see last week notes from Abhishek's notes.

4th February
ADR can be divided into two methods-
1. Adjudicatory methods​: Disputing Parties approach a neutral third party.
End Product- Order, decree, judgment or in case of arbitration- award.
In arbitration, parties appoint the 3rd person (not the state). They also have the autonomy
to decide place, time and procedure of arbitration.
2. ​Non-adjudicatory methods: ​3rd neutral person appointed but has no power to decide,
rather will aid the parties in resolving the dispute.
Mediation/Conciliation- No adjudication
Negotiation- No 3rd party, no award
Mediator- have ​low key role ​as compared to Conciliator

6th February

Why ADR was needed

● There was a gap between demand of the people and what they were getting from the
justice system in India- Adversarial System of our courts resulted in ​polarization of the
parties being exaggerated because of experience of the system​. After the end of dispute
between the parties both were unsatisfied irrespective of the outcome of the case E.g.
CPC provides for appeal even to the party who has won the case for enhanced
compensation.
● People are not satisfied because ​courts only handle legal issue​, which is only the tip of
the iceberg. The parties also have other issues which remain unaddressed as the court
only focuses on legal issues. Further, even in regard to legal issues parties feel alienated
from the whole process (lawyer is required to argue the case in the court), this results in
parties feeling not involved in the outcome of the case.

 
see last week notes from Abhishek's notes. 

● After LPG people are entering into trans-border transactions, in such cases if a dispute
arises between parties it become difficult for them as laws of every country differ in some
aspects. Although there are codes for such commercial disputes but litigation system is
lacking to provide a satisfactory outcome in these also.
● Cost (Time and Money)- Court fees in our country is low but hiring a lawyer is an
expensive matter. In addition to this sometimes suits are filed for the purpose of harassing
the other party as being in a litigation is itself hectic- Stress- can affect the health,
relationship and work of the parties. Further, litigation is also harmful in other ways-
parties have to take an off from work to appear in the court, still there is no surety
whether there case will be heard on that day or not.

Objectives of ADR

● Clarification of the wrong and impact of the harm​- In ADR information is collected if
important irrespective of its character (Legal or non-legal). This is also there in litigation
but its purpose is different- in litigation you only collects evidence which helps you to
prove your case- whatever is not relevant from legal point of view is left behind. While in
ADR information is collected for creation of value, this gives an incentive to the party to
regulate free flow of the information. Follows Quid pro Quo- if you are giving sth, you
are also receiving sth. This whole process is called ​“Problem Solving Skills”.
● Assumption and Distribution of Responsibility​: In litigation the accused is supposed to
deny everything, there is no assumption of responsibility, this results in waste of time as
everything is to be proved. Since ADR provides free flow of information and free
interaction between the parties, there is rational discussion- this results in mutual
responsibility on parties.
● Relationship Transformation​: Legal dispute between the parties damages their relations
for eternity. ADR tries to avoid it by providing amicable solution to the dispute. Even if
relations between the parties are not improved, ADR ensures that they should not get
worse. ADR protects the parties from further damaging their relationship with each other.

 
see last week notes from Abhishek's notes. 

● Moving Forward: The capacity of the parties to handle dispute should be enhanced (in
future they should be able to settle them themselves) + any dispute resulting from the
ADR dispute is also taken care of (decree passed in ADR can be enforced through court).

7th February
ADR has different conception of Harm. They feel, it first happens to an individual then to society
as harm affect both the parties. In ADR, there is no need for justice to be unidirectional thing, it
can be multidirectional (Example of Accident). Their goal is to restore the relationship between
the parties. They say justice is equal well-being of all. There has to be social-equality, there is no
need to apply same laws to every case as every human being and his circumstances are
different-their need are different.

Process Values Necessary for successful ADR

● ​Participation: ​In ADR participation is different as compared to litigation where there is
indirect participation (involvement of lawyer). In ADR there is direct participation.
Direct participation requires incentive to happen- Since in ADR collection of information
is required, it acts as an incentive for the parties- otherwise ADR won’t work.
○ There is conflict of interest in litigation. The client has his own interest ( to get the
dispute solved as quickly as possible) while his lawyer has different interest (to
prolong the dispute to earn more). But to facilitate information direct participation
is required as in ADR. Truth can only be extracted by direct participation.
○ Psychological​- direct participation gives feeling of empowerment to the parties-
Absent in litigation. When the parties are talking there is sense of
acknowledgment among parties + Mutual sense of validation. It helps parties to
get back to rationality- when parties talk to each other, there is a possibility that
their views might change. This helps in resolving the dispute between the parties.

 
see last week notes from Abhishek's notes. 

● Voluntariness of ADR Process : ​Any discussion between parties will happen only if
parties come voluntarily to ADR. This is also a negative point, as ADR won’t happen in
cases where parties don’t want to talk to each other.
● Confidentiality of Whole Process: ​Whatever is discussed between the parties should not
be disclosed before any other forum- helps parties to disclose information. Negative
point- e.g. of Corporation.
● Respect for all participants: ​Ground rules like when one party is speaking, the other
should not interfere- gives feeling of respect to parties. Respect should be given to all as
enemy is not the parties but the dispute itself. They ​De-personalise dispute from the
parties
○ How you De-personalise a dispute- the third neutral person has to make the
parties realise how much they will harm themselves if they continue the dispute or
give them incentive to end the dispute (that they both will benefit by amicably
solving the dispute).
● Fair Treatment: ​ADR requires fair treatment of parties + PNJ is applied to all process.
Giving voice to the parties, they feel they have been treated fairly. Parties know they
have everything in their control, if parties feel they have been treated fairly, there are
more chance of them complying with the agreement achieved via ADR. That’s why
consent decrees are not appealable (Section 96 of CPC).
● Respect for agreed Outcome: ​NYC convention 1958, provide for international
recognition to arbitral awards. Similar conventions are there for mediations also.+ Part III
of arbitration act says the award is as good as decree passed by civil Court.
● Flexibility of process and outcome: ​The process should be ​user friendly​. It has to be
flexible regarding outcomes- should provide space for creative solutions for problems.
● Confidentiality: ​Frank and free discussions among the parties because of confidentiality.
Even if the award is challenged in court, court is not supposed to look at procedural
defects and not at merits of the awards.
● Early intervention:

 
see last week notes from Abhishek's notes. 

○ For de-escalating the dispute: ​there might be some small disputes between the
parties, with passage of time can become huge. In ADR even such disputes are
considered as an opportunity to change the situation and improve the relations of
the parties. While in litigation, courts will only come into picture when there is a
legal issue or parties come to the court.
○ Preventive Law: ​Lawyers should not come into picture when a case is filed but
they should always be there, so no dispute can arise and should counsel the parties
at all stages, even prior to a legal dispute.

8th February
Problems in ADR
● Not all parties have same bargaining power- it affects the outcome of the ADR process
○ Three ways in which imbalance of power affects the outcome of the ADR
■ People with limited resources cannot predict what will happen in the court
and therefore, are forced to go for ADR
■ Person with less finance would want compensation as soon as possible
even if they can get more compensation through litigation, still they will
opt for ADR, as it is faster and will accept less compensation.
■ People with less resources are more likely to opt for ADR as they cannot
afford long litigation.- this vitiates their free choice as they are forced to
choose ADR.
● Judge in litigation might help the weaker party to alleviate the disparity in power- no
such thing in ADR
● Lack of authoritative consent- I​ n ADR, there is no power to check whether 3rd neutral
person has the consent of members whom he is representing. It might be possible that he
is not representing everyone’s best interest. While in litigation every party is
pre-informed, further, the court has power to call the parties to see if their interests are
represented by the person appearing before the court (Order I rule 8)- the court will check

 
see last week notes from Abhishek's notes. 

the agreement with its probable decision in such a case, if it is close, would allow. In
ADR, the third neutral party does not have this kind of power, they cannot check this.
● Lack of continuing judicial authority in ADR process- ADR is end of settlement but in
dispute further judicial intervention may be required which cannot be granted in ADR
For eg continuous mandamus special privilege which are there in litigation are not there
with ADR. Like appeal, special leave etc. they have limited power and cannot grant
injunction. So ADR cannot be used in all disputes but in some.
● diminishing the remedial value of law : - there will be ​loss of precedence.​ There will a
time when there is no public standard. ( ruhi disagrees as it is not valid concern, ADR is
only for some dispute). The remedial aspect of law will lost.
● Non state Machinery- litigation is social function of law, it is appointed by state, ADR
snatches it away from state.
● Lack of accountability- People will never get to know what is being done with their
money.
● People have a high opinion of the court. People lost the perceived advantage through
ADR. Lower the image of judiciary, opportunity of going to courts lost.
○ Mandatory ADR programmes- Oxymoron, people should have the right to
choose. Further, ADR cannot supplant the court system as if ADR fails, parties
can approach the court.

9th february
Negotiation
● (​Principled negotiation​) Principle way of negotiation; this is one school of thought
○ Negotiation is pervasive. It’s a process of dialogue between the disputants. No
third party.
○ Principle negotiation is considered the best model.
○ When we negotiation, we want a favourable solution to the problem. And we
want to get to the solution ASAP.
○ We also have concern about the relationship that we have with the party.

 
see last week notes from Abhishek's notes. 

○ The agreement to be arrived at in an efficient manner.

○ It should satisfy most of your interests as well as the legitimate interests of
another person.
○ The agreement should also not be against the societal norms, broadly.
○ There are default ways of negotiating generally. We take on the extreme
positions (demands), and we stick to it for sometime, and make some
concessions. By taking the most extreme positions, we will get into a better
settlement.
○ Is it a good method? The first problem with this method when one is bargaining
on positions only is that one tends to be associated only with the demands they
are making. The more you justify them, the more associated you become, and
it’s much harder for you to budge from the demands, r to give in. now the
demand is associated to the ego. And if we don’t agree to it, then how will we
save face; if we accept something below our demand?
○ When one is negotiating just on numbers, it’s much easier for a breakdown to
happen. Arguing over monetary terms without looking at other factors.
○ Another problem is that this type of bargaining can be very time consuming and
involves a lot of time and energy. So agreements aren’t efficient in nature.
○ Another problem is that we try to dominate the other side. So this will
adversely affect the relationship. The other person may be as dominating or be
caused to walk out.
○ Generally, there are two types of people who are bargaining: soft bargainer and
hard bargainer.
○ Soft bargainer is a person who wants agreement, amicably and is willing to
work for it. This may be because they value the relationship.
○ Hard bargainer is a person interested in getting what he wants from the dispute.
He doesn’t care about the relationship between the parties. In this case, there’s
a possibility of a walk out.

 
see last week notes from Abhishek's notes. 

○ Both the problems show that either you get what you want or you get a good
relationship.
○ So these are the issues with the principle negotiation.
○ Neither process is able to give us the result we expect.
○ Another problem is that this model can work to some extent in a biparty
dispute, but not in multiparty dispute, due to the high number of people,
interests and demands. Since, hard and soft bargaining can’t be done.
○ So, people with common goals come together to put together their collective
demands.
○ How difficult is it for these groups to move from one demand to another
demand.
○ Principle negotiation is that we have to move form these demands and look for
the underlying interests of the parties. We have to look for mutual interests.
And if there are contrasting interests, we should look for an objective way of
resolving those conflicting interests.
○ Principle negotiation says that the one problem that is there is that the problem
and the people need to be separated. This means that depersonalising problems
is what needs to be done.
○ We have to accept that all negotiators are human beings and not machines.
When humans are involved, there are certain common traits of all
■ The first is that all of us want to feel good about ourselves.
■ The other is that everybody has their own perception about things and
we think that our perception is better than that of others. From a sea of
facts, we’d give importance only to those facts that substantiate our side
of things.
■ That we didn’t mean what the other person understood. Understanding
in a different context.
■ From the default methods, it’s seen that there’s a give and take between
the demands and relationship. Principle negotiation says that this isn’t

 
see last week notes from Abhishek's notes. 

necessary and is caused by animosity. But this can be overcome if the

dispute is depersonalised. Treat the problem as a problem, and not the
people.
○ They say that every negotiator has two interests: substance of dispute an a good
relationship. The negotiator has an interest in maintaining a cordial relationship
at least during the dispute resolution process. Because if this isn’t there then it
will hamper yours as well as their interests.
○ (how to depersonalize the dispute from the parties) So to separate people from
the problem, three things need to be kept in mind. This is the most difficult step
in the negotiation process:
■ Firstly, perception. : if you want to make people do what you want them to
do, it is necessary to understand their perception. It can also help to
rephrase your demands. One should not deduce their intention form your
fears. One needs to clearly see their intention and motive. Also, don’t try
to fight or get outraged by problems. If none of these are possible, the
other negotiator can be asked about their point of view. This will also help
clarify your perception about them. The whole exercise is in order to build
trust, so the other may get the feeling you’re actually interested in
resolving the dispute.
■ Emotion. : in order to avoid emotions and their effect on the process,
litigation hands the process over to pros (lawyers). ADR says that
emotions need to be handled first and half the problem is this. One must
not react to emotional outbursts. There is a requirement for space to
discuss the emotional aspects of the dispute. To let off steam and not
have emotional outbursts.
■ Communication. : whenever one is in a dispute, the first problem is a
lack in communication between the parties.
● Either they talk to gain other people to their side or they talk just
to make their points and not hear theirs.

 
see last week notes from Abhishek's notes. 

● Lastly, to talk in a way to confuse the other person intentionally.

We’re thinking of what to say rather than hearing what the other
person is saying.
● This is a thinking influenced by the adversarial model.

11th February
How to improve communication
● Has to be an active listener- make the other person feel you are listening- it helps
in building trust as it is required for any negotiation. For this you have to make
them feel, you understand what their perception is- doesn’t mean agreeing with
their perception but acknowledging it.
● You have to accept some of their interests as legitimate. Quid-pro-quo, there has
to be some common ground, otherwise no negotiation will take place.
● No harm in asking what you want- it gives psychological satisfaction to the other
party.
● If you don’t do these things, the other party will keep on repeating their demands
again and against and there will be no negotiation- waste of time.
● Generally you don’t give importance to other persons claim, as he will think his
demands are legitimate but this strategy doesn’t work in negotiation.
● Use neutral language: ADR philosophy says- rather than calling a person
cheater, liar etc. You should use a neutral language. You can say the demand is on
higher side, please justify your demand, rather than using phrases that will offend
the ego of the other party.
● If you don’t do these things, the other party will go on defensive- this can result in
end of negotiation.

Move beyond positions (demands)

 
see last week notes from Abhishek's notes. 

● Legal dispute solve only the tip of iceberg- the whole is interest and needs of the parties.
Eg.- both the parties want orange- totally different position, either the negotiation will
end or become hard- such attitude is not good in long run.
● So, you need to look beneath the position and ask why you want it- for this there must be
trust between the parties- you have to disclose your interest and share your deepest
secrets.
○ E.g. Dispute between A and B regarding C- ​positions
■ A:​ historical connection
■ B: ​security concerns
○ Negotiation- Gives C to A with security assurances to B.
● Easier to negotiate on interests: it might be possible that positions taken by the parties are
contradictory but their interests may be reconcilable. Working on these interest help the
parties to continue negotiation. In interest there is third category “Needs”. Needs are the
basic thing which every party wants in dispute. They won’t bargain on this. If you know
the needs of the other party- negotiation will become easier.
● Three things- (1) Position (2) Interest (3) Needs, the last two motivate the parties to make
their demands.
○ You must understand these 3 things of the opposite party as well as of yourself.
You have to make chart of these things- Asking why makes it easier to make
proposals.
● Basic Human needs​- security- we cannot take this away from anyone- have to do cost
benefit analysis because of this sometime we ignore the dispute as unworthy of time.
○ Different type of needs- economic well being- ​Recognition​: ​people want others
to know and accept their fault, they want the other party to acknowledge that
they have been wronged- ​we have to find how these needs can be satisfied.

Invent Proposals

 
see last week notes from Abhishek's notes. 

● You have to invent proposals- ideas by which disputes can be amicably solve. Not easy
as we have tendency of premature judgment (people will laugh Bla Bla Bla). Therefore, it
is difficult to think of a creative solution.
● We feel there is a need to search for a single answer. You cannot expect a stressed person
to find a creative answer- he wants to narrow the difference between two opposite
positions which parties have taken + you don’t want to waste time on ideas.
● We feel it is a zero sum situation. E.g. Dividing a house- either you win or lose. In ADR
it is not accept- something called widen the size of pie- there are a lot of things on the
table, sth for everyone- you have to generate value.
● You can overcome these problems by dividing the whole process into two stages (1) Give
proposal or ideas i.e., Brainstorming (2) After this find which idea is not workable then
make them workable. This is supposed to be done by both the parties.
● With regard to issues that are irreconcilable - parties should try to objectively solve them.

February 12
Objective way of resolving dispute
● Some uniform standard trade practices to resolve mutually conflicting decision. Before
negotiation, decide in advance both may have same objective criteria. In case of criterias-
need to decide which OC is better than another?- OC should appear fair to all, can call
expert to help in deciding which one is better or third neutral party or other method-
Arbitration, Litigation. Need to ask Why OC should be accepted or not?- Known as
‘reality testing’.
● Negotiating on numbers- bargaining in the shadow of law, anticipated court decision-
cost benefit analysis- most likely that you will settle if you follow this.
● If the parties still believe that their OC is the best: need to narrow the gap- parties can call
in an expert to decide which OC is the best or call in a third neutral party.

Different strategies

 
see last week notes from Abhishek's notes. 

● Bargaining in shadow of law- settling an issue as you know you will lose in court/
unfavourable decision.
● Imbalance of power- strategy against MNC, employers, in these cases there is pressure
on the other party to enter into an agreement
○ Don’t give in to this pressure
○ How to satisfy maximum number of needs- fix bottom line- but many times we
fix bottom line in an arbitrary manner.
● Decide ​BATNA​- best alternative to negotiation agreement: Best alternative to negotiate
agreement- if you don’t negotiate what are other alternative available? E.g. if you don’t
sell, rent? Increase wages or strike?
○ It helps in deciding whether to settle or not. Parties are also required to research
on BATNA of other side.
○ Some people make the mistake of taking the sum of the whole of the BATNA.
you have several options, but in reality you will only choose the best of these
options. (i.e., compare with possible outcome in lit. and arb. While accepting
agreement).
● If other party is doing hard position bargaining then there are two options
○ Negotiation Jujitsu
○ Call neutral person

Feb 13
Negotiation Jujitsu
● The negotiator has to break the cycle of action and reaction. General tendency in cases of
hard bargaining is to strike back but that’s a waste of time, it doesn’t change anything.
So, don’t react to personal attacks. The moment you stop reacting to the way hard
negotiator is behaving, you will come on creative track.
● When you are not able to handle the force of opposition- side step and use their force on
them. Without getting into reactions, you can simply ask the person why he thinks that
the proposal you have made is not reasonable or to justify the stance taken by him.

 
see last week notes from Abhishek's notes. 

