2 MARKS QUESTION

Q1. When arbitration proceedings are deemed to have been commenced?

Ans. The arbitral proceedings shall be commenced within a period of ninety days from the date of
such order or within such further time as the Court may determine.

Q2. When arbitration and conciliation act 1996 become into force effective ?
Ans.The Arbitration and Conciliation Act, 1996 accordingly came in force on 22.08. 1996. The said
Act of 1996 was based on the UNCITRAL Model Law on International Commercial Arbitration 1985
and the UNCITRAL Conciliation Rules, 1980.

Q3. What should be the place of arbitration ?

Ans. It 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.

Q4. Stages in which the court can grant interim measures in arbitration ?
Ans. On the contrary, a party can seek interim measure at three stages, viz., before, during the
pendency of arbitral proceedings and after passing of the award, but before it is enforced under
Section 36 of the Act.

Q5. How the award can be passed if the arbitration differ in opinion?
Ans. An arbitration award is the award granted by the arbitrator in their decision. This award can
be money one party has to pay to the other party. It can also be a non-financial award, such as
stopping a certain business practice or adding an employment incentive.

Q6. What is foreign Award?

Ans. According to Section 447 of the Arbitration and Conciliation Act, 1996 a foreign award is
defined as, “an arbitral award on differences that are related to the matters which are deemed
commercial under the Indian law”

Q7. What is conciliation ?

Ans. Conciliation is an ADR process where an independent third party, the conciliator, helps
people in a dispute to identify the disputed issues, develop options, consider alternatives and try
to reach an agreement.

Q8. What is full form of UNCITRAL?

Ans. The United Nations Commission on International Trade Law (UNCITRAL) was established by
the General Assembly in 1966 (Resolution 2205(XXI) of 17 December 1966).
Q9. What you means by foreign arbitration ?
Ans. A foreign arbitration is an arbitration conducted in a place outside India, and the resulting
award is sought to be enforced as a foreign award.

Q10. What is means by lok adalat?

Ans. Lok Adalat is one of the alternative dispute redressal mechanisms, it is a forum where
disputes/cases pending in the court of law or at pre-litigation stage are settled/ compromised
amicably.

Q11. Jurisdiction of lok adalat?

Ans. The jurisdiction of the Permanent Lok Adalats is upto Rs. Ten Lakhs. Here if the parties fail to
reach to a settlement, the Permanent Lok Adalat has the jurisdiction to decide the case. The
award of the Permanent Lok Adalat is final and binding upon the parties.

Q12. Termination of arbitral proceedings?

Ans. (1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of
the arbitral tribunal under sub-section (2). (c) the arbitral tribunal finds that the continuation of
the proceedings has for any other reason become unnecessary or impossible.

Q13. What do you means by lien on arbitral award ?

Ans. (1) Subject to the provisions of sub-section (2) and to any provision to the contrary in the
arbitration agreement, the arbitral tribunal shall have a lien on the arbitral award for any unpaid
costs of the arbitration.

Q14. What is mediation?

Ans. Mediation is one of the effective and now well known alternative dispute resolution
methods, which helps the litigants to resolve their disputes voluntarily and amicably with the
assistance of a third party known as 'Mediator'. The mediator by his skills assists the parties to
settle their disputes.

Q15. Whether the signature of an arbitrator is necessary in arbitration agreement ?

Ans. Such act and provisions are now complying with section 7 of IT Act and contract entered
through electronic way is valid so as signature but in arbitration act there is no requirement as
such.

Q16. What is contractual arbitration ?

Ans. Sometimes, parties to a contract include an arbitration clause which clarifies referring any
dispute to arbitration before heading towards the courts. In such cases, terms mentioned in the
arbitration clause decide the way parties go ahead with dispute resolution through an arbitrator.
Q17. Who is presiding arbitration?
Ans. Each party shall appoint one arbitrator. The two arbitrators thus appointed shall choose the
third arbitrator who will act as the presiding arbitrator.

Q18. What is consent award ?

Ans. Consent Awards are settlement agreements recorded between the parties after the parties
have invoked arbitration to settle disputes.

Q19. What is settlement agreement?

Ans. A settlement is an official agreement between two sides who were involved in a conflict or
argument.

Q20. What should be the nationality of an arbitrator?

Ans. (1) Except where the sole arbitrator or each individual member of the Tribunal is appointed
by agreement of the parties, the majority of the arbitrators shall be nationals of States other than
the State party to the dispute and the State whose national is a party to the dispute.

Q21. Foreign award?

Ans.The New York Convention 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, made on or after the 11th day of October, 1960

Q22. Define the term arbitration agreement?

Ans. What is an arbitration agreement? It's typically a clause in a broader contract in which you
agree to settle out of court, through arbitration cases, any dispute that arises with your
counterpart.

Q23. Define the term court?

Ans. Alternative dispute resolution (ADR) offers to settle disputes outside of the courtroom with
the help of an impartial third party. Outcomes may be non-binding and advisory in nature or
enforceable without the right to appeal.

Q24. What should be the no of arbitration in tribunal?

Ans. The Tribunal consists of three arbitrators. Each party appoints one co-arbitrator. The parties
attempt to agree on the third arbitrator, the President of the Tribunal.
5 MARKS QUESTION

Q1. Arbitration agreement

Ans. Arbitration is a form of alternative dispute resolution (ADR), which is a legal technique
settling the disputes outside courts, wherein the parties to a dispute refer it to one or more
persons, by whose decision they agree to be bound. The persons to whom the dispute is referred
to are called the arbitrator or arbitral tribunal. The basic concept of arbitration is that the parties
must repose trust and faith in a person or a committee for deciding and must agree to accept such
decision.
Arbitration is a settlement technique in which a third party reviews the case and imposes a
decision that is legally binding for both sides. Other forms of ADR include mediation and non-
binding resolution by experts. It is more helpful, however, simply to classify arbitration as a form
of binding dispute resolution, equivalent to litigation in the courts, and entirely distinct from the
other forms of dispute resolution, such as negotiation, mediation, or determinations by experts,
which are usually non-binding.
Arbitration is most commonly used for the resolution of commercial disputes, particularly in the
context of international commercial transactions. In the recent past and at present Arbitration is
the most sought after mode of settling disputes between in view of the increased number of
pending cases and the time consuming processes of the courts.

Q2. Lok adalat

Ans. Lok Adalat is one of the alternative dispute redressal mechanisms, it is a forum where
disputes/cases pending in the court of law or at pre-litigation stage are settled/ compromised
amicably. Lok Adalats have been given statutory status under the Legal Services Authorities Act,
1987. Under the said Act, the award (decision) made by the Lok Adalats is deemed to be a decree
of a civil court and is final and binding on all parties and no appeal against such an award lies
before any court of law.
If the parties are not satisfied with the award of the Lok Adalat though there is no provision for an
appeal against such an award, but they are free to initiate litigation by approaching the court of
appropriate jurisdiction by filing a case by following the required procedure, in exercise of their
right to litigate.
There is no court fee payable when a matter is filed in a Lok Adalat. If a matter pending in the
court of law is referred to the Lok Adalat and is settled subsequently, the court fee originally paid
in the court on the complaints/petition is also refunded back to the parties. The persons deciding
the cases in the Lok Adalats are called the Members of the Lok Adalats, they have the role of
statutory conciliators only and do not have any judicial role; therefore they can only persuade the
parties to come to a conclusion for settling the dispute outside the court in the Lok Adalat and
shall not pressurize or coerce any of the parties to compromise or settle cases or matters either
directly or indirectly.
Q3. Arbitration award
Ans. An arbitration award is the award granted by the arbitrator in their decision. This award can
be money one party has to pay to the other party. It can also be a non-financial award, such as
stopping a certain business practice or adding an employment incentive. In simpler words, arbitral
awards refer to the decision of an arbitral tribunal, whether in a domestic or international
arbitration.
 Arbitral awards include interim awards
Domestic awards are governed by Part I whereas foreign awards are governed by part II of the
Arbitration and Conciliation Act of India. A domestic award is an award passed under the
provisions of Section 2 to 43 of the Act.
A domestic award is a result of domestic arbitration , hence it confines itself to the territory of
India, the parties should have a nexus or birth to Indian origin, basically territory comes into play
in order to asses a domestic arbitration. Award given by an arbitral institution in India or an award
even if given by a foreign state for a dispute where both the parties are of an Indian origin and the
nationality is also governed by the Indian laws shall also come within the purview of domestic
arbitration.

