Arbitration and ADR

[3rd Edn. 2012(Pb)]

CONTENTS

INTRODUCTORY

¨	General	1
¨	Alternative Dispute Resolution (ADR)	2
	Q. What is ADR?	2
	Q. When ADR is useful and recommended?	2
	Q. What is the difference between ADR and civil suit in a court?	2
	Q. What is an 'ADR Neutral'?	2
	Q. What are the features of ADR?	3
	Q. What are the advantages of ADR?	3
¨	Arbitration	3
	Q. What is Arbitration?	3
	Q. What are the advantages of Arbitration over litigation?	4
	Q. What type of disputes can be settled by Arbitration?	4
¨	Statutory Arbitration	4
	Q. What is statutory Arbitration?	4
¨	Ad hoc Arbitration	4
	Q. What is Ad hoc Arbitration?	4
¨	Fast Track Arbitration	4
	Q. What is Fast Track Arbitration?	4
¨	Attributes of Arbitration Agreement	4
¨	Conciliation and Mediation	5
	Q. What is Conciliation?	5
	Q. What is Mediation?	5
	Q. How is Mediation different from Conciliation?	5
	Q. What are the limitations of Conciliation?	6
	Q. What is 'Pre-Trial Mediation'?	6
	Q. What do you mean by the expression 'Med-Arb'?	6
	Q. What is 'Hybrid Conciliation, Mediation and Arbitration'?	6
¨	Negotiation	6
	Q. What is Negotiation?	6
	Q. How is a dispute resolved by Negotiation?	7
	Q. What is 'Position-Based Negotiation'?	7
	Q. What are Facilitated Negotiations and what is the role of a Facilitator?	7
¨	Expert Determination	7
	Q. What is Expert Determination?	7
	Q. When Expert Determination is useful?	7
	Q. What are the advantages of Expert Determination?	7
	Q. How does the Expert Determination proceed?	7
¨	Early Neutral Evaluation	8
	Q. What is 'Early Neutral Evaluation'?	8
	Q. How does 'Early Neutral Evaluation' proceed?	8
¨	Lok Adalat	8
	Q. What is Lok Adalat? Write a short note on Lok Adalat	8
¨	Nayaya Panchayat and Gram Nayayalaya	9
	Q. What is Nyaya Panchayat?	9
	Q. What is the History of Nyaya Panchayat?	9
	Q. What is the jurisdiction of Nyaya Panchayats?	10
	Q. How Nyaya Panchayats are constituted?	10
¨	Tribunals and Commissions	10
	Q. What are tribunals and why they are established?	10
¨	Development of Alternative Dispute Resolution System in India	11
	Q. What is the history of development of law of Arbitration in India?	11

THE ARBITRATION AND CONCILIATION ACT, 1996

CHAPTER 1

GENERAL PROVISIONS OF ARBITRATION

·	I. Objects and Reasons of the Act	12
	Q. Briefly discuss the objects of the Arbitration and Conciliation Act, 1996	12
¨	Extent and Commencement of the Act	14
	Scheme of the Act	14
·	II. Definitions	14
¨	Arbitration	14
	Q. Define the term arbitration	14
	Q. What are the different types of arbitration?	15
¨	Advantages and Disadvantages of Arbitration	17
	Q. Discuss the advantages and disadvantages of arbitration	17
¨	Arbitration Agreement	18
	Q. Define Arbitration Agreement	18
¨	Arbitral Award	18
	Q. What is meant by arbitral award?	18
¨	Types of Award	19
	Q. What are the different types of arbitral award contemplated under the Arbitration and Conciliation Act, 1996?	19
¨	Foreign Awards	20
	Q. Write a short note on foreign award	20
¨	Arbitral Tribunal	21
	Q. What is an arbitral tribunal?	21
¨	Court	21
	Q. Define the expression 'court' as defined in the Arbitration and Conciliation Act, 1996	21
¨	International Commercial Arbitration	22
	Q. What is International Commercial Arbitration?	22
¨	Legal Representative	23
	Q. Define the expression 'legal representative' as defined in the Arbitration and Conciliation Act, 1996	23
¨	Party	23
	Q. Define the term 'party' as defined in the Arbitration and Conciliation Act, 1996	23
¨	Scope and applicability of Part I (Section 2 - Section 43)	24
¨	Certain disputes may not be submitted to arbitration	25
	Q. Which disputes cannot be referred to arbitration?	25
¨	Statutory Arbitration	26
	Q. What is statutory arbitration?	26
	Q. Write a short note on statutory arbitration	26
·	III. Receipt of written communications	26
	Q. When a written communication is deemed to have been received under the provisions of the Arbitration and Conciliation Act, 1996	27
	Q. How service of a written communication is made under the Arbitration and Conciliation Act, 1996?	27
·	IV. Waiver of right to object	28
	Q. What a party is said to have waived him right to object? What are the pre-conditions for waiver of the right to object?	28
¨	Distinction between Waiver and Estoppel	29
	Q. Distinguish between waiver and estoppel	29
¨	Certain illustrative cases where waiver was held to have taken place	30
¨	Certain illustrative cases where waiver was held not to have taken place	31
·	V. Extent of judicial intervention	32
	Q. To what extent courts can interfere with an arbitration proceedings?	32
·	VI. Administrative assistance	34
	Q. When an arbitral tribunal can take administrative assistance?	34

