Arbitration Mediation Conciliation Professional Programme July2023

STUDY MATERIAL
PROFESSIONAL PROGRAMME
ARBITRATION,
MEDIATION
&
CONCILIATION
GROUP 2
ELECTIVE PAPER 7.1
(i)
© THE INSTITUTE OF COMPANY SECRETARIES OF INDIA
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ARBITRATION, MEDIATION & CONCILIATION

Arbitration is a legally binding process where the parties involved present their argument to one or more
impartial individuals called arbitrators without the intervention of the court. After considering the arguments
and evidences put forth by both parties, the arbitrator(s) render a judgement known as an award that is legally
binding. When parties desire to settle their disagreement outside of court, arbitration is frequently chosen.
Mediation is a confidential process facilitated by a person known as mediator. The mediator tries to communicate
with parties, identify their interests, and explore potential solutions to settle the dispute effectively and amicably.
In contrast to arbitration, the mediator helps the parties reach a compromise rather than imposing a resolution.
It is widely used in conflicts related to workplace and community.
Conciliation is a process similar to mediation, but with an additional interventionist role of the conciliator. Like a
mediator, the conciliator assist for better communication and find the solution between the parties. It is widely
used in conflicts related to labour and industrial disputes. In general, arbitration, mediation, and conciliation
offers an alternative route to resolve the dispute without the intervention of the court. They offer the parties
faster and less expensive outcomes than litigation.
Arbitration, Mediation & Conciliation jointly called as ADR mechanism, plays an important role in reducing the
burden from the judicial systems. These methods have the potential of becoming lucrative emerging areas for
the profession of Company Secretaries.
For this purpose, the course contents of this study material have been so designed as to provide practical
orientation and develop necessary acumenship in conducting ADR proceedings. Only those laws and practices
have been included which are of direct relevance to the work of a Company Secretary. Further, the literature
available on the subject has been found to be unwieldy and it has, therefore, been our endeavour to make the
study material tailored made.
This study material has been published to aid the students in preparing for the Arbitration, Mediation &
Conciliation paper of the CS Professional Programme. It is part of the educational kit and takes the students
step by step through each phase of preparation emphasizing key concepts, principles, pointers and procedures.
Company Secretaryship being a professional course, the examination standards are set very high, with focus on
knowledge of concepts, their application, procedures and case laws, for which sole reliance on the contents of
this study material may not be enough. This study material may, therefore, be regarded as the basic material
and must be read along with the Bare Acts, Rules, Regulations, Case Laws.
The legislative changes made upto May 31, 2024 have been incorporated in the study material. In addition to
Study Material students are advised to refer to the updations at the Regulator’s website, supplements relevant
for the subject issued by ICSI and ICSI Journal Chartered Secretary and other publications. Specifically, students
are advised to read “Student Company Secretary” e-Journal which covers regulatory and other relevant
developments relating to the subject, which is available at academic portal https://www.icsi.edu/student-n/
academic-portal/. In the event of any doubt, students may contact the Directorate of Academics at academics@
icsi.edu.
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The amendments to law made upto 31st May of the Calendar Year for December Examinations and upto 30th
November of the previous Calendar Year for June Examinations shall be applicable.
Although due care has been taken in publishing this study material, the possibility of errors, omissions and/or
discrepancies cannot be ruled out. This publication is released with an understanding that the Institute shall not
be responsible for any errors, omissions and/or discrepancies or any action taken in that behalf.
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Group 2
Elective Paper 7.1

SYLLABUS
OBJECTIVES
l To provide understanding, application and expert knowledge of Alternate Dispute Resolutions.
l To develop global experts in the area of Alternate Dispute Resolution systems.
Level of Knowledge : Expert Knowledge
Part I : Arbitration & Conciliation (70 Marks)

1. Arbitration: An Introduction: History of Arbitration along with all amendments l Structure of Arbitration
& Conciliation Act (A&C Act) l How is arbitration different from other modes of dispute resolutions?
l Features and advantages of Arbitration l Types of Arbitration (Institutional vs. Ad Hoc)
l General Principles of Arbitration (introduction to process of arbitration) l Other pertinent statutes such
as Limitation Act, Interest Act
2. Commercial Transactions: Introduction and Practical Aspects of Contract Law l Types of Contracts and
Concepts related to Negotiation and Conciliation l Modes of Discharging Contract l Critical Clauses
l Breach of Contract: Related Provisions l Damages under Contract Law l Drafting of Commercial
Contracts and Other Documents
3. Arbitration Agreement/Clauses and related concepts: Arbitration Agreement l Scope of Arbitration
Clause l Seat, Venue, Choice of Arbitrator, Language, applicable rules, fees, timelines, qualification of
arbitrators, prior mechanisms, l Choice of Law (Procedural, Substantive and governing law of arbitration
agreement) l Post Contract Arbitration agreement l Arb-Med-Arb clauses
4. Arbitration Institution: National & International Institutions l Bye laws of the Institutions l Incorporation/
Establishment of Arbitration Centre
5. Arbitration Procedure: Invoking Arbitration and Notice to parties l Finalisation on name of Arbitrators
mutually l Finalisation on name of Arbitrators by court l Filling of Pleadings l Fixation of Issues
l Witnesses and Evidence l Interim reliefs l Final Arguments l Award
6. Appointment of Arbitrator and Other Aspects: Common methods to appoint a sole arbitrator/ arbitral
tribunal: As per arbitration clause by mutual agreement of parties or by approaching the court under
section 11 of A&C Act. l What if parties don’t operate as per contract? l Appointment in case of Institutional
Arbitration l Challenging the Arbitrator’s appointment l Selection and Appointment of Arbitrators from
the Point of View of the Parties l Powers, Duties and Role of Arbitrators l Grounds for conflict under
Arbitration and Conciliation Act, 1996 l Where to file the petition - Pre and Post 2015-Amendment
l Waiver of rights to object l Arbitration Tribunal and Jurisdiction Issues l Kompetenz Kompetenz
principle
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7. Pleadings: Statement of Claim l Statement of Defense l Counter Claim
8. Arbitral Proceedings and Evidence in Arbitration :
Part A: Statement of Claim, Defense and Rejoinders: Oral hearings, Documentary Evidence and Written
Proceedings l Drafting of the above important submissions l Importance of leading evidence l Affidavit
of Admission/Denial by Parties l Criteria for identification of witnesses - expertise, key personnel,
credibility and credential, non-signatories l Number of witnesses l Exclusion of oral hearings and fast-
track arbitration
Part B: Evidence by affidavit: What facts need to be led through affidavit l Drafting of Affidavit l Case
Study on preparation of documents for Arbitral Proceedings
9. Preparation and Execution of Arbitral Award: Essential ingredients of an Award l Domestic v. Foreign
Awards l Drafting of Execution Petition l Types of Award l Award of Arbitration and Enforcement of Arbitral
Awards l Drafting of Arbitration Awards l Case Study on Execution of Domestic Award/Foreign Award
10. Challenge to Award: Time period of challenge l Grounds of challenge l Power of court to modify the
award l Drafting of Petition for setting aside an arbitral award l Case Study on challenging Awards
11. Appeals: Orders against which appeal can be filed l Appeal against refusal to refer parties to arbitration
l Appeal against interim relief granted by the court l Appeal against interim award of the tribunal
l Appeal against refusal to set aside an arbitral award l Case Study on Appeal against Award
12. Fast Track and virtual Arbitration: What, Why and How - Fast Track Arbitration l Required Documents
and Drafting l Steps and Procedure in Virtual Arbitration l Case Studies Related to Fast Track Arbitration
13. Arbitration under Investors' Grievances Redressal Mechanism of Stock Exchanges: Introduction
l Investors' Grievances Redressal Mechanism l Arbitration Proceedings under the mechanism
l Procedure l Regulatory Actions l Surveillance Actions l Case Studies on Arbitration under Stock
Exchange Grievance Redressal Mechanism
14. Conceptual Framework of International Commercial Arbitration: Domestic v. International Arbitration
– from the A&C Act’s purview l Role of Private International Law in Indian Council of Arbitration
l International Commercial Arbitration l The role of national courts in the international arbitration
process l The evaluation of international arbitral institutions and their rules l The drafting of an
international arbitration clause and submission agreement l Consideration of arbitration as a dispute
resolution process in the domain of international trade l International Experience in Online Dispute
Resolution: Government Run Online Dispute Resolution (ODR) Platform, Court Run ODR Platform, Private
Run ODR Platform l Procedure adopted by ODR in Brazil, South Korea, Hongkong, China, UK, USA
l Singapore International Arbitration Centre l International Centre for Settlement of Investment Disputes
(ICSID) arbitrations and current issues in international commercial arbitration (e.g. confidentiality and
consolidation) l London Court of International Arbitration
15. International Law of Arbitration: Law and practice of international commercial arbitration l UNCITRAL
Arbitration Act/Rules l CIArb- UK Model rules on International Arbitration l Model Laws on International
Commercial Arbitration l Asia Pacific Centre for Arbitration & mediation (APCAM) Rules and accreditation
system and International Arbitration l The International Bar Association (IBA) Rules on conflict of Interest
l International Chamber of Commerce (ICC) Rules on International Commercial Arbitration l New York
Convention l Geneva Convention l UN Convention on Recognition and Enforcement of Foreign Arbitral
Awards l Case Study on International Commercial Arbitration
16. Emerging Aspects: Role of Company Secretaries and Related Provisions l Arbitration Vs. Insolvency
and Bankruptcy Code: A Comparative Study l Future of Indian Arbitration: Prospects and Challenges
l Online Dispute Resolution l Important Case Laws and Recent Amendments
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17. Introduction of Conciliation: Introduction l Important Definitions l Nature and Modes of Conciliation
l Law Relating to Conciliation
18. Conciliation Proceedings: Process of conciliation l Procedural Aspects l Appointment, Roles and
Responsibilities l Drafting terms of settlement under Conciliation l Settlement Agreement l Status and
effect thereof l Drafting of Conciliation Clause/Agreement l Sections 61 to 81 A&C Act l Case Study on
Domestic Conciliation
19. Conciliation for Micro Small and Medium Enterprises: Importance of conciliation for MSME
l Conciliation procedure l Case Study on Conciliation under MSME
20. International Perspective: Comparative Study of Conciliation l International Rules on Conciliation

l Case Study on International Conciliation
Part II : Mediation (30 Marks)

21. Mediation : An Introduction: Basics of Mediation l Socio-Philosophical Roots of Mediation l Pre litigation
Mediation l Adhoc and Institutional Mediation l Private and Court Referred Mediation l Understanding
of Conflicts and their resolutions
22. Negotiation Skills and Communication: Specific Negotiations l Importance of Dialogue l Negotiation
Techniques l Communication in Mediation and Negotiation l Interest v. Position (Iceberg Concept)
23. Process of Mediation: Legal Status of Mediation l Models of mediation - rights based - interest
based - facilitative - evaluative - settlement oriented - therapeutic - transformative and other models
l Theory of mediation l Process of mediation l Role Play and assimilation l Drafting Mediation clause /
Agreement
24. Various Modes and scope of Mediation: Types of Mediation including Commercial Mediation,
Civil and commercial mediation l Court Annexed and Private Mediation l Employment mediation
l Online Mediation and use of Artificial Intelligence l Observational and Reflective Practice l Stages of
Mediation l Role of a Mediator l Mediation Clauses in Commercial Agreement l Overview of Corporate
& Commercial Negotiations l Stages of Mediation l Mediation checklist l Initiation l Mediation
Confidentiality and Neutrality l Mediated settlement agreement
25. Role of Mediation in other ADR domains: Arbitration l Commercial Courts Act l Conciliation proceedings
26. Emerging aspects: Mediation Bill and upcoming Law l Mediation under various statutes
27. Rules relating to mediation: Rules made by High Courts and Supreme Courts l Practices and Rules of
Institutional Mediation l Case Study on Domestic Mediation
28. International aspects: United Nations Convention on International Settlement Agreements Resulting
from Mediation l Singapore Convention on Mediation l International Negotiations and Diplomacy
l Influence and Importance of Culture l World Culture vis a vis Organizational Culture l International
Rules l Singapore Mediation settlement agreement l Case Studies on International Mediation
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ARRANGEMENT OF STUDY LESSONS
GROUP 2 l ELECTIVE PAPER 7.1
PART I : ARBITRATION & CONCILIATION

Sl. No. Lesson Title
1. Arbitration: Introduction, Agreements and its Institutions (Topics 1, 3 & 4)
2. Commercial Transactions (Topic 2)
3. Arbitration Procedure, Appointment of an Arbitrator and Other Aspects (Topics 5 & 6)
4. Arbitral Proceedings, Pleadings and Evidence (Topics 7 & 8)
5. Preparation and Execution of Arbitral Award (Topic 9)
6. Challenge to Award and Appeals (Topics 10 & 11)
7. Emerging Aspects: Fast Track and Virtual Arbitration (Topics 12 & 16)
8. Arbitration under Investor’s Grievances Redressal Mechanism of Stock Exchanges (Topic 13)
9. Conceptual Framework of International Commercial Arbitration (Topic 14)
10. International Law of Arbitration (Topic 15)
11. Introduction to Conciliation and its Importance for MSMEs (Topics 17 & 19)
12. Conciliation Proceedings and International Perspective of Conciliation (Topics 18 & 20)
PART II : MEDIATION
13. Mediation: An Introduction and its Process along with Rules (Topic: 21, 23 & 27)
14. Negotiation Skills and Communication (Topic 22)
15. Various Modes and Scope of Mediation including Role of Mediation in other ADR Domains
(Topics 24 & 25)
16. International and Emerging Aspects under Mediation Law (Topics 26 & 28)
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LESSON WISE SUMMARY
PART I : ARBITRATION & CONCILIATION (70 MARKS)
Lesson 1 – Arbitration: Introduction, Agreements and its Institutions

Conflicts between two or more parties can be settled by arbitration outside of the judicial system. Arbitration
has its origins in the past, when conflicts between people or organisations were frequently settled by an
unbiased third party. This third party may have been a respected member of the community or a religious
leader in some cultures. Due to the burden of cases on judicial system, Arbitration has become a popular form
of resolving the conflict amongst businesses, consumers, individuals etc. It is commonly utilised in a variety of
conflicts, including ones involving labour, construction, and international commerce. One of the main benefits
of arbitration is that it is frequently quicker and less expensive than litigation while also giving the parties
more freedom and control over how the issue will be resolved. Therefore, it is necessary to study Arbitration,
Agreements and its institutions.
It is expected that, at the end of this lesson, students will, inter alia be in a position to understand:
l History of Arbitration in India
l Structure of Legislation for Arbitration and Conciliation
l General Principle of Arbitration
l Arbitration Agreements
l National and International Institutions for ADRs.
Lesson 2 – Commercial Transactions

In contracts of a commercial nature, arbitration as a method of dispute settlement has shown to be advantageous.
Any contract or agreement wherein the rights and obligations are of a civil character may benefit from using
arbitration as a dispute resolution method. In addition to being specialists in corporate law, Company Secretaries
also have superior knowledge of business principles and contract laws because of the nature of their line of
work. One of the prominent reason for the Arbitration proceedings is disputes arisen in the course of commercial
transactions. Therefore, students should understand the commercial transactions in detail for becoming a
seasoned professional in this area.
It is expected that, at the end of this lesson, students will, inter alia be in a position to:
l Types of Contracts with reference to Commercial Transactions
l Concepts relating to Negotiation and Conciliation
l Damages under Contract Law
l Drafting of Commercial Contract and other documents
l Role of Company Secretary & Arbitration.
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Lesson 3 – Arbitration Procedure, Appointment of an Arbitrator and Other Aspects
Arbitral process means the procedures and steps involved in resolution of a dispute through arbitration. The
selection of arbitrators, who are impartial during the process is also a crucial step in the arbitration process. For
any arbitration process, the parties are free to select any arbitrator(s) they like. The objectivity or independence
of Arbitrator is of utmost importance.
Further, the decision of Arbitral tribunal is known as Arbitral award. A variety of measures, including monetary
compensation, consent, injunctions, and other kinds of relief, may be granted to the parties by the judgment.
The award may be interim, partial, or final depending on the disagreement.
Therefore, it is necessary to study the concept relating to process to be followed during arbitration, appointment
of impartial arbitrator along with its challenges, Awards etc.
l Invocation of Arbitration
l Appointment of Arbitrators
l Process of Arbitration
l Awards
l Powers, Duties and Role of Arbitrators.
Lesson 4 – Arbitral Proceedings, Pleadings and Evidence

After the initiation of an arbitration reference, the parties are required to submit their claims to the Arbitral
Tribunal. The tribunal is entrusted with the task of finding the facts. To aid the process, the parties submit their
claims and defences to the tribunal which are generally called as pleadings. To further the process and decide
on the question of the claim and defence, Evidences are to be produced to the tribunal. Evidence disclosure
might bring to light the parties’ different legal cultures, which in turn shapes their expectations of what they
must reveal. Any tribunal, including courts, arbitrations, and adjudications, must follow the “Rules of Evidence”
while making decisions. In order to substantiate the work assigned to the Arbitrators, it is necessary to study the
Proceedings of Arbitration including Pleadings and Appearances.
l Statement of Claims and Defense
l Written Proceedings
l Presentation of Evidences
l Witnesses
l Evidence by Affidavits.
Lesson 5 – Preparation and Execution of Arbitral Award

Award is the decision of Arbitral Tribunal on a matter submitted to them by the Parties. The Tribunal prepares
and passes the Arbitral Award. While passing an award, the tribunal should ensure to make it as exclusive as
possible. There should not be any lacuna which may hinder and impact the execution of the Awards. Without
execution, there is no point obtaining an award of the tribunal. Therefore, a professional working in the area of
Arbitration must be conversant with the process of execution.
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l Essential ingredients of an Award
l Type of Awards
l Drafting of Arbitral Award
l Preparation of Execution Petition
l Enforcement of Domestic and International Awards.
Lesson 6 – Challenge to Award and Appeals

There are a few reasons that can be used to overturn an award, and they mostly have to do with the arbitration
process and natural justice norms. A person who is the subject of a domestic Award must file an application with
the Court pursuant to Section 34 of the Act as soon as possible to contest the decision. If not, the Award might
be carried out as a decree by the person in whose favour it was made. On the other side, a person who has had
a foreign Award issued against him is ineligible to contest it in India. Further, an appeal can also be filed from
the certain orders such as refusing to refer the parties to arbitration, granting or refusing to grant any measure,
setting aside or refusing to set aside an arbitral award etc.
Therefore, the objective of this lesson is to inter alia introduce the students regarding:
l Grounds of challenge of Arbitral Award
l Orders against which an appeal can be filed
l Drafting of Petition for setting aside an arbitral award
l Time Period of Challenge.
Lesson 7 – Emerging Aspects: Fast Track and Virtual Arbitration

The lengthy procedure and amount of time required to arrive at a conclusion or award is one of the key challenges
in pursuing dispute resolution through any technique. Arbitration is a creative and adaptable process that can
speed up the resolution of conflicts. In this scenario, Fast track arbitration can be very beneficial in resolving
disputes quickly and efficiently. It is especially helpful in commercial contexts where parties may need to
quickly resolve conflicts in order to prevent any serious financial or reputational harm.
Further, due to the technology advancement, professionals are also expected to resort to remote hearings for
various reasons such as cost saving, time saving and accessibility. Therefore, a professional should know the
intricacies of Fast Track and Virtual Arbitration Processes.
l What, Why and How - Fast Track Arbitration
l Steps and Procedure in Virtual Arbitration
l Role of Company Secretaries in Arbitration
l Future of Indian Arbitration: Prospects and Challenges
l Online Dispute Resolution.
Lesson 8 – Arbitration under Investor’s Grievances Redressal Mechanism of Stock Exchanges

An essential instrument for defending the rights of investors in the securities market is the Investor’s Grievance
Redressal Mechanism. This method is thought to be more expedient, affordable, and informal than typical
court litigation. Investors have the option to register complaints under a number of different headings, such
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as non-settlement of deals, failure to deliver securities, unfair and dishonest business practises, and breaches
of stock exchange rules. All stock exchanges are required by SEBI to establish a “IGRC” (Investor Grievance
Redressal Committee). In order to cater the services under securities market, a professional should understand
the mechanism provided for Arbitration under Investor’s Grievances Redressed Mechanism.
l Investor’s Grievance Redressal Mechanism (IGRM)
l Investor Grievances Redressal Committee (IGRC)
l Arbitration Process at Stock Exchanges
l Surveillance actions.
Lesson 9 – Conceptual Framework of International Commercial Arbitration

International arbitration is a form of dispute resolution in which at least one of the parties is a foreign individual,
a foreign corporation with foreign incorporation, a foreign association or group of people with foreign central
management and control, or a foreign government. International commercial arbitration is an alternative dispute
resolution process that enables private parties to avoid litigation in national courts. It is used to settle disputes
arising out of international business transactions. The area of Arbitration has not only spread domestically but
also across boundaries. Therefore, understanding the framework of International Commercial Arbitration can
give a professional competitive edge over the other.
The objective of the lesson is to inter alia introduce the students regarding:
l International Arbitral Institutions
l Domestic Arbitration vs. International Arbitration
l National courts in the international arbitration process
l Government Run Online Dispute Resolution (ODR) Platform
l ODR in China, UK, USA etc.
l London Court of International Arbitration.
Lesson 10 – International Law of Arbitration

The Arbitration is resorted to for many disputes which arise between the international parties. Therefore, it
becomes pertinent for a professional to understand international laws and rules dealing with Arbitration. The
International law of Arbitration involves both civil and common law procedure which help parties to reconstruct
their procedure of arbitration so that their dispute to the contract can be resolved.
l Law and practice of International Commercial Arbitration
l Asia Pacific Centre for Arbitration & mediation (APCAM) Rules
l International Chamber of Commerce (ICC) Rules
l Foreign Arbitral Awards
l UN Conventions on Enforcement of Foreign Arbitral Awards.
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Lesson 11 – Introduction to Conciliation and its Importance for MSMEs
Due to the rising load on civil courts, numerous laws mandate that parties in a dispute first seek to settle their
differences through conciliation before bringing their case to arbitration or the civil courts. This reduces the
workload of the civil courts and saves time simultaneously. The Micro, Small, and Medium-Sized Enterprises
(MSMEs) sector is one of the most crucial sectors for India’s economic growth, particularly in light of the challenging
conditions caused by the COVID-19 pandemic, which prompted the Central Government to implement specific
financial stimulus programmes for this sector. Therefore, a professional can work as a conciliator under MSMED
Act, 2006.
The objective of the lesson is to inter alia introduce the students regarding:
l Law relating to conciliation
l Nature & Mode of Conciliation
l Conciliation Proceedings
l Importance of Conciliation for MSMEs.
Lesson 12 – Conciliation Proceedings and International Perspective of Conciliation

Conciliation is becoming more popular as a conflict resolution technique as it may be a good substitute for
arbitration. Conciliation can be seen as an effective form of dispute resolution since it is swift, economical,
and values joint decision-making. With the guidance of a conciliator, the parties to a disagreement identify
the problems and make an effort to come to an amicable resolution through the process of conciliation. To
work in this area, a professional should understand the procedure of conciliation and opportunities available
internationally.
l The process of Conciliation Proceedings
l Drafting of Conciliation Clause/Agreement
l Drafting terms of Settlement under Conciliation
l International Rules on Conciliation.
PART II : MEDIATION (30 MARKS)
Lesson 13 – Mediation: An Introduction and its Process along with Rules

Mediation is a process of resolving disputes or conflicts between two or more parties through the assistance of a
neutral third party, often denoted to as a mediator. The mediator helps the parties communicate and negotiate
in order to support them to reach a resolution that is acceptable to both sides. Finding a resolution that pleases
everyone concerned while avoiding the necessity for expensive and time-consuming legal actions is the aim of
mediation.
The Indian judicial system has also made a considerable contribution to the promotion and encouragement of
mediation as a means of resolving disputes.
l Basics of Mediation
l Process of mediation
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l Pre litigation Mediation
l Private Mediation vs. Court Ordered Mediation
l Adhoc Mediation and Institutional Mediation
l Understanding of Conflicts and their resolutions
l Negotiation in Mediation.
Lesson 14 – Negotiation Skills and Communication

The goal of negotiation is to defend the interests of the parties through compromise. This is in contrast to
the approach taken by the judiciary, which seeks to defend an individual’s right by upholding it or requiring
restitution for it. The safeguarding of the parties’ relationship is the main focus of negotiation. Without
excellent communication, mediation or negotiation cannot be successful. Transferring information is the goal
of communication during negotiations. The manner in which the parties act throughout the negotiation will
influence the styles and methods that the negotiators choose to obtain a resolution. Therefore, understanding
the topics of this lesson is necessary for the professionals inclined towards working as a Mediator.
l Specific Negotiations
l Negotiation Techniques and Styles
l Communication in Mediation and Negotiation
l Interest v. Position (Iceberg Concept).
Lesson 15 – Various Modes and Scope of Mediation including Role of Mediation in other ADR
Domains
Mediation before approaching the courts by way of civil and commercial litigation is important as it helps
the parties to negotiate with one another to reach a jointly advantageous resolution. In the legal system, this
type of alternative dispute resolution is frequently utilised to settle conflicts between two or more parties that
has real-world consequences. The mediator’s job is to break down barriers through communication, help with
issue identification, alternative exploration, and facilitation of mutually agreeable agreements to settle the
disagreement. However, the parties alone have the authority to decide. A professional company secretary can
aid parties to resolve the disputes outside the court.
l Mediation in Civil and Commercial Litigation
l Court Annexed and Private Mediation
l Online Mediation and use of Artificial Intelligence
l Role of Mediators
l Overview: Corporate and Commercial Negotiations
l Role of Mediation in other ADR domains
l Mediation Confidentiality and Neutrality.
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Lesson 16 – International and Emerging Aspects under Mediation Law
Mediation is a casual and relaxed process that involves in it discussions and deliberations between the parties.
The process offers with an opportunity to explore various possible outcomes by the parties with the aid and
assistance of a mediator, who acts as a neutral impartial third person. It is common knowledge that the Indian
justice system is largely adversarial. Yet, judicial and quasi-judicial forums continue to grapple with systemic
inadequacies and rising case pendency. To resolve this, the government has taken several measures including
promotion and development of alternate means of dispute resolution. Mediation across boundaries is also
becoming a new area of professional services. Therefore, understanding the Emerging and International
aspects can enhance the knowledge of a professional and can enlarge an area which is still unexplored.
l Upcoming Mediation Law
l Mediation under various statutes
l Singapore Convention on Mediation
l International Rules
l Singapore Mediation settlement agreement.
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CONTENTS
PART I : ARBITRATION & CONCILIATION
LESSON 1
ARBITRATION: INTRODUCTION, AGREEMENTS AND ITS INSTITUTIONS
History of Arbitration in India 4

Evolution and Development of Law of Arbitration in India 5
Model Law 8
Adoption of Model Law in India 9
Arbitration and Conciliation Act, 1996 9
Structure of Arbitration & Conciliation Act (A&C Act) 9
Amendments made to Arbitration and Conciliation Act, 1996 10
Modes of Dispute Resolutions 13
Negotiation 14
Mediation 14
Arbitration 16
Conciliation 16
Selecting the appropriate method 17
How is Arbitration different from other Modes of Dispute Resolutions 17
Features and Advantages of Arbitration 19
Arbitration and Litigation 19
Enforceability Court 19
Procedure 20
Arbitration Agreement 20
How to draft an effective Arbitration Agreement? 21
Arb-Med-Arb clause : Connecting the dots between Arbitration and Mediation 23
Key elements of an Arbitration Proceeding 24
Types of Arbitration 25
Pertinent statutes to the Arbitration Process 26
Seat of Arbitration 28
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Language of Arbitration Proceedings 30
Qualifications of the Arbitrators 31
How is an Arbitrator appointed? 32
What are the powers of an Arbitrator? 32
Arbitration Institutions 32
Arbitration Centres – International 33
Bye laws/rules of the Institutions 36
Incorporation/ Establishment of Arbitration Centre 37
Lesson Round-Up 38
Glossary 39
Test Yourself 39
List of Further Readings 39
Other References (Including Websites/Video Links) 39
LESSON 2
COMMERCIAL TRANSACTIONS
Introduction 42
Practical Aspects of Contract Law 43
Types of Contracts and concepts relating to negotiation and Conciliation 47
Negotiation 47
Conciliation 47
Types of Contracts/Agreements in which Arbitrations, negotiation and conciliation are advantageous 47

Discharge of Contract 48
Discharge by Performance 48
Discharge by Tender of Performance 49
Conditions of such Offer 49
Effect of refusal of party to perform promise wholly 49
Discharge by Mutual Agreement or Consent 49
Discharge by Lapse of time 50
Discharge by Operation of the Law 50
Discharge by Impossibility or Frustration 50
Discharge by Supervening Impossibility 51
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Discharge by Supervening Illegality 51
Cases in which there is no supervening impossibility 51
Discharge by Breach 51
Critical Clauses 51
Breach of Contract: Related Provisions 52
Damages under Contract Law 56
Liquidated Damages and Penalty 56
Other remedies Specific Performance and Injunction 57
Drafting of Commercial Contract and Other Documents 57
General Conditions of Contracts (GCC) 57
Role of Company Secretary & ADR 60
Lesson Round-Up 60
Test Yourself 61
LESSON 3
ARBITRATION PROCEDURE, APPOINTMENT OF AN ARBITRATOR AND OTHER ASPECTS
Arbitral process 64
Steps in arbitration without court intervention 65
Steps in arbitration with court intervention 65

Pre-Arbitral Process 66
Invoking arbitration and notice to parties 66
Number of Arbitrators 67
Reply to Arbitration Proceeding 67
Counter claim 67
Service of notice to arbitrate 68
Objectives for sending this notice for arbitration 68
Filing of Pleadings 68
Appointment of arbitrator 69
Types of Ad Hoc Arbitration 72
(xviii)
Witnesses and evidence 74
Interim Measures under Arbitration and Conciliation Act 75
Fixation of Issues 76
Closing arguments 76
Awards 77
Grounds to set aside an arbitral ruling 77
Vacation the arbitral award 78
Modification of arbitral award 79
Reliability of arbitral awards 79
Grounds for challenging the Appointment of an Arbitrator 80
Other Grounds for Challenge 80
Powers of Arbitrator 81
Duties or Functions of Arbitrator 81
Grounds for Conflict 82
Waiver of the Right to Object under the Arbitration and Conciliation Act, 1996 85
Arbitration Tribunal and Jurisdiction Issues 88
Understanding the Competence-Competence Principle 89
Lesson Round-Up 90
Glossary 91
Test Yourself 92
LESSON 4
ARBITRAL PROCEEDINGS, PLEADINGS AND EVIDENCE
Introduction 94
PART A - SUBMISSIONS DURING THE ARBITRATION
Written Submissions 95
Statement of Claim 97
Statement of Defence 98
Counter Claim 99
(xix)
When there is a delay in filing counter claim in an Arbitration – What is the remedy? 99
Rejoinders 100
Further and better Particulars 100
No pleadings? 100
Disclosure of Evidence 100
Oral Hearings 101
Evidence 102
The Purpose of Evidence 103
Basic Concepts - Facts 104
The Rules of Evidence in Arbitration 105
Assessing Evidence 106
Circumstantial evidence 106
Relevance 107
Admissibility 107
Weightage of Evidence 108
Impeaching Credibility 109
Proof of Statements Contained in Documents 109
Witnesses of Fact 109
Witness Statements 109
Cross-Examination 109
Re-examination 109
Expert Witnesses 110
Duties and Responsibilities 111
The Expert’s Report 111
Contents of the Expert’s Report 112
Ascertaining the Facts 112
Admissibility and Weight of Evidence 112
Court Assistance in Taking Evidence 113
Relevance or Weight Hearsay Evidence 113
Documentary Evidence 114
Burden of Proof 114
The Legal Burden 114
(xx)
The Evidential Burden 115
Standard of Proof 115
PART B : AFFIDAVITS IN ARBITRATION

Evidence by Affidavit 117
Relevant Provisions of Filing an Evidence on Affidavit 118
Understanding the Practical Approach for Presenting Evidence on Affidavit 118
Adducing evidence under Section 34 of the Arbitration Act 120
Clarification to the Fiza Developers Decision 121
Present Position in Law 121
Drafting an Affidavit 122
Essential elements of an affidavit 122
Process of drafting an affidavit 122
Affidavit – Sample 123
Statement of Claim – Sample 125
Statement of Defence - Sample 127
Lesson Round-Up 129
Glossary 130
Test Yourself 131
LESSON 5
PREPARATION AND EXECUTION OF ARBITRAL AWARD
Introduction 134
Essential ingredients of an Award 134
Ingredients of an Award 134
Interest on Arbitral Award 134
Domestic v. Foreign Award 138
Drafting of Execution Petition 139
Types of Awards 140
Enforcement of Arbitration Award 141
(xxi)
Enforcement of Domestic Awards 141
Two Tier Arbitration 143
Provisions Related to Enforcement of Arbitration Award 143
Provision under Arbitration and Conciliation (Amendment) Act, 2021 144
Duty of an Arbitrator to render an enforceable award 145
Application for Execution of part of an award 145
Enforceability of an Arbitral award 145
Pendency of Appeal 146
Validity of an Arbitral award 146
Enforcement of Foreign Awards 148
Foreign Decree and the Code of Civil Procedure, 1908 149
Domestic Arbitration v/s. International Commercial Arbitration 150
Enforcement of Foreign Arbitral Awards 151
The Public Policy doctrine and the enforcement of arbitral award 156
Drafting of Arbitration Award 164
General guidelines for drafting of Arbitral Award 165
Lesson Round-Up 172
Glossary 173
Test Yourself 173
LESSON 6
CHALLENGE TO AWARD AND APPEALS
PART A: RECOURSE AGAINST ARBITRAL AWARD (SECTION 34)
Introduction 176
Grounds of Challenge and Powers of Court to Modify the Award 176
Furnishing of Proof 178
Public Policy under Section 34 178
Arbitral Award in Conflict with Public Policy of India – Section 34(2)(b)(ii) 179
Time period of Challenge 180
(xxii)
Challenge of an Arbitral Award 182
Essential elements of Arbitral Award 182
Recourse against Arbitral Award- Analysis 183
Differentiation of Appeal under CPC and Application under the Arbitration and Conciliation Act, 1996 184
Pre-conditions for Invoking Section 34(4) of the Arbitration and Conciliation Act, 1996 184
Indian Stamp Act, 1899 185
Challenge of Foreign Awards in India 186
Difference between Challenge of Domestic Award and Foreign Award 186
Drafting of Petition for Setting Aside an Arbitral Award 187
PART B: APPEALS (SECTION 37)
Appeals under Section 37 191
Whether a second appeal lies from an order passed in appeal under Section 37? 191
Lesson Round-Up 199
Glossary 200
Test Yourself 200
LESSON 7
EMERGING ASPECTS: FAST TRACK AND VIRTUAL ARBITRATION
Fast Track Arbitration 202

Essential Features of Fast Track Arbitration 202
Difference between Fast Track Arbitration and Ordinary Arbitration 203
Law relating to Fast Track Procedure 203
Required Documents and Drafting 204
Procedure and Steps in Virtual Arbitration 204
Important Aspects for Conduct of virtual Arbitration 204
Steps under Virtual Arbitration 205
Role of Company Secretaries and Related Provision 206
Arbitration vs Insolvency and Bankruptcy Code 2016: A Comparative Study 207
Future of Indian Arbitration: Prospects and Challenges 208
Online dispute resolution 209
(xxiii)
Lesson Round-Up 211
Glossary 211
Test Yourself 211
LESSON 8
ARBITRATION UNDER INVESTOR’S GRIEVANCES REDRESSAL MECHANISM OF STOCK EXCHANGES
Introduction 214
Investor Grievance Resolution Panel (IGRP)/ Arbitration Mechanism 214
Benefits of Investors Grievances Redressal Mechanism 217
Threshold limit for Interim Relief paid out of IPF in exchanges 218
Investor Service Centre (ISC) and Investor Grievances Redressal Committee (IGRC) 218
Investor Grievance Redressal Facility at Stock Exchanges/Depositories 219
Arbitration process at Stock Exchanges 219
Resolution of complaints by Stock Exchange 219
Handling of complaints by IGRC 220
Arbitration 220
Advices to Stock Exchanges 220
Disciplinary Action Committee, defaulters’ committee, Investors Service Committee, Arbitration Committee 221
National Commodity Derivatives Exchanges 222
Arbitration mechanism made simpler 223

When can SEBI take action for non-resolution of the complaint? 230
Situation/s where SEBI has closed a complaint after due consideration but complainant keeps repeating it 230
Place of Arbitration / Appellate Arbitration 230
Threshold limit for interim relief paid out of IPF in Stock Exchanges 230
Speeding up Grievance Redressal Mechanism 231
Regulatory Actions 231
SEBI Complaints Redress System (SCORES) Portal 231
Complaints coming under the purview of SEBI 232
Complaints NOT coming under the purview of SEBI 232
Time period for Lodging of a complaint on SCORES 232
(xxiv)
Procedure to lodge complaint online in SCORES 233
How are investor complaints handled? 234
Disposing of Investor Complaints 235
Online Web Based Complaints Redressal System 235
NICE PLUS: NSE’S Investor Centre 236
Role of Arbitration Mechanism for dispute resolution 236
Surveillance Actions 239
Daily review of Price Bands 240
Deep Out-of The Money (OTM) contracts 240
Graded Surveillance Measure (GSM) 240
Defaulting clients 241
Investor’s Beware: Report Un-solicited messages/videos/any other reference 241
Lesson Round-Up 246
Glossary 248
Test Yourself 248
List of Further Readings & Other References (Including Websites / Video Links) 248
LESSON 9
CONCEPTUAL FRAMEWORK OF INTERNATIONAL COMMERCIAL ARBITRATION
Introduction 250
Domestic Arbitration 250
International Arbitration 250
Domestic Arbitration vs. International Arbitration 251
Private International Law 252
Indian Council Of Arbitration(ICA) 252
Establishment and incorporation of Arbitration Council of India 252
Composition of Council 252
Duties and functions of Council 253
Vacancies, etc., not to invalidate proceedings of Council 253
Resignation of Members 254
Removal of Member 254
(xxv)
Appointment of experts and constitution of Committees thereof 254
General norms for grading of arbitral institutions 254
Norms for accreditation 254
General norms applicable to Arbitrator 254
Depository of awards 255
Power to make regulations by Council 255
Chief Executive Officer 255
About ICA 255
Role of Private International Law in Indian Council of Arbitration 256
Concept of International Commercial Arbitration 256
Role of National Courts in the International Arbitration Process 256
Challenges and Enforcement of Awards 259
Evaluation of International Arbitral Institutions 260
Drafting of an International Arbitration Clause and Submission Agreement 262
International Arbitration Clause 262
Submission Arbitration Agreements or Post Dispute Arbitration Agreements 262
Consideration of Arbitration as a Dispute Resolution Process in the Domain of International Trade 262
Drafting of Good Commercial Contracts 263
Online Dispute Resolution(ODR) 263
Benefits of ODR 263
International experience in Online Dispute Resolution (ODR) and Procedure Adopted by ODR in 265
Foreign Countries
Singapore International Arbitration Centre (SIAC) 278
Arbitral Services Offered by SIAC 280
International Centre for Settlement of Investment Disputes (ICSID) Arbitrations 281
Current issues in International Commercial Arbitration (e.g. Confidentiality and Consolidation) 283
International Chamber of Commerce Rules, 2021 284
International Centre for Dispute Resolution(ICDR) Rules, 2014 284
London Court of International Arbitration (LCIA) 285
LCIA Arbitration Rules 288
Modifications to Recommended Clauses 289
Mediation and other forms of ADR 289
(xxvi)
Lesson Round-Up 290
Glossary 291
Test Yourself 291
List of Further Readings & Other References (Including Websites / Video Links) 292
LESSON 10
INTERNATIONAL LAW OF ARBITRATION
Introduction 294
Definition of International Commercial Arbitration 294
Law and Practice of International Commercial Arbitration 294
UNCITRAL Arbitration Act and Rules 295
UN CONVENTIONS 296
Foreign Arbitral Awards (New York Convention Awards) 297
Foreign Arbitral Awards (Geneva Convention Awards) 298
UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) 300
(The “New York Convention”)
UNCITRAL model law on International Commercial Arbitration (1985), with amendments as adopted 301
in 2006
UNCITRAL rules on transparency in treaty-based investor-state arbitration (effective date: 1st April, 2014) 302
Expedited Arbitration Rules (2021) 302
Chartered Institute of Arbitrators (Ciarb)- UK model rules on international arbitration 302
Asia Pacific Centre for Arbitration & Mediation (APCAM) rules 304
APCAM Arbitration and Mediation Rules 304
APCAM Accreditation system and International Arbitration 305
The International Bar Association (IBA) Rules on Conflict of Interest 306
International Chamber of Commerce (ICC) Rules on International Commercial Arbitration 307
New York Convention 308
Geneva Convention 308
Case Study on International Commercial Arbitration 308
Lesson Round-Up 310
Glossary 311
Test Yourself 311
(xxvii)
Other References (Including Websites / Video Links) 312
LESSON 11
INTRODUCTION TO CONCILIATION AND ITS IMPORTANCE FOR MSMEs
Introduction 314
History of Conciliation 314
Arbitration and Conciliation Act, 1996 314
Important Definitions 315
Nature & Modes of Conciliation 316
Voluntary Conciliation 316
Involuntary Conciliation 316
Importance of Conciliation for MSME 316
Conciliation Proceedings 317
Law relating to Conciliation 318
Conciliation Proceedings according to the Law 319
Roles of Conciliator 321
Responsibilities of a Conciliator 322
Glossary 325
Test Yourself 325

Other References (Including Websites / Video Links) 326
LESSON 12
CONCILIATION PROCEEDINGS AND INTERNATIONAL PERSPECTIVE OF CONCILIATION
The process during Conciliation and Procedural Aspects 328
Appointment, Roles and Responsibilities of Conciliator 329
Drafting Terms of Settlement under Conciliation 330
Points to remember while Drafting Settlement Agreement 331
Settlement Agreement 331
Status and Effect of Settlement Agreement 333
(xxviii)
How the Awards are enforced 333
Drafting of Conciliation Clause/Agreement 334
Model Conciliation Agreement 335
Sections relating to Conciliation under Arbitration and Conciliation Act, 1996 335
Comparative Study of Conciliation 336
International Rules on Conciliation 336
United Nations Commission on International Trade Law (UNCITRAL) 336
Model Conciliation Clause 341
Lesson Round-Up 345
Glossary 346
Test Yourself 346
PART II : MEDIATION
LESSON 13
MEDIATION: AN INTRODUCTION AND ITS PROCESS ALONG WITH RULES
Conflict 350
Meaning of Conflict 350
Nature of Conflict 350
Socio- Philosophical Roots of Mediation 352
Development of Mediation in India 353
Mediation Act, 2023 354
What is Mediation? 356
Advantages of Mediation 357
Types of Mediation 357
Concept of Conciliation 360
Benefits 360
Difference between Mediation and Conciliation 360
Who initiates the Mediation Process ? 361
Pre- Litigation Mediation 364
Private mediation vs. Court ordered mediation 366
(xxix)
How to find Private Mediators? 366
Appointment of Mediator 367
Qualifications of a Person to be appointed as Mediators in Court annexed or referred Mediation 368
Disqualifications in Court Annexed Mediation 369
Court- ordered Mediation 369
ADHOC mediation and Institutional Mediation 370
Procedure of Mediation 371
Fees of Mediator and Costs 373
Mediation – Role of Judiciary and Legal Status 375
Legislative Provisions on Mediation 376
The Mediation Bill, 2021 and 2023 376
Highlights of the Bill 376
Standing Committee Report 377
Ethics to be Followed by A Mediator 378
Communication in Mediation 379
Requirement for effective communication 380
Negotiation in Mediation 380
Settlement 380
Enforceability of Settlement Agreement 381
What does a settlement agreement consist of? 382
Settlement in Court annexed mediation 383
Court to Fix a Date for Recording Settlement and Passing Decree 384
The Singapore Convention on Mediation 384
Utility of Co-mediation 385
Advantages of Co-Mediator 385
Challenges of Co-Mediation 386
Do’s and Don’ts for Co-mediators 386
Domestic Mediation 387
Mediation Clause 387
Lesson Round-Up 389
Glossary 389
Test Yourself 390
(xxx)
LESSON 14
NEGOTIATION SKILLS AND COMMUNICATION
Specific Negotiations 394

What is a Conflict? 394
Ways to resolve the Dispute and the Conflict 394
Alternate ways to resolve Dispute and Conflict 395
What is Negotiation? 396
Kinds of Negotiation 396
Seven elements of Negotiation 397
Importance of Dialogue 398
Why do we negotiate? 398
Steps during Negotiation 399
Preparation 399
Information Gathering 400
Bargaining 400
How to Negotiate? 401
Negotiation Techniques and Styles 402
Communication in Mediation and Negotiation 403
Interest v. Position (Iceberg Concept) 403
Lesson Round-Up 404
Glossary 405
Test Yourself 405
LESSON 15
VARIOUS MODES AND SCOPE OF MEDIATION INCLUDING ROLE OF MEDIATION
IN OTHER ADR DOMAINS
Glossary 346
Mediation in Civil and Commercial Litigation 408
Statutes 408
Civil Procedure Code 408
(xxxi)
Consumer Protection Act 409
Commercial Courts Act, 2015 409
Companies Act, 2013 409
Procedure of Mediation or Conciliation 410
Land Mark Cases 411
Court Annexed and Private Mediation 411
Statutory provisions dealing with court referred mediation 412
Advantages of court annexed mediation 412
Private Mediation 413
Employment Mediation 413
What happens after the mediation? 414
Online Mediation and Use of Artificial Intelligence 414
Use of Artificial Intelligence 415
Reflective Practice 416
Who will benefit from a reflective practice/case consultation (RP) group? 416
Stages of Mediation 417
Role of Mediators 420
Mediation Clause in Commercial Agreement 423
Overview: Corporate and Commercial Negotiations 423
What is Negotiation? 424
Why does one negotiate? 424
Negotiation Styles 424
What is Bargaining? 424
Types of Bargaining used in negotiation 425
Meaning of Corporate and Commercial Negotiation 425
Types of Deals 425
Tips for Successful Negotiating 426
Mediation Check List (Requisites) 426
Points to be considered for Mediation 427
The following Points are to be considered Pre Mediation 427
Mediation Confidentiality and Neutrality 427
Features of Mediation 427
Confidentiality 428
(xxxii)
Mediated Settlement Agreement 428
Role of Mediation in Other ADR Domains 431
Commercial Courts Act 433
Lesson Round-Up 433
Glossary 434
Test Yourself 434
LESSON 16
INTERNATIONAL AND EMERGING ASPECTS UNDER MEDIATION LAW
Introduction 438
Conceptual Framework 438
Principle Ethics 439
Ethics of a Mediator 440
Mediation Bill and upcoming law 445
Mediation under various statutes 445
Reference to Mediation under Section 89 of CPC, 1908 445
Mediation under Special Legislations 446
Mandatory Pre-litigation 447
Difficulties with the existing framework governing mediation 447
Understanding Mandatory Mediation 448
United Nations Convention on International Settlement Agreements Resulting From Mediation 449
Purpose 449
Key Provisions 450
Resolution Adopted by the General Assembly on 20 December 2018 [On The Report Of The Sixth Committee
(A/73/496)] 73/198 451
Singapore Convention on Mediation 451
UNCITRAL WGII 452
UN General Assembly 452
Status of Convention 452
International Negotiations and Diplomacy 455
Definition of International Negotiations 455
(xxxiii)
The Significance and Necessity for Negotiation 455
Parties to International Negotiations 455
World Culture vis a vis Organisational Culture 456
International Rules 456
Singapore Mediation Settlement Agreement 460
Applicability of the Singapore Mediation Convention 460
Limitations of the Convention 461
Singapore Convention & India 461
Case Studies on International Mediation 462
Patent Mediations 462
A WIPO Mediation of a Dispute in the Automotive Industry 463
Trademark Mediations 463
IT Mediations 463
Commercial Mediations 464
Lesson Round-Up 464
Glossary 465
Test Yourself 465
TEST PAPER 468
(xxxiv)
PART I
ARBITRATION &
CONCILIATION
Arbitration: Introduction, Lesson
Agreements and its Institutions 1
KEY CONCEPTS
n Arbitration Agreements n Alternate Dispute Resolution (ADR) n Protocols and Conventions n Recognitions
and Enforcements n Model Law n Supplementary Provisions n Modes of ADRs n Advantages of ADRs n Ad hoc
Arbitration n Institutional Arbitration n Fast Track Arbitration
Learning Objectives
To understand:
 Genesis of Alternate Dispute Resolution (ADR)
 Arbitration and Conciliation Act
 Difference between various ADR Methods
 Benefits of ADR Mechanism
 Nature of ADR system
 Laws effecting the system of ADRs
 Arbitration Agreement/ Clauses
 Essentials elements to understand the process of ADRs
 National and International Institutions
 Bye Laws of Institutions for ADRs
 Establishment of Arbitration Centre
Lesson Outline
 History of Arbitration in India  How is arbitration different from other
modes of dispute resolutions
 Adoption of model law in India
 Features and advantages of Arbitration
 Structure of Arbitration & Conciliation Act
(A & C act)  Arbitration Agreement
 Amendments made to Arbitration and  How to draft an effective Arbitration
Conciliation Act, 1996 Agreement?
 Modes of Dispute Resolutions  Essential elements of an Arbitration
Agreement
 Selecting the appropriate method
3
PP-AM&C Arbitration: Introduction, Agreements and its Institutions
 Arb-Med-Arb Clause: connecting the dots  Arbitration Institutions

between Arbitration and Mediation  Bye laws of the Institutions
 Key elements of an Arbitration Proceeding  Incorporation/ establishment of Arbitration
 Types of Arbitration Centre
 Pertinent statutes to the Arbitration Process  Lesson Round-Up
 Laws applicable in an Arbitration  Glossary

 Test Yourself
 Seat of Arbitration
 List of Further Readings
 Language of Arbitration Proceedings
 Other References (Including Websites/Video
 Qualifications of the Arbitrators
Links)
REGULATORY FRAMEWORK
l Arbitration and Conciliation Act, 1996
l Code of Civil Procedure, 1908
l Foreign Awards (Recognition and Enforcement) Act, 1961
l Arbitration and Conciliation (Amendment Act), 2021
HISTORY OF ARBITRATION IN INDIA
Introduction
It has been noted that misunderstanding and conflict commonly arise whenever two people get together for the
purpose of transaction or business. Such misunderstanding & conflict needs resolution, which should be quick
and effective. Apart from litigation, there are other alternative methods of dispute resolution which are quick
and effective in nature. Arbitration is one such method.
Fundamentally arbitration is a dispute resolution mechanism through which the parties to the dispute sort out
their dispute through a third person called the arbitrator. The origin of Arbitration can be traced back to the reign
of King Solomon, who used the biblical theory to settle disputes between two mothers where each one was
claiming the right on the baby boy and the issue was who the true mother of a baby boy was.
Subsequently, all rulers used arbitration to resolve commercial and territorial disputes. For India, Arbitration
is not a new concept; it has been in use since the Vedic times. The law for Arbitration has been continuously
evolving and developing throughout our country’s history. During the industrial Revolution there was rapid
growth in worldwide business and commerce. To keep up with the rapid economic growth and in order to
avoid drawn out litigation, arbitration is seen as the preferred dispute resolution mechanism. Presently,
the judicial system is still struggling with the high pendency of on-going cases because of which a speedy
redressal has become a dream for litigants, who fears the litigation because of the delay in resolution of
issue.
As arbitration process promises a speedy remedy to the parties, it is considered as one of the most efficient
dispute resolution method. However, arbitration has its own shortcomings. These drawbacks of the arbitration
4
Arbitration: Introduction, Agreements and its Institutions LESSON 1
process are corrected time and again in order to develop a smooth and efficiently functioning process.
Whenever laws relating to arbitration are enacted, some loopholes are noticed, which led to the enactment of
the present Arbitration and Conciliation Act, 1996 which is based on the UNCITRAL model. This act has further
been amended in 2003, 2015, 2019 and 2021.
Evolution and Development of Law of Arbitration in India

Laws of Arbitration in Ancient Times 1
1) Arbitration under Hindu Law
For India, Arbitration is not a new concept; it has been in use since the Vedic times, the proof of which can
be found in various Upanishads. The first treatise that talked about the common use of arbitration in the
Vedic era was Brhadaranayaka Upanishad, which was written by sage Yajnavalkya. It also mentioned three
distinct arbitral bodies, namely:
a) A group of person, who belonged to different tribes and sects but they used to live together in the same
locality, this group of persons were called The Puga.
b) A council of artisans and tradesman who belonged to different tribes and sects but were connected to
each by being in the same profession, this group of persons were called the Sreni.
c) A group of people who are members of one family and are bound by family ties, this group is called The
Kula Collectively, these bodies were known as “panchayats” and the members of these panchayats
were called as the “Panchas”. These panchayats conducted proceedings which were informal in nature
and didn’t have any complex technicalities like a municipal court. The orders and decisions given by
these panchayats were final and binding on both the parties. However, a party aggrieved with the
decision of the kula can appeal to the sreni and it can appeal to the puga where the party is aggrieved
with the decision of the sreni. Where the party is not satisfied even by the decision of the puga, it can
put an appeal to the Pradvivaca. Even though these panchayats were non-governmental, the municipal
courts were capable to review their decisions. These panchayats used to deal with various kinds of
disputes, such as matrimonial and contractual disputes and sometimes even disputes of criminal nature.
The King used to act as the ultimate arbiter of all the disputes. However, with the changing times, the
social, cultural and economic environment of the country also changed which made the functioning
of such arbitral bodies outmoded and inadequate in some form or the other, but in spite of this these
arbitral bodies are still prevalent in rural India.
2) Muslim Law
Imam Abu Hanifa along with his disciples Abu Yusuf and Imam Mohammad systematically compiled the
Muslim law in the commentary, which came be known as the Hedaya. At that time all the Muslims in India
were governed by the Islamic laws contained in the Hedaya. 2The Hedaya among other things also laid
down the provision for arbitration. In Arabic language the word used for arbitration is “Tahkeem” and the
word “Hakam” is used to describe an arbitrator. In Muslim law an arbitrator was required to have the essential
qualities of a Kazee- an official judge presiding over a court of law. Where both the parties to the dispute are
Muslim, the entire arbitral process is governed by shariah law both substantively and procedurally.
However, where only one party is Muslim, the non-Muslim party can decide whether or not to follow
the shariah laws in settling the dispute. As per shariah law, an award made under any other law will be
considered as a foreign award, even if it fulfils most of the conditions of the shariah law. Such awards
1. International Journal of Law Management & Humanities Vol 4 issue 2