● Even if they are proposing sth unreasonable- you can frustrate his intention by asking him
to explain the rational behind the offer- break the cycle of action and reaction- Do reality
testing.
Other strategies
● Earlier, it was thought that you should call the other party at your place to negotiate as it
gives a psychological impact (you are more comfortable, while the other party is in
unfamiliar surroundings). Other trick was to go with as many people as possible to
intimidate the other party.
○ This practice has changed now- it will be better to ask the place of negotiation
from the other party- helps in building mutual trust

● Bluff- how to ensure that the information you are getting is true? Although, there is code
of conduct in negotiation, still you can ask question and verify the truthfulness of
information.
● Good cop and Bad cop: In such situation you should realise that their interests are same
and you should check the veracity even if sth comes out of good cops mouth.
● Walkout- people threaten to walk out- most of the times there are chances that it is a trick
to confuse you and make you agree with their demands.

There are situations where in spite of using all these method the negotiation may break down

Why negotiations fail??

1. Complete Breakdown, Known as “Deadlock”

2. When parties have entered into an agreement but it wasn’t able to satisfy most of their
interests

Strategic Barriers to Negotiation

 
see last week notes from Abhishek's notes. 

● Strategic behaviour due to lack of trust: ​Sharing of information is one of the core
requirement of creation of values. If negotiator do strategic bargaining then there will not
be full disclosure of information. Every negotiation has two aspects (1) Creation of value
(2) Distribution. Under first head, parties are expected to share as much info. as they can.
Distribution part is very important, without it there will be no point in negotiating with
the other party. But information asymmetry in these cases creates dilemma. Both the
parties are not sure regarding how much information the negotiator should reveal. They
like to keep certain information to themselves, so they won’t be discriminated against at
the end.
● Principal agent divergence of interest: ​In negotiation you may go with an advocate or
with a group or sometimes you hire a negotiator. Sth has to be done to overcome this
problem.
● Cognitive Barrier: ​When you are in a stressful situation you tend to behave irrationally-
problem of framing any proposal. Risk aversion- Problem in mind of the people to
considers proposals and look at its value- they will feel the pinch of losing less than
pleasure of getting more.
● Reactive Devaluation: ​If you are in a dispute and you have made a plan and the very
next day, the other party offers you the same proposal- will you accept it (Nigga no). In
most of the situation people won’t accept the proposal even if it is in their borderline-
they think there is some information hidden from them that’s why the other party is
making such proposal (Lack of trust).

How can you overcome these barriers?- can be solved with the help of mediator, he can help
parties share information with each other.

Feb 14 (banner)

 
see last week notes from Abhishek's notes. 

Conflict Management

Common reasons of dispute

● Resources
● Lack of clarity
● Personality clashes
● Power and status difference
● Goal preferences- different goals even in same team
These problems are aggravated by breakage of communication

How to respond
● How important is stake/issue
● How important is relationship
● How much time
● Relativity of power- constant struggle

Kenneth Thomos, Ralph Kilmann ‘Conflict mode instrument’- Based on two dimensions (a)
assertiveness (b) cooperativeness
1. Avoidance- refusing to accept that there is a dispute- low on both dimensions or when
power relation is not in your favour.
2. Competing: hard bargaining, refusing to concede- when you have more power in setting,
to assert your will. Not a good response in the long run.
3. Accommodating: soft bargaining; willing to make concessions- Relation are more
important than issue, creates goodwill. Person feels used in the long run. Accept one’s
wrong if power relation against you.
4. Compromising: ready to split the difference- short on time, power relation not in your
favour but not entirely unbalanced (almost equal). Both sides have to make some
concession to reach a middle ground.

 
see last week notes from Abhishek's notes. 

5. Collaborating: try to find an amicable solution- issue and relation- both equally important
to you. Power is balanced. Lot of time to resolve the dispute equal effort from all parties.

15 February
Client Counselling

ADR beneficial for people but for lawyers?

Initially lawyers weren’t happy, when ADR was introduced, lawyers went on strike against this.
In order to pacify them, they were allowed to be mediators and play part in ADR proceedings.

What is the conventional way of client counselling?

There is a way traditional lawyers used to respond to their clients. Generally, people
don’t have too much respect for lawyers. As lawyers started extracting money from their
clients and harassing the people. The traditional advocate used to think that their is
hierarchical relationship between him and his clients. Lawyer is supposed to act like an
expert and should be ready for solution at hand for client.
Second perception was, they have to give an expression to the client that they are very
busy. The advocate has to give a feeling that he is very busy, so he should not give too
much time discussing the case with client.
Client wants a clear cut perception. He doesn’t want to be told 10 things to choose from.
Further the advocate doesn’t spend time discussing the problem with the client.
This process has a problem of asking for money- it will be difficult for lawyers to ask for
fees until he gets a remedy for client. If you lose the case the whole burden is on you.
And the client won’t come to you next time + he will also tell others that you are a bad
lawyer.

 
see last week notes from Abhishek's notes. 

How lawyers can improve their practice using ADR

● Therapeutic jurisprudence and preventive law: instead of doing client counselling in
conventional way, it will be better to follow therapeutic jurisprudence- at meeting he
should interview (listen what the case is about) the client, interrupt very little then the
counselling appear which is suggesting them the future course of action.
○ The lawyer is supposed to look at legal and financial aspect but therapeutic
jurisprudence say there are other non legal issues that are important like
psychological, social, relationship- these issues should also be understood by
lawyers. This scene is known as quality of emotional intelligence “EQ”.
○ Advocate has to do drafting, research, faffing- so it is better that you suggest they
suggest what is best method for client. He should see if the drafting has other
aspects apart from legal issues. Sometimes the drafting affects the client- before
doing these things he must be aware of the goal that his client wants to achieve.
○ Must understand whole need of the client then act: if you give the feeling to the
client that you are genuinely interested in welfare of the client- even if you lose
the case you have won the trust of the client.

● Preventive law: law should be used to clearly lay down rights and liabilities of people-
law should be used to prevent disputes also- this will happen when advocate acts as an
advisor to their client.

Stages to include in these 2 practices:

1. You have to identify issues where there might be psychological impact on your client
2. Determine the legal structure which will have positive effect or minimize the negative
one: now the advocates know the ADR is there- should choose between ADR and
litigation. Since ADR contains a lot of things, it is better to discuss the options with the
client. They should not have a petty point of view, they can make themselves relevant to
the client in any of the process chosen by the party. Not doing this can result in loss of
trust in client-counsel relationship.

 
see last week notes from Abhishek's notes. 

3. Analyse future legal procedure from preventive lense: have to be farsighted what is going
to be ramification of your efforts. Should tell clients, the legal consequences of their
choice.
4. Establish a system for dealing with unanticipated events to avoid non-therapeutic
circumstances- until, unless you are in touch with your client you won’t know when the
client will need your help.

When you have to choose any process-

● Whether client wants to confront Opposing party
● Whether client wants to tell story to neutral 3rd party.
● Whether client wants to testify
● Whether client want to remain detached/ lacks time.

Further, if you win your client’s trust, he/she may seek your constant advice.

16 Feb 2019
Good Faith Negotiation
● Parties have a duty to act in good faith- Ex- Lockout agreements/clauses, can give hints
that you have offers though, while negotiating.
● Non concealment of a material fact is necessary and required in the US. Aimed at
ensuring that the negotiation is fruitful.- ​Duty to disclose
● Need to go with an honest intention to the negotiation table- duty to act in good faith is
there on both the parties.
● Acting on good faith doesn’t mean that you should have to agree to a settlement.
● You are getting something less in ADR than court and therefore you turn down the
settlement and the ADR fails

 
see last week notes from Abhishek's notes. 

○ If the court (in US) feels that you have unreasonable refused the ADR settlement
and that there was no advantage in coming to the court, they would deem it to be
in bad faith (the participation in ADR) and not grant costs in your favour.
( A settlement/agreement is as good as a contract)

Mediation
● Parties employ a 3rd neutral person who will help resolve the dispute amicable and has
no decision making powers.
● Can be defined as facilitated negotiation according to classical model.
● Leonard Riskin- role of the mediator should depend on needs of the parties.
○ If parties want mediator to be passive, ought to be. If more that is demanded, then
mediator should act accordingly.

Riskin Mediator guide ​(roles of mediator)

1. Pure facilitative
2. Narrow facilitative
3. Broad evaluative
4. Narrow Evaluative
Evaluative mediator: mediator to give an opinion on the strengths and weakness of each party’s
case.

18 Feb 2019

4 Quadrant approach (approaches mentioned above)

● If a mediator is simply focusing on litigation issues- it is pure narrow evaluative
approach.
● If encompassing all issues- Broad evaluative approach.
● When it comes to personal interest, people have different needs and sometimes parties
just want empowerment by the process

 
see last week notes from Abhishek's notes. 

○ ADR empowers parties with skill to resolve present issues and help the parties to
solve future disputes.- If you want the mediators to do this role, it is a relational
and community aspect.
○ By the present resolution of disputes- help parties to believe they can solve their
own problems. Moment you think about preventing future course of action- you
have to help them communicate effectively.
○ Mediator has to see how parties share information and can ask for confidential
information by building trust- has to play a passive role by bridging the
communication gap.
○ Mediator should not assume that he has to evaluate strengths and weakness of a
case- evaluative mediation is when parties present their case, present evidence,
inform you about strength and weakness and may give prediction about outcome
of case.
● Community Interest- community aspect is when people resolve their own disputes.
Inclusion of any of these would determine the kind of role of the mediator.
○ Ex- Labour issue: community interest is there- whether any need for discussion on
changes in present relationship between employers and workers etc.
○ Litigation tends to gloss/ignore community interests but sometimes like in
Vishakha etc. courts also take community interest into account.
● Purely Facilitative​- mediator assumes parties are best persons to resolve the dispute
keeping in mind their interests. However, the mediator has to ensure proper, effective
communication between the parties and see to it that they are sharing info. Etc. In
contrast to evaluative process, which seems to be one where justice is rendered and
parties will enter into agreement within four corners of law, this provides self
determination to the parties.
● Evaluative mediation: mediator believes he has quality to evaluate. Parties present facts,
mediator asks them to present evidence; inform parties of strength, weakness of their
case, predict possible outcome in court.

 
see last week notes from Abhishek's notes. 

○ When the mediator evaluate the case and gives a prediction against one
party-quality of neutrality would end up being questioned.
○ What about liability of mediator for wrong evaluation?- ends up with lawyers,
even in courts offering mediation 10,15 years of experience is required.
○ If any system accommodates evaluation then non-lawyers become excluded as
mediators. But theory of mediation says any neutral 3rd party can become a
mediator.

Facilitative mediation Evaluative mediation

● Facilitative mediation is in tune with ● Justice can be seen to be rendered

the philosophy of ADR. Out of the within four corners of law.
box thinking is encouraged. Parties ● There are other processes, like early
feels included. neutral evaluation that are available to
● No evaluation here, mediator helps the parties.
reach a settlement only. ● Mediation is meant to provide a
platform to resolve the root cause of
the problem
● Since the case is evaluated with
mediator- parties will enter an
adversarial stance and will try to put
forth a strong case.
● No settlement in some cases. If
mediator evaluates and tell party they
have a good case, they are likely to go
to court or might engage in positional
bargaining.

 
see last week notes from Abhishek's notes. 

19th FEB 2019

● Parties should think what role they want mediators to play as different skills are required
in facilitative and evaluative mediation.
○ Evaluative mediation​ requires some knowledge of law, to tell parties the pros
and cons of their case.
○ Parties present their statements to each other and mediator- then holds a caucus-
in caucus parties discuss their case with the mediator.
○ But adversarial tendencies creep in- as parties start hiding information.
○ In ​facilitative mediation, ​parties get a good atmosphere to discuss. Parties create
a settlement to cater to their needs.
○ In facilitative model anyone can be a mediator as no legal opinion required.
● Voluntary ADR- ​Right based and interest based- people sometimes have a dispute
resolution clause- they themselves opt to resolve a dispute through one of ADR process-
this can also be enforced by any law being a part of the contract.
● Mandatory ADR- ​it is against spirit of voluntariness of ADR- in early 1900s Roscoe
pound advocated for move to ADR- but no one did LOL.
○ So govt mandated ADR to encourage people to opt for ADR.
○ In pound conference- this conference called by Bar to discuss why people have a
problem with the judiciary
■ In the conference, prof. Sander Introduced a desire to search for
appropriate methods of dispute resolution- laid down concept of multi
door ADR.
■ Civil Reform Justice Act and ADR Act- basically to introduce ADR
through courts- people were not opting for it.
○ Why do we have mandatory ADR?

 
see last week notes from Abhishek's notes. 

■ Initially ADR processes introduced as pilot programmes- people were not

interested, they didn’t want to experiment- people prefer established
modes.
■ When parties are in a dispute, they have adversarial positions- they are not
willing to meet, settle
■ Thus, made mandatory. Sander- mandatory ADR is mandatory only at the
first level i.e. have to opt for it but once in the process- no coercion
○ Either courts direct parties for ADR or laws keep sth out of ADR. Ex.
Commercial Courts Act- pre litigation ADR- certain category of cases from going
to the court directly- some shortcuts were used to settle the dispute. Further, it is
well settled that people don’t have absolute right to approach court.
● 3 Types of Mediation
1. Pragmatic- p​ rincipled negotiation- mediator to follow principled negotiation
methods.
● Stages of Principled negotiation
○ Depersonalization
○ Identifying interests
○ Generate values
○ Identify objective criteria to help settle where there are directly
conflicting interests.
● Any type of model is fine i.e. evaluative/facilitative or rights based.
● Mediator ensures that parties stick with the process and settle differences
and conflicting interests.
2. ​Transformative model: e​ mpowerment and recognition are goals. Aims at transforming
participants in dispute- mediator talks to parties and helps them recognize each others interests.
Individual disputant should become rational to understand what is at stake, their interests, future
prospects etc.
● Recognition involves understanding opposite parties needs, interests as well.

 
see last week notes from Abhishek's notes. 

● Mediator is only to ensure that both of these goals are achieved. Parties would then
become capable to handle any future dispute by themselves.
● Dispute lies in narration of people.
[3rd model, narrative, discussed on Page 27]
20​th​ February

1. Pragmatic Mediation
This is a problem solving method. According to theory, it’s facilitative model but in practice
certain of the 4 stages of Principled negotiation involves reality testing (while generating
values). This is an evaluation method and therefore hybrid.

Owen Fisk, imbalance of power

This ​method is a pure commercial dispute resolution method. In this model nothing can be done
for the existing imbalance of powers between parties. There can only be an attempt to
ensure a fair process by allowing parties to participate actively.(analogy, even in court
there can little be done wrt imbalance) There are some strategies to protect the parties
from the imbalance-
● Parties can refuse to settle
● Mediator can help the weaker party in a private session by remaining neutral to
the parties.
● Principle of Self Determination and Autonomy ​Parties have chosen the ADR
process on their own. Parties are aware of the shortcomings of the process and of
the limitations. The limitations/shortcomings are told through client counseling.

Confidentiality, ​most of the legislations make these proceedings and communications

throughout the process confidential. There are certain qualifications attached to it.

Legal advice by the mediator, ​Riskin would say yes​ ​. It however depends on needs of parties.

Signature​, Mediator needs to sign the final settlement in order for the settlement to become a
decree of civil court. If it’s not signed, it is not enforceable. Mediator will not sign agreement if

 
see last week notes from Abhishek's notes. 

it’s not valid, illegal, coercion etc otherwise mediator would get in trouble. Agreement would
end up in court and will be checked before it’s decreed.

Transformative Model

Essence of mediation was getting lost, People started questioning the problem solving method as
it was like a pre-trial settlement. Where the judge tried to settle the matter (USA), very much
similar like order 23 CPC. Pre trial was conducted by judge, This model was leading to

1. Inequality and imbalance of power.

2. Giving an illusion of satisfactory solution

Bush and Folger said, promise of mediation i.e have to give something more than satisfactory
unless transformation not done,

Two Important aspects of TM are, recognition and empowerment. This model involves, parties
can solve their disputes by themselves by transforming the individual by making it understand
and accepting the present dispute. Transformative model is the most facilitative. People are best
judge of their problem so role of mediation ends with after these 2 steps. Individual relationship
and societal problems must be transformed. Builds capacity to deal with future disputes..

Recognition and Empowerment can be achieved if mediator-

● Listens to both parties

● Gets parties to talk
● Make parties self reflect
● Make parties understand each other’s problems

Difference between Pragmatic Model and Transformative model-

1. In Pragmatic, conflict is struggle over limited private resources

 
see last week notes from Abhishek's notes. 

2. In Transformative, there is not as much struggle, there is opportunity for growth and
transformation

Goal of Transformative is, empowerment and recog., know what you want and why you want, if
better understanding developed then successful. It makes better human beings.

Wrt power imbalance,

1. Transformative, its not the concern, imbalance impacts only when rights and duties are in
question. Mediator not to decide upon imbalance but transform.
2. While pragmatic perpetuates inequality, used as a tool to oppress weak(criticism).

Criticism of Pragmatic model by Transformative model,

1. Trans. Controls emotions to facilitate settlements as end goal is settlement.

2. Mediator has a paternalistic approach while proposing solutions, become interventionist.
3. Transform model ​sees conflict between parties as an opportunity for growth and not see it
merely as a tussle over resources.

Transformative on PSM says that Mediation is like a businessman who comes to achieve a
settlement. Focuses only on issues which can be addressed easily, harder issues are ignored. The
mediator is paid only for reaching a settlement. In case parties don’t settle, mediator in order to
get paid starts acting paternalistic, interventionist. Like a court. Party’s autonomy and self
determination are lost

However in transformative model, mediator takes the back seat. Parties drive the process. Parties
can discuss the past. After recognition and empowerment parties decide whether to settle or not.

21​st​ Feb

Model 3- Narrative model-​Win slate and Gerald Monk. Inspired by Derida and Fucco. Post
modernistic discourse is a major influence.

 
see last week notes from Abhishek's notes. 

● Model believes dispute lies in the narrative/story. story is built/constructed by

various forces.
● Dispute actually occurs in the narrative of the parties. One party makes a narrative
around the other party with their own assumption. This is called “a conflict
saturated story”.