Q4. Appointment of conciliator

Ans. Conciliator can be appointed by the parties themselves of their own choice with consensus
i.e. both should agree upon the appointment of the conciliator. IDRC has a Panel of Conciliators
with rich experience in varied fields.
The parties follow any of the following methods.
(a) The parties themselves may name a conciliator or conciliators from IDRC Panel.
(b) Each party may appoint one conciliator from IDRC Panel & may mutually agree on the third
conciliator.
(c) The parties may enlist the assistance of a suitable institution ie IDRC in connection with the
appointment of conciliators.
Here, Conciliator should not be of a specific qualification, but he should also not be ignorant of the
subject matter. He can be a expert person of the subject matter of dispute for e.g. if there is a
dispute regarding construction cost of a building in that case a person can be a civil engineer, who
has the knowledge of building construction. The important thing, which cannot be ignored, is that
conciliation is not the person who will decide the matter; rather he is a person who assists the
parties to arrive at amicable settlement, where the decision is of the parties themselves.

Q5. New york convention

Ans. The New York convention also known as the Convention on the Recognition and Enforcement
of Foreign Arbitral Awards was first adopted by the United Nations diplomatic conference on 10
June 1958 and was enforced on 7 June 1959. It is often considered as one of the most important
treaties in the field of international trade law and has a great significance. It is often described as a
foundation stone in the field of international arbitration. It requires courts of the contracting
states to give effect to an agreement to arbitrate when seized of an action in a matter covered by
an arbitration agreement and also to recognize and enforce awards made in other states, subject
to specific limited exceptions. At present, the convention is signed by 156 state parties.
It was adopted mainly for promoting healthy business relations between the countries and to
promote harmony and coordination among the states. Further it reduces the burden of the states
to decide which laws to be enforced or the procedures of which countries to be followed during
the process of the arbitration. Further it also establishes a minimum level of control which the
contracting states can exert over arbitral awards and arbitral agreements.

Q6. Settlement agreement

Ans. A settlement is a form of an agreement which is reached at between two feuding parties
during the process of mediation or conciliation. These agreements once signed by both the parties
are binding. Usually, the parties make an attempt to arrive at a settlement through these
processes as it saves court fees and other costs and time required for litigation. Neither party has
an obligation to agree on a settlement and can choose to walk away. These settlements are
preferable as they give both the parties some control over the terms of the agreement.[1] A
document is prepared which contains the terms of settlement which both the parties have agreed
upon.
A settlement agreement which is arrived at in a commercial dispute serves to strengthen the
business relations. This is because of the possibility of a win-win situation for both parties. This
mode of the settlement also serves to save the time of the courts. A settlement agreement also
ensures that the dispute between parties is settled amicably. A settlement agreement is drawn up
by the mediator based on the statements, the notes of the mediator and the documentary
evidence, if any, presented by the parties.

Q7. Costs u/s 78

Ans. (1) Upon termination of the conciliation proceedings, the conciliator shall fix the costs of the
conciliation and give written notice thereof to the parties.
(2) For the purpose of sub-section (1), "costs" means reasonable costs relating to—
(a) the fee and expenses of the conciliator and witnesses requested by the conciliator with the
consent of the parties;
(b) any expert advice requested by the conciliator with the consent of the parties;
(c) any assistance provided pursuant to clause (b) of sub-section (2) of section 64 and section 68.
(d) any other expenses incurred in connection with the conciliation proceedings and the
settlement agreement.
(3) The costs shall be borne equally by the parties unless the settlement agreement provides for a
different apportionment. All other expenses incurred by a party shall be borne by that party.
Q8. Distinguish between arbitration and conciliation
Ans. Conciliation is usually used when there is no need for an official ruling. This means that both
parties agree to work together to find a solution. However, if one party refuses to cooperate,
conciliation will not be successful. On the other hand, arbitration is typically used when there is a
need for an official ruling, such as when a contract has been breached.
Conciliation is often used as a first step in resolving a dispute. It involves negotiation between the
parties involved in the dispute. If the parties cannot come to terms, conciliation will not result in a
resolution. In contrast, arbitration is a more formal process that results in a binding decision by a
third party.
Conciliation involves both parties working together and trying to come to an agreement.
Arbitration can also be voluntary or mandatory. Voluntary arbitration allows parties to choose
whether or not they want to participate; mandatory arbitration requires all parties involved in an
issue to participate in an arbitration hearing unless they waive their right to do so.
Arbitration is often used when there is no contract that governs the relationship between two
parties or when one party does not agree with how another party has interpreted the contract’s
terms. For example, if you have an employee who believes that he should be paid more than $15
per hour based on his experience and education level, but your company only pays its employees
$8 per hour. Arbitration may be appropriate since both sides disagree on how much money this
employee should earn per hour of work performed.

Q9. u/s 26 power of arbitration tribunal to appoint experts

Ans. Expert appointment by arbitral tribunal.—
(1) Unless otherwise agreed by the parties, the arbitral tribunal may—
(a) appoint one or more experts to report to it on specific issues to be determined by the arbitral
tribunal, and
(b) require a party to give the expert any relevant information or to produce, or to provide access
to, any relevant documents, goods or other property for his inspection.
(2) Unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal
considers it necessary, the expert shall, after delivery of his written or oral report, participate in an
oral hearing where the parties have the opportunity to put questions to him and to present expert
witnesses in order to testify on the points at issue.
(3) Unless otherwise agreed by the parties, the expert shall, on the request of a party, make
available to that party for examination all documents, goods or other property in the possession of
the expert with which he was provided in order to prepare his report.
Q10. Termination of arbitral proceeding
Ans. (1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of
the arbitral tribunal under sub-section (2).
(2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings
where—
(a) the claimant withdraws his claim, unless 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,
(b) the parties agree on the termination of the proceedings, or
(c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason
become unnecessary or impossible.
(3) Subject to section 33 and sub-section (4) of section 34, the mandate of the arbitral tribunal
shall terminate with the termination of the arbitral proceedings.

Q11. Imp of lok adalat for judicial system

Ans.
 There is no court fee and if the court fee is already paid the amount will be refunded if the
dispute is settled at Lok Adalat. In other words, it is less expensive.
 The basic features of Lok Adalat are the procedural flexibility and speedy trial of the
disputes. There is no strict application of procedural laws like the Civil Procedure Code and
the Evidence Act while assessing the claim by Lok Adalat.
 Parties are free to discuss their differences of opinion without any fear of disclosure before
any law courts.
 The parties to the dispute can directly interact with the judge through their counsel, which
is not possible in regular courts of law.
 The award by the Lok Adalat is binding on the parties, and it has the status of a decree of a
civil court, and it is non-appealable, which does not cause the delay in the settlement of
disputes finally.