2. O.P. Malhotra, ‘The law and practice of Arbitration and Conciliation’, 1st edn, (Lexis Nexis-ButterworthsPublication: New Delhi 2002) p- 5- 7
5
would be enforceable by the courts, although the courts don’t have the powers to review the reasoning of
the arbitrator or the merits of the dispute. However, the court does have the power to examine the formal
conditions such as the validity and the existence of the arbitration agreement, whether the award deals with
all the merits of the case and whether the award has been made by all the arbitrators.
3) Laws During British Rule
The East India Company between the years 1772 and 1827 gave a legislative structure to the law of
arbitration in India, by enacting new rules and regulations in the three presidency towns namely Bombay,
Calcutta and Madras. These rules and regulations did lacked uniformity and clarity in details; however they
brought a significant change in the prevailing panchayat system. The Bengal Regulations of 1787, 1793, and
1795 brought significant changes in the procedure by enabling the courts to refer cases, with the consent
of both parties to arbitration and they further empowered the courts refer cases whose value was less than
` 200 to arbitration and also disputes relating to debts, disputed bargains, partnership account and breach
of contract. These provisions laid down the procedure for conducting arbitration.
The Bengal Regulation of 1802, 1814 and 1883 extended the limits of jurisdiction of arbitration by making
procedural changes. Furthermore, the Regulation of 1816 authorised the district munsifs in the Presidency
town of Madras, to hold Panchayats for sale disputes in connection with real estate and personal property.
The Regulation VII of 1827 provided for settlement of civil disputes in the Presidency town of Bombay. These
provisions remained in force until 1862 that is until the Civil Procedure Code 1859, was extended to the
Presidency towns as well.
The Code of Civil Procedure Act 1859:
After the legislative council was established for India in 1834, it enacted the Code of Civil Procedure
Act 1859. The aim for enacting such act was to codify the procedures that the civil courts would follow.
Arbitration in suits was given under sections 312 to 325 of the code and sections 326 and 327 talked
about arbitration without court intervention. However at that time this code was not in force in the
presidency towns like Calcutta, Bombay and Madras. Therefore the aforementioned provisions were
not in force in presidency towns until the code came into force in these towns in 1862. The Code of
Civil Procedure Act 1859 was repealed by the Code of Civil Procedure Act 1877, which itself was later
revised in 1882. However, the provisions relating to arbitration were reproduced in sections 506 to 526
of the new Act.
Indian Arbitration Act 1899:
The Indian Arbitration Act was enacted by the legislative council in the year 1899. This act was the first
substantive piece of legislation which talked about arbitration in India. However, it was only applicable in
the presidency towns like Calcutta, Bombay and Madras. This act broadened the scope of arbitration, as
it defined the term ‘submission’ to mean ‘a written agreement to submit present and future differences to
arbitration whether an arbitrator is named therein or not’. Before this, the term ‘submission’ was only limited
to ‘subsisting disputes’.
Therefore, before enactment of this act, a contract to refer disputed matters to arbitration came under 3
statutes, namely,
(a) the Code of Civil Procedure;
(b) the Indian Contract Act; and
(c) the Specific Relief Act.
Furthermore, under the Contract Act and the Specific Relief Act, a contract about referring existing or future
disputes to arbitration, could not be specifically enforced.
6
Therefore, the law of arbitration was not satisfactory. In the case of Dinkarrai vs. Yeshwantrai3, the Bombay
High Court observed that the Indian Arbitration Act was unnecessarily complex, and the legislature must
bring in reforms to restore its relevance.
The Schedules to the Code of Civil Procedure, 1908
The Code of Civil Procedure 1882 was repealed by the new Code of Civil Procedure 1908. In this new code
the provisions relating to arbitration were included in the second schedule. The provisions relating to the
law of arbitration which extended to other parts of the country was contained in the first schedule of the
code, on the other hand the second schedule talked about arbitration outside the scope and operation of
the 1899 Act. The second schedule mostly related to arbitration in suits while briefly providing arbitration
without intervention of a court.
Arbitration (Protocol and Convention) Act, 1937
The main aim of the Arbitration (Protocol and Convention) Act, 1937 was to give effect to the Geneva
Convention on the Execution of Foreign Arbitral Awards, 1927 and Geneva Protocol on Arbitration Clauses
1923 and. Only those matters that were considered ‘commercial’ under the law in force in India came
under the purview of this Act 4. This act was mainly concerned with the procedure for filing ‘foreign awards’,
enforcement of such foreign awards and the conditions that needed to be fulfilled for such enforcement
and the operation of this act was based on reciprocal arrangements. The provisions of this act were later
amended and consolidated in the Arbitration and Conciliation Act of 1996.
The Arbitration Act of 1940
The judicial rebuke and the hue and cry made by of the commercial community led to the enactment
of a consolidating and amending legislation i.e. The Arbitration Act of 1940. This Act appeared to be a
comprehensive and self-contained Code. Its provisions are summed up as follows:
1) The act made provisions for
(a) arbitration with court-intervention, in cases where no suit was pending before the court;
(b) arbitration without court-intervention; and
(c) arbitration in suits i.e., arbitration with court-intervention in pending suits.
Further provisions were made for all 3 types of arbitration.
2) The act interpreted the term ‘written agreement’ as a written agreement to send the present and future
disputes to arbitration, whether or not an arbitrator is present or not.
3) The act also introduced deeming provisions in order to include the provisions under the First Schedule.
4) This act came up with the provision to protect the arbitration agreement from being vitiated because of
the presence of some lacuna.
5) The courts were empowered by the act to remove an arbitrator and the umpire and to get a substitute
for them in order to ensure that arbitration should not fail by reason of misconduct or want of diligence.
6) The act empowered the courts to deal with the awards judicially after they had been filed before it. This
enabled the courts to pass judgments, with the discretion to modify, remit or set aside the award.
7) General provisions were made by the act that the courts should approve the arbitral awards by a
judgement as to the validity, existence and effect of the awards or of ‘arbitration agreement’ between
3. AIR 1930 Bom 98

4. O.P.Malhotra, ‘The law and practice of Arbitration and Conciliation’, 1st edn, (Lexis Nexis-Butterworths Publication: New Delhi 2002) p-10
7
the parties. The legislature’s intention behind enacting these provisions, was to make only one court
where all matters connected with the “arbitration-agreement” or “award” can be filed.
Drawbacks of the Arbitration Act of 1940 After the country got its independence in 1947, the trade and
industry received a great boost and industrial and commercial community started to favour settlements of
disputes through arbitration. This increased the emphasis on proceedings of arbitration which exposed the
shortcomings and infirmities in the Arbitration Act, 1940. These shortcomings were as follows:
The provisions regarding the power and duties of the arbitrators were inadequate. The act didn’t say
anything about the shortcomings in private contracts between individuals. The rules and procedure
for filings awards was different for every High Court. There was a lack of provisions that prohibited
an arbitrator or umpire from resigning at any time in the course of the proceedings, which resulted in
parties incurring heavy losses in situations where the arbitrators or umpire acted mala fide. The act
also failed to make distinction between the ‘agreement’ made in advance to submit future differences
and a ‘submission’ made after a dispute had arisen5. In the case of Guru Nanak Foundation v Rattan
Singh and Sons6, the Supreme Court held that under the Arbitration Act of 1940, the proceedings have
become highly technical, also because of its unending prolixity at every step; it can lead to a legal trap
to the unwary.
The Foreign Awards (Recognition and Enforcement) Act, 1961
Many considered the New York Convention of 1958 as one of the most effective instance of International
legislation in the entire history of commercial law’. India was a signatory of the said convention and the
main aim of the Foreign Awards (Recognition and Enforcement) Act, 1961, was to give effect to the New York
convention. The Supreme Court of India in the landmark case of Renusagar Power Co Ltd v General Electric7
held that the main object of the aforementioned act was to promote and encourage international trade by
making speedy settlement of disputes arising in trade possible through arbitration.
The United Nations Commission on International Trade Law (UNCITRAL); Model Law In 1966, the United
Nations General Assembly established United Nations Commission on International Trade Law with the
aim to promote the International trade law in order to promote the International trade. The UNCITRAL is
regarded as the core legal body in the UN, which helps in avoiding duplication of efforts and to promote
consistency, efficiency and coherence in the harmonisation of trade law. Travaux Preparatories – The
UNCITRAL, in the year 1982 adopted a set of guidelines which helped in assisting institutions with regard
to arbitration under the UNCITRAL Arbitration Rules 1976, with the aim of assisting the countries who had
adopted these Rules or a modified version of them.
MODEL LAW
The Model Law on International Commercial Arbitration was a result of the guidelines provided in the
Travaux Preparatories. It was designed for the use in all legal and geographical regions. The United
Nations Commission International Trade Law (UNCITRAL), on 21 June 1985, adopted the full context of this
Model Law on International Commercial Arbitration. The United Nation General Assembly recommended
to all the countries across the globe to enact modern arbitration legislation based on the Model Law. This
had a major influence on the Indian law and therefore these guidelines were codified in the Arbitration and
Conciliation Act 1996.
5. Tractor export v Tarapore Co AIR 1971 SC 1,11

6. 1 AIR 1981 SC 2075- 76
7. AIR 1985 SC 1156.
8
Adoption of Model Law in India

The Model law, with the exception of a few provisions, was adopted in its entirety in India, in the form of the
Arbitration and Conciliation Act 1996.
The following provisions were adopted by the act:
a) The form and definition of arbitration agreement
b) The duty of the courts to refer the parties to arbitration where a suit is brought before the court in breach
of the arbitration agreement
c) The power of courts and tribunals to provide interim measures of protection in support of an arbitration
agreement
d) The composition of the arbitral tribunal
e) Appointing arbitrators
f) Grounds to challenge an arbitrator
g) The termination of the mandate of an arbitrator because of his failure to act
h) Provisions for substitution of an arbitration when his mandate is terminated
i) The procedure for arbitration
j) The Enforceability of arbitral awards and appeal against them.
ARBITRATION AND CONCILIATION ACT, 1996

The Arbitration and Conciliation Act contained the laws relating to Arbitration in India. The act is not
exhaustive and is of consolidating and amending nature. The Arbitration and Conciliation Act, provides
rules and regulations for both Domestic and International commercial arbitration and also enforcement of
foreign arbitral awards. It also provides new rules and regulations regarding conciliation. This act proceeds
on the basis of the UN Model Law, so as to make laws relating to arbitration in India accord with the laws
adopted by the United Nations Commission on International Trade Law (UNCITRAL).
STRUCTURE OF ARBITRATION & CONCILIATION ACT (A&C ACT)

Globalization and liberalisation of the Indian economy had created the ecosystem for foreign investments to
come into India after the year 1991. The investors, however, before investing in India were looking for a vibrant
and steady alternate dispute resolution mechanism to be available to get disputes relating to their investments
in India adjudicated quickly and at a lesser cost.
However, the then prevalent alternate dispute resolution mechanism being the provisions of the Arbitration
Act, 1940 was not commensurate to the expectations of the investors, who wanted a more settled and vibrant
alternate dispute resolution statute in India. India, based on the UNCITRAL Model Law on International
Commercial Arbitration 1985 thereafter passed the Arbitration and Conciliation Act, 1996 to make its law
contemporaneous to the worldwide existent position as far as arbitration is concerned.
The Arbitration and Conciliation Act, 1996 accordingly came in force on 22.08.1996. The said Act of 1996
was based on the UNCITRAL Model Law on International Commercial Arbitration 1985 and the UNCITRAL
Conciliation Rules, 1980.
9
The key objectives of the Arbitration and Conciliation Act, 1996 were:
a. Minimisation of supervisory role of courts
b. Providing speedy disposal of the disputes.
c. Amicable, swift and cost-efficient settlement of disputes.
d. Resolving the dispute by a formal award.
e. Ensuring that arbitration proceedings are just, fair and effective.
f. Comprehensively cover international commercial arbitration and conciliation as also domestic
arbitration and conciliation.
g. Permit an arbitrator to use mediation, conciliation or other procedure during the arbitral proceedings to
encourage settlement of disputes.
h. Provide that every arbitral award is enforced in the same manner as if it were a decree of the court.
Arbitration is a quasi-judicial proceeding, wherein the parties in dispute appoint an arbitrator by agreement to
adjudicate the said dispute and to that extent differs from court proceedings. The power and functions of arbitral
tribunal are statutorily regulated. Arbitration is accordingly essentially a voluntary assumption of an obligation
by contracting parties to resolve their disputes through a private tribunal.
The Arbitration and Conciliation Act, 1996 is divided into four parts:
a) Part I which is titled “Arbitration”;
b) Part II which is titled “Enforcement of Certain Foreign Awards”;
c) Part III which is titled “Conciliation”; and
d) Part IV being “Supplementary Provisions”.
Apart from these Parts, there are Seven Schedules provided to the Act of 1996.
AMENDMENTS MADE TO ARBITRATION AND CONCILIATION ACT, 1996

The Arbitration and Conciliation Act, 1996 was first amended in the year 2003. Later in the year 2014-15, the
246th Law Commission Report recommended further changes to the act and thus the act was again amended
in the year 2015.
The 2015 Amendment was a boon for the parties who had succeeded in their dispute before the arbitral tribunal,
as in the un-amended version of the act if an arbitral award was challenged before the court, even on issuance
of notice by the court it would as good as a stay, but because of the amendment a specific stay has to be
granted. This amendment also sought to narrow down the interpretation of the term “Public Policy of India” and
the intent behind this was to give importance to the award of the arbitral tribunal and grant finality to the same.
This amendment also tried to make the whole process speedier by setting a period of 90 days within which the
arbitration proceedings have to be started by the party obtaining any interim order from the court. Interference
of courts in arbitration proceedings were also restricted by this amendment. Also it prohibited the courts from
entertaining any application in a matter where arbitration proceedings had already commenced. It was also
confirmed by this amendment that when an arbitral tribunal passes any interim orders, they are to be enforced
effectively, as prior to this amendment these interim orders were not enforced effectively as the provisions of
Civil Procedure Code were not made specifically applicable to them.
In 2017, a committee was formed; the chairman of this committee was justice Srikrishna. This committee
10
recommended further changes to the act and to give impetus to institutional arbitration, this resulted in the
Arbitration and Conciliation Act (Amendment), Act, 2019.
Following amendments were made by the 2019 amendment act:
1) Section 2(ca) was added in the act which gives a definition of an ‘arbitral institution’ i.e. an institution
designated by the Supreme Court or a High Court under the Act.
2) The amendment empowered the Supreme Court and the High Court to designate arbitral institutions for the
purpose of appointment of arbitrators. Also these institutions would be graded by the Arbitration Council of
India. In cases where such graded institutions are not available, the chief justice of High Court will maintain
a panel of arbitrators for the purpose of performing the functions of such institutions.
3) This amendment has also introduced the Arbitration Council of India, which will be set up by the central
government and will have a Chairperson who is a judge of the Supreme Court or Chief Justice of The
High Court or an eminent person who has specialised knowledge about arbitration proceedings. The main
purpose of the council is to encourage and promote Alternative dispute resolution mechanisms by framing
policies and guidelines for the operations and maintenance of professional standards in matters relating to
arbitration
4) The act was also amended to state that the process of pleadings (statement of claims and defence) must
be completed within a period of 6 months from the date of appointment of the arbitrator. Also awards must
be made by the tribunals within a period of 12 months from the date of completion of pleadings.
5) The amendment also provided some qualifications and pre-requisites which a person must have in order
to qualify as an arbitrator. Further, the amendment also prescribed some general norms which are to be
followed by the arbitrator.
After analysing all the facts and circumstances, it can certainly be stated that in India the law of arbitration is
still in development stage. The law of arbitration in India is still growing and the summit is yet to be touched
by this branch of law. No doubt that Indian Government has taken various significant steps to make the law
for arbitration more efficient. Slowly but steadily India is establishing itself as an arbitration friendly country.
There have been several amendments in the law for arbitration, which intends to make the law better and more
efficient so that it becomes most preferred platform for quick resolution of disputes.
RECENT AMENDMENTS TO THE ARBITRATION AND CONCILIATION ACT, 1996

The Arbitration and Conciliation Act, 1996 has been amended in the years 2015 and 2019, to enable making
arbitration proceedings in India to be time bound, efficacious and amenable to further litigation only on limited
grounds.
The significant amendments include: –
l Grounds for challenge to arbitrators have been detailed out and specified as per prevalent international
standards to uphold independence and impartiality of arbitrators.
l Statutory framework provided for time bound completion of arbitration proceedings.
l Interim orders that can be passed by the courts or arbitral tribunals, as the case may be, relating to
arbitral proceedings have been detailed out to enable protection of the value of the subject matter of
dispute during the pendency of the arbitration proceedings.
l The grounds for challenge to arbitral awards clarified to convey that the scope of challenge is intended
to be limited. This would enable finality to arbitral awards.
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l The provision of automatic stay on the enforcement of arbitral awards, as soon an application for
setting aside an arbitral award is filed has been done away with and a provision included that a stay on
the enforcement of an arbitral award may be granted upon imposition of conditions including deposit
in case of monetary awards.
l Proposed notification of the establishment of Arbitration Council of India (ACI) for grading of arbitral
institutes in the country.
THE ARBITRATION AND CONCILIATION (AMENDMENT ACT), 2021 (“2021 AMENDMENT”)

The Arbitration and Conciliation (Amendment Act), 2021 (“2021 Amendment”) is the most recent amendment.
The 2021 Amendment, which was passed into law on 10th March 2021 follows the Arbitration and Conciliation
(Amendment) Ordinance, 2020 promulgated by the President of India in November 2020.8
It should be noted that the changes brought about by the 2021 Amendment to Section 36 of the 1996 Act
dealing with the “enforcement” of an arbitral award is widely discussed. The authors contend that the 2021
Amendment represents a retrogression in the pro-arbitration regime sought to be fostered in India.
Firstly, the 2021 Amendment alters the scheme of the 1996 Act by creating new hurdles to the enforcement
of arbitral awards. Secondly, by limiting the discretion of courts to tailor relief to the attendant circumstances,
the 2021 Amendment has undone the enforcement-friendly changes to the 1996 Act. Lastly, the introduction
of ill-defined standards for enforcing arbitral awards (a) throws a spanner in the wheel of enforcement and (b)
creates grounds to resist enforcement which are divorced from the grounds that are available to challenge an
award. Viewed in this light, the 2021 Amendment has the potential to distort the arbitration framework in India,
negatively impacting the rights of award-holders.
Nullifies the 2015 Amendment

Even within the realm of Section 36 proceedings, the 2021 Amendment could cause substantial mischief.
One of the major reasons for bringing in the 2015 Amendment was the observation of the Supreme Court in
National Aluminium Company, that the automatic stay jurisprudence left “no discretion in the court to put the
parties on terms” which defeated “the very objective of the alternate dispute resolution system”. This grievance
found succour with the 246th Law Commission Report as well, which recognised the paralytic effect of the same
and recommended changing the law.
The legislative antidote to allay such concerns was to confer upon the Court powers to deal with enforcement
claims akin to those conferred upon civil courts under Order 41 Rule 5 of the Civil Procedure Code, 1908
(“CPC”) (See Proviso to Section 36 of the 1996 Act inserted by the 2015 Amendment). The exercise of such
powers to stay enforcement of an award under the CPC is well-established and requires illustration that
“substantial loss may result to the party applying for stay of execution unless the order is made” (See
Order 41, Rule 5(3)(a), CPC).
With the 2021 Amendment Act, the illustration of a prima facie case would entitle the party to procure an
“unconditional” stay, thereby obliterating any discretion to balance the competing equities which would
doubtless vary from case to case in staying the enforcement of an arbitral award. In this respect, the 2021
Amendment re-introduces the stultification of judicial discretion resulting in ‘paper awards’, which led to the
2015 Amendment in the first place.
Further, the 2021 Amendment includes grounds such as ‘fraud’ and ‘corruption’ which are not explicitly
contemplated under the CPC for staying a decree. These additional grounds now relate exclusively to
arbitral proceedings, suggesting a fundamental distrust in the arbitral process, thereby creating inexplicable
8. Kluwer Arbitration Blog- Ashish Dholakia and Ketan Gaur, Kaustub Narendran /May 23, 2021
12
discrimination between civil proceedings and arbitral proceedings. Such discrimination has already by decried
by the Supreme Court in the HCC Case where the Court observed:
“[…] The anomaly, therefore, of Order XLI Rule 5 of the CPC applying in the case of full-blown appeals, and not
being applicable by reason of Section 36 of the Arbitration Act, 1996 when it comes to review of arbitral awards,
is itself a circumstance which militates against the enactment of Section 87 […].” (Para 50).
AMENDMENT ON THE QUALIFICATIONS OF ARBITRATORS

Arbitration and Conciliation Amendment Act 2019, inserted Part 1A under the Act, which stipulated for the
constitution of Arbitration Council of India (ACI). Section 43J thereunder introduced the Eighth Schedule into the
Act. The Schedule became subject to wide criticism on the grounds of departure from the principles of party
autonomy. It enlisted the qualifications and experience for being appointed as an arbitrator. The prescribed
qualifications were not only restrictive but also unjustly prohibitive of the appointment of foreign arbitrators. It
was argued that this untoward approach towards foreign arbitrators goes against the very spirit of arbitration
and earns a bad reputation for India as the seat of international arbitration. Notably, these amendments have
not been notified as the Arbitration Council of India (ACI) is yet to be established.
The 2021 Amendment has addressed this concern by effectively doing away with the Eighth Schedule in
one full sweep. The Eighth Schedule now stands omitted and Section 43J states that the qualifications,
experience, and norms for accreditation of arbitrators shall be such as may be specified by the regulations.
The position of the section indicates that the “Regulations” will be framed by the ACI. The Statement of
Object and Reasons under the amendment states that this step is being taken “to promote India as a
hub of international commercial arbitration by attracting eminent arbitrators to the country.” Therefore,
the regulations framed by the ACI are expected to be drafted in the interests of party autonomy and in
consonance with international standards.
This is a welcome step in the development of arbitration. and is likely to attract more attention to India as
an international seat for arbitration because the foreign investors will no more be deprived of their right to
choose an arbitrator (even foreign). Having foreign arbitrators would not only bring confidence to the foreign
parties, but would help shed-off the perception of India as an inward-looking arbitration regime. Furthermore,
the delegation of framing legislation to the ACI could also be the cue that we may soon see the establishment
of the ACI, and with that, a new dawn for the arbitration practice in India.
MODES OF DISPUTE RESOLUTIONS

We are all familiar with the most traditional dispute-resolution process of our civil justice system: litigation and
trial with a judge or jury deciding who is right or wrong – where someone wins and someone loses. However,
there are many other options available9. Negotiation, mediation and arbitration, often called ADR or alternative
dispute resolution, are the most well known.
Whether you are involved in a family or neighborhood dispute or a lawsuit involving thousands of dollars, these
processes should be considered. They are often the more appropriate methods of dispute resolution and can
result in a fair, just, reasonable outcome for both you and the other party involved. Settlement and compromise
have long been favored in the legal system. In fact, most cases that are filed in a court are settled and never
go to trial. Only 5% of all cases filed go to trial. ADR procedures are excellent options for you in dealing with
controversy, allowing you to reach resolution earlier with less expense than traditional litigation and allow you
to maintain control of your legal matter. In fact, many courts require parties to consider some form of ADR before
going to trial. The following processes describe ways to resolve disputes.
9. Oklahoma Bar Association - Methods-for-Resolving-Conflicts-and-Disputes
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Negotiation
Definition: Negotiation is the most basic means of settling differences. It is back-and-forth communication
between the parties of the conflict with the goal of trying to find a solution.
The Process: You may negotiate directly with the other person. You may hire an attorney to negotiate directly
with the other side on your behalf. There are no specific procedures to follow – you can determine your own –
but it works best if all parties agree to remain calm and not talk at the same time. Depending on your situation,
you can negotiate in the board room of a big company, in an office or even in your own living room.
Negotiation allows you to participate directly in decisions that affect you. In the most successful
negotiations, the needs of both parties are considered. A negotiated agreement can become a contract
and be enforceable.
When and How Negotiation is Used: Most people negotiate every day. In some circumstances, you may want
a lawyer to help you negotiate a fair deal. Negotiation is the first method of choice for problem solving and
trying to reach a mutually acceptable agreement. If no agreement is reached, you may pursue any of the other
options suggested here. This process can be appropriately used at any stage of the conflict – before a lawsuit
is filed, while a lawsuit is in progress, at the conclusion of a trial, even before or after an appeal is filed.
Characteristics of Negotiation:
l Voluntary
l Private and confidential
l Quick and inexpensive
l Informal and unstructured
l Parties control the process, make their own decisions and reach their own agreements (there is no third-
party decision maker)
l Negotiated agreements can be enforceable in court
l Can result in a win-win solution.
Mediation
Definition: Mediation is also a voluntary process in which an impartial person (the mediator) helps with
communication between the parties and promotes reconciliation, which will allow them to reach a mutually
acceptable agreement. Mediation is often the next step if negotiation proves unsuccessful.
The Process: The mediator manages the process and helps facilitate negotiation between the parties. A
mediator does not make a decision nor force the parties to reach an agreement. The parties directly participate
and negotiate their own settlement or agreement.
At the beginning of the mediation session, the mediator will describe the process and ground rules. The
parties, or their attorneys, have an opportunity to explain their view of the dispute. Mediation helps each
side better understand the other’s point of view. Sometimes the mediator will meet separately with each side.
Separate “caucusing” can help address emotional and factual issues as well as allow time for receiving legal
advice from your attorney. Mediations are generally held in the office of the mediator or another agreed
neutral location.
Agreements can be creative and tailored to your specific needs. You could reach a solution that might not be
available from a court of law. For example, if you owe someone money but don’t have the cash, rather than
be sued and get a judgment against you, settlement options could include trading something you have for
something the other party wants. If an agreement is reached, it will generally be put in writing. Most people
14
uphold a mediated agreement because they were a part of making it. If a lawsuit has been filed, the agreement
is typically presented to the court as an enforceable order. If no lawsuit has been filed, the mediation agreement
can become an enforceable contract. If no agreement is reached, you have not lost any of your rights, and you
can pursue other options such as arbitration or going to trial.
When and How Mediation is Used: When you and the other person are unable to negotiate a resolution to your
dispute by yourselves, you may seek the assistance of a mediator who will help you and the other party explore
ways of resolving your differences. You may choose to go to mediation with or without a lawyer depending
upon the type of problem you have. You may always consult with an attorney prior to finalizing an agreement
to be sure you have made fully informed decisions and all your rights are protected. Sometimes mediators
will suggest you do this. Mediation can be used in most conflicts, ranging from disputes between consumers
and merchants, landlords and tenants, employers and employees, family members in such areas as divorce,
child custody and visitation rights, eldercare and probate, as well as simple or complex business disputes or
personal injury matters. Mediation can also be used at any stage of the conflict, such as facilitating settlements
of a pending lawsuit.
Who Provides this Service: Professionals provide private mediation for a fee. If you have an attorney, you can
work together to select a mediator of your choice. You may want a mediator who is knowledgeable about the
subject matter of your dispute. You may wish to use a for-fee mediator in the first instance or if early settlement
mediation has not resulted in a resolution of your dispute.
Public mediation services are available through court annexed Mediation centres countrywide.
Characteristics of Mediation:
l Promotes communication and cooperation.
l Provides a basis for you to resolve disputes on your own.
l Voluntary, informal and flexible.
l Private and confidential, avoiding public disclosure of personal or business problems.
l Can reduce hostility and preserve ongoing relationships.
l Allows you to avoid the uncertainty, time, cost and stress of going to trial.
l Allows you to make mutually acceptable agreements tailored to meet your needs.
l Can result in a win-win solution.
Advantages of Mediation:
l Parties have complete control over the settlement.
l Less stress as compared to litigation and arbitration.
l The relationship between the parties isn’t overly damaged.
l Mediation proceedings are confidential.
l The process resolves the dispute quickly.
Disadvantages of Mediation:
l Since the decision is at the discretion of the parties, there is the possibility that a settlement between
the parties may not arise.
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l It lacks the support of any judicial authority in its conduct.
l The absence of formality- Mediation proceedings are lacking in any procedural formality since they are
not based on any legal principle.
l The truth of an issue may not be revealed.
Arbitration
Definition: Arbitration is the submission of a disputed matter to an impartial person (the arbitrator) for decision.
The Process: Arbitration is typically an out-of-court method for resolving a dispute. The arbitrator controls the
process, listens to both sides and makes a decision. Like a trial, only one side will prevail. Unlike a trial, appeal
rights are limited.
In a more formal setting, the arbitrator will conduct a hearing where all parties present evidence through
documents, exhibits and testimony. The parties may agree to, in some instances, establish their own procedure,
or an administrating organization may provide procedures. There can be either one arbitrator or a panel of
three arbitrators. An arbitration hearing is usually held in offices or other meeting rooms.
The result can be binding if all parties have previously agreed to be bound by the decision. In that case, the
right to appeal the arbitrator’s decision is very limited. An arbitrator’s award can be reduced to judgment in a
court and thus be enforceable. In nonbinding arbitration, a decision may become final if all parties agree to
accept it, or it may serve to help you evaluate the case and be a starting point for settlement talks.
Advantages of Arbitration:
l Flexibility- Arbitration proceedings are flexible and more economically feasible compared to litigation.
l Time-Consuming- Arbitration proceedings occur at an expeditious rate as compared to Litigation;

therefore, it saves time for both parties.
l Confidentiality- The disputes which are subject to arbitration are treated with privacy, and are not
released to the public.
l Arbitrator- The parties have the liberty to choose an arbitrator to handle their dispute.
l Enforceability- Arbitration awards are generally easier to enforce as compared to court verdicts.
Disadvantages of Arbitration:
l If arbitration is mandatory as per the contract between the parties, then their right to approach the court
is waived.
l There is a very limited avenue for appeals.
l Arbitration does not provide for the grant of interlocutory applications.
l Arbitration awards are not directly enforceable; they are executable subject to judicial sanction.
Conciliation
Conciliation is a method of dispute resolution wherein the parties to a dispute come to a settlement with the
help of a conciliator. The conciliator meets with the parties both together and separately to enter into an
amicable agreement. Here, the final decision may be taken by reducing tensions, improving communications,
and adopting other methods. It is a flexible process, therefore allowing the parties to define the content and
purpose of the proceeding. It is risk-free and is not binding upon the parties unless they sign it.
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Advantages of Conciliation:
l Flexibility: Since the conciliation process is informal, it is flexible.
l The conciliator is often an expert in the disputed field.
l Conciliation proceedings, like any other form of ADR, is economical as compared to litigation.
l The parties to the dispute have the liberty to approach the court of law, if unsatisfied with the proceeding.
Disadvantages of Conciliation:
l The process is not binding upon the parties to the dispute.
l There is no avenue for appeal.
l The parties may not achieve a settlement to their conflict.
SELECTING THE APPROPRIATE METHOD

The method you use to resolve your dispute will depend upon your personal needs and the nature of your
particular dispute. You may want to consult with an attorney to help diagnose which process best serves your
particular situation.
Considerations:
l Private and confidential or in a public court setting
l Informal setting and a more flexible process or one that is more formal and has specific rules to follow
l Personal control or decision made by a judge or arbitrator
l Time
l Costs
l Maintaining relationships
l Dispute decided on questions of law, resolved with business principles or a solution found through
other fair, yet practical means
l Binding and easily enforceable.
There will always be times when a courtroom trial is the best option. Often, however, you are better served by
one of the other alternative dispute resolution processes. With a better understanding of the considerations that
can help you choose the most appropriate method, your conflicts can be more successfully managed and your
disputes more satisfactorily resolved.
HOW IS ARBITRATION DIFFERENT FROM OTHER MODES OF DISPUTE RESOLUTIONS

Difference between different types of Alternative Dispute Resolution (ADR) systems:10
ADR Methods- Arbitration Mediation Conciliation Negotiation

Basis
Neutral Third Adjudicator Facilitator Facilitator, Evaluator Facilitator

Party
10. Mondaq–issue 2021
17
Nature of the Legally Binding Not legally Not legally binding Not legally binding
Proceeding binding
Level of Formal Informal Informal Informal

Formality
Level of Confidentiality as Confidentiality Confidentiality as Confidentiality based

Confidentiality determined by law based on trust determined by law on trust
Formality
Mediation is an informal process; the parties may agree to certain mediation rules but they are at liberty to
amend any rules. There is no requirement to produce specified information before the mediation can commence,
neither is there a requirement to spend resources filing and serving documents. Mediation is informal and
uncomplicated.
Arbitration has been criticised for mimicking litigation; many steps have been taken to redress this and arbitrations
are less formal, nevertheless arbitration may be considered formal and complicated when compared with
mediation.
Litigation is, properly, a highly formalised process with specialised rules; non-compliance may prevent litigation
proceeding. Resources have to be committed in filing and serving documents. Litigation is a highly formal and
complicated process.
Speed
In mediation the timing is within the control of the parties. Subject to the availability of suitable and acceptable
mediators, mediation may take place as quickly as the parties desire. The length of the mediation is similarly
in the control of the parties; they can agree to stay as long, or as briefly, as required. The great majority of
mediations are restricted to one working day or less.
Speed is often claimed as a feature of arbitration; however the reality is that the availability of all the parties
involved, not least the arbitrators, dictate that the process is often protracted.
Litigation is often an infuriatingly slow process. In many jurisdictions advisers talk in terms of years rather than
months as the timescale for trial dates.
Flexibility
Mediation is a flexible process; all arrangements can be changed if it becomes apparent that this is
necessary.
Arbitration can share much of this flexibility and the Arbitration and Conciliation Act 1996 has given arbitrators
wide-ranging powers to achieve flexibility.
Litigation is an inflexible process, specific steps must be taken to initiate and progress matters.
Cost
Mediation is an inexpensive process; this is achieved and facilitated by the informality and speed of the process.
The amount of lawyer involvement can be reduced if the parties agree and in many cases the cost of preparing
for mediation is marginal to the other preparation.
The parties can share the mediator’s costs and the cost of the venue in an agreed fashion. Arbitration can
certainly help in reducing costs and dealing with a dispute in a proportionate manner.
18
In comparison to litigation, it must be remembered that while the state pays for the judge, and rooms in many
cases, in arbitration the parties must pay the arbitrator’s costs.
FEATURES AND ADVANTAGES OF ARBITRATION

1. Fast Settlement: The main reason to opt for arbitration especially in domestic disputes is the speed at
which the matter can be decided. According to Section 29A11 the award is to be passed within a period
of 12 months of referring the dispute to arbitration.
2. Flexibility: In arbitration the parties have the freedom to select or enact the procedure to conduct the
proceedings. This gives them the flexibility to tailor it to suit their needs.
3. Confidentiality: Disputes may involve certain details which parties would not want to come into the
public domain or want to keep confidential. As arbitration unlike courts happen privately i.e. no outsider
is allowed to witness the proceedings it enables such details to remain confidential.
4. Continuity of Role: Unlike national courts where judges are frequently transferred the same arbitrator or
arbitrators would decide the matter unless removed or leaves in exceptional circumstances allegations
of bias or he/she quits because of personal reasons like ill health etc. This enables the decision makers
to have a better grasp over the dispute and improves the quality of the outcome.
5. Decision by Experts: Since in arbitration parties have the freedom to choose decision makers of their
choice, they will choose those who are experts in the required field. This enhances the chances of a
better decision.
ARBITRATION AND LITIGATION

Several issues may arise when determining whether to agree on a forum selection or arbitration clause in
negotiating international contracts. This section examines some of the most important issues. Competence and
Expertise of the Decision Maker In litigation, parties generally do not have any influence over the selection of
the judge assigned to hear their dispute and are therefore not in a position to assess how technically competent
he or she is. In an arbitration, however, the parties are able to select the arbitrators (or the entity which will select
for them in the event of disagreement) and can select individuals with the relevant technical expertise to decide
their dispute. Privacy/Confidentiality Litigation is generally open to the public, with the documents filed and
judgment of the court available for public inspection. Arbitration proceedings, documents and awards, however,
are typically private between the parties and arbitral tribunal (and arbitral institution, if used). However, privacy
is not the same thing as confidentiality.
An arbitral award can enter the public domain when an enforcement proceeding is commenced, or where a party
has a legal obligation to disclose. Some courts have ruled that arbitral documents and proceedings are not protected
by confidentiality, so the local law may be an important factor in choosing the seat for the arbitration.
ENFORCEABILITY COURT
Judgments are enforced through the powers of the state. Arbitration awards do not have any such automatic
powers of enforcement, meaning that the award must be voluntarily complied with by the losing party. Where
this does not happen, the winning party can seek enforcement before a national court. Court judgments have a
territorial limitation, however, and there are no multilateral conventions for their enforcement except within the
European Union. Nevertheless, under the New York Convention on the Recognition and Enforcement of Foreign
Arbitral Awards (the “New York Convention”), an award made in one Convention state can be enforced in any
of the other Convention states upon the production of the arbitration agreement, the award, and translations,
if necessary.
11. Arbitration and Conciliation Act, 1996
19
PROCEDURE
The procedure adopted before national courts is laid down in rules applicable before such courts. These rules
are not necessarily tailored to individual cases. Parties involved in an international arbitration can tailor their
procedural rules to their particular dispute, even where the arbitration is conducted under specified arbitration
rules.
ARBITRATION AGREEMENT
Arbitration agreement is the very foundation of arbitration. It is the very source of the powers of arbitrators. It
determines the scope of their authority. As arbitration is a voluntary process there cannot be arbitration without
there being an arbitration agreement.
According to Section 7(1)12 – 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. Thus an agreement whereby parties express their consent or intention to settle the
dispute through arbitration is termed as an arbitration agreement.
Arbitration being a voluntary/ consensual process the consent must be very clear if there is any doubt about
the said consent/ intent the matter cannot be referred to arbitration. For example if the agreement provides
the parties – may refer the dispute to arbitration that would not be a competent arbitration agreement as the
intention to opt for arbitration is ambiguous.
On the other hand if parties say that the matter – shall be referred to arbitration that would be a valid agreement.
Therefore, one must be very careful while drafting the arbitration agreement. Also there must be no ambiguity
about the identity of the parties to the arbitration agreement. If some of the parties to a dispute are not a party
to the arbitration agreement they cannot be referred to arbitration. Only those who are a party to the arbitration
agreement can be referred to arbitration.
The primary source of the tribunal’s powers is the parties’ arbitration agreement. Consensual arbitration is
contractual in nature as between the parties, arbitrators and arbitral institutions. The arbitration agreement is
supplemented by provisions of the arbitration rules incorporated into it. These rules also contain specific powers
and rights exercisable by the arbitrators. According to the doctrine of severability (or separability for some), the
arbitration agreement contained in a contract can survive the invalidity or termination of the main contract
so that the jurisdiction it confers on the tribunal allows it to decide on the consequences of that invalidity. If
this were not the case, all a reluctant respondent would need to do is allege invalidity, in order to take the
proceedings before a state court – thus putting the parties back into the very place they sought to avoid by
going to arbitration.
Types of Arbitration Agreement

According to Section 7(2) of the Arbitration and Conciliation Act, arbitration agreement can be in the form of
a clause in the main contract or it can be in the form of a separate agreement. The latter is called submission
agreement. Generally, arbitration agreements are in the form of a clause in the main contract.
Form of Arbitration Agreement

The Act does not prescribe any form for an arbitration agreement apart from that it must be in writing. If it is not
in writing it cannot be enforced. An oral agreement to refer a dispute to arbitration is not appropriate. Section
7(4) of the Act mentions the above-mentioned agreement is considered to be in writing if it is contained in:
a) a document signed by the parties;
12. Arbitration and Conciliation Act, 1996
20
b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record
of the agreement; or
c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by
one party and not denied by the other.
The Supreme Court has held that the – statement of claim and defence mentioned in Section 7 (4) (c) need not
be the statement of claim and defence filed before the arbitrator and could be a statement of claim and defence
in any suit, petition or application filed before any court.
An arbitration agreement can be entered into by incorporating it from some other contract. According to
Clause (5) of Section 7 the reference in a contract to a document containing an arbitration clause constitutes
an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause
part of the contract.
As per section 7 of the Act, the parties have the freedom to form the agreement in several ways as below:
By an arbitration clause- most often in commercial arbitration in India, a contract consists of an arbitration
clause as a protectionist clause which states the party’s intent to settle any disputes arising out of the contract
to be resolved by the arbitration mechanism.
By incorporating a clause- By the virtue of the Doctrine of Kompetenz- Kompetenz, an arbitration clause which
is a part of a separate contract can also be considered an arbitration agreement. Section 7(5) of the Act, it
provides that when an agreement refers to any agreement containing an arbitration clause, it will be considered
as an arbitration agreement providing the same is in writing and when it is drafted with the intent of incorporating
it as a clause in the contract.
By communication- In precedence set by invoking provisions 7(b) and (c) in cases like Galaxy Infra an
engineering 13, Murarji Savla14 and S.N Prasad15 communication by letters or telecommunication also signifies
the intention of parties to refer to arbitration as a form of the arbitration agreement.
HOW TO DRAFT AN EFFECTIVE ARBITRATION AGREEMENT?

By virtue of the judgements of Jagdish Chander v. Ramesh Chander16 and K.K. Modi v. K.N. Modi17, the Supreme
Court of India has laid down the validity and principles of an arbitration agreement.
The principle laid down in the judgment regarding the arbitration agreement are:
l It must be in writing,
l The agreement to settle the dispute in a private tribunal is mutual,
l The private tribunal has the power to adjudicate disputes without bias and by following the principles
of natural justice,
l The parties agree to be bound by the arbitral tribunal’s decision,
l The parties must refer the dispute to a private tribunal with no prior reservations,
l The parties must have mutual agreement reflecting from the maxim “consensus ad idem”,
13. Pravin Electricals Pvt. Ltd vs Galaxy Infra And Engineering Pvt. ... on 8 March, 2021
14. (1998) 1 GLR 778
15. S.N. Prasad vs The Executive Engineer on 7 October, 2015
16 Jagdish Chander v. Ramesh Chander
17. K.K. Modi vs K.N. Modi &Ors on 4 February, 1998
21
l The clauses of the agreement must raise an obligation of performance,
l The clauses of the agreement do not exclude the essentials of separability, severability, autonomy or
any other essentials of the agreement.
GENERAL PRINCIPLES IN AN ARBITRATION AGREEMENT18

Scott v. Avery clause: in contracts involving parties of different countries such as export transactions, foreign
element and plant installation contracts, the arbitration clause should provide a machinery suitable to the
international character of the transaction for facilitating the execution of award that may be made. This clause
provides that no action shall be brought until an award has been made and such provision is very common in
commercial contracts. This type of a clause is named after the case Scott v. Avery19. This clause is a condition
precedent to the determination of liability of a party to a contract. Repudiation of contract does not affect
this clause. A party successfully pleading Svott v. Avery clause as a defence in the suit cannot subsequently
challenge the jurisdiction of an arbitrator when the matter in the suit is remitted to arbitration. There are two
exceptions in which this clause may not be pleaded as a defence to a suit. First, where the conduct of the
defendant is such that it disentitles him from relying on such clause. Secondly, where the agreement to arbitrate
has ceased to exist.
In Viney v. Bignold 20 under an insurance policy there was a clause which provided that any dispute arising in
the adjustment of a loss should be submitted to arbitration and the award should be conclusive evidence of the
amount of the loss. It was further provided that the insured should not be entitled to commence any proceeding
until the amount of the loss is determined by an arbitration award. In an action by the insured the arbitration
clause was held to be good defence to the action.
Equity clause: amiable composition. It is settled law that an arbitrator shall act in accordance with law to decide
a dispute. If the arbitration agreement is silent as to the matter in which decision of the arbitrator is sought, it is
the duty of the arbitrator to decide the dispute according to equity and good conscience. He may not in such
case follow the strict rule of law. It is often provided in arbitration clause that “the arbitrator shall be entitled
to act as amiable compositeur”. Provision of such term in arbitration agreement is called “equity clause” or
‘amiable composition clause’21. This type of clause poses certain questions before the court. First, what does
this clause mean? Secondly, what does this clause require the arbitrator to do?
The Arbitration agreement effectively incorporate the following :
1. NUMBER OF ARBITRATORS- Section 10 of the Act provides for the appointment of arbitrators at the
discretion of the parties. However, the number of arbitrators must be odd and it is also necessary to select
arbitrators who would not show any sort of bias. The number of arbitrators determines the cost of the
arbitral proceeding.
2. LANGUAGE OF PROCEEDING- In cases of international commercial arbitration in India, the agreement

usually deems smartest to have a prescribed language in which the proceeding takes place in order to
avoid any future issues in the proceeding.
18. Apurva Agarwal - Universal Legal

19. (1856) 5 HL Cas 811
20. (1887) 20 QBD 172
21. Article 33 of the UNCITRAL Arbitration Rules
22
3. SEAT AND VENUE OF THE ARBITRATION- Arbitration law in India has evolved over the years and through
precedents set by cases like the BALCO22 and the BGS Soma 23, the importance of the differentiation and
specific mention of the seat and venue have been highlighted. The venue signifies the place where the
proceeding is held, whereas the seat is where the cause of action rises. The mechanism of commercial
arbitration in India also lays down certain principles and doctrines regarding the seat and venue.
4. INSTITUTIONAL ARBITRATION- The procedures and clauses are set and agreed to in a specialized institution
which appoints the arbitrator by themselves. This is a pre-defined means of carrying out arbitral proceedings.
ESSENTIAL ELEMENTS OF AN ARBITRATION AGREEMENT
Seat of Arbitraon 01 Number of Arbitrators 06

The Pares can choose Pares may choose one
any place as the seat of or three arbitrators and
Arbitraon incorporate in the
contract
Arbitraon Instuon 02 Language of Arbitraon 05
It is advisable to specify Pares should specify
the Arbitral Instuon the language of
to administer the arbitraon to avoid the
arbitraon applicaon of default
language
Substanve Laws 03
The Pares can choose Law governing Arbitraon Agreement 04
any law including a Pares may choose the
neutral law as the law governing the
substanve law of the arbitraon agreement
arbitraon
ARB-MED-ARB CLAUSE : CONNECTING THE DOTS BETWEEN ARBITRATION AND MEDIATION

In the recent years, the “Arb-Med-Arb” process has gained traction as a dispute resolution mechanism. The
process of “Arb-Med-Arb” entails exactly what its name suggests: the commencement of arbitration proceedings,
followed by mediation to attempt an amicable resolution, followed by continuation of arbitration proceedings
irrespective of the outcome.
The Singapore International Arbitration Centre (“SIAC”) and the Singapore International Mediation Centre
(“SIMC”) have formalised their very own SIAC-SIMC Arb-Med-Arb Protocol (“AMA Protocol”) for an “Arb-Med-
Arb” clause.
The key aspects of the AMA Protocol are as given below:
a) Pursuant to the “Arb-Med-Arb” clause or as otherwise agreed by parties, the arbitration is commenced
in accordance with the applicable arbitration rules.
b) After exchanging the Notice of Arbitration and Response to the Notice of Arbitration (“arbitration
pleadings”), the arbitration is stayed.
22. Bharat Aluminium Co vs Kaiser Aluminium Technical ... on 6 September, 2012

23. (2020) 4 SCC 234.
23
c) Under the AMA Protocol, the case file with all documents lodged by parties will then be sent by the
SIAC to the SIMC where the mediation will be conducted.
d) If the dispute is not been settled by mediation (whether partially or entirely), the arbitration proceeding
will resume in respect of the remaining part of the dispute.
In India, if the mediation renders settlement agreement under the Arb-Med-Arb clause, it will be incorporated as
consent award pursuant to Section 30 & Section 31 of the A&C Act.
Arb-Med-Arb is very ideal for construction disputes wherein multiple disputes exist within an arbitration
case.
SAMPLE ARB-MED-ARB CLAUSE

The SIAC and SIMC have provided a sample “Arb-Med-Arb” clause, which we reproduce below and in italics the
portions which are subject to change depending on the agreement of parties
Any dispute arising out of or in connection with this contract, including any question regarding its existence,
validity or termination, shall be referred to and finally resolved by arbitration administered by the [Singapore
International Arbitration Centre (“SIAC”)] in accordance with the [Arbitration Rules of the Singapore International
Arbitration Centre (“SIAC Rules”)] for the time being in force, which rules are deemed to be incorporated by
reference in this clause.
The seat of the arbitration shall be ________________.
The Tribunal shall consist of [Three] arbitrator(s).
The language of the arbitration shall be __________________.
The parties further agree that following the commencement of arbitration, they will attempt in good faith to
resolve the Dispute through mediation at the [Singapore International Mediation Centre (“SIMC”)], in accordance
with the [SIAC-SIMC Arb-Med-Arb Protocol] for the time being in force. Any settlement reached in the course of
the mediation shall be referred to the arbitral tribunal appointed by [SIAC] and may be made a consent award
on agreed terms.
KEY ELEMENTS OF AN ARBITRATION PROCEEDING

Following are the key element of an arbitration proceedings both domestic and internationally.
a) the agreement to arbitrate;
b) the need for a dispute;
c) the commencement of an arbitration;
d) the arbitral proceedings;
e) the decision of the tribunal; and
f) the enforcement of the award.
24
Following flow diagram illustrates the Arbitration proceedings.
Reference to
Arbitraon
Appointment
of Arbitrator
Preliminary
Claimant Hearing or Respondent
Direct Inmaon
Statement of
Statement of
Counter-claims
Claims by
Submission by Respondent
Claimant
of Document
Submission of Submission of
Rejoinders Rejoinders
Hearings
Addional Addional
Documents by Sufficient Documents by
Claimant Evidence Respondent
Final Hearing
Publish
Award
TYPES OF ARBITRATION
Types of Arbitration
Institutional Arbitration Ad-hoc Arbitration Statutory Arbitration Contractual Arbitration
Ad hoc Arbitration
Ad hoc arbitration is an arbitration procedure agreed and arranged by the parties themselves. If they fail to do
so then it becomes the responsibility of the arbitration tribunal. This enables the parties to tailor the procedure
to its needs. That is its main attraction. This flexibility is an advantage but one must not lose sight of the fact
25
that it is not an easy thing to create the procedure. It requires a lot of expertise. However the trouble of creating
the said procedure can be escaped by choosing the rules of an arbitral institution to govern the arbitration
proceedings without submitting the arbitration to an institution.
The major disadvantage of ad hoc arbitration is that if the arbitration encounters some troubles especially
because of non- cooperation of a party, the recourse to save arbitration is to be made to the national courts.
This is problematic because parties had opted for arbitration as they did not want to go to courts. In India ad
hoc arbitration is said be more prevalent than institutional arbitration.
Institutional Arbitration
When arbitration is conducted under the supervision of an institution in accordance with its rules of procedure it
is termed as institutional arbitration.There are various institutions which administer arbitration proceedings. They
have their ownset of rules to conduct the proceedings. Some of the institutions prominent internationally are
the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA), Singapore
International Arbitration Centre (SIAC), American Association of Arbitration (AAA) etc. As far as India is concerned
some of the well- known arbitration institutions are The Indian Council of Arbitration (ICA) and Federation of
Indian Chamber of Commerce and Industry (FICCI).
The biggest advantage of institutional arbitration is that parties are saved the trouble of framing the
procedure of arbitration, since it would be conducted under the rules of the selected institution. Another
advantage is the administrative support provided by the highly trained staff which these institutions have.
Also they have good infrastructure to conduct the proceedings and list of competent arbitrators to choose
from. Most importantly if arbitration encounters any problem there will be effective support from the
institution to save it as they have their own internal mechanism to save arbitration without making recourse
to the national courts. For example in the event of non- cooperation by a party to appoint an arbitrator or
if emergency measures are to be taken even prior to the establishment of the tribunal the institution has
mechanisms and rules to deal with such situations.
Institutional arbitration may be more expensive than ad-hoc arbitration but it offers a lot more facilities than
the latter. Institutional arbitrations are conducted pursuant to institutional arbitration rules, almost always
overseen by an administrative authority with responsibility for various aspects relating to constituting the
arbitral tribunal, fixing the arbitrators’ compensation and similar matters. In contrast, ad hoc arbitrations
are conducted without the benefit of an appointing and administrative authority or generally pre-existing
arbitration rules, subject only to the parties‘ arbitration agreement and applicable national arbitration
legislation.
Fast Track Arbitration
It is the remedy to the lengthy and tedious process of arbitration. Time is the main essence of fast-track
arbitration. In this process, all the methods which consume time in an arbitration process have been removed
and the process is made much simpler. The arbitration process is also called a private process as it is not similar
to the court proceedings it takes place privately.
PERTINENT STATUTES TO THE ARBITRATION PROCESS
Limitation Act
LIMITATION PERIOD FOR APPOINTMENT OF ARBITRATOR
The limitation period for a reference of a dispute to arbitration or to appoint an arbitrator under Section 11 of Act,
26
1996 is three years from the date on which the cause of action or the claim which is required to be arbitrated
first arise. Further, mere interaction between the parties in the form of letters or reminders will not extend the
statute of limitations.
TIME LIMIT FOR PRONOUNCEMNT OF ARBITRAL AWARD
The arbitrator is bound to complete the arbitral proceeding within 12 months as enunciated in the proviso 29A of
Arbitration and Conciliation Act, 1996. The parties may, by consent, extend the period specified not exceeding
six month.
CORRECTION AND INTERPRETATION OF AWARD
Within 30 days of receipt of arbitral award, a party, may request the arbitral tribunal to24 correct any computation
errors, any clerical or typographical errors or any other errors of a similar nature occurring in the award as well
as request for interpretation of a specific point or part of the award.
The arbitrator shall make the correction or give the interpretation within thirty days from the receipt of the
request and the interpretation shall form part of the arbitral award.
SET ASIDE APPLICATION
Upon receipt of arbitral award, the aggrieved party shall file an application to 25set aside the arbitral award not
later than 3 months and the time period shall be extended up to 30 days only if the Court is satisfied that the
applicant was prevented by sufficient cause from making the application within the said period of three months
and not thereafter.
Civil Procedure Code

ENFORCEMENT OF ARBITRAL AWARD
26
Upon receipt of arbitral and completion of limitation period to set aside an arbitral award, the awardee shall
approach the court under the provisions of Civil Procedure Code, 1908 to execute the award within a period of
12 year.
Interest Act
The arbitrator has the discretion to award post-award interest on a part of the ‘sum’, which includes principal
and pre-award interest. Unless the award otherwise directs under Section 31(7)(b) of the Act only qualify
the rate of interest, not additional components of interest (such as pre-award interest). Section 31(7)(b)
of the Arbitration Act only provides that if the arbitrator does not grant post-award interest, then the
award-holder is entitled to post award interest at 18%, unless the award otherwise directs another rate of
interest.
The Supreme Court in U.H.L Power Company Ltd. v. State of Himachal Pradesh27 pronounced that the arbitral
tribunal is empowered to grant compound interest or interest on interest. The legal position has been reiterated
by the Supreme Court in Indian Oil Corporation v. U.B. Engineering Ltd. and Anr28.
24. Section 33 of Arbitration and Conciliation Act, 1996

27. (2022) 4 SCC 116
28. Civil Appeal Nos. 2921-2922 of 2022
27
LAWS APPLICABLE IN AN ARBITRATION

An arbitration proceeding may involve the application of multiple sets of laws – law governing the substantive
issues in dispute (the law of the contract), law governing the arbitration agreement, law governing the arbitration
proceedings (usually the same as the law of the seat), the law governing the parties’ capacity to arbitrate, and
the law of the place where enforcement is sought.
These laws govern various aspects of arbitration and challenge to the award rendered, and its eventual
enforcement.
Supreme Court in Government of India v. Vedanta Limited 29
pronounced the various laws applicable to an
international commercial arbitration:
1. The governing law of the contract: This law determines the substantive rights and obligations of the parties
under the contract. Where parties have chosen the governing law of the contract, the dispute is decided in
accordance with such law. In the absence of express choice of the parties, the governing law of the contract
is determined by the arbitral tribunal in accordance with applicable conflict of law rules.
2. The law governing the arbitration agreement: This law is determined separately from the governing law
of the contract, and deals with issues such as the validity and scope of the arbitration agreement, extent of
party autonomy, the jurisdiction of the arbitral tribunal etc.
3. The curial law of the arbitration: The law of the seat of arbitration is the curial law of the arbitration. The
curial law governs the procedure of the arbitration, including its commencement, appointment of arbitrators
in a default scenario, grant of interim measures, collection of evidence, hearings and challenge to the
award.
Institutional rules for arbitration, such as the ICC Rules of Arbitration or the SIAC Rules (if chosen) apply along
with the curial law to govern the procedure for the arbitration. The law governing enforcement – this law governs
the proceedings for recognition and enforcement of the award in other jurisdictions.
The law governing enforcement is the lex fori (law of the forum where enforcement is sought). The lex fori
determines the court which is competent and has the jurisdiction to decide the issue of recognition and
enforcement of the foreign award, and the available legal remedies for enforcement of the award.
SEAT OF ARBITRATION
The seat of arbitration is a juridical concept, which refers to the legal home of the arbitration. It determines the
procedural law applicable to the arbitration. Courts of the seat have exclusive jurisdiction over the conduct
of arbitration except in relation to certain ancillary matters such as stay of court proceedings in favour of
arbitration, grant of interim relief, and enforcement of the arbitral award.
As a result, the seat of arbitration has primary jurisdiction over the arbitration, with the jurisdiction of all
other states being secondary. Thus, the seat is the “centre of gravity” of the arbitration, or the anchor for the
arbitration. The venue of arbitration on the other hand is merely a geographical location where parties and/
or the arbitral tribunal may meet or hold hearings. It has no legal significance for the arbitration. The place of
arbitration may refer to either seat or venue. The Arbitration and Conciliation Act, 1996 (“Act”) notably does not
use the terms “seat” or “venue”, but instead uses the term “place of arbitration” in Section 20. The term “place
of arbitration” itself carries two distinct meanings – the use of such term in Section 20(1) and 20(2) signifies the
seat of the arbitration whereas in Section 20(3), it signifies the geographical location where hearings may be
conducted30.
29. (2020) 10 SCC

30. Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited, (2017) 7 SCC 678.
28
The Hon‘ble Supreme Court in BALCO Judgment31 held that for the purpose of Section 2(1) (e) of the 1996 Act,
the courts at the seat of the arbitration do not have exclusive jurisdiction. Instead, two courts have concurrent
jurisdiction:
(1) the court which is amenable to the seat of the arbitration; and
(2) the court within whose jurisdiction the cause of action arises.
BALCO judgment further clarified that the rule regarding prospective effect was applicable. Only to the finding
that Part I of the Arbitration Act, 1996, is applicable only to all the arbitrations which take place within the
territory of India, and not to other ratio laid down in.
The Hon‘ble Supreme Court, in the case, Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc
(Supra), has provided a detailed clarification in terms of “place”, “seat”, “situs”, “venue”. The place agreed
between the parties to conduct the arbitration proceedings under the arbitration agreement shall be the seat
of arbitration. Similarly, seat of arbitration shall be decided by the arbitrator in the absence of the contract
between the parties in relation to the same.
However, when the arbitral tribunal meets at any place for consultation among its members, hearing witnesses,
expert or parties or for inspection of documents, goods or other property, that shall be deemed to be venue of
arbitration.
In the case, Shin Satellite Public Co. Ltd. v. Jain Studios Ltd.32, one of the parties to the arbitration submitted
that the matter should be referred to arbitration either in London or Singapore where other arbitrations were
already in progress concerning the same parties but the arbitration agreement provided Delhi as the place for
arbitration. Hence, the court disallowed the request as Delhi was pre-decided by the parties as the venue and
the part of the agreement was enforceable.
When the arbitral tribunal decides the venue of arbitration, the same cannot be construed as an award by the
arbitrator and neither an interim award and therefore it cannot be appealed in the court.
The Closest-Connection Test to Ascertain the Seat of Arbitration

A question may arise as to what happens if the parties mention the venue to arbitration in the agreement but
fail to mention the seat of arbitration. In such cases, can the venue of arbitration be deemed to be the seat of
arbitration as well?
In Dozco India Pvt Ltd. v. Doosan Infracore Co. Ltd 33(2011), the Supreme Court held that if the parties fail to
mention the seat of arbitration in the agreement, the presumption is that the parties have intended the laws of
the venue of the arbitration to be the laws governing the arbitration as well unless an intention to the contrary
has been shown. This is called the closest-connection test as the country/place that is most closely connected
with the arbitral proceedings is used to determine the seat of arbitration.
In BGS SGS Soma JV v. NHPC Ltd 34(2020), the Supreme Court held that in the absence of an express mention
of the seat of arbitration, the venue of the arbitration would be deemed to be the juridical seat since the venue
of arbitration is most closely connected with the arbitral proceedings.
In Inox Renewables Ltd. v. Jayesh Electricals Ltd 35(2021), the parties to the arbitration had mutually agreed
to shift the venue of arbitration from Jaipur to Ahmedabad. It was contended by the Respondent that in the
31. Bharat Aluminium Co Ltd v Kaiser Aluminium Technical Service Inc (2012) 9 SCC 552
32. (2006) 2 Scc 628
33. Civil Original Jurisdiction Arbitration Petition No. 5 Of 2008
34. Civil Appeal No. 9307 Of 2019 (Arising Out Of Slp (Civil) No.25618 Of 2018)
35. Civil Appeal No. 1556 Of 2021 (Arising Out Of Slp (C) No.29161 Of 2019)
29
absence of a written agreement, the shift in the venue of arbitration does not result in the shift in the seat of
the arbitration. It was also contended that the courts in Rajasthan will have exclusive jurisdiction to hear the
disputes arising out of the arbitration.
The Supreme Court held that the parties to an arbitration can shift the venue of the arbitration without a written
agreement. By changing the venue of the arbitration, the seat of the arbitration also changes, and thus the
courts in Gujarat will have exclusive jurisdiction to deal with the issues arising out of the arbitration.
Seat of Arbitration determines the following:
Procedural Law
Seat Comes with the
Procedural law.
Example: it seats is Singapore
Internaonal Arbitraon Act of
Singapore is the Procedural Law
Enfroceability
Supervising Courts If the seat is a
Courts having New York Convenon
Jurisdicon over signatory then award
the seat are the becomes enforceable
Supervising Courts under the Convenon
LANGUAGE OF ARBITRATION PROCEEDINGS

The language of the proceedings is to be indicated by the parties under their agreement. If the parties fail to define
the language of the arbitration proceedings in the agreement, the arbitral tribunal has the authority to define the
language of the arbitration proceedings. The language decided for the conduct of arbitration proceedings, either
mutually through the agreement or by the arbitral tribunal, shall be applicable to any written statement of either
party, any hearing, arbitral award, decision and any communications by the arbitral tribunal.
The arbitral tribunal may, at its discretion, order the documents filed it in any other language to be translated
in the language decided for the conduct of arbitration proceedings. The relevant section of the Arbitration and
Conciliation Act, 1996 is reproduced below:
Section 22 - Language
(1) The parties are free to agree upon the language or languages to be used in the arbitral proceedings.
(2) Failing an agreement referred to in sub-section (1), the Arbitral Tribunal shall determine the language or
languages to be used in 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 agreed upon by the parties or determined by the Arbitral Tribunal.
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QUALIFICATIONS OF THE ARBITRATORS

The arbitrators play important role in accomplishing the aim of arbitration (Resolving dispute). An eminent
arbitrator should act fair in deciding the case and granting justice to the parties. He must comply with the
Principles of Natural Justice. Section 11 of the Arbitration and Conciliation Act, 1996 defines the appointment of
arbitrators.
It also mentions who can be an arbitrator?
Who is an Arbitrator?
In arbitration, an arbitrator is the presiding officer. The Cambridge dictionary defines an arbitrator as a person
who has been officially chosen to make a decision between two people or groups who do not agree.
Cambridge Dictionary
In an arbitration proceeding, he plays an important role in deciding the case. An arbitrator is an independent
third-party entity. They hear the pieces of evidence, apply the law and decide the result of the arbitration
proceedings.
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 qualifications.
A person to become an arbitrator must qualify the following conditions:
i. He can be a judge;
ii. He can be an advocate; or
iii. He can be a Company Secretary; or
iv. He can be a Chartered Accountant; or
v. He can be a CMA;
vi. He can be a maritime expert;
vii. He can be an executive; or
viii. He can be an engineer; or
ix. He can be a businessman;
x. He can be other Professional.
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.
What norms should an Arbitrator abide by?

