Midsem Qs: Arb and Conci Act, 1996

Def of International Commercial Arbitration and Court

S2
1. S2(1)(a): Arbitration: any arbitration whether or not administered by permanent arbitral
institution
2. S2(1)(e): Court: means:
(i) in the case of an arbitration other than international commercial arbitration,
A. the principal Civil Court of original jurisdiction in a district, and
B. includes the High Court in exercise of its ordinary original civil jurisdiction, having
jurisdiction to decide the questions forming the subject-matter of the arbitration if
the same had been the subject-matter of a suit,
C. but does not include any Civil Court of a grade inferior to such principal Civil
Court, or any Court of Small Causes;
(ii) in the case of international commercial arbitration,
A. the High Court in exercise of its ordinary original civil jurisdiction, having
jurisdiction to decide the questions forming the subject-matter of the arbitration if
the same had been the subject-matter of a suit,
B. and in other cases, a High Court having jurisdiction to hear appeals from decrees
of courts subordinate to that High Court
3. S2(1)(f): International Commercial Arbitration:
An arbitration relating to disputes arising out of legal relationships, whether contractual
or not, considered as commercial under the law in force in India and where at least one
of the parties is—
(i) an individual who is a national of, or habitually resident in, any country other
than India; or
(ii) a body corporate which is incorporated in any country other than India; or
(iii) an association or a body of individuals whose central management and
control is exercised in any country other than India; or
(iv) the Government of a foreign country

4. The procedure to apply for international commercial arbitration is the same as domestic
arbitration.
5. The scope of Section 2(1)(f) of the Arbitration and Conciliation Act was determined by
the Supreme Court in the case of TDM Infrastructure Pvt. Ltd. v. UE Development
India Pvt. Ltd.
A. In this case it was held that if the company has dual nationality, that means it is
registered in foreign and in India then that company for this Act would be
regarded as Indian corporation and not the foreign corporation.
6. International arbitration is also known as a ‘hybrid form of international dispute
resolution’ because international arbitration allows mixing two legal provisions
A. the Code Civil Law Procedure, 1908,
B. the Common Law Procedure
7. Planning an International Commercial Arbitration
S28 provides that in international commercial arbitration:
A. the dispute has to be decided in accordance with the rules of law designated
by the parties as applicable to the substance of the dispute;
B. the designation by the parties of the law or legal system of a given country
would have to be construed as directly referring to the substantive law of that
country and not to its conflict of laws rules, and
C. Where the parties fail to designate any such applicable law, the Arbitral
Tribunal would have to apply the rules of law it considers to be appropriate
keeping in mind all the circumstances surrounding the dispute.
8. The parties have the freedom to choose the law, which applies to their international
commercial arbitration agreement. They may choose the procedural law and also the
substantive law.
9. Parties are free to choose a venue, the language, the number of arbitrators, the manner
of appointment of arbitrators and the like, for the procedure.
10. Conduct of International Commercial Arbitration:
A. Initiation:
- The general practice of parties to an international commercial arbitration,
is to avail of the facilities of an institution.
- The initiation of the process is done by approaching the concerned
tribunal, with a request for arbitration.
- The party invoking the same is called the claimant.
- Upon receipt of the request, notice will be given to the other party, called
as the Respondent.
B. Pleadings:
- The parties to the arbitration are required to submit pleadings, both in
writing, and in oral form.
- The written submissions are required if the parties have chosen to
include the same.
C. Composition of the Arbitral Tribunal:
- Parties are free to decide the composition of the arbitral tribunal.
- The number of arbitrators, the manner of appointment and termination,
and replacement, if required, are to be determined by the parties
themselves.
- Accordingly, the tribunal is constituted for the parties to carry out their
basic procedures.
D. Jurisdiction:
- Jurisdictional competence of an arbitral tribunal is left to the tribunal itself,
to decide.
- This is in accordance with the rule of Kompetenz Kompetenz, which
warrants that no authority but the tribunal, has absolute right in
determining its jurisdictional competence to hear a given matter.
E. Preliminary Meetings/Issues:
- Once the tribunal is constituted, the parties go in for a preliminary meeting
with one another, and enumerate their prima facie claims.
- The parties are then guided into the issues, as they are framed by the
arbitrators.
F. Settlement:
- Once the parties present their sides of the case, the arbitrator works a
settlement to arrive at a compromise.
- Sometimes parties may chalk out a settlement beforehand.
- The outcome is always called an award.
G. Witness:
- including Expert witness
- Calling witnesses to the proceedings, to lead evidence and to aid in
administration of the award, are left to the parties to decide in the course
of their agreements.
H. Award-Appeal/Challenge/Annulment:
- Parties are permitted to appeal against the award, if finality has not
already been accorded by the parties.
- Further, the award, after appeal, if set aside, cannot be enforced.
I. Enforcement (1958 New York Convention):
- An award passed is capable of enforcement as a decree of a civil court
is.
- Several grounds for the refusal of an award are provided for under the
New York Convention.
11. .

The communication and effect of communication in Arbitration

1. S3: Receipt of written communications:
(1) Unless otherwise agreed by the parties,—
(a) any written communication is deemed to have been received if it is
delivered to the addressee personally or at his place of business,
habitual residence or mailing address, and
(b) if none of the places referred to in clause (a) can be found after making a
reasonable inquiry, a written communication is deemed to have been
received if it is sent to the addressee's last known place of business,
habitual residence or mailing address by registered letter or by any other
means which provides a record of the attempt to deliver it.
(2) The communication is deemed to have been received on the day it is so
delivered.
(3) This section does not apply to written communications in respect of
proceedings of any judicial authority.
2. S24(3):
A. All statements,
B. documents or
C. other information supplied to, or
D. applications made to the arbitral tribunal
by one party shall be communicated to the other party, and
A. any expert report or
B. evidentiary documents on which the arbitral tribunal may rely in making its
decision shall be communicated to the parties.
3. S25: Default of a party:
Unless otherwise agreed by the parties, where, without showing sufficient cause,
(a) the claimant fails to communicate his statement of claim in accordance with
S23(1), the arbitral tribunal shall terminate the proceedings
(b) the respondent fails to communicate his statement of defence in accordance
withS23(1), the arbitral tribunal shall continue the proceedings
- without treating that failure in itself as an admission of the allegations by
the claimant and
- shall have the discretion to treat the right of the respondent to file such
statement of defence as having been forfeited
(c) a party fails to appear at an oral hearing or to produce documentary evidence,
the arbitral tribunal may continue the proceedings and make the arbitral award
on the evidence before it.
4. Badri Singh Vinimay Pvt. Ltd. v. MMTC Ltd:
A. Delhi High Court
B. The award debtor challenged the award under Section 34 of the Arbitration
Act, 1996.
C. In these proceedings, the award debtor contended that the proceedings of the
arbitration themselves were vitiated by an improper invocation of arbitration since
no notice of commencement of arbitration in terms of Section 21 of the
Arbitration Act was served upon the award debtor.
D. Per contra, the award creditor contended that any dispute regarding
compliance of Section 21 was within the province of the arbitrator and cannot be
raised in Section 34 proceedings.
E. Further, the award creditor argued that the contents of one of its
communications (provided below) meets the criteria of valid notice of
arbitration under Section 21.
F. The Delhi High Court noticed that award debtors contention on the basis of
Section 21 is wholly unmerited for the following reasons:-
- Section 21 requires a party to send a request to the counterparty for the
dispute to be referred to arbitration and the above communication from
award creditor meets this requirement;
- The facts leading to the dispute, and the nature of the award creditor’s
claim were made sufficiently clear in this communication.
- The award creditor also stated that legal recourse would be taken by
the award creditor if its claim was not satisfied. Thus, the initiation of
arbitration proceedings in such a situation was expressly contemplated.
- The award debtor’s response of the above communication dealt with
award creditor’s claim on merits and, in fact, raises a claim on behalf of
the award debtor itself, alongwith a threat of legal action.
5. RIICO Ltd. Jaipur & Ors. vs. Manoj Ajmera & Anr.:
- Court held that a communication claiming a disputed amount and
contemplating arbitration in the alternative is sufficient notice of a request
for arbitration.
6. .