CHAPTER 2

ARBITRATION AGREEMENT

·	I. Definition and meaning of Arbitration agreement	35
	Q. What is meant by the term 'arbitration agreement'?	35
	Q. Whether there is any prescribed form for an arbitration agreement?	36
¨	Essential Elements of an Arbitration Agreement	36
	Q. What are the essential elements of an arbitration agreement?	36
¨	Time-bar clause in an arbitration agreement	37
	Q. Write a short note on time-bar clause	37
¨	Scott v. Avery clause	37
	Q.Write a short note on Scott v. Avery clause	37
¨	Construction of the Arbitration Agreement	37
	Q. What are the principles to construe an arbitration agreement?	37
·	II. Power of Judicial Authorities to refer parties to arbitration	38
	Q. Discuss the power of judicial authorities to refer the parties to arbitration	38
¨	Judicial Authority	40
¨	Two simultaneous proceedings under section 8(3)	39
·	III. Interim measures, etc. by Court	40
	Q. Discuss the power of courts to grant interim measures in an arbitration proceeding	40
¨	Interim Measure: Breach of Agreement	42
¨	Protection of Goods	42
¨	Securing the amount in dispute in arbitration	42
	Q. How the amount in dispute in arbitration is reward?	42
¨	Detention, preservation or inspection of any property	42
	Q. Discuss the provisions regarding detention, preservation or inspection of any property which is the subject-matter of dispute in arbitration	42
¨	Principles governing grant of injunction under section 9	43
	Q. What are the principles which govern the grant of injunction under section 9 of the Arbitration and Conciliation Act, 1996	43
¨	Appointment of Receivers	44

CHAPTER 3

COMPOSITION OF ARBITRAL TRIBUNAL

·	I. Number of Arbitrators	45
	Q. What should be the number of arbitrators to be appointed for an arbitration proceeding under the Arbitration and Conciliation Act, 1996?	45
·	II. Appointment of arbitrators	46
	Q. What is the procedure for the appointment of arbitrators under the Arbitration and Conciliation Act, 1996?	46
¨	Bar of Limitation	48
¨	Requirements of a Valid Appointment	48
	Q. What are the requirements of a valid appointment of an arbitrator?	48
¨	Appointment of the Arbitrator as per the Agreement between the Parties	48
¨	Appointment of Arbitrator by Chief Justice	49
	Q. When an arbitrator is appointed by the Chief Justice?	49
¨	Appointment of arbitrators by Designated Authority	50
¨	Scheme made by the Chief Justice	51
·	III. Challenge to arbitrator	51
¨	Grounds for Challenge	51
	Q. What are the grounds on the basis of which an arbitrator can be challenged?	51
	Q. When an arbitrator can be challenged?	51
¨	Challenge Procedure	52
	Q. Discuss the procedure for challenging an arbitrator	52
¨	Cases where Arbitrator is an Employee of one of the Parties	53
·	IV. Termination of the mandate of an arbitrator	54
	Q. When the mandate of an arbitrator terminates?	54

CHAPTER 4

JURISDICTION OF ARBITRAL TRIBUNAL

·	I. Competence of arbitral tribunal to rule on its jurisdiction	56
	Q. Whether an arbitral tribunal can rule on its jurisdiction?	56
¨	Question as to Jurisdiction of Arbitral Tribunal	57
¨	Time Limit for Filing Objection to Jurisdiction	57
·	II. Interim measures ordered by arbitral tribunal	57