Role of the Mediator (create an alternate story which is not in conflict, basically cant be neutral)

● Mediator needs to deconstruct this story/narrative. Find spaces and gaps in the
story. Parties create an alternative narrative or story about the relationship.
● Understand and explore alternate stories that pre existed conflict story
● Mediator has to expose the thinking pattern of the party. The model does not
require the mediator to be neutral, mediator has to align with both the parties in
order to understand their stories, create alternate stories.
● Goal is deconstruction of conflict saturated story or creating an alternate story.
● Settlement is not the main goal.

The model ​does not believe in imbalance of power. ​Foucalt​, power is knowledge, power can
always be renegotiated. Power is not coercion. Moment story is exposed, power can be re
negotiated. There should be a holistic understanding of power, power can be exercised through
different means, nothing is objective as everything is subjective. Power can be re-negotiated.

How does one create an alternative story in a narrative model?

The parties have to be disassociated from the dispute and their minds needed be opened for
different perspectives. Model is time consuming. Parties might get offended as their cherished
perspectives are being challenged by the mediator. Parties also write down how they feel in this
process.

 
see last week notes from Abhishek's notes. 

Transformative model is nothing but the depersonalization of PS model. Purposes of the 2

models are different. PS purpose is settlement while transformative is de personalization. Role
plays are only used in PS model.

22​nd​ February

Legal and Ethical issues in mediation.

Issue of Confidentiality, ​confidentiality is a cherished quality of all the ADR processes. It is

needed because

a. For development of trust

b. It ensures third party acts in a neutral manner.

In labor law, council officer has to send a report to the government regardless the outcome.
Therefore it is acting as an agent of state and thus not a neutral person. Mediator has to be
neutral, sending of reports affects confidentiality as it obstructs free flow of ideas.

But confidentiality in some case can lead to abuse as well. E.g. info on crime, wants to commit
deception. Full confidentiality is not a rule. In some cases the med. Is not bound by
confidentiality,

1. If one party conveys to other that they are about to initiate litigation e.t.c.
2. Crime deception
3. In case of fraud by one of the parties.

In countries where the mediator can be held liable, the mediator can be called as a witness

Moti Ram v. Ashok Kumar​ [2010],

● court annexed ADR within court, court connected ADR services. Services were not
provided by court.

 
see last week notes from Abhishek's notes. 

● In family dispute, role of mediator was to inform court that there was no settlement.
However mediators were sending detailed reports to court with reasons for failing. Court
however upheld confidentiality. Court said, role of mediator is to send a basic report, as
mediation proceedings are confidential. Agreement if reached may be sent to court else a
brief statement would be sufficient.

S​alem Bar Assn v. UOI

● S 89, court should explore the possibility of settlement. How can the court which is
involved in a trial also be involved in ADR. Court will get prejudiced
● No confidential nature, anything in mediation is ultimately gets discussed in court.
Court, Judge only to refer parties, but with consent.. S 89 breaches confidentiality. Parties are
free to withdraw thereby ensuring confidentiality

Perry Kansagra v. Smriti Madan Kansagra

Exception to confidentiality, custody and guardianship are qualified confidential and not
absolute.

SC, custody, guardianship of children family courts act. Mediator appointed, councilor speaks to
the kid and then sends report to the mediator. Can these reports be send to the court where there
is a failure of mediation?

Court, parties were aware that counselor was appointed, so cannot later object. Mediator can
appoint councilor. Report would be admissible only if councilor had been appointed by the court,
report includes discussions between parties, opinions of child e.t.c. which can prejudice the
court. Court held that, it cited s 12 of fam court act, parties were aware, as such no irregularity
and the report would be admissible before the court.

Mediation is an agreement under Contract act, alternative for arbitration under international law.

● Most countries don’t have any law on mediation, hence UNCITRAL came up with the
UN Singapore Convention of 2018. “Enforcement of mediation settlement agreement”.
Must honor on reciprocal basis

 
see last week notes from Abhishek's notes. 

● NY Convention applies only to international commercial disputes. (Art 1 excludes

personal, family, household and employment disputes from the convention). If any
country has a law that equates settlement with decrees of civil court then in that situation
this convention would be inapplicable.

Requirements, Settlement agreement needs to be in writing, with evidence that the agreement
was arrived at through mediation. (Requires signature of mediator and letter from institute)

25 February

Mediation is a non binding process, parties can walk out whenever want to. However settlement
is just like contract. If its breached, parties have to approach a court. UN Convention on
Mediation only covers mediation award and not agreement to mediate. (enforceability of only
settlement agreement).

When the convention states that settlement is enforceable , it also mentions the grounds for non
enforceability, which are-

1. Against public Policy

2. Related to matters which could not have been referred to mediation as per the laws of
country.
3. Parties to agreement incapable of having settled.
4. Duty/Role of mediator- if shown that mediator was not acting in a neutral manner, then
unenforceable.
5. Duty to disclose, mediator to inform any conflict of interest. Bad faith.

If these grounds are not present, the settlement is to be treated as a decree of a civil court. (india
hasn’t signed it yet) (can read Booze Allen Hamilton case on this one)

Neutrality of mediator-

1. Treat parties equally.

2. Should have no interest in subject matter of dispute.

 
see last week notes from Abhishek's notes. 

There are 2 perspectives to neutrality of mediator, procedure and content. Fair procedure is to be
ensured by mediator. However should the mediator also ensure fair outcome?

4 kinds of fairness(have to see about the process fairness)

1. Structural (STRUCTURE AND RELATIONSHIP)- structure of dispute and relationship

between parties, mediator has to take parties as they come.
● Mediator has little or no control over disparity
● Mediator can still give advice to overcome disparity.
2. Procedural(minute narrow)- this is in hands of mediator. Should ensure process to be
followed is fair, equal opportunity is given to each party. Usage of notices, caucuses,
presentations etc play a role.
3. Process-broad
4. Outcome fairness-regarding content of settlement. Should mediator tray and ensure that
the outcome is fair? 2 school of thoughts-
● Outcome should be in hands of parties as mediation is only concerned with
process. (Facilitative)
● Mediator’s role is to prevent asymmetrical settlements. (Evaluative)

According to RUHI, fair process would itself ensure fair outcome.

Mediator has an obligation of duty to not disclose and honor confidentiality. Mediator can be
held liable in court if it’s found that the mediator has breached confidentiality.

Like the manner judges have immunity, do the mediator be also immune? 2 cents-

● Should be immune like judges.

● Mediator’s role is different from adjudicatory role so cannot claim the same status.

2 situations,

 
see last week notes from Abhishek's notes. 

a) Voluntary ADR, client has a relationship with mediator. Client is paying fees. Mediator
can be held liable in cases of negligence, non disclosure of conflict of interest by
mediator and on breach of confidentiality.
b) Court annexed ADR, Where a mediator is working pro-bono, then it should be
immune(High court rules). However name can be removed from panel.

Mandatory Mediation

ADR process is ​self determined by parties. When parties have come to court for adjudication,
how can they refer it to ADR. Mandatory Mediation goes against the core of ADR as it infringes
the party autonomy.

However parties are aversed to the idea of ADR, as it is perceived as a sign of weakness by other
party. Shows, the party is proposing ADR because the party has a weak litigation case.

26 February

Interplay between neutrality and confidentiality

Requirement of good faith participation

Mediator is the manager of process, when parties are not appearing in mediation, mediator to
inform courts. Mediator is the manager of process. 2 cases where there is mandatory ADR

1. Court required mediation

2. Statute required mediation.

Major issues in both the cases-

1. When parties don’t appear in court

2. When parties are sitting with a non cooperative attitude

 
see last week notes from Abhishek's notes. 

3. When the parties reject suggestions of mediator on purpose.

Requirement of good faith mediation- number of jurisdictions have mandatory ADR.

Mediator to inform court if

1. Parties not cooperating, non appearing before mediation.

2. Parties present but are uncooperative.

3 major issues and their solutions are-

1. Mediator is not breaching any duty, when one party appears and other is non appearing,
then harm is caused to other party. In such a case the other party is penalized for non
attendance. In extreme cases, court can invoke power of contempt. (However ADR are
voluntary in nature, moment mandatory nature is attached, confidentiality is breached)
2. There is difficulty in deciding when parties are being non cooperative, problem is also
when mediator complains of non participation, loses neutrality.
3. In some countries if parties cannot improve by 10% of mediator’s solution, parties shall
be penalized and would be called bad faith.

Problem in determining Good Faith participation is that, is it mere participation or should it

reflect on settlement as well.

Problem with mandatory settlement,

1. Mandatory ADR, adds another tier to dispute resolution. Longer process and increased
cost as a whole(if go for litigation).
2. Settlement pressure, power of mediator to report bad faith, to avoid court intervention
affects confidentiality. Parties are indirectly forced to settle.
3. Judges mediating creates extra pressure for the parties.

Sandal, mandatoriness should be only at first process and then it should be voluntary. Mandatory
attendance vitiates voluntariness.

 
see last week notes from Abhishek's notes. 

Med-Arb Process(Mediation-Arbitration) (Hybrid System) (MEDOLA) (MEDARB)

Mediator tries to settle dispute, if no chance of settlement according to mediator then he converts
it into artificial proceedings and acts as an arbitrator, passes an award. This is called Med-Arb

Benefits of the system are-

1. Takes the uncertainty into account and finally settles the case.
2. Saves cost and time of other parties, if problem is not settled then parties don’t have to go
in for settlement again through different procedure in arbitration.

There are 3 Drawbacks to the system

1. Parties have no recourse after award passed, courts cannot sit in appeal over award.
2. Settlement may be sub optimal. No free discussions between parties and therefore parties
are worried that mediator will arbitrate and pass the award. Due to this pressure (called
settlement pressure) parties may enter into sub standard settlement. Ideally to avoid this
there should be different mediation and arbitration, like in pre judicial arbitration process.
3. There is issue of confidentiality and neutrality

Benefits,

1. Takes burden off courts

2. ADR is state sponsored, so more.

Legal Service Authority Act, ​codified Med-arb for public utility services, therefore needs
speedier resolution.

A different approach can be Arb-med-arb (S 30 Arb. Act), after mediation go to arbitral tribunal
and ask them to ratify settlement, give it status of an arb-award.

 
see last week notes from Abhishek's notes. 

MULTI DOOR COURT HOUSE

Different processes at court promote ADR through courts. Screening department evaluates file
and prescribes best method for the parties. Helps in Court and case management, Multi door
court segregation happens in the beginning. Only those cased go to litigation that are apt for it

Problems,

1. In cases where advocate has referred to litigation, multi door court house has referred to
mediation, then faith in advocate by the parties is shaken.
2. Screening department that recommends resolution process requires skill.

Ethical issue-mediator can be held liable for mal performance

Ethical issues at mediator

Most of the countries have a code of ethics for mediator. Code of ethics regulates mediators in
India. In India 40 hours of training required for a mediator to be skilled. ADR is court annexed,
so courts regulate.

There are different kinds of training,

● Theoretical
● Theoretical and practical.
● Evaluative, mediator is evaluated post training
● Continued education(periodic checks)

In India there is theoretical training and 10 successful mediations.

2 approaches to mediator selection,

● Private mediator seeks a mediator who is qualified and well versed with subject matter(
Evaluative)
● However he necessarily need not be a subject matter expert, mere facilitator(facilitative)

 
see last week notes from Abhishek's notes. 

Evolution in UK, ​there was a Lord Wolfe committee in 1994. It published 2 reports titled under
‘access to justice’, meant to bring reforms to the civil justice system( in 1999 and 2002 CPC was
amended under the influence of this report). The report identified 3 problems, cost, complexity
and duration/delay. Report introduced-

a) Pre action protocol

b) Judicial case management
c) Introduction of ADR

objectives of reports were,

a) Avoid litigation, encourage settlement

b) Avoid adversarial attitude
c) Reduce cost
d) Reduce delay
e) Reduce complexity

Pre Action protocol​ (a)-

1. Pre action protocol, prior to trial/litigation, there should be a discussion and there be
co-operation between parties.
2. Used principles of ADR and encouraged settlement. There should be full discussion of
issues and nothing happens, then go lit.
3. Identify issues at an first stage to avoid cost and delay.

JUDICIAL CASE MANAGEMENT, ​In present model, judiciary is passive, there should be
tracking of cases, time allotted for different tracks. It can be checked whether courts are
following timelines or not. Judiciary to take control of the entire process.

 
see last week notes from Abhishek's notes. 

27​th​ February

Lord Wolfe’s report, ​was concerned with how ADR can improve civil litigation. Change in his
interim and final choice.

● Interim report, court should not send for ADR, parties have already exercised their
choice, duty of court to decide, courts should encourage settlement.
● Final report, court should have power to impose penalty for non co operation. Kind of
mandatory process.
● Introduction of ADR (C),​ ​in small claim cases there can be mandatory ADR

INDIA

Malimath committee report+LCI 127 and 129, need for large scale amendment of CPC 1999 and
2002, CPC amended S.89. SC-Nariman committee report on administration of justice concluded
that there is a requirement of addressing complexity and delay.

1984, experiment in Himachal HC, used conciliation to rectify delay. Mandatory ADR, only if
no settlement then proceed to litigation, the experiment was successful. However government
didn’t accept this proposal.

However later Arbitration and Concilliation Act was passed and India adopted UNCITRAL Arb.
rules in 95.

Section 89 to be read with 010 R1 (a) and (b), this borrows language from UNCITRAL. S 89 is
mandatory, court will examine and if feels that the matter can be settled, shall refer it to ADR.
(Court annexed ADR was introduced by us tho).

89(1), ‘court shall refer the parties..’ court shall see,

● Possibility of settlement
● Formulate terms of settlement
● Take parties opinion
● Can re formulate in light of opinion

 
see last week notes from Abhishek's notes. 

R10O1A,- after completion of pleadings, stage of admission and denial of docs, courts to analyze
if it should frame issues or order the issue to be referred to ADR under s 89

S 89, judicial settlement to be governed by Legal services authority act. Once case in court refer
to settlement judge, where possibility of settlement shall be explored. Ruhi’s opinion, court may
or may not be involved in settlements because philosophy of ADR is judges not to be involved in
settling cases, it will become an evaluative process, judges might exert pressure.

Salem Bar Association case 1​, committee to give effect to S 89. All amended sections were
challenged. S 89, MANDATORY OR DIRECTORY?, S 89(2), ARB requires mandatory
settlement.

S 89 cannot be implemented as it has been referred to a committee formed.

Salem Bar Association case 2,​ committee submits 3 reports-

a) How can S 89 be implemented? (how can language of S 89 be fixed?)

b) Court and case management in India
c) How mediation is to be conducted?

Court, Language of S 89, use of ‘shall’ and ‘may’ are not contradictory. order 10 rule 1 (a) uses
shall and Sec 89 uses may and shall.

● Court says the word shall is for formulating terms of settlement, may for reformulating
terms of settlement. Thus the duty is mandatory.
● Terms of settlement cannot be formulated at an early stage by the court without
discussion with the parties, otherwise what the ADR professional will do..

Feb 28

Salem bar association (contd.)

● SC approved recommendation of the committee, drafted rules for ADR, mediation and
case management. Committee looked at challenges to the amendments in first Salem Bar
Association case.

 
see last week notes from Abhishek's notes. 

● s80 CPC, PURPOSE IS TO AVOID LITIGATION. S 80 if effectively used will cut

down on litigation. Govt officers must be designated to respond effectively to notices.
Apply their mind. In govt cases, there is no personal liability, and courts don’t impose
costs on govt, therefore wasting of taxpayer’s money. But courts now will levy heavy
fines on govt departments if they do not respond on time and also recommend the
department to punish the concerned officer.
● Judicial impact assessment, Court said, bills when introduced should be accompanied by
reports on its impact criminal, civil liability, no of courts, judges, staff needed. A new
law should only be passed when its shown in assessment that its required.

In a court annexed ADR, a summary of dispute is sent. Another school of thought was of the
opinion that the entire case recordings, pleadings ought to be sent for a more comprehensive
understanding. But sending the pleadings may replicate the polarization which is there in court.
Replicating the adversarial stance, focusing on the legal dispute.

● S 89, issues may and shall, terms of settlement. The procedure mentioned in S 89 CPC is
not in the arbitration act. S 5 of the arbitration act says that the procedure is to be
determined by the arbitration act.
Can CPC(general act) override arb. Act?
SC referred to ANAND Raju’s case, while the appeal was being heard in a Raju, the court
referred them to arbitration if they want to go for it. If there is no settlement under court
annexed ADR , matter returned to court under O10 Rule 1(c). ideally same judge ought
not hear the case now. But SC says that same judge can hear the case therefore only
making an opinion on whether the case can be settled when referring.
● Fees, ​Committee recommended it that the process shall be free where court mandates it.
If parties are made to pay, it will disincentivize the ADR process. There are however Lok
Adalats and are free where it is mandated Refund of court fees when settlement under the
act. This provision can be extended to ADR process also.

 
see last week notes from Abhishek's notes. 

● There shall be no confidentiality if the court is to decree the settlement. Court said, it is
not imperative upon the parties to approach the court, they can settle the case amongst
themselves.
● Mediation and conciliation act, are mediation and conciliation same or different?
Court-mediation is facilitative while conciliation is more pro active, parties when unable to settle
in conciliation, conciliator can draft a settlement statement and present it to the parties.
Parties have the option to accept or refuse, therefore more pro active. There is however
no uniform definition across the worlds, however courts maintain difference between
both the processes.

Court- need to have training for ADR processes, parties should also be informed of the option of
ADR process, after completion of pleadings.

● in some category of special cases, like family law cases, refer it to conciliation as
relationship needs to be preserved.
● In cases where there is plain simple compensation, no legal complexity, refer it to Lok
Adalat.

Courts should allow parties to opt for a process, 30 days time period should be given. Parties
should not be referred to any process without their consent. If parties disagree to all process,
court can refer them to mediation, lok adalat or conciliation, depending on demand. This
procedure is given in Legal Service Authority Act, where if even one party or court want to refer
to ADR, can do so without consent of other party.

1 February

Court and case management – rules, at the stage of trial and appeal.

1. Tracking of cases, there are total 4 tracks,

Track 1 : Family disputes, rent, eviction (9 months)
Track 2: Money Disputes (12 months)
Track 3: IPR, Copyright, Property (24 months)

 
see last week notes from Abhishek's notes. 

