Alternative Dispute Resolution

Amith Sriram K S
 UNIT 2
[Link]
[Link]
[Link]
[Link] Principles
[Link] kinds
[Link] and qualifications of an arbitrator
[Link] agreement and its drafting
[Link] of arbitrator
[Link] steps in arbitration
[Link] Award
[Link] under the Arbitration and Conciliation Act, 1996
 Arbitration Meaning

 According to Section 2 (1) (a) of Arbitration and Conciliation AcT,1996

arbitration means aby arbitration whether administered by permanent
arbitral award.
 Act doesn’t provide definition but in literal sense it means “ Settlement of
differences or disputes by mutual understanding or agreement by parties and
such settlement made before the tribunal are binding on them.
 Understanding or agreement by parties are binding on them only before the
tribunal noy by the court of law.
 Introduction – Arbitration !

●Advent of British Rule – brought in codified law

●First legislation - the Indian Arbitration Act, 1899
●The Code of Civil Procedure, 1908 also contained various provisions relating to arbitration under section 89 and
section 104.
● In 1940 the Government of India passed the Arbitration Act, 1940, the precursor to the contemporary legislation
●Arb Law, 1940 – was heavily criticized (not effective enough to meet present day requirements) and
recommended to the law commission of India
●UNCITRAL – Encouraged a more coherent and uniform arbitration law alla cross the globe > catering to the
international mode of dispute resolution
●Need to have a home legislation at par with that was required
●The result was the enactment of the Arbitration and Conciliation
Act of 1996 on the lines of the UNCITRAL Model Law.
●While the UNCITRAL Model Law on Arbitration primarily
applied only to international commercial arbitrations, the
Arbitration and Conciliation Act of 1996 aimed to consolidate and
amend Indian laws relating to domestic arbitration,
international commercial arbitration and enforcement of
foreign arbitral awards
 Contd

●The term ‘Commercial’ in context of Arbitration law – in the case of R.M

Investment and Trading Co. Ltd v. Boeing Company.
Atiabari Tea Co. Ltd V. State of Assam-( what all constitutes commercial
transaction)
●Thus, all kinds of commercial activities may be arbitral provided there is an
agreement in that regard between parties.
●But mere assistance in technical aspect, does not necessarily mean being a part of
commercial activities ( Kamini Engineering Corp v. Re Tradition) – would be
outside the scope of ‘commercial’ in the Act.
●If there is an agreement in arbitration - falls u/s.7 of the Act –
 Section 7
 Section 7 (1) defines arbitration agreement.
 Section 7 (2) provides agreement clause can be in the form of contract or in
the form of separate agreement.
 Section 7(3) – although makes it mandatory that agreement must be in
writing, section 7(4) provides that agreement can be in the following
manner:
 A document signed by parties
 An exchange of letter, telegram or other means which provide a record of
agreement.
 Statement of Object and Reasons:
●Ideally today’s act is based on three statues –
●A. The Foreign Awards ( Recognition and Enforcement Act), 1961
●B. The Arbitration ( Protocol and Convention) Act, 1937
●C. the Arbitration Act, 1940
●
○The main objectives of the act are:
I. To comprehensively cover international and commercial arbitration and conciliation as also domestic
arbitration and conciliation
[Link] a fair arbitral procedure, efficient and capable of meeting the needs of a specific arbitration
[Link] provide that the arbitral tribunal gives reasons for its arbitral award;
[Link] ensure that arbitral tribunal remains within jurisdiction
[Link] minimise supervisory roles of courts in the arbitral process
[Link] permit an arbitral tribunal to use mediation, conciliation or other procedures during the arbitral
proceedings to encourage settlement of disputes
[Link] provide that every final arbitral award is enforced in the same manner as if it were a decree of the court
General principles of arbitration

 Arbitration is Consensual: Arbitration is a mutual process that requires the

consent of both parties. Arbitration can only be initiated, if parties have
agreed to initiate it. Parties can insert any arbitration clause if it is relevant
utilizing a submission agreement between parties. The parties are also not
allowed to unilaterally withdraw from the arbitration.
 Arbitration is Neutral: Arbitration is a neutral process hence it provides
equal opportunity to the parties such as; Arbitrator, language, and venue of
the arbitration. This also ensures that no parties should enjoy the home-
court advantage
 Arbitration is a confidential procedure: The arbitration rule specifically
protects the confidentiality of the matter. The arbitration process provides
privacy. 
Contd..
•The parties choose the arbitrator: Each party has the right to choose their arbitrator to whom
they think will fit to handle their case. If the parties have chosen a three-member arbitration
tribunal, then each party appoints one of the arbitrators. Then the two selected arbitration shall
agree on the presiding arbitrator. The center can also suggest the potential arbitrator with
relevant expertise or may directly appoint members of the arbitration tribunal.
•The decision of the arbitral tribunal is final and easy to enforce: The decision of the
arbitral tribunal is final and known as Award. The decision of the arbitration tribunal must be
final and binding on both parties. Arbitration awards can be easily enforced in other nations
than court proceedings.
UNCITRAL MODEL LAW:
●The United Nations has adopted a model law on International commercial arbitration in 1985
●Recommend all countries to give due recognition – in the view of desirability and uniformity of the law of arbitral
procedures
●Aims to harmonise the concept of arbitration
●The Arb Act 1996, must not be influenced by the 1940 Act and relying on the old act would lead to misconstruction of
law. The revised Act stands independently
Possibility of intra vires?
●In Babar Ali v. Union of India – The constitutional validity of the Act of 1996 was upheld by the
Supreme Court in the case of Babar Ali v Union of India
●The concept of Arbitration – not defined in the Act
Art 2(a) UNCITRAL Model law defines “Arbitration” means by which the parties to the dispute get the matter
settled through the intervention of an agreed third person.

Ingredients on the basis of various source and as per defintion: Halsbury

1. There is an arbitration clause in the agreement to resolve disputes by means of arbitration
2. Dispute between two parties
3. There is an arbitrable dispute in terms of agreement
4. Dispute referred to a third person other than competent court / jurisdiction
5. Person or persons availing this are under an obligation to resolve the dispute and differences in a judicial manner-
that is hearing of both parties
Ingredients:
●S.2(1)(b) read with S.7 of the Act says; a valid arbitration agreement must include:
● Parties must be in ad idem
●Intention of parties to resolve disputes through Arb
●agreement must be in reference to arbitration
● the dispute to be submitted to arb is in respect of defined contractual relationship between parties
Kinds of Arbitration
Ad-hoc Arbitration: Arbitration is conducted without having any institutional proceedings, that
is, it does not comply with the rules of an arbitral institution. The parties have the option to
choose the rules and the procedure to be followed. It is not administered by other, Parties can
make own arrangements for selection of arbitrators. No administrative fees to be paid. It is
flexible, cheaper and faster
Advantages: suitable for all party types , control of process, agreed procedures, flexibility, ready-
made arbitration rules, cost effectiveness, remuneration scale agreed by parties. Disadvantage-
rely on their own judgment, only effective if there is cooperation form both end , might lack
necessary knowledge or expertise
Institutional Arbitration: In Institutional Arbitration, the parties are free to choose a particular
arbitral institution in the arbitration agreement itself. The institution’s governing body or the
parties can appoint one or more arbitrators from a panel of arbitrators that had been previously
agreed upon.
Advantages -Reputation, efficient arbitration, clear rules, quality of arbitral tribunal, supervision,
fixed remuneration. Disadvantages – Too bureaucratic , unrealistic time frames, inflexible
,
 Contd..