There are various norms that an arbitrator must abide by. They include:
l A person who is of the general reputation of accountability, integrity. He shall be capable of applying
objectivity in arriving at a settlement of disputes.
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l An arbitrator should be impartial and neutral. He must avoid entering into any associations which has
a tendency to affect the impartiality. The arbitrator must avoid circumstances which might create a
reasonable appearance of partiality or bias among the parties.
l The arbitrator must not incorporate himself in any legal proceedings. He should refrain from any
potential conflict related to the disputes which he shall arbitrate.
l He must not engage in any private discussions or conversations with the parties related to the dispute.
l The arbitrator must not accept any illegal gratifications.
l For any disputes which come before him, he must be capable of suggesting, recommending or writing
a reasonable and enforceable arbitral award.
How is an Arbitrator appointed?

l The number of arbitrators to be appointed is stated in Section 10 of the Arbitration and Conciliation Act,
1996. 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.
l 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.
l It might so happen that only one arbitrator is present. There might not be an arbitration agreement.
In that case, this is the procedure of the appointment of the 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 11(2)
and 11(5).
l While considering the application for the appointment of an arbitrator, the Court should confine to the
examination of the arbitration agreement.
What are the powers of an Arbitrator?

According to the Arbitration and Conciliation (Amendment) Act, 2021 (“2021 Act”, the arbitrator has the power to
take interim measures under section 17 of the Arbitration and Conciliation Act, 1996. Section 31 (6) 36 with 31(6)
empowers the arbitrator to make an interim arbitral award at any time. He may do so during the arbitration
proceedings in any dispute. With regards to it the arbitrator can make a final award.
The Arbitration and Conciliation (Amendment) Act, 2021 has removed the Schedule VIII of the Arbitration and
Conciliation Act, 2019. It was replaced with Section 43J. It states that “The qualifications, experience and norms
for accreditation of arbitrators shall be such as may be specified by the regulations “.
ARBITRATION INSTITUTIONS
Some of the prominent institutions which conduct institutional arbitration in India are:
1. Nani Palkhiwala Arbitration centre – Chennai and New Delhi
2. Delhi International Arbitration Centre (DIAC) – New Delhi
36. Section 31. Form and contents of arbitral award…. (6) The arbitral tribunal may, at any time during the arbitral proceedings, make an
interim arbitral award on any matter with respect to which it may make a final arbitral award.
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3. Mumbai Centre for International Arbitration

4. International Arbitration and Mediation Centre – Hyderabad
5. Indian Council of Arbitration (ICA) – New Delhi
6. Construction Industry Arbitration Council (CIAC)- New Delhi
7. LCIA India – New Delhi
8. International Centre for Alternative Dispute Resolution (ICDAR) – New Delhi
9. ICC Council of Arbitration – Kolkata.
l Mumbai Centre for International Arbitration: This is the most popular arbitration institution based in India
for large commercial disputes. It was set up in 2016 and is led by a very competent and internationally
renowned board of arbitration practitioners from across the globe, has received significant traction, but
does not yet have a notable list of administered matters.
l Nani Palkhivala Arbitration Centre: This is another institution that has seen significant growth in recent
years. It has been formally recognised by the Madras High Court to render assistance in arbitration
matters by its Order dated 21 September 2005. The Centre has a panel of arbitrators comprising retired
judges, lawyers, and civil servants, among others.
Some High Courts in India have also set up arbitration centres affiliated with such High Courts, such as the:
l Delhi International Arbitration Centre.
l Madras High Court Arbitration Centre.
l Arbitration & Conciliation Centre - Bengaluru (Domestic and International), an initiative of the High Court
of Karnataka.
l Jammu and Kashmir International Arbitration Centre, an initiative of the Jammu and Kashmir High Court.
Despite these developments, most arbitrations in India are still conducted on an ad hoc basis. Recent legislative
amendments to the Arbitration Act, including, in particular, the amendments in 2019, have encouraged
institutional arbitration with the aim of changing this position.
ARBITRATION CENTRES – INTERNATIONAL

The following is a non-exhaustive list of arbitration centres which have institutional rules based on, or inspired
by, the UNCITRAL Arbitration Rules37 :
AUSTRALIA
Australian Centre for International Commercial Arbitration (ACICA)
Institute of Arbitrators & Mediators Australia (IAMA)
AUSTRIA
Vienna International Arbitration Centre (VIAC)
BAHRAIN
Bahrain Chamber for Dispute Resolution (BCDR-AAA)
37. https://uncitral.un.org/
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BELARUS
Chamber of Arbitrators at the Union of Lawyers
BELGIUM
Belgian Centre for Arbitration and Mediation (CEPANI)
BRAZIL
Centro de Arbitragem e Mediação, Câmara de ComércioBrasil-Canadá (CCBC)
CANADA
British Columbia International Commercial Arbitration Centre (BCICAC)
CHINA
China International Economic and Trade Arbitration Commission (CIETAC)
Shenzhen Court of International Arbitration (SCIA)
Hong Kong, China
Hong Kong International Arbitration Centre (HKIAC)
CIETAC HONG KONG ARBITRATION CENTRE
DENMARK
Danish Institute of Arbitration
EGYPT
Cairo Regional Centre for International Commercial Arbitration (CRCICA)
FINLAND
Arbitration Institute of the Finland Chamber of Commerce (FAI)
FRANCE
International Chamber of Commerce, International Court of Arbitration (ICC)
GERMANY
German Institution of Arbitration (DIS)
INDONESIA
Indonesian National Board of Arbitration (BANI)
IRAN
Tehran Regional Arbitration Centre (TRAC)
ITALY
Chamber of Arbitration of Milan (Camera Arbitrale Milano) of the Chamber of Commerce of Milan
JAPAN
Japan Commercial Arbitration Association (JCAA)
MALAYSIA
Kuala Lumpur Regional Centre for Arbitration (KLRCA)
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MAURITIUS
Mauritius International Arbitration Centre (MIAC)
MEXICO
Centro de Mediación y Arbitraje (CANACO)
MEXICO
Centro de Arbitraje de México (CAM)
MONGOLIA
Mongolian International National Arbitration Centre (MINAC)
MONTENEGRO
Arbitration Court at the Chamber of Economy of Montenegro (ACCEMN)
NETHERLANDS
Permanent Court of Arbitration at The Hague (PCA)
NIGERIA
Regional Centre for International Commercial Arbitration-Lagos
NORWAY
Arbitration Institute of the Oslo Chamber of Commerce
QATAR
Qatar International Center for Conciliation and Arbitration (QICCA)
REPUBLIC OF KOREA
Korean Commercial Arbitration Board (KCAB)
RUSSIAN FEDERATION
International Commercial Arbitration Court (ICAC) at the Russian Federation Chamber of Commerce and Industry
SAUDI ARABIA
Saudi Centre for Commercial Arbitration (SCCA)
SINGAPORE
Singapore International Arbitration Centre (SIAC)
SLOVENIA
Ljubljana Arbitration Centre at the Chamber of Commerce and Industry of Slovenia (LAC)
SOUTH AFRICA
Arbitration Foundation of South Africa (AFSA)
SPAIN
Corte de Arbitraje de la Cámara Oficial de Comercio e Industria de Madrid
SWEDEN
Arbitration Institute of the Stockholm Chamber of Commerce (SCC)
35
SWITZERLAND
Swiss Chambers’ Arbitration Institution (SCAI)
Swiss Arbitration Association
THAILAND
Thailand Arbitration Center (THAC)
UNITED ARAB EMIRATES
Dubai International Arbitration Centre (DIAC)
UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND
London Court of International Arbitration (LCIA)
UNITED STATES OF AMERICA
International Institute for Conflict Prevention & Resolution (CPR)
International Centre for Settlement of Investment Disputes (ICSID)
International Centre for Dispute Resolution (AAA-ICDR)
BYE LAWS/RULES OF THE INSTITUTIONS

According to the Report of the High Level Committee to Review the Institutionalisation of Arbitration Mechanism
in India under the Chairmanship of Justice B. N. Srikrishna Retired Judge, Supreme Court of India, Institutional
arbitration refers to the administration of arbitration by an institution in accordance with its rules of procedure.
There are over 35 arbitral institutions in India. These include, in addition to domestic and international arbitral
institutions, arbitration facilities provided by various public-sector undertakings (“PSUs”), trade and merchant
associations, and city-specific chambers of commerce and industry. A large number of these arbitral institutions
administer arbitrations under their own rules or under the Arbitration Rules of the United Nations Commission
on International Trade Law (“UNCITRAL Arbitration Rules”).
These Rules/Bye Laws provide the detailed procedure for conduct of Arbitral Proceedings. It includes the
following:
1. Notice of request: The requirement for issuing a notice of request for arbitration is covered under this
clause of the rules.
2. Number of Arbitrators: The rules relating to the number of arbitrators for a panel are mentioned under
this rule. For example: There can be a sole arbitrator or arbitrators with odd number and if the parties
had agreed for even number of arbitrators, the Institution can include a rule for appointment of presiding
arbitrator.
3. Appointment of arbitrators: The procedure for appointment of arbitrators may be mentioned under this
rule. The requirements with respect to nationality, qualification, procedure etc. can be mentioned under
this rule.
4. Grounds of Challenge and its procedure: The grounds of challenge of the appointment of the arbitrator
can be mentioned under this clause. For example: A person who is a relative of any of the party is not
eligible to be an arbitrator in the matter. The procedure of the challenge is also to be mentioned under this
clause.
5. Rules relating to Statement of Claim and Defence: The rule of pleadings should be clearly specified in
the rules/bye laws of the Institution in order to make the process transparent.
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6. Others rules: Other rules such as powers of taking interim measures, place of arbitration, appointment
of experts, time limit for making an award, fees and costs, forms and contents of Arbitral Award, Costs,
Corrections of Award, Deposits etc. are also essential requirements for the Arbitral Proceedings.
Incorporation/ Establishment of Arbitration Centre

An arbitration centre can be established in accordance with the law in force at the time of establishment. We
can understand it with the aid of the below examples:
(i) Indian International Arbitration Centre
New Delhi International Arbitration Centre Act, 2019 was passed to provide for the establishment
and incorporation of the New Delhi International Arbitration Centre for the purpose of creating an
independent and autonomous regime for institutionalised arbitration and for acquisition and transfer
of the undertakings of the International Centre for Alternative Dispute Resolution and to vest such
undertakings in the New Delhi International Arbitration Centre for the better management of arbitration
so as to make it a hub for institutional arbitration and to declare the New Delhi International Arbitration
Centre to be an institution of national importance and for matters connected therewith or incidental
thereto. The name of the centre was changed to Indian International Arbitration Centre in year 2023.
(ii) 38
Mumbai Centre for International Arbitration
The Mumbai Centre for International Arbitration (MCIA) established in a joint initiative between the
domestic and international business and legal communities.
The MCIA aims to be India’s premier forum for commercial dispute resolution by providing:
l arbitral rules which draw on the latest innovations in international arbitration best practice and are also
attuned to the Indian market;
l a dedicated secretariat which facilitates the efficient, flexible, cost-effective and impartial administration
of arbitration proceedings.
Fees
According to section 11(14) of the Arbitration and Conciliation Act, 1996, for the purpose of determination of the
fees of the arbitral tribunal and the manner of its payment to the arbitral tribunal, the High Court may frame such
rules as may be necessary, after taking into consideration the rates specified in the Fourth Schedule to the Act.
THE FOURTH SCHEDULE
Sum in dispute Model fee
Up to Rs. 5,00,000 Rs. 45,000
Above Rs. 5,00,000 and up to Rs. 20,00,000 Rs. 45,000 plus 3.5 per cent. of the claim amount over
and above Rs. 5,00,000
Above Rs. 20,00,000 and up to Rs. 1,00,00,000 Rs. 97,500 plus 3 per cent. of the claim amount over and
above Rs. 20,00,000
Above Rs. 1,00,00,000 and up to Rs. 10,00,00,000 Rs. 3,37,500 plus 1 per cent. of the claim amount over
and above Rs. 1,00,00,000
38. https://mcia.org.in/about/
37
Above Rs. 10,00,00,000 and up to Rs. 20,00,00,000 Rs. 12,37,500 plus 0.75 per cent. of the claim amount
over and above Rs. 1,00,00,000
Above Rs. 20,00,00,000 Rs. 19,87,500 plus 0.5 per cent. of the claim amount over
and above Rs. 20,00,00,000 with a ceiling of Rs. 30,00,000
In the event, the arbitral tribunal is a sole arbitrator, he shall be entitled to an additional amount of twenty-five
per cent on the fee payable as per the table set out above.
LESSON ROUND-UP
l Fundamentally arbitration is a dispute resolution mechanism through which the parties to the dispute
sort out their dispute through a third person called the arbitrator.
l After the legislative council was established for India in 1834, it enacted the Code of Civil Procedure
Act 1859. The aim for enacting such act was to codify the procedures that the civil courts would follow.
l Globalization and liberalisation of the Indian economy had created the ecosystem for foreign
investments to come into India after the year 1991. The investors, however, before investing in India
were looking for a vibrant and steady alternate dispute resolution mechanism to be available to get
disputes relating to their investments in India adjudicated quickly and at a lesser cost.
l The Arbitration and Conciliation Act, 1996 was first amended in the year 2003. Later in the year 2014-
15, the 246th Law Commission Report recommended further changes to the act and thus the act was
again amended in the year 2015.
l Arbitration and Conciliation Amendment Act 2019, inserted Part 1A under the Act, which stipulated
for the constitution of Arbitration Council of India (ACI). Section 43J thereunder introduced the Eighth
Schedule into the Act. The Schedule became subject to wide criticism on the grounds of departure from
the principles of party autonomy.
l We are all familiar with the most traditional dispute-resolution process of our civil justice system:
litigation and trial with a judge or jury deciding who is right or wrong – where someone wins and
someone loses.
l Conciliation is a method of dispute resolution wherein the parties to a dispute come to a settlement
with the help of a conciliator. The conciliator meets with the parties both together and separately to
enter into an amicable agreement.
l Arbitration agreement is the very foundation of arbitration. It is the very source of the powers of
arbitrators. It determines the scope of their authority. As arbitration is a voluntary process there cannot
be arbitration without there being an arbitration agreement.
l The SIAC and SIMC have provided a sample “Arb-Med-Arb” clause, which we reproduce below and in
italics the portions which are subject to change depending on the agreement of parties.
l Ad hoc arbitration is an arbitration procedure agreed and arranged by the parties themselves. If they
fail to do so then it becomes the responsibility of the arbitration tribunal. This enables the parties to
tailor the procedure to its needs. That is its main attraction.
l The limitation period for a reference of a dispute to arbitration or to appoint an arbitrator under Section
11 of Act, 1996 is three years from the date on which the cause of action or the claim which is required
to be arbitrated first arise.
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l The language of the proceedings is to be indicated by the parties under their agreement. If the parties
fail to define the language of the arbitration proceedings in the agreement, the arbitral tribunal has the
authority to define the language of the arbitration proceedings.
l According to section 11(14) of the Arbitration and Conciliation Act, 1996, for the purpose of determination
of the fees of the arbitral tribunal and the manner of its payment to the arbitral tribunal, the High Court
may frame such rules as may be necessary, after taking into consideration the rates specified in the
Fourth Schedule to the Act.
GLOSSARY
Arbitration: means any arbitration whether or not administered by permanent arbitral institution.
Arbitration Agreement: means an agreement referred to in section 7 of the Arbitration and Conciliation Act,
1996
Arbitral Award: It includes an interim award;
TEST YOURSELF
(These are meant for recapitulation only. Answers to these questions are not to be submitted for
evaluation)
1. Write a short note on genesis of Alternate Dispute Resolution (ADR) in India.
2. Explain the recent Amendments to the Arbitration and Conciliation Act, 1996.
3. What are the different modes of Alternate Dispute Resolution Modes?
4. Explain the difference between various modes of Alternate Dispute Resolution.
5. What are advantages of Arbitration?
6. Whether Arbitration Clause and Arbitration Agreement be used interchangeably. Comment.
LIST OF FURTHER READINGS
Handbook on Arbitration: A Practical Guide for Professionals

- ICSI Publication
OTHER REFERENCES (Including Websites/Video Links)
l https://www.indiacode.nic.in/bitstream/123456789/1978/1/A1996-26.pdf
l https://www.indiacode.nic.in/bitstream/123456789/11413/1/a2019-17.pdf
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40
Lesson
Commercial Transactions
2
KEY CONCEPTS
nCommercial Transactions n Contract Law on Transactions n Negotiation vis-à-vis Conciliation n Discharge of
Contracts
Learning Objectives
To understand:
 The role of commercial transaction in under Alternate Dispute Resolutions (ADRs)
 The types of contracts where Negotiation and Conciliation is beneficial
 How contracts are discharged and remedies of ADRs can be advantageous
 Provisions relating to Breach of Contract
 Damage provisions under Contract Law
 How to draft Commercial Contracts
Lesson Outline
 Introduction - Discharge by Supervening Illegality
 Practical aspects of Contract Law - Discharge by Breach
 Types of Contracts and concepts relating to  Critical Clauses
Negotiation and Conciliation
 Breach of Contract: Related Provisions
 Discharge of Contract
 Damages under Contract Law
- Discharge by Performance
 Drafting of Commercial Contract and other
- Discharge be Tender of Performance documents
- Discharge by mutual agreement or  Role of Company Secretary & Arbitration
consent
 Lesson Round-Up
- Discharge by Lapse of time
 Test Yourself
- Discharge by Operation of Law
- Discharge by Impossibility or Frustration
 Other References (Including Websites/
- Discharge by Supervening Impossibility Video Links)
41
PP-AM&C Commercial Transactions
l Indian Contract Act, 1872
l Arbitration and Conciliations Act, 1996
INTRODUCTION
A transaction is a commercial transaction if it is connected with the industry, trade or business of the party
incurring the liability. Commercial transactions is generally defined as some sort of payment for a good or
service. There are many forms of commercial transactions, including those that occur between two separate
businesses, consumers and businesses, businesses and government entities and between internal divisions
of a company to name a few. Commercial transactions can happen on a large scale or small scale. In short,
commercial transactions are at the heart of doing business. Following transactions are some of the example of
commercial transactions that may refer for arbitration in case of disputes arising out of-
l ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile
documents, including enforcement and interpretation of such documents;
l export or import of merchandise or services;
l issues relating to admiralty and maritime law;
l transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales,
leasing and financing of the same;
l carriage of goods;
l construction and infrastructure contracts, including tenders;
l agreements relating to immovable property used exclusively in trade or commerce;
l franchising agreements;
l distribution and licensing agreements;
l management and consultancy agreements;
l joint venture agreements;
l shareholders agreements;
l subscription and investment agreements pertaining to the services industry including outsourcing
services and financial services;
l mercantile agency and mercantile usage;
l partnership agreements;
l technology development agreements;
l intellectual property rights relating to registered and unregistered trademarks, copyright, patent,
design, domain names, geographical indications and semiconductor integrated circuits;
l agreements for sale of goods or provision of services;
l exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum;
l insurance and re-insurance;
l contracts of agency relating to any of the above
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Commercial Transactions LESSON 2
PRACTICAL ASPECTS OF CONTRACT LAW

“Arbitration Agreement” means an agreement referred to in section 7 of the Arbitration and Conciliation Act,
1996. The essentials of section 7 are as under:
(a) 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.
(b) That agreement may be in the form of an arbitration clause in a contract or in the form of a separate
agreement.
(c) That agreement shall be in writing.
(d) The reference in a contract to a document containing an arbitration clause constitutes an arbitration
agreement if the contract is in writing and the reference is such as to make that arbitration clause part
of the contract. For example: A document on the website of a company containing terms and conditions
relating to an arbitration may be referred to in by the written Contract.
Section 7(4) further clarifies when an agreement can be treated as “ïn writing”.
According to section 7, 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; or
(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by
one party and not denied by the other.
In view of this, one of the most important conditions for initiating Arbitration Proceedings is an Agreement.
Therefore, the necessary provisions of the Contract Law is also to be complied with. The effect of contract law
can be understood by understanding the ratio of the cases hereinafter follows:
CASE LAWS
Tata Capital Finance Limited v. Shri Chand Construction and Apartment Pvt. Ltd. (Judgment dated
24.11.2021 in FAO(OS) 40/2020)
In this case, the validity of the below mentioned arbitration clause which lacked mutuality, was decided by
Delhi High Court:
“12.18....Notwithstanding anything contained hereinabove, in the event due to any change in the legal status
of TCHFL or due to any change or amendment in law or notification being issued by the Central Government
or otherwise, TCHFL comes under the purview of the Securitization and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002. (“SARFAESI Act”) or the Recovery of Debts due to Banks
and Financial Institutions Act, 1993 (the DRT Act), which enables TCHFL to enforce the security under the
SARFAESI Act or proceed to recover dues from the Borrower under the SARFAESI Act and/ or the DRT Act,
the Arbitration provision hereinbefore contained shall, at the option of TCHFL , cease to have any effect and if
arbitration proceedings are commenced but no award is made, then at the option of TCHFL such proceedings
shall stand terminated and the mandate of the arbitrator shall come to an end from the date when such law
or its change/ amendment or the notification, becomes effective or the date when TCHFL exercises its option
of terminating the mandate or arbitrator, as the case may be…..”
43
The court reasoned that the wording of the above clause allows the appellant the option to enforce the
security under the SARFAESI Act. The moment the Appellant exercises the option, the arbitration agreement
ceases to have any effect i.e., the option of arbitration can be abandoned at the will of Appellant only. The
above clause nowhere mentions that the respondent has the same right. Thus, the option to give a go-bye
to the Arbitration agreement is only available to the Appellant and not to the Respondent. Such a clause
destroys the essential feature of an Arbitration agreement i.e. of mutuality.
The clause negates the essential element of an arbitration agreement, which is, mutual promise to submit
differences to arbitration i.e. mutuality. Mutuality does not permit reservation of the right of reference to
arbitration to only one party. For a valid Arbitration agreement, it is essential that either of the parties have
the right to ask for a reference.
DLF Home Developers Limited v. Rajapura Homes Private Limited [Judgment dated 22.09.2021 in
ARBITRATION PETITION (CIVIL) NO. 16 OF 2020]
In this case, Supreme Court analysed the law pertaining to courts’ powers to determine whether the arbitration
agreement correlate with the dispute.
The court anlysed, there is no gainsaying that by virtue of the Arbitration and Conciliation (Amendment) Act,
2015, by which Section 11 (6-A) was introduced, the earlier position of law as to the scope of interference
by this Court at the stage of referral has been substantially restricted. It is also no more res integra that
despite the subsequent omission of Section 11(6-A) by the Arbitration and Conciliation (Amendment) Act,
2019, the legislative intent behind thereto continues to be a guiding force for the Courts while examining an
application under Section 11 of the Act.
The jurisdiction of Court under Section 11 is primarily to find out whether there exists a written agreement
between the parties for resolution of disputes through arbitration and whether the aggrieved party has
made out a prima facie arbitrable case. The limited jurisdiction, however, does not denude this Court of its
judicial function to look beyond the bare existence of an arbitration clause to cut the deadwood. A three-
judge bench in Vidya Drolia (Supra), has eloquently clarified that this Court, with a view to prevent wastage
of public and private resources, may conduct ‘prima facie review’ at the stage of reference to weed out any
frivolous or vexatious claims.
To say it differently, this Court(Supreme Court) or a High Court, as the case may be, are not expected
to act mechanically merely to deliver a purported dispute raised by an applicant at the doors of the
chosen Arbitrator. On the contrary, the Court(s) are obliged to apply their mind to the core preliminary
issues, albeit, within the framework of Section 11(6-A) of the Act. Such a review, as already clarified by
this Court, is not intended to usurp the jurisdiction of the Arbitral Tribunal but is aimed at streamlining
the process of arbitration. Therefore, even when an arbitration agreement exists, it would not prevent
the Court to decline a prayer for reference if the dispute in question does not correlate to the said
agreement.
Union of India v. Manraj Enterprises (Judgment dated 18.11.2021 in CIVIL APPEAL NO. 6592 OF 2021)
It was contended that in this case, that the contract between the parties specifically bars payment of interest,
not only on the earnest money or security deposit, but also upon any amounts payable to the contractor
under the contract. It is urged that since the parties are governed by the contract and the arbitrator and
the arbitration proceedings are creatures of the contract, they cannot traverse beyond what has been
contemplated in the contract between the parties.
The question in issue was whether the contractor is entitled to any interest pendente lite on the amounts
payable to the contractor other than upon the earnest money or the security deposit.
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The supreme court held that it is clear from the above provision that if the contract prohibits pre- reference
and pendente lite interest, the arbitrator cannot award interest for the said period. In the present case, clause
barring interest is very clear and categorical. It uses the expression “any moneys due to the contractor” by
the employer which includes the amount awarded by the arbitrator.
The court also held that the learned Arbitrator in the instant case has erred in awarding pendente lite and
future interest on the amount due and payable to the contractor under the contract in question and the same
has been erroneously confirmed by the High Court.
PSA Sical Terminals Pvt. Ltd v. The Board of Trustees of V.O. Chidambranar Port Trust Tuticorin (Judgment
dated 28.07.2021 in CIVIL APPEAL NOS. 3699-3700 OF 2018)
In this case, whether the court can exercise its powers in accordance with the requirement of justice i.e ex
debito justitiae.
The Supreme Court held that an Arbitral Tribunal is not a Court of law. Its orders are not judicial orders. Its
functions are not judicial functions. It cannot exercise its powers ex debito justitiae. It has been held that the
jurisdiction of the arbitrator being confined to the four corners of the agreement, he can only pass such an
order which may be the subjectmatter of reference.
L&T Finance Limited v. Dm South India Hospitality Private Limited (Judgment dated 08.11.2021 in ARB. A.
(COMM.) 14/2020)
In this case, the Delhi High Court observed that an arbitral tribunal, while adjudicating an application for
interim protection under Section 17, does not determine the lis between the parties.
It is not required, or even expected, to embark on a detailed analysis of the clauses of the contract, or their
true construction and import. It acts, essentially, on equity. While doing so, of course, the arbitral tribunal
– as in the case of a Court exercising Section 9 jurisdiction – would not pass directions inimical to the
contractual covenants, or which would hinder their compliance or enforcement at a later stage. If, however,
while protecting the rights and claims of the parties as urged on the basis of the terms of the contract, the
arbitral tribunal, in order to balance the equities, ensure placement of the parties before it on an even
ground, and preserve the sanctity of the arbitral process, grants interim protection, the sustainability of the
grant cannot be tested on a strict construction of the covenants of the contract.
Welspun Specialty Solutions Ltd. v. Oil and Natural Gas Corporation Ltd. (Judgment dated 13.11.2021 in
CIVIL APPEAL NO. 6834 OF 2021)
In this case, the Supreme Court made the law clear on the point that when the time is essence of the Contract.
It stated:
It is now settled that ‘whether time is of the essence in a contract’, has to be culled out from the reading
of the entire contract as well as the surrounding circumstances. Merely having an explicit clause may not
be sufficient to make time the essence of the contract. As the contract was spread over a long tenure, the
intention of the parties to provide for extensions surely reinforces the fact that timely performance was
necessary. The fact that such extensions were granted indicates ONGC’s effort to uphold the integrity of the
contract instead of repudiating the same.
Tata Capital Housing Finance Ltd. vs. Shri Chand Construction and Apartment Private Limited and Ors.
(24.11.2021 - DELHC)
Whether a valid arbitration clause providing for arbitration of claims of one party and providing for the
remedy of the Court or any other fora for the claim of the other party is allowed? No
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A bare perusal of the section clearly shows that while “some or all disputes” can be referred to the arbitration,
the parties are not at the liberty to split the claims which arise out of the same defined legal relationship i.e.
there cannot be a valid arbitration clause providing for arbitration of claims of one party and providing for
the remedy of the Court or any other fora for the claim of the other party.
In the present case, the appellant is within the purview of the SARFAESI Act even though it was not on the
date of entering into the agreement containing the arbitration clause. The moment the appellant comes
within the purview of the SARFAESI Act and DRT Act, the appellant has the option to enforce the security
under the SARFAESI Act and to proceed to recover dues under the SARFAESI Act or the DRT Act and then
the Arbitration provisions, at the option of the appellant, will cease to have effect. However, the appellant
asserts that loss of security in the form of original title deeds will not come with the purview of SARFAESI Act.
Hence in the case of loss of documents, resort to arbitration is the only option available to the respondent,
meaning thereby, that in respect of the claim of the appellant i.e. recovery of dues from the respondent,
the arbitration will cease and the SARFAESI will be enforced but since there are no dues recoverable and
only recovery of loss documents remains, the arbitration will continue to have the effect (the claims of
Respondent against the appellant).
In our opinion, this cannot be allowed. Since the claims arise in respect of the same legal relationship, the
same cannot be split to be adjudicated by arbitration - in respect of claims of one party and, simultaneously,
the claim of the other party arising in respect of the same legal relationship to be adjudicated/determined
by the SARFAESI/DRT Act. If this is permitted, it may very well be possible that the respondent/plaintiff in
the present suit in respect of the same injury would pursue his claims under the Arbitration and Conciliation
Act, while the appellant - relying on the aforesaid clause, pursues his claim under SARFAESI/DRT Act. This
would not only be permitting splitting up of claims and causes of action, but also result in multiplicity of
proceedings and a possibility of conflicting judgments on the same issues.
Inter Ads Exhibition Pvt. Ltd. vs. Busworld International Cooperative (13.01.2020 - DELHC)
In this case, the main and substantive relief claimed in the petition, as extracted in the earlier part of the
judgment is for setting aside the termination notice dated 15.03.2019. Learned counsel for the respondent in
my view is right in her contention that the said relief cannot be granted in a petition under Section 9 of the
Act (i.e. Arbitration and Conciliation Act). The contract between the parties is clearly determinable in nature.
Article 7.3 of JVA-I enables either one of the parties to terminate the agreement, if the other party is in default
or is in breach of any material obligation under the JVA and has failed to correct the default within 30 days
of the receipt of the notice.
The Court held that Once a contract is determinable in nature and has been terminated by one party to the
contract, the same cannot be revived or restored by a Court and specific performance of the same cannot
be sought by the defaulting party. This has been clearly held by the Court in the case of RPS Educational
Society (Regd.) vs. DDA, OMP 538/2008, decided on 02.09.2009.
Analysis of above decisions
The contract law supports the Law relating to Arbitration as the Arbitral Process is mainly gets effective due
to the agreement of the parties.
Arbitration agreement not to be discharged by the death of any party
Further, according to section 40 of the Act, an arbitration agreement shall not be discharged by the death
of any party thereto either as respects the deceased or as respects any other party, but shall in such event
been forceable by or against the legal representative of the deceased. The mandate of an arbitrator shall
not be terminated by the death of any party by whom he was appointed.
Also, nothing in section 40, shall affect the operation of any law by virtue of which any right of action is
extinguished by the death of a person.
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TYPES OF CONTRACTS AND CONCEPTS RELATING TO NEGOTIATION AND CONCILIATION
Negotiation
Negotiation is the way in which individuals communicate with one another in order to arrange their affairs
in commerce and everyday life, establishing areas of agreement and reconciling areas of disagreement.
Negotiation has been defined as “the process we use to satisfy our needs when someone else controls what
we want.” Most disagreements are dealt with in one way or the other by negotiation between the principals
themselves; relatively few involve legal intercession. Negotiation tends often to be a practical skill learnt
pragmatically by personal experience. There are, however, various theories of negotiation, as well as many
different individual styles and approaches. Negotiation in details will be studied in Lesson 14.
Conciliation
The settlement of disputes through conciliation covers a wide range of issues. Among others they include
commercial and civil disputes and claims for breach of obligations. These may be factual, legal or technical
disputes that can range from simple disagreement to complex and substantial technical or commercial disputes.
They may arise in relation to virtually any kind of disputes e.g. issues arising under contracts; commercial or
corporate disputes; torts and breach of duty including negligence allegation and insurance claims; consumer
disputes; disagreements in business or professional relationships such as partnership, principal and agent,
franchiser/franchisee and many others. Industrial and Labour disputes, family disputes including issues arising
on separation and divorce, Community and Neighbourhood issues, Public Policy issues and social conflicts
may also be taken up under conciliation. There are many other fields in which conciliation is being used for
settlement of disputes for example, mediation in academia, hospitals and health care systems for consumer
disputes, to deal with farmer/lender debt issues and for many other purposes.
The conciliation process and negotiations can be used by an arbitrator for effective resolution of disputes.
Types of Contracts/Agreements in which Arbitrations, negotiation and conciliation are

advantageous
Arbitration as mode of dispute resolution has proven to be beneficial in the contracts of Commercial Nature. The
Arbitration as dispute resolution system can prove to be advantageous in every type of contract or agreements
where the rights and liabilities are of civil nature. However, it can be more favorable for following types of
contacts/agreements:
1. Outsourcing Agreements: Outsourcing is the contracting out of a company’s non-core, non-revenue
producing activities to specialists. It differs from contracting in that outsourcing is a strategic management
tool that involves the restructuring of an organization around what it does best - its core competencies.
Two common types of outsourcing are Information Technology (IT) outsourcing and Business Process
Outsourcing (BPO). BPO includes outsourcing related to accounting, human resources, benefits, payroll,
and finance functions and activities. Knowledge Process outsourcing (KPO) includes outsourcing related
to legal, paralegal, and other highly skilled activities. However, many a times people neglect to pay
attention while drafting an outsourcing agreement.
An outsourcing agreement though carefully been drafted can lead to a dispute. Therefore, an arbitration
clause, negotiation and conciliation can prove to be beneficial.
2. Business Collaboration: When two parties join hands for exchange of technical know-how, technical
designs and drawings; training of technical personnel of one of the parties in the manufacturing and/or
research and development divisions of the other party; continuous provision of technical, administrative
and/or managerial services, they are said to be collaborating in a desired venture. The agreements
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drawn and executed between such collaborating parties are known as “foreign collaboration
agreements”. A large number of Indian industrialists have already entered into long and short-term
collaboration arrangements with foreign companies, firms etc.
These agreements also can sometimes lead to a dispute and Arbitration, negotiation and conciliation
may prove to supportive for the situation.
3. Assignment Deeds: There can be various types of assignments. For example: Assignment of Business
Debts, Assignment of Goodwill, Assignment of Intellectual Property. In such type of assignment,
the situations may arise in which resolution of dispute becomes imperative and Arbitration clause,
negotiation and conciliation can prove to be helpful.
4. Partnership Agreements: Partnership is an association of two or more like minded persons formed with
a common objective to establish a lawful business house of their choice with the idea of earning profits.
However, in any business enterprise the possibility of its incurring loss cannot be ruled out. Therefore,
all partners of a firm mutually agree to share all profits and losses of the business amongst them
according to their predetermined shares/proportions fixed by them in the partnership agreement.
In case of partnership agreements, Arbitration, negotiation and conciliation process may prove to be
beneficial for the parties.
5. Employment Contracts: These contracts are entered into by and between the Employers and Employees.
Service contracts are drafted in the same way as other agreements. The terms of employment are
fixed and clearly expressed and nothing should be left to presumptions. They are required to be both
affirmative (describing the acts and duties to be performed) as well as negative (putting restrictions
on the acts of the employee during and/or after the term of employment). As the employer and the
employee may not be conversant with law, the terms of a service contract should be as explicit as
possible and should be easily intelligible to a lay man, Unlike other agreements and legal documents
which need not contain matters presumed or implied by law, it is better in such an agreement to specify
even such matters and all other matters so as to make it a complete code, embodying the rights and
duties of each party.
An agreement howsoever carefully been drafted always has scope that a dispute may arise. Therefore,
an arbitration, negotiation and conciliation can prove to be prolific in these contracts.
DISCHARGE OF CONTRACT
Discharge by Performance
The parties to a contract must either perform, or offer to perform, their respective promises, unless such
performance is dispensed with or excused under the provisions of Contract Act, 1872 or of any other law.
Promises bind the representatives of the promisors in case of the death of such promisors before performance,
unless a contrary intention appears from the contract.
Examples
A promises to deliver 50 cars on 07th April, 2023 on payment of 5 Crore Rupees to Z. A dies on 2nd April,
2023. B is the legal representative who is also Son of A. B should deliver the goods and Z should pay
5 crore rupees.
A promises to prepare a report for increase of growth for ZMAKL Limited by 07th April, 2023 on a
payment of 10 Lakh Rupees. A dies on 2nd April, 2023. This contract cannot be enforced either by A’s
representatives or by Z.
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Discharge by Tender of Performance

Where a promisor has made an offer of performance to the promisee, and the offer has not been accepted, the
promisor is not responsible for non-performance, nor does he thereby lose his rights under the contract.
It means one party is ready to perform his part but the other party is not performing. In this case the person
offering to perform is not responsible for non-performance, nor does he lose his rights under the contract.
Conditions of such Offer

Every such offer must fulfil the following conditions:
(1) Unconditional Offer: The offer of performance must be unconditional.
(2) Reasonableness: The offer of performance must be made at a proper time and place, and under such
circumstances that the person to whom it is made may have a reasonable opportunity of ascertaining
that the person by whom it is made is able and willing there and then to do the whole of what he is
bound by his promise to do.
(3) Certainty of the thing promised: if the offer is an offer to deliver anything to the promisee, the promisee
must have a reasonable opportunity of seeing that the thing offered is the thing which the promisor is
bound by his promise to deliver.
(4) Offer to Joint Promisees: An offer to one of several joint promisees has the same legal consequences
as an offer to all of them.
Example
A contracts to deliver to Z at his godown, on the 1st April, 2023, 100 cars of a brand. In order to make an offer
of a performance with the effect stated in this section, A must bring the cars to Z’s godown, 1st April, 2023,
under such circumstances that Z may have a reasonable opportunity of satisfying himself that the thing
offered is cars of that brand contracted for, and that there are 100 cars.
Effect of refusal of party to perform promise wholly

When a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirety,
the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in
its continuance.
Example
A, a poet, enters into a contract with Z, the manager of a restaurant, to do poetry at his restaurant one nights
every week during the next twelve months, and Z engages to pay him 10,000 rupees for each performance.
On the tenth night, A willfully absents himself from the theatre. B is at liberty to put an end to the contract.
With the assent of Z, A performs on the eleventh night. Z has signified his acquiescence in the continuance
of the contract, and cannot now put an end to it, but is entitled to compensation for the damage sustained
by him through A’s failure to sing on the tenth night.
In the above situation, If the parties to an agreement has Arbitration clause or agree to refer the matter for
Arbitration. Arbitration can be useful for the parties.
Discharge by Mutual Agreement or Consent

The parties can modify the terms of the original contract by novation, rescission, and alteration of contract. If
the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract,
need not be performed.
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Example
A has taken a loan from ABXFZR Finance Limited(A NBFC) under a Contract. It is agreed between A, ABXFZR
Finance Limited and CDSLKM LLP Co that A shall accept CDSLKM LLP Co. as his debtor, instead of ABXFZR
Finance Limited. The old debt is at an end, and a new debt has been contracted.
Every promisee may dispense with or remit, wholly or in part, the performance of the promisee made
to him, or may extend the time for such performance,or may accept instead of it any satisfaction which
he thinks fit.
Example
A promises to paint a picture for B. B afterwards forbids him to do so. A is no longer bound to perform the
promise
A owes B, under. a contract, a sum of money, the amount of which has not been ascertained. A, without
ascertaining the amount, gives to B, and B, in satisfaction thereof, accepts, the sum of 2,000 rupees. This is
a discharge of the whole debt, whatever may be its amount.
Discharge by Lapse of time

The Limitation Act, in certain circumstance, affords a good defence to suits for breach of contract, and in fact
terminates the contract by depriving the party of his remedy to law. For example, where a debtor has failed to
repay the loan on the stipulated date, the creditor must file the suit against him within three years of the default.
If the limitation period of three years expires and he takes no action he will be barred from his remedy and the
other party is discharged of his liability to perform.
Discharge by Operation of the Law

Discharge under this head may take place as follows:
(a) By merger: When the parties embody the inferior contract in a superior contract.
(b) By the unauthorised alteration of items of a written document: Where a party to a written contract
makes any material alteration without knowledge and consent of the other, the contract can be avoided
by the other party.
(c) By insolvency: The Insolvency Act provides for discharge of contracts under particular circumstances.
For example, where the Court passes an order discharging the insolvent, this order exonerates or
discharges him from liabilities on all debts incurred previous to his adjudication.
Discharge by Impossibility or Frustration

An agreement to do an act impossible in itself is void.
Contract to do an act afterwards becoming impossible or unlawful. – A contract to do an act which, after
the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent,
unlawful, becomes void when the act becomes impossible or unlawful.
Compensation for loss through non-performance of act known to be impossible or unlawful. – Where one
person has promised to do something which he knew, or, with reasonable diligence, might have known, and
which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such
promisee for any loss which such promisee sustains through the nonperformance of the promise.
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Discharge by Supervening Impossibility

A contract will be discharged by subsequent or supervening impossibility in any of the following ways:
(a) Where the subject-matter of the contract is destroyed without the fault of the parties, the contract is
discharged.
(b) When a contract is entered into on the basis of the continued existence of a certain state of affairs, the
contract is discharged if the state of things changes or ceases to exist.
(c) Where the personal qualifications of a party is the basis of the contract, the contract is discharged by
the death or physical disablement of that party.
Discharge by Supervening Illegality

A contract which is contrary to law at the time of its formation is void. But if, after the making of the contract,
owing to alteration of the law or the act of some person armed with statutory authority the performance of the
contract becomes impossible, the contract is discharged. This is so because the performance of the promise is
prevented or prohibited by a subsequent change in the law.
Example
A enters into contract with B for cutting trees. By a statutory provision cutting of trees is prohibited except
under a licence and the same is refused to A. The contract is discharged.
Cases in which there is no supervening impossibility

In the following cases contracts are not discharged on the ground of supervening impossibility–
(a) Difficulty of performance: The mere fact that performance is more difficult or expensive than the parties
anticipated does not discharge the duty to perform.
(b) Commercial impossibilities do not discharge the contract: A contract is not discharged merely
because expectation of higher profits is not realised.
(c) Strikes Lockouts etc.: Strikes, lockouts and civil disturbance like riots do not terminate contracts unless
there is a clause in the contract providing for non-performance in such cases.
Supervening impossibility or illegality is known as frustration under English Law.
Discharge by Breach
Where the promisor neither performs his contract nor does he tender performance, or where the performance is
defective, there is a breach of contract. The breach of contract may be (i) actual; or (ii) anticipatory. The actual
breach may take place either at the time the performance is due, or when actually performing the contract.
Anticipatory breach means a breach before the time for the performance has arrived. This may also take place
in two ways – by the promisor doing an act which makes the performance of his promise impossible or by the
promisor in some other way showing his intention not to perform it.
CRITICAL CLAUSES
Any contract should be drafted carefully. But in case of Commercial Contracts, more diligence is required as the
value at stake are comparably more in case if commercial. Though, all the clauses require enough time and due
attention but few important clauses requires more diligence. These clauses inter alia are as under:
1. Operating Clauses: An agreement can be split into parts as any other document viz. Title, Date, Parties,
Recitals, Testatum, Operating Clause, Schedule (if necessary), Exceptions and Reservations (if any),
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Habendum, Covenants (if any) and Testimonium. Operating clauses are one the most important clauses
of an agreement as they can be said to be the purpose and essence of a contract. They are required to
be drafted very carefully. Otherwise the purpose of an contract may not succeed.
2. Confidentiality Clause: In modern business transactions, it is sometimes necessary for the seller to
supply detailed specifications, literature, etc. relating to the goods particularly if the goods are of
scientific or technical nature. In such cases, it is usual to provide in the contract as to whether the
technical documentation supplied by the seller will become the property of the buyer or it has to
be returned to the seller after a stipulated time. It is also desirable to provide that the technical and
confidential information contained in the documentation should be kept confidential by the buyer and
that it will not be transmitted by him to a third-party without the permission of the seller.
3. Force Majeure: Another very important provision witnessed in modern commercial contracts relates to
force majeure or excuses for non-performance. This provision defines as to what particular circumstances
or events beyond the control of the seller would entitle him to delay or refuse the performance of the
contract, without incurring liability for damage. It is usual to list the exact circumstances or events, like
strike, lockout, riot, civil commotion, Government prohibition, etc. which would provide an excuse to the
seller to delay or refuse the performance. It may be further provided that events of a similar nature,
which are beyond the control of the seller and which could not have been avoided with due diligence
would also furnish the above relief.
4. IPR Protection Clauses: As the size of the Businesses are growing, the importance and value of IPR is
increasing. Therefore, it is essential that the IPR Protection clause are always included in commercial
contracts.
5. Dispute Resolution: The last, but not the least, important is the provision regarding settlement of
disputes under the contract by arbitration or otherwise. It is usual to provide for an arbitration clause
in the contract, particularly under the auspices of an arbitral institution. A suitable arbitration clause
may be provided by the parties by mutual agreement. It is also desirable to provide for the mode of
appointment of arbitrator and also for the venue of the arbitration in the arbitration clause.
BREACH OF CONTRACT: RELATED PROVISIONS

Section 73 provides the provisions relating to the Compensation for loss or damage caused by breach of
contract. It states:
When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party
who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally
arose in the usual course of things from such breach, or which the parties knew, when they made the contract,
to be likely to result from the breach of it.
Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the
breach.
Further this section also provides for the provisions for compensation for failure to discharge obligation
resembling those created by contract. It states:
When an obligation resembling those created by contract has been incurred and has not been discharged,
any person injured by the failure to discharge it is entitled to receive the same compensation from the party in
default, as if such person had contracted to discharge it and had broken his contract.
Explanation. – In estimating the loss or damage arising from a breach of contract, the means which existed of
remedying the inconvenience caused by the non-performance of the contract must be taken into account.
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Illustrations and Examples relating to Breach of Contract