Track 4: Any other case (24 months)

2. Court managers are appointed. Initially they were appointed from a management background
but they lacked the knowledge of how courts worked. Officers to keep time of track. Keep
track by asking senior judge. Fixation of time when issuing of notice (Summons).
Consequences of non appearance etc kick in after a time. Need time limits for written
statement, replication etc. Courts should follow the timelines.
3. Service of summon by plaintiff, Order 5: Plaintiff can serve summons through courier. If
returned with note that defendant refused – if found false, perjury charge. If service of
summons fails; order for substituted summons must be made.
4. Previously cases were called by bailiff, which was a waste of time. In high Court, Supreme
court - Registrars carry out non judicial functions (also some judicial functions). Saves
judicial time.
5. Interim order, abused by parties. Ad iterim injunction, ex parte injunction – defendant when
challenges, Plaintiff seeks adjournment to prolong the order. It was recommended that such
injunctions be vacated if not defended. When there are no reasonable grounds, vacate
injunction order
6. In CPC, a lot of time is wasted on interlocutory applications. It is unlikely that parties,
advocates would appear in time before the LC – fellow advocates setting etc.
7. Examination in chief on affidavit. Cross Examination before the local commissioner, to be
allowed by the court. In case of objections to questions; referred to court. No judicial powers.
8. Court: Cant appoint advocates as local commissioner. HC to conduct exams to appoint
commissioner. Appointing commissi oner only where recording of evidence lengthy. Court
should give short dates.
9. Costs should follow the event as arule. Not awarding the exception. Court should be strict
and give reasons for not awarding exceptions.
10. Perjury: False allegations; contempt of court. Prosecuted. After 3 adjournments seek costs,
order 17. Need cogent reasons to seek an adjournment.

 
see last week notes from Abhishek's notes. 

Afcon Infrastructure​ (2010)

Dispute between parties; issue was that one party moved an application under section 89 for
arbitration Matter referred to arbitration inspite of objections by other parties. Original Petition
Rejected.

S 89: ‘shall’ which means Mandatory ADR. OP’s objection rejected. Framed issues and referred
to arbitration.

In SC main issue was without consent referred to arbitration under S 89 and the problem with S
89

Two problems of section 89:

Problem 1) Typographical error, Definition of mediation and judicial settlement confused.

General definitions of M and JS are different. Mediation not done by court while judicial
settlement is done by court.

Under s 89 Legal Services Authority Act may apply in the absence of laws. Mediation is not
done by a judge but a qualified mediator. True definition of judicial settlement, settlement
arrived between parties by the help of judges also known as pre lit settlement. opposite (kind of)
definition given under 89.

● More apt, JS-narrow settle, only legal issue

● Mediation- all issues

JS subset of mediation

 
see last week notes from Abhishek's notes. 

18 Mach

[Law Commission of India Report post Afcon judgement Recommended amendment of section
89. Still Not yet amended. In interpreting the section, ratio of Afcon case is used]

Problem 2) why courts formulating terms settlement?

● Court, can only do summary proceedings, cannot formulate terms of settlement. S 73 of

arbitration and conciliation act, conciliator can draft himself Terms of Settlement. S 89
wants Court to do the same at the initial stages only. However if we ask court to draft
settlement, it will increase burden, motive is to decrease burden. Also since the matter is
to be referred to arbitration, no point in courts to formulate settlement.
● Terms of settlement task of concened person i.e mediator, Lok Adalat or the judge in
Judicial Settlement.. court followed Salem-2, said only brief the nature of disputes,
cannot draft terms of settlement.
● Whether ref to ADR is mandatory, word shall is used.
Court, S 89-“where it appears’, courts have to mandatorily explore possibility of settlement.
norm is to refer, exception is to not. If not referred then have to give a reasoned answer.
E.g class action cannot be referred to arbitration. Court has given guidelines on deciding
the most suitable method. For referring in Arbitration, consent of all parties is required,
that too in writing. Parties can file joint memo/affidavit.
Since after award, parties have limited rights of review and revision, written consent is required.
Same rule is followed in conciliation. Written agreement is required. Moreover
conciliator has to be appointed within 30 days.

19​th​ March

● Concilliation

 
see last week notes from Abhishek's notes. 

Part 3 of arbitration and conciliation Act lays procedure for conciliation. One party sends invite
to other party for conciliation. If no reply, then it is deemed rejection. Consent of both parties is
required. Settlement is as good as a decree of civil court.

● Types of cases and their referral

If complex case, send to mediation
If only application ​of legal principle, then to Lok Adalat.
Part​ies want to settle and judges guidance is required, send to Judicial settlement.

● Mediation is free, Judicial settlement/Lok Adalat is also free. In mediation and lok adalat,
court fee also waived.
● Lok Adalat, it is a pre litigation process. When parties are in court and parties want and
court feels after hearing reluctant parties, court can send the case to Lok Adalat, even
without consent. There are no expenses in Lok Adalat, court still has control over the
case and there is no court fees.
● Stage of referral. Should not be a blanket referral other than of O10. Once evidence stage
starts judicial mind should be applied in referring, parties might be delaying. However in
matrimonial dispute, should not follow 010
● The most suitable time for referral is after filing of plaint and notice served to defendant.
As after the pleadings, parties get hardened.

DK Srinivasan v Deepa​, in matrimonial dispute, there should be a pre litigation ADR

Mediation rules, 2004

All HC have own rules. Rules in DELHI

● In district court, run by judge, has a panel of Mediator, which includes judicial officers
and lawyers. They render free service. Parties are asked to report to mediation centre and
there they are assigned mediation.

 
see last week notes from Abhishek's notes. 

● In High court, it is run by advocates(started in ahemdabad). If it is referred by court, then

its free, if referred by parties, then have to pay fees.
● Delhi government and HC formed Delhi Dispute Resolution Society for pre lit cases.
Services are free. Mediators are given training and the society has no coercive powers to
ensure presence.

Post Mid-sem
15 April
● The 1st legislative council for india was formed in 1834, followed by the first Indian
arbitration act of 1889.
○ Prior to this act also arbitration was used by panchayats to resolve disputes
between individuals (med-arb).
● Two major events
○ NY convention
○ UNCITRAL model law 1985
○ The purpose of these was to have uniform law of arbitration all over the world.
Other methods were not backed by such powerful strong conventions.
● Foreign Arbitral Award: ​if you want to enforce an arbitral award passed in a country in
any other country- it is called enforcement of foreign arbitral award.
○ Section 13 of CPC- res judicata is also applicable on foreign decrees- shows that
foreign decrees can also be enforced in other countries.
● NY Convention provides for ​presumption of validity ​to an award passed by a tribunal
○ It is important because it has the power of divesting the court with jurisdiction to
decide a case
○ Presumption of validity shifts the burden to the side who is claiming that the
award is invalid
○ Anyone who alleges it is invalid has to prove it + court by itself cannot go into
merit of the case/agreement.

 
see last week notes from Abhishek's notes. 

● UNIFORMITY
○ There were different provision regarding arbitration in different countries which
dealt mainly with commercial disputes- need to improve the system- So
UNCITRAL provided model framework, it was expected from the countries to
adopt these laws and bring their laws in conformity with it.
● Why 1996 amendment was needed:
○ To combine the three different laws which were governing arbitration at that point
of time in India
○ UNCITRAL provided for conciliation- wasn’t there in 1940 Act
○ 1940 ACt gave lot of power to the court in supervising the arbitration- prior
confirmation of court was needed for an award to attain the status of a decree.
○ Arbitrators weren’t required to give reasons for their decisions
■ Can be misused by arbitrator
■ No grounds for appeal were there + if any award was challenged, courts
had to go in in details of the case.
● Changes introduced by 1996 amendment
○ Presumptive validity of arbitration agreement and award
○ Restrictions were imposed on the wide power of the courts- which were there in
1940 Act
■ Courts weren’t supposed to interfere by their own
■ Grounds are available under every law- where arbitral award can be
annulled
■ Courts have to understand they are not sitting as court of appeal
○ Judicial Minimalism- ​minimize the role of judiciary- Courts should not interfere
until required by ADR law, weren’t supposed to act like they do in civil matters.
○ Duty to supplement and expedite arbitration- depending on the facts- if parties are
delaying the procedure (Section 8 and 11)
● Thing that should be there for arbitration
○ Must be an agreement to arbitrate

 
see last week notes from Abhishek's notes. 

○ Dispute
○ Constitution of a private tribunal
○ Adjudicatory role of tribunal- judicial body, judicial process- opportunities to
parties to present their case on which case must be decided.
○ Intention of the parties to be bound by the judgment
● Processes similar to arbitration
○ Mini trial or early neutral intervention- ​choose jury, make brief presentation of
their case then the jury/neutral evaluator will present his opinion on strengths &
weaknesses of their case- only in advisory opinion
○ Expert determination- ​can be binding or non binding. Most of the time
non-binding- parties select people who are expert in the area of dispute-these
experts conduct an independent investigation into the dispute on the basis of his
observation, supposed to announce the rights and liabilities of parties- non
binding. Parties do it to understand their position and plan future course of action.
○ The protection of NY & UNCITRAL only available for arbitration not these
methods.
● Types of arbitration
○ Ad-hoc arbitration​- Parties choose to arbitrate- party autonomy is maximum
under this- have to understand that parties want arbitration when they are in
dispute, during dispute it becomes difficult to have consensus regarding
timing/venue
■ Problems:
● Requires a lot of cooperation
● It is cheaper but very difficult to decide upon procedure/rules of
arbitration
● Have to arrange for their own secretary ​+ since it does not have
any institutional backing, can be delayed by parties as well as
adjudicator.

 
see last week notes from Abhishek's notes. 

○ Institutional Arbitration: Just write in your agreement which rule/institution you

want to be followed- already have rules, procedures + have well trained
arbitrators. Parties will also be in control, Other benefit includes quality of award
will be good. Some of them also do internal evaluation of award so it won’t be set
aside by the court. The Problem with this is reduced party autonomy and
increased cost as not only are you paying for the resources, but the fees of the
arbitral institutions as well.

18th April
● Why people go for arbitration??
○ Party Autonomy: ​able to choose judges, venue, time. Though the arbitrators are
chosen by the parties, they cannot act as their agent. Right to chose is important
because we can choose someone who is an expert in the area of dispute- But
expertise of the judge is not the sole criterion - he should be good at adjudication
i.e., should listen to the parties and look at the material presented by the parties.
■ Limitation- ​expertise of the arbitrator will override the presentation by the
parties.
■ Right to choose venue and time is more important than choosing the
judge- convenient for the parties.
○ Finality of award: ​fewer remedies are available against judgment of the tribunal.
In civil- there are lot of options/remedies available to the parties- make it a long
and cumbersome process.
■ Only one appeal is there in arbitration- mostly used for commercial
disputes which requires speedy disposal.
○ Presumption of validity of arbitration agreement
○ Confidentiality​- this aspect is completely absent in the civil process.
Confidentiality in arbitration can only be breached in special circumstances.
● Problems with arbitration:

 
see last week notes from Abhishek's notes. 

○ There can be a situation where arbitrator can wrongly apply the law and given the
few options available after the decree has been passed- can be problematic for
parties. Although it can be challenged on the grounds mentioned in the statute but
then parties have to start from zero again.
○ Confidentiality​- disadvantage to the larger public in cases which can affect
public in general.
○ Cost & Speed are not available in ​institutional arbitration​. Institution requires a
lot of checks and processes, as they want to ensure that arbitration under them
will not get questioned at a later stage + you are getting everything ready made,
which increases the cost of arbitration
○ In Ad hoc arbitration in India, arbitrators are judges they are conducting
arbitration like normal courts- time is wasted + these arbitrators also charge
percentage fees- this makes the process expensive.
○ Limited power of tribunal- creature of arbitration agreement- unlike courts who
have some inherent powers, not because of CPC but because of it being a civil
court, an arbitration tribunal derives its powers from the arbitration agreement-
the powers come out of agreement of the parties, so they only have powers given
to them by the parties.
Courts can pass orders against third parties (Joinder of parties). If there are two
parties litigating in different courts on same matters- can be consolidated (Section
10 of CPC)- while tribunal cannot pass award against any third party- ​as per
section​ only signatories of the agreement are parties to arbitration agreement and
tribunal only has power over them.
Multi party arbitration- if there are various disputes between parties- depending
on their will, it can be heard by the same tribunal- otherwise not

Section 27 of arbitration act (Court assistance in taking evidence) - tribunal can

take the help of the court for collecting evidence. For purpose of securing

 
see last week notes from Abhishek's notes. 

evidence, can take the help of civil court. Civil courts have to substitute &
expedite arbitration whenever needed​.

Only awards get protection of NY Convention & UNCITRAL- for any other
order, the tribunal has no coercive value- it is of no use. However amendments are
there regarding 3rd party- initially tribunal wasn’t allowed to pass
interlocutory/other orders- for all these, the parties have to go to the court because
tribunal has no power to grant it.
After 2015 Amendment​- all tribunals to grant interim measures of relief. See
section 17 (interim measures ordered by arbitral tribunal)- section 17 starts with
“​unless otherwise agreed by the parties”​ , which means that parties can decide
whether the tribunal will have the power to grant interim relief or not.

2nd Class

Attributes of Arbitration Agreement

● Have stand alone kind of character
● Can be a part of main contract
● Can be a separate document
● Can incorporate any arbitration agreement in the business relationship that they have

Principle of Separability
● In all cases of dispute the first thing that is going to be alleged is that the contract is void,
in order to effectuate arbitration in such condition, this fiction is created.
● But there may be situations where validity of contract can affect the validity of the
arbitration agreement- e.g. incapacity of parties to enter into a contract (contract with
minor).
● If there is an arbitration agreement, parties have discretion to withhold some disputes
from going to the tribunal or refer them to the tribunal- as they wish

 
see last week notes from Abhishek's notes. 

Doctrine of Kompetenz-Kompetenz
● The tribunal has jurisdiction to decide about its own jurisdiction- this is a power of civil
court. Not necessary that all the authorities created under a statute have this power
● Section 16 (competence of arbitral tribunal to rule on its jurisdictional) ​of the act
talks about the doctrine of kompetenz-kompetenz
● Two aspects of KK:
○ Positive Aspect: That the tribunal decides its competence.
○ Negative Aspect: That the Court should not interfere with this.
● To raise the plea that the Arb Trib does not have competence, you need to raise it before
the submission of the statement of defence, unless the arbitral tribunal considers such a
delay justified.

International Commercial arbitration (section 2(1)(f) of arbitration act)

Two things are important in this-
1. Process of setting aside of foreign arbitral award
2. Recognition and enforcement of foreign arbitral award.
In order to understand the difference between these two things we have to learn the difference
between domestic and international arbitration

There are two ways of defining the word ​“international”

1. With nature of dispute i.e., if the dispute is related to international trade
2. Focused on the parties i.e., domicile of the party
These are the two ways using which a country can decide if an arbitration is international or not.

On reading of ​section 2(1)(f) ​it becomes clear that India follows the second approach.

TDM infrastructure Pvt. Ltd. v UE India pvt. Ltd.:​ ​ In this case the SC had to decide whether the
arbitration agreement was of “international commercial arbitration” as defined by section 2(1)(f)

 
see last week notes from Abhishek's notes. 

or not- there were 2 companies which were incorporated in India but its directors were based in
Malaysia. SC held since both the companies were incorporated in India, it cannot be
International arbitration- regardless of the place from which there companies are controlled, what
you need to check is where the Company was incorporated.

● UNCITRAL Model law

Article 1(3) An arbitration is international if:
(a) The parties to an arbitration agreement have, at the time of the conclusion of that
agreement, their places of business in different states; or
(b) One of the following places is situated outside the state in which the parties have their
places of business:
(i) The place of arbitration if determined in, or pursuant to, the arbitration agreement;
(ii) Any place where a substantial part of the obligation of the commercial
relationship is to be performed or the place with which the subject-matter of the
dispute is most closely connected; or
(iii) The parties have expressly agreed that the subject-matter of the arbitration
agreement relates to more than one country.

Some arbitration may be considered ICA under law of some country but not in our country- this
can cause confusion regarding which court will have the power to set aside/recognition etc- for
such arbitrations- have to refer to NY convention article 1 i.e., foreign award will be one that is
not made in country which we are talking about.

Seat theory and delocalise theory of arbitration

Article 5(1)(e) of NYC 1958 talks about both of them- article 5(1)(e) provides that:
“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.”
● Seat theory: award being set aside by the court of the country where it has been made-
basically seat of arbitration.

 
see last week notes from Abhishek's notes. 

● Delocalise: parties choose arbitration because they want neutral forum- as per this theory
the power should rest with the court where you are filing for recognition and execution of
the award.

22nd April
● There are various ways in which ICA has been defined throughout the world- what if two
parties decide to arbitrate in a foreign country- is it ICA?
○ As per UNCITRAL- yes- since UNCITRAL is model law, it has widest meaning
○ Indian- no

● Section 2(e) of arbitration act defines ​Court- ​it is important as court does not have the
same definition as provided in the cpc- only specific courts have jurisdiction (not every
court).

● Domestic v Foreign award

Part I of the arbitration act by virtue of section 2(2) will apply in domestic arbitration where seat
is in India. Further, section 2(7)- any award passed by tribunal located in India- domestic award,
so can be set aside by Indian courts. Courts of India would not have the power to set aside ICA.

● In order to decide jurisdiction in our law- subject matter is important, since CPC is not
applicable to arbitration. Types of jurisdictions that are important- pecuniary and subject
matter (HC in original jurisdiction where as District courts don’t have unlimited
jurisdiction).

● section 5 and 8 uses the word judicial authority- it is inclusive of judicial and all other
quasi judicial bodies as well. Thus, even if the proceeding is before a tribunal, they are
covered under the AC Act.

 
see last week notes from Abhishek's notes. 

○ Thus, if one party might not want to arbitrate, will approach some judicial
authority- E.g. Consumer forum, if such authorities are approached in presence of
an arbitration agreement, they have to refer the matter to arbitration.
● Only HC’s were given jurisdiction for ICA- might need expert treatment + inferior courts
weren’t given jurisdiction because of expediency.
● In BALCO judgment- court has committed an error of comparing ICA with domestic
arbitration. In ICA- parties can choose any forum, normally they choose neutral place, as
they don’t want to give homeground advantage to any party. Principle that procedure to
be governed by the seat, their court will have the jurisdiction + there are matters where
jurisdiction lies with both the countries.
○ Following this, Indian courts said same principle - also applies to domestic
arbitration- assets in another state, seat is different- by following the CPC, the
place where assets have been located will also have jurisdiction along with seat
(state). If Seat is Delhi and assets are in Chattisgarh, Chattisgarh Courts also will
have concurrent jurisdiction.
● Section 20 says parties are free to choose any place for arbitration- this was based on
principle of ICA, the critique is based on 2(1)(e)- section 20 to be interpreted in light of
the definition of court as given in 2(1)(e)- partie can choose C as seat of arbitration but
out of A and B will also have jurisdiction to decide issue regarding arbitration.
● Section 28 (rules applicable to substance of dispute)- Right to choose law only in ICA, if
arbitration is between two indian parties then it will be governed by Indian arbitration act.
● In ICA parties comes from different countries- there are 5 different laws which can be
applied to such arbitration
1. Which law would govern the capacity of the parties to enter into agreement. In
our country it is indian contract act
2. Law which will govern the validity of arbitration agreement- doctrine of
separability, different law can be applied to the arbitration agreement and the
main contract.
3. Lex arbitri- procedural law of the arbitration

 
see last week notes from Abhishek's notes. 