 Statutory Arbitration- There are some laws or statutes which specify dispute resolution
through arbitration only. While dealing with legal relationships under such laws, arbitration
is the way out for settling the disputes. It is mandatory arbitration. Consent of the parties is
not required.
 Domestic arbitration- both the parties must be Indians and the proceedings take place in
India itself. In the Arbitration and Conciliation Act, 1996 there is no specific definition
given to domestic arbitration. A mere reading of Section 2(2) can lead us to infer that
domestic arbitration is when the parties had agreed to resolve any disputes that arise in
India. The proceedings must be held in the domestic territory and must be in lieu of the
procedural and substantive law in India.
 International arbitration- When at least one of the party involved is domiciled or resident
outside India or subject matter of the differences or dispute is related to a place outside
India.
Section 2(1)(f) in THE ARBITRATION AND CONCILIATION ACT, 1996- (f)
“international commercial arbitration” means an arbitration relating to disputes arising
out of legal relationships, whether contractual or not, considered as commercial under the
law in force in India and where at least one of the parties
(i) an individual who is a national of, or habitually resident in, any country other than
India; or
(ii) a body corporate which is incorporated in any country other than India; or
(iii) a company or an association or a body of individuals whose central management and
control is exercised in any country other than India; or
(iv) the Government of a foreign country
Contd..
Foreign Arbitration- When the arbitration proceedings is conducted outside India.

Fast Track Arbitration: It does not involve any procedure that takes time and upholds
the main objective or arbitration, that is, to resolve a dispute in a short period of time. In
the provision of the Act, fast-track arbitration is given a stipulated time period of six
months. The arbitrator only makes use of the written submission and unlike other forms
of arbitration, one sole arbitrator is sufficient to resolve the dispute.
Arbitration Agreement
●S.7 (1) - “In this Part, “arbitration agreement” means an agreement by the parties to submit to arbitration
all or certain disputes which have arisen or which may arise between them in respect of a defined legal
relationship, whether contractual or not.”
(2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a
separate agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is contained in—
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of telecommunication [including
communication through electronic means] which provide a record of the agreement;
(c) an exchange of statements of claim and defense in which the existence of the agreement is alleged by
one party and not denied by the other
 Forms of Arbitration Agreement
• A standalone separate Arbitration Agreement :A separate arbitration agreement can be
formed in addition and reference to the operative agreement between the parties.
• An arbitration clause can be formed in the operative agreement as to the section of the
agreement that deals with the rights and options of the parties in the event of a legal dispute
arising out of the contract. An arbitration clause is construed as an arbitration agreement.
• As per Section 7(5), any reference to a document containing an arbitration clause shall also
be construed as an arbitration agreement provided that the referred contract is in writing and
the reference is made with the intention to make that arbitration clause the part of the
contract. In M/s Elite Engineering and Construction (HYD.) Private Ltd. v. M/s Techtrans
Construction India Private Ltd. general reference to the incorporation of a separate
arbitration clause will not be tenable in law. The reference shall be clear and must indicate
the intention of the parties to incorporate.
 Contd..
 According to Section 7(b) of the 1996 Act, an arbitration agreement can also
be inferred from communication that is the exchange of letters, telex,
telegrams, or other means of telecommunication, which provide a record of
the agreement between the parties. In Galaxy Infra and Engineering
Pvt. Ltd v. Pravin Electricals Pvt. Ltd the Delhi High Court
held that the draft agreement exchanged by email between
the parties can be construed as a valid arbitration
agreement.
What amounts to arbitration agreement
The Madhya Pradesh High Court in M.P. Housing Board v. Satish Kumar Raizada, has held that where the words "reference" and
"final’ "conclusive" and "binding" were used in the clause, it amounts to arbitration agreement. However, clause 29(2) of the contract
read as under :- "If any party to the contract is not satisfied with the decision of the "Superintending Engineer", it may make a
reference to the Chief Engineer, P.W.D, Madhya Pradesh, through the Executive Engineer concerned within 30 days from the date of
communication of the decision of the Superintending Engineer, and the Chief Engineer will give his decision after hearing the
parties and his decision thereon shall be final, conclusive and binding on all parties to the contract. In case no reference is made
within the period specified above, the decision of the Superintending Engineer shall be final, conclusive and binding on the parties.

Factum of a contract – Submission to arbitrator for decision – parties free to submit any agreement / matter of interpretation of
contract.
Constitution of agreement between parties – not necessarily to be signed by parties, reduced to writing and the assent
of parties is established. In Jugal Kishore Rameswaram case , both parties are not required to sign but if one party signs
by establishing the arbitration agreement and the other party accepts( accent ), that’s sufficient. The Act does not make a
signature mandatory.
 An arbitration clause is not required to be stated in peculiar form. What is required is
whether parties have agreed to settle the dispute by referring to arbitration or not.
 Under the Act oral agreement cannot be recognized – Gopal Chand Vs Madan Lal
 Agreement must expressly or impliedly spell out arbitration clause- State of Orissa
Vs Damodar Das.
 Arbitration in the absence of agreement – Cannot be referred to arbitration without an
explicit arbitration clause.
 Government arbitration agreement must be in accordance with A.299 of Constitution
Expressed to be made by Governor or President.
Must be in Writing
Execution must be in such a manner as the Government might direct or authorize.
 The 1940 Act allowed the parties to appoint any number of arbitrators. Section 10, brought
a welcomed change allowing the parties to appoint as many arbitrators as they wished, as
long as the number of arbitrators is odd.
 choosing the language of the arbitration proceedings beforehand is always a wise decision.
 In an arbitration agreement, the parties must select either ad hoc or institutional
arbitration Delhi International Arbitration Centre (DIAC), Nani Palkhivala International
Arbitration Centre,, and Mumbai Centre for International Arbitration (MCIA).
 Seat of arbitration should be specifically provided for in the arbitration clause. If the
arbitration clause does not mention the seat or provides only the venue of arbitration,
parties must ensure to fix the seat of arbitration in the first/preliminary hearing of the
arbitral proceedings, by mutual consent.
 Seat of arbitration is a location selected by the parties as the legal place of arbitration,
which consequently determines the procedural framework of the arbitration.
 Lastly signature if not accent.
 1. An Arbitration agreement is entered (herein after referred as Agreement) is made and entered into on _/_/_. , by and
between.
1.1 (A) a company incorporated under Companies Act, 2013 with CIN XXXX, PAN XXXX and its registered office
located at Bengaluru, India. And
1.2 (b) an individual person, aged 27 , Son of ABC, with PAN XXXXX and place of residence located at Bengaluru ,
India ( Employee)
The Company and Employee are herein after referred a Party and collectively are Parties
Recital Clause.
2. Whereas,
[Link] Employee is working in the Company as a Financial auditor with the effect from _/_/_
[Link] employment , there could be disputes amongst the parties related to employment
2.3. The Parties agree to resolve such disputes through the mean of Arbitration and through approaching Courts.
 [Link] Clause
3.1Scope of Claims under this Agreement: This Agreement is Applicable to all the disputes between the Parties, arising
out of Employee employment with Company or the termination thereof, whether asserted during employment with
Company or after it has ended.