Q12. Conventional award

Ans. The New York convention also known as the Convention on the Recognition and Enforcement
of Foreign Arbitral Awards was first adopted by the United Nations diplomatic conference on 10
June 1958 and was enforced on 7 June 1959. It is often considered as one of the most important
treaties in the field of international trade law and has a great significance. It is often described as a
foundation stone in the field of international arbitration. It requires courts of the contracting
states to give effect to an agreement to arbitrate when seized of an action in a matter covered by
an arbitration agreement and also to recognize and enforce awards made in other states, subject
to specific limited exceptions. At present, the convention is signed by 156 state parties.
Section 53 to Section 59 under Arbitration and Concillation Act 1996 deals with Foreign Award ,
passed under Geneva Convention. The said awards can be executed as if it was decree passed by
the civil court of original jurisdiction in India as envisaged under section 36 of this Act.
Q13. Arbitration tribunals
Ans. As per the strategy paper given by Niti Aayog in 2018, there were 29 million cases pending in
Indian courts, and at that time it was said that it would take more than 324 years to clear that
backlog with the number of judges that were appointed. Now the pendency has risen to 44 million
cases and there are only 21.03 million judges over 1 million people in the country. These statistics
are somewhat worrisome. Considering such a situation, people nowadays are considering
alternate ways of dispute resolution and ‘arbitration’ is one such way.
Arbitration is an alternative method provided for dispute resolution in civil matters. It is a way in
which a dispute is decided by private individuals appointed and not the judicial officers appointed
to the courts and tribunals of the country directly. These private individuals are called arbitrators,
and they are quasi-judicial officers. However, all the matters cannot be decided by way of
arbitration. Such matters involve matters related to crimes, matrimony, insolvency and winding
up, guardianship, tenancy, testamentary matters, trusts, etc. This bifurcation is made by keeping
in mind the kind of right affected, i.e., ‘right in rem’ or ‘right in personam’ and also the jurisdiction
of special courts and the analysis of public policy.
Whenever a dispute arises between two parties and they decide to resolve the dispute through
arbitration, an arbitral tribunal is to be set up. An “arbitral tribunal” means a sole arbitrator or a
panel of arbitrators. Their task is to adjudicate and resolve the dispute and to provide an arbitral
award.

Q14. Forms and contents of an arbitral award

Ans. (1) The award shall be made in writing.
(2) The award shall state the reasons upon which it is based, unless the parties have agreed that
no reasons are to be given or the award is an award on agreed terms under section 53.
(3) The award shall state its date and the seat of the arbitration as determined in accordance with
section 34(1). The award shall be deemed to have been made at the seat of the arbitration,
irrespective of where it is written or signed, and regardless of the method whereby it is signed,
whether it is signed by the members of the arbitral tribunal in person, it is sent to be signed by
each member separately, or it is signed by electronic means.
(4) An award signed by electronic means shall have the same legal validity and enforceability and
constitute the original award for the purposes of section 61(2)(a) of these Regulations, as an
award with manually executed signatures of arbitral tribunal.
(5) After the award is made, an electronic copy shall be delivered to each party. An original hard
copy of the award shall be delivered on request of a party.
(6) The arbitral tribunal shall fix the costs of the arbitration in its award or as provided for in
subsection (8) below. Unless the arbitral tribunal determines otherwise, the recoverable costs of
the arbitration shall be determined on the basis that they are reasonable and proportionate.
(7) In fixing the costs of the arbitration, the arbitral tribunal may direct to whom, by whom, and in
what manner, the whole or any part of the costs shall be paid.
(8) If the arbitral tribunal does not fix the costs of the arbitration in its award, a party to the
arbitral proceedings may, within 30 days of receiving the award, apply to the arbitral tribunal for a
further award on costs. After giving the parties an opportunity to make representations, the
arbitral tribunal shall make a further award on costs.
(9) Subject only to sections 58 and 62, all awards made by the arbitral tribunal shall be final and
binding on the parties.

Q15. Appointment of an arbitration

Ans.
 The nationality of an arbitrator is not essential unless the parties otherwise agree upon it.
 The parties can also form an agreement on the procedure for appointing arbitrators.
 In case of failure to reach an agreement on the procedure of appointment, clause (3)
prescribes the following procedure for the appointment of three arbitrators:
 Each party appoints an arbitrator.
 The two arbitrators then jointly appoint the third arbitrator, who acts as the presiding
arbitrator.
 The Supreme Court and high courts have the power to designate arbitral institutions. The
arbitral institutions are graded by the Arbitration Council of India under Section 43-I of the
Act. If a high court has no graded arbitral institution, the Chief Justice of the concerned
high court may maintain a panel of arbitrators and also review it from time to time.
 Clause 4 states that when the procedure mentioned in clause (3) is applied, there are two
conditions, which are the following:
 Each party must appoint an arbitrator within thirty days of receiving the request from the
other party to do so.
 The two arbitrators must reach an agreement on appointing the third arbitrator within
thirty days from the date of their appointment.
 In case of failure of either of the two conditions, the appointment shall be made by the
arbitral institution designated by the Supreme Court or a high court upon the application
or request of a party.

Q16. Role of conciliator

Ans. Conciliators have a variety of roles and responsibilities to ensure that the parties reach a fair
resolution. Here are some examples, as:
 Hold meetings with each individual party to discuss how the meeting will go
 Review relevant documents and information to help reach conclusions
 Maintain a neutral position within a meeting to ensure both parties receive fair
considerations
 Allow parties involved to reach their own resolution
 Be prepared to settle disputes by issuing their own resolution, should the parties ask
 Meet with witnesses and other persons related to the parties to obtain statements and
additional information about the dispute in question
 Prepare settlement agreement documents based off of the resolution the parties reached
 Practice confidentiality regarding the parties, their personal information and details
regarding the dispute
12 MARKS QUESTION