4. Law governing the rights and liabilities- substantive

5. Law for recognition and enforcement of arbitral award- can be more than 1 law,
where assets are in different countries. A and B have assets in K and L, in all
these countries assets are located, have to see in which country the parties will
most probably seek the enforcement, so all these laws have to be kept in mind.
● Lex arbitri- ​parties cannot choose, general principle of international law i .e., seat of
arbitration will govern the procedure. E.g. if parties are arbitrating in India, arbitration
and conciliation act will apply.
○ It is to be noted that most of the provision of Indian arbitration act are not
mandatory in nature- becomes clear from Section 4 which talks about waiver, as
only the non mandatory provisions of the act can be waived.
○ Non mandatory provisions starts with- ​“unless otherwise agreed by the parties”
● How the parties will decide procedure if they are non mandatory?
○ It is to enhance party autonomy, to give complete freedom to choose their own
procedure.
○ How parties choose their procedure? Given that arbitration act is not as detailed as
CPC
■ E.g. If parties choose to arbitrate in U.K- parties choose any arbitration
institution rules, eg. LCIA, SIAC rules- these institutes have detailed
procedural rules- same rules are in hands of parties to choose. ANywhere
if there is any gap/lacuna in the rules parties have chosen, then
unless/otherwise agreed by parties lex arbitri will apply.
● We can conclude that lex arbitri will govern 3 things-
○ internal procedure of arbitration e.g. how tribunal is constituted, evidence,
testimony. (mostly non mandatory in nature)
■ Exception- due process requirement/ fair trial- section 18 of our law
embodies the principle of fair trial.
○ External relationship of arbitration tribunal with courts of the country. E.g. section
8,9,11,34 and 37- most are mandatory to some degrees.

 
see last week notes from Abhishek's notes. 

○ The external relationship between the court and public policy of the state

23 April
● Whether law in the country(seat) is pro-arbitration or not??- do the courts of the state
respect their obligation under NY convention to keep out or arbitration i.e., non
interference by the court. See article 5 of NY convention.
● When choice of seat made- lex arbitri is automatically chosen- no such choice to choose
procedure different from the one prescribed by the seat.
● Courts tend to desire a degree of control over ADR in the name of public policy.
● Three elements of lex arbitri
○ Internal Procedure- The procedure of arbitration of the country will be governed
by the arbitration of the country. It consist of both mandatory and non mandatory
provisions. UK clearly delineates. But most nations like India do not clearly
delineate. Mandatory provisions are there to ensure equal treatment and fairness.
○ External Procedure- Relationship of tribunal with the courts- courts to expedite
process of arbitration section 8, 27, 37.
○ Broader relationship between courts and public policy: some disputes are non
arbitrable e.g. consumer disputes.
● Lex arbitri- cannot choose foreign law which derogates with the mandatory provisions of
public policy.
● Seat theory of Arbitration: ​Lex Loci arbitration- seat decides law- 5(1)(b) of NY
convention + article 2 of UNCITRAL
● Delocalized theory of arbitration​- Arbitration should be free of national restraints
unless absolutely necessary. Right to choose law should be unrestricted and even lex
arbitri should be chosen by parties. Arbitration has no relation to state, state organs etc. as
the arbitrator, parties might all be foreign to the country. Interference should only be
there for the sake of execution. Tribunal does not have all powers of civil court- so has to
depend upon courts- courts should play a supportive role like-
○ Interim measures (9)

 
see last week notes from Abhishek's notes. 

○ Conduct evidence (27)

○ Appoint arbitrator (8)
Further, courts of the seat should not have power to set aside arbitral award.
● Substantive law- X
Seat- Y
assets/ recognition- z
All 3 laws should be aligned, should not be in contradiction to each other. E.g. Y’s
national law should not prohibit X.
● As per delocalized theory- Courts at Y should not have power to set aside award. Only
Courts at Z- where courts execute- would have power to set aside.
○ Problem will arise if mandatory provision of lex arbitri of Y is in conflict with
chosen law- in such a situation mandatory provision of Y would prevail.
● Delocalized theory is confusing- seat courts would have jurisdiction as well as executing
court
○ Mandatory provision of Y as well as court whose Lex arbitri is chosen will have
jurisdiction.
● Bhatia International v Bulk Trading S.A.: ​In this case SC gave credence to delocalized
theory (not followed now). Indian arbitration act has extra-territorial application. Unless
parties don’t state that arbitration act of India won’t apply, it will apply.- Word ‘only’ is
not used in section 2 of Indian act unlike in UNCITRAL model law.
● Venture Global v Satyam: ​arbitration agreement between 2 companies. Seat-US- but
Indian party challenged arbitration award u/s 34. Relied on Bhatia international case as
Indian arbitration act was not excluded by the parties.
The SC agreed with the decision in Bhatia International case and stated that the provision
of part I of the act would apply to all arbitrations including international commercial
arbitrations and to all proceedings relating thereto. WHere such arbitration is held in
India, the provision of part-I would compulsorily apply and parties are free to deviate to
the extent permitted by the provisions of part-I. Even in the case of international

 
see last week notes from Abhishek's notes. 

commercial arbitrations held out of India provisions of part-I would apply unless the
parties by agreement, express or implied, exclude all or any of its provisions.
● ONGC v Saw Pipes: ​SC expanded definition of public policy- more power to court to
interfere- easier to set aside due to broader definition of ‘public policy’ multiple
proceedings in India & US- SC had to visit- de-localized or seat theory.
● Balco Case: ​SC had to decide in BALCO whether we follow seat or delocalize theory.
SC said we do not follow delocalized theory. SC said we follow seat theory, and
UNCITRAL model law. Overruled Bhatia international case.

24th April
● Arbitration agreement is the most important document as every power of the tribunal
emerges from it- tribunal doesn’t have the power to decide on the basis of
equity/consciousness.
● ​Two things to be looked at regarding validity of the arbitration agreement
1. Formal validity of the arbitration agreement- provided in section 7(arbitration
agreement). Form in which arbitration agreement has to be.
a. Requirement of agreement in writing- also in article 2 of NY convention-
there is now some relaxation about this requirement. In 2006 UNCITRAL
was amended, ​they gave two options to the countries ​ - 2nd option was
more dynamic as it completely removed the requirement of written
agreement, it gave more importance to the consent requirement. Wider
definition was given to the term writing- was made to include oral
agreements, email, telegraph etc. first option included writing but removed
the requirement of signature, while the second option done away with both
the requirements.
b. Requirement of signature- latest amendment of 2015 has done away with
this requirement.
➢ Whether the countries will be bound by NY Convention or UNCITRAL

 
see last week notes from Abhishek's notes. 

○ NY convention provides for maximum formal requirement and no other

onerous requirement can be legislated by the countries than this.
○ But does the NY also provides for minimum threshold??
■ Article 7 of NYC- countries can have beneficial laws which are
pro-arbitration. Therefore 2006 UNCITRAL amendment is
acceptable and does not go against article 2 of NY convention.
2. Substantive requirement: article 2(3) of NY convention and article 8 of UNCITRAL
provides that- courts of acting state to refer parties to arbitration if there is an arbitration
agreement between them unless the same is null and void, incapable of being performed etc.

● Effect of arbitration agreement

Arbitration agreement entails two things:
1. Positive obligation to arbitrate:​ specific performance of arbitration agreement is not done
generally in all countries because of principle of autonomy of parties -so specific
performance will mean parties are compelled to arbitrate, which is against the principle of
ADR.
a. Article 8 of uncitral and 2(3) of NY convention- if one party files a civil suit
despite of arbitration agreement, the duty of the court is to stay the suit. Section 8
of arbitration act provides for dismissal of proceeding in presence of an arbitration
agreement- Indirect way of honouring the arbitration agreement. E.g. A files suit,
B should ask the court to dismiss the suit and refer the parties to arbitration- then
the court will see whether the agreement is valid/null or void then decide whether
to transfer it or not.
b. US has federal arbitration act which allows courts to order specific performance
c. In australia- specific performance of arbitration agreement- parties can be charged
for contempt of court if they don’t do arbitration.
2. Negative obligation​- not to litigate- earlier the remedy for violation/breach of arbitration
agreement was compensation- anti suit injunction was also there, if one party files a civil
suit then seat court can pass an anti suit injunction against the party.

 
see last week notes from Abhishek's notes. 

● Substantive validity of arbitration agreement

○ Pathological (defective) arbitration clauses:
■ It can be indefinite
■ Consent of parties to arbitrate dispute even after tribunal constituted; rest
of the details can be worked out.
● Reference to institutions/arbitrators who are now deceased are still valid.
● Mutual contradictory terms- can be solved by deleting the later part.
● What If intention to arbitrate is vague- no arbitration agreement as even the
intention/consent is not visible.
○ Pro arbitration approach- can still ask a party to enforce it

25th April
● Article 8 of UNCITRAL and 2 of NY convention
Breach of arbitration agreement- party that filed civil suit in breach of agreement can argue in
cases of pathologic agreement that arbitration agreement is invalid and hence there is no
obligation to arbitrate. Decision of the court will depends on legal system i.e. if it is pro-
arbitration or not.

In India- courts would state that there is no intention to arbitrate-​ section 7 provides​ that clear
intention to arbitrate is required, so no valid arbitration agreement.

● Meaning of null and void​- involves- incapacity, fraud, mistake, duress, undue influence
etc. renders agreement void.
Further, arbitration agreement is unconscionable if- asymmetrical i.e., one party taking major
decisions. General trend is not to them as null and void as the other party has consented to such
an agreement and was fully aware about it, so should be bound by it. E.g. In cases of government
contracts- mostly their officer is appointed as arbitrator- these are valid on the grounds that it is

 
see last week notes from Abhishek's notes. 

cost effective (don’t have to pay the arbitrator/officer) + such an officer is better equipped to
decide the dispute as part of the same department.
Invoices and Bills- n​ ot accepted by the court, if one party abuse the unequal bargaining power
then the court can think of such agreement as unconscionable or one signed under undue
influence.
● Arbitration agreement is ​inoperative ​in cases of termination and waiver + when dispute
no longer exists.
Waiver: ​In act it has not been discussed in detail- can be inferred from reading of section 8 of
arbitration act
“Power to refer parties to arbitration where there is an arbitration agreement.—2 [(1) A judicial
authority, before which an action is brought in a matter which is the subject of an arbitration
agreement shall, if a party to the arbitration agreement or any person claiming through or under
him, so applies ​not later than​ the date of submitting his first statement on the substance of the
dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court,
refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement
exists.]”

It uses the word “not later than”- the other party has to raise objection at first instance before
filing of first statement of defence. If a suit is filed and opposite party does not object to it, it is
deemed he has waived his right to arbitrate.

Mahesh Kumar v Rajasthan state road transport corporation: ​One of the parties filed a civil
suit and other party in its WS raised objection that suit should be dismissed as there is an
arbitration agreement + they also raised a counterclaim in the WS.
Issue- whether the suit should be dismissed or not- other party argued that it should’t be as they
have waive their right to arbitrate under section 8 by filing WS.
The other party argued that this submission should be treated as not accepting the jurisdiction of
the court and requirement of section 8 is complied with.

 
see last week notes from Abhishek's notes. 

Decision- court held that this is a case of waiver. mere existence of arbitration agreement is not
sufficient. Section 8 of arbitration act talks about timeline and steps that parties have to take:
1. File objection before W.S
2. Photocopy of original arbitration agreement is to be submitted.
Only then it can be said that you want to arbitrate. If not complied with, deemed waived,
especially since he filed a counter-claim thereby accepting jurisdiction of the court.

● U.S- FAA- waiver cannot be automatic- should be something more than a latent act- in
this you can argue no waiver is there.
● Agreement being incapable of being performed- i.e., arbitrator is dead- usually such
objections are not accepted.
● Sometimes parties raise objection of inconvenience of seat/forum convenience- cannot be
a ground for setting aside arbitration agreement.

● Multi-tier ADR​- agreements involving various methods of dispute resolution like

mediation, negotiation, arbitration etc.
E.g. Negotiation for 30 days, if negotiation fails then mediation then arbitration
If parties to such agreement go directly to arbitration will the award be valid?
Some courts treat it as a lack of jurisdiction of tribunal to arbitrate the dispute and hold the award
to be invalid.
Courts may treat it as an issue of maintainability/ admissibility- just a procedural issue which
doesn’t affect the authority/jurisdiction of the tribunal.
Courts doesn’t interfere if parties consulted to skip.

What should be the approach of courts in such cases?

Have to go back to the Kompetenz-kompetenz doctrine- arbitral tribunal has to deal with
jurisdictional issues + 2 other limbs:
1. Court should not decide the jurisdiction issue in the first place and wait for the tribunal to
decide it. After it the court can go into the merits in setting aside of award- section 34.

 
see last week notes from Abhishek's notes. 

2. If court has to decide the issue of jurisdiction - should do it on prima-facie value and refer
it back to the tribunal.

Two approaches
1. Prima facie- french courts follow this approach. Aim is to expedite the process- to decide
conclusively needs a lot of evidence and will take too much time- quicker method +
protect the Kompetenz-Kompetenz - the only exception is, if agreement looks null and
void prima-facie. In this approach, if courts come to know that tribunal has been
constituted and still parties have come to them- won’t even decide it prima facie.
2. U.S Approach (conclusively deciding the issue)- whenever a court is seized with a
jurisdiction objection, it has to conclusively decide the issue then refer it to arbitration.
Reasoning being- referring the matter to arbitration if agreement is null and void will
result in wastage of time and money.- FAA (federal arbitration act)

26th april
There are ​five jurisdictional issues​:
1. Existence of arbitration agreement
2. Validity of arbitration agreement
3. Arbitrability of dispute
4. Composition of tribunal
5. Qualification- no conflict of interest- competence of tribunal
As per Kompetenz kompetenz doctrine- arbitral tribunal should decide these jurisdiction issues-
at pre-arbitration stage courts can decide jurisdictional issues- except when parties have agreed
that only tribunal is to decide the jurisdiction issues.

● If objection w.r.t validity of main contract- tribunal will decide coz arbitration clause not
in question+ principle of severability.
● If objection against arbitration agreement then court will decide.

 
see last week notes from Abhishek's notes. 

● If objection is regarding existence of arbitration agreement- case of capacity/ fraud/undue

influence- even if agreement in such situation, it is null and void- in such cases court is to
decide the question

UNCITRAL model law article 8 (2006)- ​it gives no direction as to what should be the approach
of the court. Whether it should decide prima facie or conclusively- so it needs to be interpreted
with article 5 (minimal judicial intervention) and article 16 (kompetenz-Kompetenz)

Section 8 of Indian arbitration act talks about referring the parties to arbitration- major changes
were introduced in section 8 by the 2015 amendment- it also added “any person claiming
through or under him”- non signatories were included by this- because of complexity of
relationship, not only the main company or party but also others who will be affected by the
dispute between the signatories to the arbitration agreement- it was needed as if parties to the
agreement are not willing to arbitrate then the interest of others will also not be settled- so now
they can make application under section 8 and even non signatories can also be referred for
arbitration.

● Difference between section 8 and UNCITRAL

1. Use of word judicial authority instead of court- to include all authorities created for
addressing different disputes
2. Timeline is also there in article 8

● Article 8 of UNCITRAL lays down procedural requirements:

○ Timeline
○ Application for referral to arbitration
○ Submission of copy of arbitration agreement/ original arbitration agreement.

 
see last week notes from Abhishek's notes. 

● Present​ Article 8 of UNCITRAL and NY convention - courts were not to refer the
dispute for arbitration if agreement was null and void - they had to decide jurisdiction
issue before referring to arbitration.
○ We have deviated from last phrase of article 8 - we didn’t want to give the court
scope of intervention- if formal requirement are complied with then the courts
have no jurisdiction. Can intervene only if court find the agreement ​prima facie
invalid.
● SBP & Co v. Patel engineering Ltd​: the ratio of this case applies to all pre-arbitration
cases (section 8,9 and 11)- SC held that- though we have not copied article 8 of
UNCITRAL, but you cannot say that judicial organ will act mechanically and refer the
dispute for arbitration deciding the jurisdictional issue- have to satisfy (i) validity of
arbitration agreement (ii) existence of agreement- only then the matter can be referred to
arbitration.
SC said issue arises if it refers a matter to arbitration and then tribunal says it doesn’t

● Booz Allen & Hamilton v SBI home finance ltd.: ​SC for the first time laid down steps
for arbitrability of dispute- held that court should decide arbitrability before referral.- was
valid till 2016 amendment
● ​Sukanya Holding v Jayesh h Pandey: ​ In this case a suit was filed in a civil court and
an application was filed under section 8- all the parties to the suit were not parties to the
arbitration agreement and civil suit covers the interest of those who were not directly
involved in the agreement
Opposite party contended that cause of action can be bifurcated along with parties-
some go for civil suit and others for arbitration.
Decision: SC said this bifurcation of cause of action and consolidation of parties isn’t available
under arbitration and conciliation act. Non signatories to the agreement are excluded from
section 8 and can’t be referred to arbitration.
If allowed, parties will add unnecessary parties and ask for additio​nal reliefs to avoid referral to
arbitration.

 
see last week notes from Abhishek's notes. 

Chloro Control v Severn trent: ​Group of companies doctrine included- non signatories were
included as well- but this case is not applicable to part I of arbitration act i.e., section 8-
judgment with regards to foreign arbitration i.e., section 45..

29th April
Difference between UNCITRAL article 8 and Section 8 of indian arbitration and conciliation act

Article 8 Section 8

It uses the word court A&C uses judicial authority to include

tribunal etc in its ambit

Article 8 is restricted to parties to the A&C has broadened the word ‘party’ to
agreement- “if a party so requests” include non-signatories also

Courts don’t have to refer the parties for A&C does not use null and void. If parties
arbitration if if finds that agreement is null approach court, file a civil suit and an
and void, inoperative or incapable of being application is filed under section 8, then the
performed. court has duty to refer them for arbitration
unless the agreement is prima facie invalid.