3.2Internal Grievance Procedure : The Employee understand that, before commencing arbitration under this
agreement , he may attempt to resolve a claim through Company’s internal procedure for resolving Employees
grievances in effect at that time.
[Link]
4.1If the claim cannot be resolved through the internal grievance procedure , if applicable or another mutually
acceptable voluntary dispute resolution method such as mediation, the claims must be resolved through final and
binding arbitration conducted under Indian Arbitration and Conciliation Act, 1996.
4.2The venue of the arbitration shall be in Hyderabad, unless parties aggress otherwise.
 5. Arbitration Procedure
5.1 Any request of arbitration by either party shall be served and filed within the statute of limitations applicable to the
claim(S) upon which arbitration is sought or required.
5.2. Each party is expected to respond within thirty (30) calendar days to each communication regarding selection of an
arbitrator and schedule the hearing.
5.3. The parties shall choose mutually agreeable neutral arbitrator.
5.4.
5.5.
5.6 Arbitration award will be final and binding on the parties.
6. Arbitration Cost
6.1 Each party shall bear their own standard arbitration and litigation cost.
7. Governing laws.
7.1 This agreement shall be governed by and construed and enforced pursuant to procedural and substantive provisions of
applicable laws
 Severability
8.1 if any portion of the agreement becomes illegal, it will not affect the validity of the agreement
Waiver
9.1 Failure to enforce any of its rights by a Party shall not constitute waiver of such rights.
Interpretation
10.1 Agreement shall be interpreted in favor of arbitration.
Amendment
11.1 No amendment shall be binding unless it is writing .
Notice
12.1 Notices required under this agreement shall be in writing and delivered personally (including courier)> Notices shall be effective upon
receipt.
Company Employee:
By: By:
Name: Name:
Tittle: Tittle:
Witness : Witness
 Who can be an Arbitrator?
A person who is of sound mind can be appointed as an arbitrator. The nationality of an arbitrator is not
specifically restricted. Hence, the arbitrator may be of any nationality. This is as per Section 11 of the
Arbitration and Conciliation Act, 1996 (“The Act”). Furthermore, the parties are free to choose the
arbitrator and determine the arbitrator’s qualification.
 A person to become an arbitrator must qualify the following conditions:
• He can be a judge.
• He can be an advocate; or
• He can be a chartered accountant; or
• He can be a maritime expert.
• He can be an executive; or
• He can be an engineer; or
• He can be a businessman.
Some arbitral institutions which conducts international arbitration, have included foreigners for being
arbitrators. This was to enable the foreign parties to appoint arbitrators of other nationalities whom they
consider more appropriate.
 Section 11 of The Arbitration and Conciliation Act, 1996 provides for the appointment of Arbitrator(s).
An arbitrator is appointed under the following means - (1) Appointment by Parties (2) Appointment by
Court
 The number of arbitrators to be appointed is stated in Section 10 of the Act. It states that the parties are
free to decide the number of arbitrators, however, the number should not be even. For the appointment
of an arbitrator, the parties are free to decide the procedure. In case the parties fail to decide or agree
on the appointment of arbitrators, they must refer to the agreement.
 If the agreement states that three arbitrators are to be appointed for arbitration, each party must choose
one. Among the two appointed arbitrators must jointly appoint an arbitrator for the proceeding, who
shall act as a presiding arbitrator.
 The parties must decide the arbitrator within 30 days from the day of receipt by one party’s request
from the other party for his decision. Else the Chief Justice or his designate appoints the same, as
mentioned under section 17 (2) and 17 (5).
A person designated to be appointed as an arbitrator must possess the below
mentioned qualifications :
(1) Confidence of Parties
(2) (2) Impartiality
(3) (3) Technical and legal Qualifications
(4) (4) Disinterested Party To Litigation aka No Conflict of Interest
(5) (5) Should be able to enter into a Contract vis-à-vis Adjudication of the
Arbitration Agreement
 Powers of Arbitrator

According to Section 17 of this Act, when any party during the arbitration proceeding or at any
time after making of the arbitral award, may seek the interim measure before the arbitration
tribunal. The arbitration tribunal has the power to take an interim measure relating to:
Appointment of guardian for minor or person of unsound mind;

For the protection of:-

 Interim custody and sale of goods which are subjected to the arbitration agreement;
 Securing amount which is disputed in the arbitration;
 Detention, prevention or inspection of any property or thing which is subjected to
arbitration;
 Appointment of receiver;
 Such other interim measure is necessary for the eyes of the Court
 EX-Parte
In any arbitration proceeding, the arbitrator has the power to proceed to ex-parte i.e in
the favor of one party if another party contravenes any provision of this Act. According
to Section 25, there are three conditions under which the court may pass an ex- parte
award:
1. When the claimant fails to communicate his statement of claim in accordance with 
Section 23(1) of the Act.
2. When the respondent fails to communicate his statement of claim in accordance with
Section 23(1) of the Act.
3. When any party fails to appear at an oral hearing or to produce the document or to
produce documentary evidence.
The court, however, doesn’t proceed ex-parte against any party without giving him the
notice regarding the court’s intention to proceed ex parte on a specific date, time and
place
 According to Section 26 of the Act, the arbitrator has the power to appoint
one or more experts to report to him on a specific issue, if he finds it
necessary in any case.
 Power to make awards.
 DUTIES.

 Section 12 and Section 18 of The Arbitration and Conciliation Act, 1996 imposed an
important duty on the arbitrator that in any arbitration proceeding that he must have to
be independent and impartial.
 According to Section 20 of this Act, it is the duty of the arbitrator to appoint the time
and place of arbitration if the parties have failed to decide it amongst themselves.
 In the case of Steel Authority of India v. British Marine 2016, the Court said that the
arbitrator must have to disclose all such facts which are likely to affect impartiality or
which might create an appearance of partiality or bias. 
 The arbitrator should have to make effective decisions without doing any misconduct.
 According to Section 33 of this Act, it is a duty of the arbitrator to correct or interpret
the award passed by himself within 30 days from the date of receipt:
Section 8 of the act of 1996  In cases where there is an arbitration clause, it is
obligatory for the Court under the 1996 Act to refer the parties to arbitration in
terms of their arbitration agreement (Section 8). However, the Act does not oust the
jurisdiction of the Civil Court to decide the dispute in a case where parties to the
arbitration agreement do not take appropriate steps as contemplated by Section 8 of
the Act.

The parties agreed to refer the question of winding up a company to arbitration.

However, the power to order winding up of a company is conferred upon the
company court by the Companies Act. As the arbitrator has no jurisdiction to wind
up a company, the Court cannot make such a reference under Section 8. (Haryana
Telecom Ltd. v Sterlite Industries (India) Ltd., AIR 1999 SC 2354)
 Procedure for the appointment:
Section 11 only confers power on the High Court to appoint an arbitrator or presiding
arbitrator only when the following conditions are fulfilled:
a. where there is a valid arbitration agreement;
b. the agreement contains for the appointment of one or more arbitrators;
c. the appointment of the arbitrator is to be made by mutual consent of all the parties to
the dispute.
d. differences have arisen between the parties to the arbitration agreement; or between
the appointed arbitrators;
e. the differences are on the appointment or appointments of arbitrators
Arbitral Tribunal - S. 2(1)(d) - Sole arbitrator or panel
S.10 Chapter II - determination of arbitrators

Failure to abide by S.10(1) - shall consist of sole arbitrator

 Abolition of umpire system in new act

 Arbitrators to have requisite qualifications as agreed by parties - Old Act did not specify the requisite
qualifications, new Act emphasises on the need to have qualifications in the respectable field - depending on the
technicality
 Arbitrators to rule in its own jurisdiction - The old Act did not mention where the disputed parties would refer
for arbitration but new Act has the power to rule upon its own jurisdiction. Acc to the Apex court - Jurisdiction
connotes “power to decide”.
 A party can challenge jurisdiction but must raise objection before the submission of defence and not at a later stage
of proceedings
Appointment of a third arbitrator by the court in case of disagreement between two arbitrators:
In ICICI Ltd. v. East Coast Boat Builders & Engineers Ltd., two arbitrators were
appointed by respective parties, but they did not agree on the name of the third arbitrator. The
petitioner made an application for appointment of the third arbitrator by the court under s.11
of the Act. The court accepted the prayer and appointed the third arbitrator.