CHAPTER 5

CONDUCT OF ARBITRAL PROCEEDINGS

·	I. Equal Treatment of Parties	59
¨	Arbitral Tribunal's Duty to Treat the Parties with Equality	59
¨	Arbitral Tribunal's duty to give each party a full opportunity to present his case	60
·	II. Determination of Rules of Procedure	61
¨	Applicability of the Code of Civil Procedure, 1908 and the Indian Evidence Act, 1872 to the Arbitral Proceedings	62
·	III. Place of Arbitration	62
·	IV. Commencement of Arbitral Proceedings	63
·	V. Language to be used in the Arbitral Proceedings	64
·	VI. Statement of Claim and Defence	64
·	VII. Hearings and Written Proceedings	65
·	VIII. Default of a Party	67
·	IX. Expert Appointment by Arbitral Tribunal	67
·	X. Court Assistance in Taking Evidence	68

CHAPTER 6

MAKING OF ARBITRAL AWARD AND TERMINATION OF PROCEEDINGS

·	I. Rules Applicable to Substance of Dispute	71
	Q. Discuss the rules applicable to the substance of dispute under the Arbitration and Conciliation Act, 1996	71
¨	Ex aequo et bono	72
	Q. What is meant by the expression 'Ex aequo et bono'?	72
¨	Amiable Compositeur	72
	Q. Write a short note on Amiable compositeur	72
¨	Lex arbitri	73
	Q. Write a short note on Lex arbitri	73
·	II. Decision Making by Panel of Arbitrators	73
	Q. How an arbitral tribunal make its decisions?	73
·	III. Settlement	74
	Q. Discuss the power of an arbitral tribunal to encourage the parties to arrive at settlement of their dispute	74
	Q. What an arbitral tribunal will do if the parties arrive at settlement of their dispute?	74
	Q. What is the status of an arbitral award on agreed terms? Can it be enforced like an arbitral award?	74
·	IV. Form and Contents of Arbitral Award	75
	Q. What is the form of an arbitral award?	75
	Q. What are the contents of an arbitral award?	75
¨	Formal Requirements of an Award	76
	Q. What are the formal requirements of an arbitral award?	76
¨	Arbitral Tribunal's Power to make Interim Award	77
	Q. Discuss the power of an arbitral tribunal to make interim award	77
¨	Arbitral Tribunal's Power to Award Interest	78
	Q. Discuss the power of an arbitral tribunal to award interest	78
¨	Award of Cost by Arbitral Tribunal	79
	Q. What are 'Costs' in relation to an arbitration proceedings?	79
	Q. Discuss the power of an arbitral tribunal to award cost	79
·	V. Termination of Proceedings	80
	Q. How an arbitration proceeding comes to an end?	80
	Q. When an arbitral tribunal issues an order for termination of the arbitral proceedings?	80
·	VI. Correction And Interpretation of Award; Additional Award	81
	Q. How the computational, clerical or typographical errors in an arbitral award are corrected?	81
	Q. What is the period of limitation for making an application for such correction?	81
	Q. What is the procedure for obtaining an additional arbitral award as to claims presented in the arbitral proceedings but omitted from the arbitral award?	82
	Q. Can an arbitral tribunal suo motu give interpretation of an arbitral award made by it?	82