● 1940 Act- no competence with the tribunal to decide its own jurisdiction- can’t listen to
jurisdictional issue, so had to go to courts. This was there till 1996 (despite UNCITRAL
coming in 1985)
● National Insurance Company ltd v Bhogara Polyfab- ​SC tried to explain patel
engineering case, laid down 3 categories of question:
1. Where the court has to must decide the issue
2. Where court may choose to decide the issue (or leave them to the decision of the
arbitral tribunal)

 
see last week notes from Abhishek's notes. 

3. Court should leave the issues exclusively to the arbitral tribunal.

Category I issues are:
A. Whether the party making the application has approached the appropriate HC. (right
court)
B. Whether there is an arbitration agreement and whether the party who has applied under
section 11 of the act, is a party to such an agreement. (agreement and party to agreement)

Category 2 issues are:

A. Whether the claim is a dead (long-barred) claim or a live claim (limitation)
B. Whether the parties have concluded the contract/transaction by recording satisfaction of
their mutual rights and obligation or by receiving the final payment without objection.
(conclusion of contract)

Category 3 issues are:

A. Whether a claim made falls within the arbitration clause (as for example, a matter which
is reserved for final decision of a departmental authority and excepted or excluded from
arbitration. (claim under arb clause)
B. Merits or any claim involved in the arbitration. (merits)

● What is a valid arbitration agreement??

Booz allen Hamilton v SBI housing Finance- validity of an arbitration agreement is to be
determined on the grounds mentioned in section 7 of the arbitration act.

30th April
Whether dispute capable of being arbitrated?
● Section 34- grounds for setting aside the arbitral award
● Section 34(2)(b) provides for setting aside of arbitral award by the court if the subject
matter of the dispute is not capable of settlement by arbitration under the law for the time
being in force.

 
see last week notes from Abhishek's notes. 

● Article 8 of UNCITRAL provides for arbitration unless the agreement is null and void,
inoperative or incapable of being performed.
● Section 8 of Indian arbitration act is different from article 8 of UNCITRAL as it uses “no
valid arbitration agreement”
● Booz Allen Hamilton case​- it lays down 3 step test to check arbitrability of a dispute at
section 8 stage
1. Whether the subject matter of the suit is ‘arbitrable’, that is capable of being
adjudicated by a arbitral tribunal
2. Whether the subject matter of the suit fell within the scope of the arbitration
agreement.
3. Whether such dispute is part of the disputes raised in the pleading before the
arbitral tribunal.
● Have to see nature of rights i.e. whether it’s a right in rem or personam
Right in rem- these are non-arbitrable as affects rights of public at large. These should be
adjudicated upon by public forum (Courts) e.g. constitutional issue, criminal, family matters,
testamentary etc.
Right in personam- disputes w.r.t. These can be referred for arbitration as only involve interest of
private parties.
Exceptions- The Court held that subordinate rights in personam arising from rights in rem are
arbitrable.
subordinate right to rem+ contractual relationship which arises from a right can be held
arbitrable. E.g. license- it is a right in personam arising out of Right to rem.

● Rakesh Kumar malhotra v Rajinder Kumar malhotra

Case filed by shareholders, they alleged mismanagement on part of the company. If you apply
Booz allen test, the dispute was arbitrable - Court says look at the remedy that the shareholders
are asking for- companies Act allows for regulation of companies, this remedy cannot be granted
by an arbitral tribunal. Though Booz allen was applicable, court points out its limitation.

 
see last week notes from Abhishek's notes. 

● Eros International- ​Booz allen talked about subordinate rights in rem- can be referred to
arbitration- even tribunal can give relief in these cases. Criticism- parties can add
remedies to defeat arbitration. IP disputes may be arbitrable subject to the relief sought.

Allegation of fraud
Fraud can vitiate arbitration agreement
● Abdul Kadir v Madhav Prabhakar: ​if there is an allegation of fraud, person has right
to defend on a public fora- public forum should decide such cases.
● N Radhakrishnan v Maestro engineers: ​SC applied Abdul Kadir and held that all
issues of fraud are non arbitrable in nature.
● Bharat Rasiklal v Gautam Rasiklal: ​Need to see the nature of allegations of fraud. If
they are serious, such that they can vitiate the arbitration agreement then they should be
decided by the court before referring to arbitration.
● Swiss Timing v Organising Committee: ​SC held that the ratio of N. Radhakrishnan is
not correct law. All allegations of fraud are arbitrable.
(​[Link]
ingle-view/article/india-arbitration-friendly-allegations-of-fraud-and-corruption-no-bar-fo
[Link]?no_cache=1&cHash=b9f986f77adbcd660bc2e23c0a319931​)
● 246th LCI make all allegations of fraud arbitrable, not accepted yet.
● A. Ayyasamy v A. Paramasivam: ​In this case SC partly applied Radhakrishnan and
Rasiklal case. Held that in cases of fraud simpliciter, refer the parties for arbitration. If
serious allegations are there, then the case is to be decided by court as it will involve
complex facts and will require leading of evidence- courts are better equipped to handle
these cases.
Further, court said that it is bound by Booz Allen i.e., disputes concerning right of rem
are not arbitrable- to be decided by court.
● Ruhi says this is wrong, case can be referred to arbitration and assistance of court can be
taken for collecting evidences.(Section 27)
● In ICA- disputes concerning fraud are also arbitrable

 
see last week notes from Abhishek's notes. 

Domestic- difference between serious and simpliciter.

● World Sport Group v Msm Satellite: ​SC held that- w.r.t ICA any dispute is arbitrable.
Section 45 makes fraud arbitrable in cases of ICA.
● LCI recommendation concerning section 7(1)- ​after the words “contractual or not” add
“, concerning a subject matter capable of settlement by arbitration”
[​Note: ​this amendment makes it abundantly clear that a dispute must be arbitrable in the
first place]
In this regard SC has two opposing views
1. Court should decide arbitrability of dispute
2. Court should not

1 May
● In an ICA case concerning fraud- if a suit is filed by a party then which law will apply
(Indian or foreign).
ICA happening outside India- if suit filed in India (in violation of arbitration agreement) then
court has to refer the parties for arbitration unless arbitration agreement is invalid or
non-arbitrable.
Arbitrability of the dispute is to be decided as per lex arbitri of ​Seat. ​SC didn’t want Indian
policies to affect international arbitrations.
● LCI on section 16 (Kompetenz - Kompetenz)- After sub-section (6), insert sub-section
“(7) the arbitral tribunal shall have the power to make an award or give a ruling
notwithstanding that the dispute before it involves a serious question of law, complicated
questions of fact or allegations of fraud, corruption etc.”
● Law is settled for ​consumer disputes- ​Section 3 of COPRA ​says remedy provided under
the act is in addition and not in derogation of remedies provided in any other law.
Further, section 2(3) of the arbitration act states that “this part shall not affect any other
law for the time being in force”. Both of these sections are to be read with section 8 of
arbitration act.`

 
see last week notes from Abhishek's notes. 

It is affirmed by ​Skypack Courier ltd v Tata Chemical (2000) and Trans mediterranean
Airways v M/S Universal exports (2011)
● National Seeds corporation Ltd v Madhusudhan: ​In this case SC held that it is not
mandatory for consumer fora to refer COPRA disputes to arbitration. COPRA is a social
welfare legislation and it has been enacted in light of various international conventions to
which India is a party.
● Rosedale developers v Aghore Bhattacharya: ​the remedy of arbitration available to the
complainant does not bar the jurisdiction of the consumer forums and the consumer
forums are not under an obligation to refer the matter to the arbitral tribunal.
● Emmar Mgf Land Ltd. v Aftab Singh: ​SC arrived at the following conclusions-
1. Disputes which are to be adjudicated and governed by statutory enactments,
established for specific public purpose to sub-serve a particular policy are not
arbitrable.
2. There are vast domains of the legal universe that are non-arbitrable and kept at a
distance from private dispute resolution.
3. The subject amendment was meant for a completely different purpose, leaving
status quo ante unaltered and subsequently reaffirmed and restated by the Hon’ble
supreme court
4. Section 2(3) of the arbitration act recognizes schemes under other legislations that
make disputes non-arbitrable.
5. In light of the overall architecture of the consumer act and court-evolved
jurisprudence, amended sub-section (1) of section 8 cannot be construed as a
mandate to the consumer forums, constituted under the act, to refer the parties to
arbitration in terms of the arbitration agreement.

3 May
● Emmar MGF case
a. Held that we are bound by test laid down in Hamilton case which is right in rem and right
in personam

 
see last week notes from Abhishek's notes. 

b. COPRA- some rights in personam and some in rem

c. In other words they basically say that all consumer disputes are not non-arbitrable. There
are few which are arbitrable due to Booz allen.
d. Section 8 obligation is also arising out of international law. But international law
obligations also exists for consumer rights as well.
e. Person filing in COPRA has chosen his remedy- can’t be referred to arbitration after
filing- section 8 does not apply
Implied COPRA disputes are not arbitrable.

IPR Disputes
● US and Switzerland have made IP disputes arbitrable
● Booz Allen: ​IPR dispute involves right in rem hence non arbitrable + Sub contracts are
right in personam e.g. Licensing- Arbitrable.
● Eros International Ltd v Telemax Links India​ 2011 Bom HC: Don’t look at nature of
right but nature of remedy i.e. whether arbitrator can grant the remedy or not- tried to
modify Booz Allen
● Internationally IP disputes are arbitrable. So when an arbitral award is passed it has to be
submitted to authority that has power to decide IP rights. + send a copy of court order
saying that court has no problem with award.
Insolvency Cases- ​non arbitrable after insolvency code
Competition Law:
Internationally - arbitrable in some contexts if international in character
India- Public interest is involved- Booz Allen- Right in rem
● UOI v CCI ​2012 Delhi HC: applied Booz Allen Case- right in rem, hence non arbitrable.
As per section 19 of competition law anyone can file a complaint. CCI is to investigate and then
issue a cease and desist notice. This is beyond the scope of arbitration. Arbitrators tend to be pro
business while competition law seeks to regulate business.
● Mitsubishi Motors Corp v Soler Chrysler plymouth ​(USA)​: ​Antitrust claims are
arbitrable if they have an international element.

 
see last week notes from Abhishek's notes. 

● Eco swiss china time ltd. v Benetton International: ​International disputes on antitrust
are arbitrable.
● Still, if it is an ICA, and it is happening in India, and the parties chose the substantive law
of another country, Indian Competition Law will still apply. They are mandatory in
nature.
‘Second look doctrine’- came from interpretation of mitsubishi case. Arbitrator can arbitrate
dispute but courts will have a right to have a second look-to check award i.e., whether law is
applied correctly or not. In ICA, parties can choose substantive law. Here we have to choose law
of that country because of interest of country in protecting its public policy- apply law of seat.

Ruhi says this is obvious- not in all cases there is a section 34 application.+ parties anyway go to
court with the award for its approval to avoid issues in execution.
● In IL authority which has power to deal with such cases is amicus. Authority would
check whether arbitration carried out properly or not.

Labour Disputes
What if section 8 application is filed before Labour court
● Kingfisher Airlines v Captain Prithvi Malhotra: ​In this case employees were asking
for wages when kingfisher went bankrupt- Section 8 application was filed-court looked
into booz allen case and held it is not right is rem even though it has larger impact. Court
held that these disputes can be referred to arbitration but not under arbitration act but
under ID act as it has a special arbitration procedure which takes into account difference
in power relation.
Go beyond Booz allen- have to see purpose behind the act+ look at special laws and see
if there is an element of public policy.+ whether remedy can be granted by arbitral tribunal or
not.
● Rajesh Korat v Management Innoviti: ​Section 8 not mandatory under ID act- parties
can be referred for arbitration under ID act.
------------------------------------------------------------------------------------------------------------------

 
see last week notes from Abhishek's notes. 

Section 8 and Section 45

Both of these sections are related. Their wording prior to amendment was different.
Section 8- word party was there prior to 2015
Party or any person claiming through or under him (post 2015)
Under Section 45 which is based on article 8 of UNCITRAL, ‘party’ was not restricted to
signatories to arbitration agreement from starting.
● Chloro Controls v Severn Trent water purification: ​Agency was used to include
non-signatories to arbitration agreement - agents binds principal + merger of entities - can
bring non-signatories in play. Rights in arbitration agreement can be assigned like
contractual rights. Hence non-signatories can also be brought under fold of arbitration
agreement.+ ​section 8 is different from section 45 (pre-amendment).
● Corporate Veil- ​Complex structures were created to defraud 3rd parties, circumvent tax
law etc. Important to know who is the actual party to the arbitration agreement. Need to
lift corporate veil; alter ego of parent company to be revealed. Can see who is having
maximum control to see who is party to the agreement- to include non signatories to
arbitration agreement.
● Group of companies doctrine- ​The Dow Chemicals v Isover [Link]: ​laid down
doctrine to include non-signatories. The Arbitral Award said that as the Dow Chemicals
Company(the parent company which was a non-signatory) was involved ​in the
conclusion, performance, or termination of the contracts.
[Link]
-arbitration-agreements
● Chloro Control Case: ​whether non signatories can be made party to the arbitration is to
be determined by looking at various factors:
○ Court to see if company is related to signatories.
○ Commonality of subject matter of dispute between signatories and non signatories
○ Whether nature of transaction is composite between the parties.
○ Is it equitable to refer to arbitration than to not.

 
see last week notes from Abhishek's notes. 

● Ameet Lal chand v Rishabh Enterprises: ​In this case SC interpreted section 8 in the
light of the amendment act, in allowing any party, “claiming through or under” a party
who was party to an arbitration agreement, to refer the dispute to arbitration. With such
an interpretation, the SC has preferred to follow the principle laid down in chloro
Controls case.
Further, in conjunction with the language of section 8(1) that “notwithstanding any judgment,
decree or order of the supreme court or any court, it may be considered that the SC has restricted
the applicability of the sukanya case to the amended section 8. While not stated expressly, SC’s
reference to the 246th report of law commission also reflects, that the Sukanya case may no
longer be applied to to proceedings under section 8 of the act.
[Link]
9th May (Courtesy 66)
After ​chloro controls two sets of laws in India -- part I and Part II. The language of the two
sections (45 and 8) was different + judicial interpretation which clarified that domestic
arbitrations were only governed by Sukanya Holdings and not Chloro Controls.

For the purposes of section 8, party is not amended to include non-signatories. They are able to
apply only in section 8 not 9 or 11 etc. Only for the purpose for reference to arbitration
non-signatories have a claim. However parties still means party to arbitration agreement.
Section 7 gives a requirement of signature, thus party to arb agreement means signatory to arb
agreement.

Meaning of “parties or people/persons claiming under them”? Would group of companies

doctrine be included under this?
It is equitable to refer them to arbitration if they are a group of companies. Would be inequitable
to not.
Group of Companies is not an internationally recognized doctrine though -- so would it be
included under “parties or people/persons claiming under them”? Analyze yourself.

Countries have their own laws to protect the rights of the third party. We have included group of
companies in our definition because we don’t have such laws.
Group of companies violates the fundamental principle of arb, non signatories can be referred.
Corporate law principles are also being violated. It is thus not a very sound principle.

 
see last week notes from Abhishek's notes. 

Group of Companies doctrine is recognized in India to include non signatories within the
purview of Arb Agreement.

Ruhi on why section 8 needed to be amended: The logic behind including different companies in
s 45 included the fact that companies can have complex business structures and thus may be
affected by arbitration even when not signatories. But applying common sense-- There can be
companies that have a complex business structure within India also -- therefore need to also
apply s 45 logic to the Indian scenario.
*The chloro control ratio under section 45, expanded the meaning of the phrase “parties or
persons claiming under them”.

Amendments were made in sec 8(2) also.

Clause 2 talks about formal requirement of application under Article 8

Along with the application you have to file arb agreement or certified copy of it
When Section 8(1) was amended, section 8(2) was also amended.
Amendment- even if the parties don’t have arb agreement they can still file, since
non-signatories might not have a copy of the arb agreement and they can still file.

Why do you have to submit a copy of the arb agreement?

They have to check the prima facie validity of the arb agreement and whether subject matter of
the suit is the same as that in the arb agreement.
Clause 3-
Simply because an application is filed under Section 8 doesn’t mean that a continuing
arbitration will stop.

If arbitration hasn’t commenced and one party files a civil suit, even during the pendency of this
suit, arbitration can be commenced.

In such situations, one of the parties that files a section 8 application, another party can
commence the proceedings and these can continue and the tribunal can also pass an award.
Tactics parties use to get an ex parte arbitral award. They are completely valid and are deemed
decree of the court.
Can the order of the court under section 8 be appealable?

 
see last week notes from Abhishek's notes. 

Yes. Section 37 gives a list of orders appealable in nature. But only one appeal is available. No
further appeal. Order passed under Section 8 is appealable. (refusing to refer parties to
arbitration under section 8 is available) This litigation can continue, but the arbitral tribunal can
grant an arbitral award.
Seat of Arbitration
Q Is there any importance attached to seat of arbitration?
The procedural law of that country will apply, (the arbitration act will apply).
Power to annul the arbitral award is also with the court of the seat.

Seat and Venue

Section 20 is relevant for this topic though it uses the word “place of arbitration” Here place
means seat.

Clause 1 - Parties can choose place of arbitration. Clause 2- If parties haven’t decided, tribunal
will decide
Clause 3- apart from this seat, the parties can with the consultation of the tribunal also choose
venues. For example if witnesses are in a different place, then the tribunal can meet at any place
and conduct hearings. Venues have no relevance only for collection of evidence and hearing.
However seat is important, it decides lex arbitri. (3 things considered lex arbitri)
So, there is a difference between seat and venue.

1. Parties have liberty to choose.

Parties are generally not governed by lex arbitri
Because arbitration laws of each country only provide a broad framework.
In each country, certain mandatory and certain default provisions.

2. Relation between public and court (compulsory provision)

CONSIDERATIONS KEPT IN MIND WHILE CHOOSING SEAT OF ARBITRATION
Firstly the parties should see that the country they choose for arb is a party to the NYC.
Secondly, whether the country is a signatory to the UNCITRAL model law. (UNCITRAL model
law important because it is pro arbitration)
Thirdly, parties choose a neutral country just for the purpose of ensuring neutrality of
arbitrators (because arbitrators generally from that country)
Fourthly, convenience and cost, sometimes objection is raised to the inconvenience of the seat.

 
see last week notes from Abhishek's notes. 

3. Seat affect both internal (affect the detailed procedures of arbitration)

and external aspects of arb.