Institutional arbitration in line with administrative assistance

1. Institutional Arbitration is a method of arbitration in which the whole proceeding of
arbitration is done by the institution or organisation appointed by the parties in a
contract.
2. India isn’t the choice as the seat for arbitration by the parties due to lack of facilities
and late disposal of cases, therefore the parties prefer International arbitral tribunals
for resolution of disputes.
3. The arbitration agreement specifies how an arbitral institution will be chosen.
4. The parties expressly agree that if a dispute arises within the contract’s term, it will be
resolved by institutional arbitration.
5. The foreign business community prefers these institutions because they have a
A. comprehensive arbitration procedure,
B. an experienced panel of arbitrators and
C. expertise makes for a quick and effective dispute resolution process.
6. In M/S Nandan Biomatrix Limited v D 1 Oils Limited observed that
A. when the parties had expressly decided to settle their disputes by institutional
arbitration rather than ad hoc arbitration then they shall strictly adhere to the
arbitration clause without any exception or derogation.
B. A contract between parties with an arbitration provision designating an
individual as the arbitrator can invoke the jurisdiction of administrative
arbitrations.
C. These organisations follow predetermined rules and protocols when
conducting arbitrations.
7. Benefits:
A. Participation of arbitral institutions in issues relating to the formal structure of
the arbitration, particularly at the beginning of the tribunal, such as the
appointment of arbitrators or the selection of an arbitral role, has proved to be
highly helpful in some situations.
B. It helps in resolving disputes in an efficient manner.
C. If an effective body is situated with experienced arbitrators and proper rules the
institutional arbitration can be made cost-effective and speedier.
D. Institutional arbitration having a predetermined procedure that keeps updating
with the latest development and the arbitrators who are specialised in different
fields will help the parties in the resolution of the dispute.
E. An Institutional Arbitral tribunal will provide efficient governance, flexibility to the
parties, and scrutiny of defects.
8. India:
A. India is one of the fast-growing economies in the world with the increase in
foreign investment requires to reduce the complexity in procedure and
increase the effectiveness of the system.
B. Established organisations and institutions are needed in our country so that the
arbitration procedure can be conducted with properly established rules and
with the help of professionals.
C. The shift has to be towards Institutional arbitration, there is purpose and need for
the same while dealing with the complex economy which needs structural
adjudication.
D. MCIA is also committed to creating a thriving arbitration environment in India
that benefits all stakeholders involved, including arbitrators, judges, law firms,
central and state governments, businesses, and other clients.
E. In 2016 a committee headed by Justice B.N Krishna was set up for review and
reformation of Institutional Arbitration
- It aimed to identify concerns with the arbitration process and to hear
about the obstacles that have been raised as institutional arbitration has
evolved.
- At the international level, institutional arbitration is preferred by the parties
for resolution of the dispute
- In our country, due to lack of proper structure and lack of faith in
institutions and organisations ad-hoc arbitration method is favoured for
resolution of disputes.
- Subsequently, the New Delhi International Arbitration Bill was also
introduced which got the assent of the president on 26th July 2019.
F. India needs to widen its platform for institutional arbitration because these
entities have modern rules that encourage them to grant parties more leeway.
G. SIAC and HKIAC were greatly aided by their respective governments, which
offered adequate financial and infrastructural support as well as playing an
important role in international promotion; in a similar manner the Indian
Government must try to maintain an adequate standard of arbitration institutions.
H.
9. S6: Administrative assistance:
In order to facilitate the conduct of the arbitral proceedings, the parties, or the arbitral
tribunal with the consent of the parties, may arrange for administrative assistance by
a suitable institution or person.
10. Institutional Arbitration:
A. Institutional arbitration refers to the arbitration procedure undertaken by parties,
in consonance with an arbitration institution.
B. Plenty of popular institutions such as the
- London Court of International Arbitration,
- the ICC institute of Arbitration,
- the International Court of Arbitration,
- Singapore International Arbitration centre,
- Hong Kong Institute of Arbitration Centre, to name a few, administers
arbitration procedures on a regular basis.
C. Each institute has a set of rules that govern arbitral proceedings conducted by
them, and while parties may be free to choose the substantive laws governing
their arbitration and disputes allied therein, the procedural laws are essentially
governed only by the rules of these institutions.
11. The advantages of institutional arbitration to those who can afford it are apparent.
Foremost are:
A. availability of pre-established rules and procedures which assure that
arbitration will get off the ground and proceed to conclusion with dispatch;
B. administrative assistance from institutions providing a secretariat or court of
arbitration
C. lists of qualified arbitrators, often broken out by fields of expertise;
D. appointment of arbitrators by the institution should the parties request it;
E. physical facilities and support services for arbitrations;
F. assistance in encouraging reluctant parties to proceed with arbitration and
G. an established format with a proven record.
12. The primary disadvantages attending the institutional approach are:
A. administrative fees for services and use of facilities may be high in disputes
over large amounts, especially where fees are related to the amount in dispute.
For lesser amounts in dispute, institutional fees may be greater than the amount
in controversy:
B. the institution's bureaucracy may lead to added costs and delays and
C. the disputants may be required to respond within unrealistic time frames.
13. Clauses may be:
A. Ad hoc
B. Institutional
C. Hybrid: institution appoints arbitrators, other processes are ad hoc
14. S6 assists hybrid clause .

Drafting of arbitration agreement or clause (both ad hoc and

institutional clauses)
1. Details to be included in an Arbitration Clause while drafting:
A. Nature of disputes
B. Number of arbitrators
C. Law applicable to the procedure or procedural law to be adopted including
arbitration rules of an institution
D. Place of arbitration
E. Language of arbitration proceedings
F.
2. Details to be included in an Arbitration Agreement while drafting:
A. Minimum qualifications of arbitrators
B. How will the arbitrators be selected
C. Division of expenses
D. Discovery: Will depositions, interrogatories, requests to produce documents,
requests for inspection be allowed?
E. Scheduling:
- Unless extended by the arbitrator for good cause shown, arbitration
hearings shall begin no later than 4 months after the selection of the
arbitrator days shall be allotted to the arbitration hearings, and the
arbitrator shall determine how much of the hearing time shall be allocated
to the direct and cross examination of witnesses. The arbitrator shall
allocate time equally amongst the parties.
F. Privacy:
- Confidentiality provision, keeping confidential any dispute, any testimony,
any documents produced, and any outcome of the arbitrator.
G. Role of Arbitrators:
- Parties may want to consider whether the arbitrators may also serve as
mediators
H. Rules of Evidence:
- It is taken as a given in most arbitration that the Rules of Evidence do not
govern, and that the arbitrator has discretion to consider whatever
evidence he wants.
I. Briefs:
- If parties want to file pre-hearing or post-hearing briefs, they have to
provide for them in the arbitration agreement.
- Each party shall prepare an opening letter brief, no more than 3 pages
long, setting forth the parties position at the outset of arbitration, and
allowing each party to submit briefs, with stated page limitations, to the
arbitrators within days after the close of the arbitration hearings.
- Parties may want to vary the briefs allowed, depending upon the amount
in controversy, or may wish to allow the arbitrator to decide this matter.
J. Decision format:
- The manner in which the award is to be worded can be specified.
K. Appeal-Enforcement:
- Arbitration awards are generally thought to be final and binding. You
should say this in your arbitration agreement.
- But parties may want to consider that courts sometimes get involved,
unless the arbitration agreement prevents their involvement.
- A well-drafted arbitration agreement will set forth the precise agreement
of the parties on both substantive and procedural arbitrability.
L. Limit: The Arbitrators Authority:
- Most statutes allow a court to set aside an award if the arbitrator exceeds
his powers. A well-drafted arbitration clause defines the powers of the
arbitrator.
- "The arbitrator shall have the authority to award compensatory damages."
- An award of punitive damages by an arbitrator, or an attempt by an
arbitrator to issue an injunction, would undoubtedly exceed his authority
under such a clause.
M. Choice of law
N. Provisional remedies: attachment, garnishment or preliminary injunctive relief