Q1. Conciliator is the role of complete trust and confidence? Which is maintained by the legal
provisions discuss?
Ans. Part 3rd of the Act deals with conciliation. Conciliation means the settling of disputes without
litigation. Conciliation is a process by which discussion between parties is kept going through the
participation of a conciliator. The main difference between arbitration and conciliation is that in
arbitration proceedings the award is the decision of the Arbitral Tribunal while in the case of
conciliation the decision is that of parties arrived at with the assistance of the conciliator.
The law relating to conciliation has been codified for the first time in India on the pattern of
UNCITRAL Conciliation Rules.
 Application And Scope- Section 61
This part shall apply to conciliation of disputes arising out of legal relationship, whether
contractual or not and to all proceedings.
This part shall not apply where by virtue of any law for the time being in force certain disputes
may not be submitted to conciliation.
Section 61 points out that the process of conciliation extends, in the first place, to disputes,
whether contractual or not. But the disputes must arise out of legal relationship. It means that the
dispute must be such as to give one party the right to sue and other party the liability to be sued.
The process of conciliation extends, in the second place, to all proceedings relating to it. But Part
3rd of the Act does not apply to such disputes as cannot be submitted to conciliation by virtue of
any law for the time being in force.
Principles of Procedure
 Independence and impartiality – Sec 67(1)
The conciliator should be independent and impartial. He should assist the parties in an
independent and impartial manner while he is attempting to reach an amicable settlement of their
dispute.
 Fairness and justice – Sec 67(2)
The conciliator should be guided by principles of objectivity, fairness and justice. He should take
into consideration, among other things, the rights and obligations of the parties, the usages of the
trade concerned, and the circumstances surrounding the dispute, including any previous business
practices between the parties.
 Confidentiality – Sec 75, 70, proviso
The conciliator and the parties are duly bound to keep confidential all matters relating to the
conciliation proceedings. Similarly, when a party gives an information to the conciliator on the
condition that it be kept confidential, the conciliator should not disclose that information to the
other party. (Sec 70, proviso)
 Disclosure of information – Sec 70
When the conciliator receives an information about any fact relating to the dispute from a party,
he should disclose the substance of that information to the other party. The purpose of this
provision is to enable the other party to present an explanation which he might consider
appropriate.
 Cooperation of parties with conciliator – Sec 71
The parties should in good faith cooperate with the conciliator. They should submit the written
materials, provide evidence and attend meetings when the conciliator requests them for this
purpose.
 Rules of procedure – Sec 66
The conciliator is not bound by the rules contained in the Code of Civil Procedure, 1908 or the
Indian Evidence Act, 1872. Though the conciliator is not bound by the technical rules of procedure,
he should not ignore the principles of natural justice.
 Place of meeting – Sec 69(2)
The parties have freedom to fix by their agreement the place where meetings with the conciliator
are to be held. Where there is no such agreement, the place of meeting will be fixed by the
conciliator after consultation with the parties. In doing so the circumstances of the conciliation
proceedings will have to be considered.
 Communication between conciliator and parties - Sec 69(1)
The conciliator may invite the parties to meet him or may communicate with them orally or in
writing. He may do so with the parties together or with each of them separate
Q2. Arbitration can get the assistance of the court but not interference?
Ans. Taking cognizance of the United Nations Commission on International Trade Law Model Law
(1985 (hereinafter referred to as “UNCITRAL Model Law”) on International Commercial
Arbitration, the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) was
formed to adopt the Arbitration method to resolve the disputes arising between the parties.
Before the UNCITRAL Model Law, the Arbitration proceedings were governed by the Arbitration
Act, 1940.
Arbitration is one of the types of Alternative Dispute Resolution by which the parties resolve their
dispute by appointing a third party, known as an Arbitrator, without going to the Courts. The
decision of the Arbitration Tribunal shall be final and binding until and unless it is set aside by the
Court by way of intervention. An Arbitration Agreement is an essential instrument to refer the
dispute to the Arbitral Tribunal. There are crores of pending cases in Indian Courts. The Arbitration
was adopted to remove pressure on the courts. Arbitration is a speedy, money-saving, time-saving
method to resolve the dispute.
Although arbitration is a whole different process/method to resolve the dispute, the Courts can
intervene in the proceedings as mentioned under the Act, 1996 itself. According to Section 5 of
the Act, 1996 the Courts have very limited scope to intervene in between the arbitration
proceedings in very circumstances i.e., to appoint an arbitrator, where the arbitration agreement
is not valid under the eyes of the law, the arbitration procedure was not in accordance with the
agreement, etc. Judicial Intervention in arbitral proceedings is just to ensure fairness and protect
the rights of the parties.
Scope of judicial intervention
The issue of judicial intervention in arbitration is swamped with conundrums which makes it easy
to sink into the technicalities of the definition and limitations. The ever-changing and evolving
state of Arbitration in India contributes to the diversity of this topic. The key question in this
regard comes down to the intervention of the judiciary in Arbitration proceedings and to what
extent its intervention is acceptable. The Act, 1996 along with the amendments done in 2015 and
2019, was enacted to lessen the overburdened court and use arbitration as a means to dispute
resolution. The Act aimed to divert the traffic of cases from the traditional route of litigation to
arbitration, so the legislators made sure to include provisions that could limit judicial interference
which would be a time-consuming process that would inhibit the speedy disposition that Alternate
Dispute Resolution offers.
 Judicial Intervention before Arbitration Proceedings:
When taking the term “Judicial Authority” into consideration, it can be seen that the courts have
widened the scope of this term when required in order to increase the scope of application of the
law. The Supreme Court in Fair Air Engineers Pvt Ltd., v. NK Modi, held that the State Commission
and the National Commission under the Consumer Protection Act, 1986 are to be treated as
“Judicial Authority”. It was also said that a commission under the Monopolies and Restrictive
Trade practices act, 1969 is also judicial authority. In the case of Canara Bank v. Nuclear Power
Corporation of India Ltd, the Apex Court held that the Company Law Board can be considered a
judicial authority.
 Judicial Intervention during Proceedings:
There are many sections involved where the judiciary steps in during the proceedings. Section 9 of
the act deals with the interim measures that can be granted by the court. While section 17
empowers the arbitral tribunals to make orders according to the section. While section 9 has the
same power as Judiciary, but the purpose of both sections is entirely different.
The power given in Section 9 is not subject to the autonomy of the parties in dispute and is
mandatory in nature. The interim measures are not substantive relief. An application under
section 9 is not a civil suit and the relief under it does not arise from a contract. The court’s duty is
limited to ensuring that the rights to adjudication before an arbitral panel are not violated.
 Judicial Intervention after Proceedings:
Section 34 of the Act states the Application for setting aside the arbitral award. It specifies that
Judicial intervention is prohibited but also provides the special circumstances where an arbitral
award can be set aside by a court i.e., the exceptions to it. Section 34(2)(a) provides certain
grounds on which the courts can set aside an arbitral award, conditions being that:
1. The party was under some incapacity;
2. The arbitration agreement is not valid in accordance with the law to which it was subjected
by the parties to the agreement;
3. Proper notice of the arbitrator’s appointment or the proceedings was not given;
4. The dispute did not fall within the terms of those which could be submitted to arbitration
or the award contains a decision beyond the scope of the arbitration; or
5. The tribunal was not composed in accordance with the parties’ agreement.
 Is judicial intervention in arbitration justified
The Act, 1996 gives autonomous power to the parties to appoint the arbitrator or arbitrators of
their choice by entering into an arbitration agreement. The court will refer the parties to the
arbitrator panel/bench before intervening in the dispute if any. The Judicial Intervention was
included in the Act just to protect the rights of the party, keep an eye on the action of arbitrators,
and fairness in delivering justice.
Domestic arbitrations are the most common in India. As a result, any foreign element is in short
supply. The government and similar agencies merely become adversarial parties. The arbitrators
designated by the center are government workers who may be prejudiced in favor of one party or
the other for a variety of reasons. Politics, power, and money can all be used to buy justice. It’s
also simpler in arbitration proceedings because they’re more informal in nature, and arbitrators
are frequently unfamiliar with how to efficiently handle arbitration proceedings. The idea of
arbitration law does not match the reality of the legal system. As a result, its objective is defeated.
Q3. Why the measure of alternate dispute resolution are not widely accepted in india?
Ans.
Lack of awareness
Although India is moving towards modernisation, it is yet a developing country. Which means,
most people are ignorant towards Arbitration and still trust Courts more than alternative dispute
resolution. The people of India find it very difficult to trust someone other than a judge due to
which the Courts are overburdened with cases which are also Arbitral in nature and ADR can
provide instant justice.
Arbitrators
Majority of problems associated with Arbitrator/s were addressed and resolved in the 2015
amendment act but still, one of the problems is yet to be addressed. Looking at the DNA strand of
Arbitration, one of the traits is to provide a speedy resolution. The documents which are being
submitted are less aggressively formal but respectful. Since the majority of Arbitrator/s are either
retired judges from Supreme Court of India or High Court of a particular state the Arbitration
sometimes tends to follow conventional Court layout for submission of documents, pattern to be
followed during proceedings etc which may hinder the efficiency of the Arbitration.
Overlapping effect of different laws
Micro, Small & Medium Enterprise Development Act, 2006 was introduced to protect the supplier
from hardship like non-payment of goods or services. The act imposes the obligation on large and
government undertakings to pay for the goods within 45 days of the purchase otherwise a
compound interest or three times bank rate as specified by the RBI will be levied on the defaulter.
Even after that, payment is not made the enterprise can approach Facilitation Council. Section 18
of the MSMED Act gives us a detailed mechanism to be followed. Firstly, there must be due
between the supplier and the buyer and one of the parties must refer to the dispute of non-
payment due to the Facilitation Council. Secondly, the Council has two levels at which they can
resolve the dispute:
(1) Conciliation – if the Conciliation is successful, the settlement agreement will be binding to the
parties.
(2) Arbitration – if the Conciliation is not successful, then the matter is referred to Arbitration.
Irrespective of whether the Arbitration agreement is carried out before or after the