In Kanagarani Durairaj v. Dwaragan, it was held that:

in absence of a delegation of power by the Chief Justice of High Court under s.11 of the Act,
the City Civil Court has no jurisdiction to appoint an arbitrator under s.11 of the court
Judicial Intervention
Section 5 of the Act, 1996 provides for the extent of judicial intervention which\
says that “notwithstanding anything contained in any other law for
the time being in force, in matters governed by this Part,no judicial authority shall
intervene except where so provided in this Part”

Under Section 5, the words used are “Judicial Authority” which is a wider term than
the word “Court” and judicial authority includes all such authorities/agencies conferred with
the judicial powers of the Government.
Arbitral Award:
S.2 (1) ( c ) - does not define but states that ‘Arbitral award’ includes an interim award.

S. 31 (6) submits an explanation under ‘Arbitral Tribunal’ - therefore, an interim award can be a final and binding award.

[Link] - “ It is an instrument which embodies a decision of an arbitrator or arbitrators as regards matters referred to
him or them”

An arbitral award is not a contract but decision determined out of a contract

Contents must be in writing and not oral.

 Domestic awards are governed by Part I whereas foreign awards are governed by part II of the
Arbitration and Conciliation Act of India. A domestic award is an award passed under the
provisions of Section 2 to 43 of the Act.
A domestic award is a result of domestic arbitration ; hence it confines itself to the territory of
India, the parties should have a nexus or birth to Indian origin.
 Form and contents:
S. 2(1)(c) - not exhaustive definition.

Every AA must contain the following:-

1. Factual aspect of disputed matter

2. Submission of parties
3. Contention of parties to rival submissions
4. Arbitrator’s view
5. Delivery of an arbitral award

There is no prescribed form of arbitral award but S.31 of 1996 Act, provide certain criterias.
To be followed by arbitrator
 Terms and contents of AA
 Must be in writing / Signed by arbitrator or arbitrators

 Must be based on reasoning

 Must show date and place of arbitration

 Certified copy of AA is to be delivered to each party

 If AA has payment of money involved, the AA must include the rate of interest as the Arbitral tribunal deems
reasonable

 The cost of arbitration to be fixed by the AA

 Language must be free of ambiguity

 AA shall state its date and the place of arbitration as determined in accordance with S20.
Essentials
1. Writing and signed
2. Parties must be competent to initiate the proceeding
3. A sustainable arbitral award must be reasoned one - S.31(3) of the A & C Act 1996
4. There must be arb clause to assign disputes or differences before arbitral tribunal
5. The contents of AA must be connected with the subject matter of the dispute
arbitrated

( Where the AA is based on mutual settlement of the dispute by the parties, no reason to be
given)
 AA operates as res judicata
In Shashi Sekhareshwar v. Lalit Mohan - The privy council , inter alia, observed that a decree passed on the
foundation of AA would have the same effect as an ordinary judgment of a court and on the question which has
already been decided by the arbitrators operates as res judicata(a thing or matter that has been finally juridically decided
on its merits and cannot be litigated again between the same parties)

Award may be Final / Interim

unless there is an agreement to the contrary between the parties , the arb could make an interim award because it has the
same sanctity of a final award. If it is not complied with, it could not be enforced through the court by the same
procedure as in the case of final award.

No time limit provided - but arbitrators can be terminated if he fails to act without ‘undue delay’ S.14

AA by consent - This legislation recognizes liberty of parties to come to settlement. The Arbitrator must be satisfied
about the validity of the settlement and has to give award in those terms. Arbitrator may encourage efforts of settlement
AA to be made by majority - S.29(1) - Decision of Arbitral tribunal shall be made by majority.
AA to be signed by arbitrator for validity. If more than two arbitrators, if no unanimous decision,
majority decision rules. Dissenting opinion to be appended, but not obligatory

S.35 - Finality / binding nature of award. S.35

Law of limitation : Art 54 of Limitation ACt, 1963 - Article 54 of the Limitation Act, 1963
prescribes the limitation of three years, for suits for specific performance or for setting aside AA
suit can be filed within 3 month

Stamp duty payable - No separate provision but must follow Indian Stamp Act, 1899. Karnataka
HC: After amendment, stamp duty payable on arbitral award amount is 0.75%

Interest from the date of submission to the date of AA.

Treated as a decree of a court.

 EnforcemenotA
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 The regulation and execution of decrees in India is regulated by the Civil Procedure Code,
1908 (“CPC”)
 For the same way as an Indian court decree, domestic and international awards are enforced.
 However, there is a difference depending on the seat of arbitration. Seated arbitral award
(“domestic award”) would be governed by Part I of the Act, enforcement of foreign —
seated awards (“international award”) would be governed by Part II of the Act.
 Part I of the Act is mentioned in S.36
Duties of Arbitrator
1. Duty to act fairly - Showing undue favors to one party at the cost of the other in matters handled by him would be
looked upon with suspicion by the Courts.
2. Adherence to the principles of natural justice - an arbitrator is not bound by the technical and strict rules of
evidence which are founded on fundamental principles of justice and public policy.

Equal opportunity to be heard: Oil & Natural Gas Commission Ltd. v. New India Civil Erectors Pvt. Ltd., 1996
(Suppl) Arb LR 426 (DB—Bom)
3. Hearing in absence of one party - An arbitrator would be guilty of misconduct if he is charged with any information
having been obtained from one side which was not disclosed to the other. ( Padam Chand Jain v. Hukam Chand Jain,
AIR 1999 Del 61) Such an information may be oral or in writing.

4. Failure to consider vital documents - Even if the department did not produce those documents before the arbitrator, it
was incumbent upon him to get hold of all the relevant documents for arriving at a just decision.

The making of an award without the basic documents, namely, the arbitration agreement before the arbitrators at the time
of application of mind, i.e. at the time of considering the rival contentions of the parties is not permissible. The arbitrator
has to insist on the production of the agreement, even if not presented by the parties, as without such agreement being on
record, the respective contentions of the parties cannot be adjudicated upon
[Link] must act within submission - In order to determine whether the arbitrator has acted in excess of
jurisdiction what has to be seen is whether the claimants could raise a particular dispute or claim before the arbitrator.

[Link] to decide on his skill and knowledge

[Link] cannot delegate his functions

[Link] to proceed ex-parte- An arbitrator ought not to proceed ex parte against a party if he has not appeared at one
of the sittings. The arbitrator should give another notice fixing date, time and venue and intimate that he would proceed
with the matter ex parte if either party fails to attend. Even after notice if the defaulting party does not attend, the
arbitrator may proceed in his absence (Hemkunt Builders P. Ltd. v. Panjabi University, Patiala, 1993(1) Arb LR 348.)
9. Failure to act without unreasonable delay - Section 14(1)(a) of the Act provides that the mandate of an arbitrator
shall terminate if he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without
undue delay. Thus, where the named arbitrator does not act for three months despite repeated reminders, it can be clearly
said that the mandate of the named arbitrator shall be deemed to have been terminated as he failed
Minimum requirements for a proper hearing:
(i) each party must have notice that the hearing is to take place and of the date, time and place of holding such hearing;

ii) each party must have a reasonable opportunity to be present at the hearing along with his witnesses and legal advisers,
if any, if allowed;

(iii) each party must have an opportunity to be present throughout the hearing;

(iv) each party must have a reasonable opportunity to present statements, documents, evidence and arguments in support
of his own case;

(v) each party must be supplied with the statements, documents and evidence adduced by the other side;