(a) A contracts to sell and deliver 50 machines to B, at a certain price to be paid on delivery. A breaks his
promise. B is entitled to receive from A, by way of compensation, the sum, if any, by which the contract
price falls short of the price for which B might have obtained 50 machines of like quality at the time
when the machines ought to have been delivered.
(b) A hires B’s ship to go to Bombay, and there take on board, on the first of January, a cargo, which A is to
provide, and to bring it to Calcutta, the freight to be paid when earned. B’s ship does not go to Bombay,
but A has opportunities of procuring suitable conveyance for the cargo upon terms as advantageous as
those on which he had chartered the ship. A avails himself of those opportunities, but is put to trouble
and expense in doing so. A is entitled to receive compensation from B in respect of such trouble and
expense.
(c) A contracts to buy of B, at a stated price, 50 maunds of rice, no time being fixed for delivery. A afterwards
informs B that he will not accept the rice if tendered to him. B is entitled to receive from A, by way of
compensation, the amount, if any, by which the contract price exceeds that which B can obtain for the
rice at the time when A informs B that he will not accept it.
(d) A contracts to buy B’s ship for 60,000 rupees, but breaks his promise. A must pay to B, by way of
compensation, the excess, if any, of the contract price over the price which B can obtain for the ship at
the time of the breach of promise.
(e) A, the owner of a boat, contracts with B to take a cargo of jute to Mirzapur, for sale at that place, starting
on a specified day. The boat, owing to some avoidable cause, does not start at the time appointed,
whereby the arrival of the cargo at Mirzapur is delayed beyond the time when it would have arrived if
the boat had sailed according to the contract. After that date, and before the arrival of the cargo, the
price of jute falls. The measure of the compensation payable to B by A is the difference between the
price which B could have obtained for the cargo at Mirzapur at the time when it would have arrived if
forwarded in due course, and its market price at the time when it actually arrived.
(f) A contracts to repair B’s house in a certain manner, and receives payment in advance. A repairs the
house, but not according to contract. B is entitled to recover from A the cost of making the repairs
conform to the contract.
(g) A contracts to let his ship to B for a year, from the first of January, for a certain price. Freights rise,
and, on the first of January, the hire obtainable for the ship is higher than the contract price. A breaks
his promise. He must pay to B, by way of compensation, a sum equal to the difference between the
contract price and the price for which B could hire a similar ship for a year on and from the first of
January.
(h) A contracts to supply B with a certain quantity of iron at a fixed price, being a higher price than that for
which A could procure and deliver the iron. B wrongfully refuses to receive the iron. B must pay to A,
by way of compensation, the difference between the contract price of the iron and the sum for which A
could have obtained and delivered it.
(i) A delivers to B, a common carrier, a machine, to be conveyed, without delay, to A’s mill informing B that
his mill is stopped for want of the machine. B unreasonably delays the delivery of the machine, and
A, in consequence, loses a profitable contract with the Government. A is entitled to receive from B, by
way of compensation, the average amount of profit which would have been made by the working of
the mill during the time that delivery of it was delayed, but not the loss sustained through the loss of the
Government contract.
( j) A, having contracted with B to supply B with 1,000 tons of iron at 100 rupees a ton, to be delivered at
a stated time, contracts with C for the purchase of 1,000 tons of iron at 80 rupees a ton, telling C that
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he does so for the purpose of performing his contract with B. C fails to perform his contract with A,
who cannot procure other iron, and B, in consequence, rescinds the contract. C must pay to A 20,000
rupees, being the profit which A would have made by the performance of his contract with B.
(k) A contracts with B to make and deliver to B, by a fixed day, for a specified price, a certain piece of
machinery. A does not deliver the piece of machinery at the time specified, and in consequence of
this, B is obliged to procure another at a higher price than that which he was to have paid to A, and is
prevented from performing a contract which B had made with a third person at the time of his contract
with A (but which had not been then communicated to A), and is compelled to make compensation for
breach of that contract. A must pay to B, by way of compensation, the difference between the contract
price of the piece of machinery and the sum paid by B for another, but not the sum paid by B to the third
person by way of compensation.
(l) A, a builder, contracts to erect and finish a house by the first of January, in order that B may give
possession of it at that time to C, to whom B has contracted to let it. A is informed of the contract
between B and C. A builds the house so badly that, before the first of January, it falls down and has
to be re-built by B, who, in consequence, loses the rent which he was to have received from C, and is
obliged to make compensation to C for the breach of his contract. A must make compensation to B for
the cost of rebuilding the house, for the rent lost, and for the compensation made to C.
(m) A sells certain merchandise to B, warranting it to be of a particular quality, and B, in reliance upon this
warranty, sells it to C with a similar warranty. The goods prove to be not according to the warranty, and
B becomes liable to pay C a sum of money by way of compensation. B is entitled to be reimbursed this
sum by A.
(n) A contracts to pay a sum of money to B on a day specified. A does not pay the money on that day, B,
in consequence of not receiving the money on that day, is unable to pay his debts, and is totally ruined.
A is not liable to make good to B anything except the principal sum he contracted to pay, together with
interest up to the day of payment.
(o) A contracts to deliver 50 maunds of saltpetre to B on the first of January, at a certain price. B afterwards,
before the first of January, contracts to sell the saltpetre to C at a price higher than the market price of
the first of January. A breaks his promise.
In estimating the compensation payable by A to B, the market price of the first of January, and not the
profit which would have arisen to B from the sale to C, is to be taken into account.
(p) A contracts to sell and deliver 500 bales of cotton to B on a fixed day. A knows nothing of B’s mode of
conducting his business. A breaks his promise, and B, having no cotton, is obliged to close his mill. A is
not responsible to B for the loss caused to B by the closing of the mill.
(q) A contracts to sell and deliver to B, on the first of January, certain cloth which B intends to manufacture
into caps of a particular kind, for which there is no demand, except at that season. The cloth is not
delivered till after the appointed time, and too late to be used that year in making caps. B is entitled to
receive from A, by way of compensation, the difference between the contract price of the cloth and its
market price at the time of delivery, but not the profits which he expected to obtain by making caps, nor
the expenses which he has been put to in making preparation for the manufacture.
(r) A, a ship-owner, contracts with B to convey him from Calcutta to Sydney in A’s ship, sailing on the first of
January, and B pays to A, by way of deposit, one-half of his passage-money. The ship does not sail on
the first of January, and B, after being in consequence detained in Calcutta for some time and thereby
put to some expense, proceeds to Sydney in another vessel, and, in consequence, arriving too late in
Sydney, loses a sum of money. A is liable to repay to B his deposit, with interest, and the expense to
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which he is put by his detention in Calcutta, and the excess, if any, of the passage-money paid for the
second ship over that agreed upon for the first, but not the sum of money which B lost by arriving in
Sydney too late.
Section 74 provides the provisions for Compensation for breach of contract where penalty stipulated for.
Section 74 states:
When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such
breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach
is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the
party who has broken the contract reasonable compensation not exceeding the amount so named or, as the
case may be, the penalty stipulated for.
Explanation. – A stipulation for increased interest from the date of default may be a stipulation by way of
penalty.
Exception. – When any person enters into any bail-bond, recognizance or other instrument of the same nature,
or, under the provisions of any law, or under the orders of the Central Government or of any State Government,
gives any bond for the performance of any public duty or act in which the public are interested, he shall be
liable, upon breach of the condition of any such instrument, to pay the whole sum mentioned therein.
Explanation. – A person who enters into a contract with Government does not necessarily thereby undertake
any public duty, or promise to do an act in which the public are interested.
Illustrations and Examples
(a) A contracts with B to pay B Rs. 1,000, if he fails to pay B Rs. 500 on a given day. A fails to pay B Rs. 500
on that day. B is entitled to recover from A such compensation, not exceeding Rs. 1,000, as the Court
considers reasonable.
(b) A contracts with B that, if A practises as a surgeon within Calcutta, he will pay B Rs. 5,000. A practises
as a surgeon in Calcutta. B is entitled to such compensation; not exceeding Rs. 5,000, as the Court
considers reasonable.
(c) A gives a recognizance binding him in a penalty of Rs. 500 to appear in Court on a certain day. He
forfeits his recognizance. He is liable to pay the whole penalty.
(d) A gives B a bond for the repayment of Rs. 1,000 with interest at 12 per cent. at the end of six months,
with a stipulation that, in case of default, interest shall be payable at the rate of 75 per cent. from the
date of default. This is a stipulation by way of penalty, and B is only entitled to recover from A such
compensation as the Court considers reasonable.
(e) A, who owes money to B a money-lender, undertakes to repay him by delivering to him 10 maunds of
grain on a certain date, and stipulates that, in the event of his not delivering the stipulated amount by
the stipulated date, he shall be liable to deliver 20 maunds. This is a stipulation by way of penalty, and
B is only entitled to reasonable compensation in case of breach.
(f) A undertakes to repay B a loan of Rs. 1,000 by five equal monthly instalments, with a stipulation that
in default of payment of any instalment, the whole shall become due. This stipulation is not by way of
penalty, and the contract may be enforced according to its terms.
(g) A borrows Rs. 100 from B and gives him a bond for Rs. 200 payable by five yearly instalments of Rs.
40, with a stipulation that, in default of payment of any instalment, the whole shall become due. This is
a stipulation by way of penalty.
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Section 75, provides for the Party’s right of rescinding contract and entitlement to compensation. It states:
A person who rightfully rescinds a contract is entitled to compensation for any damage which he has sustained
through the non-fulfilment of the contract.
Illustration
A, a singer, contracts with B, the manager of a theatre, to sing at his theatre for two nights in every week
during the next two months, and B engages to pay her 100 rupees for each night’s performance. On the sixth
night, A wilfully absents herself from the theatre, and B, in consequence, rescinds the contract. B is entitled
to claim compensation for the damage which he has sustained through the non-fulfilment of the contract.
DAMAGES UNDER CONTRACT LAW

The damages can be differentiated as Liquidated damages and Unliquidated damages.
Liquidated Damages: Where the contracting parties agree in advance the amount payable in the event of
breach, the sum payable is called liquidated damages.
Unliquidated Damages: Where the amount of compensation claimed for a breach of contract is left to be
assessed by the Court, damages claimed are called unliquidated damages.
Further, unliquidated damages can be divided into the following types:
(a) general or ordinary damages: These are restricted to pecuniary compensation to put the injured party
in the position he would have been had the contract been performed. It is the estimated amount of loss
actually incurred. Thus, it applies only to the proximate consequences of the breach of the contract and
the remote consequences are not generally regarded.
(b) Special damages: Special damages are those resulting from a breach of contract under some peculiar
circumstances. If at the time of entering into the contract, the party has notice of special circumstances
which makes special loss the likely result of the breach in the ordinary course of things, then upon his-
breaking the contract and the special loss following this breach, he will be required to make good the
special loss.
(c) Exemplary or punitive damages: These damages are awarded to punish the defendant and are not,
as a rule, granted in case of breach of contract. In two cases, however, the court may award such
damages, viz.,
(i) breach of promise to marry; and
(ii) wrongful dishonour of a customer scheque by the banker
(d) Nominal damages: Nominal damages consist of a small token award, e.g., a rupee of even 25 paise,
where there has been an infringement of contractual rights, but no actual loss has been suffered. These
damages are awarded to establish the right to decree for breach of contract.
Liquidated Damages and Penalty

Where the contracting parties fix at the time of contract the amount of damages that would be payable in
case of breach. This may be in the nature of liquidated damages or penalty. The test of the two is that where
the amount fixed is a genuine pre-estimate of the loss in case of breach, it is liquidated damages and will be
allowed. If the amount fixed is without any regard to probable loss, but is intended to frighten the party and
to prevent him from committing breach, it is a penalty and will not be allowed. In Indian law, there is no such
difference between liquidated damages and penalty. Section 74 provides for “reasonable compensation” upto
the stipulated amount whether it is by way of liquidated damages or penalty.
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Other remedies Specific Performance and Injunction

It means the actual carrying out by the parties of their contract, and in proper cases the Court will insist upon the
parties carrying out this agreement. Where a party fails to perform the contract, the Court may, at its discretion,
order the defendant to carry out his undertaking according to the terms of the contract. A decree for specific
performance may be granted in addition to or instead of damages.
An injunction, is an order of a Court restraining a person from doing a particular act. It is a mode of securing the
specific performance of a negative term of the contract, (i.e., where he is doing something which he promises not
to do), the Court may in its discretion issue an order to the defendant restraining him from doing what he promised
not to do. Injunction may be prohibitory or mandatory. In prohibitory, the Court restrains the commission of a
wrongful act whereas in mandatory, it restrains continuance of a wrongful commission.
DRAFTING OF COMMERCIAL CONTRACT AND OTHER DOCUMENTS

Contracts are essential element of all business relationships and it is necessary to execute proper commercial
contracts with parties to avoid future disputes. With the growing business activities, the quantum of contracts
has increased proportionately, which demands more conscious approach from the parties to the contract.
When two companies wish to do business with each other, a contract specifies the activities entered into by both
organizations and the terms through which they will each fulfill their parts of the agreement. Contracts affect
business profitability in a very large way due to the emphasis on revenue and expenses.
When a contract is phrased poorly, one organization might lose countless money over a simple technicality that
lack the resources to identify. Effective contract drafting can ultimately create a powerful business relationship
and pave the road to greater profitability over the long term, but only when managed correctly.
You should start by drafting an agreement; either from scratch or by using a contract template. The advantage
of using a contract template is that it is more efficient and it can help you ensure that the contract is compliant
and consistent with your standards. A good contract management software should offer the opportunity to work
in templates; either your own, some delivered by lawyers or more generic documents. You should also be able
to capture and collect all your existing contracts with an upload function so that all your legal documents can
be stored and analysed together.
GENERAL CONDITIONS OF CONTRACTS (GCC)

It is essential to understand the general conditions of the Contract. Owing to its name it contains standard terms
and conditions which are generally applicable for all contracts irrespective of the nature of work, supplier type
and other factors. Normally, the terms and conditions are about the rights and obligations of the contracting
parties. Lay the framework for the entire relationship between the parties on the project. Understand what to
look for and what the language means.
General Conditions are an inherent part of the Contract. It governs the entire contract. Contain contractual
principles applicable to most projects with supplements for a particular project. Contains broad aspects
relating to the roles, rights and duties and responsibilities of the parties to the contract. Generally, contains the
Constants. Format forms the basis for modification.
It establishes the general risks, liabilities and obligations of the contracting parties and the administrative
procedures for the administration of the contract i.e. the general conditions of contract. It is framed around
the processes and procedures which commence with the signing of the Form of Offer and Acceptance and
conclude with the Employer making a final payment to the Contractor.
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General Condition Clause1

(a) DEFINITION AND INTERPRETATION
(b) EXECUTION, CORRELATION, AND INTENT
The Contract Documents shall be signed by the Owner and Contractor as provided in the Agreement.
If either the Owner or Contractor or both do not sign all the Contract Documents, the Designer shall
identify such unsigned Documents and ensure that they are properly signed by the necessary
parties.
Execution of the Contract by the Contractor is a representation that the Contractor has visited the site,
become familiar with local conditions under which the Work is to be performed, correlated personal
observations with requirements of the Contract Documents, has checked and verified all site conditions,
and hereby waives any and all claims, present or future, for misrepresentation on the part of the Owner
or Designer.
The intent of the Contract Documents is to include all items necessary for the proper execution and
completion of the Work by the Contractor. The Contract Documents are complementary, and what is
required by one shall be as binding as if required by all
(c) OWNERSHIP AND USE OF DESIGNER’S DRAWINGS, SPECIFICATIONS AND OTHER DOCUMENTS
(d) INTERPRETATION: In the interest of brevity the Contract Documents frequently omit modifying words
such as “all” and “any” and articles such as “the” and “an,” but the fact that a modifier or an article is
absent from one statement and appears in another is not intended to affect the interpretation of either
statement.
(e) CONFIDENTIAL NATURE OF DOCUMENTS AND INFORMATION
(f) PROHIBITION ON ASSIGNMENT, MODIFICATIONS
(g) INDEMNIFICATION
(h) ENCUMBRANCES AND LIENS
(i) FORCE MAJEURE; OTHER CHANGES IN CONDITIONS
( j) TERMINATION
SPECIAL CONDITIONS OF CONTRACT (SCC)

Special conditions of contract (SCC) shall be read in conjunction with the general conditions of contract (GCC)
also referred to as General Terms and conditions of works contract, Schedule of Quantities, Specifications of
work, drawings and any other document forming part of this contract wherever the context so requires.
Where any portion of GCC is contradicting any provisions of the SCC, then unless a different intention appears,
the provision(s) of the SCC of contract will override the provision(s) of GCC.
Special conditions
l Extends anything not included or modified in the Supplementary Conditions, thus are an inherent part
of the Contract for Construction.
l Extend the Conditions for a specific region, or project, or owner/ organization.
1. This list of Sample Clauses is for reference and not exhaustive, there can more general conditions clauses that can be included in the
contract.
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l Is likely a standard document issued by the owner (usually a public agency) to be attached to the
general and supplementary conditions.
l Are new items, and do not follow the format of General Conditions.
Sample Clauses
a. Lowest price syndrome: It is always a guiding principle nowadays that the work should be awarded to
Lowest bidder only. Proper evaluation of Lowest bidder has to happen in terms of his credentials in jobs
execution, financial, safety statistics, technical capability etc before the price bid is considered.
b. Dispute Resolution-Arbitration: Most of the times, it is one sided favouring the customer, not the vendor.
Time lines for arbitration also are not mentioned in the tender documents. Also, If there are several
disputes in one job, payments should be released to vendor as soon as particular dispute is resolved,
rather than waiting for resolution of all disputes.
c. Engagement of screened & credible vendors: A committee has to thoroughly study the technical bid of
the vendors and then come to a conclusion on their capability to execute the project in terms of financial
& technical parameters and also the track record of the vendors in executing similar works. CIDC is
having approved vendors list and that list should be given preference while choosing the vendors.
d. Cash flows and payments to be released: Abnormal delays are happening in payments to vendors.
Time lines to be defined strictly for payments and interest to be paid to vendors if there is delay in
payments.
e. Pre-engineered and pre-fabricated technologies: In many government departments, even now,
obsolete construction technologies are being used. A committee has to be formed to study new
technologies in construction to save time & cost, and adopt them in construction. CIDC has list of
approved vendors who adopt such technologies and vendors should be short-listed accordingly.
f. Penalties and Bonuses: Mostly the penalties are levied one sided only, and as a result, vendors are
suffering. A rational and logical approach is required in this regard. Also bonus clause should be
incorporated in the tender document to reward the vendors in case of early completion of work.
Difference Between General & Special Conditions of Contract
General Conditions of Contract Special Conditions of Contract
Contains standard terms and conditions which are Relates to the specific contract. It includes terms and
generally applicable for all contracts irrespective of conditions which are applicable for that particular
the nature of work, supplier type and other factors contract only and will vary for each contract
depending upon the nature of work, supplier type and
other factors
It would not be advisable to change or adjust GCC as Although it is important to get the SCC veted by
these terms and conditions might have a long term legal also but since it is generally specific to one
legal implication and therefore need to be veted by contract and more of tactical (operational) nature, it’s
the legal team implications may not be as deep as the GCC
It is more of strategic in nature It is more technical in nature
it is like if you want to change the look of your home for a particular event or function, you generally do not
tamper with the foundation of the building but may change the interior decoration for different events.
Drafting of Commercial Contracts in details has been covered in the paper Drafting, Pleadings & Appearances.
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ROLE OF COMPANY SECRETARY & ADR

Company secretaries are not only corporate legal experts but due to the very nature of profession, their
knowledge is far superior in respect of commercial understanding. They have an edge in the sense that they
understand the underlying commercial transaction or the legal framework in a more effective manner. Since
they are exposed to various facets of law and the management, they can formulate a better strategy in arbitral
proceedings while advising to the client. Thus company secretaries in practice can act as strategist and
authorized representative in arbitral proceedings. Presently company secretaries in practice render Arbitration
and Conciliation Services such as advising on arbitration, negotiation and conciliation in commercial disputes
between the parties, acting as arbitration/conciliator in domestic and international commercial disputes and
drafting Arbitration/Conciliation Agreement/Clause.
LESSON ROUND-UP
l A transaction is a commercial transaction if it is connected with the industry, trade or business of the
party incurring the liability. Commercial transactions is generally defined as some sort of payment for
a good or service.
l The court anlysed, there is no gainsaying that by virtue of the Arbitration and Conciliation (Amendment)
Act, 2015, by which Section 11 (6-A) was introduced, the earlier position of law as to the scope of
interference by this Court at the stage of referral has been substantially restricted. It is also no more
res integra that despite the subsequent omission of Section 11(6-A) by the Arbitration and Conciliation
(Amendment) Act, 2019, the legislative intent behind thereto continues to be a guiding force for the
Courts while examining an application under Section 11 of the Act.
l Arbitration as mode of dispute resolution has proven to be beneficial in the contracts of Commercial
Nature. The Arbitration as dispute resolution system can prove to be advantageous in every type of
contract or agreements where the rights and liabilities are of civil nature.
l The parties to a contract must either perform, or offer to perform, their respective promises, unless such
performance is dispensed with or excused under the provisions of Contract Act, 1872 or of any other
law.
l The Limitation Act, in certain circumstance, affords a good defence to suits for breach of contract, and
in fact terminates the contract by depriving the party of his remedy to law. For example, where a debtor
has failed to repay the loan on the stipulated date, the creditor must file the suit against him within
three years of the default.
l Contracts are essential element of all business relationships and it is necessary to execute proper
commercial contracts with parties to avoid future disputes. With the growing business activities, the
quantum of contracts has increased proportionately, which demands more conscious approach from
the parties to the contract.
l General Conditions are an inherent part of the Contract. It governs the entire contract. Contain
contractual principles applicable to most projects with supplements for a particular project. Contains
broad aspects relating to the roles, rights and duties and responsibilities of the parties to the contract.
Generally, contains the Constants. Format forms the basis for modification.
l Company secretaries are not only corporate legal experts but due to the very nature of profession,
their knowledge is far superior in respect of commercial understanding. They have an edge in the
sense that they understand the underlying commercial transaction or the legal framework in a more
effective manner.
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TEST YOURSELF
(These are meant for recapitulation only. Answers to these questions are not to be submitted for evaluation)
1. Explain the relation between Alternate Dispute Resolutions and Contract Law?
2. How Alternate Dispute Resolution methods can prove to be beneficial for Commercial Transactions?
Explain.
3. What is the status of an “arbitration clause which lacked mutuality” legally? Cite relevant case law.
4. Can courts determine whether the arbitration agreement correlate with the dispute? Comment with the
help of a Case Law.
5. Explain various mode of discharge of contracts.
6. What can be the role of a Company Secretary in ADR Proceedings?
Handbook on Arbitration: a Practical guide for Professionals

– ICSI Publication
Course Material of ICSI PMQ Course on Arbitration
l https://www.indiacode.nic.in/bitstream/123456789/2187/2/A187209.pdf
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62
Arbitration Procedure, Appointment Lesson
of an Arbitrator and Other Aspects 3
KEY CONCEPTS
n Pre arbitral process n Arbitral process n Notice to arbitration n Fillings of pleads n Appointment, power and
duties of arbitrator n Arbitral awards n Pre and Post Amendment n Waiver of the Rights n Jurisdiction issue
n The competence-competence n Principle
Learning Objectives
To understand:
 Arbitral process with and without court intervention
 What a notice to arbitration should contain; What is the objective of sending a notice
 Kinds of replies to notice to arbitrational proceeding
 The importance and procedures involved in exchanging written pleadings in arbitration proceedings
 The appointment process, the importance of mutual agreement between the parties in the selection
of arbitrators, the guidelines for the appointment of arbitrators, and the role of courts in the
appointment process
 Interim measures provided under the Arbitration and Conciliation Act, 1996
 Importance for defining the scope of the dispute and streamlining the proceedings
 Importance of an effective closing argument
 The provisions related to challenging an arbitral award under Section 34 of the Arbitration and
Conciliation Act, 1996, and to provide a definition of an arbitral award
 information on the grounds and limitations for setting aside an arbitral ruling under the Indian
Arbitration and Conciliation Act of 1996
 Powers, Duties and functions of arbitrator
 The grounds for potential conflicts in the arbitration process under the Act
 Major amendments brought about by the 2015 Amendment Act
 Section 4 of the Indian Arbitration and Conciliation Act, 1996, which deals with the deemed waiver
of a party’s right to object in certain circumstances
 Jurisdiction issues in the arbitral tribunal, the principles of party autonomy and competence-
competence, and the remedies provided by the Arbitration and Conciliation Act, 1996, against an
arbitration award
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PP-AM&C Arbitration Procedure, Appointment of an Arbitrator and Other Aspects
Lesson Outline
 Arbitral Process  Pre Amendment
 Invoking Arbitration and Notice to Parties  Post 2015 Amendment
 Number of Arbitrators  Waiver of the Right to Object under the

Arbitration and Conciliation Act, 1996
 Reply to Arbitration Proceeding
 Arbitration Tribunal and Jurisdiction issues
 Service of Notice to Arbitrate
 Understanding the Competence-
 Fillings of Pleadings
Competence Principle
 Appointment of Arbitrator
 Lesson Round-Up
 Appointment in Case of Institutional
 Glossary
Arbitration and Ad Hoc Arbitration
 Test Yourself
 Witnesses and Evidence
 Interim Measures under Arbitration and
Conciliation Act  Other References (Including Websites/
Video Links)
 Prayers for Temporary Protective Measures
 Fixation of Issues
 Awards
 Modification of Arbitral Award
 Reliability of Arbitral Awards
 Grounds for Challenging the Appointment of

an Arbitrator.
 Powers of Arbitrator
 Duties or Functions of Arbitrator
 Grounds for Conflict
l Indian Evidence Act, 1872
ARBITRAL PROCESS
Arbitral process refers to the procedures and steps involved in resolving a dispute through arbitration. Arbitration
is a form of alternative dispute resolution where parties agree to have their dispute heard and resolved by an
impartial third-party arbitrator or a panel of arbitrators, instead of going through traditional court litigation.
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Arbitration Procedure, Appointment of an Arbitrator and Other Aspects LESSON 3
Steps in arbitration without court intervention
• Noce to Arbitrate (Claimant / Respondent)

• Reply
• Appointment of Arbitrator
• Case Management Conference
• Statement of Claim
• Statement of Defense
• Oral Hearing
• Arguments
• Award
• Voluntary Enforcement
Steps in arbitration with court intervention

l Notice to Arbitrate
l Reply – Denies existence of arbitration agreement or affirms existence of arbitration agreement but no
consensus on appointment of arbitrator
l Intervention of court under section 8 or section 11
l Interim Relief from court under section 9 where urgent relief is required from court and there is no
provision for emergency arbitration
l Appointment of arbitrator: The parties will select an arbitrator or panel of arbitrators or in absence of
consensus, court will appoint the arbitrator
l Challenge to jurisdiction – where arbitrator states that he doesn’t have jurisdiction or he exceeded
his jurisdiction under section 16(2) or 16(3), respectively, such decision of arbitrator can be challenged
before court under section 37(2) of the Act
l Case Management Conference
l Statement of Claim
l Statement of Defense
l The party’s u/s 27 may engage in limited discovery to obtain information and evidence to support their
case.
l Arbitration hearing
l Arbitration award
l Award can be challenged under section 34
l If the parties do not voluntarily comply with award, court’s intervention with enforcement may be sought
under section 36 of the Act.
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Pre-Arbitral Process
Pre-arbitral process refers to the preliminary procedures that parties engage in before initiating formal
arbitration proceedings. This phase is crucial in resolving disputes outside of the court system, as it provides an
opportunity for parties to come to a mutual agreement before committing to the time and expense of arbitration.
The process is as follows:
l Notice to Arbitrate
l Appointment of an arbitrator (S. 11)
l Challenge/Termination of an arbitrator
l Interim Measures (S. 9)
l Case Management Conference
l Terms of Reference for Arbitrator
INVOKING ARBITRATION AND NOTICE TO PARTIES

According to the general rule, arbitration is assumed to have started when one party gives notice to arbitrate
to the other stating his intention to invoke the arbitration agreement and requests that they both take action to
start the arbitration process.
It cannot be expected of the other party to be aware of the party invoking the arbitration agreement’s desire to
have the issues arbitrated until a notice requesting their appointment of an arbitrator according to the arbitration
agreement is served on them. The notice of invocation of arbitration also acts as a record to show the date it
was sent, which is important for limitation purposes.
Any step that must be carried out as a prerequisite to using the arbitration agreement must be done so before
using the arbitration agreement. The opponent may object about non-compliance with the mandatory procedure
specified in the agreement before invoking arbitration agreement if such a mandatory method is not followed
before invoking arbitration agreement. If the party seeking to invoke the arbitration agreement does not follow
this mandatory procedure and the opposing party does not object before the arbitral tribunal, this amounts to
waiver under Section 4 of the Arbitration and Conciliation Act, 1996.
While preparing the notice invoking the arbitration agreement, the party seeking to invoke the arbitration
agreement must be meticulous.
In India, a notice to arbitration should generally contain the following information:
1. The names and contact information of the parties involved in the dispute.
2. A statement indicating that the dispute will be resolved through arbitration, rather than through litigation
in a court of law.
3. A brief summary of the dispute, including the relevant facts and any legal or contractual provisions that
are relevant to the dispute.
4. A request for a specific form of relief or remedy, such as monetary damages, injunctive relief, or specific
performance.
5. The rules and procedures that will govern the arbitration, including any designated arbitration
organization, the location of the arbitration, and the number of arbitrators who will be appointed.
6. A copy of the arbitration agreement, if any, that the parties have previously entered into.
7. A deadline for responding to the notice and for selecting an arbitrator or arbitrators if necessary.
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8. A statement indicating that the parties agree to abide by the decision of the arbitrator or arbitration
panel and to waive any right to appeal the decision.
9. A statement requesting the other party to nominate an arbitrator, in case of a two-arbitrator panel or to
agree on the appointment of a presiding arbitrator in case of a three-arbitrator panel.
10. A statement indicating that if the other party does not respond to the notice within a specified time
period, the initiating party may proceed with the appointment of an arbitrator or arbitrators on its own.
11. It is important to note that the specific requirements for a notice to arbitration in India may vary
depending on the arbitration agreement, the applicable law, and the rules or procedures that apply to
the arbitration. It is recommended to consult an attorney or a legal expert in India for guidance on the
specific requirements for a notice to arbitration.
NUMBER OF ARBITRATORS
The arbitral tribunal will only consist of one arbitrator if the arbitration agreement specifies the appointment of
a single arbitrator or if the arbitration agreement is silent about the number of arbitrators.
The party that requests arbitration under the arbitration agreement may suggest the names of a few arbitrators
and may request that the other party accept one of those names or suggest another name if the first suggestion
is rejected by the other party within thirty days of the date of receipt of the notice.
REPLY TO ARBITRATION PROCEEDING

When a party receives a claim in an arbitration proceeding, they may choose to reply in several ways. One
common way to reply is to admit, deny, or admit but deny liability, as follows:
1. Admit the claim: The party may agree that the claim is valid and accept the liability for the damages
or losses claimed by the other party. In this case, the parties may proceed to discuss the amount and
terms of the settlement or award.
2. Deny the claim: The party may dispute the validity or merits of the claim, arguing that it is not supported
by the facts or the law, or that the damages or losses are exaggerated or unfounded. In this case, the
parties will need to present evidence and arguments to support their positions.
3. Admit but deny liability: The party may acknowledge that the claim is valid and the damages or
losses have occurred, but deny that they are responsible for them, based on various grounds such as
limitation periods, force majeure, or third-party liability. In this case, the parties will need to present
evidence and arguments to support their positions, and the arbitral tribunal will need to determine the
liability and the amount of damages or losses, if any.
COUNTER CLAIM
A counterclaim is a claim made by the respondent against the claimant in response to the original claim,
seeking relief for damages or losses caused by the claimant’s actions or omissions related to the same dispute.
The following are the ingredients for a good counter claim:
1. Scope: The counterclaim must be related to the same transaction or occurrence that is the subject of
the claim, or arise out of the same contract or relationship. It cannot be a separate or unrelated claim.
2. Timing: The counterclaim can be made in the initial response to the notice of arbitration, or later in the
arbitration proceedings, subject to the time limits and procedures set forth in the arbitration rules or the
agreement of the parties.
3. Procedure: The counterclaim must be asserted with sufficient detail and supporting evidence to enable
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the arbitral tribunal to consider and decide on its merits. The parties may have the right to present
evidence and arguments in support of their respective claims and defenses.
4. Relief: The counterclaim may seek various types of relief, such as damages, injunctions, specific
performance, or declaratory relief, subject to the applicable law and the jurisdiction of the arbitral
tribunal.
5. Impact on the original claim: The counterclaim may affect the original claim and the amount of
damages or losses claimed by the claimant, as it may reduce or offset the claimant’s entitlement to
relief.
6. Decision: The arbitral tribunal will decide on the merits of the counterclaim, based on the evidence and
arguments presented by the parties, and will include the decision in the final award. The decision may
be enforceable against the claimant, subject to the applicable law and the jurisdiction of the courts.
SERVICE OF NOTICE TO ARBITRATE

Section 3 of the Arbitration and Conciliation Act, 1996 addresses the circumstances under which the respondent
is presumed to have received a notification. Any written communication is deemed to have been received if it
is personally delivered to the addressee or left at his place of business, habitual residence, or mailing address.
If none of the locations mentioned above can be located after making a reasonable search, a written
communication is deemed to have been received if it is sent by registered letter or by any other method which
provides a record of the attempt to deliver it.
Objectives for sending this notice for arbitration

The parties to the arbitration agreement who are the targets of a claim ought to be aware of those claims. It’s
possible that in response to the notice, the recipient may accept some of the claims in full or in part, which would
help to focus on the areas of disagreement.
Such a notification gives the recipient the chance to determine whether the claims are legally or chronologically
barred, estopped, or unsustainable in light of the factual circumstances surrounding the parties’ disagreement.
This notification specifies the procedure to be used for the arbitration procedures and arbitrator appointment. It
will not be feasible to determine whether the processes for the appointment of an arbitrator and other procedures
as envisioned in the arbitration provision have been followed unless a notice invoking the arbitration clause
has been given. Arbitration agreements almost often prohibit the unilateral appointment of an arbitrator by one
of the parties; the choice of the arbitrator must be agreed upon by both parties. An important function of the
notification provided under Section 21 is to facilitate agreement on the choice of an arbitrator.
Even if the notice required by Section 21 of the act allows one of the parties to select the arbitrator, the party
making such an appointment must nonetheless notify the other party in advance of the person it intends to
nominate. Such a person could very well be “disqualified” from serving as an arbitrator for a variety of reasons.
After obtaining such notice, the recipient may be able to draw attention to this flaw and convince the claimant
to designate a qualified individual.
FILING OF PLEADINGS
Statements of claim and statement of defence are typically exchanged in written procedures. They are the
primary fillings of the arbitration proceeding. The quantity, order, and deadlines for submitting written pleadings
may all be agreed upon by the parties. Unless specifically stated differently, the respondent may also submit
a counterclaim. The Claimant presents the evidence supporting his claims, the points of contention, and the
requested reliefs through the “Statement of Claim” (SOC). The Respondent, on the other hand, supplies the
arbitral tribunal with a “Statement of Defence” (SoD), which outlines his defence and other details to refute
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the claim made by the Claimant. The Arbitration and Conciliation Act of 1996’s Section 23 mandates that the
Statement of Claim and Defense include all relevant facts, remedy requests, and documentary evidence.
Section 25 of the Arbitration and Conciliation Act of 1996 emphasises the significance of the Statement of
Claim and Defense. According to the Section, the arbitral tribunal may end the entire arbitration process if the
claimant fails to submit his Statement of Claim. Nonetheless, Section 25(2) gives the arbitral tribunals the power
to continue hearing arguments if the respondent does not provide a statement of defence. The arbitral tribunal
may also decide to treat the respondent’s failure to submit the Statement of Defence as a forfeiture or waiver
of their claim under this Section. Hence, failing to submit a statement of claim or statement of defence would
negatively affect any party’s standing before the arbitral tribunal.
The statements made by each party serve as the foundation for their respective arguments. As a result, the
parties must appropriately construct their statements. The High Court of Delhi in the case of of M/s. Cinevistaas
Ltd. V. M/s. Prasar Bharti, O.M.P. (COMM) 31/2017 held that claims that have already been raised in the notice of
arbitration are not time-barred by limitation, even if they are not included in the statement of claim, in a case
involving a petition brought under Section 34 of the Arbitration and Conciliation Act, 1996 (“Act”) challenging
an arbitrator’s decision. The analysis of the law regarding arbitral orders that are subject to challenge under
Section 34 of the Act, which deals with requests to vacate arbitral judgements, makes the ruling noteworthy as
well.
It is also established that if the respondent wished to make changes in the statement of defense , they are
permitted to do so via section Section 23(3) of the Arbitration and Conciliation Act, the Respondent may be
permitted to amend the statements, but only under certain conditions, such as: The parties have not set any
constraints on themselves regarding the amendment of the statements; The amendment may be permitted by
the arbitral tribunal if the request for such amendment/ supplementing has been made without any unreasonable
delay; the amendment may be rejected if they fall under the ambit of the arbitration agreement and can be
made without manifest and grave justice to the party seeking the amendment; and the amendment will be
allowed if the arbitral proceedings are still ongoing.
APPOINTMENT OF ARBITRATOR
The appointment of arbitrators is an essential element of the arbitration process, as it involves the selection of
a neutral third party who is responsible for resolving disputes between the parties. Section 11 of the Arbitration
and Conciliation Act, 1996, deals with the appointment of arbitrators and has undergone certain amendments
in 2015 and 2019 to address issues that have arisen in the appointment process.
These amendments introduced significant changes in the appointment process. It established the Arbitration
Council of India (ACI), which is responsible for maintaining a panel of arbitrators and promoting the development
of arbitration in the country. Another notable development is that the designation of any person or institution by
the Courts, shall not be regarded as a delegation of judicial power.
The Arbitration and Conciliation Act, 1996, provides for the finalisation of the name of arbitrators through mutual
agreement between the parties. Section 11(1) of the Act states that the parties are free to agree on the procedure
for appointing the arbitrator(s). This includes the selection of an arbitrator or a panel of arbitrators who are
mutually agreed upon by the parties. The Act encourages the parties to agree on the selection of arbitrators as
it promotes a more efficient and cost-effective arbitration process.
If the parties cannot come to a mutual agreement on the procedure for appointment, Section 11(3) provides
the following guidelines for the appointment of three arbitrators: each party selects an arbitrator, and the two
arbitrators then jointly select the third arbitrator who acts as the presiding arbitrator.
Further, under Section 11(4), there are two prerequisites when the procedure described in clause (3) is utilized.
Firstly, both parties must nominate an arbitrator within thirty days of receiving a request from the other party
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to do so. Secondly, within thirty days from the appointment of both arbitrators, they must arrive at a consensus
regarding the appointment of the third arbitrator.
Mutual agreement on the selection of arbitrators remains the preferred method for finalizing the name of
arbitrators, which provides that the courts shall not intervene in the selection of arbitrators made by the parties,
except as provided in Section 11(6) which deals with a situation where the appointment process breaks down or
a party fails to act in the appointment process.
When the parties do not agree on the appointment of an arbitrator under Section 11(6) of the Arbitration and
Conciliation Act, 1996, either party may request the Supreme Court or the High Court, or any person or institution
designated by such court, as the case may be, to appoint the arbitrator.
The Supreme Court or the High Court, as the case may be, will then examine the request and may seek further
information or clarification from the parties, as it deems fit. Once satisfied, the Court will appoint the arbitrator
or arbitrators, as the case may be.
In making the appointment, the Court or Designated Institution will take into consideration the qualifications
required of the arbitrator as agreed upon by the parties, as well as any other relevant factors, such as the
nationality of the arbitrator or his or her ability to communicate in a particular language. The designated
institution or court shall then appoint a sole arbitrator or a panel of arbitrators, depending on the agreement
between the parties. The appointment made by the Court is final and cannot be appealed against.
Efficiency is a key factor in arbitral proceedings and the same is safeguarded by Article 11(7) which enumerates
that the decision by the designated authority under Sub-Section (4), (5) and (6) is final. The Supreme Court, or
High Court, or the person or institution designated by such Court, has far reaching powers and may require an
arbitrator to disclose in writing his/her qualifications or any and other considerations as are likely to secure the
appointment of an independent and impartial arbitrator, with due consideration to Section 12(1).
Further, when parties in international arbitration belong to different nationalities and there is a requirement for
the appointment of a sole arbitrator or a third arbitrator, the designated arbitral institution by the Supreme Court
or a high court can appoint an arbitrator who does not share the nationalities of the parties involved.
10.04.2023 NTPC LTD. v. M/S SPML Infra Ltd. Supreme Court
The pre-referral jurisdiction of the courts under Section 11(6) inheres two inquiries: (i) primarily the existence
and the validity of an arbitration agreement and (ii) secondary inquiry with respect to the non-arbitrability of
the dispute
Brief Facts
The present appeal arose out of a decision of the High Court of Delhi, allowing the Respondent’s application
under Section 11(6) of the Arbitration and Conciliation Act, 19962 for the constitution of an Arbitral Tribunal.
It is the case of Appellant NTPC that there were no subsisting disputes between the parties in view of the
Settlement Agreement and that the application for arbitration is an afterthought and abuse of the process.
The Appellant and Respondent entered into a contract for “Installation Services for Station Piping Package
for Simhadri Super Thermal Power Project Stage II”. In terms of the contract agreement, SPML furnished
Performance Bank Guarantees and Advanced Bank Guarantees to secure the Appellant.
Pursuant to the successful completion of the project, a Completion Certificate was issued by NTPC. NTPC
informed SPML that the final payment under the contract would be released upon the receipt of a No-
Demand Certificate from SPML. The No-Demand Certificate was issued by SPML and NTPC also released
the final payment. The Bank Guarantees were however withheld.
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NTPC informed SPML that the Bank Guarantees were withheld on account of pending liabilities and disputes
between the parties with respect to other projects. SPML naturally protested. SPML informed NTPC that the
retention of Bank Guarantees, despite issuance of the Completion Certificate and the No-Demand Certificate,
by linking them to some other projects, was unjustified. Following the protest, SPML raised a demand from
NTPC as liabilities recoverable for actions attributable to NTPC under this very contract.
SPML called upon NTPC to appoint an Adjudicator for resolving pending disputes in terms of the General
and Special Conditions of Contract. As no action was taken by NTPC, SPML moved the Delhi High Court by
filing Writ Petition, for the release of the Bank Guarantees.
While issuing notice, the High Court directed NTPC not to encash the Bank Guarantees, and further directed
SPML to keep the Bank Guarantees alive.
Pending the Writ Petition, negotiations between the parties culminated in a Settlement Agreement. Through
the Settlement Agreement, NTPC agreed to release the withheld Bank Guarantees. SPML also agreed to
withdraw its pending Writ Petition and undertook not to initiate any other proceedings, including arbitration,
under the subject contract.
Following the Settlement Agreement, the Bank Guarantees were released by NTPC. SPML withdrew the Writ
Petition.
After the aforesaid settlement of the disputes, followed by its implementation, SPML repudiated the
Settlement Agreement and filed the present application under Section 11(6) of the Arbitration & Conciliation
Act, 1996 in the Delhi High Court. In this Arbitration Petition, SPML alleged coercion and economic duress in
the execution of the Settlement Agreement. The allegation was, that the retention of the Bank Guarantees
compelled SPML to accept the terms of Settlement Agreement. SPML also averred that NTPC had failed to
appoint an arbitrator in spite of repeated requests, and therefore the High Court must constitute an Arbitral
Tribunal, in exercise of its jurisdiction under the Act.
The High Court examined the correspondence between the parties in detail. It rejected the first contention of
NTPC that SPML should have first resorted to an alternative dispute resolution mechanism under the Dispute
Resolution Clause. It noted that such a request was, in fact, made by SPML on an earlier occasion, but NTPC
failed to respond to the same. On the request for arbitration and the allegation of economic duress that
allegedly prevailed in signing the Settlement Agreement.
Issue
In the present case, the court was primarily concerned with the pre-referral jurisdiction of the High Court
under Section 11 of the Act and would like to underscore the limited scope within which an application under
Section 11(6) of the Act has to be considered.
Decision
The position of law with respect to the pre-referral jurisdiction, as it existed before the advent of Section 11(6A)
in the Act, was based on a well-articulated principle formulated by Supreme Court in National Insurance Co.
Ltd. v. Boghara Polyfab (P) Ltd. In Boghara Polyfab, the Supreme Court held that the issue of non-arbitrability
of a dispute will have to be examined by the court in cases where accord and discharge of the contract is
alleged. Following the principle in Boghara Polyfab, the Court in Union of India & Ors. v. Master Construction
Co. observed that when the validity of a discharge voucher, no-claim certificate or a settlement agreement is
in dispute, the court must prima facie examine the credibility of the allegations before referring the parties to
arbitration. Yet again in New India Assurance Co. Ltd. v. Genus Power Infrastructure Ltd., this Court observed
that allegations of fraud, coercion, duress or undue influence must be prima facie substantiated through
evidence by the party raising the allegations.
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Taking cognizance of the legislative change, this Court in Duro Felguera, noted that post the 2015
Amendments, the jurisdiction of the court under Section 11(6) of the Act is limited to examining whether an
arbitration agreement exists between the parties – “nothing more, nothing less”.
Eye of the Needle: The referred precedents crystallise the position of law that the pre-referral jurisdiction of
the courts under Section 11(6) of the Act is very narrow and inheres two inquiries. The primary inquiry is about
the existence and the validity of an arbitration agreement, which also includes an inquiry as to the parties to
the agreement and the applicant’s privity to the said agreement. These are matters which require a thorough
examination by the referral court. The secondary inquiry that may arise at the reference stage itself is with
respect to the non-arbitrability of the dispute.
The Hon’ble Supreme Court in the case of Chennai Metro Rail Limited Administrative Building v. M/s
Transtonnelstroy Afcons (JV) & Anr. decided by Supreme Court on 19th October, 2023 has decided that
Unilateral Increase of Fees by Arbitrators does not make the Arbitrators automatically ineligible. However,
it can be a breach of Law.
For details:
https://main.sci.gov.in/supremecourt/2021/13794/13794_2021_1_1501_43311_Judgement_10-Apr-2023.pdf
APPOINTMENT IN CASE OF INSTITUTIONAL ARBITRATION AND AD HOC ARBITRATION

Ad-hoc arbitration involves parties designing their own arbitration process and appointing arbitrators directly.
The parties may agree on the rules governing the arbitration process, including the appointment of arbitrators
and the procedures for the conduct of the proceedings.
Institutional arbitration is a form of arbitration where the parties agree to have their dispute resolved by an
arbitration institution rather than through an ad-hoc arbitration process. The Arbitration and Conciliation Act,
1996, provides for the appointment of arbitrators in case of institutional arbitration.
The appointment of arbitrators for institutional arbitration shall be made by the institution designated by the
Supreme Court or High Court, as the case may be. This means that the institution appointed by the court shall
appoint a sole arbitrator or a panel of arbitrators, depending on the agreement between the parties.
The designated institution is also responsible for maintaining a panel of arbitrators and promoting the
development of arbitration in the country. Arbitration Council of India (ACI) is the designated institution for
institutional arbitrations in the country.
Types of Ad Hoc Arbitration

Ad hoc arbitration is a type of arbitration that is not administered by an established arbitration institution.
Instead, the parties agree to the procedures and rules that will govern the arbitration, including the selection of
arbitrators. Some examples of ad hoc arbitral bodies:
1. Single-arbitrator ad hoc arbitration: In this type of ad hoc arbitration, the parties agree to appoint
a single arbitrator to resolve their dispute. The arbitrator is usually agreed upon by the parties or
appointed by a mutually agreed third party.
2. Panel-arbitrator ad hoc arbitration: In this type of ad hoc arbitration, the parties agree to appoint a
panel of arbitrators to resolve their dispute. The arbitrators are usually agreed upon by the parties or
appointed by a mutually agreed third party.
3. Special ad hoc arbitration: In this type of ad hoc arbitration, the parties agree to specific procedures
and rules that are tailored to their particular dispute. This could include the selection of arbitrators with
specific expertise in the subject matter of the dispute, or the use of specific procedural rules.
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4. Industry-specific ad hoc arbitration: Some industries have developed their own ad hoc arbitral bodies
to deal with disputes within the industry. For example, the Construction Industry Model Arbitration Rules
(CIMAR) are often used in construction disputes, and the Sport Dispute Resolution Centre of Canada
provides ad hoc arbitration for disputes in the Canadian sport industry.
Appointment of Arbitrators in an ad hoc Arbitration

In an ad hoc arbitration, the appointment of arbitrators is typically done by the parties themselves, rather than
by an arbitral institution. The following are the general steps involved in the appointment of arbitrators in an ad
hoc arbitration:
1. Drafting of the arbitration agreement: The parties should first agree to submit their dispute to ad
hoc arbitration and include an arbitration clause in their contract or agreement. The arbitration clause
should specify the number of arbitrators and the procedure for their appointment.
2. Initiation of the arbitration: Once a dispute arises, one party will typically send a notice of arbitration to the
other party, invoking the arbitration clause and stating their intention to proceed with ad hoc arbitration.
3. Selection of arbitrators: The parties will then need to agree on the appointment of arbitrators. If
the arbitration agreement specifies the number of arbitrators, the parties will need to agree on the
appointment of a sole arbitrator or each party’s appointed arbitrator, who will then choose the presiding
arbitrator. If the parties cannot agree on the appointment of arbitrators, the dispute resolution mechanism
specified in the arbitration agreement may need to be followed.
4. Appointment of arbitrators: Once the parties have agreed on the arbitrators, they should appoint them
by written notice. The appointment should include the name, address, and contact information of the
arbitrator and a statement that the arbitrator accepts the appointment.
5. Confirmation of the arbitral tribunal: After the appointment of arbitrators, the arbitral tribunal should
confirm its appointment in writing to the parties.
6. Commencement of the arbitration: Once the arbitral tribunal is confirmed, the parties can begin
the arbitration process, including the exchange of written submissions, evidence, and oral hearings,
according to the agreed-upon procedure.
Appointment of Arbitrators in Institution Arbitration

In case of institutional arbitration, the general steps slightly differ. The Singapore International Arbitration
Centre (SIAC) is an example of an institutional arbitration. The following are the general steps involved in the
appointment of arbitrators in SIAC arbitration:
1. Submission of the notice of arbitration: The party initiating the arbitration will typically submit a notice
of arbitration to the SIAC, along with any necessary fees and supporting documents.
2. Appointment of the arbitral tribunal: The SIAC will then appoint the arbitral tribunal in accordance
with its rules and procedures. The tribunal may consist of a single arbitrator or a panel of arbitrators,
depending on the agreement of the parties.
3. Notification to the parties: Once the arbitral tribunal is appointed, the SIAC will notify the parties of the
appointment and provide them with the names, addresses, and qualifications of the arbitrators.
4. Confirmation of the appointment: The appointed arbitrators will need to confirm their appointment
in writing to the SIAC and the parties. The confirmation should include a statement that the arbitrator
accepts the appointment, any disclosures required by the SIAC rules, and a declaration of independence
and impartiality.
5. Challenge of arbitrators: If a party has concerns about the independence or impartiality of an appointed
arbitrator, they may challenge the appointment. The challenge will be reviewed by the SIAC, which will
decide whether to accept or reject the challenge.
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6. Replacement of arbitrators: If an arbitrator resigns or is otherwise unable to act, the SIAC will appoint
a replacement arbitrator in accordance with its rules and procedures.
7. Commencement of the arbitration: Once the arbitral tribunal is confirmed, the parties can begin
the arbitration process, including the exchange of written submissions, evidence, and oral hearings,
According to the rules and procedures specified by the SIAC.
WITNESSES AND EVIDENCE

The parties are allowed to choose any arbitrator(s) they want for any arbitration procedure.
The arbitrators, however, cannot represent the parties as this would raise legitimate concerns about their
independence or impartiality. The Madras High Court ruled in Soceite Aninmina Lucchesse Oil v. Gorakhram
Gokalchand that the arbitrators were required to convene and act in accordance with natural justice principles.
They must not only exercise good judgement but also refrain from acting as the party’s agents or advocates.
The Arbitrators are in charge of their own procedure and are free to run the arbitration in any way they see fit.
It is established by law that arbitrators are not constrained by the formal standards of proof upheld by courts.
The Arbitral Tribunal shall not be governed by the Indian Evidence Act, 1872, or the Code of Civil Procedure,
1908, according to Section 19 of the Act. Unless the parties expressly provide in the agreement, admissibility,
relevance, and materiality of evidence are within the exclusive jurisdiction of the Tribunal.
The arbitral tribunal must adhere to the statutory procedure when the parties have not stipulated a different
process. The Act’s Section 19(4) requires the arbitral tribunal to adhere to the procedure.
The power of Arbitral Tribunal to conduct arbitral proceedings includes the power to decide the admissibility,
relevance, substance and weight of any evidence. Thus, the Arbitral Tribunal shall assess whether a particular fact is
relevant or admissible in accordance with its own good judgement without regard to the statutory provisions.
This does not, however, entail that the arbitrators are free from the requirements of natural justice and the norms
of proof.
The Andhra Pradesh High Court has expressly said that parties are free to agree on the process to be followed
by the Arbitral Tribunal in Hindustan Shipyard Limited vs. Essar Oil Limited and Ors.
Where such a procedure is not predetermined, the Arbitral Tribunal must follow the statutory procedure, which
requires it to fairly assess all of the evidence in the record and reach a decision that is consistent with the terms
of the dispute.
It has been ruled that the principles of natural justice, fair play, equal opportunity for both parties, and to pass
an order, interim or final, based upon the material or evidence placed by the parties on the record and after due
analysis and/or appreciation of the same by giving the terms of the contract a proper and correct interpretation,
subject to the laws, simply cannot be overlooked. Furthermore, it has been ruled that parties may choose their
own arbitration process if they agree to it.
There are few sections in the act itself that states certain procedures with respect to evidence. The arbitrators
lack the authority to compel witnesses who refuse to come before the panel.
Nonetheless, Section 27 gives the tribunal the authority to ask the court for help gather evidence in accordance
with the Model Law. Such a witness shall be subject to the same penalties and punishment as he may receive
for comparable offences in cases heard before the court if he fails to appear in accordance with any order of the
court, makes any other default, refuses to provide testimony, or is found guilty of any contempt of the arbitral
tribunal. The court has two options for gathering evidence: either appointing a commissioner or mandating that
the evidence be sent directly to the arbitral tribunal.
Section 26 allows the arbitral tribunal to designate experts for any particular subject, and parties must supply
the experts with any pertinent material.
It will be possible for a party to request the expert to appear in an oral hearing following the delivery of his
report so that the parties may ask him questions. Also, Any individual delivering testimony before a person
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authorised to administer an oath “will be bound to declare the truth on such issue,” according to Section 8 of
The Indian Oath’s Act, 1969. As a result, the tribunal can legally swear that the witnesses are testifying before
an arbitral tribunal and that if they lie under oath, they will have violated the Criminal Laws.
A court is not an arbitral tribunal. Any procedural flaw does not invalidate the Award unless it violates the
principles of natural justice, equity, or fair play for the parties who were wronged.
The parties are free to present whatever evidence to support the facts required to establish their cases in
the context of international arbitration. The rules of evidence in arbitration aren’t prescriptive; they provide
the parties the freedom to select the rules that are most practical and pertinent. This supports the purpose of
arbitration, which is to lessen the parties’ court contact and provide a more convenient dispute resolution option.
INTERIM MEASURES UNDER ARBITRATION AND CONCILIATION ACT

The 1996 Arbitration and Conciliation Act abolished the previous arbitration legislation in India and incorporated
local arbitration, international commercial arbitration, and conciliation law. The new Act was created to ensure
a just and speedy resolution of disputes in an international commercial contract, following the model set forth
by the United Nations commission on international trade law (UNCITRAL).
In accordance with the Arbitration Act of 1940, a party could open court proceedings by submitting an application
for the appointment of an arbitrator under Section 20 and, concurrently, a request for temporary relief under
the Second Schedule read in conjunction with Section 41(b) of the previous Act. The New Act of 1996’s Section
9 gives the court the authority to require a party to take temporary measures or protection in response to
an application. Moreover, Section 17 grants the Arbitral Tribunal authority to issue interim orders unless the
agreement expressly forbids such authority.
In the matter of M D Army WHO vs. Sumangal services (p) Ltd, which was heard by the Indian Supreme Court
and published in AIR 2004 SC 1344, the court noted that even under Section 17 of the 1996 Act, the arbitrator’s
authority is restricted. It is not allowed to give any instructions that go beyond the arbitration agreement or
the reference. Even under Section 17 of the 1996 Act, an interim order may only be addressed to a party to the
arbitration and must be related to the topic of the dispute. It can’t be directed at different people. Even under S.
17 of the 1996 Act, the Arbitral Tribunal lacks the authority to implement its order, and the provision for judicial
enforcement is absent.
According to a plain interpretation of section 9, a party may apply to the court for an interim measure of
protection before, during, or after the arbitral procedures, as well as at any time after the arbitral award is made
but before it is enforced in line with section 36.
PRAYERS FOR TEMPORARY PROTECTIVE MEASURES MAY INCLUDE THE FOLLOWING
Appointment of a guardian for a minor or person not of sound mind
Preserving or temporary custody of, or selling, perishable goods
Securing the amount of claims
Allowing inspecon or temporary injuncon or appointment of receiver
Any other relief the court, in its discreon, may deem appropriate in light of
the circumstances of the case
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The Supreme Court was asked to consider whether, pursuant to Section 9 of the Arbitration and Conciliation Act,
1996, the Court has the authority to issue interim orders even before arbitral proceedings begin and before an
arbitrator is appointed in the case of M/s. Sundaram Finance Ltd. v. M/s. NEPC India Ltd., AIR 1999 SC 565. The
SC ruled that it is not required for arbitration proceedings to be ongoing or at least for a notice to have been
issued before a Section 9 application is submitted.
If the arbitration agreement does not prevent it, the Arbitral Tribunal may, upon a party’s request, require the
other party to adopt any temporary protective measures that the Arbitral Tribunal may judge necessary with
respect to the subject matter of the dispute. As part of the procedure, it has the authority to order the provision
of adequate security.
Additionally, this authority must be used in accordance with the arbitration agreement or terms of reference. It is
extremely odd that Section 17 allows the arbitral tribunal to issue interim orders yet gives the panel no authority
to enforce those orders. Additionally, the new Arbitration Act does not contain a provision that guarantees the
execution of interim decisions issued by the Tribunal or that treats interim orders as enforceable decrees similar
to final awards. In other words, the tribunal’s authority is constrained, and any interim award must unavoidably
blend with the final award in order to be enforceable.
Similar authority is granted to the arbitral tribunal in UNCITRAL model law under Articles 16 and 21 of the
Arbitration Rules.
The following conclusions would result from a close examination of Sections 9 and 17: - The new arbitration Act
grants the arbitral tribunal the authority to issue orders granting temporary relief, whereas the Old Act did not
do so.
Only once the arbitral tribunal has been established and is operating can Section 17 powers be used. The
terms “before, during, or after” make clear how broad the court’s powers are under section 9. Even before the
arbitration begins, a party may apply to the court for temporary safeguards. The court has extensive authority
and is supreme in awarding temporary relief. Yet, the court’s involvement in the tribunal’s formation is minimal.
The Supreme Court noted in Firm Asok Trading Vs. Gurumukhdas Saluja AIR2004 SC 1433 that Section 17
would only be in effect while the Arbitral Tribunal was in place. The powers granted to the arbitral tribunal
under Section 17 and the court’s powers under Section 9 may partially overlap at that time, but for the
purposes of the pre- and post-arbitral processes, the party seeking an interim measure of protection must
only turn to the court.
FIXATION OF ISSUES
Fixation of issues is an important step in the arbitration process, as it helps to define the scope of the dispute
and streamline the proceedings. Section 23 of the Arbitration and Conciliation Act, 1996 provides for the fixation
of issues by the arbitral tribunal after consulting with the parties.
The tribunal can also allow the parties to make written submissions on the issues to be framed. Once the issues
have been framed, the tribunal can proceed with the hearing of the dispute.
Fixation of issues is an important aspect of the arbitration process, as it helps to ensure a fair and efficient
resolution of the disputes.
Closing arguments
An opportunity to make closing arguments is given after each party has finished making their case. The
information cited in closing argument should be summarised for it to be convincing and which impugn the
opponent’s argument.
The closing address typically outlines the burden of proof with relation to the topics in dispute, defines the
issues, and refreshes the arbitrator’s memory as to which facts are in dispute and which are common cause. It
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provides justifications for rejecting the opposing party’s evidence.