commencement of the Insolvency process, but before passing Insolvency order; then the
resolution to be followed is solely dependent on the receiver handling the Insolvency. If the
Arbitration agreement has the jurisdiction to govern the dispute between the parties (the
company will be replaced by the receiver handling insolvency) and the receiver agrees to abide by
the Arbitration terms of the contract then no permission of the NCLT is required. If the receiver
denies abiding by the terms of the contract then the party involved in Arbitration can apply to the
NCLT for convincing the receiver to adopt arbitration as a resolution to settle a dispute.
The decision shall be solely in hands of the NCLT, having regards to the circumstances. If the NCLT
passes an Order to ignore the Arbitration clause/agreement already in place because of the
circumstances of the Insolvent Company, then the other party is left only with one remedy i.e. to
file a civil suit to seek relief against the receiver. Regarding the power vested in the hands of the
receiver to push the other party which is involved in Arbitration against the wall, the receiver is
not bound to consider the status of another party. The question here to be answered is not the
powers of the receiver but the worth of an Arbitration clause/agreement.
Lack of legislation
The only parent act which is governing Arbitration in India is The Arbitration and Conciliation
Act,1996. The quantum of an arbitral award is the same as that of a decree from a Court but due
to the lack of legislative infrastructure, most of the people are still not willing to take risks or a
leap of faith regarding matters of large quantum that they may face in business. Rather than just
having guidelines from various forums like Indian Arbitration Forum, Indian Council of Arbitration
etc. There must be a law to enforce these guidelines.
To overcome this confusion Section 87 was introduced in the 2019 Amendment Act which
reversed the judgement of BCCI v. Kochi cricket (2018) 6 SCC 287 but later the Supreme Court
struck down Section 87 of 2019 Amendment Act. Because of this havoc, people fear to take up
Arbitration to resolve the disputes. There are too many guidelines and rules that one can follow
which sometimes may complicate simple Arbitration proceedings.
Q4. What is foreign award? What are the condition provisions in which the same can be
enforced in india ?
Ans.
 Foreign award
According to Section 447 of the Arbitration and Conciliation Act, 1996 a foreign award is defined
as, “an arbitral award on differences that are related to the matters which are deemed
commercial under the Indian law”.
Under the Arbitration and Conciliation (Amendment) Act, 2015. There are two avenues available
for the enforcement of foreign awards in India, viz., the New York Convention and the Geneva
Convention, as the case may be.
A. Enforcement under the New York Convention
Sections 44 to 52 of the Arbitration and Conciliation (Amendment) Act, 2015 deals with foreign
awards passed under the New York Convention.
The New York Convention 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, made on or after the 11th day of October, 1960-
a) In pursuance of an agreement in writing for arbitration to which the Convention set forth
in the First Schedule applies, and
b) In one of such territories as the Central Government, being satisfied that reciprocal
provisions have been made may, by notification in the Official Gazette, declare to be
territories to which the said Convention applies.
From the abovementioned conditions, it is clear that there are two pre-requisites for enforcement
of foreign awards under the New York Convention. These are:
a) The country must be a signatory to the New York Convention.
b) The award shall be made in the territory of another contracting state which is a
reciprocating territory and notified as such by the Central Government.
Section 47 provides that the party applying for the enforcement of a foreign award shall, at the
time of the application, produce before the court (a) original award or a duly authenticated copy
thereof; (b) original arbitration agreement or a duly certified copy thereof; and (c) any evidence
required to establish that the award is a foreign award. As per the new Act, the application for
enforcement of a foreign award will now only lie to High Court.
Once an application for enforcement of a foreign award is made, the other party has the
opportunity to file an objection against enforcement on the grounds recognized under Section 48
of the Act. These grounds include:
a) the parties to the agreement referred to in section 44 were, under the law applicable to
them, under some incapacity, or the said agreement is not valid under the law to which the
parties have subjected it or, failing any indication thereon, under the law of the country
where the award was made; or
b) the party against whom the award is invoked was not given proper notice of the
appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to
present his case; or
c) the award deals with a difference 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 those not so submitted, that part of the award which
contains decisions on matters submitted to arbitration may be enforced; or
d) the composition of the arbitral authority or the arbitral procedure was not in accordance
with the agreement of the parties, or, failing such agreement, was not in accordance with
the law of the country where the arbitration took place; or
e) the award has not yet become binding on the parties, or has been set aside or suspended
by a competent authority of the country in which, or under the law of which, that award
was made.
f) the subject-matter of the difference is not capable of settlement by arbitration under the
law of India; or
g) the enforcement of the award would be contrary to the public policy of India.
The Amendment Act has restricted the ambit of violation of public policy for international
commercial arbitration to only include those awards that are: (i) affected by fraud or corruption,
(ii) in contravention with the fundamental policy of Indian law, or (iii) conflict with the notions of
morality or justice.
It is further provided that if an application for the setting aside or suspension of the award has
been made to a competent authority, the Court may, if it considers it proper, adjourn the decision
on the enforcement of the award and may also, on the application of the party claiming
enforcement of the award, order the other party to give suitable security.
Section 49 provides that where the Court is satisfied that the foreign award is enforceable under
this Chapter, the award shall be deemed to be a decree of that Court.
B. Enforcement under the Geneva Convention
Sections 53-60 of the Arbitration and Conciliation (Amendment) Act, 2015 contains provisions
relating to foreign awards passed under the Geneva Convention.
As per the Geneva Convention, "foreign award" means an arbitral award on differences relating to
matters considered as commercial under the law in force in India made after the 28th day of July,
1924,-
a) in pursuance of an agreement for arbitration to which the Protocol set forth in the Second
Schedule applies, and
b) between persons of whom one is subject to the jurisdiction of some one of such Powers as
the Central Government, being satisfied that reciprocal provisions have been made, may,
by notification in the Official Gazette, declare to be parties to the Convention set forth in
the Third Schedule, and of whom the other is subject to the jurisdiction of some other of
the Powers aforesaid, and
c) in one of such territories as the Central Government, being satisfied that reciprocal
provisions have been made, by like notification, declare to be territories to which the said
Convention applies, and for the purposes of this Chapter, an award shall not be deemed to
be final if any
d) proceedings for the purpose of contesting the validity of the award are pending in any
country in which it was made.
Section 56 provides that the party applying for the enforcement of a foreign award shall, at the
time of the application, produce before the court (a) original award or a duly authenticated copy
thereof; (b) evidence proving that the award has become final and (c) evidence to prove that the
award has been made in pursuance of a submission to arbitration which is valid under the law
applicable thereto and that the award has been made by the arbitral tribunal provided for in the
submission to arbitration or constituted in the manner agreed upon by the parties and in
conformity with the law governing the arbitration procedure. As per the new Act, the application
for enforcement of a foreign award will now only lie to High Court.
The conditions for enforcement of foreign awards under the Geneva Convention are provided
under Section 57 of the Arbitration and Conciliation Act, 1996. These are as follows:
a) the award has been made in pursuance of a submission to arbitration which is valid under
the law applicable thereto;
b) the subject-matter of the award is capable of settlement by arbitration under the law of
India;
c) the award has been made by the arbitral tribunal provided for in the submission to
arbitration or constituted in the manner agreed upon by the parties and in conformity with
the law governing the arbitration procedure;
d) the award has become final in the country in which it has been made, in the sense that it
will not be considered as such if it is open to opposition or appeal or if it is proved that any
proceedings for the purpose of contesting the validity of the award are pending;
e) the enforcement of the award is not contrary to the public policy or the law of India.
The Amendment Act has restricted the ambit of violation of public policy for international
commercial arbitration to only include those awards that are: (i) affected by fraud or corruption,
(ii) in contravention with the fundamental policy of Indian law, or (iii) conflict with the notions of
morality or justice.
However, the said section lays down that even if the aforesaid conditions are fulfilled,
enforcement of the award shall be refused if the Court is satisfied that-
a) the award has been annulled in the country in which it was made;
b) the party against whom it is sought to use the award was not given notice of the
arbitration proceedings in sufficient time to enable him to present his case; or that, being
under a legal incapacity, he was not properly represented;
c) the award does not deal with the differences contemplated by or falling within the terms
of the submission to arbitration or that it contains decisions on matters beyond the scope
of the submission to arbitration: Provided that if the award has not covered all the
differences submitted to the arbitral tribunal, the Court may, if it thinks fit, postpone such
enforcement or grant it subject to such guarantee as the Court may decide.
Furthermore, if the party against whom the award has been made proves that under the law
governing the arbitration procedure there is any other ground, entitling him to contest the validity
of the award, the Court may, if it thinks fit, either refuse enforcement of the award or adjourn the
consideration thereof, giving such party a reasonable time within which to have the award
annulled by the competent tribunal.
Section 58 provides that where the Court is satisfied that the foreign award is enforceable under
this Chapter, the award shall be deemed to be a decree of the Court.
Q5. Discuss the salient feature of arbitration and conciliation act 1996?
Ans. In the present time, the arbitration is governed by the law of arbitration which is provided
under the Arbitration and Conciliation Act, 1996. Earlier to this Act, there were 3 Acts that
governed the law of arbitration in India that are as follows:
a) The Arbitration (Protocol and Convention) Act, 1937.
b) The Arbitration Act, 1940.
c) The Foreign Awards (Recognition and Enforcement) Act 1961.
These Acts were repealed by the Arbitration and Conciliation Act 1996. However, the Model Law
also contributed in drafting and implementing the provisions of the Arbitration and Conciliation
Act, 1996. the Model Law was adopted by the United Nations General Assembly on the
recommendation of the United Nations Commission on International Trade Law (UNCITRAL).
Therefore, The Arbitration and Conciliation Act, 1996 came in order to consolidate and amend the
already existing laws relating to domestic arbitration. The Act came into force on 25 January,