(vi) each party must have a reasonable opportunity to cross-examine his opponent’s witnesses and reply to the arguments
advanced in support of his opponent’s case
Kinds of Arbitral Award
Enforcement : Domestic AA
 Enforcement: ( represents the conversion of a favourable
award into concrete relief for the claimant,)
 The regulation and execution of decrees in India is regulated by the Civil Procedure Code,
1908 (“CPC”)
 For the same way as an Indian court decree, domestic and international awards are enforced.
 However, there is a difference depending on the seat of arbitration. Seated arbitral award
(“domestic award”) would be governed by Part I of the Act, enforcement of foreign — seated
awards (“international award”) would be governed by Part II of the Act.
 Part I of the Act is mentioned in S.36
 If an award is passed in domestic arbitration and sought to be enforced anywhere it must
satisfy the local laws for the validity of enforcement.
 An award becomes enforceable once the period of three months for challenging the award
as laid out under Section 34 of the Arbitration and Conciliation Act, 1996 has elapsed or that
the application to set aside the award has been rejected
 Supreme Court, had in National Aluminum Company Ltd. (NALCO) v. Pressteel &
Fabrications (P) Ltd. and Anr. (2004) 1 SCC 540 held that once a domestic arbitral award is
challenged under Section 34 of the 1996 Act it becomes unexcitable.
 But the mere filing of a challenge under Section 34 would not render a domestic arbitral
award unenforceable, and a stay of the operation of the award would have to be specifically
sought from and granted by the relevant court.
• Enforcement of Foreign Arbitral Award: India is a signatory to Geneva Convention on the
Execution of Foreign Arbitral Awards, 1927 (“Geneva Convention”) and Convention on the
Recognition and Enforcement of Foreign Arbitral Awards, 1958 (“New York Convention”).
• When the award is enforceable in India? If a party receives a binding award from a
state signing the New York Convention or the Geneva Convention and the award is made in
a territory recognized by India as a convention country, the award would then be
enforceable in India
a. The country must be a signatory to the Convention.
b. The award shall be made in the territory of another contracting state which is a reciprocating
territory and notified as such by the Central Government.
• Central Govt. has notified 48 countries as reciprocating countries out of 196 countries in the
world -
 In India, implementing a foreign award is a two-stage procedure begun by filing a
request for execution. 
 Initially, a judge will decide if the award met with the law’s criteria.
 Once an award has been considered enforceable, it can be applied as a court order.
 The enforcement of a foreign award under Part II of the Arbitration Act would be
covered by Article 137 of the Limitation Act which provides a period of three years,
starting from when the right to apply accrues.
Enforcement of domestic awards
Passing of award > Wait for 90 days in order to apply for the execution of award > Award may be challenged U/S 34 of
the Act ( Setting aside of award)

Expiry of period > Award cannot be challenged

S.34 Mean a stay on the proceeding for execution of the award u/1996 Legislation

Amendment Act 2015 - now a party who is challenging an award has to move a separate application and pray for a stay
on the execution of an award.
 Enforcement of Foreign awards

Initiation by filing an execution petition , and is a two-stage process:

In the first stage a competent court would determine the adhered of the award to the requirements of the Act,

the second stage being to enforce that award like a decree of that court.

A foreign award must:

A. This award must deal with differences arising out a “commercial relationship”

In RM Investments Trading Co Pvt Ltd v Boeing Co & Another - “The term ‘commercial’ should be
given a wide interpretation so as to cover matters arising from all relationships of a commercial
nature, whether contractual or not”

B. The second requirement being that the country where the award has been issued must is a country
notified by the central government to be a reciprocating country.
Enforcement under the New York Convention
Sections 44 to 52 of the Arbitration and Conciliation (Amendment) Act, 2015 deals with foreign awards passed
under the New York Convention.

The New York Convention defines "foreign award" as an arbitral award on differences between persons arising out
of legal relationships, whether contractual or not, considered as commercial under the law in force in India

there are two pre-requisites for enforcement of foreign awards:

1. The country must be a signatory to the New York Convention.

2. The award shall be made in the territory of another contracting state which is a reciprocating territory and
notified as such by the Central Government.
Requirements for enforcement of foreign awards
Section 47 provides that the party applying for the enforcement of a foreign
award shall, at the time of the application, produce before the court
 Original or a duly certified copy of the award passed by the Arbitral Tribunal

• Original or duly authenticated copy of the agreement.

• Evidence required proving the existence of a foreign award.

 Grounds to contest an award.
 parties to the settlement were under any disability.
 party did not receive a proper notice of appointment of proceedings.
 reward deals with a distinction that does not fall within the terms of the
agreement.
 Award contains decisions on matters beyond the scope of being referred
arbitration.
 proceedings did not comply with the agreement.
 Under Indian law, the subject matter of the dispute cannot be resolved by
arbitration.
Conditions for enforcement of domestic and foreign arbitral awards
 Award is ultra vires the submission to arbitration or the agreement itself.
 Composition of the arbitral tribunal or the commencement of arbitral procedure is ultra
vires agreement.
 Especially a foreign award has not yet become binding on the parties, or has been
suspended or set aside by a competent authority of the country in which that award was
made.
 Arbitrator is not capable to settle the subject matter of the dispute under the Indian law.

 Enforcement of the award could be contrary to the public policy of India.

The Amendment Act has restricted the ambit of violation of public policy for international commercial arbitration to only
include those awards that are:

) affected by fraud or corruption,

(ii) in contravention with the fundamental policy of Indian law, or

(iii) conflict with the notions of morality or justice.

Section 49 provides that where the Court is satisfied that the foreign award is enforceable under this Chapter, the award shall
be deemed to be a decree of that Court.
Enforcement under the Geneva Convention
Sections 53-60 of the Arbitration and Conciliation (Amendment) Act, 2015 contains provisions relating to foreign awards passed under
the Geneva Convention.

The conditions for enforcement of foreign awards under the Geneva Convention are provided under Section 57 of the Arbitration and
Conciliation Act, 1996. These are as follows:

1. the award has been made in pursuance of a submission to arbitration which is valid under the law applicable thereto;
2. the subject-matter of the award is capable of settlement by arbitration under the law of India;
3. the award has been made by the arbitral tribunal provided for in the submission to arbitration or constituted in the manner agreed
upon by the parties and in conformity with the law governing the arbitration procedure;
4. the award has become final in the country in which it has been made, in the sense that it will not be considered as such if it is
open to opposition or appeal or if it is proved that any proceedings for the purpose of contesting the validity of the award are
pending;
5. the enforcement of the award is not contrary to the public policy or the law of India.
, the said section lays down that even if the aforesaid conditions are fulfilled, enforcement of the
award shall be refused if the Court is satisfied that-

1. the award has been annulled(declare invalid) in the country in which it was made;
2. the party against whom it is sought to use the award was not given notice of the arbitration
proceedings in sufficient time to enable him to present his case; or that, being under a legal
incapacity, he was not properly represented;
3. the award does not deal with the differences contemplated by or falling within the terms of the
submission to arbitration or that it contains decisions on matters beyond the scope of the
submission to arbitration: Provided that if the award has not covered all the differences
submitted to the arbitral tribunal, the Court may, if it thinks fit, postpone such enforcement or
grant it subject to such guarantee as the Court may decide.