Generally, law of seat will not provide detailed procedures. But might be different for some
countries.
Before you decide you should know the arbitration act of the country and whether it has a
detailed procedure.
Indian act has certain mandatory requirements- section 18 and 19.

The amendment has made one more change- it has changed the time limit.
After amendment, Section 29 A- puts a time- line within which arbitration has to be completed.-
12 months. Time starts at appointment of arbitrators

Most of the countries don’t find it a good provision because arbitration is dependent on the
consent of the parties. The time limit is less. If they are unable to complete within 12 months
then there are a lot of consequences.

EXTERNAL ASPECTS OF ARBITRATION

1. Reference to arbitration (sec 8) scope of power a court has at this stage?
In our country, prior to amendments,courts were going into jurisdictional issues taking a lot of
time to refer parties to arbitration
This has to be checked, what type of role the court performs at the stage of referral.

2. Mode of Exercising Power by Courts to Grant Interim Measure of Protection (cease and desist
orders etc) (IMP)
Prior to amendment: 1. the power to grant IMP was available to court and tribunal,
2. The tribunal did not have any power to enforce its orders.
End result was parties ended up going to court because tribunals did not have power
3. The tribunal did not have power over third parties. (inspection, cease and desist, etc.) (this
can be a problem)
So need to see the type of regime- Whether tribunal has power or do we need to go to court for
everything
You will then land up investing in courts as well if Tribunal does not have powers

 
see last week notes from Abhishek's notes. 

Apart from this we have to see if at sec 9 stage it goes into jurisdictional issues or just grant
referral?

4. Appointment and removal of arbitrators

What is the law, how much power court has, grounds for removal of arbitrators?
Prior to amendment, our law was lacking in this because:
Section 11- huge jurisprudence because of the phrase chief justice of HC and SC. (so had to
decide whether power is administrative or judicial) prior to 2015 amendment we were lacking
on this count hence India was not chosen for arbitration. It brings a lot of money into the
country. (Lot of delay in commencement of arb when deciding all jurisdictional issues etc.

5.​ Help of the court in collecting evidence- section 27

Approach of court- whether forthcoming in helping- section 27

6. Grounds for annulment of arbitration award:

Are these grounds of such nature that they will interfere with the award at all stages?
Is it appellate or superficial (just looking at procedure)?

Sec 34- notice given, agreement valid, but no ground on which the court will get appellate power
(sit on all issues of law and fact). Or is it in line with UNCITRAL model law which do not go into
the appellate power, to respect the principles of arb. This is how lex arbitri will affect the choice
of the proceedings.

SEAT of arbitration - based on territoriality theory

Article 1(2) UNCITRAL model law : The provision of this law will apply at the country where
seat of arbitration located with some exceptions
Exception is 8,9, 35, 36. Territorial aspect of lex arbitri- will govern all the procedural aspects in
that country, this comes from UNCITRAL model.

Section 2(2) Indian AA- Part I will apply when seat of arbitration in India- reinforces the fact
that we follow seat theory.

General principles of arbitration-

Parties free to choose any place and any law- seat theory- arb in london then arb act of london
will apply.

 
see last week notes from Abhishek's notes. 

Delocalisation theory is opposite to seat theory. Even if choose to arbitrate in London, can
choose arbitration act of India.
Lot of countries followed delocalisation theory

India- adoption of delocalised theory and went back to seat theory.

Section 2(2)- This part shall apply where place of arbitration is in India. (section 2(2),(4),(5),(7))
UNCITRAL 1(2) uses the word “only”
2(4) uses“every arbitration” 2(5) uses “all arbitrations”

Bhatia international
In Bhatia international, we adopted delocalisation theory.
ICA- happening outside India.
One of the parties was of India. They moved a section 9 application in Indore
The issue before the Indore court was- can the Indian courts grant IMP on an arb having seat
outside India?
Party was about to sell all assets in India. They applied ICC rules to the proceedings.
Argument: The application for IMP should have been filed in Paris (which was the seat)
The paris court should have the right to decide IMP. Moreover, ICC rules also allow for filing of
IMP
The argument was the party is located in India and if you wait for paris court, then you will get
paris court, then file petition in Indian court, have that recognised and once after Indian courts
approve, the IMP will apply. To prevent this,

So SC in this case held that Indian courts can grant IMP even when the seat of arbitration is in
India because The arb act of India will apply to INDian parties outside India unless they
specifically say that Arb act of India will not apply.
Did this by interpreting 2(2), 2(4), 2(5), 2(7) and UNCITRAL model law

10 May
Delocalised theory of arbitration: We followed briefly because of the Bhatia Case.

Bhatia Intnl (2002 case): Seat is outside India, s 9 application filed — Madhya Pradesh HC said
that the application has to be filed at the seat of arbitration.

 
see last week notes from Abhishek's notes. 

SC: Though, we are following uncitral model law to a huge extent but we have deviated from the
territorial principle of the law — Indians when arbitrating outside india can still choose the
applicability of the Indian ACA — this is essentially delocalised theory

Section 2 sub-clause 2, 4, 5, 7

UNCITRAL Article 2

Use the word ONLY in the UNCITRAL LAW which means that the provision of this law will
apply only and only if the seat is in our country

SC pointed out that S2(2) of ACA — does not use ONLY. This is an important deviation.
If you read part II of ACA — it governs arbitrations when ICA is happening outside in a
convention country.
Part I will apply to both domestic arbitration happening in India and ICA happening in India
There is a lacuna in the law: what will happen when ICA happening in a non-convention
country. This is why they interpret it the way they do, making part I applicable internationally as
well.

Secondly court said that if you see definition of ICA in s2(f) — the law does not make any
distinction between ICA happening in India or outside India

Third— IF YOU read 2(2) in light of 2(4) and (5) — part I will apply to all and every arbitration.
Because the word only is not there, then it applies also to ICA happening in India. This is not an
exclusive clause but is an inclusive clause. It will apply to all and every arbitration which is in
clause 4 & 5, which would include arbitration outside iNDIA.
How is this interpretation correct? When arb is happening in india, then ofc ACA will apply —
no choice to derogate. Only the non-mandatory clauses will be optional. As for arbitration
outside India, ACA does not mandatorily apply to such arbitrations, but parties can choose to
apply it to their dispute by mentioning it in their agreement. So the mandatory aspect of the law
is seat-oriented.

^So that’s how the court gave the ACA an extra terrestrial applicability — which is an aspect of
the delocalised theory of arbitration.

 
see last week notes from Abhishek's notes. 

They also gave another practical reasoning: There may be a lot of situations when the assets of a
company may be located at a country that is not the seat, and approaching the seat court might
take a long time, leading to the loss of the assets in that time — that way people will be
remediless. So in order to not have this situation, this interpretation the court gave.
Ruhi: far fetched reasoning, amounts to rewriting the whole of the law.

Arbitration happening in non-convention country — the two imp rights flowing from Geneva
and NY convention : Presumptive validity of arb agreement, and arb award — do not apply.
This means that the award will have to be scrutinised properly, in which case it makes sense to
apply part I to it, because there is more scrutiny in part I.

—
UNCITRAL model laws have made exceptions — “Except for Art 8, 9, 17, 35 and 36.”
Law Commission suggested we should also make an exception in order to avoid rigour of BALCO
judgement because it is excluding s 9 applications as well.
That is why proviso added to s2(2) — if parties are arbitrating outside India, they can still apply
s 9, 27, and 37 — party autonomy based.

Implied exclusion:

2011 judgements of SC (prior to amendment) — We amended s2(2) in 2015

Videocon Industries v UoI

— ICA happening outside India — in the arbitrators agreement they had discussed that
arbitration agreement will be governed by English laws, Seat will be at KL, substantive law of
India — This is implied exclusion in terms of the procedural law of India

Doscoe v Russant
Seat was Seoul, law governing arbitration was Korean.

Yograj Infra v. Sanyong Engg

Art 37, and s 17 — ask me later im not discussing now
In most of these cases the substantive (governing) law was India. The argument was that this
implies the arbitration act would also apply. SC said no, because substantive law does not imply

 
see last week notes from Abhishek's notes. 

choosing procedural law. You have chosen diff stuff for seat and arbitration agreement, could be
implied procedural law of some other place.
—
Issues:
Ulterior motives of parties getting solved through Bhatia. FORUM SHOPPING.
Court has introduced the concept of patent illegality in public policy in ONGC v Saw Pipes — this
widened interference of courts at s 34 stage. Which means setting aside of arbitral awards.

Major breakthrough:
Venture Global v Satyam Computer (2008)
ICA was happening outside India, award passed in USA, this was proceeding for enforcement of
the award. At this point the US company filed a s 34 application in India due to Bhatia Intnl.
Argument: Because part I applies and there is no exclusion, so we can file setting aside
application in India. ​They did this because in 2003 patent illegality ground was included — if
award passed outside India breaches any law of India, then court will set aside the award. They
were basically forum shopping.
If you see the general seat theory, the award that has been made final at the seat, should be
treated as a foreign award only and part II should apply. But because of Bhatia, part I was being
applied and s 34 grounds were applicable.

BALCO Case
Overruled Bhatia. SC said we follow the Seat theory of arbitration. S 2(4) and (5) is in different
contexts, we cannot interpret 2(2) in light of those two.
The main issue was regarding assets located in some other countries than the seat — s 9. The
court held that that is none of the court’s business lol. You draft your agreement according to
this. Parties are not remediless, it is just a longer route. Apna khud dekho lol.
Part I and part II mutually exclusive.

Applies prospective overruling though — which was problematic. The BALCO ratio applied only
in a few cases.

(Courtesy Dwd)

13/05

 
 see last week notes from Abhishek's notes. 

Why odd number of arbitrators?

● UNCITRAL says there can be even number of arbitrators.

● Section 10 however says there shall be an ​odd number of arbitrators. Indian law
departed from UNCITRAL so as to promote certainty.

Case law- ​Narayan Prasad Lohiya v Nikunj Kumar Lohiya

● Issue, ​there was a family business dispute, there was an agreement to settle the
same. One of the clause however said that there shall be 2 people to settle the
dispute. ​Firstly, ​court held they will not go into merits of case to see whether the
agreement referred mediator, arbitrator e.t.c, court said they will look into the
intention to arbitrate.
● Argument, petitioner said ​the award would be invalid under Section 10. The
section is mandatory in nature and uses the word “shall not be even”. ​Opposition
said that Section 10 is not mandatory in nature. Moreover the challenge to the
validity first must be raised under S16 (objection to be raised before tribunal first
and then to the court). The party cannot challenge the validity under S 34 directly.
● Argument, Section 4, ​provides for waiver of right of objection. If the party
doesn’t object (or object within specified time) of and proceeds ahead with any,
A) Non compliance of the non mandatory provisions of the act
B) Non compliance with any provision of the arbitration act,

It shall be deemed of the parties to have waived their right to object.

● Argument, Lex Arbitration connects to public policy here. There are odd
numbers of arbitrators to ensure certainty. Moreover there is usage of word shall.
Implying the mandatory nature of the section 10. Therefore cannot be waived.

● Argument, Section 16 does not cover composition of arbitral tribunal. There is inherent
lack of jurisdiction under the section to mandate on composition, therefore there is no
requirement to fulfill Section 16.

 
see last week notes from Abhishek's notes. 

● Argument, S 4, 10, 16 ​is to be read together. So that no section is rendered redundant. S

16 gives timeline, if not followed, then deemed to be waived. Relevant sections
a) 16(2)-​even if self appointed arbitrator, can raise an objection
b) 16(3)-​can raise even after time limit passed with request for condonation of delay.
c) 16(5)-​Arbitral Tribunal can reject the objection
d) 16(6)-​can go under S 34 to set aside the order.
● If not raised within timeline, then S 4 applies, implying the waiver of rights. There can be
no waiver at mandatory provisions of law. So S 10 is non mandatory as it can be waived.
Since objections under S 10 were not raised, they were deemed to be waived.
● If mandatory provisions are violated by composition then S 34(2)(V) applies. Court held,
S 34(2)(v) is not violated since arbitration agreement is followed then there is no need to
read next part as ADR is all about party autonomy.
● Conclusion, S 4 is different from S 16, cannot read S 16 to say it is non mandatory. This
would be wrong interpretation.

14/05

Relationship between S 29 Arbitration Act and UNCITRAL. UNCITRAL says if the number
of arbitrators cannot be decided, set the limit at 3. While Indian Law says, if can’t be decided, set
it at 1. Court also said in response to public policy in sec 10 that arbitrators can be added later.

● Rule of majority is a rule in CPC, same should be adopted in Arbitration as well.

According to Section 29, parties may decide the authority for deciding upon procedural
issue. Since word used is may, it is not mandatory upon the party. (mentioned Sec 12,
Grounds for challenge, read the section)
● Reasons for adopting arbitrator,
a) To disclose any conflict to the parties in writing (added post amendment)
b) To be able to devote sufficient time to arbitration.

 
see last week notes from Abhishek's notes. 

In US. however, both of the parties can appoint a non - neutral arbitrators to see no injustice is
done to them. Both the arbitrators are presided by a neutral arbitrator. Section 12 of Act
and S 12 of UNCITRAL rejects US mode as there are obligations on the arbitrator-

a) Duty to act judicially.

b) Duty to disclose.
c) Duty to act fairly.

● In case of sole arbitrator, both parties have following options (Section 11)-
a) Both parties chose
b) ask institution to appoint one for them
c) designate a person to nominate one for them
d) Name an arbitrator in the agreement itself.

If everything however fails, parties can approach the seat court, the court will appoint one
arbitrator for them.

● In case there is provision for 3 panel arbitrator, the parties are to appoint each one
arbitrator who in turn will appoint one more arbitrator. If any party fails to appoint an
arbitrator, or the 2 arbitrators fail, parties can approach court.(this remedy refused by
certain countries, simply have a sole arbitrator deciding) 3 arbitrators is expensive,
scheduling is expensive and time consuming as well, there are more conflicts.
● Challenging of procedure, if the parties have raised objections on the impartiality of
procedure, if the objection is rejected by the tribunal. Parties then have to continue with
the process. However can set aside the award at a later date(S 34). Grounds for challenge
under S 12-
a) Duty to disclose any conflict of interest
b) Duty to disclose whether can devote sufficient time or not
c) Must be impartial and independent.

 
see last week notes from Abhishek's notes. 

d) Should possess the qualifications agreed by the parties.

● Problems associated with Section 12-
a) No duty earlier to disclose, so a lot of litigation was done on bias.
b) Named arbitrator-one party got right to appoint an arbitrator
c) Impartiality and independence-vague claims as to the exact definition. Now s 11 has
many instances to explain the same.
d) Arbitrators were taking endless time. (5-10 years)

As a result of the above problems​, Section 11 was amended. Schedule V and V11 were added
to streamline the appointment of arbitrators. Rules from International Bar Association
were borrowed. Time disclosure was made necessary. Post 2015 amendment there was
another change. No longer can only the CJI of SC/HC could appoint, but SC/HC could
also appoint.

● Any application under Section 11 is to be decided in 30 days. Court needs to check

existence of arbitration agreement before appointment of the arbitrator. While in Sec 8
court checks the validity of the agreement as opposed to checking the existence.

15/05

Usage of word CJI

Article 11 uses the phrase, if the parties are unable to appoint any arbitrator, parties can move the
court. Section 11 while uses the word CJI of HC/SC and not the word court. Word CJI was used
as the decision of court/CJI is final and non appealable. Remedies can be issued in forms of 136
and writs. Order is binding and final.

Case, Konkan Railways V. Rani Constructions (5J)

● This case answered the question why the word CJI was used

 
see last week notes from Abhishek's notes. 

● Power is vested in the highest authority to instill faith in parties. Nature of the function
performed by CJI is dual in nature, administrative (appointment) as well as judicial.
Section 6 says power to appoint an arbitrator can be delegated to other person/
institutions. Therefore the power is not judicial. As judicial power cannot be delegated.
So this is an admin function.
● Substantive rights and liabilities of parties are not being decided upon. Merely there is an
appointment of arbitrator after checking existence of the arbitration agreement. This is
done to expedite the process. Court in doing so however has to keep in minds the
qualifications required by the parties. Court concluded, since no right and liabilities were
being decided upon, relief under S 136 cannot be sustained. Only 226 and 32 remains.

Case, SBP V Patel Engineering (7J)

● Case overruled Konkan Railways​. Case held order under S 11 to be judicial. Case held
the function of appointing arbitrator to be a judicial function. CJI is not a persona
designate. It is a class and not named person. Hence not an admin duty. Decision of
tribunal is not final, there exists some remedy, however if there exists no remedy from
CJI’s decision, final and hence judicial.
● If in case arbitral tribunal decides arbitration agreement does not exists, then effectively
overrules CJI’s decision, which is not acceptable.
● If its an admin power then when the court refuses to appoint an arbitrator, a writ would
have to be issued against then CJI. This cannot be intent of the legislature i.e. to pass writ
of mandamus against the CJI.
● Reason to choose CJI was to cut down appeals and instill faith. Therefore it is a non
judicial function; therefore CJI would be allowed to do it.
● Sometimes the jurisdiction is with the district court, to avoid this used CJI of HC/SC.
Don’t want it to go any judge in HC/SC.
● When the CJI does any function, it can be delegated to any other judges only and not to
institutions and other persons. CJI has to decide whether
a) Parties have approached right HC,

 
see last week notes from Abhishek's notes. 

b) there exists a live claim

c) there exists a valid arbitration agreement.

For all of it adjudication is required, therefore judicial function.

● Once decided the order cannot be reopened by the parties/tribunal. Final SLP. Only 136
right available.
● Case does away with Kompetenz-kompetenz doctrine.

Case, National Insurance Company v. Boghara

● The case clarified Patel Engineering, court to see if live claim not included in TBD-
a) Whether party approached right HC
b) Whether there exists a valid arbitration agreement.
● MBD, whether a live claim or not (claim subsisting or not, barred or terminated). Courts
should not decide merits of dispute and scope of agreement. This should be done prima
facie. Patel engineering was criticized as it led to loss of business. Therefore it was
amended, used UNCITRAL, art 11. Now use courts instead of CJI.
● ICA, HC to exercise original jurisdiction.

Now post amendment,

● Section 11(6)a, court to not look at jurisdiction but only at existence of an arbitration
agreement.
● Section 8 (prima facie) and S 11(only existence) on different plane
● Section 11 (6)b, reference not judicial function. Court can now refer to any arbitration
institute for appointment. Adjudicatory work is only to look for existence of agreement
while admin will see the appointment.
● Time limit set at 60 days.
● Section 11(7)-decision final, no 226 now.

 
see last week notes from Abhishek's notes. 