1996.
There are total 86 sections in this Act and it is divided into 4 parts, in which Part I deals with
General provisions on arbitration, Part II deals with the Enforcement of certain foreign awards,
Part III deals with conciliation and Part IV deals with the Supplementary provisions.Salient features
of the Arbitration and Conciliation Act, 1996
Some of the important salient features of Act are as follows –
1. A more comprehensive statute: The Arbitration and Conciliation Act, 1996 is more
comprehensive than the earlier Act of 1940. It consists of 86 sections divided into 4 parts.
2. Arbitral award treated at per with a decree: Another notable feature of the Act of 1996 is
that the arbitral award and settlement arrived at during conciliation proceedings have at
per with the decree of the court. In other words the arbitral award is enforceable in the
same manner as a decree of a law court.
3. Curtailment of the courts process: The power of the court under the Act of 1996 has been
considerably curtailed as compared with the earlier Arbitration Act of 1940. The arbitrator
has been endowed with absolute powers and he is completely immune from the court’s
control during the arbitration proceedings.
4. Abolition of the Umpire system: Another important feature of the Act of 1996 is the
abolition of the umpire system. The earlier Act of 1940 provided that where an even
number of arbitrators were appointed and such arbitrator failed to make an award within
the specified time, or where there was difference of opinion between two arbitrators, the
umpire should enter on the reference instead of the arbitrators.
5. Qualification of the arbitrator: There were no qualifications for appointment as an
arbitrator as prescribed in the earlier Arbitration Act of 1940. But now the Act of 1996
provides for qualification of the arbitrator. Since nowadays a large number of disputes
arising between the parties are of technical nature, therefore such disputes can properly
be decided only by the arbitrators who are competent and well versed in such matters.
6. Assistance of court in certain matters: the Act of 1996 provides for taking assistance from
the court only in certain specific matters, the Arbitral tribunal or a party may seek
assistance from the court in taking evidence. The court may therefore order the witness to
provide evidence to the arbitral tribunal directly. But the act does not confer any power on
the Arbitral tribunal to summon witnesses. Therefore, the Arbitral tribunal or a party with
the approval of the arbitral tribunal may apply to the court for assistance in taking
evidence.
7. Empower to pass interim orders: another notable feature of the Act of 1996 is the
provision relating to the interim measures, which empower the arbitrator or arbitral
tribunal to pass interim orders in respect of the subject matter of the dispute at the
request of the party.
8. Arbitral award in conflict with public policy is void: the new Act of 1996 provides that an
Arbitral award which is in conflict with the public policy in India shall not be valid in law
being null and void and can be set aside by the court.
9. International Commercial Arbitration defined: The Act of 1996 specifically defines the
term “International Commercial Arbitration” under Section 2(1)(f), it means an arbitration
relating to disputes arising out of legal relationship whether contractual or not, considered
as commercial under the law in force in India and where at least one of the parties
whether an individual, body corporate or a company is having business or residing abroad
and in case of Government, the government is of a foreign country.
10. Scope of conciliation more wide: Part III of the Act of 1996 deals with a new international
approach to conciliation and explains its application scope. Thus making the scope of
conciliation more wide.
11. Arbitrator to give reasons for the award: The Act 1996 under sub-section 3 of section 31
provides that an arbitral tribunal must state reasons for its award. However, where the
parties themselves have agreed in writing that no reasons are to be given or where the
award is in terms of a settlement reached between the parties, the requirement of a
reasoned award may be waived off.
12. Enforcement of foreign awards: The Act of 1996 provides for enforcement of certain
foreign awards made under the New York Convention and Geneva Convention respectively
as contained in Part II of the said Act as a decree of the court. The countries which have
neither adopted the New York convention nor the Geneva convention are outside the
scope of Part II of the Act and therefore their awards are not enforceable as foreign awards
in India.
Q6. What are the provisions relating to correction, interpretation and additional award?
Ans. Correction and interpretation of an arbitral award is a post-award process. The arbitration
law is based on the UNCITRAL model law (The United Nations Commission on International Trade
Law).
Section 33 of the Arbitration and Conciliation Act, 1996 is the statutory provision that allows for
correction and interpretation of an award.
The important reason here is that human errors can occur. This means that there are situations
when there are errors in an arbitral award. These errors could be simply typing errors or
something major such as a decision missing from the proceedings in the final award. These kinds
of errors put one party at a disadvantage. These errors are unacceptable as the award, once
granted, is not up for appeal.
After paying for arbitral proceedings and investing time in it both the parties would expect a well-
drafted and considered arbitral award to be granted. A mistake in the award is disappointing; it
creates problems during the enforcement of the award.
The above-mentioned points indicate the importance of Section 33. Many other countries have a
similar provision to aid parties and to rectify any mistakes that might have occurred. For example,
English Arbitration Act 1996, Section 57, provides that a tribunal may, on its own initiative or on
the application of a party, correct an award to “remove any clerical mistake or error arising from
an accidental slip or omission or clarify or remove any ambiguity in the award”.
However, it is pertinent to note that the request for correction or interpretation of an award does
not reopen the proceedings. The evidence and arguments have already been verified, interpreted
and understood. No proceedings are repeated. Only the examination of the arbitral award takes
place. No rehearing will take place.
Section 33(1) of the Arbitration and Conciliation Act
This sub-section states that:
(1) Within thirty days from the receipt of the arbitral award, unless another time period has been
agreed upon by the parties:
(a) a party, with notice to the other party, may request the arbitral tribunal to correct any
computation errors, any clerical or typographical errors or any other errors of a similar nature
occurring in the award;
(b) if so agreed by the parties, a party, with notice to the other party, may request the arbitral
tribunal to give an interpretation of a specific point or part of the award.
A limitation period of 30 days is put on the application submitted. After the completion of 30 days,
no party can request correction or interpretation.
It is also important to notice that one party who wants to move under Section 33 does not need
the consent of the other party. It is only important that the other party is notified if any such
proceeding is being applied for by the other party.
Clause (a): This clause includes any basic human error that might occur during the drafting of the
award. Drafting errors can be corrected easily. This is an important provision because if such
errors are ignored then they can lead to a change in the meaning of the ruling and can stir trouble
during enforcement.
The language of the statutes uses the word ‘computational errors’. On the face of it, it can mean
that errors related to calculation and arithmetic are being considered. However, the language is
such that its meaning can be extended to include the methods that are used to carry out
calculations.
This way, the scope of the statute can be expanded because calculation would be restricted to
include only numbers but computation can comprise of the methods and steps/procedure used to
arrive at those numbers.
Clause (b): This clause mentions interpretation of an arbitral award. The only problem that is faced
by parties is that there are very few situations when both parties have an issue with the meaning
conveyed by the arbitral award. It creates problems if one party agrees and the other party does
not.
In cases where both the parties agree, it can be used for an interpretation conveying the clear
meaning of the arbitral award for better enforcement of the same.
Q7. Discuss the award , jurisdiction and power at lok adalat? Imp of lok adalat for judicial
system? Explain the concept and and procedure of lok adalat?
Ans.
 Arbitral award jurisdiction
There is no inherent jurisdiction of an arbitral tribunal. Instead, its jurisdiction is derived from the
agreement between the parties to decide a particular dispute by way of arbitration. Thus, the
jurisdiction of an arbitral tribunal is not derived from any legislation. There is a high level of party
autonomy.
 Power of lok adalat
1. The Lok-Adalat shall have the same powers as are vested in a civil court under the code of
civil procedure 1908 while trying a suit in respect of the following matters namely;
a) The summoning and enforcing the attendance of any witness and examining him on
oath.
b) The discovery and production of any document.
c) The reception of evidence on affidavits.
d) The requisitioning of any public record or document or copy of such record or
document from any court of office and
e) Such other matters as may be prescribed.
2. Without prejudice to the generality of the powers contained in sub sec. (1), every Lok
Adalat shall have the requisite powers to specify its own procedure for the determination of
any dispute coming before it.
3. All proceedings before the Lok Adalat shall be deemed to be judicial proceedings within the
meaning of sec. 193, 219 and 228 of the I.P.C and every Lok-Adalat shall deemed to be
civil for the purpose of sec. 195 of C. P C.
 Importance of lok adalat
1. There is no court fee and if the court fee is already paid the amount will be refunded if the
dispute is settled at Lok Adalat. In other words, it is less expensive.
2. The basic features of Lok Adalat are the procedural flexibility and speedy trial of the
disputes. There is no strict application of procedural laws like the Civil Procedure Code and
the Evidence Act while assessing the claim by Lok Adalat.
3. Parties are free to discuss their differences of opinion without any fear of disclosure before
any law courts.
4. The parties to the dispute can directly interact with the judge through their counsel, which
is not possible in regular courts of law.
5. The award by the Lok Adalat is binding on the parties, and it has the status of a decree of a
civil court, and it is non-appealable, which does not cause the delay in the settlement of
disputes finally.
 Procedure of lok adalat
The Lok Adalats are generally organized by state legal aid and advice boards or the district
legal aid committees etc.
Lok Adalats shall have jurisdiction to determine and arrive at a compromise or settlement
between the parties to a dispute in respect of;
a) Any case pending before the court; or
b) Any matter which is falling within the jurisdiction of and is not brought before any court
for which the Lok Adalat is organized.
The Lok Adalat shall not have jurisdiction in respect of any matter or case relating to an
offence not compoundable under any law.
The date and place of holding a Lok Adalat are fixed about a month in advance by the Legal
Aid Board. The date so fixed is generally a Saturday or Sunday or some other holiday.
1nformation about holding a Lok Adalat is given wide publicity through press, posters, radio,
TV, etc.
Before a Lok-Adalat is held, its organizers request the presiding officers of the various local
courts to examine cases pending in their courts where in their opinion, conciliation is possible.
Once the cases are identified, parties to the dispute are motivated by the judges of the Lok Adalats
to settle their cases through Lok Adalat.
Generally, senior judicial officers are invited to inaugurate a Lok Adalat.
The team of Lok Adalat generally consist of retired judges, senior local officers, members of