Section 58 provides that where the Court is satisfied that the foreign award is enforceable under this
Chapter, the award shall be deemed to be a decree of the Court.
 Provisions OfArbitrationAnd ConciliationAct, 1996 Dealing With ArbitralAward

Section 29 of the Arbitration and Conciliation Act, 1996- Decision making by a panel of arbitrators
( The decision of the Arbitral Tribunal is going to be in the majority).
Section 30 of the Arbitration and Conciliation Act, 1996: Settlement If the parties with success
conform to a settlement then the same can be incorporated within the form of an award and  can
encourage the parties to settle their dispute by way of mediation, conciliation, negotiation.
According to Section 31, Arbitral awards shall be signed and written and other essentials.
According to Section 32  arbitral tribunal can terminate the arbitral proceedings.
Section 33 of the Arbitrational and Conciliation Act- Correction and Interpretation
Section 33 plays an important role to ensure that the parties do not suffer due to the mistakes of the
arbitration tribunal.
 Contd..
Section 34 of the Arbitration and Conciliation Act of 1996 specifies grounds for challenging an arbitral award
rendered under Section 31. 

Case Laws Cheran Properties Limited Vs Kasturi And Sons Limited

Facts:
An agreement was entered between Sporting Pastime India Limited (SPIL), Kasturi Sons and Limited (KSL), KC
Palanisamy (KCP) and Hindcorp Resorts Private Limited (Hindcorp). Under the agreement, SPIL was to allot 240 lakhs
equity shares to KSL against the book debts. KSL offered to sell 243 lakhs equity shares to KCP. KCP agreed to take over
the business, shares and liabilities of SPIL as per the Agreement.

KCP failed to comply with its obligations under the Agreement. KSL and Hindcorp initiated Arbitration proceedings against
KCP and SPIL. The Arbitral Tribunal made its award directing KCP and SPIL to return the share certificates of SPIL to KSL
and Hindcorp. KSL was directed to pay an amount of INR 3,58,11,000 together with interest at 12% p.a.
KCP challenged this Judgement under Section 34 of the Arbitration and Conciliation Act. The challenge was
dismissed by the High Court of Madras. KSL held proceedings against Cheran, a nominee of KCP to execute the
award which directed the transmission of shares. KSL approached the National Company Law Tribunal, where it
was held that Cheran is a nominee of KCP and holds shares on its behalf.

Issue:Whether an Arbitral award is binding on a third party?

Judgement:
As per the above reasons, Court contended that the appeals are lacking in merit. The Appeals shall stand
dismissed.
Section 37 of Arbitration and Conciliation Act, 1996- Appeal Appeal against an order passed by the
court.

The time limit for filing appeals u/s 37If the appeal is being filed in a High Court, within 90 days
If the appeal is being filed in any other Court, within 30 days from the date of the order.
 l a n u b i r T l a r t i b r A f o n o i t i s o p m o C

Chapter-III of the Arbitration and Conciliation Act, 1996 talks about the composition of

the arbitral tribunal. 
The provisions which are discussed in detail in Chapter-III are mentioned below-
1. The number of arbitrators
2. Their appointment
3. Power of the Central Government to amend the schedule
4. Grounds on which the appointment of the arbitrator can be challenged
5. Procedure to challenge the appointment
6. Failure or impossibility on the part of the arbitrator to act
7. Termination of the mandate and substitution of the arbitrator
The number of arbitrators should be odd and not even. It helps in determining the clear
majority of the tribunal and avoids any sort of discrepancy in that regard.
 The Arbitration and Conciliation (Amendment) Act, 2019 provided for the
establishment of the Arbitration Council of India with the view of promoting the
other alternative dispute redressal mechanisms.
Composition of the Arbitration Council of India
 It consists of a Chairperson who is either:
• A judge of the Supreme Court 
• A judge of a High Court 
• Chief Justice of a High Court
• An eminent person with expert knowledge in the conduct of arbitration.  
 A person of any nationality can be an arbitrator in a case unless specifically provided in the
agreement.
 Parties to the dispute can approach the courts for the appointment of arbitrators to decide upon
the dispute at hand.
 For domestic arbitration, appointments are made by the institution designated by the concerned
High Court. For International arbitration SC.
As per the Arbitration and Conciliation (Amendment) Act, 2021, the previously provided qualification criter
were removed and replaced with a provision that the qualifications, experience, and norms for accreditation o
arbitrators were to be specified under the regulations.
 The qualifications to be an arbitrator as per Eighth Schedule were as below:
• An advocate with 10 years of experience
• A chartered accountant with 10 years of experience
• A cost accountant with 10 years of experience
• A company secretary with 10 years experience
• An officer of the Indian Legal Service
• An officer with a law degree having ten years of experience in legal matters
 Section 9
 Section 9 of the Arbitration and Conciliation Act, 1996 deals with interim relief in an arbitration proceeding. It
entitles any party to obtain an interim relief at three stages – 
1. Before the commencement of the arbitration proceedings
2. During arbitration proceedings
3. After when the arbitral award is given but before its enforcement
 A considerable time may elapse between the time of invoking the arbitration and the appointment of an
arbitral tribunal by the Court.
 During the time in between, if an urgent relief is sought and there is hardly any time to wait, Section 9
specifically provides before that “arbitral proceedings”, an individual is also entitled to move the Court if
he/she feels the urgency.
 Therefore, the entire purpose of Section 9 is to provide relief to the parties when the arbitral tribunal is not
even in existence. 
 Similarly, at any time after the arbitral award and before its enforcement as provided by Section 36
, one has the right to go to the Court.
 Because, right after the passing of the award and before the enforcement, one has to wait
effectively for a period of 90 days under Section 34 

 In Companies Act v. Mr. Ashok Khurana (2014), the Bombay High Court held
that the parties who are not parties to an arbitration agreement can still file an
application under Section 9 if they are likely to be affected by the reliefs
claimed therein.
 The Delhi High Court, in the case of 
Ashwani Minda and M/s Jay Ushin Limited v. M/s U-Shin Limited and M/s Minebea Mitsumi Inc
orporated 
(2020) while deciding upon the scope of applicability of Section 9 in connection with the
foreign seated arbitrations, held that an application under Section 9 would not be maintainable
after the constitution of an arbitral tribunal in a foreign seated arbitration if an efficacious
remedy is available before the arbitral tribunal.
 In the case of New Morning Star Travels v. Volkswagen Finance (2020), the Delhi High Court
held that orders relating to an application under Section 9 cannot be passed ex-parte.
 Section 16