3. Clauses may be:

D. Ad hoc
E. Institutional
F. Hybrid: institution appoints arbitrators, other processes are ad hoc
4. Ad hoc: It is agreed by both parties to refer disputes arising from a delta in shipment or
payment or both to arbitration. The parties hereby agree to appoint one arbitrator who
shall abide by the procedural laws laid down by the Arbitration Act, 1996. The
proceedings shall be conducted in English and in Chennai.

5. Ad hoc (internet example - Indian)

Any dispute, controversy, difference or claim arising out of or relating to this

contract, including the existence, validity, interpretation, performance, breach or
termination thereof or any dispute regarding non-contractual obligations arising out of or
relating to it shall be referred to and finally resolved by arbitration administered by
the Indian Dispute Resolution Centre under the IDRC Domestic Arbitration Rules,
2019 in force when the Notice of Arbitration is submitted.

The parties hereby agree as follows:

1. The parties agree to submit their dispute (s), controversy (ies), claim (s), or
difference (s) to arbitration for resolution.
2. The law of this arbitration clause shall be governed by the IDRC Domestic
Arbitration Rules, 2019.
3. The seat of arbitration shall be New Delhi ... (India).
4. The number of arbitrators shall be ... (one or three).
5. The Arbitrator(s) shall be nominated/appointed from the panel of Arbitrators of
Indian Dispute Resolution Centre.
6. The arbitration shall be administered by Indian Dispute Resolution Centre in
accordance with its Rules.
7. The award rendered shall be final and binding on both the parties.
8. The arbitration proceedings shall be conducted in ... (English)"

6. Agreement:
End with:
Signed: ___ (Claimant)
Signed: ___ (Respondent)
Date: ____
7. Ad hoc (internet example):
“Any dispute, controversy or claim arising out of or relating to this contract, or the
breach, termination or invalidity thereof, shall be settled by arbitration in accordance with
the UNCITRAL Arbitration Rules as at present in force.”
The appointing authority shall be _______________ (name of institution or person);
The number of arbitrators shall be _____ (one or three);
The place of arbitration shall be [Atlanta, Fulton County, State of Georgia, United States
of America];
The language(s) to be used in the arbitral proceedings shall be ______________

8. ICSI’s example of ADR Clause:

It is hereby agreed by and between the parties that if any controversy, dispute or
difference shall arise concerning construction, meaning, violation, termination, validity or
nullity including without limitation the scope of any Clause or any part thereof, or of the
respective rights or liabilities herein contained, the Parties shall make an attempt first to
resolve the same by discussion or mediation. However, if the. Parties hereto fail to
resolve the controversy, dispute or difference amicably within 7 (seven) days of
commencement of discussions, conciliation or mediation, then any Party shall upon
expiry of such period of 15 (fifteen) days be entitled to refer such controversy, dispute or
difference to be resolved by arbitration in accordance with the Arbitration and
Conciliation Act, 1996 or any statutory modifications on re-enactment thereof as in force.
The language to be used in the mediation and in the arbitration shall be English. In any
arbitration commenced pursuant to this clause, the sole arbitrator shall be appointed by
the mutual consent of the parties as per the provisions of the Arbitration and Conciliation
Act, 1996. The seat, or legal place, of arbitration shall be New Delhi, India. The cost of
the Arbitration proceedings shall be shared equally by both the parties.

9.
10. .

Interim measures by Court and Arb tribunal

S9 and S17
1. Interim relief is like an urgent remedy granted in exceptional circumstances
2. Generally, interim relief is granted when:
A. Prima facie there is a case
B. The balance of convenience lies with the aggrieved party who is seeking the
remedy
C. Irreparable damage or injury may be caused if the interim relief is not granted
3. S9 and S17 enable any party to any arbitration agreement to file an application for
interim relief from the Court or Arbitral Tribunal respectively
4.
S9
1. S9:
A. A party may put an application for interim relief to the court
- Before the commencement of arbitration proceedings
- During arbitration proceedings or
- At any point of time before the enforcement of the arbitral award
B. Generally, courts do not allow a petition for interim relief after the tribunal has
been constituted unless the aggrieved party proves beyond doubt that the relief
provided by the tribunal under S17 shall be futile
C. In case the Court passes an order for interim relief, before the commencement of
arbitral proceedings, then the proceedings shall have to be commenced within 90
days from the date of interim relief order or within such further time that the Court
may grant
2. S9: Interim Measures, etc, by court:
(1) 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 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
(e) such other interim measure of protection as may appear to the Court to
be just and convenient, and the Court shall have the same power for
making orders as it has for the purpose of, and in relation to, any
proceedings before it.
(2) Where, before the commencement of the arbitral proceedings, a Court passes an
order for any interim measure of protection under sub-section (1), 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.
(3) Once the arbitral tribunal has been constituted, the Court shall not entertain
an application under sub-section (1), unless the Court finds that circumstances
exist which may not render the remedy provided under section 17 efficacious
3. Any party to the agreement may file an application to the Concerned Court
4. After the pronouncement of the arbitral award, only the successful party who is entitled
to seek enforcement of the award may file an application for relief under S9
5. The unsuccessful party of a proceeding may not file for interim relief as there is no ward
enforced in its favour
6. Jurisdiction of the Court:
A. The court of the seat of arbitration has exclusive jurisdiction over the arbitration
proceedings under the Act
B. Thus, a S9 application has to be made in the relevant district court or high
court
C. An appeal against an interim order may be made to the suitable court as per
S37(1)(b)
7. .

S17
1. S17 gives the arbitral tribunal the power to pass an order for interim measures if a party
applies to the tribunal for such interim relief
2. A party may apply for interim relief under S17 of the Act only after the arbitral tribunal
has been constituted till the arbitral award is passed
3. During this time, the Courts generally do not allow for an application under S9
4. S17: Interim measures ordered by arbitral tribunal:
(1) A party may, during the 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 the arbitral tribunal—
(i) for the appointment of a guardian for a minor or 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
(e) such other interim measure of protection as may appear to the arbitral
tribunal to be just and convenient, and the arbitral tribunal shall have the
same power for making orders, as the court has for the purpose of, and in
relation to, any proceedings before it.
(2) Subject to any orders passed in an appeal under section 37, any order issued by
the arbitral tribunal under this section shall be deemed to be an order of the
Court for all purposes and shall be enforceable under the Code of Civil
Procedure, 1908 (5 of 1908), in the same manner as if it were an order of the
Court
5. An appeal from an order granting or refusing to grant an interim relief under S17 may be
made as per S37(2).