CHAPTER 7

RECOURSE AGAINST ARBITRAL AWARD

·	I. Application For Setting Aside Arbitral Award	83
	Q. When can an application for setting aside an arbitral award be made? What is the period of limitation for making such an application?	83
	Q. Discuss the grounds on which an arbitral award can be set aside	83
¨	Incapacity of Parties	84
	Q. Discuss 'incapacity of parties' as a ground for setting aside an arbitral award under section 34 of the Arbitration and Conciliation Act, 1996	84
¨	Non-validity or Non-existence of the Arbitration Agreement	85
	Q. Discuss invalidity or non-existence of the arbitration agreement on a ground for setting aside an arbitral award by court	85
¨	Non-compliance of due Process	86
	Q. Discuss how non-compliance of due process during an arbitral proceeding vitiates an arbitral award?	86
¨	Jurisdictional error on the part of the Arbitral Tribunal	87
	Q. How jurisdictional error on the part of the arbitral tribunal affords a ground for setting aside an arbitral award under section 34 of the Arbitration and Conciliation Act, 1996?	87
¨	Improper Composition of the Arbitral Tribunal or the Arbitral Procedure	88
	Q. Discuss improper composition of the arbitral tribunal or the arbitral procedure as a ground for setting aside an arbitral award under section 34 of the Arbitration and Conciliation Act, 1996	89
¨	Inarbitrability of the Subject-matter	90
	Q. What will be the consequence when a matter which is not arbitrable under the law is arbitrated upon and an award is made?	90
¨	Arbitral award in conflict with the public policy of India	90
	Q. What is the meaning of the expression public policy of India as mentioned in section 34(2)(b)(ii) of the Arbitration and Conciliation Act, 1996? Can an award which is in conflict with the public policy of India be enforced by the court?	91
¨	Fraud or Corruption-Grounds for setting aside an Arbitral Award under Section 34(2)(b)(ii)	92
	Q. Discuss fraud or corruption as a ground for setting aside an arbitral award under section 34(2)(b)(ii) of the Arbitration and Conciliation Act, 1996	92
¨	Violation of Section 75 as a Ground for Setting Aside an Arbitral Award	93
	Q. What will be the consequence when an arbitral award is made in violation of section 75 of the Arbitration and Conciliation Act, 1996?	93
	Q. Discuss the consequences of failure on the part of the arbitrator (s) or the parties to maintain confidentiality during an arbitration proceeding	93
¨	Violation of Section 81 as a Ground for Setting Aside an Arbitral Award	93
	Q. Discuss violation of section 81 of the Arbitration and Conciliation Act, 1996 in making an arbitral award as a ground for setting aside the award	94
¨	Adjournment of Proceeding under Section 34 for Setting Aside an Arbitral Award by the Court and Remission of the Award to the Arbitral Tribunal	94
	Q. Whether a proceeding for setting aside an arbitral award under section 34 be adjourned by the court? If so, why?	94
	Q. Discuss the jurisdiction of the court, to which an application for setting aside an arbitral award was made, to remit the award to the arbitral tribunal	94
	Q. Discuss the jurisdiction of an arbitral tribunal in deciding matter remitted to it under section 34(4) of the Arbitration and Conciliation Act, 1996	95
¨	Time limit for making an Application for Setting Aside an Arbitral Award under Section 34	95
	Q. What is the time limit for making an application for setting aside an arbitral award under the provisions of section 34 of the Arbitration and Conciliation Act, 1996? Whether the provisions of the Limitation Act, 1963 applies to the making of such application?	95
¨	Right to get an award set aside in statutory right	96
¨	Proper Approach of the Court in Setting Aside an Arbitral Award	96
	Q. What should be the proper approach of the court in setting aside an arbitral award? Support your answer with decided cases	96
¨	Constitutional Validity of Section 34	97
	Q. Discuss the constitutional validity of section 34 of the Arbitration and Conciliation Act, 1996	97

CHAPTER 8

FINALITY AND ENFORCEMENTS OF ARBITRAL AWARDS

·	I. Finality of Arbitral Awards	98
	Q. "Subject to Part I of the Arbitration and Conciliation Act, 1996 an arbitral award shall be final and binding on the parties and persons claiming under them respectively". Comment	98
	Q. Discuss the applicability of the principle of res judicata to an arbitral award	99
·	II. Enforcement of Arbitral Awards	99
	Q. How an arbitral award is enforced?	99
	Q. When can an arbitral award be enforced?	99
¨	Which Court can enforce an Arbitral Award?	100
¨	Power of the Executing Court	100
	Q. Comment on the power of the executing court while executing an arbitral award	100

CHAPTER 9

APPEALS

·	I. Appealable Orders	101
	Q. What are the appealable orders under section 37 of the Arbitration and Conciliation Act, 1996?	101
	Q. What is the remedy available to a party to an arbitration proceeding where the arbitral tribunal has refused to grant an interim measure under section 17 of the Arbitration and Conciliation Act, 1996?	101
	Q. What is the remedy available to an aggrieved party when-	102
	Q. (a) The arbitral tribunal rejects a plea that it does not have jurisdiction to deal with the subject-matter of arbitration or that it is exceeding the scope of its jurisdiction?	102
	Q. (b) The arbitral tribunal accepts the plea that it does not have jurisdiction to deal with the subject-matter of arbitration?	103
¨	Proper approach of the Appellate Court while Setting Aside an Award	103
	Q. What should be the proper approach of the appellate court while setting aside an arbitral award?	103
¨	No Second Appeal lies from an Order passed in Appeal under Section 37	104
	Q. Discuss whether a second appeal lies from an order passed in appeal under section 37?	104
	Q. Discuss whether an order passed in appeal under section 37 is revisable? Support your answer with appropriate case law	104
¨	None Appealable of Order under section 37	104
¨	Period of Limitation for Preparing an Appeal under Section 37	104
	Q. What is the period of limitation for preferring an appeal under section 37 of the Arbitration and Conciliation Act, 1996?	104