 Section 16 specifies that the Arbitral Tribunal has the power to decide whether it has the locus to adjudicate the
dispute or not. It provides that an arbitration tribunal is competent to rule on its own jurisdiction.
 Section 16 of the Arbitration and Conciliation Act enables the arbitrator to decide about the existence of an
arbitration clause.
 Arbitral Tribunal must be constituted according to the arbitration agreement with the mutual consent of the
parties. It  may constitute a sole arbitrator or a group of arbitrators.
 The subject matter should be arbitrable and should be in accordance with the agreement. Disputes pertaining to
criminal cases, matrimonial disputes, tenancy disputes, and insolvency disputes are not arbitrable. It should not
be barred by law or public policy.
 Section 16(2) states that any objections about jurisdiction have to be raised before filing a statement of
defence. 
 If the tribunal allows the objection raised by the parties, in such a scenario,  an appeal can be made under 
 Section 37 of the Act provides that if a person is not satisfied with the order passed by the
tribunal, he/she can appeal to the court.
 Functions of Arbitration Tribunal
 Arbitral tribunals don’t exercise statutory jurisdiction. They define their jurisdiction as per
the needs of the parties involved in the dispute. 
 It is the duty of the tribunal so assigned to finalise the place and time for the proceedings
as per the convenience and consent of the parties to the dispute.
 An arbitration tribunal should analyse all the evidence and witnesses to be sure of the
circumstances and then take a stand on the basis of which the arbitral award is given by
the tribunal.
 There is an obligation for the arbitrators in the tribunal to maintain the secrecy of all the
facts in order to maintain the trust values defined, intact.
 STATEMENT OF CLAIMS AND DEFENCES. Within the agreed period or the period
determined by the tribunal, the claimant shall state the facts supporting his claim, the points at
issue and the relief or remedy sought and the respondent shall state his defence in respect of
those particulars. The parties should submit the documents they rely in support of their claim or
defence.
 Section 17 has been amended which now provides wide power to arbitrators
to grant interim measure of protection.
 Fast Track Procedure- Parties may adopt fast track procedure by following
the procedure in Section 29-B.
 Similarly, amended Section 31 provides for award of interest which may
pertain to pre-arbitration, during the arbitration and post arbitration also.
Principles Governing Award of Interest : The legal position relating to the power of the arbitrator to award of
interest is : (1) If there is no reference regarding the claim of interest either expressly or impliedly, the arbitrator
has no power to award interest. (2) If there is a reference relating to the claim of interest, the arbitrator can award
interest from the date of reference till the date of award or upto the date of decree. (3) The arbitrator has no power
to award interest after the date of the decree and the Court alone is competent to award interest after the date of the
decree. (4) The Court has no power to award interest from the date of award till the date of decree or from the date
of suit till the date of the decree as the same is impliedly prohibited by S. 31(7) and the arbitrator alone is entitled
to do so by virtue of reference.
 Section 8 of the act of 1996  In cases where there is an arbitration clause, it is obligatory for the Court under
the 1996 Act to refer the parties to arbitration in terms of their arbitration agreement (Section 8). However,
the Act does not oust the jurisdiction of the Civil Court to decide the dispute in a case where parties to the
arbitration agreement do not take appropriate steps as contemplated by Section 8 of the Act.  Similarly, the
Court is to refer the parties to arbitration under Section 8 of the 1996 Act only in respect to “a matter which is
the subject matter of an arbitration agreement”

The parties agreed to refer the question of winding up a company to arbitration. However, the power to order
winding up of a company is conferred upon the company court by the Companies Act. As the arbitrator has no
jurisdiction to wind up a company, the Court cannot make such a reference under Section 8. (Haryana Telecom
Ltd. v Sterlite Industries (India) Ltd., AIR 1999 SC 2354).
 
 Revision or Review of an Award : There is nothing in S. 37 which in any way takes away the
powers that the High Court possesses of entertaining petition of revision or review U/S. 115 of
the Civil Procedure Code. Hence, a revision petition against an order passed on appeal under this
section is competent.
 Types of Award
 Interim Award – This is a temporary award until the tribunal has given its final decision. A
provisional award can only be made if the parties have agreed that “the tribunal may have the
power to order on a provisional basis any relief which it would have power to grant in a final
award” (s.39 Arbitration Act 1996).
 Partial Award – Some elements of the parties’ claim have been determined but other issues remain
and need to be resolved before the final award is made. Parties can continue arbitrating the
remaining issues.
 Consent Award – Usually the parties have reached a settlement and agreed to terms which are then
incorporated into an award which can be enforced like a Judgment by consent. A consent award
enables one party to take enforcement proceedings when another party fails to comply with the
terms of the settlement. Consent awards usually expedite the conclusion of arbitration proceedings
 Performance Award – It is most common to see awards made in monetary terms, however, a party can
be ordered to perform specific works, hand over goods or rights. For example, a contractor may be
required to carry out remedial works in a building to ensure work is finished to the quality required. The
difficulty is that these types of award create grounds for further dispute. An arbitrator should award a
monetary award where possible in these instances to avoid escalation of conflict.
• Final Award – This should usually be in writing and signed by all the arbitrators. The award must
contain reasons and state where the arbitration took place. It must also be dated (this is important for
calculating interest on payments). Once the final award is made this ends proceedings.
• Additional Award – Usually once the final award it made, the tribunal has no further authority.
However, the parties can request an additional award be made on an undecided issue still in dispute
Advantages of Arbitration
PRIVACY AND CONFIDENTIALITY - Judicial proceedings in courts are conducted in an open
court in the gaze of the general public. Everything right from pleadings, evidence, proceedings to the
final decision is open and accessible for all and sundry. In contradistinction to judicial proceedings
arbitration is a private affair. Some parties prefer to have that their disputes determined out of public
gaze and for them arbitration is a good option. Confidentiality is therefore an institutional security in
arbitration.

CONVENIENCE OF PARTIES AND FLEXIBILITY OF PROCEDURE - In the judicial process

the parties have no control over the proceedings and they have no say as regards the procedure, venue
and time of judicial proceedings. The procedure is largely predetermined, the venue is fixed and the
time is controlled by the presiding judge. However arbitration caters to the convenience of the parties
which is a very important advantage of arbitration.
3. LIBERTY TO CHOOSE ARBITRATOR

The arbitrator is a private judge chosen by the parties to adjudicate their dispute. Arbitration provides flexibility to the
parties to choose any person of their choice to adjudicate their disputes. The right to choose or to have a say in the choice
of one or more members of the arbitral tribunal is also regarded as an important advantage. This permits the parties and
gives them an option to have their dispute resolved by experts and professionals having specialized knowledge and
experience in the applicable arena.
4. ARBITRATION IS POTENTIALLY EXPEDITIOUS Arbitration is potentially faster in comparison to litigation
and can be expedited to suit the needs and requirements of the parties. The parties may also take recourse to a
summary form arbitration referred to as Fast Track arbitration. Complex commercial/ business disputes require
expeditious resolution as high stakes are involved and expeditious resolution is in the interest of trade and commerce.
The arbitral tribunal follows a simplified procedure and is not bound by the provisions of the Code of Civil Procedure,
1908 or the Indian Evidence Act, 1872. Thus the arbitral procedure can be moulded so as to suit the requirements of
the parties.

5. FINALITY OF AWARDS - The award can be set aside by the court only on certain specified grounds as
enunciated under section 34 of the Arbitration and Conciliation Act, 1996. The ambit and scope of section 34 of the
Arbitration and Conciliation Act, 1996 is also limited and the court does not exercise appellate jurisdiction. Thus
while in judicial proceedings we have provisions for successive appeals where at least the first appellate court
appreciates the factual evidence also, in arbitration there is no provision for an appeal against the award. Where no
application under section 34 of the Arbitration and Conciliation Act, 1996 is made or such application is made and
refused the award is treated as a decree of the court and can be executed as such.
6. EXTENSIVE ENFORCEABILITY OF ARBITRAL AWARDS - An arbitration award passed in India can be
enforced in other countries as well. Various countries including India are the signatories of the Geneva Protocol, 1923 and
the New York Convention on Recognition and Enforcement of Foreign Awards, 1958 which facilitate enforcement of
arbitral awards. Similarly foreign awards which have been passed in the other countries, which are signatories to the
Geneva Protocol and the New York Convention and have made reciprocal arrangements, are enforceable in India
What are the grounds for challenging the jurisdiction of an arbitrator? Ans. S. 12 (3) provides that an
arbitrator may be challenged "only" if the circumstances exist that give rise to justifiable doubts as to
his independence or impartiality, or that he does not possess the qualifications agreed to by the
parties. The use of the word "only" in this sub-section means that he cannot be challenged on other
grounds than those mentioned U/Sub. S. (1). S. 12 (4) provides that a party may challenge an
arbitrator appointed by him or in whose appointment he has participated, only for other reasons of
which he becomes aware after the appointment has been made
S. 27 provides for Court assistance in taking evidence with the object of facilitating efficient conduct
of arbitration. S. 27(1) provides that an application can be made to the court for such assistance
either by the arbitral tribunal or by a party with the approval of the tribunal. The approval of tribunal
is necessary to avoid the abuse of the arbitral process. U/S. 27(3), the court may, within its
competence and according to its rules on taking evidence, execute the request by ordering that the
evidence be produced directly to the arbitral tribunal. U/S. 27(4), the Court while making orders,
may issue the same processes to witnesses as it may issue in suits tried before it.
The recording of evidence by the Court can be availed of in arbitral proceedings when : (i) the
arbitral tribunal desires so; or (ii) a party wishes so and the request is acceded to by the arbitral
tribunal
What are the kinds of Arbitration? Ans: Kinds of Arbitration are : (a) Ad hoc Arbitration, (b) Contractual Arbitration, (c)
Institutional Arbitration, and (d) Statutory Arbitration.