Appointment of arbitrator and substitution of arbitration - the

process in detail

Appointment
1. Party autonomy ensures that the parties are generally free to determine their own
procedure for appointing the arbitrator or arbitrators, including the procedure for the
selection of an umpire or chairman.
2. If the parties decline to specify the mode for selecting the arbitrators, then the relevant
legal system will usually provide a default selection process.
3. Characteristically, appointments will usually be made on the following basis:
A. If the tribunal is to consist of a sole arbitrator, the parties shall jointly appoint
the arbitrator within a stipulated time frame of a request in writing by either party
to do so.
B. If the tribunal is to consist of an even number of arbitrators: Each party shall
appoint an equal number of arbitrators and the arbitrators so appointed shall
forthwith appoint a third arbitrator as the chairman of the tribunal.
C. If the parties arrive at a deadlock where appointing an arbitrator is concerned,
they will be permitted to refer, under s. 11, Arbitration and Conciliation Act, 1996,
to the Chief Justice of the High Court of the State in whose jurisdiction they are
(for domestic arbitration) or the Chief Justice of India (for international
arbitration), to appoint an arbitrator.
4. S11:
S11: Appointment of arbitrators:
(1) A person of any nationality may be an arbitrator, unless otherwise agreed by
the parties.
(2) Subject to sub-section (6), the parties are free to agree on a procedure for
appointing the arbitrator or arbitrators.
(3) Failing any agreement referred to in sub-section (2), in an arbitration with three
arbitrators, each party shall appoint one arbitrator, and the two appointed
arbitrators shall appoint the third arbitrator who shall act as the presiding
arbitrator.
(4) If the appointment procedure in sub-section (3) applies and—
(a) a party fails to appoint an arbitrator within thirty days from the receipt
of a request to do so from the other party; or
(b) the two appointed arbitrators fail to agree on the third arbitrator within
thirty days from the date of their appointment,
the appointment shall be made, upon request of a party, by the
Supreme Court or, as the case may be, the High Court or any person
or institution designated by such Court
(5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole
arbitrator, if the parties fail to agree on the arbitrator within thirty days from
receipt of a request by one party from the other party to so agree the
appointment shall be made, upon request of a party, by the Supreme Court or,
as the case may be, the High Court or any person or institution designated by
such Court.
(6) Where, under an appointment procedure agreed upon by the parties,
(a) a party fails to act as required under that procedure; or
(b) the parties, or the two appointed arbitrators, fail to reach an agreement
expected of them under that procedure; or
(c) a person, including an institution, fails to perform any function
entrusted to him or it under that procedure, a party may request the
Supreme Court or, as the case may be, the High Court or any person or
institution designated by such Court] to take the necessary measure,
unless the agreement on the appointment procedure provides other
means for securing the appointment.
(6A) The Supreme Court or, as the case may be, the High Court, while
considering any application under sub-section (4) or sub-section (5) or sub-
section (6), shall, notwithstanding any judgement, decree or order of any Court,
confine to the examination of the existence of an arbitration agreement. (6B)
The designation of any person or institution by the Supreme Court or, as the
case may be, the High Court, for the purposes of this section shall not be
regarded as a delegation of judicial power by the Supreme Court or the High
Court.
(7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-
section (6) to the Supreme Court or, as the case may be, the High Court or the
person or institution designated by such Court is final and no appeal including
Letters Patent Appeal shall lie against such decision
(8) The Supreme Court or, as the case may be, the High Court or the person or
institution designated by such Court, before appointing an arbitrator, shall seek
a disclosure in writing from the prospective arbitrator in terms of sub-section
(1) of section 12, and have due regard to
(a) any qualifications required for the arbitrator by the agreement of the
parties; and
(b) the contents of the disclosure and other considerations are likely to
secure the appointment of an independent and impartial arbitrator.
(9) In the case of appointment of sole or third arbitrator in an international
commercial arbitration, the Supreme Court or the person or institution
designated by that Court may appoint an arbitrator of a nationality other than
the nationalities of the parties where the parties belong to different nationalities.
(10) The Supreme Court or, as the case may be, the High Court, may make
such a scheme as the said Court may deem appropriate for dealing with
matters entrusted by subsection (4) or sub-section (5) or sub-section (6), to it.
(11) Where more than one request has been made under sub-section (4) or
sub-section (5) or sub-section (6) to the Chief Justices of different High
Courts or their designates, different High Courts or their designates, the High
Court or its designate to whom the request has been first made under the
relevant sub-section shall alone be competent to decide on the request.
(12)
(a) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and
sub-section (10) arise in an international commercial arbitration, the
reference to the “Supreme Court or, as the case may be, the High Court”
in those sub-sections shall be construed as a reference to the “Supreme
Court”; and
(b) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and
sub-section (10) arise in any other arbitration, the reference to “the
Supreme Court or, as the case may be, the High Court” in those sub-
sections shall be construed as a reference to the “High Court” within
whose local limits the principal Civil Court referred to in clause (e) of
sub-section (1) of section 2 is situate, and where the High Court itself is
the Court referred to in that clause, to that High Court.
(13) An application made under this section for appointment of an arbitrator
or arbitrators shall be disposed of by the Supreme Court or the High Court or the
person or institution designated by such Court, as the case may be, as
expeditiously as possible and an endeavour shall be made to dispose of the
matter within a period of sixty days from the date of service of notice on the
opposite party.
(14) For the purpose of determining the fees of the arbitral tribunal and the
manner of its payment to the arbitral tribunal, the High Court may frame such
rules as may be necessary, after taking into consideration the rates specified in
the Fourth Schedule.
(15)
5. .

Substitution
1. Challenge to appointment of Arbitrator:
A. An arbitrator is expected to be independent and impartial are some
circumstances due to which his independence or impartiality can be challenged,
B. If there he must disclose the circumstances before his appointment, as under
S12(1).
C. The appointment of Arbitrator can be challenged only if circumstances exist
that give rise to justifiable doubts as to his independence or impartiality
D. He does not possess the qualifications agreed to by the parties.
E. Appointment of arbitrator cannot be challenged on any other ground.
F. The challenge to appointment has to be decided by the arbitrator himself.
G. If he does not accept the challenge, the proceedings can continue and the
arbitrator can make the arbitral award.
H. However, in such a case, an application for setting aside an arbitral award can
be made to the Court.
I. If the court agrees to the challenge, the award can be set aside, as under S13.
J. Thus, even if the arbitrator does not accept the challenge to his appointment, the
other party cannot mall further arbitration proceedings by rushing to court.
K. The can be made in Court only after arbitral award is made

2. Removal and Substitution

A. The procedure for the removal and substitution of an arbitrator is as given in
S13 of the Act which says that an application shall be filed by the party seeking
change of the arbitrator quoting the grounds therein, within a period of 15
days of constitution of the tribunal, or after becoming aware of the
circumstances relating to his disqualification or lack of impartiality/
Independence
B. At this the courses open to the Tribunal are:
- the arbitrator withdraws himself from the proceedings or
- the Tribunal will decide on the challenge.
C. If the tribunal rejects the challenge then the arbitration shall proceed and
award shall be made
D. If the party still holds on to the challenge then now he may challenge before
the court only
3. However, the Act permits that if the parties like they may provide any other challenge.
Normally parties are not known to provide any alternate procedure procedure.
4. Grounds for substitution: S14:
S14. Failure or impossibility to act:
(1) The mandate of an arbitrator shall terminate and he shall be substituted by
another arbitrator, if
(a) he becomes de jure or de facto unable to perform his functions or for
other reasons fails to act without undue delay; and
(b) he withdraws from his office or the parties agree to the termination of
his mandate.
(2) If a controversy remains concerning any of the grounds referred to in clause (a)
of sub-section (1), a party may, unless otherwise agreed by the parties, apply to
the Court to decide on the termination of the mandate.
(3) If, under this section or sub-section (3) of section 13, an arbitrator withdraws
from his office or a party agrees to the termination of the mandate of an
arbitrator, it shall not imply acceptance of the validity of any ground referred
to in this section or sub-section (3) of section 12.
5. S15: Termination of mandate and substitution of arbitrator:
(1) In addition to the circumstances referred to in section 13 or section 14, the
mandate of an arbitrator shall terminate
(a) where he withdraws from office for any reason; or
(b) by or pursuant to agreement of the parties.
(2) Where the mandate of an arbitrator terminates, a substitute arbitrator shall be
appointed according to the rules that were applicable to the appointment of
the arbitrator being replaced.
(3) Unless otherwise agreed by the parties, where an arbitrator is replaced under
sub-section (2), any hearings previously held may be repeated at the
discretion of the arbitral tribunal.
(4) Unless otherwise agreed by the parties, an order or ruling of the arbitral
tribunal made prior to the replacement of an arbitrator under this section shall
not be invalid solely because there has been a change in the composition of the
arbitral tribunal.
6. S29A: Time limit for arbitral award:
S29A(6): While extending the period referred to in sub-section (4), it shall be open to
the Court to substitute one or all of the arbitrators and if one or all of the arbitrators
are substituted, the arbitral proceedings shall continue from the stage already
reached and on the basis of the evidence and material already on record, and the
arbitrator(s) appointed under this section shall be deemed to have received the said
evidence and material.
7. .