the Bar, spirited public-men, active women social worker, elders of the locality and voluntary social
organizations. The members of the Lok Adalat are called conciliators. The number of conciliators is
usually three.
If conciliation result in a settlement of a dispute, a compromise deed is drawn up and after
obtaining the signatures of the parties to the disputes and their advocates, it is presented to the
presiding officer of the competent court who is normally present at the place where the Lok Adalat
is organized.
The judge (Presiding officer) after examining the fairness and legality of compromise and
satisfying himself that the compromise has been arrived at by the free will and mutual consent of
the parties, passes a decree.
Q8. Discuss the composition, jurisdiction and power of the arbitral tribunal ?
Ans.
 COMPOSITION OF THE ARBITRAL TRIBUNAL
A dispute can go to arbitration on the basis of an agreement between the disputing parties to
submit the dispute to resolution by arbitration, where an arbitrator or a tribunal of arbitrators is
appointed and has been given the legal authority to act by the parties.
The composition of the arbitral tribunal or the appointing of the sole arbitrator is a characteristic
and crucial issue in arbitration. There can be little doubt that the composition of the arbitral
tribunal will have a huge effect on the resolution of the dispute. Not only this, but the composition
of the tribunal will have some important legal consequences related to the starting date for the
arbitration and can have repercussions if a party applies to have the award set aside or enforced
later on. These consequences will be explained in greater detail below but are mostly related to
the validity of the appointments of the individuals who will act as arbitrators under the conditions
set out in the Turkish International Arbitration Code.
The tenet of freedom of choice for the parties forms a basis for the Turkish International
Arbitration Code and as far as possible this tenet is honoured at all stages of the arbitration
process. As a result of this principal, the disputing parties can appoint an arbitrator by their direct
decision, or alternatively indirectly by specifying in the arbitration agreement that a third party
can be selected as the appointing authority.
 Jurisdiction of arbitral tribunals
Competence of arbitral tribunal to rule on its jurisdiction—
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,—
An arbitration clause which forms part of a contract shall be treated as an agreement independent
of the other terms of the contract; and
A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the
invalidity of the arbitration clause.
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.
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 of its authority is raised during the arbitral
proceedings.
The arbitral tribunal may, in either of the cases referred to in sub-section (2) or sub-section (3),
admit a later plea if it considers the delay justified.
The arbitral tribunal shall decide on a plea referred to in sub-section (2) or sub-section (3) and,
where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral
proceedings and make an arbitral award.
A party aggrieved by such an arbitral award may make an application for setting aside such an
arbitral award in accordance with section 34.
Interim measures ordered by arbitral tribunal—
Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order a
party to take any interim measure of protection as the arbitral tribunal may consider necessary in
respect of the subject-matter of the dispute.
 POWER OF THE ARBITRAL TRIBUNAL*
1. At any time in the proceedings, the Arbitral Tribunal may attempt to settle the dispute between
the parties, including by addressing them to the Mediation Service of the Chamber of Arbitration
of Milan.
2. The Arbitral Tribunal may issue all urgent and provisional measures of protection, also of
anticipatory nature, that are not barred by mandatory provisions applicable to the proceedings.
3. Where multiple proceedings are pending before the Arbitral Tribunal, the Tribunal may order
their consolidation, if it deems them to be connected.
4. Where the same proceedings concern several disputes, the Arbitral Tribunal may order their
separation.
5. If a third party requests to join a pending arbitration or if one of the parties to the arbitration
seeks a third party’s intervention, the Arbitral Tribunal shall decide the application after consulting
the parties, taking into consideration all relevant circumstances of the case.
Q9. When award is considered as final award?
Ans. The Final Award is the key decision in an arbitration that has important consequences, in the
sense that it is the end outcome of a controversy, or a dispute submitted to an arbitral tribunal or
a sole arbitrator, and it will affect the rights between the parties and may not normally be
appealed. In addition to resolving the legal or factual differences between the parties, the Final
Award may also decide upon the interpretation of contract terms or determine the respective
rights and obligations of the parties to a contract.
Final Award in an Arbitration
The term Final Award is not only used to differentiate other types of awards, such as interim or
provisional awards [1] and partial awards[2], but also to denote two different situations:
First, it refers to an award which marks the end of arbitral proceedings and settles all claims
between the parties. This is the way the term is used in the UNCITRAL Model Law on International
Commercial Arbitration (“Model Law”), where Article 32(1) states that “the arbitral proceedings
are terminated by the final award”. When a Final Award is made, the authority of the tribunal
ends;
Second, an award is final given that it produces res judicata effect between the parties and can be
challenged or enforced.
Despite the above, there is no universally acceptable definition of an arbitration “award”. The
structure, form and content of an award may depend on the composition of the tribunal, or the
arbitrator, who drafts the award, on the nature of the dispute, and on the applicable laws and
rules. In fact, an arbitral tribunal is free to determine the manner in which it will make awards.
Given its importance, an award should be carefully drafted, and it is always advisable to start
drafting it at an early stage of arbitral proceedings to ensure that there is plenty of time for
eventual revisions. This becomes more important when the arbitral tribunal is composed of three
members, so that each arbitrator has enough time to make its own comments on the draft. In a
panel of three arbitrators, the chairman is usually responsible for drafting the award, but if the
case is complex the work may be split into parts, although one person, usually the chairman, will
coordinate the work and ensure that the reasoning is consistent.
Basic Features of a Final Award
Good final awards are commonly recognizable, as they tend to include several characteristics. For
instance, under the International Court of Arbitration Rules (“ICC Rules”), each award, before
being rendered, is subject to the approval of the ICC Court by a scrutiny process (Article 34) to
guarantee that it is in a good condition and to reduce the risk of its enforcement being refused.
For the scrutiny process there is a guidance checklist that arbitrators may follow.
A short checklist can also be found in Article 31 of the Model Law which requires that the award
shall be in writing and signed; state the reasons upon which it is based; state the date and the
place of arbitration; and that it must be delivered to each party.
A final award should state basic information, such as the identification of the arbitrators, the
identification of the parties and their legal representatives, the terms of the arbitration
agreement, the basis of jurisdiction of the tribunal, the place of the arbitration, the applicable laws
to the merits and the procedure and the language of the proceedings.
Then, the main content of the award should record the claims and defences of the parties, the
tribunal’s conclusions on the issues and its reasoning, and finally a dispositive part where the
tribunal states its decisions on damages, interest and the award of costs.
Reasoning in a Final Award
An award should state the reasons upon which the decisions are made. This is often considered as
a requirement of due process, as it is for instance, in the European Convention of Human Rights.
Also, most arbitration rules establish that “the award shall state the reasons upon which it is
based” (ICC Rules (Article 32(2)), Model Law (Article 31(2)) and Article 48(3) of the International
Centre for Settlement of Investment Disputes Convention (“ICSID Convention”).
Q10. Conciliation procedure played imp role in settlement of dispute?
Ans. Conciliation means a process whereby parties by mutual consent appoint conciliator or
conciliation officers to assist them in their attempt to reach an amicable settlement of their
industrial dispute arising out of a contractual relationship.
Section 4 of Industrial Disputes Act, 1947 authorizes the appropriate government to engage such
number of persons as may be deemed necessary by notification in the Official Gazette as
conciliation officers, for discharging the responsibility of mediating in and promoting the
settlement of industrial disputes.
Section 12 of Industrial Disputes Act, 1947 provides duties of conciliation officers.
The conciliation officers do not have the authority to impose upon the parties a solution of or to
dispute.
The contract shall clearly draft by setting out the conciliation process not limited to as below:
 Scope and applicability
 Panel of Conciliators
 Appointment and Number of Conciliators
 Commencement of Conciliation proceedings
 Procedure to be followed by the Conciliation officers
 Role of the Conciliation officers
 Venue for Conciliation Proceedings
 Time Frame
 Remuneration & Cost
 Settlement Agreement
 Termination of Conciliation proceedings
 institutional-arbitration-success-in-india
The Conciliation proceedings are concluded in the following manner:
 Where conciliation ended in settlement – the date on which settlement is signed by the
parties to the disputes or
 Where conciliation ended in failure, the date on which the appropriate Govt receives the
failure report of a conciliation officer. or
 When a reference is made to a Labour Court/Industrial Tribunal during the pendency of
conciliation proceedings.
In the case of non settlement or failure of conciliation, copies of failure report under Section 12 (A)
of Industrial Disputes Act 1947 are required to be sent to the parties to the dispute.
If the party raising the dispute fails to turn-up without reasonable cause, the case may be closed
under intimation to it. If the opposite party fails to turn-up, in spite of having been given
reasonable no. of opportunities, an adverse inference may be drawn, and the case is proceeded
with on ex-parte basis
Restrictions on Role of Conciliator – Section 80
Section 80 places two restrictions on the role of the conciliator in the conduct of conciliation
proceedings:
1. Clause (a) of Section 80 prohibits the conciliator to act as an arbitrator or as a
representative or counsel of a party in any arbitral or judicial proceeding in respect of a
dispute which is subject of the conciliation proceedings.
2. Clause (b) of Section 80 prohibits the parties to produce the conciliator as a witness in any
arbitral or judicial proceedings.
Q11. State the form and content of an arbitral award ?
Ans. Section 31: Form and contents of arbitral award.
31. (1) An arbitral award shall be made in writing and shall be signed by the members of the
arbitral tribunal.
(2) For the purposes of sub-section (1), in arbitral proceedings with more than one arbitrator, the
signatures of the majority of all the members of the arbitral tribunal shall be sufficient so long as
the reason for any omitted signature is stated.
(3) The arbitral award shall state the reasons upon which it is based, unless—
(a) the parties have agreed that no reasons are to be given, or
(b) the award is an arbitral award on agreed terms under section 30.
(4) The arbitral award shall state its date and the place of arbitration as determined in accordance
with section 20 and the award shall be deemed to have been made at that place.
(5) After the arbitral award is made, a signed copy shall be delivered to each party.