An effective closing argument can be said to contain the following:
1. The facts that will be contested and those that were initially agreed upon have been decided by the
parties.
2. Any discrepancies or questions that the other party’s witnesses were unable to resolve, as well as any
witnesses that the opposing party failed to call, should be brought to the commissioner’s attention.
3. It is important to draw attention to the flaws in the other side’s arguments’ reasoning.
4. It is a good idea to have evidence from the law to back up your claims. The arbitrator should have easy
access to a complete copy of the judgement.
While the value of a strong closing argument cannot be understated, a party must still invest a lot of time and
effort in preparation to successfully prove the facts that the closing argument is based on.
AWARDS
Section 34 of the 1996 Act makes reference to both Article 34 of the UNCITRAL (United Nations Commission on
International Trade Law) Model Law and Section 30 of the Arbitration Act 1940, which both deal with annulling
an arbitral ruling.
The grounds for contesting an arbitral award issued under Section 31 are outlined in Section 34 of the Arbitration
and Conciliation Act of 1996.
Yet there are restrictions for challenging an award under Section 34, such as the fact that it can only be done
within three months of receiving the award, which can be extended for an additional 30 days.
The court determined in Municipal Corp. of Greater Mumbai v. Prestress Products (India) (2003) that the new
Act (1996) was passed with the explicit parliamentary goal of limiting judicial participation and that Section 34’s
restriction on the potential scope of a challenge to an award was a key component of this legislation.
Definition
An arbitration tribunal’s decision in an arbitration action is known as an arbitral award, and it is thought to have
the same legal standing as a court’s ruling in some cases.
The award may grant the parties a range of relief, including monetary compensation, consent, injunctions, and
other types of relief. The type of the award—interim, partial, or final—depends on the dispute. Additionally,
unless the parties have agreed that no justification should be provided or the judgement is an arbitral award on
predetermined terms under Section 30 of the Arbitration and Conciliation Act of 1996, the arbitral award must
provide the reasons behind its conclusion.
Grounds to set aside an arbitral ruling

The Arbitration and Conciliation Act of 1996 provides few grounds under Sections 34(2)(a) and (b) for the Court
to set aside an arbitral ruling, including the following:
Incapacity of the parties Any party who is a minor or under the age of majority is not required to abide
by any agreements made. The agreement is therefore null and unlawful, and
any award rendered in such a circumstance may be vacated by the court. For
instance, a lady who has schizophrenia, a mental disease, may request that
an award be withheld through the help of her agent.
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Agreement itself was A contract must satisfy each of its key requirements in order to be
invalid enforceable. The arbitration agreement will be deemed invalid if the contract
is unenforceable, and the arbitral ruling may be set aside as a result.
Other party must be If the party making the application did not receive advance notice of the
notified arbitrator's appointment or the arbitral processes or was otherwise unable to
present his case, the arbitral award will be revoked.
Subject matter is beyond If the arbitral award addresses a matter that is not covered by the arbitration
arbitration agreement or contains rulings on topics that are not covered by the arbitration
agreement, the arbitral award will be called into question. Additionally, only
that portion of the arbitral award, including decisions on subjects not submitted
to arbitration, may be set aside if judgements on items submitted to arbitration
can be distinguished from those not so submitted.
Composition of the arbitral The aggrieved party may seek to have the award annulled in court if the
tribunal not as per contract arbitrator is not chosen in accordance with the terms of the agreement or by
the parties, or if any other administrative requirement of the agreement that
was decided earlier by the parties has not been completely executed.
In addition to the reasons listed above, the court may set aside an arbitral award as specified in Section 34(2)
(b) of the Arbitration and Conciliation Act, 1996 due to the following reasons as well:
Subject matter of any other An arbitral award may be contested if it relates to another act or law rather
act or law than the Arbitration Act.
Not adhering to India's If the arbitral award conflicts with India's Public Policy, the court may annul it.
Public Policy
An arbitral ruling cannot be overturned under the following circumstances:

l Application submitted three months after receiving the award: According to Section 34, if an
application to set aside an award is submitted more than three months after the applicant received
the arbitral award, the Court will not take the application into consideration. The caveat to this section
further provides that the Court may hear the application for an extra 30 days, but not longer, if the Court
is persuaded that the applicant was prohibited from filing the application within the required timeframe
for appropriate reasons.
l Incorrectly interpreting the law or valuing the evidence: an arbitral award cannot be overturned
merely because the law was applied incorrectly or the evidence was not properly weighed.
l Reason for the award: The award must be supported by reasons, according to Section 31(3) of the
Arbitration Act, unless the parties explicitly indicated otherwise in their agreement or if the decision was
rendered subject to predetermined circumstances as described in Section 30 of the Act.
Vacation the arbitral award

According to Section 34(3) of the Arbitration Act, the aggrieved party shall submit a request to vacate the
arbitral award within three months of the date of the award. The three-month deadline could be extended by
another 30 days if the applicant can convince the court that there was a good reason he wasn’t able to file the
application. The time limit set forth in Section 34(3) expires after “three months”. It is best practise to design this
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time as a calendar month rather than a 90-day period. The period would therefore conclude in the third month,
on the day that corresponds to the start date.
In addition, the Arbitration Act's Section 34(6) establishes a one-year deadline for handling the application
from the notification period. Given the numerous cases that come up in commercial arbitration, the goal
of enacting this article is to encourage the prompt resolution of disputes. However, based on a number of
prior decisions, the Supreme Court determined in the State of Bihar & Ors. v. Bihar Rajya Bhumi Vikas Bank
Samiti, (2018) that the altered parts are advisory rather than mandatory. By examining these samples, it was
possible to discern the nature of the changed clauses.
MODIFICATION OF ARBITRAL AWARD

The findings in the arbitral decision cannot be altered or modified, and Section 34 is the only provision that can
annul the arbitral award.
A division bench of the Supreme Court of India ruled in favour of minimal judicial intervention in the case of
Project Director, National Highway Authority of India v. M. Hakeem & Anr., (2021), holding that courts cannot
amend, revise, or alter an arbitral judgement under Section 34 of the Arbitration Act.
However, the Court has permitted modifications to awards under Article 142 of the Indian Constitution in the
interest of thorough justice, which clearly states that the Court hasn’t backtracked on the modification of the
award but is instead respecting Section 34 by indicating minimal judicial involvement.
It is crucial to keep in mind that disagreements and problems with award change are not exclusive to India.
The English Arbitration Act, 1996 gives courts the authority to overturn a decision if a challenge is brought on a
substantive issue or an appeal is made on a legal problem. On the other hand, there is no provision for partial
annulment of arbitral verdicts in the Arbitration Act. The arbitral award should therefore be altered or changed
in part by being partially set aside.
RELIABILITY OF ARBITRAL AWARDS

An arbitration award is analogous to a court decision in that it is legally binding on the parties and is important
in that it helps the parties resolve their disagreement. Whether or not the arbitration decision is binding is the
most crucial consideration when considering whether or not to appeal a judgement. Any party or parties may
challenge the judgement without a good reason if the arbitration is ineffective and non-binding. To challenge
the decision in court, as they would in a jury trial, the party or parties must, however, have a strong reason to
do so if the arbitration is binding.
No one should be permitted to question the arbitrators’ capacity to resolve a dispute. The parties shall abide
by the arbitrator’s award, whether it is in their best interests or not. It was determined in Eastern and North
East Frontier Railway Cooperative Bank Ltd. v. B. Guha and Co., (1986), that the court could not reconsider the
evidence even if the arbitrator had made a mistake. As long as the arbitrator follows the correct procedures,
parties to an arbitration agreement agree to accept the arbitrator’s decision even if it is erroneous. As a result, as
determined in Rajasthan State Mines and Minerals Ltd. v. Eastern Engineering Enterprise, courts cannot impede
the enforcement of an award based on a legal or factual error (1999).
The problem of the burden of cases on courts, for which the arbitration tribunal was initially founded and as
a key goal, would resurface if the courts are granted the authority to review based on a legal or factual error.
However, if the court is convinced that the applicant party does not have a copy of the arbitration agreement
and will not be able to obtain one during the normal course of the arbitration procedure, the Arbitration Act
permits the court to hear any such applications for intervention in arbitration cases.
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GROUNDS FOR CHALLENGING THE APPOINTMENT OF AN ARBITRATOR

A prospective arbitrator is required to provide a written disclosure of certain circumstances that could raise
questions about his independence or impartiality under the 2015 amendment to Section 12(1) of the Act.
According to Section 12(1)(a), the arbitrator must reveal any direct, indirect, previous, or current relationships with
the parties as well as any financial, business, professional, or other interests in the dispute’s subject matter that
might influence his objectivity. Similar to this, Section 12(1)(b) refers to any situations that would make it difficult
for an arbitrator to dedicate enough time to complete the arbitration within a year.
In the sub-section, there are two explanations. The Fifth Schedule should be consulted in order to determine
if the conditions outlined in Section 12(1)(a) are present, according to the first. According to the second, such a
disclosure must follow the format specified in the sixth schedule.
The fifth schedule deals with following types of relations which might give rise to reasonable doubts:
1. Arbitrator’s relationship with parties or counsel
2. Arbitrator’s relationship to the dispute
3. Arbitrator’s interest in the dispute
4. Arbitrator’s past involvement with the dispute
5. Relationship of co-arbitrator’s
6. Relationship of the arbitrator with parties and others in the dispute
7. Other Circumstances.
The arbitrator may be contested if the factual situation of a case fits under any of the aforementioned categories.
For optimal objectivity, these broad terms cover a variety of situations. However, this schedule’s “Explanation
3” notes that if it’s a specialised arbitration involving a narrow field and it’s customary to select the same
arbitrators from a small pool of specialists, then this should be taken into account while implementing these
criteria. None of these titles make the appointment of an arbitrator immediately prohibited.
Subsection 1 is reinforced by Section 12(2), which mandates that an arbitrator should disclose any conflict of
interest as soon as practicable, unless a written disclosure has already been made.
OTHER GROUNDS FOR CHALLENGE

Section 12 provides an illustration of the actual grounds for challenging this section (3). An arbitrator may be
challenged if his independence and impartiality are questioned as a result of the events described in Section
12(1), or if he doesn’t meet the agreed-upon requirements.
A party to the dispute who names the arbitrator may object for grounds of which he learns only after the
appointment. Any prospective arbitrator who fits into any of the categories listed in the Act’s Seventh Schedule
is automatically disqualified, according to section 12(5), which was added by the 2015 amendment.
The majority of the headings in the Fifth Schedule are also covered by the Seventh Schedule. Although not as
comprehensive as the Fifth Schedule, the list just serves as a barrier to appointment as an arbitrator, as was
already established. The parties may, however, agree in writing to waive this restriction.
l Schedule includes:
1. Arbitrator’s relationship with the parties or counsel
2. Relation of Arbitrator to the dispute
3. Arbitrator’s interest in the dispute.
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POWERS OF ARBITRATOR
The powers of Arbitrators include:
1. Power to administer an oath to the parties.
2. Power to take interim measures: According to Section 17 of this Act, any party may ask the arbitral
tribunal for an intermediate measure at any point during the arbitration proceeding or after the arbitral
decision has been made.
3. The arbitrator has the power to proceed ex-parte, or in favour of one party, in any arbitration proceeding
if another party violates any provision of this Act.
4. In accordance with Section 26 of the Act, the arbitrator may, in any event, select one or more experts
to provide him with a report on a particular subject. The arbitrator also has the authority to provide the
expert with any pertinent data, papers, or items for his scrutiny. If required, the arbitrator may also name
the expert as a witness at a hearing, but in order for the expert to be chosen, he must first persuade the
parties that he is knowledgeable about the issues at hand.
5. The most significant authority granted to arbitrators by The Arbitration and Conciliation Act, 1996, is the
authority to make awards.
6. In cases involving international commercial arbitration, the arbitral dispute must be resolved in
accordance with the rules of procedure determined by the parties; however, if they are unable to agree,
the arbitrator will determine the rules that will apply.
DUTIES OR FUNCTIONS OF ARBITRATOR

The duties and functions of arbitrators inter alia include the following:
1. Choose the arbitration’s date, time, and location: The arbitrator shall fix the time and place of the
arbitration in accordance with Section 20 of the Arbitration and Conciliation Act if the parties cannot
agree on such dates and places.
2. To be Independent and Impartial: The Arbitration and Conciliation Act, 1996’s Sections 12 and 18
established a significant obligation on the arbitrator, requiring him to act independently and impartially
during any arbitration hearing. Being impartial means that the arbitrator should treat both parties
equally and should not have any personal or professional ties to either party that could influence the
outcome of the arbitration. Being independent means that the arbitrator will not have any relationships
with either party that could influence the outcome of the arbitration.
3. Duty to disclosure: According to Section 12 of Arbitration and Conciliation Act, an arbitrator has a duty
to reveal any material information that both parties are required to be aware of at the time of his initial
meeting with them.
4. Effective resolution: The arbitrator should be required to render decisions that are both valid and
impartial. Should not be part of any misconduct like granting prizes that go against the law to be
compromised or bribed; or violate the natural fairness principle.
5. Duty to determine the rule of procedure: Section 19 states that no procedural rules apply to the
arbitration process. The arbitration tribunal may follow any procedure that the parties have previously
agreed upon; however, if there has been no prior agreement on this matter, the arbitrator shall have
complete discretion to determine the appropriate course of action.
6. Duty to interpret or correct the award: Section 33 of the Arbitration and Conciliation Act states that it is the
responsibility of the arbitrator to rectify or elucidate the award that he has passed within 30 days from the
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date of receiving it. If a party notifies the other party, they may request the arbitration tribunal to correct any
errors in the award, such as typographical, computational, clerical, or any other similar errors.
GROUNDS FOR CONFLICT

The grounds of conflicts under the Arbitration Proceedings inter alia includes the following:
1. Appointment of arbitrator: The following conditions must be satisfied for an individual to serve as an
arbitrator: the parties’ confidence, impartiality, lack of interest in the litigation and absence of conflicts of
interest, and technical and legal qualifications. Section 12(1) of the Arbitration and Conciliation Act, 1996
provides grounds for challenging the appointed arbitrator. These include the arbitrator’s relationship
with any of the parties, the arbitrator’s relationship to the dispute, the arbitrator’s interest in the dispute,
the relationship between the arbitrators, and any other relevant situations.
2. Seat and Venue of arbitration: Section 20 of the Arbitration and Conciliation Act, 1996 governs
the selection of the Venue of Arbitration. The parties may choose the venue if it is specified in the
agreement, and the Seat cannot be changed. It is important to note that there is a distinction between
the Seat and Venue. The Seat refers to the place where the arbitration is conducted, while the Venue is
the location of the proceedings. However, in institutional arbitration, the Venue cannot be changed, and
the parties must be present at the institution during the proceedings. In ad hoc arbitration, the parties
have the flexibility to decide on the Venue where the arbitration will take place. The Seat and Venue of
Arbitration can be challenged on two grounds. Firstly, if either party is absent during the proceedings,
and secondly, if the arbitrator accepts the choice of Venue of one of the parties.
3. Choice of language: Section 22 of the Arbitration and Conciliation Act provides the parties with the
freedom to choose the language to be used in the proceedings. However, in certain situations, such as
when one party is from Russia, another from Japan, and the arbitrator is from England, it may be difficult
to understand the chosen languages. In such cases, the arbitrator and parties must agree on a common
language to be used in the proceedings. The choice of language in arbitration can be challenged if any
party fails to follow the agreed-upon language or uses a language that is not understandable to the
other party or the arbitrator.
4. Arbitrability of Disputes: There are certain matters that cannot be resolved through arbitration,
including matrimonial problems such as divorce, guardianship of a minor, testamentary matters,
insolvency matters, criminal proceedings, and disputes related to charities. The arbitrability of a dispute
can be challenged on the basis of whether the dispute is capable of being resolved through arbitration
and whether it falls within the scope of arbitration.
5. If a party is dissatisfied with the arbitral award, they must deliver a notice to the other party. Under
Section 34 of the Arbitration and Conciliation Act, 1996, the parties may file an application if they are
not satisfied with the decision. However, there are certain grounds on which an arbitral award can be
challenged, such as if the agreement is void or if the parties are under some incapacity. Additionally,
the decision given by the arbitrator can be suspended by a competent authority of the country, or if the
dispute cannot be resolved by the arbitration law. The application of the decision may also be contrary
to Indian public made by fraud or corruption or is in contravention with basic notions of morality, it can
also be suspended.
PRE AMENDMENT
The Arbitration and Conciliation Act, 1996 (the “Act”) was enacted to provide a legal framework for the arbitration
of commercial disputes in India. However, over time, it was found that there were certain shortcomings in the
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Act that needed to be addressed. As a result, the Indian Parliament passed the Arbitration and Conciliation
(Amendment) Act, 2015 (the “2015 Amendment”), which brought about significant changes to the Act.
l Before the Amendment, the Act had several shortcomings that had an adverse impact on the arbitration
process.’
l One of the main issues was the delay in the disposal of arbitration cases.
l Moreover, the enforcement of arbitral awards was also problematic, as the Indian courts were reluctant
to enforce foreign arbitral awards. This created a negative impression of the Indian legal system among
foreign investors and affected India’s international reputation.
POST 2015 AMENDMENT

The 2015 Amendment aimed to address the shortcomings of the Act by introducing several important changes.
Some of the key changes are as follows:
a. Interim relief from court: Following the BALCO case judgment by the Supreme Court, Indian courts
lacked the jurisdiction to intervene in arbitrations outside India. Consequently, in situations where
the assets of a party were located in India, and the likelihood of asset dissipation existed, the other
party could not seek interim orders from the Indian courts. This caused significant problems for parties
who chose to arbitrate outside India since interim orders made by tribunals outside India were not
enforceable in India. The Amendment Act aimed to remedy this by adding Section 2(2), which provides
for interim relief in cases where the place of arbitration is outside India, subject to agreement. However,
the amendment only applies to international commercial arbitration and excludes two Indian parties
arbitrating outside India.
b. Interim relief from the arbitral tribunal: The modifications made to Section 17 have empowered the
arbitral tribunal with the same authority as that of a court under Section 9. To minimise court intervention
and encourage parties to approach the arbitral tribunal, the Amendment Act specifies that once the
tribunal has been established, courts cannot entertain applications for interim measures, except under
circumstances where such remedy would not be efficacious. Furthermore, the Amendment Act clarifies
that interim measures granted by the arbitral tribunal would have the same effect as an order of a civil
court under the Civil Procedure Code, 1908. This is a crucial development as the previous arbitration
regime did not allow for the statutory enforcement of interim orders by the arbitral tribunal, rendering
them virtually meaningless.
Another provision in the Amendment Act requires arbitration proceedings to commence within 90 days
of the court passing an interim order, or within a period as prescribed by the court. This change aims to
prevent parties from misusing the provision to obtain ex parte or ad interim orders and subsequently not
proceeding with arbitration
c. Limited scope to refuse arbitration: The modified Section 8 authorizes the judicial authority to refer the
parties to arbitration if there is an arbitration agreement, unless it appears prima facie that there is no
valid arbitration agreement. Although Section 8(1) mentions “judicial authority”, in Section 8(2) the term
“Court” is used instead of “judicial authority,” which seems to be an oversight.
d. No automatic stay of arbitral award: Before the Amendment Act, simply filing a challenge petition
against an arbitral award would result in an immediate stay of the award. This process could take several
years for the court to decide, making arbitration a lengthy and ineffective process. The Amendment Act
has made a positive change by requiring a separate application to be filed in order to seek a stay of
the arbitral award, and there will be no automatic stay granted. The court must now provide reasons for
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granting a stay, and the provisions of the CPC for granting a stay of a money decree will be applicable.
As a result, the losing party will need to deposit a portion or the entire sum awarded in the arbitral
award or furnish security, as determined by the court.
e. Time Bound proceedings: The Amended Act aims to expedite the arbitration process by implementing
faster timelines. A proviso has been added to Section 24 that requires the arbitral tribunal to conduct oral
hearings on a day-to-day basis, without granting adjournments unless sufficient cause is demonstrated.
Heavy costs may be imposed by the tribunal for adjournments without sufficient cause. Arbitral awards
must be made within 12 months of the arbitrator(s) receiving written notice of their appointment, with
a possible extension of 6 months if mutually agreed upon by the parties. If the award is not made
within 18 months, the mandate of the arbitrator(s) will terminate, unless extended by the court upon an
application filed by any party.
f. Fast track procedure: The Amendment Act introduces Section 29B which provides the parties with the
option to agree to a fast track mechanism wherein the arbitrator(s) must render the award within six
months from the date of receiving written notice of appointment. The dispute will be resolved solely
based on written pleadings, documents, and submissions submitted by the parties, without any oral
hearing, except when deemed necessary by the arbitral tribunal or upon request by all parties to clarify
specific issues. However, it may not be a common occurrence for parties in a dispute to agree to such
a fast track procedure.
g. A new expansive cost regime introduced: Section 31A has recently been introduced, which grants
broad powers to the arbitral tribunal to award costs. The arbitral tribunal may determine whether costs
are payable, the amount of costs to be paid, and the timing of payment. The provision specifies that
generally, the losing party will be required to pay costs to the winning party.
h. Disclosure requirements of arbitrator: The Amendment Act has adopted the disclosure requirements
of the IBA Guidelines on Conflict of Interest in International Arbitration by including the Fifth and Seventh
Schedule. These schedules serve as a reference for identifying situations that render an arbitrator
ineligible.
i. Cap on fees of arbitrator: To prevent arbitration from becoming too costly, the Amendment Act has
introduced the Fourth Schedule, which provides a fee model for arbitrations other than international
commercial arbitrations and for cases where parties have agreed to the rules of an arbitral institution.
Additionally, Section 11A (2) specifies the process for the Central Government to amend the Fourth
Schedule. However, as the rates mentioned in the Fourth Schedule are to be considered by each state’s
High Court when framing rules, this could lead to a lack of consistency in fee structures across the
country.
Other changes
1. The Arbitration and Conciliation Act 1996 was amended by the Arbitration and Conciliation (Amendment)
Act 2015 to make the process of arbitration in India more user-friendly, cost-effective, and efficient.
However, there are certain areas where the Amendment Act has fallen short of expectations, and there
are some issues that remain unresolved.
2. One such issue is whether Indian parties can choose foreign law to resolve disputes through arbitration.
Another is the lack of statutory recognition for the “emergency arbitrator” as provided under some
institutional rules.
3. The Amendment Act does not address the issue of confidentiality in arbitrations, nor does it provide a
time limit for the enforcement of foreign arbitral awards.
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4. The Law Commission Report had recommended changes to Section 16 of the Arbitration Act to empower
the arbitral tribunal to decide disputes involving serious questions of law, complicated questions of fact,
or allegations of fraud, corruption, etc. Still, these recommendations have not been accepted.
5. Section 44(b) requires the reciprocating territory to be notified by the Central Government in Official
Gazette, which reduces the scope of enforcing foreign arbitral awards significantly.
6. Finally, there is confusion regarding whether the amendments will have a retrospective or prospective
effect for court actions concerning arbitration and the arbitration proceedings.
WAIVER OF THE RIGHT TO OBJECT UNDER THE ARBITRATION AND CONCILIATION ACT, 1996
Article 8 of the UNCITRAL Model Law on International Commercial Arbitration is based on the principle of
estoppel, was introduced with the aim of ensuring efficiency in the arbitration process. However, during
negotiations leading up to the introduction of this article, concerns were raised that its strict application could
lead to unfair treatment of a party. This concern continues to be relevant, particularly in countries like India
where ad hoc arbitration is prevalent.
Section 4 of the Indian Arbitration and Conciliation Act, 1996 is equivalent to Article 8 of the Model Law, which
deals with the deemed waiver of a party’s right to object in certain circumstances. Indian courts frequently
refer to the travaux preparatoires, or official record of negotiations, to understand the context and objective of
a particular provision.
The idea of a general principle of waiver was first discussed in the Fifth Session of the Working Group on
International Contract Practices, United Nations Commission on International Trade Law. Most parties believed
that a general waiver rule was necessary, albeit in a less rigid form that would apply only in cases of fundamental
violations of procedural provisions. Parties suggested softening the language by replacing the word “promptly”
with less strict terms like “without delay” and limiting the provision’s application to non-mandatory provisions
rather than all provisions. They also discussed introducing a provision that specified which provisions of the
Model Law would be mandatory. The session also discussed the provision’s scope, with one faction advocating
for its effect to be limited to the arbitration proceedings, while the majority believed it should extend to the post-
award stage, i.e., recognition and enforcement of the award.
Section 4 of the Arbitration and conciliation Act makes it clear that for the provision to apply, a party must have
knowledge of the derogation or violation. The principle of waiver has always required knowledge of the party
as a prerequisite for its general application. The term “waiver” is not defined under the Act, but Indian courts
have defined it as the intentional or voluntary relinquishment of a legal right or advantage. However, courts
have differentiated between “waiver” and “estoppel” based on intent. The phrase “know that” in Section 4 of
the Arbitration & Conciliation Act has been interpreted to mean “actual knowledge,” and it does not contain the
phrase “knows or ought to know.”
The conduct of the party during the arbitration is also closely related to their knowledge, such as whether
they participated in the proceedings despite knowing of the defect and without stating an objection in time.
According to Russel on Arbitration, a party who takes part in the proceeding is in a different position from one
who does not. The Arbitration & Conciliation Act uses the phrase “yet proceeds with arbitration” to refer to this.
The travaux preparatoires regarding Article of the Model Law state that “proceeding” includes appearing at a
hearing or communicating with the arbitral tribunal or the other party. Therefore, a party would not be deemed
to have waived their right if they were prevented from sending any communication due to a postal strike or
similar impediment for an extended period. Thus, the timing of the objection raised by a party is a crucial factor
in determining whether they have proceeded with the arbitration. The provision regarding time limits must be
included in the arbitration agreement or the relevant arbitration rules, or may be determined by the tribunal
itself. If there is no specified time limit, the objection must be raised “without undue delay.”
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Another essential precondition for invoking Section 4 of the Arbitration and Conciliation Act is the phrase “any
provision of this part from which parties may derogate.”
In the case of Narayan Prasad Lohia v. Nikunj Kumar Lohia, the Supreme Court addressed the issue of whether a
mandatory provision of the Act could be waived by the parties. The court ruled that Section 10 of the Arbitration
and Conciliation Act was derogable, as a party had the right to object to the composition of the Arbitral Tribunal
under Section 16(2) of the Arbitration and Conciliation Act. The court also held that if a party did not raise the
objection regarding the composition of the Arbitral Tribunal under Sections 12 and 13, it was barred from raising
the same at a later stage. The court’s observation that Section 34 of the Arbitration and Conciliation Act did
not permit a challenge to the award on the grounds of a violation of Part I of the Act if the composition of the
Arbitral Tribunal was in compliance with the arbitration agreement further supported the view that Section 4
was derogable. In Lohia Case, the Hon’ble Supreme Court addressed whether mandatory provisions can be
waived, but the scope of its findings was limited to Section 10 of the Arbitration and Conciliation Act. The Court
did not extend its test of opportunity to object under Section 16 of the Arbitration and Conciliation Act to other
provisions such as Sections 12 and 13 of the Arbitration and Conciliation Act, and did not comment on the nature
of provisions that could be derogated from.
In Adani Enterprises Ltd. v. Antikeros Shipping Corpn., the Hon’ble Bombay High Court held that Section 11
of the Arbitration and Conciliation Act could not be derogated from, as it confers powers on the High Court
and the Supreme Court, and that a party cannot be deemed to have waived its right to recourse under the
provision.
These cases demonstrate the preconditions that govern the application of Section 4 of the Arbitration and
Conciliation Act, and an understanding of these conditions and key provisions of the Act can provide insight into
how the provision applies to arbitration and related proceedings.
The right to refer a disagreement to arbitration is provided under Section 8(1) of the Arbitration and Conciliation
Act, subject to the requirement that it be done within the timeframe specified therein, i.e. before submitting the
first statement on the substance of the issue.
In Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., the Hon’ble Supreme Court ruled that even though
Section 8 of the Arbitration and Conciliation Act does not specify a deadline, an application under Section
8 of the Arbitration and Conciliation Act must be submitted as soon as possible, and a party who voluntarily
participates in the litigation and submits to the court’s jurisdiction cannot later argue that the parties should be
sent to arbitration because there is an arbitration agreement.
It has been made clear that Section 8 of the Arbitration and Conciliation Act has been interpreted to permit the
simultaneous filing of an arbitration reference and written statement.
Nonetheless, if a party filed a written declaration prior to asking for an arbitration reference, even though it said
“without prejudice to the arbitration agreement,” the same was deemed insufficient to counteract the effect of
an arbitration waiver.
Hence, when establishing whether a party has waived a right, the party’s actions must be taken into account.
Any action done to terminate an interim order has been ruled not to constitute a waiver in the context of interim
orders.
Contrary to Section 8 of the Arbitration and Conciliation Act, Section makes no clear mention of the court’s
authority to decide whether an arbitration agreement is genuine. Nonetheless, it has been determined that the
phrase “presence of arbitration agreement,” as it appears in Section 11 of the Arbitration and Conciliation Act,
also refers to the agreement’s legality, and that the scope of the court’s judicial review under the two provisions
is the same. The Arbitration and Conciliation Act’s Section 11 does not, however, set a deadline by which any
challenge to the existence of the arbitration agreement must be made. In the absence of such a limit, a party
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may be required to raise an objection without undue delay in accordance with Section 4(b) of the Arbitration
and Conciliation Act. Delay has been taken into account in petitions filed under Section 11 of the Arbitration and
Conciliation Act where a party has been barred from raising concerns regarding the arbitrability of the dispute
after having failed to do so earlier.
It can be claimed that in the absence of a set period of time, the proper deadline for raising an objection will
depend on the specific facts and circumstances of the case.
The reasons for contesting the appointment of an arbitrator are outlined in Section 12 of the Arbitration and
Conciliation Act, while Section 13 outlines how to do so. According to the aforementioned requirements, a party
who wants to contest the appointment must do so within the following time frames:
(a) as specified in the agreement; or,
(b) within fifteen days after the day the tribunal is established or the party learns of the conflicting
circumstances.
However, if a party who participated in the appointment of an arbitrator learns of the circumstances after the
appointment, he is not prohibited from making an objection under Section 12 of the Arbitration and Conciliation
Act. Depending on the circumstances surrounding the ineligibility, a party’s right to object to the establishment
of Section 12 of the Arbitration and Conciliation Act may need to be waived.
While waiver under Section 4 of the Arbitration and Conciliation Act includes circumstances of deemed waiver
by behaviour, the Hon’ble Supreme Court has made it clear in Bharat Broadband Network Ltd. v. United Telecoms
Ltd. that the waiver under Section 12(5) of the Arbitration and Conciliation Act requires an express written
agreement between the parties. The Hon’ble Court also ruled that Section 4 of the Arbitration and Conciliation
Act would not be applicable due to the clear language in Section 12(5) of the Arbitration and Conciliation Act.
Hence, a party cannot be regarded to have forfeited its right to object under Section 12(5) of the Arbitration and
Conciliation Act because it is an obligatory provision by simply taking part in an arbitration case or by declining
to object.
The Supreme Court held that the principle of waiver would not be applicable even in the case where a party did
not raise the objection before the Arbitral Tribunal under Section 16(2) of the Arbitration and Conciliation Act but
did so in the earlier proceedings under Section 11 of the Arbitration and Conciliation Act that were still pending
appeal. As a result, it would seem that a party who was made aware of the arbitration procedures but elected
not to participate in them and has not brought up the issue at any point before the petition under Section 34 of
the Arbitration and Conciliation Act is presumed to have relinquished its right to object.
The subject of waiver often leads to disputes, particularly when one party seeks to capitalize on the other
party’s delay during arbitration proceedings. This problem is more prevalent in India, where ad hoc arbitration is
common and institutional arbitration is just starting to gain traction. To address this issue, one solution could be
to transition to institutional arbitration, as it provides a more defined process and institutions have mechanisms
in place to handle waiver-related issues.
Determining the appropriate level of stringency for waiver rules is not a straightforward matter. On one hand, a
waiver can extinguish a party’s right, but on the other hand, it should not reward or fail to penalize a party for
their lack of diligence. To strike a balance between the two and promote efficiency, a more rigorous system of
costs could be introduced, as provided for in the Act but not yet fully implemented. If a party wishes to dispute
a waiver, they should bear appropriate costs. Ultimately, the law must ensure justice is served, and arbitration
proceedings cannot ignore this principle. Indian courts should strive for a pro-arbitration stance by minimizing
their interventions. However, when a party’s lack of diligence requires court intervention to promote efficiency,
the consequences of costs cannot be ignored. Implementing such a system should encourage parties to be
more diligent and efficient, potentially rendering the issue of waiver moot over time. Ironically, this would be the
most fitting tribute to the provision
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ARBITRATION TRIBUNAL AND JURISDICTION ISSUES

Arbitral tribunal does not possesses statutory jurisdiction. Tribunal has the authority to adjust its jurisdiction
based on the parties’ requirements. The scope of the tribunal’s jurisdiction is primarily determined by the arbitral
agreement.
The principle of party autonomy emphasizes that when two parties have the ability to settle their disputes
independently, they also have the right to demonstrate this ability to any third party in order to openly establish
their disagreement. Therefore, it is crucial to consider a carefully crafted agreement as it empowers the tribunal
to determine matters related to jurisdiction.
Section 17 of the Arbitration and Conciliation Act, 1996 specifically mentions the jurisdiction to decide specific
matters. Some instances where the competence of the arbitral tribunal is dependent on resolving questions
include appointing a guardian for someone who is of unsound mind or a minor during the arbitration process,
ensuring the safety and security of the subject matter of the arbitration, and issuing provisional injunctions.
The arbitral tribunal has the authority to determine and regulate its own jurisdiction, including any challenges
to the existence or validity of the arbitration agreement, for which purpose The arbitration clause, as a part of
the contractual agreement, should be considered a separate and independent agreement from the other terms
of the contract; and an arbitral tribunal’s decision that the contract is void does not automatically invalidate the
arbitration clause.
A party cannot raise a plea claiming that the arbitral tribunal lacks jurisdiction after submitting their defence
statement. If a party alleges that the arbitral tribunal is exceeding its authority, they must raise the plea as soon
as the matter in question arises during the arbitral proceedings. If a party is dissatisfied with the arbitral award,
they can apply for the award to be set aside under Section 34.
The previous Arbitration Act did not allow the Arbitral Tribunal to determine its own jurisdiction However, now
Section 16 empowers the Arbitral Tribunal to regulate its own jurisdiction. Section 16 of the Act also encompasses
the principle of competence-competence, which has two aspects: first, it allows the tribunal to decide on its
jurisdiction without seeking approval from the courts, and second, it emphasizes the court’s reluctance to decide
on the issue before the tribunal has ruled on it.
In some instances, an arbitration agreement may not be a standalone document, but instead may be included
as a clause within a larger agreement or contract between the parties. If the larger contract is deemed illegal or
void, the question arises as to whether the arbitration clause embedded within it also becomes void.
However, after the enactment of the Arbitration and Conciliation Act in 1996, Section 16(1) declared that the
arbitration clause, even if embedded in a contract, is considered separate and independent from the rest of the
contract. Thus, an invalidity determination of the larger contract by the Arbitral Tribunal does not necessarily
invalidate the arbitration clause.
The law provides certain remedies to ensure proper and efficient conduct of arbitration proceedings. The
repealed Arbitration and Conciliation Act, 1940 provided three remedies against an arbitration award-
modification, remission, and setting aside. These remedies have been further amended by the Arbitration and
Conciliation Act, 1996, and are now divided into two parts. The remedy for rectification of errors has been given
to the Tribunal and the parties to decide. The remedy for setting aside the award has also been amended, and
the award will now be returned to the tribunal for removal of defects.
Section 34 provides some grounds for setting aside an arbitral award, including an invalid agreement,
incongruity, inefficiency on the part of one of the parties, incapacity in the subject of the arbitration process,
opposing public policy, and discrepancies in the appointment of the arbitrators.
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UNDERSTANDING THE COMPETENCE-COMPETENCE PRINCIPLE

At the core of the principle of Competence-competence is the power to determine jurisdiction. If there is no
challenge to the arbitral tribunal’s Competence-competence decision, it takes effect within the state of the seat,
and the resulting award is recognized under the New York Convention in the same way as an award from an
arbitral tribunal whose Competence-competence was challenged before the courts of the seat but upheld.
Any limitation of Competence-competence over a question for which jurisdiction may potentially be exercised
will be used by respondents to delay and complicate the proceedings. Relying solely on the will of the parties
is logically insufficient to encompass Competence-competence determinations on the operability of such will
and to give effect to arbitral decisions denying jurisdiction due to the inoperability of party will.
Regarding the principle of Competence-competence in India, it is important to consider the extent of powers
exercised by a judicial authority when appointing an arbitrator under Section 11 of the Arbitration and Conciliation
Act, 1996. This scope has been subject to constant changes over time.
Before the Arbitration and Conciliation (Amendment) Act, 2015, the section’s wording did not provide much
clarity on the matters that could be reviewed when granting or denying an application under Section 11.
The scope of powers exercised by a judicial authority appointing an arbitrator under Section 11 of the Arbitration
and Conciliation Act, 1996, which has been constantly evolving, is relevant in the context of the principle of
competence-competence.
The scope of power exercised under Section 11 - case of SBP & Co. v. Patel Engineering Ltd., as follows:
(a) determining whether there is a valid arbitration agreement between the parties;
(b) determining whether the party which has made the request under Section 11, is a party to the arbitration
agreement; and
(c) whether the party making the motion had approached the appropriate High Court.
The court pointed out that the Competence-competence principle would only apply if the parties had gone
to the Arbitral Tribunal without recourse to Section 8 or 11 of the Act. If jurisdictional issues are decided under
these sections before a reference is made, Section 16 cannot be used by the Arbitral Tribunal to ignore the
decision given by the judicial authority. The court held that the finality conferred on an order passed prior to the
reference by the statute that creates it cannot be reopened by the arbitrator during the proceeding before the
tribunal. Therefore, the case undermined the importance of the Competence-competence principle enshrined
in Section 16 of the Act.
As a result of this case, the Law Commission in its 246th report recommended that the scope of judicial
intervention under Section 11 should be restricted to only examining the existence of the arbitration agreement.
This recommendation was incorporated through the insertion of Section 11(6A) by the 2015 amendment.
The purpose of this doctrine - minimize judicial interference in disputes submitted to the tribunal by parties.
Case of Duro Felguera S.A. v. Gangavaram Port Ltd. also upheld the same.
When there is a jurisdictional issue and a determination of competence, the question of limitation often arises.
Hon’ble Supreme Court held in Pandurang Dhoni Chougule v. Maruti Hari Jadhav that “a plea of limitation is a
plea of law which concerns the jurisdiction of the court which tries the proceedings, as a finding on these pleas
in favour of the party raising them would oust the jurisdiction of the concerned court.”
The Supreme Court in Uttarakhand Purv Sainik Kalyan Nigam Ltd. v. Northern Coal Field Ltd. has ruled that if an
application under Section 11 is rejected on the grounds of limitation, the issue should be left for determination
by the arbitrator.
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However, there are exceptions to this doctrine, such as when the arbitration agreement is procured by fraud or
deception, or when parties have only entered into a draft agreement as a proposal to arbitrate.
19.03.2024 NBCC (India) Limited versus Zillion Infra Projects Pvt. Ltd. Supreme Court
Reference in one contract to the terms and conditions of the other contract would not ipso facto make the
arbitration clause applicable unless there is a specific mention/reference thereto
Facts
The appellant, NBCC (India) Limited is a Government of India undertaking, engaged in construction of power
plants and other infrastructure projects. The respondent, M/s Zillion Infraprojects Pvt. Ltd. is engaged in the
construction and infrastructure sector. The appellant issued an Invitation to tender majorly for Construction
of the Weir. The Respondent submitted the bid and appellant awarded the contract for Construction of the
Weir to the respondent. A dispute arose and the respondent issued a notice invoking arbitration and further
seeking consent for the appointment of a former Judge of a High Court, as Sole Arbitrator. The appellant did
not respond so the respondent filed an application at the High Court under Section 11(6) of the Arbitration
Act. The High Court confirmed the proposed appointment of the former Judge of the Delhi High Court, as the
Sole Arbitrator. Aggrieved by the orders, the appellant filed the appeals before Supreme Court.
Issue
Learned Senior Counsel inter alia submitted before the Supreme Court that a mere reference to the terms
and conditions without there being an incorporation in the L.O.I. would not make the lis between the parties
amenable to the arbitration proceedings. Relying on the judgment of Supreme Court in the case of M.R.
Engineers and Contractors Private Limited vs. Som Datt Builders Limited, he submitted that unless the L.O.I.
specifically provides for incorporation of the arbitration clause, a reference to the arbitration proceedings
would not be permitted in view of the provisions of sub-section (5) of Section 7 of the Arbitration Act.
Decision
The Hon’ble Supreme Court held that:
“when there is a reference in the second contract to the terms and conditions of the first contract, the arbitration
clause would not ipso facto be applicable to the second contract unless there is a specific mention/reference
thereto.
We are of the considered view that the present case is not a case of ‘incorporation’ but a case of ‘reference’.
As such, a general reference would not have the effect of incorporating the arbitration clause. In any case,
Clause 7.0 of the L.O.I., which is also a part of the agreement, makes it amply clear that the redressal of the
dispute between the NBCC and the respondent has to be only through civil courts having jurisdiction of Delhi
alone.”
For details: https://www.sci.gov.in/wp-admin/admin-ajax.php?action=get_judgements_pdf&diary_no=1274
72021&type=j&order_date=2024-03-19
LESSON ROUND-UP
l Arbitration is a form of alternative dispute resolution where parties agree to have their dispute heard
and resolved by an impartial third-party arbitrator or a panel of arbitrators, instead of going through
traditional court litigation.
90
l Pre-arbitral process refers to the preliminary procedures that parties engage in before initiating formal
arbitration proceedings. This phase is crucial in resolving disputes outside of the court system, as it
provides an opportunity for parties to come to a mutual agreement before committing to the time and
expense of arbitration.
l A counterclaim is a claim made by the respondent against the claimant in response to the original
claim, seeking relief for damages or losses caused by the claimant’s actions or omissions related to
the same dispute.
l The appointment of arbitrators is an essential element of the arbitration process, as it involves the
selection of a neutral third party who is responsible for resolving disputes between the parties.
l The appointment of arbitrators is an essential element of the arbitration process, as it involves the
selection of a neutral third party who is responsible for resolving disputes between the parties.
l The parties are allowed to choose any arbitrator(s) they want for any arbitration procedure. The
arbitrators, however, cannot represent the parties as this would raise legitimate concerns about their
independence or impartiality.
l Section 23 of the Arbitration and Conciliation Act, 1996 provides for the fixation of issues by the arbitral
tribunal after consulting with the parties.
l An arbitration tribunal’s decision in an arbitration action is known as an arbitral award. The award may
grant the parties a range of relief, including monetary compensation, consent, injunctions, and other
types of relief. The type of the award—interim, partial, or final—depends on the dispute.
l The arbitrator shall fix the time and place of the arbitration in accordance with Section 20 of this Act if
the parties cannot agree on such dates and places.
GLOSSARY
Arbitral process - Procedures and steps involved in resolving a dispute through arbitration.
Case management conference - meeting held between the parties involved in an arbitration to discuss and
establish a framework for the arbitration process.
Notice of Arbitration: A formal written notice sent by one party to another, invoking the arbitration clause in
the agreement and requesting the commencement of arbitration proceedings.
Claim: A demand or request for relief, compensation, or damages made by one party against another in a
dispute.
Respondent: The party against whom a claim is made in an arbitration proceeding.
Legal or Chronological Bar: A legal or procedural restriction that prevents a claim or defense from being
pursued, either due to the passage of time or other legal requirements.
Appointment of Arbitrator: The process of selecting an arbitrator by the parties or a designated institution
to hear and decide on a dispute in an arbitration proceeding.
Unilateral Appointment: The appointment of an arbitrator by one party without the agreement of the other
party.
Disqualification of an Arbitrator: The removal or rejection of an arbitrator from serving on an arbitration
panel, usually due to a conflict of interest, bias, or lack of qualifications.
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Qualified Individual: An arbitrator who possesses the necessary knowledge, skills, and experience to hear
and decide on a dispute in an arbitration proceeding.
Fillings of pleadings: Statements of claim and statement of defense are the primary fillings of the arbitration
proceeding. These statements are typically exchanged in written procedures. The parties may agree upon
the quantity, order, and deadlines for submitting written pleadings. Unless specifically stated differently, the
respondent may also submit a counterclaim.
Single-arbitrator ad hoc arbitration: An ad-hoc arbitration process in which parties agree to appoint a
single arbitrator to resolve their dispute.
Panel-arbitrator ad hoc arbitration: An ad-hoc arbitration process in which parties agree to appoint a panel
of arbitrators to resolve their dispute.
Experts: Individuals designated by the arbitrator(s) to provide their expertise on a specific subject.
Oral Hearing: A hearing where witnesses and experts are questioned by the parties and the arbitrator(s).
Oath: A solemn promise to tell the truth.
TEST YOURSELF
1. What are the limitations of the arbitrator’s authority in issuing interim orders under Section 17 of the
Arbitration and Conciliation Act of 1996 in India?
2. What is the principle of party autonomy and how does it relate to the determination of jurisdiction in
arbitration?
3. What is the difference between “waiver” and “estoppel” according to Indian courts, and what is the
prerequisite for the general application of the principle of waiver under the Arbitration and Conciliation
Act, 1996?
4. What are the grounds on which an arbitral award can be challenged according to the Arbitration and
Conciliation Act, 1996?
5. What are the Powers and Duties of Arbitrator?
l Commercial Arbitration - International Trends and Practices by Chirag Balyan & Yashraj Samant.
l International Arbitration Law and Practice by Gary. B. Born
l Avtar Singh’s Law of Arbitration and Conciliation and Alternative Dispute Resolution (ADR) Systems by
Saurabh Bindal
l Dr. P.C. Markanda Arbitration: Step by Step by Naresh Markanda, Rajesh Markanda and DR. P.C.
Markanda
l Everything You Need To Know About Arbitration by Tariq Khan
92
Arbitral Proceedings, Pleadings Lesson
and Evidence 4
KEY CONCEPTS
n Written Submissions n Statement of Claim n Statement of Defence n Counterclaim n Rejoinders n Facts in Issue
n Collateral Facts n Relevant Facts n Relevance n Witness Statements n Cross-Examination n Documentary
Evidence
Learning Objectives
To understand:
 The rules relating to Written Submissions
 Preparation of the Statement of Claim
 Preparation of the Defence
 Preparation of Counter Claims
 Oral Hearings
 Rules of Evidence In Arbitration
 Obligations and Accountabilities of Expert Witnesses
 Court Aid in taking Evidence
 Filing of the Evidence through Affidavit
 Method of drafting an Affidavit
Lesson Outline
 Introduction  Assessing Evidence
 Written Submissions  Weightage of Evidence
 Statement of Claim  Impeaching Credibility
 Statement of Defence  Proof of Statements contained in Documents
 Counterclaim  Witnesses of Fact
 Rejoinders  Witness Statements
 Disclosure of Evidence  Cross-examination
 Oral Hearings  Re-examination
 Evidence  Expert Witnesses
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PP-AM&C Arbitral Proceedings, Pleadings and Evidence
 Duties and Responsibilities  Understanding the Practical approach for

presenting Evidence on Affidavit
 The expert’s Report
 Adducing Evidence under Section 34 of the
 Ascertaining the Facts
Arbitration act
 Admissibility and Weight of Evidence
 Drafting an Affidavit
 Court assistance in Taking Evidence
 Affidavit
 Relevance or Weight Hearsay Evidence
 Statement of Claim & Defence
 Documentary Evidence
 Lesson Round-Up
 Burden of Proof
 Glossary
 Statute
 Test Yourself
 Contract Terms
 Standard of Proof
 Evidence by Affidavit Links)
 Relevant provisions of filing an Evidence on
Affidavit
l MSMED Act 2006
INTRODUCTION
Fact-finding is an important task of the tribunal, and nowhere in the arbitral procedure is the cultural contrast
more vivid than in the presentation of evidence. The civil law culture tends to prefer contemporaneous
documents or, at least, written statements by witnesses. Professionals usually do not assist in the preparation
of these statements. On the other hand, the common law tradition favours oral testimony, where the decision-
maker can observe the demeanour of the witness.
The arbitration tribunals do not tend to follow strict rules of evidence found in common law countries. They also
tend to favour documentary evidence. It is rare for a tribunal to exclude relevant evidence, although they may
give it different weight, depending on its source. The burden of proof will generally be with the party alleging
a particular fact.
The standard of proof is akin to the common law’s civil standard of ‘balance of probabilities’ rather than the
strict ‘beyond reasonable doubt’ used in criminal cases.
The Arbitrators are the masters of their own procedure and may conduct arbitral proceedings in a manner
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Arbitral Proceedings, Pleadings and Evidence LESSON 4
they consider appropriate. It is a settled law that arbitrators are not bound by the technical rules of evidence
as observed by the courts. Section 191 of the Act clearly states that the Arbitral Tribunal shall not be bound by
the Code of Civil Procedure, 1908, or the Indian Evidence Act, 1872. The power of Arbitral Tribunal to conduct
arbitral proceedings includes the power to determine the admissibility, relevance, materiality and weight of any
evidence. Thus, the relevancy or admissibility of a particular fact is to be decided by the Arbitral Tribunal as per
its own good sense, and reference to the statutory provisions are not necessary.
However, this does not imply that the arbitrators are not bound by rules of evidence and fundamental
principles of natural justice. In Hindustan Shipyard Limited Vs. Essar Oil Limited and Ors2., the Andhra
Pradesh High Court has categorically stated that parties are free to agree on the procedure to be followed
by the Arbitral Tribunal. When such procedure is not fixed, the Arbitral Tribunal has to follow the statutory
procedure; it means it has to weigh the entire evidence on record properly and that it has to come to a
just conclusion within the parameters of the dispute. It has been held that the principles of natural justice,
fair play, equal opportunity to both the parties and to pass order, interim or final, based upon the material/
evidence placed by the parties on the record and after due analysis and/or appreciation of the same by
giving proper and correct interpretation to the terms of the contract, subject to the provisions of law, just
cannot be overlooked. It has been further held that parties, by consent, may adopt their own procedure
for conducting arbitration. An Arbitral Tribunal is not a Court. Any lacuna in procedure does not vitiate the
Award, unless it is in breach of principle of natural justice, equity or fair play for the aggrieved parties. It has
been reiterated by the Bombay High Court in Vinayak Vishnu Sahasrabudhe v. B.G. Gadre3 and Ors. that
though the Arbitration Act does not provide for the procedure to be followed by the arbitrators, even so,
the Arbitrators are bound to apply the principles of natural justice.
The power to decide the relevancy and admissibility of evidence is the sole jurisdiction of the Arbitrator.
The Arbitrator is the judge of the quality and quantity of evidence that is produced by the parties. By
virtue of this power, an arbitrator can call for additional evidence too, if it will be helpful for him to decide
upon the dispute. But the exercise of this power has to be circumscribed within the fundamental principles
of natural justice. It must be exercised cautiously and for some legitimate cause and not as a matter of
routine. As stated by the Delhi High Court4, you cannot win battles by springing surprises. It means that the
Arbitrator is free to call for additional evidence at a belated stage of the arbitral proceedings as long as it
does not cause prejudice to the other party. It would be unfair if parties are permitted to plead and proof at
variance. If permission to lead evidence is ordinarily allowed, it will be impossible to conclude the hearing
of any arbitral proceedings.
This chapter explains in detail about the ARBITRAL PROCEEDINGS, PLEADINGS AND EVIDENCE and the best
practices being followed in India.
PART A - SUBMISSIONS DURING THE ARBITRATION
WRITTEN SUBMISSIONS
Written submissions are often referred to as pleadings. There is no required form and different legal traditions
may treat the submissions differently. Whatever their format, their purpose is the same: they allow each side to
know what the other party’s contentions are in order to address them in their own written submissions and at
the evidentiary hearing.
1. 19. Determination of rules of procedure.—(1) The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) or the
Indian Evidence Act, 1872 (1 of 1872).
2. 2005 (1) ALD 421, 2005 (1) ALT 264, 2005 (1) ARBLR 454 AP
3. AIR 1959 Bom 39, ILR 1959 Bom 87
4. Delhi Development Authority Vs. Krishna Construction Co. 183 (2011) DLT 331 (DB) at para 19
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The old term ‘pleading’ referred to a traditional court style pleading that set out the case of the claimant to be
answered by the respondent. It was written in typical litigation-style language and was written as a persuasive
document rather than having the primary purpose of defining the issues which the arbitrator is to determine.
It is for the arbitrator to decide when and how these pleadings are to be ‘filed’ or ‘served’ (sent simultaneously
to the tribunal and to the other parties). The tribunal will usually do this at the procedural hearing after hearing
the parties’ comments, and then notify the procedural calendar to everyone.
Written pleadings are usually exchanged sequentially, so that the claimant fires the first shot, the statement
of claim, and the respondent answers with the statement of defence (and counterclaim, if any). Exceptionally,
however, the arbitral tribunal may direct that the parties should submit their written pleadings simultaneously,
so that each party delivers a written submission of its claims against the other on a set date, and then, on a
subsequent date, the parties exchange their written answers and so forth.
The order in which the statements are filed is very important. Firstly the claim is filed simultaneously with
the arbitrator and the respondent. Then the defence with any counterclaim is filed simultaneously with
the arbitrator and the claimant; and then the reply to the defence and the defence to the counterclaim
is simultaneously filed with the arbitrator and the respondent; and finally any reply to the defence to the
counterclaim is simultaneously filed with the arbitrator and the claimant. Although this sounds confusing it
is quite a simple progression and enables each party to consider the claims, defences and arguments of
the other party.
Whilst simultaneous exchanges can reduce the overall duration of the written phase, they are more likely to
lead to the arbitral equivalent of ‘ships passing in the night’. For this reason, simultaneous exchange remains
less common than sequential exchange for pre-hearing submissions.
The Arbitration and Conciliation Act stipulates the submission requirements as follows:
23. Statements of claim and defence.—
(1) Within the period of time agreed upon by the parties or determined by the arbitral tribunal, the claimant
shall state the facts supporting his claim, the points at issue and the relief or remedy sought, and the
respondent shall state his defence in respect of these particulars, unless the parties have otherwise
agreed as to the required elements of those statements.
(2) The parties may submit with their statements all documents they consider to be relevant or may add a
reference to the documents or other evidence they will submit.
[(2A) 5
The respondent, in support of his case, may also submit a counterclaim or plead a set-off, which shall
be adjudicated upon by the arbitral tribunal, if such counterclaim or set-off falls within the scope of the
arbitration agreement.]
(3) Unless otherwise agreed by the parties, either party may amend or supplement his claim or defence
during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to
allow the amendment or supplement having regard to the delay in making it.
(4) 6
The statement of claim and defence under this section shall be completed within a period of six months
from the date the arbitrator or all the arbitrators, as the case may be, received notice, in writing of their
appointment.
The delivery of the claim, the defence (and counterclaim, if any) and any reply to the defence (and defence to
the counterclaim, if any and reply to the defence to the counterclaim, if any) completes the pleadings stage of
a reference.
5. Ins. by Act 3 of 2016, s. 11 (w.e.f. 23-10-2015)