Fifth schedule in ref with S12 (Have good reading)

1. S12: Grounds for challenge:
(1) When a person is approached in connection with his possible appointment as
an arbitrator, he shall disclose in writing any circumstances,
(a) such as the existence either direct or indirect, of any past or present
relationship with or interest in any of the parties or in relation to the
subject-matter in dispute, whether financial, business, professional or
other kind, which is likely to give rise to justifiable doubts as to his
independence or impartiality; and
(b) which are likely to affect his ability to devote sufficient time to the
arbitration and in particular his ability to complete the entire arbitration
within a period of twelve months.
Explanation 1.—The grounds stated in the Fifth Schedule shall guide in
determining whether circumstances exist which give rise to justifiable
doubts as to the independence or impartiality of an arbitrator.
Explanation 2.—The disclosure shall be made by such person in the form
specified in the Sixth Schedule.
(2)
(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.
(5) Notwithstanding any prior agreement to the contrary, any person whose
relationship, with the parties or counsel or the subject-matter of the dispute,
falls under any of the categories specified in the Seventh Schedule shall be
ineligible to be appointed as an arbitrator:
Provided that parties may, subsequent to disputes having arisen between
them, waive the applicability of this subsection by an express agreement in
writing

2. 5th schedule: grounds give rise to justifiable doubts as to the independence or

impartiality of arbitrators wrt S12(1)(b)
A. Arbitrator’s relationship with the parties or counsel
- Is in a business relationship,
- Represents or is the lawyer the firm of the counsel
- Part of management in affiliate of one of the parties
- Commercial relationship
- Regular advisor of the appointing party
- Close family relationship
- Financial interest - arbitrator/close family
B. Relationship of the arbitrator to the dispute
- Given legal advice or expert opinion to a party
- Previous involvement in the case
C. Arbitrator’s direct or indirect interest in the dispute
- Holds shares in the parties/its affiliates
- Close family has financial interest in the outcome
- Him/close family has close relationship with concerned 3rd party
D. Previous services for one of the parties or other involvement in the case
- As a counsel or arbitrator in the past three years
E. Relationship between an arbitrator and another arbitrator or counsel
- Two arbitrators are lawyers of the same firm
- Lawyer of one’s firm is an arbitrator in another dispute of one party
- A close family member of the arbitrator is a partner or employee of the
law firm representing one of the parties
- The arbitrator has in the past three years received more than three
appointments by the same counsel or the same law firm
F. Relationship between arbitrator and party and others involved in the
arbitration
- The arbitrator’s law firm is currently acting adverse to one of the parties or
an affiliate of one of the parties.
- The arbitrator had been associated within the past three years with a
party or an affiliate of one of the parties in a professional capacity, such
as a former employee or partner.
G. Other circumstances
3. .

Provisions relating to place of arb, lang, pleadings in arbitration,

hearing in arb and time factor in arb + Fasttrack arb
1. S20: Place of arbitration:
(1) The parties are free to agree on the place of arbitration.
(2) Failing any agreement referred to in sub-section (1), 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.
(3) Notwithstanding subsection (1) or sub-section (2), the arbitral tribunal may,
unless otherwise agreed by the parties, meet at 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.
2. S22: Language:
(1) The parties are free to agree upon the language or languages to be used in the
arbitral proceedings.
(2) Failing any agreement referred to in sub-section (1), the arbitral tribunal shall
determine the language or languages to be used in the arbitral proceedings.
(3) The agreement or determination, unless otherwise specified, shall apply to any
written statement by a party, any hearing and any arbitral award, decision or
other communication by the arbitral tribunal.
(4) The arbitral tribunal may order that any documentary evidence shall be
accompanied by a translation into the language or languages agreed upon by
the parties or determined by the arbitral tribunal.
3. S23: Statements of claim and defence:
(1) Within the period of time agreed upon by the parties or determined by the
arbitral tribunal, the claimant shall state the facts supporting his claim, the
points at issue and the relief or remedy sought, and the respondent shall state
his defence in respect of these particulars, unless the parties have otherwise
agreed as to the required elements of those statements.
(2) The parties may submit with their statements all documents they consider to
be relevant or may add a reference to the documents or other evidence they
will submit.
(2A) The respondent, in support of his case, may also submit a counterclaim
or plead a set-off, which shall be adjudicated upon by the arbitral tribunal, if
such counterclaim or set-off falls within the scope of the arbitration agreement.
(3) Unless otherwise agreed by the parties, either party may amend or
supplement his claim or defence during the course of the arbitral proceedings,
unless the arbitral tribunal considers it inappropriate to allow the amendment
or supplement having regard to the delay in making it.

4. S24: Hearings and written proceedings:

(1) Unless otherwise agreed by the parties, the arbitral tribunal shall decide
whether to hold oral hearings for the presentation of evidence or for oral
argument, or whether the proceedings shall be conducted on the basis of
documents and other materials
- Provided that the arbitral tribunal shall hold oral hearings, at an
appropriate stage of the proceedings, on a request by a party, unless
the parties have agreed that no oral hearing shall be held
- Provided further that the arbitral tribunal shall, as far as possible, hold
oral hearings for the presentation of evidence or for oral argument on
day-to-day basis, and not grant any adjournments unless sufficient
cause is made out, and may impose costs including exemplary costs on
the party seeking adjournment without any sufficient cause
(2) The parties shall be given sufficient advance notice of any hearing and of any
meeting of the arbitral tribunal for the purposes of inspection of documents,
goods or other property.
(3) All statements, documents or other information supplied to, or applications
made to the arbitral tribunal by one party shall be communicated to the other
party, and any expert report or evidentiary document on which the arbitral
tribunal may rely in making its decision shall be communicated to the parties

5. S29A: Time limit for arbitral award:

(1) The award shall be made within a period of twelve months from the date the
arbitral tribunal enters upon the reference.
- Explanation.—For the purpose of this sub-section, an arbitral tribunal
shall be deemed to have entered upon the reference on the date on
which the arbitrator or all the arbitrators, as the case may be, have
received notice, in writing, of their appointment.
(2) If the award is made within a period of six months from the date the arbitral
tribunal enters upon the reference, the arbitral tribunal shall be entitled to
receive such amount of additional fees as the parties may agree.
(3) The parties may, by consent, extend the period specified in sub-section (1) for
making an award for a further period not exceeding six months.
(4) If the award is not made within the period specified in sub-section (1) or the
extended period specified under sub-section (3), the mandate of the
arbitrator(s) shall terminate unless the Court has, either prior to or after the
expiry of the period so specified, extended the period:
- Provided that while extending the period under this sub-section, if the
Court finds that the proceedings have been delayed for the reasons
attributable to the arbitral tribunal, then, it may order reduction of fees
of arbitrator(s) by not exceeding 5% for each month of such delay.
(5) The extension of period referred to in sub-section (4) may be on the application
of any of the parties and may be granted only for sufficient cause and on such
terms and conditions as may be imposed by the Court.
(6) While extending the period referred to in sub-section (4), it shall be open to the
Court to substitute one or all of the arbitrators and if one or all of the arbitrators
are substituted, the arbitral proceedings shall continue from the stage already
reached and on the basis of the evidence and material already on record, and
the arbitrator(s) appointed under this section shall be deemed to have received
the said evidence and material.
(7) In the event of arbitrator(s) being appointed under this section, the arbitral
tribunal thus reconstituted shall be deemed to be in continuation of the
previously appointed arbitral tribunal.
(8) It shall be open to the Court to impose actual or exemplary costs upon any of
the parties under this section.
(9) An application filed under sub-section (5) shall be disposed of by the Court as
expeditiously as possible and endeavour shall be made to dispose of the
matter within a period of sixty days from the date of service of notice on the
opposite party.

