that there are chances of

47
Alternate Dispute Resolution (ADR)

such settlement. However, a court

cannot refer a matter to the Lok
Adalat without giving both parties a
reasonable opportunity to be heard.

48
Alternate Dispute Resolution (ADR)

49