6. Ins. by Act 33 of 2019, s. 5 (w.e.f. 30-8-2019).
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STATEMENT OF CLAIM
A statement of case, also called a statement of claim, will set out the duty owed (either in tort or in contract), the
alleged breach of that duty, and the consequent damage. The arbitral tribunal may require that the claimant
file, either simultaneously with the statement of case or shortly thereafter the documents relied upon by the
claimants, the evidence of witnesses, and a statement of the law relied upon.
The statement of claim must contain all the factual matters relied upon and refer to the evidence in support
of those factual claims linked with any contention of law relied upon, together with an itemisation of the relief
claimed including interest and costs.
Though the sequence of events appears that statement of claim as a precedent act, in case of interim relief it is
not mandatory; Statement of Claim not sine qua non to Filing an Application under Section 17 of the Arbitration
Act.
It should be noted that post the 2015 Amendment, the powers of the Arbitral Tribunal under Section 17 of the
Arbitration and Conciliation Act, 1996 (“Act”), are at par with and akin to the powers of the Court under Section 9
of the Act. Whilst the non-filing of the Statement of Claim did not serve as an impediment to the Courts granting
interim reliefs under Section 9, the question on whether an Arbitral Tribunal is empowered to grant interim reliefs
under Section 17 in the absence of a Statement of Claim remained unclear.
The Hon’ble Delhi High Court has in the matter of Sanjay Arora and Anr. v/s. Rajan Chadha & Ors.7, put the above
controversy to rest and opined that an Application for interim reliefs preferred under Section 17 of the Act need
not mandatorily be preceded by filing of the Statement of Claim.
Interestingly, the view taken by the Delhi High Court deviates from the one taken by the Hon’ble Bombay High
Court in as much as the latter has held that filing of the Statement of Claim is sine qua non to preferring an
Application under Section 17.
Pertinently, after the 2015 amendment, the phrase “during the arbitral proceedings” was incorporated in Section
17. Section 21 of the Act stipulates that arbitral proceedings deem to commence on the date when a notice,
requesting for reference of the dispute to arbitration is issued by one party to another, thereby implying that
arbitral proceedings commence even before the Arbitral Tribunal is constituted as the notice invoking arbitration
would necessarily be prior in point of time.
On perusing the above referred provisions in unison, the Hon’ble Court observed that they empower the Arbitral
Tribunal to pass orders in terms of Section 17 at any point of time and that post the 2015 amendment, filing of
the Statement of Claim, prior to moving the Arbitral Tribunal under Section 17, can no longer be regarded as a
mandatory requirement.
The amendment to the Statement of Claim:
Any party may seek to amend their claim after the commencement of an arbitration reference. There may be
consequences in terms of wasted costs for the other party in the dispute in dealing with any revision at an
advanced stage of the reference.
The arbitrator should consider whether the application to revise the claim is reasonable and timely. The
arbitrator does have a discretion to award costs against the party applying to amend their claim so that the
other party is restored (in terms of costs expended) to the position they would have been in had a party altering
their claim got it right first time.
Permission to amend should be granted when:
(a) relevant facts arise during the course of disclosure.
7. (2021 SCC Online Del 4619)
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(b) the amendment is to correct a mistake in the original submission;

(c) the amendment is to deal with a request for clarification or the provision of further and better particulars;
(d) to put a different legal argument on alleged facts;
(e) to raise new issues which have an impact on the issues already referred to the arbitrator.
It is a contentious issue whether to allow such amendments can be allowed after the initial submission before
the Arbitral tribunal. Delhi High court clarified this in the following case:
Rejection of additional claims by impugned order have all trappings of an arbitral award
Cinevistaas Ltd. vs. Prasar Bharti 8
Facts : The Petitioner, Cinevistaas Ltd., had undertaken production of a game show the telecast of which was
approved by Prasar Bharti, which is the public service broadcaster established under a statute. When Prasar
Bharti informed Cinevistaas that the show would not be aired, the latter triggered arbitration and a sole arbitrator
was also appointed by the High Court of Delhi upon an application made by Cinevistaas.
During the pendency of the arbitration, Cinevistaas moved an application before the arbitrator seeking permission
to correct two claims in its statement of claims. Through the correction, Cinevistaas sought to increase the claims
regarding losses incurred on account of concept development, research scripting and appointing technicians.
This application was dismissed by the arbitrator on 08.08.2009 on the ground of limitation. The arbitrator held
that the changes sought to be made by the application constituted additional claims and that the application
for incorporating such additional claims, was barred by limitation. It was this order of the arbitrator that was
challenged before the High Court.
Sequitur by the Court:
35. Arbitral proceedings are not meant to be dealt with in a straitjacket manner. Arbitral proceedings cannot
also be conducted in a blinkered manner. There could be various situations wherein, due to inadvertent or other
errors, applications for amendments/corrections may have to be moved. So long as the disputes fall broadly
within the reference, correction and amendments ought to be permitted and a narrow approach cannot be
adopted.
36. In the facts of this case, it is clear that the quantification of claims was done correctly in the notice invoking
arbitration, in the application under Section 11 as also in the writ petition filed by the Petitioner. The rejection of
the additional claims has in fact resulted in greater delay rather than expeditious disposal. The bona fides of
the Petitioner are not in question. Rejection of additional claims by the impugned order have all the trappings
of an award and hence the Section 34 petition is clearly maintainable.
37. It is, accordingly, held that the present petition is maintainable. Additional claims having been raised in the
first place in the notice invoking arbitration, the claims are not time barred by limitation as the commencement
of arbitral proceedings is governed by Section 21 of the Act which stipulates that the notice invoking arbitration
constitutes commencement. Amended claim petition is, therefore, directed to be taken on record.
STATEMENT OF DEFENCE
The respondent’s defence will admit or deny each matter set out in the statement of case. If there is a denial, the
respondent must state what the correct position is alleged to be. The arbitrator may require the respondent’s
evidence and legal submissions to be set out in the same way as was required of the claimant.
The statement of defence prepared in answer must contain all factual matters and any contentious law upon
which the respondent intends to rely. It must also deal with each item in the statement of claim which the
8. (12.02.2019 - DELHC).
98
respondent may admit or deny and the grounds of fact and denial together with any other factual matters,
evidence or contentions of law on which the defence of the respondent is to be based.
COUNTER CLAIM
If the respondent brings a counterclaim, it will add to its Defence its own statement of case. The claimant must
then submit a Defence to the Counterclaim. The tribunal must ensure that the counterclaim arises out of the
same contract to which the arbitration agreement applies, and that it falls within the ambit of the arbitration
clause. The Model Law does not deal specifically with the issue of counterclaims arising out of a different
contract. In contrast, the English Arbitration Act has set out specific situations where an arbitral tribunal can
address these types of counterclaims. The tribunal can consider a counterclaim arising out of another contract
only if:
a. that other contract possesses a compatible arbitration agreement;
b. the arbitrator has also been appointed as arbitrator for the determination of the counterclaim from the
other contract; and
c. the ‘claim arbitration’ and the ‘counterclaim arbitration’ have been consolidated by the agreement of
the parties.
These criteria are typical of the considerations most courts and arbitral tribunals will weigh in deciding whether
the counterclaim is indeed a true counterclaim or, in fact, needs to go elsewhere for resolution.
When there is a delay in filing counter claim in an Arbitration – What is the remedy?
Delhi High Court, single judge, in the case of Airone Charters Private Limited v. Jetsetgo Aviation Services
Private Limited decided by High Court of Delhi on 12.10.2021 that the Petitioner’s counterclaims were struck off
before the Arbitral Tribunal (AT) on the ground of being filed at an extremely belated stage.
Thereafter, after attempting several different courses of actions to agitate its counterclaims, the Petitioner
finally filed the present Petition under Section 11 of the Arbitration & Conciliation Act, 1996, for referring its
counterclaims to arbitration by the already constituted AT (presumably because they already knew the
disputes very well).
The Court observed as follows:
1. The Claims of the Petitioner were prima facie appearing to be within limitation. In any case issues of
limitation and res-judicata which were raised by the Respondent would be looked into by the Arbitrator
once it was in seisin of the dispute.
2. The right to legal redress is a fundamental right and cannot be obliterated altogether. Therefore the
right of the Petitioner to raise its counterclaim could not be destroyed altogether, even though initially
it had been dismissed by AT being delayed, and as the time period of the arbitration was almost about
to expire.
3. The Petitioner has the choice of either raising its disputes as a counterclaim or by serving fresh notice
of dispute ( State of Goa v. Praveen Enterprises 9).
4. Simply because the counterclaims were alive at the inception of the first arbitral proceedings and were
required to be raised then, it cannot be said that they could not be permitted to be raised later, unless
the arbitration clause was specifically worded in that manner.
9. (2012) 12 SCC 581
99
(Distinguished Dolphin Drilling v. O.N.G.C. 10, and explained Gammon India Ltd. v. N.H.A.I11). Based on the above,
although the Court did not refer the disputes to the same AT, the Court appointed one of the arbitrator’s as the
Petitioner’s nominee, directed the Respondent to appoint its nominee and thereafter the two learned arbitrators
to proceed to appoint the presiding arbitrator.
The Court disposed off the petition with an observation that needless to say, if the parties would be agreeable
to the claims being decided by the existing AT, that would be the eminently advisable course to pursue, which
would aid in expeditious disposal of arbitral proceedings.
REJOINDERS
If the parties so desire and the tribunal considers it appropriate, there may be a Reply to the Defence (on both
claim and counterclaim), and perhaps a second, and even third round of written submissions. Good practice
demands that before ordering a second round of written submissions, the tribunal consider the cost of this
further step in relation to the importance and amount of the claim.
Further and better Particulars

It is frequently the position once the ‘statement of case’ has been served on a party that they wishes to receive
clarification on some of the matters covered. A request may be made by an application for ‘further and better
particulars’ and it is often the case that after further information is disclosed that some of the issues referred to
the arbitrator may be settled.
If the parties are unable to agree among themselves as to what additional information should be provided in
reply to the request then the matter will be referred to the arbitrator and this is usually done in an interlocutory
hearing or by a written application.
NO PLEADINGS?
In some instances, the parties may have been arguing by letter for several months. It may, in a simple
case, be possible to let these letters stand as the pleadings of the parties in order not to waste time
reiterating what the parties have already stated probably more than once. In some commercial arbitrations
concerning, for example, the quality of grain, there will be no written submissions (and possibly no oral
evidence or hearing). The arbitrator, an expert in the grain market, examines the grain by smelling, tasting,
touching, and handling. These ‘look and sniff’ arbitrations are still used to some extent but it is rare to
dispense with the written submissions.
DISCLOSURE OF EVIDENCE
Whatever form of procedure is adopted, it is for the arbitrator to rule on whether any documents or classes
of documents should be disclosed and produced by the parties, and when. The disclosure of evidence may
highlight the differing legal cultures of the parties, which, in turn, shape their expectations about what they must
disclose. In common law jurisdictions, the rule is that a party must disclose material evidence (and relevant
law), even if it is unfavourable to that party. In civil law jurisdictions, this obligation is not only unknown, it
may even be forbidden. Lawyers from some civil law jurisdictions can be disbarred for divulging information
unfavourable to their client. Finding the path between these conflicting obligations and expectations can be
one of the tribunal’s most delicate tasks.
It is a general rule in allowing any application for disclosure that a party may only see such particulars as
ought to have been in the original statement in the first place. Parties must be prevented from prolonging the
10. 2010 (3) SCC 267

11. AIR 2020 DELHI 132
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arbitration procedure and deliberately increasing costs by embarking on ‘fishing expeditions’ to discover facts
that are not central or relevant to the issues referred to the arbitrator.
Vital evidence may include hospital reports, a site agent’s diary, the general manager’s reports to head office,
emails between the parties, plans, graphs, working models, or the minutes of meetings. If a party is relying on
a document, it may be attached to the written submissions. If a party would rather the document never come
to light, it may try to avoid disclosure. If any important document or other evidence has not been disclosed, the
party wishing to see it may apply to the arbitrator for an order for its production.
Having heard submissions from the other side, the arbitrator may order that the document be made available
for inspection or that copies be delivered to the requesting party within a certain time limit. It is important to
realize that it may take some time to assemble the documents when establishing the timing of subsequent
procedural steps.
In practice, the usual format for dealing with requests for disclosure is the Redfern Schedule.
This is in the form of a chart with 4 columns:
Column (1): documents requested.
Column (2): reasons for request.
Column (3): objections to production.
Column (4): left blank for the decision of the tribunal on each request.
ORAL HEARINGS
Although the Arbitration and Conciliation Act, 1996 (‘the Act’) affords a non-absolute right to an oral hearing,
it follows from the wordings of Section 24 of the Act that the parties may agree to conduct the arbitration
without holding a hearing. It also follows that as a matter of public policy, that in any case, the requirement of
due process may not be waived. The presence of ‘due process’ is a fundamental characteristic to any arbitral
proceeding and documents-only arbitration is no exception.
It should be noted that there may arise allegations of due process violations when the right under Section 2412
is waived through the application of Section 29B. Let us consider a scenario where written arguments and
counter-arguments are duly submitted by Companies A and B respectively. A argues that B has over-valued its
losses, on three grounds. But the arbitrators base their calculation of damages payable on B’s arguments. Here,
A can contest the award in Court on the ground that the right to be heard and consequently due process, was
violated because the arbitrators failed to address A’s grounds against over-valuation. It is to be noted that there
are no rules of minimum duty prescribed for arbitrators and no other auxiliary rules of procedure. This might
prove sufficient for a court to annul the award but there is also scope for the alternative.
There may be other allegations of violation as well. For instance, in the Sukhbir Singh case the petitioner
had challenged the award of the tribunal on grounds of violation of natural justice. It was alleged that the
petitioner was not given a reasonable opportunity to cross-examine the witnesses on account of fabrication
of documents. The Court upon inspection found that the tribunal had not maintained the minimum standard
12. Section 24 of the A&C Act - Hearings and written proceedings. —(1) Unless otherwise agreed by the parties, the arbitral tribunal shall
decide whether to hold oral hearings for the presentation of evidence or for oral argument, or whether the proceedings shall be conducted
on the basis of documents and other materials:
Provided that the arbitral tribunal shall hold oral hearings, at an appropriate stage of the proceedings, on a request by a party, unless the
parties have agreed that no oral hearing shall be held:
[Provided further that the arbitral tribunal shall, as far as possible, hold oral hearings for the presentation of evidence or for oral argument on
day-to-day basis, and not grant any adjournments unless sufficient cause is made out, and may impose costs including exemplary costs on
the party seeking adjournment without any sufficient cause.]
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of rules of natural justice and hence the award was set aside. Possibilities of such instances of fabrication of
documents in documents-only arbitration, would not be favoured by the proviso under Section 24(1), leading to
a blatant violation of due process.
Though a mere possibility of abuse might be insufficient grounds for amendment, in order to avoid unconstitutional
stances by tribunals and inconsistent decision-making by courts, we believe that the question that needs an
answer through amendment of Section 24 is, what is due process in an arbitral proceeding?
Any procedure which indorses the ‘right to be heard’ of all concerned parties, may be termed as due process.
The scrutiny on processual matters must be placed only on whether the parties were afforded proper procedural
opportunities to present their case, and not on whether there was an oral hearing [The violation of a party’s right
to present its case is a ground for challenge under Sections 34(2)(a)(iii)13 and 48(b) of the Act].
Therefore, excluding the blanket application of Sections 34(2)(a)(iii) and 48(b), a clause similar to that prescribed
by Swiss law is imperative in the Indian context. The clause must read, “if in a proceeding under Section 29B,
the arbitral tribunal, does not take into account some statements of facts, arguments, evidence and offers of
evidence submitted by one of the parties which ought to be considerations in the decision to be issued it would
amount to the violation of due process”.
This amendment is needed to ensure unnecessary due process violation claims in documents-only arbitration,
such that, even in waiving the “oral hearing right”, the parties’ fundamental right to be heard, is in no manner
violated.
Oral evidence (testimony) and hearsay Testimony is an oral statement of a witness made on oath in a hearing.
This evidence is offered as evidence of the truth of what is said. This is normally direct evidence of matters of
which the witness has first-hand knowledge – what he experienced with one of his five senses: what he saw,
heard, said, did or smelt. This should be distinguished from hearsay evidence and circumstantial evidence.
Circumstantial evidence was discussed under relevant facts above. Hearsay evidence is discussed in more
detail below.
In Keane’s ‘The Modern Law of Evidence’, hearsay is defined as: “any statement, other than one made by a
witness in the course of giving evidence in the proceedings in question, by any person, whether it is made
on oath or un-sworn and whether it was made orally, in writing or by signs and gestures, which is offered as
evidence of the truth of its contents.” Of course, if the statement is to be introduced merely to prove that it was
made, rather than to prove that the contents are true, the statement will not be hearsay but ‘original’ evidence.
If the original evidence is relevant to a fact in issue, then it will be admissible.
EVIDENCE
Introduction
The arbitrator has a duty to properly consider the evidence presented by the parties in support of their claim,
defence or counterclaim. The arbitrator therefore needs a full understanding of the legal principles governing
the admissibility, reliability and weight that should be attached to any oral or documentary evidence presented
by the parties.
In the absence of an express agreement by the parties, the arbitral tribunal can, subject to Part I of the Arbitration
and Conciliation Act14, conduct the proceedings in the manner it considers appropriate. There is nothing in Part
I of the Arbitration and Conciliation Act prohibiting or limiting the arbitral tribunal’s power to order disclosure
of documents and attendance of witnesses. On the other hand, the courts have recognised that the arbitral
13. Section 34. Application for setting aside arbitral award. (2) An arbitral award may be set aside by the Court only if— (iii) the party making
the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to
present his case;
14. Section 19(3), of the A&C Act- Determination of rules of procedure.
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tribunal has the same powers as the courts with respect to discovery, inspection, and production of documents,
and summoning of witnesses.
If a direction issued by the arbitral tribunal directing production of documents by a party is not complied with,
the tribunal can draw an adverse inference from the conduct of the parties, or it can apply to the court under
section 27 of the Arbitration and Conciliation Act for assistance in taking evidence.
As per section 1 of the Indian Evidence Act, 1872 the said Act does not apply to proceedings before the Arbitrator.
Further, section 19(1) of the 1996 provides that Arbitral Tribunal shall not be bound by the Indian Evidence Act.
Thus the inapplicability of technical rules of evidence is statutorily recognized.
While provisions of the Evidence Act, 1872 do not in terms apply to arbitration proceeding, the principles of Law
of Evidence generally apply to arbitration proceeding. Section 18 of the 1996 Act insists that the parties shall be,
treated with equality and each party shall be given a full opportunity to present his case.
Under section 24 the parties are entitled to sufficient advance notice of any hearing and of any meeting of the
arbitral tribunal for the purposes of inspection of documents, goods or other property. Further, all statements,
documents etc. supplied to, or applications made to, the arbitral tribunal by one party is required to be
communicated to the other party, and any expert report or evidentiary document on which the arbitral tribunal
may rely in making its decision ought to be communicated to the parties.
Thus, the Arbitral Tribunal is bound to see that there is no violation of principles of natural justice and no
evidence is taken behind the back of any party or that no evidence is taken without allowing the other party to
scrutinize the same15. Similarly, if there is no evidence before an arbitrator or award is based on no evidence,
the Court can set aside such an award.16
The arbitrator can appoint one or more experts to report to it on specific issues and require a party to give the
expert(s) any relevant information or to produce, or to provide access to, any relevant documents, goods, or
other property for their inspection17. The tribunal can also order the expert(s) to participate in the oral hearings
where the parties have been given the opportunity to cross examine the expert(s) on their testimony.
The ‘Rules of Evidence’ is an important concept in the decision-making process in any tribunal, including
courts, arbitrations and adjudications. In court, the ‘rules’ are prescribed by the rules of court and in common
law jurisdictions the precedent decisions from the courts themselves are important. In arbitration, in some
jurisdictions, the ‘rules’ may be binding on the arbitrator as he sieves through the evidence in preparation of
the award. Although not always binding, the ‘Rules of Evidence’ provide an arbitrator with a valuable source of
guidance when reviewing the evidence offered in support of the parties’ various submissions; and assist him in
arriving at findings of fact (and law) and thereby reaching a decision on the issues. To properly appreciate the
‘Rules of Evidence’, it is essential to understand some of the basic concepts that underlie the law of evidence.
Therefore, this lesson explores evidence, as follows:
l The purpose of evidence.
l Basic concepts: facts, and types of evidence.
l The rules of evidence and their application.
The Purpose of Evidence

The word ‘evidence’ originates from the Latin term ‘evidentia’ which means ‘to show clearly, to discover clearly
and certainly, to ascertain or to prove’. Thus, evidence is something which serves to prove or disprove the
15. Union of India v. D. Bose AIR 1981 Cal 95

16. Delhi Development Authority v. Alkaram, AIR 1982 Del 365
17. Section 26 of the A&C Act- Expert appointed by arbitral tribunal
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existence or non-existence of an alleged fact. The party who alleges the existence of a certain fact has to prove
its existence, and the party who denies it has to disprove its existence, or prove its non-existence.
All facts traditionally considered as evidence may not, however, be evidence in the eyes of the law. Rather,
evidence is something presented before the court for the purpose of proving or disproving the issue in question.
In other words, evidence is the means by which a party satisfies the court of the truth of a disputed fact between
the parties.
Evidence is defined in Keane: The Modern Law of Evidence as: “Information by which facts tend to be proved,
and the law of evidence is that body of legal rules regulating the means by which facts may be proved in courts
of law and tribunals and arbitrations in which the strict rules of evidence apply.”
The purpose of presenting evidence is to assist a tribunal in determining disputed areas of fact and disputed
issues of opinion (expert evidence). The law of evidence is the body of legal rules developed, and in some
jurisdictions enacted, to govern:
a. Facts that may be considered in court. This is the issue of relevant evidence that may be adduced
before the court to support an allegation:
i. Facts in issue; and
ii. Facts relevant to the facts in issue;
b. The methods of securing the consideration of these facts:
i. By proof through real evidence or documentary evidence;
c. Facts which need not be proved:
i. Judicial notice of facts which are so notorious in public knowledge or are capable of being verified
by authoritative texts;
ii. Judicial admission – facts admitted in pleadings, in open court, in examination of witnesses, in
testimony etc.
d. The party that must secure the consideration of which facts, the burden of proof and the degree of
proof required to win the case. The function of controlling the flow of evidence is, from the arbitrator’s
perspective, one of procedure and good management. It is vital to ensure that the time is used efficiently,
and party representatives bear a heavy burden to ensure the evidence is placed before the arbitrator
in a relevant, understandable, logical and effective manner. It greatly assists the arbitrator if the parties
ensure that only evidence referred to in the submissions themselves is included, and it obviously helps
if documentary evidence is provided in chronological order, paginated and annotated in the submission
that it supports.
Basic Concepts - Facts

There are three types of facts, discussed below, that may be proved or disproved by evidence:
Facts in issue
Facts in issue are also referred to as the ‘principal’ facts. These are facts that the referring party must prove to
succeed. So, where for example the responding party denies a contractual relationship, the principal facts the
referring party must prove are those that establish the formation of the contract between the parties, a breach
and the loss suffered.
In an allegation of negligence where the responding party denies the breach of duty, the facts in issue are those
that would establish a breach and the resulting causal link to the damages claimed. In an arbitration, the facts in
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issue should be capable of being identified in the referral notice, one purpose of which (in a well-ordered claim)
is to set out the terms of the dispute and what aspects the parties do not dispute.
Relevant facts
Relevant facts are the facts which are to prove that the ‘fact in issue’ exists. This type of evidence is additionally
referred to as ‘circumstantial evidence’. This can best be explained by the use of a criminal law example. If the
fact in issue is whether A shot X, an eyewitness would be the best way to prove the facts in issue. However,
if such evidence is unavailable, the fact that after the incident, a policeman found the gun in A’s car would
be a relevant fact that assists in proving the fact in issue. In an arbitration case, a fact in issue might be that
a cargo delivery was delayed. Useful evidence would be a document showing the arrival date, but if that
was not available, then a witness statement from the harbourmaster confirming the date of arrival would be
relevant.
Collateral facts
There are three types of collateral facts, discussed below:
l Facts regarding the competence of witnesses. For example, evidence to prove that a potential witness
is suffering from a mental illness and so would not be able to provide competent evidence.
l Facts regarding the credibility of a witness. A good example of this is the case of Thomas v. David [1836].
In this case, a witness denied in cross-examination that she was the mistress of a man in whose favour
she was giving evidence. Collateral evidence was allowed in order to contradict her testimony.
l Preliminary facts. These are normally facts relating to the admissibility of evidence. A good criminal law
example would be the rule that confessions must not be obtained through the use of oppression.
So, if a defendant claims to have been tortured, the court will hear evidence of this before deciding if the
confession is admissible. Types of Evidence There are four forms of evidence: real, demonstrative, documentary
and testimonial evidence. This section is concerned with the way these forms of evidence can be presented.
Real evidence As the name indicates, this type of evidence is usually a material object produced for inspection.
Sometimes, it is the characteristics of the thing that are relevant and may be of significant importance. For
example, in a case where the quality of the work is in issue, the defective work or materials will be ‘real evidence’.
Demonstrative evidence Demonstrative evidence can be used to supplement the evidence of a witness, such
as the use of e-maps or hand-drawn diagrams or photographs (regularly used in construction cases to capture
a moment in time in the process) to illustrate the scene of an occurrence. It is brought into evidence through
the testimony of the witness producing that evidence. The question that arises in dealing with demonstrative
evidence is whether the photograph, for example, is evidence of fact or merely adds weight to the testimony of
the witness who is giving the evidence of fact. The evidence that the witness is giving is that he saw the defect
and the photograph illustrates, or demonstrates what he saw.
THE RULES OF EVIDENCE IN ARBITRATION

An arbitral tribunal is independent of restrictions imposed by the adjective law, however, it is bound to follow
the fundamental principles of natural justice and in that event, must not disregard the rules of evidence which
are based on such principles. It was held by the Apex Court, in Mallikarjun v Gulbarga University18 that for the
purposes of constituting a valid arbitration agreement. Certain principles which are based on natural justice are
not necessary to be expressed in arbitration agreement as violation of such principles would result in unjust and
unfair procedure adopted by the arbitration tribunal.
18. [2003 (3) ARBLR 579 SC],
105
Now, if the arbitral tribunal is bound by fundamental principles of natural justice, Section 91 and 92 of IEA shall
apply to the arbitral proceedings. In Bengal Jute Mills Co. Ltd. vs Lal chand Dugar19, the Calcutta High Court
has held that the principles embodied under sections 91 and 92 of IEA lay down the principles of natural justice
and an arbitral tribunal is bound to follow such principles even though it is not bound by the IEA. These rules of
evidence are sometimes thought to be based on the ‘best evidence’ principle.
The rule of evidence contained under section 91 of IEA20 is regarded as the cardinal rule of evidence, not one of
technicality but of substance. It stipulates the rule that oral proof cannot be substituted for the written evidence
of any contract which the parties have put into writing. The reason behind this rule is that the writing is tacitly
considered by the parties themselves as the only repository and the appropriate evidence of their agreement.
Further, section 92 of IEA debars, from working into oral evidence, once the contract is executed in writing
except as provided in the provisos thereof.
In a court, the rules of evidence typically cover a number of topics including: the relevance and admissibility of
evidence; the burden of proof; the weight to be attached to different types of evidence; the order in which evidence
is given; privilege; hearsay evidence; written evidence and disclosure of documents; witness evidence (of fact) and
expert evidence (opinion). Whilst these ‘rules’ are not binding on an arbitrator, a proper understanding of evidence
and the concepts that underpin the ‘rules’ are essential for anyone intending to make decisions as an arbitrator.
To illustrate the evidential concepts in an arbitration, consider the questions an arbitrator must ask in the
analytical process by which he decides the facts of the dispute:
l What facts are alleged by the referring party?
l Which of these facts are disputed by the responding party?
l Of each disputed fact, which party has the burden of proof?
l In respect of each fact that is disputed, what evidence is adduced by the party who has the burden of
proof?
l Is the evidence in respect of any of the disputed facts incontrovertible?
l For those alleged facts not supported by incontrovertible evidence, what evidence does the party not
having the burden of proof have to rebut the allegation?
l Which party’s evidence does the arbitrator prefer?
The arbitrator has then made his decision as to the facts.
ASSESSING EVIDENCE
Circumstantial evidence
Circumstantial evidence can be oral, documentary or real. Pollock CB in R v. Exall [1866], compared circumstantial
evidence to a rope made up of several cords: “One strand of the cord may be insufficient to sustain the weight,
but three stranded together may be quite of sufficient strength. Thus it may be in circumstantial evidence –
there may be a combination of circumstances, no one of which would raise a reasonable conviction of more
than a mere suspicion; but the three taken together may create a conclusion of guilt which as much certainty as
human affairs can require or admit of.”
19. [AIR 1963 Cal 405]

20. S. 91 of IEA - When the terms of a contract, or of a grant, or of any other disposition of property, have been reduced to the form of a
document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given
in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself, or secondary
evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained.
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Relevance
There are several concepts that are fundamental to understanding evidence. One of these is relevance. The
rule is that all evidence that is sufficiently relevant to prove or disprove a fact in issue, which is not excluded by
any other rule of evidence, is admissible.
Though relevance is named as the first criterion for admission, in practice it is not easy to separate the wheat
from the chaff. Arbitrators are reluctant to limit the evidence that can be submitted and normally err toward
permitting parties to present evidence, including the introduction of materials of questionable relevance.
Arbitrators are mindful of the fact that their award can be set aside if a party was ‘unable to present the case’. It
should be emphasised that parties must only be afforded a fair opportunity for presenting their cases; this does
not mean that arbitrators are required to wait until a party actually avails itself of the right to be heard.
Thus, a party cannot insist on the admission of evidence that the tribunal considers irrelevant. However, it would
be unrealistic to rely fully on that way of thinking. National arbitration laws usually do not counterbalance that
basic principle of arbitral proceedings which protects the party’s right to be heard, so do not help arbitrators with
any special rules concerning relevance; therefore, unless the evidence is manifestly irrelevant, any irrelevancy-
based refusal to admit evidence submitted by a party is associated with significant risk. In essence, where a
piece of evidence does not prove or disprove an issue, it will be inadmissible. If the purpose of introducing
evidence to court is to try to prove facts, it stands to reason that only relevant evidence is allowed. If introduced,
irrelevant evidence would simply have the effect of adding confusion, rather than assisting with the resolution
of the matter between the parties.
Admissibility
When evidence is said to be admissible, it means that as a matter of law, the evidence is properly admitted to
the court. Of course, the first condition is that the evidence must be relevant. However, relevant evidence is not
always admissible, and it is necessary to appreciate that relevant evidence may be excluded. For example,
highly relevant evidence may be withheld as a matter of public policy on the grounds that disclosure would
jeopardise national security.
The main categories of inadmissible evidence are opinion evidence and privileged communications.
l When dealing with opinion evidence, we are not concerned with expert evidence but non-expert
evidence. There are special rules on the evidence of experts.
l Privilege rules can affect the admissibility of evidence. Privileged communications are confidential
conversations and documents passing between parties and their legal advisers (normally). Other than
questions of relevance, the major issues relating to admissibility of evidence in arbitration arise from
the application of the exclusionary rules, by which evidence that is relevant may be excluded. An
arbitrator has discretion as to the application of the law of evidence and this includes the possibility of
ignoring the exclusionary rules. However, an arbitrator should at the very least be cognisant of those
rules and of the prejudice that might be caused to one of the parties if they are not applied.
The concept of the general admissibility of relevant evidence is recognised in international arbitration. It was
largely taken from the common law tradition (eg. the USA evidence law with respect to admissibility establishes
one seemingly simple rule: all relevant evidence is generally admissible, evidence which is not relevant is not
admissible). Thus, generally speaking all relevant evidence is admissible in arbitration, except as otherwise
provided by mandatory rules, or by agreement of the parties. The concept of deciding to ‘admit’ or ‘exclude’
evidence gives a broad meaning to the term ‘admissibility’, that includes the evaluation and assessment of
evidence in deciding the case. Arbitrators admit evidence; that is why admissibility is the most general condition
for evidence to be admitted.
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Once a piece of evidence has been rendered inadmissible, that determination may serve as a ground for
it to be refused in admission, or excluded from evidence if already admitted. It is necessary to distinguish
between refusal or exclusion on purely procedural grounds (eg. non-compliance with the terms established
by the tribunal for submissions) and exclusion on the grounds of inadmissibility. The parties can agree, or the
tribunal can determine, that evidence must be submitted in a timely fashion; in that respect, the tribunal can set
a specific deadline for submission and can refuse any evidence submitted after that deadline.
Non-compliance with the deadline by the submitting party does not directly affect the properties of the
evidence and shall be dealt with as if it were a procedural issue, that is, evidence may be admitted
if procedural fairness is not prejudiced. A similar approach can be taken if a party requests leave to
exclude documents which were not exchanged. The arbitrators should not consider those documents to
be automatically inadmissible. Where documents were not exchanged in accordance with the rules of
procedure, the arbitrators may adjourn the hearing to afford the disadvantaged party a fair opportunity to
examine and comment on the documents.
WEIGHTAGE OF EVIDENCE
Another basic concept that should be considered at this stage is the weight of evidence. In civil litigation, it is
for the judge to consider relevance, admissibility and what weight ought to be given to the evidence. Unlike
admissibility, which is a question of law, weight is a question of fact. When we speak of weight here, it means
the cogency or probative worth of the evidence. This may be assessed by the judge applying common sense
and, of course, experience.
The following factors may assist:
l the extent to which the evidence is supported or contradicted by other evidence;
l in direct testimony, the demeanour, plausibility and credibility of the witness and all the circumstances
in which he claims to have perceived the facts in issue;
l in the case of hearsay, in England and Wales, the Civil Evidence Act 1995 gives guidance on specific
issues to be taken into account regarding weight. In essence, the judge must look at the evidence
before him and consider if it is both credible and reliable.
A witness may be credible, but his evidence may not be reliable. Honest witnesses may give evidence that is
inaccurate or mistaken. Weight, like relevance, is a question of degree. The evidence may be so weak that it
could not possibly justify finding in favour of the party introducing it, in which case it will be insufficient evidence.
On the other hand, the evidence may be so weighty that it could justify finding in favour of the party introducing
it, in which case there is sufficient evidence on the face of the matter. Finally, the weightiest possible evidence
will be regarded as conclusive evidence.
The practical issues regarding the weight to be attached to conflicting evidence are important to a practising
arbitrator. Where the evidence is in conflict, the arbitrator may wish to call those making the conflicting statements
before him in a meeting to help him make up his mind as to which one he believes. It is not always possible,
however, to decide from the demeanour of a witness whether he is telling the truth or not. In fact, sometimes the
most nervous of witnesses can be shown to have been telling the truth where the bare-faced liar appears to be
very convincing. What the arbitrator has to do in the circumstances is the same function as anyone who has to
consider evidence: he has to assess and test it for consistency and probability.
The basic approach is to have a framework of incontrovertible facts. This should always be done at the outset
of any consideration of evidence.
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IMPEACHING CREDIBILITY
Most pieces of legislation dealing with evidence permit evidence to be admitted for the purpose of attacking
or supporting the credibility of hearsay statements. This applies where the maker of the statement is not being
called to give evidence. Rules permit evidence that the maker of the statement has been convicted of a crime,
evidence of bias on the part of the maker in favour of the party adducing his statement and evidence that the
maker has made a previous inconsistent statement.
PROOF OF STATEMENTS CONTAINED IN DOCUMENTS

Some legislation, such as the Evidence Act Singapore, differentiates between documents, generally those
documents that form part of the records of a business or public authority. As to general documents, they allow
the production of the documents as evidence (always so long as it is otherwise admissible) and if the original is
not in existence, a copy, which the court may require to be authenticated.
WITNESSES OF FACT
When an arbitration is concerned with what actually happened, witnesses of fact can help to establish this. The
arbitrator has to determine whether these witnesses should attend the hearing and give evidence, or if written
statements will suffice. If a witness attends, the usual procedure is for the advocate presenting the witness to
elicit ‘direct evidence’ or ‘evidence in chief’, after which the counsel for the opposing party and the tribunal will
ask questions.
WITNESS STATEMENTS
If, as is often the case, witness statements are exchanged in advance of the hearing, the tribunal may decide
to use this in lieu of direct evidence. A copy of a party’s witness statement is supplied to the other side several
weeks or months before the hearing. With witness statements, the other side knows in advance the evidence
that it is required to accept, explain, or rebut and the hearing may be shorter if the witness statement is used in
lieu of direct evidence. What is usually to be avoided is the worst of both worlds - the duplication of procedures,
with both witness statements and direct evidence. A disadvantage of using witness statements is that they are
often prepared by lawyers so may not represent the unprompted view of the witness. Also, if a witness wants
to alter the statement after it has been filed, this may attract undue attention to the alterations. Generally,
witnesses will have a copy of the statement in front of them while testifying. Problems may arise when the
advocate calling a witness wants to ask questions to amplify points made in the witness statement or to add
new details. Opposing counsel may complain of ambush or surprise, and demand the opportunity to meet this
new evidence. It will be for the tribunal to decide how to deal with this.
CROSS-EXAMINATION
In common law jurisdictions, once a witness has given direct evidence either orally or by the witness statement,
the opposing side can pose questions. The object of these questions is to test how much weight is to be given
to the witness’s evidence. Cross examination is a technique which is virtually unknown in civil law jurisdictions
where it is simply not necessary since the court procedures are, for the most part, based on written evidence.
With the increased use of international arbitration, more civil law advocates have exposure to some form of
cross examination, but in a case where parties are from both traditions, the result is often a compromise.
RE-EXAMINATION
After a cross-examination, the party calling the witness can ask questions, but usually only relating to the
matters raised in the cross-examinations.
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It is important to understand that these rules and techniques of examining witnesses evolved in the common
law tradition when trial by jury was the norm, and when many jurors did not read or write. One purpose for
testing the witness was to protect unsophisticated jurors who might otherwise take unreliable testimony at face
value. In contrast, civil law judges are trained jurists, accustomed to weighing and evaluating evidence. The
international arbitral tribunal has more in common with the civil law judge than with the unsophisticated jury
of old. As a result, the rules of evidence used in common law courts are usually relaxed in the international
arbitration setting.
EXPERT WITNESSES
Section 2621 of The A&C Act empowers the arbitral tribunal to appoint one or more experts and take their
reports on certain issues. In Girdhari Lal v Kameshwar Prasad22, it was stated by the court that even though the
provisions of Sec. 45 of the Evidence Act may not be applicable in the literal sense in an arbitral proceeding, but
the pith and substance of the principles contained therein about obtaining the opinion of the persons especially
skilled in science or art are the relevant factors. Normally the expert has to give his opinion before the arbitrator,
or the court and he must be allowed to be examined and cross-examined by the respective parties.
When an arbitrator, in addition to having to determine what happened, must also decide why it happened,
expert evidence is required. Such evidence will be needed to determine technical matters such as why a certain
operation went wrong; why the brakes on a vehicle failed; which of several possibilities was the primary cause
of a delay; why a building collapsed. This evidence, called the ‘expert’s report’, is always in writing and always
exchanged between the parties in advance. An expert’s report in reply is also produced and exchanged. A copy
of each of these reports is, of course, supplied to the arbitrator. Because the reports will be taken ‘as read’, the
experts go straight into their cross-examination. It is therefore vital for the arbitrator to have mastered these
reports before the experts are called. Although a tribunal may need this evidence, they cannot order either
party to engage an expert. If neither party wishes an expert, the tribunal can appoint its own expert.
‘Unless otherwise agreed by the parties, the arbitral tribunal (a) may appoint one or more experts to report
to it on specific issues to be determined by the arbitral tribunal’. At first sight, this appears an ideal solution.
However, the disadvantage is that a tribunal-appointed expert may cause both parties to hire their own experts
to advise them about testing the tribunal’s expert, thereby increasing the expense.
Views differ about the rules that control admissibility of expert evidence. The following have been put forward
as possible guidelines for assessing the admissibility of expert evidence:
l “field of expertise: the claimed knowledge or expertise should be recognised as credible by others who
are capable of evaluating its theoretical and experiential foundations;
l expertise: the witness should have sufficient knowledge and experience to entitle him or her to be held
out as an expert who can assist the court;
21. 26. Expert appointment by arbitral tribunal.—

(1) Unless otherwise agreed by the parties, the arbitral tribunal may—
(a) appoint one or more experts to report to it on specific issues to be determined by the arbitral tribunal, and
(b) require a party to give the expert any relevant information or to produce, or to provide access to, any relevant documents, goods or other
property for his inspection.
(2) Unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal considers it necessary, the expert shall, after
delivery of his written or oral report, participate in an oral hearing where the parties have the opportunity to put questions to him and to
present expert witnesses in order to testify on the points at issue.
(3) Unless otherwise agreed by the parties, the expert shall, on the request of a party, make available to that party for examination all
documents, goods or other property in the possession of the expert with which he was provided in order to prepare his report.
22. [AIR 1989 All 210]
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l common knowledge: the information sought to be elicited from the expert should be something upon
which the court needs the help of a third party, as opposed to relying upon its own general knowledge
and common sense;
l ultimate issue: the expert’s contribution should not have the effect of supplanting the function of the
court in deciding the issue before it; and
l basis: the admissibility of expert opinion evidence depends on proof of the factual basis of the opinion.”
DUTIES AND RESPONSIBILITIES

The duties and responsibilities of expert witnesses in a civil case had a number of duties and responsibilities to
the court, including the following:
l the expert evidence presented to the court should be the independent product of the expert and should
not be influenced as to form or content by the exigencies of the current litigation;
l the expert witness should act as an independent assistant to the court and his duty was to furnish an
objective and unbiased opinion concerning the matter within his area of expertise;
l an expert witness in the High Court should never assume the role of an advocate;
l facts or assumptions upon which the expert’s opinion was founded should be stated along with material
facts which could detract from the opinion advanced;
l an expert witness ought to make it clear when a matter (for example, a question or issue) falls outside
his area of expertise;
l if insufficient data was available to enable the expert to properly research his opinion or part thereof,
then that deficiency had to be stated, together with an indication that the opinion was provisional;
l if when following an exchange of reports, the expert witness changed his mind on a material matter,
then that change of view should be communicated to the other side without delay through legal
representatives and, when appropriate, to the court; and
l all the documents and exhibits referred to in the expert evidence should be provided to the other side
at the same time as the exchange of reports.
THE EXPERT’S REPORT

From an expert’s report, an arbitrator wants to learn what facts have led that expert to come to this opinion as
to causation, amount of damages etc.; whether any books or articles support the expert’s opinion; and why and
to what extent this expert rejects the opinion of the opposing expert. When a court gives leave for parties to call
an expert, a court will often order the experts to meet before they produce their reports. The purpose of this
meeting is to give the experts an opportunity to discuss the case and to discover in broad terms the contentions
of the other expert. Arbitrators may wish to make a similar arrangement.
A modern practice is for the tribunal (after consulting with the parties’ counsel) to establish a briefing note to
the experts. This brief contains a list of issues to be addressed by both parties’ experts, in the same order. The
tribunal is then sure to have input from both sides on the same questions, and can then judge which is more
acceptable. The Chartered Institute of Arbitrators has prepared a guidance document on the use of experts.
This is included as Appendix 5. Arbitrators and advocates can look to the protocol for assistance in briefing the
experts, presenting, and evaluating their evidence. The arbitral tribunal can decide instead of, or in addition to,
relying upon the evidence of witnesses, whether and to what extent the tribunal should itself take the initiative
in ascertaining the facts and the law.
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Contents of the Expert’s Report

Article 5.2 of the International Bar Association (IBA) Rules on the Taking of Evidence in International Arbitration
states that the expert report should contain:
i. the full name and address of the Party-Appointed Expert, a statement regarding his or her present and
past relationship (if any) with any of the Parties, their legal advisors and the Arbitral Tribunal, and a
description of his or her background, qualifications, training and experience;
ii. a description of the instructions pursuant to which he or she is providing his or her opinions and
conclusions;
iii. a statement of his or her independence from the Parties, their legal advisors and the Arbitral Tribunal;
iv. a statement of the facts on which he or she is basing his or her expert opinions and conclusions;
v. his or her expert opinions and conclusions, including a description of the methods, evidence and
information used in arriving at the conclusions. Documents on which the Party-Appointed Expert relies
that have not already been submitted shall be provided;
vi. if the Expert Report has been translated, a statement as to the language in which it was originally
prepared, and the language in which the Party-Appointed Expert anticipates giving testimony at the
Evidentiary Hearing;
vii. an affirmation of his or her genuine belief in the opinions expressed in the Expert Report;
viii. the signature of the Party-Appointed Expert and its date and place;
ix. if the Expert Report has been signed by more than one person, an attribution of the entirety or specific
parts of the Expert Report to each author.”
ASCERTAINING THE FACTS

In a common law trial, all matters of proof and evidence are left to one party to produce and the other to
challenge. The judge plays little part – sitting rather passively and giving judgment based only upon what
the parties have presented. In contrast, a civil law judge takes an active role and will not hesitate to pose
questions during the hearing. The arbitrator may choose between these approaches or, as is more often the
case, combine them, probably allowing counsel to present questions first and then posing any questions that
the arbitrator wants clarified. Different tribunals will have different styles, and may adapt their own styles
depending on the legal and cultural background of the parties before them. Arbitrators should keep in mind
that the parties and their counsel are almost certainly more informed about the details of the case than the
tribunal can possibly be.
ADMISSIBILITY AND WEIGHT OF EVIDENCE

If the parties haven’t made any agreement on the matter, the tribunal has to determine whether to apply strict
rules of evidence (or any other rules) as to the admissibility, relevance, or weight of any material tendered on
any matters of fact or opinion, and the time, manner, and form in which that material should be exchanged and
presented. Two matters are dealt with in this provision—admissibility and relevance, and weight.
Admissibility: It is for the arbitrator to determine whether to apply any rules of evidence in deciding whether to
admit:
a. hearsay evidence – any statement by a person other than the witness, whether made orally, in writing,
or by signs and gestures.
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An example: “I heard the garage foreman tell George not to worry about the leak - there wasn’t time”;
and
b. documentary evidence – includes maps, plans, graphs, drawings, photographs, discs, tapes, videotapes,
films, and negatives. The practical answer is for the arbitrator to always admit any statement or
document. If evidence is excluded, the party concerned may feel that it has not been able to present its
case, and consider challenging the resulting award. The relevance or weight that an arbitrator gives to
that document is another matter.
COURT ASSISTANCE IN TAKING EVIDENCE

The arbitral tribunal has the power to direct a party before it to produce a document or provide evidence.
23
However, the arbitral tribunal does not have jurisdiction over third parties. Section 27 provides assistance to
the arbitral tribunal or parties in respect of third parties who may be required to be summoned as witnesses or
in possession of documents which may be required to be produced in the arbitration.
The arbitral tribunal, or a party with approval of the tribunal, is empowered to apply to the courts for assistance
in taking evidence24. The court, may in its discretion, execute the request by ordering any person to provide
evidence to the arbitral tribunal directly or issue summons to the such person to appear before the tribunal25.
The ambit of Section 27 has been held to include not just persons who are parties to the arbitral proceedings,
but also third parties26. If any person fails to appear or adduce evidence or is guilty of any contempt before the
arbitral tribunal, then such person shall be subject to such disadvantages, punishments or penalties, as they
would incur for like offences in suits tried before courts.27
RELEVANCE OR WEIGHT HEARSAY EVIDENCE

The concept of hearsay evidence is unknown in many jurisdictions. Strict rules developed in the common law
tradition were to protect jurors from accepting information from unreliable sources. In civil law courts, where the
decision-makers are judges, this protection is less important.
Following are the criteria that any arbitrator can consider in deciding how much weight to give hearsay evidence:
a. whether it would have been reasonable and practicable for the party by whom the evidence was
adduced to have produced the maker of the original statement as a witness;
b. whether the original statement was made contemporaneously with the occurrence or existence of the
matters stated;
c. whether the evidence involves multiple hearsay (“He told me that she had said it was raining hard when
she drove home.”);
d. whether any person involved had any motive to conceal or misrepresent matters;
e. whether the original statement was an edited account, or was made in collaboration with another or for
a particular purpose;
23. Bharat Heavy Electricals Ltd. v. Silor Associates S.A., 2014 SCC OnLine Del 4442
24. Section 27(1) of the Act.
25. Sections 27 (3) and 27(4) of the Act
26. Delta Distilleries Ltd. v. United Spirits Ltd. & Anr., (2014) 1 SCC 113.
27. Section 27(5) of the Act.
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f. whether the circumstances in which the evidence is adduced as hearsay are such as to suggest an
attempt to prevent proper valuation of its weight.’
Another consideration might be whether the hearsay evidence is corroborated by other evidence.
DOCUMENTARY EVIDENCE
Unlike the usual common law procedure for “proving” documents, these may usually be submitted directly to
the tribunal by the party wishing to rely on them. Usually, parties will agree that a copy of a document will be
accepted as authentic unless one party objects to it, in which case the tribunal will rule on the admissibility and
the weight to be given to that document. If a witness testifies, for example, “The foreman stated in his report that
a drain had been inspected”; that hearsay could be proved by producing the report itself, or an authenticated
copy of that report, or by a copy of the authenticated copy. This, of course, only proves that in the report the
foreman had stated that the drain had been inspected.
The truth of that statement - whether the drain had in fact been inspected - is another matter. In a territorial
dispute before the International Court of Justice (which deals with arbitrations between states), the claimant
submitted historical documents to prove the ownership of some islands situated between the two states. When
respondent’s counsel showed the documents to be falsified, the claimant retracted them.
Documentary evidence is evidence in written form whether handwritten, printed or computer-generated. This
group of evidence can include all printed or printable materials, such as maps and photos. Like demonstrative
evidence, the admissibility and ultimate weight of this type of evidence will depend on its authentication by the
witness through whom it is introduced into evidence. A document may be introduced as evidence of the truth of
its contents or to show that it exists or to prove its condition, in which case it may be regarded as real evidence.
However, because documents contain human language, and because of the historical development of the
common law, documents present special problems not presented by other forms of real evidence, such as when
they contain hearsay. If a document is used as evidence of the truth of its contents (or the representations made
within it), then it cannot be hearsay.
So, for instance, a contract may be produced to show that it is the contract between the parties and that it exists
in that particular form, containing those particular terms. In this sense it is both real evidence and documentary
evidence. What a party cannot rely on in producing the contract is that, in order to understand the terms of
the contract, other extrinsic evidence should be taken into account. This latter issue is known as the ‘parol
evidence rule’. In common law, the parol evidence rule excludes the admission of evidence not included in the
contract itself in order to interpret the words used in the contract, such as minutes of a meeting where the term
was negotiated. Thus, a written instrument is seen as a complete expression of the contracting parties’ mutual
understanding, and it cannot be challenged by past or contemporary evidence contradicting it or modifying its
content, unless the will of one of the parties has been affected by a recognised vice of consent. No equivalent
rule exists in the civil law legal tradition.
BURDEN OF PROOF
The burden of proof is the obligation to prove facts in issue. There are two main types of burden, the legal
burden and the evidential burden. It is not always easy to identify the burdens and judges do not always specify
which burden they are dealing with. This section attempts to clarify the area far as is possible.
The Legal Burden

The legal burden of proof is the obligation on a party to prove a fact in issue. If the party who bears this burden
cannot prove the facts in issue, then they do not succeed. Whether or not the burden is discharged will only be
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decided at the end of the case. Most cases involve more than one issue and the legal burden of proof in relation
to these issues may be distributed between the parties to an action. For example, in a claim in negligence,
where the respondent alleges contributory negligence, the referring party bears the legal burden on the issue
of negligence and the responding party bears it on the contributory negligence.
The incidence of the Legal Burden

The general rule in civil as opposed to criminal cases is that ‘he who asserts must prove’. For example, in a
claim in negligence, the referring party bears the legal burden of proving duty, breach and causation. The legal
burden of proving a defence (one that goes beyond the simple denial of the referring party’s assertions such as
consent or contributory negligence), lies with the responding party.
Statute
The incidence of the legal burden may also be fixed by legislation. A good example is a case of misrepresentation
that affects the validity of a contract: the French Civil Code provides that the innocent party must prove that it
would not have entered into the contract had it not been for the deception.
Contract terms
In written contract and insurance disputes, the legal burden may be fixed by the terms of the contract.
However, if there is no express agreement by the parties, the issue is a question of construction for the
court. In Munro Brice v. War Risks Association [1918], an insurance policy covered the ship subject to an
exception in respect of loss or capture in consequence of war hostilities. The ship in question disappeared
for reasons unknown and the claim was made. The question to be decided was whether the plaintiffs had
to prove that the ship was not lost by reason of enemy action. The court found for the plaintiff, saying that
the defendants bore the burden of proving that the facts fell within the exception and they had failed to
do so.
However, where a claimant relies on a proviso, the burden of proving that the facts fall within the proviso may
fall on him, as in The Glendarroch [1894]. In this case, the plaintiff brought an action in negligence for the non-
delivery of goods. The goods were lost when the boat carrying them sank. Under the bills of lading, there
was a clause exempting the defendants from liability in respect of loss or damage caused by the perils of the
sea, provided the defendants were not negligent. The court held that the plaintiffs bore the burden of proving
the contract and the non-delivery and if the defendants relied on an exception clause, it would be for them to
prove that the facts fell within it. However, if the plaintiffs sought to rely on the proviso (the negligence of the
defendant), it would be up to them to prove.
The Evidential Burden