6. S29B: Fast track procedure:

(1) Notwithstanding anything contained in this Act, the parties to an arbitration
agreement, may, at any stage either before or at the time of appointment of
the arbitral tribunal, agree in writing to have their dispute resolved by fast track
procedure specified in sub-section (3).
(2) The parties to the arbitration agreement, while agreeing for resolution of dispute
by fast track procedure, may agree that the arbitral tribunal shall consist of a
sole arbitrator who shall be chosen by the parties.
(3) The arbitral tribunal shall follow the following procedure while conducting
arbitration proceedings under sub-section (1):
(a) The arbitral tribunal shall decide the dispute on the basis of written
pleadings, documents and submissions filed by the parties without
any oral hearing
(b) The arbitral tribunal shall have power to call for any further information
or clarification from the parties in addition to the pleadings and
documents filed by them
(c) An oral hearing may be held only, if, all the parties make a request or if
the arbitral tribunal considers it necessary to have oral hearing for
clarifying certain issues;
(d) The arbitral tribunal may dispense with any technical formalities, if an
oral hearing is held, and adopt such procedure as deemed appropriate
for expeditious disposal of the case.
(4) The award under this section shall be made within a period of six months from
the date the arbitral tribunal enters upon the reference.
(5) If the award is not made within the period specified in sub-section (4), the
provisions of sub-sections (3) to (9) of section 29A shall apply to the
proceedings.
(6) The fees payable to the arbitrator and the manner of payment of the fees shall
be such as may be agreed between the arbitrator and the parties.
7. .

Arbitral award, setting aside and the grounds in detail

S31, 33, 34, 35, 36
Chapter VI: making of arbitral award
Chapter VII: setting aside (S34)
1. An arbitration award (or arbitral award) is a determination on the merits by an
arbitration tribunal in arbitration, and is analogous to a judgement in a court of law.
2. The legal requirements relating to the making of awards vary from country to country
and, in some cases, according to the terms of the arbitration agreement.
3. Although in most countries, awards can be oral, this is relatively uncommon and they
are usually delivered in writing.
4. An arbitral award can be monetary or non-monetary
A. Monetary: made for payment of a sum of money from one party to another
B. Non-monetary: no money needs to be paid but includes decisions like stopping a
business practice, increasing unemployment perks and incentives.
5. The following are requirements under the Arbitration Act 1996 which the award must
comply with, unless the parties agree to vary them under section 52 of the Act:
A. The award must be in writing
B. It must be signed by all of the arbitrators making to the award (dissenting
minority arbitrators need not sign unless the parties agree that they must);
C. The award must contain reasons
D. The award must state the "seat" of the arbitration (the place where the
arbitration took place); and
E. The award must state the date upon which it is made.
This is important for determination of time limits and the calculation of interest,etc
6. Requirements for enforcing arbitral awards in India:
Must be an award in a particular form:
A. S31(1): provides, inter alia, that an award shall be
- made in writing and
- be signed by the members of the arbitral tribunal
B. S31(2):
- Proceedings with more than one arbitrator:
- Signature of majority is sufficient provided the reason for any omitted
signature is stated
- After the award, a signed copy is to be delivered to each party
C. S31(3): the arbitral award shall state the reasons upon which it is based unless
- Parties have agreed otherwise
- The award is on agreed terms under S30
D. .
7. Many countries permit the parties to vary the conditions, which reflect the fact that
arbitration is a party-driven process.
8. An arbitration comes into being as a result of an enforceable agreement.
9. An agreement enforceable under law is called a contract.
10. To be enforceable the agreement must be
A. made by free consent of the parties.
B. Not induced by coercion, undue influence, fraud, misrepresentation or mistake as
to a matter of fact essential to the agreement.
C. It is void if a party is a minor or not of sound mind or is disqualified from
contracting by any law to which he is subject.
D. When both the parties to the agreement are under a mutual mistake as to a
matter of fact essential to the agreement, the agreement is void.
E. An arbitration agreement unlawful is void.
F. The consideration of which or object is unlawful if it is forbidden by law
G. It is fraudulent or involves or implies injury to the person or property of another
or the courts regard it as immoral or opposed to public policy.
11. The Arbitration Act provides that an arbitration agreement should be in writing, Hence,
no oral arbitration is possible in India.
12. It is not necessary to constitute the agreement in any single document. It can be spread
over so many documents.
13. Arbitrators are not at liberty to make an award without giving reasons unless it is so
stipulated in the agreement.
14. The powers of the Court to interfere with the awards are now very limited.
15. Application for setting aside:
A. To ascertain the proper conduct of arbitration proceedings, the law allows certain
remedies against an arbitral award
B. An aggrieved party may resort to the law court for setting aside the award

16. Section 34 of the Arbitration Act provides for an application to the Court for setting
aside an award under the following circumstances:-
A. S34(2)(a)(i): Incapacity of party
- If a party to a contract is a minor or unsound who is not represented by a
guardian
- To protect their interest
- S9: appointment of a guardian for arbitration proceedings
B. S34(2)(a)(ii): Invalidity of the agreement
- Where agreement clause is added in a contract, the arbitration will be
invalid if the contract is invalid
C. S34(2)(a)(iii): Want of proper notice:
- If the party was not given proper notice regarding the appointment of
arbitrator or another notice of proceedings, the award may be set aside.
- Dulal Podda v. Executive Engineer, Dona Canal Division: court held
that the appointment of arbitrator on request of appellant without notice to
the respondent and an ex-parte decree will be held illegal and is liable for
setting aside
D. S34(2)(a)(iv): Award deals with disputes not referred to arbitration:
- If the subject does not come within the jurisdictional ambit of the tribunal,
the award is invalid
E. S34(2)(a)(v): Arbitral tribunal was defective in composition
- If the composition of the tribunal was not in obedience with the agreement
of the parties or if the procedure or conduct of proceedings was not
properly followed
F. S34(2)(b)(i): Subject matter not capable of arbitration
- Matters of criminal nature or concerning public rights
G. S34(b)(ii): Award is in conflict with public policy.
- Award in violation of public policy of India
H.
17. Limitation under S34(3):
A. S34(3) provides that an application to set aside should be made within 3
months from the date on which they received an award
B. If the court is satisfied that the applicant was prevented by sufficient cause, it
may be extended by 30 days only
18. UOI v. Punjab Communication:
A. The amount which was payable by one party was not specified in the award and
the decision was unclear and incapable of being enforced
B. Thus, the award was set aside
19. An award can be enforced as such because it is now equated with a decree of the
Court.
20. A party who wishes to enforce the award can file it before the Court and it will be treated
as a decree unless set aside in an application under section 34.
21. An application for setting aside shall not be made after three months of the receipt
of the award or after three months of an application under section 33 to the arbitration
for any correction of the award.
22. An arbitrator has got the power to file the award and the connected papers in Court-
suo-motu' at any time. There is no period of limitation fixed for it.
23. The arbitrator has to give a signed copy of the award to the parties.
24. After receiving the award the concerned party has to apply to the Court to execute
the award and obtain reliefs.
25. The court will issue notice to the judgement debtor
A. After receipt of notice if the judgement debtor does not appear before Court, ex
parte execution may be ordered granting the relief prayed for in the Petition.
B. If the judgement debtor appears and files an objection, the objection will be
heard and disposed of and only thereafter necessary relief will be granted by
the Court.
C. Under Order XXXI of the Code of Civil Procedure a judgement debtor can be
proceeded against either in person or against his property. Personal execution is
by arresting the judgement debtor.
D. A judgement debtor can be imprisoned for a period of three months.
E. The expenses for this have to be met by the decree holder.
F. Execution against property is by attaching and selling through Court the saleable
interest of the judgement debtor in the property.
G. If a judgement debtor has no assets, he is safe in spite of a decree against him
as he cannot even be imprisoned for the decree.
H. The procedure for enforcing foreign awards is as per Part II of the present Act
and incorporates the Geneva Convention of 1927 and the New York Convention
of 1958