17/05

Time duration of 30 days​, the arbitrator has to be appointed within 30 days else an application
lies to HC/SC. In case however a person appoints an arbitrator after 30 days, the appointment
shall not be invalid provided application under S 11 hasn’t been filed.

Case, ​application under Section 11 after 5 years

Court, ​5 years is beyond limitation. Default time period of application is 3 years. So till 3 years
application can be moved.

Application under S 11 has to be decided within 60 days. S 11 says that arbitrator can be of any
nationality. However S 9 (ICA) mandates the arbitrator’s natiodannality to be different from
nationality of party. This is done to ensure impartiality.

● Section 12, schedule 5,6,7 (added in 2015), Grounds for disqualification are-
a) Impartiality and independence
b) Qualification

Notice is send to the arbitrator that the party wants to appoint, then in that case-

a) Arbitrator is required to give in writing any possible conflict of interests.

b) Classify that they would be available and capable of devoting time.

● Read section 6(format in which disclosure is to be done) and 5(justifiable conflict of

interest) for conflict of interest. Arbitrator has a continuous duty, conflict of interest
might arise later.
● Section 12(5), if arbitrator’s relationship with SJM, counsel, party falls under schedule 7,
then there cannot be any appointment done. Parties can waive this conflict if in case it
arises post-appointment.

 
see last week notes from Abhishek's notes. 

● Section 8 and 11 require different treatment, Under Section 8(valid arbitration

agreement), court has power to see validity prima facie. Under section 11 (appointment),
nature of intervention of court is different, only existence seen.

Section 12(1)(a) and (b) clarifies what is a justifiable doubt.

Case, Indian Oil Corporation v Raja transportation Pvt Ltd.

● Larger PSU granting a tender to private individuals are different in bargaining power.
They had no power to bargain, only have to sign. Usually standard form contract is
signed by the contractor. Violation of S.7, agreements needed be ad idem and S 18
requires fair play.
● S 11, S 34 used by Pvt Company alleging biasedness on part of arbitrator as Arbitrator
was part of govt department.
● Court said no problem as they are high ranking official and same goes in arbitral tribunal.
● SC said nothing in A and C act prevents from high ranking govt officers appointment as
arbitrator. Parties entered the contract on own. If there is an actual case of bias i.e. the
person is the direct superior/subordinate of the disputant then it may be challenged. If
person is unconnected with the dispute, then allowed.
● LCI 246​th criticized it. Said there was unequal bargaining power. Since private contractor
cant change terms of contract, such application should be quashed.

Case, Denel Proprietary Ltd v Ministry of Defense

In this case court applied ratio of Indian oil case. Observed that the named arbitrator here was the
direct subordinate, causing bias, quashed the appointment and replaced it with judge.

International Bar Association developed ethics of arbitrator in ICA( independence, impartiality,

judicious etc). 2004, IBA drafted guidelines on Conflict of Interest. Amended in 2014.
Guidelines had 7 principles on ethics. 3 lists of various relationships are-

 
see last week notes from Abhishek's notes. 

a) Red-disqualify (waivable and non waivable). Schedule 7 and 12(5)- can waive. In case
party wants someone close.
b) Green-No conflict of interest.
c) Orange-all other grounds. In case of justifiable doubts (schedule 5), requires disclosure

20/05/19

Section 12 Amendment
2 explanations added, Sub-Section 5 added, schedule 5,6,7 added, to clarify neutrality and
impartiality. These were very crucial to arbitration.

Termination of arbitrator
● Section 12 talks about ineligibility of arbitrator, section 13, 14 and 15 talks about the
procedure. Section 13(4) is mandatory in nature. It tells about the challenge procedure.
● Removal of arbitrator, If one party objects and arbitrator withdraws (this is not admission
of guilt under s 14) or if both parties decide to remove arbitrator.
● Section 13-parties can choose any procedure to decide objections under s 12. If arb
tribunal rejects these objections, then can resort to S 34, post awards.
● UNCITRAL art 13​, when arbitral tribunal rejects the objections, appeal to civil court is
allowed. In India however, orders aren’t appealable usually. Unless they deal with
substantive rights and liabilities. The deviation from UNCITRAL is because of
pro-arbitration stance in India.
● Section 14, failure or impossibility to act. Under this mandate automatically ends.
a) Arbitrator, de jure (legal incapability such as bankruptcy or criminal case) or de facto
(physical incapability) is unable to perform his/her functions or fails to act.
b) Withdraws/ parties terminate the contract.
● If there is any controversy regarding 1​st and 2​nd ​(arbitrator not accepting his incapability),
then in that case when the arbitrator rejects the objections then,
a) Party’s autonomy, they can decide under the agreement.
b) Can approach court under Section 14.

● Three methods of termination-

 
see last week notes from Abhishek's notes. 

a) Can himself withdraw

b) Parties can agree themselves and terminate
c) Done by court
In the cases, substitute arbitrator is to be appointed.
● Other than the aforementioned reasons (S 12 and 14), arbitrator can be terminated under
S 15-
a) Arbitrator’s personal reason
b) Parties may not want to continue with the same arbitrator

Case, Volstalpine Schienem v DMRC

● Schienem wanted to appoint an ex-high court judge as arbitrator (because any prior
agreement contrary to Section 12 is invalid). DMRC wanted to follow the arbitration
agreement, nominated 5 members of railway department. One selected out of them. For
remaining 4 Volstapine was asked to select.
● Challenge on the basis​ of Sec 12, Schedule V and V11.
● Court said if legislature was against the appointment of ex employees, then there would
have been an entry under schedule 5 or 7. No reason to impute bias on a high level govt
officer. Ex govt employee was not even related to department.
● Court then went into procedure​, Originally DMRC had a list of 31, short listed
candidates out of which they nominated 5 and chose 1. Gave choice of 4 to opposition.
Court said, this was a sham, there was no real choice given to opposition. Court held
Schienem is to choose from final of 31 instead.
[Read 7h schedule, 5​th​ schedule and 12(3) for clarity]

Case, HRD Corp v. Gail

● There were 2 arbitrators, objections were raised against both. J lahote (arb 1) had
previously given a legal opinion to GAIL. J dohatia (arb 2) had previously acted as an
arbitrator. In a previous case of GAIL.
● 5​th​ schedule- 15 and 22. Entries 1-19 of V11th are same. There is no timeline under S 14.
● Whether de jure inability or should be under S 12.

 
see last week notes from Abhishek's notes. 

a) If under section 12-timeline under S 13 different, subject to party autonomy. If

tribunal rejects, there is nothing to be done.
b) Under Section 14, started expanded meaning of de jure, so objection started under S
14.
● Parties started resorting to 14(2). Especially with respect to sole arbitrator proceedings.
Where arbitrator has already been named.
● Parties would file a sec 11 app. For app. Of arbitrators.
● Court said, S 12(5) is related to Schedule 7. Rest of schedule 7 is related to schedule 5.
SC said relation between arbitrator and party do not have a business relation. Ruhi says
no. court rubbishes objections.

Case, TRF Ltd v Energo Engineering Pvt Ltd

● Named arbitrator ineligible under S 12(5) , 12(5) has an exception, parties can waive
objection.
● Can this ineligible named arbitrator appoint another arbitrator and that arbitrator
can continue​? No, arbitrator’s appointment was void ab initio, thus named arbitrator was
ineligible, all the actions are invalidated.

Case, Bharat Broadband Ltd v United Telecom

● CMD appointed a sole arbitrator, when arbitration proceedings were going on, the TRF
judgment came, BBNL appointed arbitrator and after TRF themselves wanted to remove
arbitrator. UTL said that under sec 12(4) can object only on grounds unaware at the time
of appointment. BBNL were aware so they cannot now raise objection.
● Under S 12, 13 and 14 and TRF judgment, the office of arbitrator becomes void ab initio
as CMD ineligible, hit by S 12(5)
● This is a case of Dejure inability under Section 12(5)
● Court held, section 7 is relaxed on agreement to be in against (can enter agreement into
email etc now). In section 12(5), this agreement is not relaxed, has to be in writing.

 
see last week notes from Abhishek's notes. 

Cannot assume waiver by conduct, unless in writing. (proviso to Sec 12(5)) held
appointment to be void ab initio.

21/05

Interim Measure of Protection (IMP)

● S 9 deals with IMP, as does S 17(3 things written down, unclear). S 9 can approach
before court at 3 instances, can approach even before the tribunal constituted, during
process or if tribunal refuses, can to court post award-pre enforcement. For granting IMP
by arbitral tribunal, after Arbitral Tribunal constituted or when award is passed before
enforcement.

● S. 9 is IMP by Court, while S 17 is IMP by Arbitral Tribunal.

Why it was to be amended,

● Power of tribunal is limited to practices only and Subject matter of dispute was a
problem.
● Tribunal has no power of enforcement. Interim orders of tribunal are not awards. S 17
was non-mandatory earlier.
● Thus, parties would end up in court even though there was a S 17. Purpose of ADR being
undermined, therefore parties keep approaching court, caused delays etc.

As a result it was amended, post amendment(S 9(2))-

● You can even go to the tribunal for IMP even post award. But this is unlikely, since it
would cause reconstitution of the arbitral tribunal.
● Has to commence in 90 days from IMP order. Thus parties after security IMP would not
commence arbitration, effectively maintaining status quo.

 
see last week notes from Abhishek's notes. 

● Stage when parties are contesting the arbitration agreement, court would infer there is no
intention of arbitration.
● Hence the tribunal is constituted, it has focused for IMP. Only in exceptional cases they
should approach the court

S 27(5), available with tribunal to punish non cooperative party. S17 was amended on lines of
Article 17 of UNCITRAL (Amended in 2006)

● Non signatories can invoke arbitration under S 5 and not under other sections.
● S 17 A, UNCITRAL- Conditions for granting. S 17 A and C Act has no criteria.
● Order 39( when granting injunctions) it must be seen-
a) Prima facie case
b) Irreparable injury
c) Balance of convenience

17 a criteria-

a) Extra harm would be caused to one party if Imp is not granted.

b) Prima facie case

Important Provisions

● 17 B​-Ad interim protection (ex-parte injunction)

● 17 A​- Grounds same as Order 39 grounds
● 17 C​-ad interim protection. Valid for 20 days. Subject to extension from tribunal. Ad
interim protection is non executable. Hence voluntary something-under UNCITRAL
court.
● 17​- Tribunal does not have all trappings of a civil court, hence ought not to have
power to seek security from a party. This is a problem. Tribunals have no power to
execute their own orders.
● But 17 E​-Tribunals allowed to ask for security.
● 17 F​, similar to order 39. Party to disclose any change in circumstances post getting
IMP.

 
see last week notes from Abhishek's notes. 

● 17 P​, MP of a tribunal recognized as binding and even if the country does not
recognize it as an award, it is to be enforced nonetheless.
● 17 I​, non recognition of IMP(Similar to our S 48band S 34). Party does not give
security even after security IMP. IMP terminated by tribunal/court.
● Art 9​-even if you’ve initiated Arbitration, can go court for IMP.
● Art 17 J-court can also give IMP. Seat theory and where the assets are located can
grant IMP. (ICA)
● Tribunal should have power to give IMP. Was borrowed, added in A and C. We have
deviated from art 17. We do not emphasize on party autonomy. We have not given
tribunals power to give ad-interim protection. Tribunals order as good as a decree of
civil court under our S 17.
● Amendment to S 2(2), S9, 27, 37 are applicable even if ICA happens outside India if
its included in the arbitration agreement.[after Bhatia, part 1 Applies unless excluded]
● 37 included, this mentions list of appealable orders, in case court rejects your
application should be allowed appeal,
● S 27, needed to collect evidence. S 9 IMP
● By the amendment we are following Bhatia International. You can exclude or include
part 1 for ICA happening outside India.
● S 9, inclusive approach. HC follow an exclusive approach through this phrase is ch S
9. Court need not follow strict standard. Court applies general principles of CPC,
consonant with Initial procedure and not whole of CPC. Strict application of order 28,
29 would not aid parties in securing IMP.
● 17 I​, courts being very technical. Tribunals granted power to give IMP.
● A and C act and 246 LCI, arbitral tribunal definition should be amended to include
emergency arbitrator.

22/05

Concept of emergency arbitrator

 
see last week notes from Abhishek's notes. 

The purpose is to grant interim measure of protection prior to Arbitral Tribunal constitution.
Parties appoint emergency arbitrator to grant IMP (interim measure of protection). The
emergency arbitrator has duration of 10 days max. it can decide its own jurisdiction. Case
has to be decided prima facie as it is not binding on subsequent arbitral tribunal.

23/05

Case, HSBC Holidays v Abitel studies

● The case defines award and includes emergency awards as well.

● Case is Pre BALCO, pre 2015. The centre was Singapore. There was an emergency arb.,
the party wanted to execute the award in India.
● Parties went to SIAC [pre-BALCO], parties to write an agreement that parties reserve
their right to go Indian Courts. Under SIAC, emergency award passed. One party wanted
to execute it in INDIA.
● Definition of award in our act includ es, interim award. LCI’s recommendation on
emergency arbitrator and emergency award not incorporated. The definition does not
include emergency arbitrator.
● To enforce a foreign award in India, the award needs to be an arbitration award protected
by NY convention, recognized under our law. Since countries have widened the
definition of arb and arbitration award, India has not.
● Parties went to SIAC [pre-BALCO], parties to write an agreement that parties reserve
their right to go Indian Courts. Under SIAC, emergency award passed. One party wanted
to execute it in INDIA.
● Court passed the same award under S9 rather than recognizing it. The award was in line
with emergency awards however the court did that without directly enforcing emergency
award. [basically not in favor of emergency award]

Case, Raffles Design India v Educom Professional

 
see last week notes from Abhishek's notes. 

Section 17, award of arbitrator is equivalent of a civil court, can be enforced. This case was
related to emergency award.

● Delhi HC, we don’t recognize emergency arbitration award as awards, therefore tribunals
does not include ‘emergency arbitrator’ under A and C act. Cannot get protection under S
17, have to file under S 9.
● Post amendment, S9 is applicable unless parties exclude the application.
[S 20, 18, 19 and 29 –read]

21 was read with 29 A. This is however not suggested in LCI report. This was done to rectify
delay, to promote institutional arbitrator. There are penalties for exceeding timelines, checks on
the arbitrator. However there are no similar checks on ad-hoc arbitrator.

Case, NBCC Ltd V JG Engineering

This case highlights the problem due to which S 29 A(laying timeline) was added.

● [This case was prior to 29 A], government contracts, serving officers appointed as
arbitrators usually but transferred off. Arbitration was pending for 3-4 years. Thus
arbitrator kept on getting transferred, due to which arbitration would start de novo
● Whether there should be used S 11 or S 14.
● Went under 11(6), arbitrator cant complete his tenure. Despite extensions by HC,
arbitration could not conclude. Time lapsed, thereafter award passed.

Issue

● Award challenged as arbitrator had become functus officio (lost his mandate).
● Can the HC impose a timeline of 6 months (pre 29 A case).

Court

S 5 says court to act in compliance of arbitration Act, the act didn’t have provisos for such
extensions. HC could not have exceeded. The timeline can be extended by mutually with parties.

 
see last week notes from Abhishek's notes. 

There can be implied extension of time. But since no party objected when arbitrator time lapsed,
implied extension by parties to arbitrator. Arbitrator also did not ask for an extension.

● Court held that award could not be upheld [technicalities], arbitrator had become
functuos officio which automatically ended the mandate under 14(2)
● Held that HC acted in its power in giving an extension of 6 months, within its
inherent powers and in tune with ADR philosophy of speedy justice. Even a
substitution of arbitrator under S 11, 15, arbitrator need not start de novo.

As a result of all these problems, 29 A was added. Parties have right to extend timeline, further
extension by court can impose cost on arbitration and parties. Internationally however this
practice is not considered good, it hinges with party’s autonomy. Court intervention is also
frowned upon.

25/05

● S29A. Date starts from which Arbitral Tribunal enters upon reference( when receives
notice in writing of their appointment) , award to be passed within 12 months from date
of arbitral tribunal enters reference.
● S21​-commencement of proceedings, one party sends notice to OP. this is relevant for S
43, limitation
● S 43, ​limitation period ends S 21.
● S 3​, receipt of communication is said to be when personally delivered, this does not apply
to court summons.
● There are 2 timelines-
a) S21
b) S 29A

There might be lot of time between S 21 (commencement of proceedings) and S 29 A

(appointment of arbitrator). After appointment however timeline of 12 months begin.

● S 29 B​, fast tract procedure, document only arbitration, there are no oral hearings, if the
parties want. Award within 6 months from date when arbitral tribunal enters upon

 
see last week notes from Abhishek's notes. 

reference. This was earlier in S 24. There is shorter time limit of 6 months. When there is
a sole arbitrator, process is faster.

Awards

Types of awards-

a) Final award (finally decides rights and liabilities)

b) Interim award (settlement on some issues), Interim award is as good as a final award,
similar to a prelim decree. It decides some of rights and liabilities of the parties. S9,17,16,
appealable under S 37 A and C.
c) Settlement Award. It is given under Section 30. Regardless of arbitration agreement, does
not prevent settlement (by ways of negotiation etc). Right to settle the dispute is
paramount, you are not prevented from settling the dispute through mediation,
negotiation etc, even if arbitration proceedings going on. If no settlement arbitrator can
proceed from where they left it up. If they settle-
a) Terminate arbitration tribunal.
b) Or ask tribunal to pass a settlement award in their favor. Tribunal to see if
award legal. No conflict with A and C.

The award can directly be enforced after validation from arbitral tribunal, in case it can also be
enforced independently under the Contract Act.

Internationally definition is different. It includes interim measure of protection and jurisdictional

awards. In India they are considered procedural awards( appealable), not given them status of
awards.

E.g.-S 16 and 17

Important provision-

● S 30(4)​, settlement arbitration award has the same status as an arbitration award.
Consent decrees (023) are non-appealable under CPC. However in settlement decree
S 34 is available.

 
see last week notes from Abhishek's notes. 

● S 31(3)(b)​, award via settlement, no recovery required in awards. Since it’s a non
speaking award. Court in such case will only question the factum of settlement (Ruhi
says). Due to a non-speaking order, court will go into details, such as factum and this
will breach confidentiality
● S 31(3)(b) talks about reasoned award unless it is a settlement award under S 30. No
reason is required in such case. a reasoned award includes-
a) All arbitrators/majority of arbitrators to sign the awards, write in reason for
dissent (if any)
b) Date, time, place of award (for determining seat)