(6) The arbitral tribunal may, at any time during the arbitral proceedings, make an interim arbitral
award on any matter with respect to which it may make a final arbitral award.
(7) (a) Unless otherwise agreed by the parties, where and in so far as an arbitral award is for the
payment of money, the arbitral tribunal may include in the sum for which the award is made
interest, at such rate as it deems reasonable, on the whole or any part of the money, for the
whole or any part of the period between the date on which the cause of action arose and the date
on which the award is made.
Q12. State the ground for setting aside of an award?
Ans.
Acc to Sec. 34 of the Arbitration and Conciliation Act 1996 deals with the setting aside of the
arbitral award. In order to set aside an arbitral award, individual needs to file an application in the
court. Such an application by the party may be acknowledged or discarded by the court. This
provision of challenging is diverse than the procedure of appeal. When the arbitral tribunal gives
an award, it is diverse from the judgment which a court usually gives. The court in general accepts
an application of challenge only if it comes under ambit of Sec. 34 only.
The following grounds are:
 Incapacity of a party.
 Unlawful agreement.
 No notice to the other party.
 Subject matter extent to the scope of the arbitration agreement.
 Formation of Tribunal not as per the agreement.
 Subject matter not under the arbitration law.
 Award in conflict with the public policy of India.
Prior to filing an application in the court to set aside the award, the party filing the application has
to hand over a notice of such filing to the opposite party.
 Incapacity of the parties
In case any of the parties is of unsound mind or is minor, then such persons are not bound to act
in harmony with any agreement or contract. Therefore, the agreement itself becomes null and
void and passing any award in such case can be set aside by the court.
 Unlawful agreement
If the contract is unlawful, then the arbitration agreement will also be held to be invalid. All the
essential elements of a contract have to accomplish in order for it to become enforceable.
 No notice to the other party
A prior notice must be sent to the other party regarding the commencement of the proceedings or
of invocation of the arbitral clause of the agreement.
 Subject matter extent to the scope of Arbitration Agreement
While formulating an agreement, the parties describe as to what all can be enclosed in the subject
matter and what are the disputes that are enclosed under the arbitration agreement.
Consequently, only those subject matters can be referred to an arbitral tribunal to resolve the
dispute, not any other. If the tribunal acts ultra vires to the agreement, the party affected may file
an application in the court and challenge such award.
 Formation of the Tribunal not as per the Agreement
In case the Arbitrator is not appointed as per the agreed terms of the agreement or by the parties
which has not been followed or any other bureaucratic aspect that was decided earlier in the
agreement by the parties has not been followed all the way through, then such affected party may
challenge the award in the court to set aside the award.
 Subject matter not under the ambit of Arbitration law
There are certain types of matters that are not arbitral in nature like criminal, insolvency or any
other public matters. These matters have been unambiguously barred under the purview of
arbitration.
 Award in conflict with the Public Policy of India
This ground has additional three more explanations, which was added in the 2015 amendment.
1. Award through deception or dishonesty.
2. In contravention to fundamental policy of India.
3. In disagreement with ethics or integrity.