26. Pursuant to this any person interested in enforcing a foreign award shall apply to a
Court having jurisdiction over the subject matter of the award.
27. The parties seeking to enforce a foreign award must produce:
A. The original award or a duly authenticated copy thereof.
B. Evidence proving that the award has become final and
C. Such evidence is necessary to prove that the award is a foreign award.
28. Types of Arbitration Awards:
A. Interim Award
B. Agreed Award: An agreed award is usually in the form of a settlement between
the parties of their dispute, ie, the equivalent of a judgement by consent. The
settlement is embodied in the form of an award.
C. Reasoned Award: A reasoned award is not a sub-category of award, but is used
to describe an award where the tribunal sets out its reasoning for its decision.
D. Additional Award: An additional award is an award which the tribunal, by its
own initiative or on the application of a party makes in respect of any claim
which was presented to the tribunal but was not resolved under the principal
award.
E. Draft Award: A draft award is not an award as such, and is not binding on the
parties until confirmed by the tribunal
29. .

2015 amendments (read the provisions)

1. The Government of India decided to amend the Arbitration and Conciliation Act, 1996
by introducing the Arbitration and Conciliation (Amendment) Bill, 2015 in the
Parliament.
2. The Union Cabinet chaired by the Prime Minister, had given its approval for
amendments to the Arbitration and Conciliation Bill, 2015 taking into consideration the
Law Commission’s recommendations, and suggestions received from
stakeholders.
3. The President of India on 23rd October 2015 promulgated the Arbitration and
Conciliation (Amendment) Ordinance, 2015 amending the Arbitration and Conciliation
Act, 1996 to make
A. arbitration a preferred mode of settlement of commercial disputes and
B. India a hub of international commercial arbitration
4. The definition of the expression ‘Court’ was amended.
A. The amended law makes a clear distinction between an international
commercial arbitration and domestic arbitration with regard to the definition of
‘Court’.
B. In so far as domestic arbitration is concerned, the definition of “Court” is the
same as was in the 1996 Act
C. However, for the purpose of international commercial arbitration, ‘Court’ has
been defined to mean only High Court of competent jurisdiction. Accordingly, in
an international commercial arbitration, as per the new law, district court will
have no jurisdiction and the parties can expect speedier and efficacious
determination of any issue directly by the High court which is better equipped
in terms of handling commercial disputes.
5. Amendment of Section 2(2):
A. A proviso to Section 2(2) has been added which envisages that subject to the
agreement to the contrary, Section 9 (interim measures), Section 27(taking of
evidence), and Section 37(1)(a), 37(3) shall also apply to international
commercial arbitrations, even if the seat of arbitration is outside India,
meaning thereby that the new law has tried to strike a kind of balance between
the situations created by the judgments of Bhatia International and Balco v.
Kaiser. Now Section 2(2) envisages that Part-I shall apply where the place of
arbitration is in India and that provisions of Sections 9, 27, 37(1) (a) and 37 (3)
shall also apply to international commercial arbitration even if the seat of
arbitration is outside India unless parties to the arbitration agreement have
agreed to the contrary.
6. Amendment to Section 8: (Reference of parties to the dispute to arbitration):
A. Section 8, which mandates any judicial authority to refer the parties to
arbitration in respect of an action brought before it, which is subject matter of
arbitration agreement .
B. The sub-section(1) has been amended envisaging that notwithstanding any
judgement, decree or order of the Supreme Court or any court, the judicial
authority shall refer the parties to the arbitration unless it finds that prima facie
no valid arbitration agreement exists.
C. A provision has also been made enabling the party, who applies for reference of
the matter to arbitration, to apply to the Court for a direction of production of the
arbitration agreement or certified copy thereof in the event the parties applying
for reference of the disputes to arbitration is not in the possession of the
arbitration agreement and the opposite party has the same.
7. Amendment to Section 9 (Interim Measures):
A. The amended section envisages that if the Court passes an interim measure of
protection under the section before commencement of arbitral proceedings,
then the arbitral proceedings shall have to commence within a period of 90
days from the date of such order or within such time as the Court may
determine.
B. Also, that the Court shall not entertain any application under section 9 unless it
finds that circumstances exist which may not render the remedy under Section
17 efficacious.
C. The above amendments to Section 9 are certainly aimed at ensuring that parties
ultimately resort to the arbitration process and get their disputes settled on merit
through arbitration.
D. The exercise of power under Section 9 after constitution of the tribunal has
been made more onerous and the same can be exercised only in
circumstances where remedy under Section 17, appears to be non-efficacious
to the Court concerned.
8. Amendment to Section 11 (Appointment of Arbitrators):
A. In so far as section 11, “appointment of arbitrators” is concerned, the new law
makes it incumbent upon the Supreme Court or the High Court or person
designated by them to dispute the application for appointment of arbitrators
within 60 days from the date of service of notice on the opposite party.
B. As per the new Act, the expression ‘Chief Justice of India’ and ‘Chief Justice
of High Court’ used in earlier provision have been replaced with Supreme
Court or as the case may be, High Court, respectively.
C. The decision made by the Supreme Court or the High Court or person
designated by them have been made final and only an appeal to the Supreme
Court by way of Special Leave Petition can lie from such an order for
appointment of arbitrator.
D. The new law also attempts to fix limits on the fee payable to the arbitrator and
empowers the high court to frame such a rule as may be necessary
considering the rates specified in Fourth Schedule.
9. Amendment to Section 12:
A. Amendment to Section 12, as per the new law makes the declaration on the part
of the arbitration about his independence and impartiality more onerous.
B. A Schedule has been inserted (Fifth Schedule) which lists the grounds that
would give rise to justifiable doubt to independence and impartiality of arbitrator
and the circumstances given in Fifth Schedule are very exhaustive.
C. Any person not falling under any of the grounds mentioned in the Fifth Schedule
is likely to be independent and impartial in all respects.
D. Also, another schedule (seventh schedule) is added and a provision has been
inserted that notwithstanding any prior agreement of the parties, if the arbitrator’s
relationship with the parties or the counsel or the subject matter of dispute falls
in any of the categories mentioned in the seventh schedule, it would act as an
ineligibility to act as an arbitrator.
E. However, subsequent to disputes having arisen, parties may by expressly
entering into a written agreement waive the applicability of this provision. In
view of this, it would not be possible for Government bodies to appoint their
employees or consultants as arbitrators in arbitrations concerning the said
Government bodies.
10. Amendment to Section 14:
A. Amendment of Section 14 aimed at filling a gap in the earlier provision, which
only provided for termination of mandate of the arbitrator.
B. If any of the eventualities mentioned in sub-section (1) arises. The new law also
provides for termination of mandate of arbitration and substitution and his/her
substitution by another one.
11. Amendment to Section 17 (Interim Measures by Arbitral tribunal):
A. The old Act had lacunae where the interim orders of the tribunal were not
enforceable.
B. The Amendment removes that lacunae and stipulates that an arbitral tribunal
under Section 17 of the Act shall have the same powers that are available to a
court under Section 9 and that the interim order passed by an arbitral tribunal