This is also referred to as the burden of adducing evidence. The obligation here is to adduce enough evidence
to raise an issue for the court’s consideration. It is worth noting that a party may have an evidential burden in
relation to one issue without having the legal burden. One of the main differences between the two burdens is
when the evidence is considered. In order to determine if the legal burden has been discharged, the judge will
look at all the evidence presented, whereas when dealing with the evidential burden, the judge will consider
only the particular evidence relevant to the issue.
STANDARD OF PROOF
While the burden of proof determines which party should prove the relevant facts and law underlying an
assertion, the standard of proof sets the level of proof required and thus goes to the heart of the case. There is
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no unanimously recognised standard of proof in international arbitration as there is with the burden of proof –
national laws vary. Yet, the standard of proof is often considered to be a ‘balance of probability’, ‘preponderance
of the evidence’ or ‘more likely than not’ standard – that is, a standard that does not rise to the ‘beyond all
reasonable doubt’ standard that applies, for instance, in criminal matters in common law jurisdictions.
Arbitral tribunals usually refer, cumulatively or exclusively, to the applicable substantive national law to
determine the applicable standard of proof. Although the standard of proof varies from one legal system
to another, the standard is often similar or leads to a similar analysis. In common law jurisdictions, the
party making the claim for damages must meet the standard of proof for civil cases – that is, the ‘balance
of probabilities’ test.
CONCLUSION
The Arbitration and Conciliation Act does not prescribe detailed default rules regulating procedure. However, it
does provide some useful guidance to the parties and the arbitrators on the manner in which arbitrations should
be conducted. Parties can deviate from these default rules by specific agreement, subject to the limitation that
any procedure devised by the parties or the tribunal must meet the basic tenets of an adjudicatory process.
The Arbitration and Conciliation Act provides, among other things, that:
l The claimant must usually state the facts supporting their claim, the points at issue, and the relief
or remedy sought, and the respondent must state their defence in respect of these particulars, and
any counterclaim or set-off they seeks to claim, while filing their statement of claim and defence,
respectively.
l Parties can submit with their statements all documents they consider to be relevant or add a reference
to the documents or other evidence they will submit.
l Either party can amend or supplement their claim or defence during the arbitral proceedings, unless the
arbitral tribunal considers it inappropriate to allow the amendment or supplement having regard to the
delay in making it.
l The arbitral tribunal must, as far as possible, hold oral hearings for the presentation of evidence or for
oral argument on a day-to-day basis, and not grant any adjournments unless sufficient cause is made
out, and can impose costs including exemplary costs on the party seeking adjournment without any
sufficient cause.
l The parties must be given sufficient notice in advance of any hearing and of any meeting of the arbitral
tribunal for the purposes of inspection of documents, goods, or other property.
l All statements, documents or other information supplied to, or applications made to, the arbitral tribunal
by one party must be communicated to the other party, and any expert report or evidentiary document
on which the arbitral tribunal relies on in making its decision must be communicated to the parties.
l If, without showing sufficient cause, the claimant fails to communicate his/her statement of claim, the
arbitral tribunal must terminate the proceedings.
l If, without showing sufficient cause, the respondent fails to communicate their statement of defence, the
arbitral tribunal must continue the proceedings without treating that failure in itself as an admission of
the allegations by the claimant and must have the discretion to treat the right of the respondent to file
such statement of defence as having been forfeited.
l If, without showing sufficient cause, a party fails to appear at an oral hearing or to produce documentary
evidence, the arbitral tribunal can continue the proceedings and make the arbitral award on the
evidence before it.
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After perusal of the rules of evidence under the Indian Evidence Act and laws stipulated in The Act, it is essential
to analyse the setting aside of an arbitral award on the ground of insufficiency of evidence. In this context, the
extract of judgment of Calcutta High Court in West Bengal Industrial InfraStrictire Development Corp.vs Star
Engineering Co.28 has been produced below:
“Arbitrator is the sole Judge of the law and of the facts. If he had taken the decision on the basis of whatever
evidence was on record and had allowed the claim, his award cannot be challenged on the basis of
inadequacy or inadmissibility or impropriety of evidence, particularly when both the parties had the full
opportunity to argue their respective cases and adduce evidence.
Total absence of evidence or arbitrator’s failure to take into consideration a very material document on
record or admission of the parties in arriving at the finding are however good grounds for challenging the
proceeding for legal misconduct of the arbitrator.”
Also, it has been held by the Bombay High Court in Rasiklal Rathilal vs Fancy Corporation29 that once the
Court comes to a conclusion that documents are required for adjudication of the issues, it may issue direction
or pass such an order to produce the original documents before the Arbitral Tribunal. An arbitral award is often
challenged on the ground of insufficiency of evidence.
The insufficiency of evidence to reach the finality of award must be distinguished with complete absence of
evidence in reasoning of the award. As section 19 of The Act mandates the inapplicability of IEA and CPC,
the arbitral award must be valid until and unless it violates the fundamental principles of natural justice. No
applicability of technical rules of evidence is one of the fundamental reasons behind invoking arbitration by the
parties to the dispute.
An arbitral award should not be set aside on the ground of insufficiency or inadequacy of evidence as in
ordinary parlance, the appraisal of evidence in an arbitral proceeding is not the matter which a court looks into
while setting aside an award.
PART B : AFFIDAVITS IN ARBITRATION
EVIDENCE BY AFFIDAVIT
Introduction
Under Commercial matters, considering the heavy reliance upon documents for establishing its case, it
becomes incumbent for the parties to prove the veracity of such documents. The stage at which the parties
need to prove such documents and facts are followed immediately after completion of the pleadings i.e., with
the filing of the evidence by way of affidavit. Though, neither the Civil Procedure Code, 1908 (“CPC”) nor the
Indian Evidence Act, 1872 (“Evidence Act”) are per se applicable to arbitration, the arbitral proceedings are
largely pari materia to the civil trial conducted under the CPC and as a rule of general practice, principles
laid down in the CPC, as well as Evidence Act, are followed in arbitration and the provisions of CPC can be
applied if they are not inconsistent with the provisions of Arbitration and Conciliation Act, 1996 (“Arbitration and
Conciliation Act”).1 Hence, production of evidence by way of affidavit forms an inevitable part of the arbitration.
Since the subject matter of arbitration involves a commercial dispute, the parties tend to rely on voluminous
documentary evidence, and it becomes essential to prove such documents by way of producing witnesses on
affidavit. In addition, the evidentiary stage i.e., filing of the witness statement also assumes importance since it
provides the last opportunity as a matter of right to produce any document that the parties seek to rely upon to
strengthen their case.
28. [AIR 1987 Cal 126]

29. [2007 (3) Bom CR 603]
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Relevant Provisions of Filing an Evidence on Affidavit

Since neither the CPC nor the Evidence Act are per se applicable to arbitration, the said witness statement is
filed under Section 19 of the Arbitration and Conciliation Act. Section 19(4) of the Arbitration and Conciliation
Act empowers the arbitral tribunal “to determine the admissibility, relevance, materiality and weight of any
evidence”.
Nevertheless, while presenting the witness affidavit, as a rule of general practice, principles laid down in the
CPC as well as Evidence Act are followed. In the CPC, the stage of evidence is dealt with under Section 30 of
the CPC read with Order 18 Rule 4 of the CPC which mandates the examination-in-chief of a witness on affidavit.
Furthermore, Order 19 of the CPC lays down the procedure required for admission of an affidavit before the
court. Order 19 of the CPC inter alia provides for the following conditions for an affidavit to be admissible before
a court -
a. Affidavits shall be confined to such facts as the deponent is able of his own knowledge to prove;
b. Affidavits should follow a chronological sequence of the relevant dates and events;
c. Affidavits should not be the reproduction of the pleadings;
d. Each para of the Affidavit so far as possible, be supported by a document.
Since evidence adduced by way of affidavits cannot be relied upon until the witness is available for cross-
examination30, the Evidence Act also attains equal importance in an arbitration proceeding.
UNDERSTANDING THE PRACTICAL APPROACH FOR PRESENTING EVIDENCE ON AFFIDAVIT

It is a settled principle of law that the burden of proof lies upon a party only to the extent that its submissions
(be it factual or documentary) are disputed by the other party. No proof is required for the admitted facts or
documents. It is therefore the presentation of evidence is immediately preceded by the admission/denial of
documents of opposite parties. Order 11 Rule 4 of the CPC mandates the parties to set out explicitly whether
such party is admitting or denying the -
a. correctness of contents of a document.
b. existence of a document.
c. execution of a document.
d. issuance or receipt of a document.
e. custody of a document.
It is only based on the statement of admission/denial of the documents, the other party can prepare and present
the evidence of the witness on affidavit. The party filing such evidence thereafter prepares a table of such
denied documents and segregates it on the basis of its denial.
For instance, if the existence of any document is denied, the same can be proved by any facts which suggest
that the other party themselves has referred to such documents in its pleadings or correspondences. Similarly,
in order to strengthen one’s case and to proof the veracity of such denied documents, it is important to proof the
existence of the document and the contents of the document that proves one’s case which has been denied by
the other in the admission/denial of the documents.
30. Ayaaubkhan Noorkhan Pathan vs. the State of Maharashtra, (2013) 4 SCC 465.
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Moreover, sub-rule 3 of Rule 4 Order 11 of CPC states that there cannot be a mere denial of the documents.
Parties must provide a reason for the denial of a specific document. Especially, when the party denies a receipt
but admits the content, it is a settled law that the party must provide for the reasoning of the same. However, if
such documents are public documents or any other documents the party adducing the evidence by way of the
affidavit should proof to the best of their knowledge as to the authenticity of those documents along with the
sources where it was procured from.
Similarly, for proving the disputed facts, the practical approach is to separate the facts which have been disputed
by the opposite party from those which have been admitted. It becomes important for the party preparing the
evidence to distinguish the admitted facts from the disputed facts and keep its focus upon corroborating those
facts by way of affidavits that have been disputed by the other party.
Furthermore, as stated above, as per the requirements of Order 19 Rule 6 of the CPC, the evidence
should state the facts in the chronological order bringing together the list of dates following the events
subsequently pointing out the claims and the documents that have been relied upon by the parties to
establish their case.
Similarly, in technical and complicated arbitrations, the statement of an expert witness is also provided by
way of affidavit. The affidavit normally contains the facts associated to the specific issue that the witness is
proving, coupled with their scholarly expert opinion on the same. The arbitrators also have a right to question
the expert witnesses and clarify their technical doubts on the subject of the dispute. In such cases, the expert
report affidavit comes in handy because the Tribunal can refer to it in order to gain clarity on the subject, in
consequence to the dispute.
In certain arbitrations, the Tribunal comes across as very rigid when they expect the Parties to submit every
declaration, application, statement etc. in the form of affidavit. If they are overused, since these procedures
come from the application of court procedure into arbitration, they make arbitration highly time consuming and
unwieldy.
It is not necessary to submit evidence by affidavit in all circumstances. Arbitrators may accept evidence without
affidavit as well. It is for the parties’ counsel to sense whether certain facts need to be asserted through affidavit.
Depending on the situation and gaging the Tribunal’s conduct, it would be advisable to submit evidence along
with an affidavit/verification that the submitted information is true to the best of one’s knowledge. As a legal
strategy, neither of the parties want to rub the Tribunal the wrong way. It is also important to gain the Tribunal’s
trust and confidence. Hence submitting all the evidence by affidavit can be considered one of the options to
instill confidence to the Tribunal.
If the documentary evidence is not submitted by affidavit, then only the document including a cover page
describing and summarising it is submitted. It is advisable to substantiate the issue at hand for which the
particular document is going to be referred, when additional documents are submitted as evidence.
Conclusion
Thus, it can be safely concluded that in the case of arbitration even though there is no statutory requirement
for the parties to follow the rules of the Evidence Act or Civil Procedure Code, Section 19 of the Arbitration
and Conciliation Act empowers the Arbitral Tribunal to call for evidence by way of affidavit. Also, the rules to
produce evidence by affidavit laid down in the CPC i.e., under Order 18, Rule 4 , and Order 19 of the CPC are not
inconsistency with any of the provisions of the Arbitration and Conciliation Act and therefore is applicable even
for evidence produced before the Arbitral Tribunal.
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ADDUCING EVIDENCE UNDER SECTION 34 OF THE ARBITRATION ACT

It has been well established that proceedings under Section 34 of the Arbitration and Conciliation Act, 1996
(“the Act”) are summary in nature. The scope of enquiry in any proceedings under Section 34 of the Act has
been restricted to consider whether any of the grounds mentioned in Section 34(2) or Section 13(5) or Section
16(6) are made out to set aside the award, the grounds for which are specific. In a recent decision passed by the
Supreme Court in Canara Nidhi Limited vs. M. Shashikala31, it was held that under Section 34 of the Act, cases
should be decided only with reference to the pleadings and the evidence placed before the arbitral tribunal and
the grounds specified under Section 34(2) of the Act and only in exceptional circumstances should additional
evidence be adduced. However, this position of law has not always been the case. With there being a change
after the 2015 Amendment, we witnessed two new sub-sections being inserted to Section 34 of the Act, which
has played a role in the change in understanding of the law with regards to adducing evidence under Section
34 of the Act. Through this article we aim to trace the development of law on adducing evidence under Section
34 of the Act.
Pre 2015 Amendment

Under Section 34 (2) (a), it has been stated that a “party making the application furnishes proof”, which could
lead to a natural conclusion that a party will have to plead and prove the grounds mentioned in Section 34(2)
of the Act. The High Courts in India all have their separate rules on arbitration. The rules on arbitration by some
High Courts do allow for all provisions of the Civil Procedure Code, 1908 (“CPC”) to be applicable, in fact Rule
4(b) of the Karnataka High Court Arbitration Rules32 provides that all provisions of the CPC shall be applicable
to an application under Section 34 of the Act insofar as they could be made applicable.
The Supreme Court in Fiza Developers and Inter-Trade Private Limited v. AMCI (India) Private Limited and Anr.33
(“Fiza Developers Decision”) was considering the issue of whether issues as contemplated under Order XIV
Rule 1 of the CPC should be framed in an application under Section 34 of the Act and held that framing of issues
is not required as the proceedings are summary in nature. However, the Court further went on to add that an
opportunity to the aggrieved party has to be afforded to prove existence of any of the grounds under Section
34(2) of the Act, and as a result the Court allowed the applicant in the case to file affidavits of the applicant’s
witnesses as “proof” and granted the respondent-defendant an opportunity to place their evidence by affidavit.
With regards to cross-examination of the witnesses the Court held that “… Where the case so warrants, the court
permits cross-examination of the persons swearing to the affidavit. Thereafter, the court hears arguments and/or
receives written submissions and decides the matter. This is of course the routine procedure. The court may vary
the said procedure, depending upon the facts of any particular case or the local rules34.”
The 2015 Amendment

Section 34 of the Act was amended by Act 3 of 2016 by which sub-sections (5) and (6) of Section 34 were added
to the with effect from 23.10.2015. Sub-section (5) directed parties to ensure a notice is given to the other party
before initiating any proceeding under Section 34 of the Act.35 Whereas, sub-section (6) requires Courts to
31. Civil Appeal Nos. 7544-7545 of 2019 (Arising out of SLP (C) Nos. 35673-74 of 2014)
32. Application under Section 14 or Section 34 shall be registered as an arbitration suit, the applicant being treated as the plaintiff and the
parties to the award other than the applicant being treated as defendants and the proceedings thereafter shall be continued as in the case
of a suit and all the provisions of the Civil Procedure Code, 1908, shall apply to such proceeding insofar as they could be made applicable.
33. ( 2009 ) 17 SCC 796
34. ( 2009 ) 17 SCC 796
35. (5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall
be accompanied by an affidavit by the applicant endorsing compliance with the said requirement.
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dispose of an application under Section 34 of the Act within a year from the date the notice under sub-section
(5) was filed. Thus, after the 2015 amendment there was now a definite time period within which the courts were
to decide an application under Section 34 of the Act.
Clarification to the Fiza Developers Decision

While it was widely recognized that the Fiza Developers Decision was correct in holding that proceedings
under Section 34 of the Act are summary in nature, there was a need to clarify the correct position in law
after the 2015 Amendment especially with the insertion of sub-section (5) and sub-section (6). After the 2015
Amendment there were conflicting judgments arising out different High Courts of the country and there was a
need for a clarification with regards to the correct position of law. The Supreme Court in Emkay Global Financial
Services Limited v. Girdhar Sondhi36 (“Emkay Decision”) clarified that the Fiza Developers Decision must be
read in light with sub-sections (5) and (6) of the Act and stated that an application for setting aside an arbitral
award would not ordinarily require anything beyond the record that was before the arbitrator. The Court further
clarified that only if there were matters not contained in the record before the arbitrator and would be relevant
for determining issues arising under Section 34(2)(a), only then they maybe brought to the notice of the Court
by way of affidavits filed by both parties. With regards to cross-examination of the witnesses swearing the
affidavits the Court held that cross-examination of persons swearing to the affidavits should not be allowed
unless necessary.
Report of the High Level Committee to Review the Institutionalisation of Arbitration Mechanism
in India
The High Level Committee chaired by Justice B.N. Srikrishna had also commented on the inconsistencies
that had been brought about with the phrase “party making the application furnishes proof”. The High Level
Committee noted that opportunity to furnish proof in proceedings under Section 34 of the Act had led to
inconsistent practices by various High Courts who had begun insisting on proceedings under Section 34 of the
Act to be conducted in the manner of that of a regular civil suit despite the Fiza Developers Decision wherein
it was held that proceedings under Section 34 of the Act should not be conducted in the same manner as civil
suits, with regards to framing of issues under Rule 1 of Order 14 of the CPC37. To ensure that proceedings under
Section 34 of the Act were decided expeditiously the High Level Committee proposed that Section 34 of the
Act be amended and the phrase “party making the application furnishes proof” should be substituted with the
words “establishes on the basis of the Arbitral Tribunal’s record that.” This change has been accepted by the
legislature and therefore as a result in the 2019 Arbitration Act, Section 34 (2)(a) of the Act now reads as
“(2) An arbitral award may be set aside by the Court only if —
(a) “establishes on the basis of the Arbitral Tribunal’s record that….”
Present Position in Law

In light of the 2019 amendment and 2015 amendment to the Act, it is evident that the intention of the legislature
is to ensure proceedings under Section 34 of the Act are resolved expeditiously and any application under
Section 34 of the Act must be read in light of the decisions set forth in Fiza Developers Decision and the Emkay
Decision. In this context the recent judgment of the Supreme Court in Canara Nidhi Limited vs. M. Shashikala[38
becomes even more relevant for it has been clarified that only in exceptional circumstances should evidence in
the form of affidavits and cross-examination of those witnesses be permitted. If there does exist any exceptional
36. (2018) 9 SCC 49

37. Report of Justice B.N. Srikrishna Committee quoted in Emkay Global Financial Services Ltd. v. Girdhar Sondhi (2018) 9 SCC 49]
38. Civil Appeal Nos. 7544-7545 of 2019 (Arising out of SLP (C) Nos. 35673-74 of 2014)
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circumstance wherein parties are required to adduce evidence in the form of an affidavit, then it must be
indicated as to what point a party intends to adduce evidence for and should disclose specific documents or
evidence that would be required to be produced.
Thus if an exceptional circumstance does arise, then there must be specific averments in the affidavit as to the
necessity and relevance of the additional evidence sought to be adduced which would be beyond the record
that was before the arbitrator.
DRAFTING AN AFFIDAVIT
Introduction
An affidavit is a statement made by a person before the court or an appropriate adjudicating authority, wherein
the deponent (the person who makes the statement) states the facts and information related to the matter in
dispute, in his knowledge and swears it to be true. There are various provisions in Indian law, which explain
what an affidavit is and the proper procedure that must be followed while submitting it before the court.
Civil Procedure Code 1908 : Order XIX (19)

As per Rule 1: A court can at any time, for which reasons can be recorded, order that an affidavit shall be
submitted to prove any facts or circumstances as the court may wish and find reasonable.
Rule 3(1) describes the situation or circumstances which can be explained through an affidavit. It says that
affidavits will be confined to such facts that the deponent is able to prove through his own knowledge. However
interlocutory applications are excluded from the ambit of this rule and therefore in interlocutory applications,
statements of his belief may also be admitted provided proper reasoning and explanation is given for the same.
Essential elements of an affidavit

Certain aspects of an affidavit are of vital importance to be included, so as to validity to the said affidavit. They
are as under:
l The declaration should be made by a legal person,
l Contents of the affidavit should relate and connect with the said facts of the case,
l The declaration must be in writing,
l The language of the said declaration must be in the first person,
l The affidavit must be signed or affirmed, before a Magistrate or other authorised and appropriate
officer.
Process of drafting an affidavit

l At the top, write the name of the court, tribunal in which the affidavit is to be submitted, along with the
allotted case/suit no.
l Mention the names of parties in brief.
l As a heading/title of the document, mention ‘AFFIDAVIT’ in the bold and underlined font.
l Thereafter give the details of the deponent (the person who is testifying as to the truth of submissions
made by him, in the main petition) such as the name of the deponent and his father, age of deponent
and his residential address, followed by ‘Do solemnly affirm and declare as under.’
l In the first paragraph after the introduction, the deponent has to mention that he/she is the plaintiff or
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the defendant (as the case may be) in the suit for which the affidavit is being submitted and he has to
make a declaration that he is fully aware and conversant with the facts of the case and can testify for
the same.
l In the second paragraph, mention that the petition or submission made in the petition has been drafted
by the counsel of the deponent and that the contents have been read over in vernacular language, with
detailed explanation made to the deponent, along with consequences of the same, been explained to
him.
l Mention in brief the circumstances of the suit or the submission made by the deponent. In case the
main petition already contains the details, the same need not be repeated in the affidavit and one can
mention that ‘contents of the petition are not being repeated here for sake of brevity and therefore one
shall consider the same as a part of this affidavit.’
l Lastly, state that it is the deponent’s true and correct statement, followed by a paragraph about
verification, which will state that contents of the affidavit are true and correct to the deponent’s
knowledge and that nothing material has been concealed.
AFFIDAVIT – SAMPLE
THE COURT OF REGIONAL MICRO & SMALL ENTERPRISES FACILITATION COUNCIL, COIMBATORE
REGION
Address: _____________________
E-mail: ______________________
In the Matter of:
__________________ (Hereinafter Claimant)
____________________________ (Address)
Mobile _______________
Email: _____________________
AND
_______________ (Hereinafter Respondent)
____________________________ (Address)
Mob : _______________
Email:____________________
SUBJECT: CLAIMANT’S RESPONSE TO THE RESPONDENT’S LETTER OF DEFENCE.
References:
1. Hearing notice dated 26.10.2022 from MSEFC- region.
2. Respondent’s reply (dated 29/07/2022) to Claimant’s petition via Samadhan portal
On behalf of our client, (Claimant) we herewith submit the following for the MSEFC’s perusal and
appropriate remedy under the MSMED Act 2006.
l ____________________________ (Respondent) awarded two Contracts to our client.
l First Contract is for the Fabrication and Supply of Pre-fabricated E house for their end client
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____________________________.
l As per the Purchase Order, Time for Completion was 13 weeks for the E house Engineering and
Fabrication works. Though the work was started in a timely manner, due to the Respondent’s lack
of preparedness and coordination, the work was completed with 10 weeks delay.
l Subsequently PO 2037046009/18.12.2020 was issued for the transportation and delivery of the
above E house, at the __________________.
l Delivery acceptance was issued by the end client on 30th August 2021. The claimant further
records that the delays during this period were not attributable to them but to force majeure
reasons stipulated in the Contract.
l The Claimant performed both the two Contracts satisfactorily and the delivery acceptance was
made for both the Contracts. In spite of that, there is a payment delay of INR _______ (INR
_____________________________) by the respondent.
l We have already submitted the payment schedules and Invoice copies for MSEFC’s perusal.
l The Claimant, as part of the amicable settlement process, submitted a claim request on 14th of
June 2022 for which the respondent is yet to send a formal reply. Therefore, my client approached
MSEFC for the recovery of overdue payment via petition dated 15th July 2022.
l After the submission of petition via Samadhan, respondent sent a written reply dated 29/07/2022
stating that the amount INR _____________ (INR ___________________________ only) is
withheld towards LIQUIDATED DAMAGES for the delays in both the Contracts.
Our submission is that,
1. THE CLAIMANT NEVER COMMITTED ANY DELAYS / BREACH OF CONTRACT; ON THE CONTRARY THE
DELAYS WERE SOLELY ATTRIBUTABLE TO THE RESPONDENT
2. It is well settled legal principle that the defaulting promisor cannot retain the money of promise.
3. The principles embodied in Section 37 of the Indian Contract Act has been reiterated by the judiciary
that where an obligation is cast on a party and he commits a breach of such obligation, he cannot be
permitted to take advantage of such situation.
4. We wish to highlight that the Claimant incurred substantial damages due to the respondent’s breaches
and already pertinent claim was submitted to the respondent dated 14th June 2022.
5. It is evident from the above that even if there is an alleged breach of Contract, the resultant damages
should be adjudicated by the Court and no pecuniary liability arises until such adjudication.
6. On the Contrary, the respondent withheld INR ___________ (INR _________________________),
unilaterally which is against the Law.
We again emphasize here that there are no delays / breach attributable to the Claimant; despite that the
respondent withheld/ delayed substantial amount resultant of huge financial burden to the MSME supplier’s
cashflow which is the lifeline of their business.
OUR PRAYER IS:
THE CLAIMANT THUS RESPECTFULLY PRAYS BEFORE THE MSEFC COUNCIL THAT NECESSARY ORDERS ARE
PASSED PURSUANT TO THE MSMED ACT 2006, AS FOLLOWS:
I. DIRECT THE RESPONDENT TO SETTLE THE OUTSTANDING PRINCIPAL PAYMENT AS INCLUDED IN
THIS PETITION WHICH IS INR _______________ (INR ______________________________).
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II. DIRECT THE RESPONDENT TO PAY OTHER RECOVERABLE MONIES DUE TO THE DELAYS CAUSED BY
THEM IN PAYMENT AND WORKS AS FOLLOWS:
LOSSES INCURRED BY WAY OF ADDITIONAL RESOURCES DUE TO DELAY BY _____________ DURING
E HOUSE WORKS. INR _____________
STORAGE CHARGES DUE TO DELAYS CAUSED BY ________ INR _______________
LOSSES INCURRED DUE TO DELAY DURING TRANSPORTATION AND DELIVERY AT LOCATION.
______________
III. DIRECT THE RESPONDENT TO PAY THE PENAL INTEREST (3 TIMES PREVAILING INTEREST RATE AS PER
THE PRIVATE COMMERCIAL LENDING) FROM THE APPOINTED DATE TILL THE DATE OF REALISATION.
IV. FURTHER DIRECT THE RESPONDENT TO PAY ALL REASONABLE COSTS ASSOCIATED WITH THIS
RECOVERY OF DELAYED PAYMENTS, SUCH AS LEGAL COSTS, RENEWAL OF BONDS/GUARANTEES,
UNRECOVERED MONIES, ETC.,
V. AND PASS ANY OTHER ORDER OR ORDER(S) AS THE MSFC COUNCIL DEEMS FIT AND APPROPRIATE
GIVEN THE CIRCUMSTANCES OF THE CASE, EQUITY, AND JUSTICE
Date : Counsel for the Claimant.
Place: _________________
STATEMENT OF CLAIM – SAMPLE

Ref No:__________
BEFORE THE SOLE ARBITRATOR
CLAIM PETITION NO: OF 2021
STATEMENT OF CLAIM
PART A: Compulsory Information
I. DETAILS OF CLAIMANTS:
(1) M/s. ABC Pvt Ltd
through its Managing Director vide Power of Attorney
Shri.___________________
residing at ___________________
having office at _________________________
(2) M/s. XYZ Limited
through its authorized person
Shri. _____________________________
residing at ___________________________
having office at __________________________________
II. DETAILS OF RESPONDENTS:
(1) ________________________
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through its Vice Chairman

III. STATEMENT OF FACTS:
Annexed.
IV. THE POINTS FOR CONSIDERATION:
Annexed.
V. THE GROUNDS OF CLAIMS
Annexed.
VI. DELAY ANALYSIS
Annexed
VII. THE DAMAGES ACCRUED / QUANTUM ANALYSIS
Annexed.
VII. THE RELIEFS/REMEDIES / PRAYER:
PART B: Documents Annexed
The Statement of claim is accompanied by the following documents:
I. Detailed Chronological List of Dates
Annexed.
II. Copy of the following documents:
1. Copy of the tender
2. Copy of the bid
3. Copy of the Joint Venture
4. Copy of the Agreement
5. Copy of the General Terms of the Contract
6. Copy of the Work Order
…………………………………….
III. Copies of all communication between the parties are annexed with index
Annexed.
PART C: Other Evidence
I. Other Evidences
Labour / Staff / Machinery deployment records
Proof of Payments made to various stakeholders
Insurances for the resources
Guarantee / Bonds renewal details
Any other submission / approvals
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PART D: Service of the Statement of Claim

It is submitted that the statement of claim along with all the documents and annexure have been served on the
respondent’s counsel on ___________ at AM/PM by _______________. The counsel has counter signed the
claim for proof of the same.
PART E: Additional Information
Signature of the Claimant Date: __________________
PART F: For office use only
Date of filing: Filed by: __________________
STATEMENT OF DEFENCE - SAMPLE

BEFORE THE SOLE ARBITRATOR
DEFENSE PETITION NO: ___OF 2022
STATEMENT OF DEFENCE
I. DETAILS OF CLAIMANTS:
(1) M/s. ABC Pvt Ltd
through its Managing Director vide Power of Attorney
Shri.___________________
residing at ___________________
having office at _________________________
II. DETAILS OF RESPONDENTS:
(1) M/s. XYZ Pvt Ltd

through its Whole time Director vide Power of Attorney
Shri.___________________
residing at ___________________
having office at _________________________
III. STATEMENT OF FACTS
1. We are [_____________] Company, the Respondent in arbitration case No. [_______] at the India
International Arbitration Centre (IIAC) whose information is as follows:
Address :
Legal representative :
Tax Code :
Telephone :
Fax :
Email :
2. The Respondent in this arbitration is represented by [__________] in accordance with the Power
of Attorney No [___________] dated [______________].
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3. On [______________], the Respondent received the IIAC’s Notice No. [_______] dated
[___________] with respect to the dispute with the Claimant – [_________] Company. In response
to the request in the Notice, by this Statement of Defense, the Respondent would like to submit its
opinion as below.
I. Factual background
4. On [_____________], the Claimant and the Respondent signed the Contract/Agreement/
No[________] regarding the sale of goods/provision of service/________. According to the
Contract/Agreement/______, the Respondent is obliged to [_____________], the Claimant is
obliged to [___________].
5. In fact, the Respondent performed/ failed to perform the Contract/Agreement _____ (specify how
the Respondent performed/ failed to perform). The Claimant performed/ failed to perform the
Contract/Agreement _____ (specify how the Claimant performed/ failed to perform).
6. Additional matters (if any): [____________].
II. Legal basis for the Respondent’s defense
7. In the Arbitration Agreement No [_________] dated [___________]/Article [________] on dispute
settlement of the Contract/Agreement, the Parties agreed as follows: [“____________”](specify
the content of the arbitration agreement).
8. Opinion/arguments of the Respondent against the Claimant’s requests stated in the Request
for Arbitration [___________](specify whether the Respondent agrees or disagrees with the
Claimant’s requests and/or other opinion, attached documents, evidences (if any)).
9. On the basis of the aforementioned submissions, the Respondent respectfully requests the Arbitral
Tribunal as follow(s):
(i) [____________];
(ii) [____________];
(iii) [_____________]
10. The Respondent selects Mr./Ms. [___________] to act as an Arbitrator/The Respondent request
the IIAC to appoint an Arbitrator to resolve the dispute between the Claimant and the Respondent.
Mr./Ms. [__________] is an Arbitrator listed in the IIAC’s Arbitrator List.
11. Please contact Mr./Ms. [____________]via the followings details:
Address :
Telephone :
Email :
12. Regarding the place of arbitration, Article________ of the contract/agreement provides that
___________/ the respondent proposes that _______________ is the place of Arbitration.
On behalf of the Respondent
(sign, stamp)
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CASE STUDY
Topware Limited is a listed company having Paid up share capital of Rs. 100 crore engaged in the business
of manufacturing of fans and coolers. It is the one of the biggest manufacturer of air cooler, Fans etc. It is
well-known for making residential Air Coolers, Fans and Industrial Air Coolers, as well as for its ability to cool
enormous spaces. In addition to a wide choice of air coolers and other household appliances, they offer an
all-India sales and servicing network with more than 10,000 retail touch points. XYZ, LLP founded in 1996 is
a condenser manufacturing firm. Topware issues a tender for supply of Condenser / Capacities.
The tender has been awarded to XYZ, LLP. While drafting the agreement, the parties included the clause
that if in case any dispute arises during the tenure of Agreement, the same will be resolved by the common
arbitrator namely Mr. S.
A dispute arose between company and LLP in which the company claimed that the condenser provided by
the firm is of poor quality and does not meet the required standards norms. In consequence, the company
stopped making the payment to the firm. XYZ, LLP intends to refer the matter for arbitration.
In this regard, prepare a Statement of Claim on behalf of XYZ, LLP. Assume necessary facts.
LESSON ROUND-UP
l Fact-finding is an important task of the tribunal, and nowhere in the arbitral procedure is the cultural
contrast more vivid than in the presentation of evidence. The civil law culture tends to prefer
contemporaneous documents or, at least, written statements by witnesses.
l Written pleadings are usually exchanged sequentially, so that the claimant fires the first shot, the
statement of claim, and the respondent answers with the statement of defence (and counterclaim, if
any). Exceptionally, however, the arbitral tribunal may direct that the parties should submit their written
pleadings simultaneously, so that each party delivers a written submission of its claims against the
other on a set date, and then, on a subsequent date, the parties exchange their written answers and
so forth.
l Any party may seek to amend their claim after the commencement of an arbitration reference. There
may be consequences in terms of wasted costs for the other party in the dispute in dealing with any
revision at an advanced stage of the reference.
l Whatever form of procedure is adopted, it is for the arbitrator to rule on whether any documents or
classes of documents should be disclosed and produced by the parties, and when. The disclosure of
evidence may highlight the differing legal cultures of the parties, which, in turn, shape their expectations
about what they must disclose.
l Oral evidence (testimony) and hearsay Testimony is an oral statement of a witness made on oath
in a hearing. This evidence is offered as evidence of the truth of what is said. This is normally direct
evidence of matters of which the witness has first-hand knowledge – what he experienced with one of
his five senses: what he saw, heard, said, did or smelt.
l The ‘Rules of Evidence’ is an important concept in the decision-making process in any tribunal,
including courts, arbitrations and adjudications. In court, the ‘rules’ are prescribed by the rules of court
and in common law jurisdictions the precedent decisions from the courts themselves are important. In
arbitration, in some jurisdictions, the ‘rules’ may be binding on the arbitrator as he sieves through the
evidence in preparation of the award.
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l When an arbitration is concerned with what actually happened, witnesses of fact can help to establish
this. The arbitrator has to determine whether these witnesses should attend the hearing and give
evidence, or if written statements will suffice.
l The arbitral tribunal has the power to direct a party before it to produce a document or provide
evidence. However, the arbitral tribunal does not have jurisdiction over third parties. Section 27
provides assistance to the arbitral tribunal or parties in respect of third parties who may be required to
be summoned as witnesses or in possession of documents which may be required to be produced in
the arbitration.
l In a recent decision passed by the Supreme Court in Canara Nidhi Limited vs. M. Shashikala, it was held
that under Section 34 of the Act, cases should be decided only with reference to the pleadings and the
evidence placed before the arbitral tribunal and the grounds specified under Section 34(2) of the Act
and only in exceptional circumstances should additional evidence be adduced.
l An affidavit is a statement made by a person before the court or an appropriate adjudicating authority,
wherein the deponent (the person who makes the statement) states the facts and information related
to the matter in dispute, in his knowledge and swears it to be true.
GLOSSARY
Written Submissions: Written submissions are often referred to as pleadings. There is no required form and
different legal traditions may treat the submissions differently. Whatever their format, their purpose is the
same: they allow each side to know what the other party’s contentions are in order to address them in their
own written submissions and at the evidentiary hearing.
Statement of Claim: A Statement of Case, also called a statement of claim, will set out the duty owed (either
in tort or in contract), the alleged breach of that duty, and the consequent damage. The arbitral tribunal
may require that the claimant file, either simultaneously with the statement of case or shortly thereafter the
documents relied upon by the claimants, the evidence of witnesses, and a statement of the law relied upon.
Statement of Defence: The Respondent’s defence will admit or deny each matter set out in the statement of
case. If there is a denial, the respondent must state what the correct position is alleged to be. The arbitrator
may require the respondent’s evidence and legal submissions to be set out in the same way as was required
of the claimant.
Rejoinders: If the parties so desire and the tribunal considers it appropriate, there may be a Reply to the
Defence (on both claim and counterclaim), and perhaps a second, and even third round of written submissions.
Good practice demands that before ordering a second round of written submissions, the tribunal consider
the cost of this further step in relation to the importance and amount of the claim.
Admissibility: When evidence is said to be admissible, it means that as a matter of law, the evidence is
properly admitted to the court. Of course, the first condition is that the evidence must be relevant. However,
relevant evidence is not always admissible, and it is necessary to appreciate that relevant evidence may
be excluded.
Witness Statements: Witness Statements are exchanged in advance of the hearing, the tribunal may decide
to use this in lieu of direct evidence. A copy of a party’s witness statement is supplied to the other side
several weeks or months before the hearing.
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TEST YOURSELF
1. In an arbitration, in what circumstances might it be appropriate to dispense with written submissions?
Is this common?
2. At what point should witness statements be exchanged between the parties? When should the tribunal
receive them?
3. What is the purpose of cross-examination?
4. Who can decide whether evidence is admissible and what weight it should be given? What factors
should be considered in these decisions?
5. How does evidence assist the arbitrator?
6. How far do civil and common law approaches to evidence differ?
7. What guidance on use of evidence is available to an arbitrator?
8. What is a fact in issue?
9. Give a definition of hearsay.
10. How would you define ‘relevance’ in the context of the law of evidence?
11. What are the main types of inadmissible evidence?
12. In what context is ‘weight’ used in evidence?
13. When may hearsay evidence be excluded?
14. To what degree is hearsay evidence admissible to impeach the credibility of a witness?
l Handbook on Arbitration: a Practical guide for Professionals
ICSI Publication
l Course Material of ICSI PMQ Course on Arbitration
ICSI Publication
131
132
Preparation and Execution of Lesson
Arbitral Award 5
KEY CONCEPTS
n Award n Domestic Award n Foreign Award n Two Tier Arbitration
Learning Objectives
To understand:
 Arbitration Award and Implementation of
 Vital components of an Award
Arbitral Awards
 Difference between Domestic Award and
 Court’s power to modify award
Foreign Award
 Drafting of an Award
 Drafting of Execution Petition
 Categories of Award
Lesson Outline
 Introduction  Enforcement of Foreign Arbitral Award
 Essential Ingredients of an Award  The Public Policy doctrine and the
Enforcement of Arbitral Award
 Domestic v. Foreign Award
 Types of Awards
 Drafting of Execution Petition
 Enforcement of Arbitration Award
 Enforcement of Arbitration Award
 Drafting of Arbitration Award
 Application for Execution of part of an
Award  Lesson Round-Up
 Enforceability of an Arbitral Award  Glossary
 Pendency of Appeal  Test Yourself
 Validity of an Arbitral Award  List of Further Readings
 Enforcement of Foreign Award  Other References (Including Websites/Video
Links)
 Foreign Decree and the Code of Civil
Procedure, 1908
133
PP-AM&C Preparation and Execution of Arbitral Award
l Income Tax Act, 1961
l Foreign Awards Act, 1961
l Limitation Act 1963
INTRODUCTION
The key requirement of the contents of the award that are prescribed in the Arbitration and Conciliation Act,
1996 is that the award should be a well-reasoned and speaking award including reference to a Settlement
if arrived at in terms of Section 30. However, if the parties have prior agreed that the award need not give
the reasonings, while laying down the procedural aspects for conduct of proceedings, the Arbitral Tribunal is
obligated to adopt such guidelines in its award as specified in Sec 19(2) of the Arbitration and Conciliation Act,
1996. This exception to a speaking and well-reasoned order has been carved out in Section 31(3). There is no
benefit of an award if it remains unexecuted. Therefore, Execution of Award is one of the key step after passing
of award in an Arbitration Proceedings.
ESSENTIAL INGREDIENTS OF AN AWARD
Ingredients of an Award
An award shall consist of the following:
l An award shall be made in writing and be signed by all the members of the Arbitral Tribunal.
l In a situation where there is more than one arbitrator, the award shall be signed by majority of the
arbitrators with reasons for the omitted signature.
l The award shall state the reasons on which it is based.
l The award shall state the date and the place of arbitration.
l Signed copy of the arbitral award must be delivered to each of the parties.
Interest on Arbitral Award

In commercial contracts, where a huge amount of capital investment is at stake, it is righteous that in a situation
where any party defaults in their obligations, the defaulting party is made to undo the losses suffered by
their actions. Such contracts have commercial risks and greater exposure, therefore it is just and equitable
that the opposite party be compensated not only for the capital but also for the time value of money for non-
performance by the other party or breach of the contract. It is with this intention that award of interests becomes
a key factor in ensuring that investments and investors do not have to pay for the cost of funds for which they
are not responsible.
The object of providing for interest on an award is to compensate the damage resulting from the fact that on
default by one party, the opposite party is not deprived of the deployment of the money and the returns that
could have been earned from the invested sum. It is with this objective the arbitration laws of various nations
and the Indian Arbitration and Conciliation Act, 1996 provides for payment of interest.
An arbitrator while determining the question on the interest on award, has to take into consideration several
factors which enable him to determine the nature of the loss incurred and determine an appropriate interest
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Preparation and Execution of Arbitral Award LESSON 5
on the award made. The first document which enables the arbitrator to decide if the interest is to be awarded,
is the commercial contract which has given rise to the dispute. Since arbitration laws provide an autonomy to
the parties, unless parties themselves agree that the arbitrator shall have the power to award interest on the
award, the same power cannot be exercised by the arbitrator. Given that the Arbitral Tribunal is the creation of
the contract itself, the Arbitral Tribunal is bound to honour the terms of agreement between the parties.
The Arbitration and Conciliation Act, 1996 provides for a pre as well as post award interest. The pre-award
interest is to ensure that the arbitral proceedings are concluded without any unnecessary delay. The post
award interest is to ensure speedy trial and compliance of payment of amount awarded against the defaulting
party. Till date of payment of decretal (awarded) amount, the party who has been awarded the claim, is entitled
to claim interest.1 2
CASE LAWS
The Supreme Court of India has observed on the payment of interest in the following matter:
Hyder Consulting (UK) Ltd. v. Governor, State of Orissa,
Brief Facts
Civil Appeal arose from an order of Orissa High Court dtd 28-7-2010 in a writ petition quashing the order of
the Trial Court (Dist. Court) in an execution petition filed by the Appellant where post award interest payment
consisting of principal sum and pendente lite interest aggregating to Rs 8.92 crores was granted in favour
of the appellant. The award dated 26-4-2000 was upheld by the Division Bench where a principal sum of
Rs 2.30 crores was granted in favour of Appellant. Directions were given to the Trial Court to recalculate
the total amount payable under the award following the principles as laid down in State of Haryana and Ors
v. S.L. Arora and Co2. The Supreme Court special bench remanded the appeal to an appropriate two judge
bench of this Court to adjudicate the matter.
Rulings of Supreme Court
A. Meaning of “sum” for award of interest
1) The Court dealt with Section 31(7) and emphasised on the word “sum” directed to be paid under
award along with pre-award interest and post-award interest, as the case may be. The word sum
would include pre-award interest and post award interest, along with / without principal sum as
the award determines. The pre-award interest loses its character and becomes subsumed as part
of the sum. Thus, where the post award interest is granted under Section 31(7)(b), the sum would
be inclusive of pre award interest and principal, if allowed by the arbitrator. The Supreme Court
analysed the distinction between the power to award interest by the Civil Court under Section 34
of Code of Civil Procedure, 1908 “on the principal sum adjudged” vis a vis the inclusive definition of
word sum used in Section 31(7) which means the aggregate sum of principal and interest. The word
interest is distinct from principal which is a payment for compensation for deferment or withholding
of the principal sum during this period.
2) Grant of pre-award interest is discretionary powers of the arbitrator and has to be applied depending
on the facts of each case. However, as provided in Section 31(7)(a) if there is a prior agreement
between the parties for grant of pre-award interest, that would prevail and the arbitrator has to
recognise it in the award. Pre-award interest ensures that arbitral proceedings are concluded
without delays with a speedy disposal.
1. (2015) 2 SCC 189.

2. (2010) 3 SCC 690
135
3) Post-award is not mandatory but is at the discretion of the Arbitral Tribunal. If award does not specify
post-award interest, then the concerned party will receive statutory interest of 18% pa under Section
37(1)(b). The non obstante clause “unless the award otherwise directs” amplify the discretion of the
arbitrator. Only if the award is silent on the payment of post award interest, then Section 31(7)(b) comes
into play to grant the statutory interest of 18% pa to the party entitled.
B. Interpretation of statutes
Under general rules of interpretation of statutes, the word appearing in the same Section of a statute, must
be given the same meaning, unless there is anything to the contrary to indicate otherwise. In such a case,
different meanings may be given to the word as contextual.
The Supreme Court held as follows:
Para 82. Section 31(7)(a) of the Act deals with grant of pre-award interest while sub-clause (b) of Section
31(7) of the Act deals with grant of post-award interest. Pre-award interest is to ensure that arbitral
proceedings are concluded without unnecessary delay. Longer the proceedings, would be the period
attracting interest. Similarly, post-award interest is to ensure speedy payment in compliance of the award.
Pre-award interest is at the discretion of the Arbitral Tribunal, while the post-award interest on the awarded
sum is mandate of statute – the only difference being that of rate of interest to be awarded by the Arbitral
Tribunal. In other words, if the Arbitral Tribunal has awarded post-award interest payable from the date
of award to the date of payment at a particular rate in its discretion then it will prevail else the party will
be entitled to claim post-award interest on the awarded sum at the statutory rate specified in clause (b) of
Section 31(7) of the Act,i.e. 18%. Thus, there is a clear distinction in time period and the intended purpose
of grant of interest.
Section 31(7) of the Arbitration and Conciliation Act, 1996 provides that it is not mandatory for the arbitrator
to discuss in detail the reasons over awarding interest but the grant of interest and the rate shall be based
on the doctrine of reasonability. Only, in a situation where the arbitrator awards a different rate of interest
as agreed by the parties, it is obligatory upon the arbitrator to give cogent reasons for the variation.
Further, in the situation with the arbitrator while granting the claims of any party, fails to deal with the issue
of interest on the award, the Court can modify the award only to the extent of granting award of interest
on the amount of claim or monies awarded to the claimant. However, the Courts do not have unbridled
powers to grant interest in such instances.
The Supreme Court of India gave an important ruling3 with reference to the power of the arbitrator to
award interest upon the sum during the arbitral proceedings. While deliberating upon Section 31 (7)(a), the
Supreme Court made the following observations:
1. Section 31 (7)(a) of the Arbitration and Conciliation Act, 1996 provides that the term ‘sum’ shall also
include any interest on the pre award. Only in a situation where no interest is awarded by the Arbitral
Tribunal the word ‘sum’ comprises only the principal.
2. On the comparison of the provisions and Section 34 of the Code of Civil Procedure, the Court
observed that Section 34 of the Code of Civil Procedure empowered the Courts to avoid interest on
the principle/principal sum and not merely the sum. Section 31(7) of the Arbitration and Conciliation
Act, 1996 provides that the pre award interest awarded along with the principal sum shall also be
included under Section 31(7).
3. At the post award stage, the sum that is directed to be paid by the Arbitral Tribunal shall include the
interest. Therefore, a post award interest which is granted by the Tribunal is only on the sum that is
directed to be paid by the Tribunal and not on any other amount referred to as interest. The Court
therefore ruled that the term ‘interest on interest’ is inaccurate.
3. Hyder Consulting (UK) Limited vs. Governor, State of Orissa, (2015) 2 SCC 189.
136
4. While deliberating upon Section 31(7), the Court ruled that the provision was enacted to encourage
only payment of the award sum, therefore the sum could be interpreted to include interest in line
with the purpose which the provision is to serve.
11.08.2023 M/S LARSEN AIR CONDITIONING AND REFRIGRATION Supreme Court

COMPANY versus UNION OF INDIA & ORS.
Old Arbitration Act contained a provision which enabled the court to modify an award. However, that power
has been consciously omitted by Parliament, while enacting the Arbitration and Conciliation Act, 1996.
Facts
The dispute between the appellant and Union of India (‘respondent-state’) arose from a contract entered into
pursuant to being awarded the tender. In the course of work, certain disputes arose. The respondent-state
referred the dispute to arbitration. The tribunal published its award and directed the first four respondents to
pay 18% pendente lite and future compound interest on the award in respect of certain Claims.
The respondent-state challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996
(‘the Act’). The district court, dismissed the challenge on the ground that it could not sit in appeal over the
award and since the respondent-state had failed to file any proof of the grounds alleged. Aggrieved, the
respondent-state, preferred an appeal before the High Court. In the interim, the respondent-state deposited
Rupee Foradian10,00,000 in the District Court, Kanpur against `1,82,878.11 due at the time.
Partly allowing the appeal, the High Court disapproved the reasoning in the award on one of the claims; it
held that the sum of Rupee Foradian3 lakhs awarded towards compensation for loss caused due to non-issue
of tender document and paralysing business could not have been granted. The High Court held that it could
not be said that the proceedings (in the present case) were under the Arbitration Act, 1940, and therefore,
the rate of interest granted should not be 18%. The High Court referred to Supreme court’s judgments in
K. Marappan v. Superintending Engineer TBPHLC Circle Anantapur, M/s Raveechee & Co. v. Union of India
and Ambica Construction v. Union of India while deciding this question of pendente lite interest; it was held
that the bar to award interest on the amounts payable under the contract would not be sufficient to deny
the payment of interest pendente lite. The High Court proceeded to reduce the rate of interest from 18% (as
ordered by the arbitrator), to 9% per annum.
Issue
Reduction of Rate of Interest by the Courts
Decision
The Hon’ble Supreme Court said that the limited and extremely circumscribed jurisdiction of the court under
Section 34 of the Act, permits the court to interfere with an award, sans the grounds of patent illegality, i.e.,
that “illegality must go to the root of the matter and cannot be of a trivial nature”; and that the tribunal “must
decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a
reasonable manner, it will not mean that the award can be set aside on this ground” [ref: Associate Builders].
The other ground would be denial of natural justice. In appeal, Section 37 of the Act grants narrower scope
to the appellate court to review the findings in an award, if it has been upheld, or substantially upheld under
Section 34. It is important to notice that the old Act contained a provision which enabled the court to modify
an award. However, that power has been consciously omitted by Parliament, while enacting the Act of 1996.
This means that the Parliamentary intent was to exclude power to modify an award, in any manner, to the
court.
137
…. the impugned judgment warrants interference and is hereby set aside to the extent of modification of rate
of interest for past, pendente lite and future interest. The 18% per annum rate of interest, as awarded by the
arbitrator is reinstated.
For details: https://main.sci.gov.in/supremecourt/2019/35835/35835_2019_8_1501_46026_Judgement_11-
Aug-2023.pdf
DOMESTIC V. FOREIGN AWARD

According to section 2(1) (c) of the Arbitration and Conciliation Act, 1996, “arbitral award” includes an interim
award. Further, section 2(7) of the Act provides that an arbitral award made under Part I shall be considered
as a domestic award and Chapter I and Chapter II of Part II are relating to enforcement of Foreign Award. The
below mentioned cases provides a more clear picture of the difference between Domestic and Foreign Award.
The Bombay High Court in the case of (Jindal Drugs Limited Mumbai. v. Noy Vallesina Engineering SPA,Italy and
Ors) observed as follows:
“It appears from the reading of the Act that in so far as the challenge and enforceability is concerned, there are
different schemes for a domestic Award and a foreign Award”.
The Act provides for a direct challenge to a domestic Award under Section 34. A domestic Award is enforceable
as a decree passed by a Civil Court, after the period provided for challenging the same expire, and in case it
is challenged, after the challenge fails under Section 34. Foreign Awards cannot be challenged in India. It is,
therefore, quite clear that an application under Section 34 is not at all contemplated insofar as a foreign award
is concerned.
In terms of Challenging Foreign Arbitral Award in Indian Courts is concerned there have been different views of
the Supreme Court of India.(Bhatia International v. Bulk Trading S.A. and Ors4).
The Supreme Court in this decision observed that, unless the parties expressly or impliedly agreed to the
contrary, the Indian Courts have jurisdiction with respect to foreign seated arbitration akin to decisions in India
under Part I of the Arbitration and Conciliation Act, 1996. This decision was unequivocally overruled by the
Supreme Court of India. (Bharat Aluminium Company. v. Kaiser Aluminium Technical Services Inc5). Part I of the
Arbitration and Conciliation Act, 1996 does not apply to foreign seated arbitrations.6
CASE LAWS
Bharat Aluminium Company. v. Kaiser Aluminum Technical Services Inc8.
Facts:
The Appellants had entered into an agreement with the respondents whereby the respondents were
required to supply and install computer-based system at one of the appellant premises. The agreement
was governed by the prevailing law of India but it contained an arbitration clause that stated that any
dispute that may arise in future shall be governed by the English Arbitration Law and the venue shall
be London.
4. (2002) 4 SCC 105

5. Civ App 3678 of 2007
6. (Supra).
138
When the dispute arose between appellants and the respondents with respect to performance of the
agreement and then the matter was referred to arbitration, the proceeding was held in England and two
awards were passed. Aggrieved by the decision of the Arbitral Tribunal, the appellants filed an application
under Section 34 of the Arbitration and Conciliation Act, 1996, which was refused by the District Court and
the High Court of Chhattisgarh and finally the appellants approached the Supreme Court of India.
Held: The Supreme Court of India decided as follows:
(i) Part I and Part II are applicable to different fields. Part I of the Act of 1996 is applicable to all
domestic awards, including to awards where both the parties to the dispute are Foreign Parties but
the proceedings are held in India, or International Commercial Arbitration held in India.
(ii) Part II of the Act of 1996 applies to enforcement of Foreign Awards in India.
(iii) The principle of territoriality in Model Law is adopted in Act of 1996 Mutatis Mutandis.
(iv) Section 48 of Part II does not confer jurisdiction on two courts to annul the award and is provided
only to provide alternative to parties to challenge the award in case, Law of the country where seat
of arbitration is located has no provision for challenge of the award.
(v) Interim Relief u/s.9 can be awarded in case seat of arbitration in International commercial arbitration
in India and thus intervention u/s.9 can be sought only with respect to domestic awards. Part II has
no provision that grants interim relief leading to the logical inference that Indian Court cannot pass
interim orders against award delivered outside India.
(vi) The Arbitral Awards awarded in International Commercial Arbitration with seat of Arbitration outside
India shall be subject to the Jurisdiction of Indian Courts only when they are sought to be enforced
in India in accordance with Part II of the Act.
(vii) Part I of the Act shall not be applicable to non-convention arbitral awards. The definition of Foreign
Award is limited to New York Convention and Geneva Convention and hence the Act does not
provide for enforcement of non-convention Arbitral awards.
Principle: It would be against the Provisions of the Arbitration and Conciliation Act, 1996, to interfere with
the Foreign Arbitral Award as the Act of 1996 provides for challenging only Domestic Arbitral Awards under
Section.34. The above decision makes it clear that Foreign Arbitral Awards cannot be challenged in Indian
Courts as Section 34 of the Arbitration and Conciliation Act, 1996 provides for setting aside of Domestic
Arbitral Awards only.
DRAFTING OF EXECUTION PETITION

Where the time for making an application to set aside the arbitral award under section 34 has expired, ,
such award can be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of
1908), in the same manner as if it were a decree of the court. However, when an application to set aside
the arbitral award has been filed in the Court under section 34, the filing of such an application shall not
by itself render that award unenforceable, unless the Court grants an order of stay of the operation of the
said arbitral award.
Further, where the Court is satisfied that a Prima facie case is made out that, –
(a) the arbitration agreement or contract which is the basis of the award; or
(b) the making of the award, was induced or effected by fraud or corruption,
it shall stay the award unconditionally pending disposal of the challenge under section 34 to the award.
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Specimen Format for Plaint under CPC for enforcement of Award