What are the essentials of an Arbitration Agreement ? Ans. The essentials of an Arbitration agreement are : (i) An
agreement to which the parties must be ad idem. (ii) The agreement must be in writing. (iii) The agreement must be to
refer a present or future difference to arbitration, whether an arbitrator is named in the agreement or not.
Whether Arbitral Tribunal is competent to rule on its jurisdiction?
What procedure is to be followed by the arbitral tribunal? Ans. S. 18 provides definite obligations on the arbitral
tribunal to i.e., treat all the parties with equality and to give an opportunity to each party to present his case. The
arbitral tribunals are supposed to observe the principles of natural justice. U/S. 34 it has been provided that in case
the arbitral tribunals fail to observe these principles, they may be set aside by the Courts. In this way, the arbitral
tribunals are supposed to perform their functions honestly and impartially.
 S.33 Correction and Additional Award.
 Within thirty days from the receipt of the arbitral award, unless another period of time has been agreed upon by the parties-
 a.   a party, with notice to the other party, may request the arbitral tribunal to correct any computation errors, any clerical or
typographical errors or any other errors of a similar nature occurring in the award;
 b.   if go agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to give an interpretation
of a specific point or part of the award.
 1.  
 2.   If the arbitral tribunal considers the request made under sub-section (1) to be justified, it shall make the correction or give
the interpretation within thirty days from the receipt of the request and the interpretation shall form pan of the arbitral award.
 3.   The arbitral tribunal way correct any error of the type referred to in clause (a) of sub-section (1), on its own initiative, within
thirty days from the date of the arbitral award.
 4.   Unless otherwise agreed by the parties, a party with notice to the other party may request, within thirty days from the
receipt of the arbitral award, the arbitral tribunal to make an additional arbitral award as to claims presented in the arbitral
proceedings but omitted from the arbitral award.
 5.   If the arbitral tribunal considers the request made under sub-section (4) to be justified, it shall make the additional arbitral
award within sixty days from the receipt of such request.
 Default of Party
 Section 25 of the Act deals with three situations where the parties are at default. 
 Firstly, the arbitral tribunal terminates the proceedings when the claimant without showing
sufficient cause, fails to communicate his statement of claim in accordance with 
Section 23(1). Secondly, the arbitral tribunal continues the proceeding when the
respondent fails to communicate his statement of defence in accordance with Section
23(1).
 Thirdly, if there is sufficient cause then the termination is recalled and proceeding gets
restored
 Termination 
 The arbitral proceedings are terminated either by the final arbitral award or by an order of
the arbitral tribunal terminating the arbitral proceedings. 
 The arbitral tribunal terminates the arbitral proceedings in any of these cases where:
1. the claimant withdraws the claim and respondent does not object to it,
2. both parties are in consensus and agree to terminate the arbitral proceedings, or
3. the continuation of the arbitral proceedings has become impossible or irrelevant
considering the present facts of the case.
 Also, the termination of the arbitral proceedings terminates the mandate of the arbitral
tribunal and the arbitral tribunal becomes functus officio. The term “functus officio”
means no longer holding office or having official authority once a decision is rendered.
 Any party who finds any information under Section 12 to cause suspicion and apprehension of bias
or impartiality and independence of the arbitrator, within 15 days of becoming aware of such
circumstances or within 15 days of the constitution of the Tribunal, must send a written statement
of the reasons for the challenge to the Tribunal. S.13
Chapter II Arbitration agreement
7 Arbitration agreement

8 Power to refer parties to arbitration w

here there is an arbitration agreemen
t
9 Interim measures etc. by Court.

IMPORTANT PROVISIONS
Chapter III Composition of arbitral tribunal

10 Number of arbitrators

11 Appointment of arbitrators

12 Grounds for challenge

13 Challenge procedure

14 Failure or impossibility to act

15 Termination of mandate and substitution of ar

bitrator

IMPORTANT PROVISIONS
 S.16 – Chapter IV Jurisdiction of arbitral tribunal.
Chapter V Conduct of arbitral proceedings

18 Equal treatment of parties

19 Determination of rules of procedure

20 Place of arbitration

21 Commencement of arbitral proceedings

22 Language

23 Statements of claim and defence

24 Hearings and written proceedings

25 Default of a party

26 Expert appointed by arbitral tribunal

27 Court assistance in taking evidence

Chapter VI 28 Rules applicable to substance of di
spute

29 Decision making by panel of arbitr

ators
30 Settlement

31 Form and contents of arbitral awar

d
32 Termination of proceedings

33 Correction and interpretation of aw

ard; additional award
 RECOURSE AGAINST ARBITRAL
CHAPTER VII AWARD

34 Application for setting aside arbitra

l award
Finality and enforcement of
Chapter VIII
arbitral awards
35 Finality of arbitral awards
36 Enforcement
Chapter IX Appeals
37 Appealable orders
 Enforcement
of Certain
Part II
Foreign
Awards
 Q &A
 Explain the silent features of Arbitration Act.
 Write a short note on Arbitration agreement.
 What is arbitration award? Narrate the essentials of an arbitration award.
 What is arbitral clause? Explain how it differs from arbitration agreement?
 In a dispute between Mr. A & B , C will be appointed as arbitrator. C will examine witnesses and before giving
award he will withdraw his consent to be arbitrator. Whether C’s act is valid?
 Write a short note on Qualifications of arbitration.
 Discuss the provisions relating to conduct of arbitral proceedings.
 Explain the composition of arbitral tribunal.
 A is appointed as sole arbitrator by B & C. A & his wife invested in B’s company. A gives verdict in favor of B. C
discovers this after 2 months . Can C ask for setting aside of the award?
 Q&A
 An arbitral tribunal denied equal opportunities to one of the parties in arbitral proceedings and later passed an
award. Can this award be challenged ?
 A & B have decided the dispute to refer to arbitration, but they have failed to decide in which language. Give
suggestions. - 22. Language.
 1.   The parties are free to agree upon the language or languages to be used in the arbitral proceedings.
 2.   Failing any agreement referred to in sub-section (1), the arbitral tribunal shall determine the
language or languages to he used in the arbitral proceedings.
 3.   The agreement or determination, unless otherwise specified shall apply to any written statement by a
party, any hearing and any arbitral award, decision or other communication by the arbitral tribunal.
 4.   The arbitral tribunal may order that any documentary evidence shall be accompanied by a translation
into the language or languages agreed upon by the parties or determined by the arbitral tribunal.
 Kinds of arbitration.
 There was a dispute between Mr.M & Mr. J. they appointed A,B,& C as their arbitrators. Award was signed
by only A & C. Is Arbitration award valid?
 An apprentice –deed between minor and his employer contained an arbitration clause. Is the clause binding
on minor?
 When an application can be made to set aside arbitral award.
 Challenging grounds for appointment of an arbitrator.