would be enforceable as if it is an order of a court.
C. The new amendment also clarifies that if an arbitral tribunal is constituted, the
Courts should not entertain applications under Section 9 barring exceptional
circumstances.
12. Amendment to Section 23:
A. The new law empowers the Respondent in the proceedings to submit counter
claim or plead a set-off and hence falling within the scope of arbitration
agreement.
13. Amendment to Section 24:
A. It requires the arbitral tribunal to hold the hearing for presentation of evidence
or oral arguments on a day to day basis, and mandates the tribunal not to grant
any adjournments unless sufficient causes are shown.
B. It further empowers the tribunal to impose exemplary cost where adjournment
is sought without any sufficient cost.
14. Insertions of new Section 29A and 29B( Time limit for arbitral award and Fast Track
Procedure):
A. To address the criticism that the arbitration regime in India is a long drawn
process defying the very existence of the arbitration act, the Amended Act
envisages to provide for time bound arbitrations.
B. Under the amended act, an award shall be made by the arbitral tribunal within
12 months from the date it enters upon reference.
C. This period can be extended to a further period of maximum 6 months by the
consent of the parties, after which the mandate of the arbitrator shall terminate,
unless the Court extends it for sufficient cause or on such other terms it may
deem fit.
D. Also, while extending the said period, the Court may order reduction of fees of
arbitrator by upto 5% for each month such delay for reasons attributable to the
arbitrator.
E. Also, the application for extension of time shall be disposed of by the Court
within 60 days from the date of notice to the opposite party.
F. The Ordinance also provides that the parties at any stage of arbitral proceedings
may opt for a fast track procedure for settlement of dispute, where the tribunal
shall have to make an award within a period of 6 months.
G. The tribunal shall decide the dispute on the basis of written pleadings,
documents and submissions filed by the parties without oral hearing, unless
the parties request for or if the tribunal considers it necessary for clarifying
certain issues.
H. Where the tribunal decides the dispute within 6 months, provided additional fees
can be paid to the arbitrator with the consent of the parties.
15. Amendment to Section 25:
A. The new Act empowers the tribunal to treat Respondent’s failure to
communicate his statement of defence as forfeiture of his right to file such
statement of defence.
B. However, the tribunal will continue the proceedings without treating such
failure as admission of the allegations made by the Claimant.
16. Amendment to Section 28:
A. The new law requires the tribunal to take into account the terms of contract
and trade usages applicable to the transaction.
B. In the earlier law, the arbitral tribunal was mandated to decide disputes in
accordance with the terms of the contract and to take into account the trade
usages applicable to the transaction.
C. To that extent, the new law seeks to relieve the arbitrators from strictly
adhering to the terms of the contract while deciding the case.
D. However, the arbitrator can still not ignore the terms of the contract.
E. Therefore, the new amendment seems to bring in an element of discretion in
favour of the arbitrators while making an award.
17. Amendment to Section 31:
A. This provides for levy of future interest in the absence of any decision of the
arbitrator, on the awarded amount @2% higher than current rate of interest
prevalent on the date of award.
B. The current rate of interest has been assigned the same meaning as assigned to
the expression under Clause (b) of Section 2[1] of the Interest Act, 1978.
18. In addition, the new Act lays down detailed parameters for deciding cost, besides
providing that an agreement between the parties, that the whole or part of the cost of
arbitration is to be paid by the party shall be effective only if such an agreement is made
after the dispute in question had arisen.
19. Therefore, a generic clause in the agreement stating that cost shall be shared by the
parties equally, will not inhibit the tribunal from passing the decision as to costs
and making one of the parties to the proceedings to bear whole or as a part of such
cost, as may be decided by the tribunal.
20. Amendment of Section 34 (Limiting the gamut of Public Policy of India):
A. As per the new amendment, an award passed in an international arbitration,
can only be set aside on the ground that it is against the public policy of India
if, and only if,
- the award is vitiated by fraud or corruption
- it is in contravention with the fundamental policy of Indian law
- it is in conflict with basic notions of morality and justice.
B. The present amendment has clarified that the additional ground of “patently
illegality” to challenge an award can only be taken for domestic arbitrations and
not international arbitrations.
C. Further, the amendment provides that the domestic awards can be challenged
on the ground of patent illegality on the face of the award but the award shall
not be set aside merely on the ground of an erroneous application of law or
by re-appreciation of evidence.
D. The new Act also provides that an application for setting aside an award can be
filed only after issuing prior notice to the other party.
E. The party filing the application has to file an affidavit along with the application
endorsing compliance with the requirement of service of prior notice on the
other party.
F. A time limit of one year from the date of service of the advance notice on the
other parties has been fixed for disposal of the application under Section 34.
G. Significantly, there is no provision in the new Act which empowers the court or
the parties to extend the aforesaid limit of one year for disposal of the application
under Section 34.
21. Amendment to Section 36 (Stay on enforcement of award):
A. The Ordinance provides that an award would not be stayed automatically by
merely filing an application for setting aside the award under Section 34.
B. There has to be a specific order from the Court staying the execution of award
on an application made for the said purpose by one of the parties.
C. The Ordinance aims to remove the lacunae that existed in the previous Act
where, pending an application under Section 34 for setting aside an arbitral
award, there was an automatic stay on the operation of the award.
D. The new law also empowers the Court to grant stay on operation of arbitral
award for payment of money subject to condition of deposit of whole or a part
of the awarded amount.
22. Amendment to Section 37:
A. Under Section 37(1), the new law makes provision for filing of an appeal
against an order of judicial authority refusing to refer the parties to
arbitration under Section 8.
23. As regards enforcement of certain foreign awards, the new law seeks to add
explanation of Sections 48 and 57 thereby clarifying as to when an award shall be
considered to be in conflict within public policy of India. The parameters are the same
as are provided under Section 34. Similarly, the expression “Court” used in Sections 47
and 56 have been defined to mean only the High Court of competent jurisdiction.
24. .

Class Notes
1. Legislations on Arbitration:
A. 1899: Bengal Regulation
B. 1940: Arbitration Act
C. 1996: Arbitration and Conciliation Act
- Amended in 2015, 2019, 2021
2. Important Sections of the Act:
A. S11, S2(3), S2(a)
B. 8th schedule in 2021 amendment: experiences and qualifications of arbitrators -
now removed
C. S7: Arbitration Agreement - to be read with S2
D.
3. LOI: Letter of Intent - LOA: Letter of Acceptance
4. GCC: General Conditions of Contract, GCC: Special Conditions of Contract
5. FIDIC Contracts:
A. FIDIC is a French language acronym for Fédération Internationale Des
Ingénieurs-Conseils
B. means the international federation of consulting engineers.
6. NN Global Case:
A. SC (5J Bench) - unstamped agreements or documents even without arbitration
clause are not valid
B. Recent judgment with 7 members bench overruled and held valid
7. Details to be included in an Arbitration Clause while drafting:
A. Nature of disputes
B. Number of arbitrators
C. Law applicable to the procedure or procedural law to be adopted including
arbitration rules of an institution
D. Place of arbitration
E. Language of arbitration proceedings
8. .