IN THE COURT OF ___________________
A.B. (add description and residence) _________________________ Plaintiff
against
C.D. (add description and residence) ______________________ Defendant
A. B., the above-named plaintiff, states as follows: –
1. On the ___day of______20___, the plaintiff and defendant, having a difference between them
concerning a demand of the plaintiff for the price of ten barrels of oil which the defendant refused
to pay; agreed in writing to submit the difference to the arbitration of E. F and G. H. and the original
document is annexed hereto.
2. On the ___day of___________20____ the arbitrators awarded that the defendant should pay the
plaintiff rupees.
3. The defendant has not paid the money
4. Facts showing when the cause of action arose and that the Court has jurisdiction.
5. The Value of the subject-matter of the suit for the purpose of jurisdiction is …….rupees and for the
purpose of court-fees is………….rupees.
6. The Plaintiff Prays:
(i) _______________
(ii) ______________
Verification:-
I, ___________________S/o___________________ R/o_______________________ do hereby verify that
the contents of this application are true to my knowledge and belief.
Place:
Dated:
(Signatures)
Through
(Signature)
Advocates
TYPES OF AWARDS
The awards can be classified in four categories i.e. Interim Award, Additional Award, Settlement Award and
Final Award.
1. Interim award – Section 2(1)(c) of Arbitration and Conciliation Act, 1996 defines Arbitral Award. According
to the definition, “arbitral award” includes an interim award. It is an award made by a tribunal during
the pendency of the matter. The jurisdiction to make an interim arbitral award is left to the good sense
of the Arbitral Tribunal. The Interim Award does not end the proceedings and Arbitration Proceedings
comes to end after passing of Final Award.
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2. Additional award – 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. If the arbitral tribunal considers the request to be justified, it can make the additional arbitral
award within sixty days from the receipt of such request.
Corrections and Interpretation of the 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 so agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal
to give an interpretation of a specific point or part of the award.
If the arbitral tribunal considers the request to be justified, it can make the correction or give the
interpretation within thirty days from the receipt of the request and the interpretation shall form part of
the arbitral award.
The arbitral tribunal may also correct any error of the type mentioned above, on its own initiative, within
thirty days from the date of the arbitral award.
3. Settlement awards – With the agreement of the parties, the arbitral tribunal may use mediation,
conciliation or other procedures at any time during the arbitral proceedings to encourage settlement.
An award. If the parties settle the dispute, the arbitral tribunal shall terminate the proceedings and, if
requested by the parties and not objected to by the arbitral tribunal, record the settlement in the form
of an arbitral award on agreed terms. .
4. Final award – An award which finally determines all the issues in a dispute is called Final Award. The
Final Award is the decision on the points that were identified by or submitted to the Arbitral Tribunal. It
is the final outcome of the Arbitral Process. If the final award is not appealed or recourse has not been
taken against the award, it leads to conclusion of the Arbitral Proceedings.
ENFORCEMENT OF ARBITRATION AWARD

Enforcement of Award can be classified into two categories i.e. Enforcement of Domestic Award and Enforcement
of Foreign Award. The enforcement for both these type of awards is discussed hereinafter.
Enforcement of Domestic Awards

The purpose of Sections 35 and 36 of Arbitration and Conciliation Act is to ensure that once an award is given
by the Arbitral Tribunal, the award is binding on the parties and any person claiming under the award. The
main point to be noted is that any person, though not a party to the arbitration but claiming under the award is
bound by the award and the award shall be enforced upon the person as per Section 36 of the Arbitration and
Conciliation Act, 1996.
Section 35 provides the provides the provisions relating to Finality of Arbitral Awards. It provides that subject to
part I an arbitral award shall be final and binding on the parties and persons claiming under them respectively.
In India, arbitration proceedings are dealt and regulated as per the Arbitration and Conciliation Act, 1996 and
its amendments thereof. This Act provides that when the time for making an application to set aside the arbitral
award has expired, or when such application has been made and rejected in accordance with Section 34, the
141
award would be considered as final and binding on the parties under it, in accordance with Section 35, and shall
be enforced under the Code of Civil Procedure, 1908 as if it were a decree of the Civil Court in accordance with
Section 36. Section 35 and 36 of Arbitration and Conciliation Act, 1996, fall under Chapter VIII of the Act. These
Sections majorly deal with the finality, recognition and enforcement of an arbitral award. Any award, which is
not challengeable or rejected as an objection under Section 34, is deemed to be final and binding on the parties
to the arbitration. However, to implement Sections 35 and 36, the prevailing party may face a challenge against
the award under Section 34, wherein there is a period of three (3) months for the other party to challenge the
award. If the non-prevailing party forgoes or its application challenging the award is unqualified then the award
is deemed to be considered as final and binding on all the parties under Section 35. Once the period of three
months has lapsed without any application to challenge the award, then the prevailing party may approach the
Court for enforcing the award under Section 36.
For considering the grounds to challenge the award, Section 34 shall be analyzed in detail which furnish that no
application can be made after the expiry of 3 months from the date of receipt of award by the party, subject to
a 30 day relief period that may be granted by the Court at its sole discretion. This Arbitration and Conciliation
Act, 1996 also provides that the application may be made by a party only if it establishes on the basis of the
record of the Arbitral Tribunal of the grounds specified in Section 34 of the Arbitration and Conciliation Act, 1996.
Reaching to this stage, it is important to examine how the Courts interpret the rights and the powers, the Section
has granted them, in order to realize if the Courts have taken a different or anti-arbitration position or have
engaged in unnecessary interference which renders the enforcement of such awards as difficult.
For the purpose of binding the award as final, Section 35 deals with:
When an arbitration is called between the parties and respondent do not appear or object upon notices for the
reason of non-accepting the venue as feasible, then the party seeking arbitration will have the right to go ahead
with the proceedings and the arbitrator can pass the award in absence of the respondent, the same award can
be enforced by the appellant in accordance with Section 36 of Arbitration and Conciliation Act, 1996. Later
the respondent can challenge the award under Section 34, reasoning the non-appearance to the arbitration
proceedings.
In the case of Quippo Construction Equipment Limited v. Janardan Nirman Pvt. Limited7 Hon’ble Supreme Court
held that:
“(i) the arbitration in question was a domestic and an institutional arbitration where CIAA was empowered
to and did nominate the arbitrator. It was not as if there were completely different mechanisms for
appointment of arbitrator in each of the agreements. The only distinction was that according to one
of the agreements the venue was to be at Kolkata. The specification of place of arbitration may have
special significance in an International Commercial Arbitration, where the place of arbitration may
determine which curial law would apply. However, in the present case, the applicable substantive as
well as curial law would be the same.
(ii) It was possible for the Respondent to raise submissions that arbitration pertaining to each of the
agreements be considered and dealt with separately. It was also possible for him to contend that in
respect of the agreement where the venue was agreed to be at Kolkata, the arbitration proceedings
be conducted accordingly. Considering the facts that the Respondent failed to participate in the
proceedings before the arbitrator and did not raise any submission that the arbitrator did not have
jurisdiction or that he was exceeding the scope of his authority, the Respondent must be deemed to
have waived all such objections,
(iii) In the circumstances, the Respondent was now precluded from raising any submission or objection as
7. CA NO.2378 OF 2020 - 29.04.2020-SC.
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to the venue of arbitration, the conclusion drawn by the Court while dismissing Miscellaneous Case was
quite correct and did not call for any interference. In any case, the fact that the cause title showed that
the present Appellant was otherwise amenable to the jurisdiction of the selected Court, could not be
the decisive or determining criteria. Hence the award is held as final and binding on both the parties in
accordance with Section 35, of the Arbitration and Conciliation Act, 1996”.
Another issue related to Section 35 of the Arbitration and Conciliation Act, 1996 faced by many parties is:
whether an arbitral award is binding on a third party, who is not a signatory to the arbitration agreement? To
resolve this issue and provide the clarity on the Section 35, Supreme Court in the case of Cheran Properties
Limited v. Kasturi and Sons Limited and Ors.8 held that Section 35 of the Arbitration and Conciliation Act, 1996
states that an arbitral award is “binding on the parties and persons claiming under them”. The expression
“persons claiming under them” is a legislative recognition of the doctrine that besides the parties, an arbitral
award binds every person (party not a signatory to the arbitration agreement) whose capacity or position is
derived from and is the same as a party to the proceedings. This expression was held to widen the net to include
those who claim under the award, irrespective of whether such person was a party to the arbitration agreement
or the arbitral proceedings.
After an award has been made, either it is challenged under Section 34 of the Arbitration and Conciliation
Act,1996 or is enforced under Section 36 of the Arbitration and Conciliation Act,1996. In the light of Section 35 of
the Arbitration and Conciliation Act, 1996 the crucial question is as to whether the award of the first-tier Arbitral
Tribunal will be considered a “final award”. If it is so, then that would leave open the option to file a petition
under Section 34 to both parties. This would create a legal conundrum as one party may file a petition to the
Court for setting aside of the arbitral award, while the other party may file an appeal against the award to the
second tier/Appellate tribunal. In such a scenario, or even otherwise, it becomes important to have a clear set
of rules and regulations that would govern two tier arbitrations and the enforceability of such awards in order
to provide legal certainty regarding the same.
Two Tier Arbitration

Two Tier Arbitration means in case an award given by a sole arbitrator it would be appealed to an Arbitral
Tribunal consisting of a panel of three arbitrators or a higher odd number. This concept is permissible subject to
having a clause to the effect in the arbitration agreement. In that event, the award given by the sole arbitrator
cannot be enforced and after exhausting the appeal before the panel of arbitrators, the award so rendered
by the said panel will be enforceable subject to the application of provisions under Section 35 and 36 of the
Arbitration and Conciliation Act, 1996. A three Judges bench of the Hon’ble Supreme Court of India delivered
a judgment in M/s Centrotrade Minerals and Metal Inc. v. Hindustan Copper Ltd9 upholding the validity of such
constitution of appellate Arbitral Tribunals.
PROVISIONS RELATED TO ENFORCEMENT OF ARBITRATION AWARD

Section 36 of the Arbitration and Conciliation Act, 1996 provides the provisions relating to Enforcement. It
mentions that:
(1) Where the time for making an application to set aside the arbitral award under Section 34 has expired,
then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the
provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a decree of the Court.
(2) Where an application to set aside the arbitral award has been filed in the Court under Section 34, the
filing of such an application shall not by itself render that award unenforceable, unless the Court grants
8. CA Nos.10025-10026/2017 – 24.04.2018 SC.

9. Civil Appeal No 2562 of 2006 dated 15-12-2016.
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an order of stay of the operation of the said arbitral award in accordance with the provisions of sub-
section (3), on a separate application made for that purpose.
(3) Upon filing of an application under sub-section (2) for stay of the operation of the arbitral award, the
Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for
reasons to be recorded in writing:
Provided that the Court shall, while considering the application for grant of stay in the case of an arbitral
award for payment of money, have due regard to the provisions for grant of stay of a money decree under the
provisions of the Code of Civil Procedure, 1908.
Provided further that where the Court is satisfied that a Prima facie case is made out that, –
(b) the making of the award, was induced or effected by fraud or corruption, it shall stay the award
unconditionally pending disposal of the challenge under section 34 to the award.
Explanation. – For the removal of doubts, it is hereby clarified that the above proviso shall apply to all court
cases arising out of or in relation to arbitral proceedings, irrespective of whether the arbitral or court proceedings
were commenced prior to or after the commencement of the Arbitration and Conciliation (Amendment) Act,
2015.
The main purpose of this Section is to enforce an award given by the Arbitral Tribunal as equivalent to the
decree of the Court and enforced in accordance to the provisions of the Code of Civil Procedure, 1908 and as
per the Arbitration and Conciliation (Amendment) Act, 2019 the filing of an application before the Court under
Section 34 shall not make the award unenforceable unless the Court grants an order of stay. It shall be applied
retrospectively.
Thus the amended Section 36 of the Arbitration and Conciliation Act, 1996 provides for:
(a) after expiry of making an application to set aside the arbitral award (i.e. 90 days from the award) the
award shall be enforced as if it was a decree of the Court;
(b) filing of an application under Section 34 shall not by itself render the award unenforceable;
(c) upon an application for grant of stay of the award, the Court has the discretion to grant stay, which may
be subject to such conditions as it may deem fit;
(d) while passing any stay order the Court is to “have due regard” to the provisions of Code of Civil
Procedure, 1908 for grant of stay of money decree.
Provision under Arbitration and Conciliation (Amendment) Act, 202110

As a further development to Section 36, The latest Arbitration and Conciliation (Amendment) Act, 2021 has been
enacted to address the concerns raised by stakeholders after the enactment of the Arbitration and Conciliation
(Amendment) Act, 2019 and to ensure that all the stakeholder parties get an opportunity to seek unconditional
stay of enforcement of arbitral awards where the underlying arbitration agreement or contract or making of the
arbitral award are induced by fraud or corruption.
1. In Section 36(3) of the Arbitration and Conciliation Act, 1996, after the proviso, the following shall be
inserted and shall be deemed to have been inserted with effect from 23rd day of October 2015, namely:-
“Provided further that where the Court is satisfied that a prima facie case is made out,-
(a) That the arbitration agreement or contract which is the basis of the award; or
10. Enactment dated 4th Nov 2020
144
(b) The making of the award, was induced or effected by fraud or corruption, it shall stay he award
unconditionally pending disposal of the challenge under Section 34 to the award”.
Explanation,- For the removal of doubts, it is hereby clarified that the above proviso shall apply to all Court cases
arising out of or in relation to arbitral proceedings, irrespective of whether the arbitral or Court proceedings were
commenced prior to or after the commencement of the Arbitration and Conciliation (Amendment) Act, 2015.
Duty of an Arbitrator to render an enforceable award

Some rules of arbitration contain an express provision that the arbitrator shall ‘make every effort’ to ensure that
the award is enforceable. Even the most successful and promising arbitrator in the world cannot guarantee
that the Arbitral Tribunal’s award will be enforceable in whatever country enforcement may be sought. The
maximum that can be expected is that the Arbitral Tribunal will do its best to ensure that the appropriate
procedure is followed and that each party is given an impartial and a fair hearing.
APPLICATION FOR EXECUTION OF PART OF AN AWARD

During pendency of Section 34 application, wherein the non-prevailing party has challenged the award, the
present execution application is not maintainable. Under the Arbitration and Conciliation Act, 1996, once a
Section 34 application is filed to challenge the validity of an arbitral award, the award becomes non-executable
and no part of the award can be executed.
The Supreme Court in the case of National Aluminium Co. Ltd. v. Pressteel and Fabrications (P) Ltd and Ors. has
stated that the arbitral award given becomes non-executable once a Section 34 proceeding is filed to set aside
the award by the non-prevailing party and the Court states that:
“Para 11: However, we do notice that this automatic suspension of the execution of the award, the moment an
application challenging the said award is filed under Section 34 of the Act, leaving no discretion in the Court to
put the parties on terms, in our opinion, defeats the very objective of the alternate dispute resolution system to
which arbitration belongs. We do find that there is a recommendation made by the concerned Ministry to the
Parliament to amend Section 34 with a proposal to empower the civil Court to pass suitable interim orders in
such cases. In view of the urgency of such amendment, we sincerely hope that necessary steps would be taken
by the authorities concerned at the earliest to bring about the required change in law.”
In the above case law, before enactment of the Arbitration and Conciliation (Amendment) Act, 2015 the automatic
stay of the award is applicable once Section 34 is filed in the Court. This defeats the very objective of the alternative
dispute resolution system, and thus the Section was amended in the Arbitration and Conciliation (Amendment)
Act, 2015. It would be clear that looking at the practical aspect and the nature of rights presently involved, and
the sheer unfairness in the provision before the execution of Arbitration and Conciliation (Amendment) Act, 2015
which granted an automatic stay to execution of an award before the enforcement process under Section 36
takes place (the stay could last for a number of years) without having to look at the facts of each case, it is clear
that Section 36 as amended by the Arbitration and Conciliation (Amendment) Act, 2015, should apply to Section
34 applications filed before the commencement of the Arbitration and Conciliation (Amendment) Act, 2015 to
avoid the automatic stay.
ENFORCEABILITY OF AN ARBITRAL AWARD

It is well settled that preferring of an appeal does not operate as stay on the decree or order appealed against
or on the proceedings in the Court. A prayer for the grant of stay of proceedings or on the execution of decree
or order appealed against has to be specifically made to the appellate Court and the appellate Court has
discretion to grant an order of stay or to refuse the same. The only guiding factor is the existence of sufficient
cause in favour of the appellant on the availability of which the Appellate Court would be inclined to pass an
order of stay.
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In Atma Ram Properties Pvt. Ltd. v. Federal Motors Pvt. Ltd.11 experience shows that the principal consideration
which prevails with the Appellate Court is that Inspite of the appeal having been entertained for hearing by the
Appellate Court; the appellant may not be deprived of the fruits of his success in the event of the appeal being
allowed. This consideration is pitted and weighed against the other paramount consideration: why should a
party having succeeded from the Court be deprived of the fruits of the decree or order in his hands merely
because the defeated party has chosen to invoke the jurisdiction of a superior forum. Still the question which
the Court dealing with a prayer for the grant of stay asks itself is why the status quo prevailing on the date of
the decree and/or the date of making of the application for stay be not allowed to continue by granting stay,
and not the question why the stay should not be granted.
PENDENCY OF APPEAL
Mere pendency of an application seeking leave to appeal does not put in jeopardy the finality of the decree or
order challenged and it is only if the application is allowed and leave granted that the finality of the decree or
order under challenge is jeopardized. The proposition that an appeal is a continuation of the original proceedings
in the sense that within the scope of appellate power conferred by the statute which could be as wide as those
of the trial Court the Appellate Court can review the decision of the authority whose order is challenged does
not imply that the order of the authority or Court of first instance cannot be executed.
In the case of Kerala State Electricity Board through its special officer (revenue) and Ors. v. MRF Ltd. and Ors12
it was held that the pendency of appeal before the Supreme Court only ensured that the proceedings had not
been concluded and the ultimatum has not been met. But in the absence of any interim order of the Supreme
Court granting stay of operation of the judgment, the judgment given by the Arbitral Tribunal shall be binding
between the parties.
Mere filing of appeal does not operate as a stay of the order challenged. Mere pendency of the appeal does
not have the effect of suspending the operation of the award of the Arbitral Tribunal.
The provisions of the Code of Civil Procedure, 1908 would be applicable to proceedings under the Arbitration
and Conciliation Act, 1996 before the Courts’. The effect of the application of the Code of Civil Procedure, 1908
would be that the Appellate Court would possess the power of grant of stay. The petitioner therefore is not
remedy less. Stay can be granted in the appeal before the Supreme Court under Article 136 and no ground for
applying the principle that the High Court has power to do substantial justice Ex debito justitiae is made out
when leave has been granted and the case is pending before the Apex Court.
VALIDITY OF AN ARBITRAL AWARD

The question that arises for determination in this matter is when would the period of limitation for execution of
a decree passed in a suit for partition commence. In other words, question is when such a decree becomes
enforceable from the date when the decree is made or when the decree is engrossed on the stamp paper which,
out of these two would be the starting point of limitation. The Supreme Court in the case of Chiranji Lal (D) by Lrs.,
v. Hari Das (D) by Lrs13 held that the question as to whether the award is required to be stamped or registered is
relevant only when the parties would file the award for its enforcement under Section 36 of the Arbitration and
Conciliation Act, 1996. On the strength of this authority, it was contended that the parties can object to admissibility
of such a decree arising out of an award on account of non-registration and non-stamping at that stage.
In the case of Anusuya Devi v. M. Nanik Reddy14, the appellants and the respondents are the members of the
11. (2005) 1 SCC 705.

12. (1996) 1 SCC 597.
13. AIR 2005 SC 2564: 2005 (10) SCC 746: 2005 (6) SRJ 450.
14. AIR (2003) 8 SCC 565.
146
joint family. It appears that certain disputes arose and as a result of which they entered into an agreement
to refer the dispute to the Arbitral Tribunal for deciding the partition of the Joint Hindu properties. Although
the agreement postulated the Arbitral Tribunal of five persons, it is not disputed that there were only four
persons who comprised the Arbitral Tribunal. The Arbitral Tribunal gave an award on 31stMay, 1998 which was
subsequently corrected on 10th June, 1998 by a clarification order. The respondents herein, who appears to
have not satisfied with the award, filed two petitions under Section 34(1) of the Arbitration and Conciliation Act,
1996 for setting aside the award.
The Supreme Court held that non-stamping of the arbitral award is not a ground for challenge under Section
34 of the Arbitration and Conciliation Act, 1996 but can be considered as a ground to object at the stage of
enforcing the award under Section 36 of the Arbitration and Conciliation Act 1996.
CASE LAWS
Case Law 1
Brief Facts
In Board of Control for Cricket in India v. Kochi Cricket Pvt. Ltd. and Ors, a notice was sent by the Respondent
invoking arbitration under franchise agreement. The sole arbitrator was appointed, who delivered two
arbitral awards against Appellant and in favour of Respondents. Appellants filed application under Section
34 of Arbitration and Conciliation Act, 1996 challenging aforesaid arbitral awards. Respondents filed two
execution applications for payment of amounts awarded under two awards, pending enforcement of such
awards.
Decision
These were resisted by the 2 Chamber Summons filed by the Appellants dated 3rd December, 2015,
praying for dismissal of aforesaid execution applications stating that old Section 36 would be applicable,
and that therefore there would be automatic stay of awards until the Section 34 proceedings had been
decided.
The Judge gave a judgment which dismissed the aforesaid Chamber Summons and found that amended
Section 36 would be applicable in facts of present case. Hence, the present appeal was filed by the
Appellant.
The judge further said that it is well settled that execution proceedings are procedural in nature and
retrospective and therefore, the substituted Section 36 would apply even in cases where the Section 34
application is made before the commencement of the Arbitration and Conciliation (Amendment) Act, 2015.
Case Law 2
Brief Facts
In Pam Developments Private Ltd. v. State of West Bengal, the respondent filed stay application under
amended Section 36(2) of the Arbitration and Conciliation Act, 1996 in the pending proceedings under Section
34 of the Arbitration and Conciliation Act, 1996 before High Court. The stay application of the Respondent
was dismissed in default. The executing Court passed an order attaching the sum of Rs.2.75 Crores lying to
the credit of the Respondent-State of West Bengal with the Reserve Bank of India. It was further clarified that,
in the event there was no stay of operation of the award by the adjourned date (04.12.2018), it would be open
to the Appellant (award holder) to pray for release of the said amount. Relying on an order of a co-ordinate
bench of the High Court wherein an unconditional stay of award had been granted to the State Government,
the Executing Court dismissed the execution petition filed by the Appellant. Without filing the application
for recall of the order, whereby the stay application of the Respondent had been dismissed in default,
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the Respondent filed a fresh application for stay of the award, in which the impugned order of unconditional
stay was passed after relying on the provisions of Order XXVII Rule 8A of Code of Civil Procedure, 1908.
Challenging the said order, the present Appeal has been filed. The submission of Appellant is two-fold.
Firstly, that the provision of Order XXVII Rule 8A of Code of Civil Procedure, 1908 would not be applicable
to the present case, and as such the Court ought not to have considered the same while deciding the
application for stay of the award under Section 36 of the Arbitration and Conciliation Act, 1996. Secondly, it
has been submitted that even if the provision of Order XXVII Rule 8A are to be taken into account, then too
the Courts should not pass an order of unconditional stay of award.
Decision
Section 36 of the Arbitration and Conciliation Act 1996 also does not provide for any special treatment to
the Government while dealing with grant of stay in an application under proceedings of Section 34 of the
Arbitration and Conciliation Act 1996. In view of consideration and also the provisions of Section 18 providing
for equal treatment of parties, it would make it clear that, there is no exceptional treatment to be given to
the Government while considering the application for stay under Section 36 filed by the Government in
proceedings under Section 34 of the Act.
Also, in Sub-Section (3) of Section 36 of the Arbitration and Conciliation Act 1996 mandates that, while
considering an application for stay filed along with or after filing of objection under Section 34 of the Arbitration
and Conciliation Act 1996, if stay is to be granted then, it shall be subject to such conditions as may be
deemed fit. The said Sub-Section clearly mandates that, the grant of stay of the operation of the award is to
be for reasons to be recorded in writing “subject to such conditions as it may deem fit”. The proviso makes it
clear that, the Court has to “have due regard to the provisions for grant of stay of a money decree under the
provisions of the CPC”.
The phrase “have due regard to” would only mean that the provisions of Code of Civil Procedure, 1908 are to
be taken into consideration, and that they are not mandatory. While considering the phrase “having regard
to”, this Court in the case of Shri Sitaram Sugar Company Limited. v. Union of India has held that,
the words ‘having regard to’ in Sub-Section are the legislative instruction for the general guidance of the
Government in determining the price of sugar. They are not strictly mandatory, but in essence directory.
ENFORCEMENT OF FOREIGN AWARDS

The world today has become economically interdependent. Business now has no boundaries and global market
players are emerging on. In this era of interdependence, the importance of an improved and an efficient legal
system for the facilitation of international business, trade and investment has become the need of the hour.
With the advent of the economic reforms of 1991, it was important for India as well to revamp its commercial
laws and provide for an easy and a more friendly method for the investors for the resolution of disputes as big
international business houses were eyeing the Indian markets to make investment after the liberalisation of
the policies. The United Nations Commission on International Trade Law, established by the United Nations
General Assembly, played an important role in harmonising the law related to international business and
trade. The UNCITRAL Model Law, 1985 was prepared by a consortium of many countries who participated
in the discussions as ‘member states’, therefore ensuring global acceptance. This UNCITRAL Model Law was
designed keeping in mind the need to unify and modernise the law related to arbitration in various jurisdictions
to promote international trade and primarily was aimed to create a uniform law related to arbitration in terms of
the composition of the Arbitral Tribunal, the jurisdiction of the Arbitral Tribunal and cover aspects of recognition
and enforcement of foreign arbitral award.
India signed the New York Convention on 10th June 1958 and ratified the convention on 13th July 1960. India also
148
is a signatory to the Geneva Protocol on Arbitration Clauses, 1923 and the Geneva Convention on the Execution
of Foreign Arbitral Awards, 1927. Prior to the execution of Arbitration and Conciliation Act, 1996 the law on the
enforcement of foreign arbitral award was governed by the Foreign Award (Recognition and Enforcement) Act,
1961.
Sections 44-52 of the Arbitration and Conciliation Act, 1996 deals with the execution of foreign award passed
under the New York Convention and Section 53-60 of the Arbitration and Conciliation Act, 1996 provides for the
process of enforcement of award as per the Geneva Convention.
FOREIGN DECREE AND THE CODE OF CIVIL PROCEDURE, 1908

With the expanding cross border transactions and businesses, it becomes important that cross border decrees
and judicial decisions are given universal applicability and particularly by the Courts in the country where
the decision is to be executed. The mechanism of executing a foreign award in India is governed by the Code
of Civil Procedure, 1908. Section 2(6)15 of the Code of Civil Procedure, 1908 defines a ‘Foreign Judgment’ as
the judgment passed by a foreign Court. The term ‘Foreign Court’ is defined by Section 2(5)16of the Code of
Civil Procedure, 1908 as a Court situated outside India and one which is not established or continued by the
authority of the Central Government. The specific provision under the Code of Civil Procedure, 1908 governing
the enforcement of foreign award in India is Section 44A. The provision lays down certain qualifications which
must be required for a foreign judgment to be enforceable in India by the Indian Courts. These necessary pre-
conditions required for a foreign judgment to be executed in India include are as follows:
l An application shall be made to the District Court where the decree may be executed along with the
certified copy of the decree of the Foreign Superior Court and a certificate from such Superior Court,
stating the extent, if any, to which the decree has been satisfied or adjusted and such certificate by
itself shall be a conclusive proof to the extent of such satisfaction.
l The said decree which is to be executed in India by the Indian Courts should have been passed by a
Superior Court of a reciprocating17 territory.
Section 13 of the Code of Civil Procedure, 1908 provides for the test of conclusiveness of the Foreign Judgment
or Decree and provides that a Foreign Judgment or Decree shall be conclusive unless it has been pronounced
by a Court of competent jurisdiction, has not been given on the merits of the case, appears on the face of the
proceedings to be on an incorrect view of international law or a refusal to recognise the laws of India in a
situation where such laws are applicable, proceedings in which the judgment has been obtained in violation of
the principles of natural justice, or has been obtained by fraud and sustains a claim founded on a breach of any
law in force in India. A party before approaching the Court for the enforcement of the foreign award shall ensure
that the favoured Judgment or Decree passes the tests as laid down above to be enforceable in India. Section
14 of the Code of Civil Procedure, 1908 provides that the Indian Court shall presume upon the production of
any document purporting to be a certified copy of a Foreign Judgment that such Judgment/Decree has been
pronounced by a Court of competent jurisdiction. Sec 44 A of the Code of Civil Procedure, 1908 permits a
judgment passed by a Court of the notified reciprocating territory to be directly made enforceable in India as if
it were a decree passed by a Court in India by filing the certified copy of the superior Court of the reciprocating
territory.
In a situation where the award is passed in one country and needs to be executed in the other, it really would
be a challenge to persuade the Courts to recognise a foreign Decree/Judgment. In 1971, desiring to establish
15. S.2(6) "foreign judgment" means the judgment of a foreign Court.

16. S.2(5) "foreign Court" means a Court situated outside India and not established or continued by the authority of the Central
Government.
17. Reciprocating Territory means any country or territory outside India which the Central Government may by notification declare as a
reciprocating territory.
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common provisions on mutual recognition and enforcement of judicial decisions, rendered in several respective
countries, the Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial
Matters, 197118 (hereinafter the Convention) was signed at the Hague, which is a multilateral treaty governing the
enforcement of judgments entered by one nation’s legal authorities in other signatory nations. It is one of the
many progressive conventions in the area of private international law. The convention mandates and promotes
the realm of Public International Law and co-operation between the signatories of this convention. However,
India had its reservation with respect to Article 10, 15 and 16 of the Convention and therefore never became a
party to the Convention.
In a situation where the Judgment/Decree is not of a reciprocating jurisdiction, the Bombay High Court19 ruled
that in such a situation the decree holder should file in the domestic Court of competent jurisdiction, a suit on
that foreign decree or on the original, underlying cause of action, or both. To obtain that decree, he must show
that the foreign decree, if he sues on it, satisfies the tests of Section 13 Code of Civil Procedure, 1908.
Domestic Arbitration v/s. International Commercial Arbitration

The Arbitration and Conciliation Act, 1996 defines an International Commercial Arbitration under Section 2(f) as
follows:
“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 is-
i. an individual who is a national of, or habitually resident in, any country other than India or,
ii. a body corporate which is incorporated in any country other than India; or
iii. an association or a body of individuals whose central management and control is exercised in any
country other than India, or
iv. the Government of a foreign country”
Upon a perusal of the definition provided above, in a simple language, an international commercial arbitration
means the disputes settled through arbitration which involves parties that transcend the national boundaries.
On the other hand, a domestic arbitration is one where the arbitration takes place in India, the subject matter
of the contract is in India, the merits on which the dispute exists between the parties and the procedure that is
to be applicable for the arbitral proceedings is governed by the local laws of India. For example, Switzerland
determines the nature of the arbitration being international or domestic on the basis whether at the time when
the arbitration agreement was concluded between the parties, at least any of the parties was not domiciled or
habitually resident in Switzerland.
Article 1(3) of the UNCITRAL Model Law, 1985 summarises under what circumstance can an award be considered
to be an international award and provides that; (i) an arbitration shall be an international commercial arbitration
when at the time of conclusion of that agreement, the parties had their places of businesses in different States
(ii) the place of the arbitration as defined under the agreement is situated outside the State in which the parties
have their businesses, (iii) the place where the substantial part of the obligations of the contract is situated
outside the place in which parties have their businesses, or (iv) in a situation where the parties have themselves
agreed that the subject matter of the arbitration agreement relates to more than one country.
Redfern and Hunter20, defines an international commercial arbitration as follows:
18. Text of the Convention available at: https://www.hcch.net/en/instruments/conventions/full-text/?cid=78.

19. Marine Geotechnics LLC v. Coastal Marine Construction and Engineering Ltd. 2014 (2) BOM CR 769
20. Blackaby, Nigel. Redfern And Hunter on International Arbitration. Oxford; New York:Oxford University Press, 2009.
150
“An arbitration is considered to be ‘international’ if (in the sense of the Model Law) it involves parties of different
nationalities, or it takes place in a country that is ‘foreign’ to the parties, or it involves an international dispute.
Nonetheless, a caveat must be entered to the effect that such arbitrations will not necessarily be universally
regarded as international. If a question arises as to whether or not a particular arbitration is ‘international’, the
answer will depend upon the provisions of the relevant national law.”
The Supreme Court of India in TDM Infrastructure (P) Ltd. v. UE Development India (P) Ltd.21, while determining
whether an arbitration is a domestic or a foreign arbitration ruled that a company which is incorporated in India,
has the Indian nationality for the purpose of Arbitration and Conciliation Act, 1996. It therefore cannot be said
that where both the parties who get into an arbitration agreement and are companies registered in India, the
arbitration agreement between them be referred to as International Commercial Arbitration under Section 2(1)
(f).
ENFORCEMENT OF FOREIGN ARBITRAL AWARDS

Part-II of the Arbitration and Conciliation Act, 1996 deals with enforcement of Foreign awards. Chapter I of Part
II of the Act deals with Sections 44 to 52 for any award passed under New York Convention.
Section 44. Definition. – In this Chapter, unless the context otherwise requires, “foreign award” means an arbitral
award on differences between persons arising out of legal relationships, whether contractual or not, considered
as commercial under the law in force in India, made on or after the 11th day of October, 1960 –
(a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the First
Schedule applies, and
(b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been
made may, by notification22 in the Official Gazette, declare to be territories to which the said Convention
applies.
International commercial arbitration awards delivered out of India related to disputes contractual or not arising
out of a prior agreement in writing between the parties for submitting such disputes to arbitration as per the
Convention stated in First Schedule to the Arbitration and Conciliation Act, 1996 which refers to New York
Convention. India is a signatory to such Convention.
Section 45. Power of judicial authority to refer parties to arbitration. – Notwithstanding anything contained in
Part I or in the Code of Civil Procedure, 1908 (V of 1908), a judicial authority, when seized of an action in a matter
in respect of which the parties have made an agreement referred to in Section 44, shall, at the request of one of
the parties or any person claiming through or under him, refer the parties to arbitration, 23[unless it prima facie
finds] that the said agreement is null and void, inoperative or incapable of being performed.
Judicial authority while dealing with a dispute where parties have agreed in writing under Section 44 shall at
request of any party refer matter to arbitration unless the commercial arrangement is prima facie void.
Section 46. When foreign award binding. – Any foreign award which would be enforceable under this Chapter
shall be treated as binding for all purposes on the persons as between whom it was made, and may accordingly
be relied on by any of those persons by way of defence, set-off or otherwise in any legal proceedings in India
and any references in this Chapter to enforcing a foreign award shall be construed as including references to
relying on an award.
Foreign award shall be binding inter se parties and any one party may rely upon it as a defence, set off in, legal
proceedings initiated in India.
21. (2008) 14 SCC 271.
22. Subs. By the Arbitration and Conciliation (Amendment) Act, 2021 (3 of 2021), dt. 11-03-2021 w.e.f 4-11-2020.
23. Subs. For the words “unless it finds” by Act No. (33 of 2019), dt. 09-08-2019. w.e.f. 30-8-2019 vide SO 3154 (E), dt. 30-8-2019.
151
Section 47. Evidence. – (1) The party applying for the enforcement of a foreign award shall, at the time of the
application, produce before the Court –
(a) the original award or a copy thereof, duly authenticated in the manner required by the law of the country
in which it was made;
(b) the original agreement for arbitration or a duly certified copy thereof; and
(c) such evidence as may be necessary to prove that the award is a foreign award.
(2) If the award or agreement to be produced under sub-Section (1) is in a foreign language, the party seeking
to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular
agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient
according to the law in force in India.
[Explanation. – In this Section and in the Sections following in this Chapter, “Court” means the High Court having
original jurisdiction to decide the questions forming the subject-matter of the arbitral award if the same had been
the subject-matter of a suit on its original civil jurisdiction and in other cases, in the High Court having jurisdiction
to hear appeals from decrees of courts subordinate to such High Court.]
Any party seeking enforcement of a foreign arbitral award shall have to produce original or authenticated
copies of the award, the arbitration agreement and a translated copy of the award, if not in English, by the
diplomatic or consular agent in India. All foreign arbitral awards will be dealt by the High Court having original
civil jurisdiction or with the appellate jurisdiction to hear decrees from lower or subordinate Court.
Section 48. Conditions for enforcement of foreign awards. – (1) Enforcement of a foreign award may be refused,
at the request of the party against whom it is invoked, only if that party furnishes to the Court proof that –
(a) the parties to the agreement referred to in Section 44 were, under the law applicable to them, under
some incapacity, or the said agreement is not valid under the law to which the parties have subjected it
or, failing any indication thereon, under the law of the country where the award was made; or
(b) the party against whom the award is invoked was not given proper notice of the appointment of the
arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(c) the award deals with a difference not contemplated by or not falling within the terms of the submission
to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so
submitted, that part of the award which contains decisions on matters submitted to arbitration may be
enforced; or
(d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the
agreement of the parties, or, failing such agreement, was not in accordance with the law of the country
where the arbitration took place; or
(e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent
authority of the country in which, or under the law of which, that award was made.
(2) Enforcement of an arbitral award may also be refused if the Court finds that –
(a) the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or
(b) the enforcement of the award would be contrary to the public policy of India.
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[Explanation 1. – For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy
of India, only if, –
(i) the making of the award was induced or affected by fraud or corruption or was in violation of Section 75
or Section 81; or
(ii) it is in contravention with the fundamental policy of Indian law; or
(iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2. – For the avoidance of doubt, the test as to whether there is a contravention with the fundamental
policy of Indian law shall not entail a review on the merits of the dispute.]
(3) If an application for the setting aside or suspension of the award has been made to a competent authority
referred to in clause (e) of sub-Section (1) the Court may, if it considers it proper, adjourn the decision on the
enforcement of the award and may also, on the application of the party claiming enforcement of the award, order
the other party to give suitable security.
Any party aggrieved by the foreign award or the Court suo motu may move the Court to challenge the
enforcement of the said award. The aggrieved party can challenge the order before it becomes enforceable
or has been suspended or set aside by competent authority on grounds of incapacity of parties, inadequate
notice for appointment of arbitrator and commencement of proceedings, subject matter was not in terms of
adjudication, improper composition of Arbitral Tribunal. The Court can also refuse to enforce the order if found
to be inconsistent with Indian laws or opposed to public policy or on grounds of fraud, corruption, morality or
injustice.
Section 49. Enforcement of foreign awards. – 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.
Unless the Court intervene under Section 48 the Court shall enforce the award as it were a decree of the Court.
Section 50. Appealable orders. – (1) Notwithstanding anything contained in any other law for the time being in
force, an appeal shall lie from the order refusing to –
(a) refer the parties to arbitration under Section 45;
(b) enforce a foreign award under Section 48;
to the Court authorised by law to hear appeals from such order.
(2) No second appeal shall lie from an order passed in appeal under this Section, but nothing in this Section shall
affect or take away any right to appeal to the Supreme Court.
The appeal shall lie from refusal to refer to arbitration under Section 45 and not enforcing the foreign award
invoking provisions of Section 48. No second intra Court appeal will lie against the Court in appeal. However,
appeal to Supreme Court shall remain unimpaired.
Section 51. Saving. – Nothing in this Chapter shall prejudice any rights which any person would have had of
enforcing in India of any award or of availing himself in India of any award if this Chapter had not been enacted.
There shall not be any prejudice to the rights of any person of enforcing foreign awards in India even if this
Chapter was not enacted.
Section 52. Chapter II not to apply. – Chapter II of this Part shall not apply in relation to foreign awards to
which this Chapter applies.
Chapter II relating to Geneva Convention shall not apply to this Chapter.
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Chapter II deals with Geneva Convention Awards as contained in Sections 53 to 60 read with Second and
Third Schedule to the Arbitration and Conciliation Act, 1996.
Section 53. Interpretation. – In this Chapter “foreign award” means an arbitral award on differences relating to
matters considered as commercial under the law in force in India made after the 28th day of July, 1924, –
(a) in pursuance of an agreement for arbitration to which the Protocol set forth in the Second Schedule
applies, and
(b) between persons of whom one is subject to the jurisdiction of some one of such powers as the Central
Government, being satisfied that reciprocal provisions have been made, may, by notification in the
Official Gazette, declare to be parties to the Convention set forth in the Third Schedule, andof whom the
other is subject to the jurisdiction of some other of the powers aforesaid, and
(c) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been
made, may, by like notification, declare to be territories to which the said Convention applies, and for the
purposes of this Chapter an award shall not be deemed to be final if any proceedings for the purpose of
contesting the validity of the award are pending in the country in which it was made.
Foreign awards refer to commercial disputes which have been submitted for adjudication under arbitration in
terms of a written agreement made under Second Schedule. The foreign award will not be treated as final if
there is a challenge or a contest pending before the appropriate forum in the country of origin.
Section 54. Power of judicial authority to refer parties to arbitration. – Notwithstanding anything contained
in Part I or in the Code of Civil Procedure, 1908 (V of 1908), a judicial authority, on being seized of a dispute
regarding a contract made between persons to whom Section 53 applies and including an arbitration agreement,
whether referring to present or future differences, which is valid under that Section and capable of being carried
into effect, shall refer the parties on the application of either of them or any person claiming through or under
him to the decision of the arbitrators and such reference shall not prejudice the competence of the judicial
authority in case the agreement or the arbitration cannot proceed or becomes inoperative.
A judicial authority to whom a commercial dispute has been referred, shall refer the matter to arbitration based
on a prior written agreement made under Second Schedule. However, this will not impair the discretion to act
otherwise if the agreement lacks legal infirmities.
Section 55. Foreign awards when binding. – Any foreign award which would be enforceable under this Chapter
shall be treated as binding for all purposes on the persons as between whom it was made, and may accordingly
be relied on by any of those persons by way of defence, set-off or otherwise in any legal proceedings in India
and any references in this Chapter to enforcing a foreign award shall be construed as including references to
relying on an award.
This Section is a replica of Section 46 of the New York Convention Awards and reiterates that a foreign award
shall be binding inter se parties and any one party may rely upon it as a defence, set off in, legal proceedings
initiated in India.
Section 56. Evidence. – (1) The party applying for the enforcement of a foreign award shall, at the time of
application produce before the Court –
(a) the original award or a copy thereof duly authenticated in the manner required by the law of the country
in which it was made;
(b) evidence proving that the award has become final; and
(c) such evidence as may be necessary to prove that the conditions mentioned in clauses (a) and (c) of sub-
Section (1) of Section 57 are satisfied.
(2) Where any document requiring to be produced under sub-Section (1) is in a foreign language, the party
seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or
154
consular agent of the country to which that party belongs or certified as correct in such other manner as may be
sufficient according to the law in force in India.
1
[Explanation 1. – In this Section and in the Sections following in this Chapter, “Court” means the High Court
having original jurisdiction to decide the questions forming the subject-matter of the arbitral award if the same
had been the subject-matter of a suit on its original civil jurisdiction and in other cases, in the High Court having
jurisdiction to hear appeals from decrees of courts subordinate to such High Court.]
Section 47 provisions of New York Convention Awards shall also apply to Geneva Convention Awards mutatis
mutandis
Section 57. Conditions for enforcement of foreign awards. – (1) In order that a foreign award may be enforceable
under this Chapter, it shall be necessary that –
(a) the award has been made in pursuance of a submission to arbitration which is valid under the law
applicable thereto;
(b) the subject-matter of the award is capable of settlement by arbitration under the law of India;
(c) the award has been made by the arbitral tribunal provided for in the submission to arbitration or
constituted in the manner agreed upon by the parties and in conformity with the law governing the
arbitration procedure;
(d) the award has become final in the country in which it has been made, in the sense that it will not be
considered as such if it is open to opposition or appeal or if it is proved that any proceedings for the
purpose of contesting the validity of the award are pending;
(e) the enforcement of the award is not contrary to the public policy or the law of India.
[Explanation 1. – For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy
of India, only if, –
(i) the making of the award was induced or affected by fraud or corruption or was in violation of Section
75 or Section 81; or
(ii) it is in contravention with the fundamental policy of Indian law; or
Explanation 2. – For the avoidance of doubt, the test as to whether there is a contravention with the fundamental
policy of Indian law shall not entail a review on the merits of the dispute.]
(2) Even if the conditions laid down in sub-Section (1) are fulfilled, enforcement of the award shall be refused if
the Court is satisfied that –
(a) the award has been annulled in the country in which it was made;
(b) the party against whom it is sought to use the award was not given notice of the arbitration proceedings
in sufficient time to enable him to present his case; or that, being under a legal incapacity, he was not
properly represented;
(c) the award does not deal with the differences contemplated by or falling within the terms of the
submission to arbitration or that it contains decisions on matters beyond the scope of the submission to
arbitration:
Provided that if the award has not covered all the differences submitted to the arbitral tribunal, the Court may,
if it thinks fit, postpone such enforcement or grant it subject to such guarantee as the Court may decide.
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(3) If the party against whom the award has been made proves that under the law governing the arbitration
procedure there is a ground, other than the grounds referred to in clauses (a) and (c) of sub-Section (1) and
clauses (b) and (c) of sub-Section (2) entitling him to contest the validity of the award, the Court may, if it thinks
fit, either refuse enforcement of the award or adjourn the consideration thereof, giving such party a reasonable
time within which to have the award annulled by the competent tribunal.
Section 48 provisions of New York Convention Awards shall also apply to Geneva Convention Awards mutatis
mutandis.
Section 58. Enforcement of foreign awards. – 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.
On enforcement of the award by the Court it will be deemed as a decree of that Court.
Section 59. Appealable orders. – (1) An appeal shall lie from the order refusing –
(a) to refer the parties to arbitration under Section 54; and
(b) to enforce a foreign award under Section 57,
to the court authorised by law to hear appeals from such order.
(2) No second appeal shall lie from an order passed in appeal under this Section, but nothing in this Section shall
Appeal provisions of Section 50 of New York Convention Awards shall also apply replica to Geneva Convention
Awards.
Section 60. Saving. – Nothing in this Chapter shall prejudice any rights which any person would have had of
enforcing in India of any award or of availing himself in India of any award if this Chapter had not been enacted.
THE PUBLIC POLICY DOCTRINE AND THE ENFORCEMENT OF ARBITRAL AWARD

Since the decisions rendered by Arbitral Tribunals are not subjected to appeal before any Courts, it becomes
important that these quasi-judicial bodies do not digress from the pious task of imparting justice. Broadly
speaking, it may also be noted that the role of the judicial body is to ensure that the realm of public policy is
not set aside as public order is equally important as individual freedom. Therefore, the Arbitral Tribunals must
ensure that in the process they do not abandon the public policy element while passing any award. The awards
passed by the Arbitral Tribunals which are contrary or opposed to the public policy therefore can be challenged
before the Judicial Courts and thereby also set aside.
The earliest of the laws on Arbitration in India was the Indian Arbitration Act, 1899 (hereinafter 1899 Act). The
1899 Act provided ‘misconduct and improper procurement of award’ as the only ground when the Court could
interfere with the award and set it aside. The 1899 Act was repealed and replaced by the Arbitration Act, 1940.
The Arbitration Act, 1940 in addition to the grounds mention in the 1899 Act, added an award being ‘otherwise
invalid’ as an additional ground to set aside the award by the Courts, thus giving a scope for the expansion of
judicial review. The challenges faced by the Arbitration Act, 1940and the need to boost the alternate dispute
resolution process was realised and addressed by the lawmakers who repealed the Arbitration Act, 1940 and
introduced the Arbitration and Conciliation Act, 1996.
The UNCITRAL Model Law, 1985 introduced an award being opposed to ‘public policy’ as a valid ground for
setting aside the arbitral award. This concept was adopted by India in the Arbitration and Conciliation Act, 1996
under Section.34 (relating to the domestic awards) and under Section.48 (relating to the foreign award).
In arbitration, the autonomy of the parties is kept at the highest pedestal. Therefore, any Court adjudicating
upon the validity of an arbitral award is not to function as an appellate Court, but merely is to decide upon
156
the legality of the validity of the arbitral award. But the jurisprudence related to what constitutes public policy
has been a matter of debate and discussions until the Arbitration and Conciliation (Amendment) Act, 2015
was brought into force which amended Arbitration and Conciliation Act, 1996. The Arbitration and Conciliation
(Amendment) Act, 2015 expressly laid down the features of public policy whose violation would be considered
as being opposed to the public policy.
CASE STUDY
Case Law: Prior to implementation of Arbitration and Conciliation Act, 1996.
Renusagar Power Co. Ltd. v. General Electric Co.24
One of the earlier instances where the Supreme Court was to determine the legality of the foreign arbitral
award on ground of it being opposed to the public policy of India was in Renusagar Power Co. Ltd. v. General
Electric Co.
Renusagar Power Co. Ltd. (hereinafter Renusagar) was an electricity generating and distributing company
established under the Companies Act, 1956; and wanted to set up a unit in Mirzapur District of Uttar
Pradesh. General Electric Co. was a company based out of the United States and was primarily involved in
the manufacture of, selling and repairing of several electrical products and ancillary activities. Renusagar
wanted to enter into an agreement with General Electric for supplies of certain products that could be used
for setting up the proposed plant in the Mirzapur District. After attaining permission from the Government
authorities, Renusagar and General Electric (collectively referred to as parties) entered into an agreement
on August 24, 1964. The agreement between the parties provided for an arbitration clause which mentioned
that in case of any dispute between the parties, the said dispute shall be referred to International Chamber
of Commerce (hereinafter ICC) for arbitration. The agreement provided for a constitution of three-member
Arbitral Tribunal, out of which one were to be nominated by each party and the third shall be appointed
by the ICC. The subject matter of the dispute was a provision in the contract between the parties which
provided that if General Electric received an exemption from the Government of India with respect to the
payment of income tax on the interest amount paid by Renusagar, General Electric shall exempt and reduce
the interest rate upon Renusagar from 6.5% per annum to 6% per annum commencing from the date of such
exemption. The Government of India gave its approval under the Income Tax Act, 1961 to the loan obtained
by Renusagar from General Electric and thereby exempted the interest. However, the same was withdrawn
on September 11, 1969 retrospectively and General Electric was held liable to pay income tax on the interest
payable at 6.5% per annum. The said order of September 11, 1969 was set aside by the Delhi High Court.
Subsequently some issue related to the payment of interests arose between the parties and the parties
pursuant to the arbitration agreement decided to arbitrate at the ICC.
A suit was filed by Renusagar at the original side of the Bombay High Court with a prayer restraining the
Arbitral Tribunal at the ICC from progressing further with the arbitration and also restraining the Arbitral
Tribunal from passing any orders requiring Renusagar to make any deposit for any sum. Renusagar got an
award in its favour ex-parte. On the contrary, an application was filed by the General Electric before the
Bombay High Court. Both the applications were heard together, and a common order was passed which
allowed the application of General Electric and imposed a stay on all previous orders. In the meanwhile, the
arbitration proceedings begun at the ICC and Renusagar appeared under protest. Subsequently, an award
was passed against Renusagar for an amount of US $ 12,215,622.14.
General Electric filed an execution petition under Section 5 of the Foreign Awards Act, 1961 in the Bombay
High Court. The Bombay High Court accepted the application for the enforcement of arbitral award. The said
order for execution was challenged through an LPA to the Division Bench of the High Court. The Division
24. 1994 AIR 860, 1994 SCC Supl. (1) 644
157
Bench of the High Court dismissed the application but granted a certificate of appeal to the Supreme Court.
The objections raised by Renusgaar before the Supreme Court were that the award was against the public
policy of India under Section 7(1)(b)(ii) of the Foreign Awards Act.
The Supreme Court on the ambit of Public Policy held as follows:
“IV. Meaning of ‘public policy’ in Section 7(1)(b)(ii) of the Act
Para 46. While observing that “from the very nature of things, the expressions ‘public policy’, ‘opposed to
public policy’ or ‘contrary to public policy’ are incapable of precise definition” this Court has laid down:
Public policy … connotes some matter which concerns the public good and the public interest. The concept
of what is for the public good or in the public interest or what would be injurious or harmful to the public good
or the public interest has varied from time to time.” (See : Central Inland Water Transport Corpn. Ltd. and Anr
v. Brojo Nath Ganguly and Anr.)
The Supreme Court allowing the enforcement of the award, held that “public policy” shall be used in a
narrower sense to be attracted. Further It was held that an enforcement of an foreign award could be refused
if it is proved that such award is contrary to:
i. Fundamental Policy of Indian Law; or
ii. The interests of India; or
iii. Justice or morality.
Case Law: Post Arbitration and Conciliation Act, 1996
Bhatia International v. Bulk Trading S.A. and anr.25
After the discussion of the realm of the public policy in the enforcement of foreign arbitral award in India,
the three judge bench of the Supreme Court was again called upon to determine the scope of public policy
as under the Arbitration and Conciliation Act, 1996. The arbitration clause between the parties provided
that in an instance of a dispute, the dispute shall be referred to adjudication by the ICC. An application
under Section 9 of the Arbitration and Conciliation Act, 1996 was filed before the Additional District Judge,
Indore seeking an injunction restraining the parties from alienating, transferring and/or creating third-party
rights. The major contention that was raised was on the applicability of Part I of Arbitration and Conciliation
Act, 1996 to the foreign arbitral proceedings. Answering the question in positive, the Supreme Court held
that Part I of the Arbitration and Conciliation Act, 1996 shall also be applicable to international commercial
arbitrations. It was held by the Supreme Court as below:
Para 16. A reading of the provisions shows that the said Act applies to arbitrations which are held in India
between Indian nationals and to international commercial arbitrations whether held in India or out of India.
Section 2(1)(f) defines an international commercial arbitration. The definition makes no distinction between
international commercial arbitrations held in India or outside India. An international commercial arbitration
may be held in a country which is a signatory to either the New York Convention or the Geneva Convention
(hereinafter called “the convention country”). An international commercial arbitration may be held in a non-
convention country. The said Act nowhere provides that its provisions are not to apply to international
commercial arbitrations which take place in a non-convention country. Admittedly, Part II only applies to
arbitrations which take place in a convention country. Mr Sen fairly admitted that Part II would not apply to an
international commercial arbitration which takes place in a non-convention country. He also fairly admitted
that there would be countries which are not signatories either to the New York Convention or to the Geneva
Convention. It is not possible to accept the submission that the said Act makes no provision for international
commercial arbitrations which take place in a non-convention country.
25. (2002) 4 SCC 105.
158
Oil and Natural Gas Corporation Ltd. v. Saw Pipes26

A wider interpretation was given to the term of public policy by the Supreme Court. Herein, the Supreme
Court while adopting the grounds for setting aside the foreign award as laid down in the Renusgar case, also
added ‘patent illegality’ as one of the facets for setting aside an arbiral award. The Supreme Court held as
below:
“Para 22. The aforesaid submission of the learned Senior Counsel requires to be accepted. From the
judgments discussed above, it can be held that the term “public policy of India” is required to be interpreted
in the context of the jurisdiction of the court where the validity of award is challenged before it becomes
final and executable. The concept of enforcement of the award after it becomes final is different and the
jurisdiction of the court at that stage could be limited. Similar is the position with regard to the execution of
a decree. It is settled law as well as it is provided under the Code of Civil Procedure that once the decree
has attained finality, in an execution proceeding, it may be challenged only on limited grounds such as the
decree being without jurisdiction or a nullity. But in a case where the judgment and decree is challenged
before the appellate court or the court exercising revisional jurisdiction, the jurisdiction of such court would
be wider. Therefore, in a case where the validity of award is challenged, there is no necessity of giving a
narrower meaning to the term “public policy of India”. On the contrary, wider meaning is required to be given
so that the “patently illegal award” passed by the Arbitral Tribunal could be set aside. If narrow meaning as
contended by the learned Senior Counsel Mr Dave is given, some of the provisions of the Arbitration Act
would become nugatory. Take for illustration a case wherein there is a specific provision in the contract
that for delayed payment of the amount due and payable, no interest would be payable, still however, if the
arbitrator has passed an award granting interest, it would be against the terms of the contract and thereby
against the provision of Section 28(3) of the Act which specifically provides that “Arbitral Tribunal shall decide
in accordance with the terms of the contract”. Further, where there is a specific usage of the trade that if the
payment is made beyond a period of one month, then the party would be required to pay the said amount
with interest at the rate of 15 per cent. Despite the evidence being produced on record for such usage, if the
arbitrator refuses to grant such interest on the ground of equity, such award would also be in violation of
sub-Sections (2) and (3) of Section 28. Section 28(2) specifically provides that the arbitrator shall decide ex
aequo et bono (according to what is just and good) only if the parties have expressly authorised him to do so.
Similarly, if the award is patently against the statutory provisions of substantive law which is in force in India
or is passed without giving an opportunity of hearing to the parties as provided under Section 24 or without
giving any reason in a case where parties have not agreed that no reasons are to be recorded, it would be
against the statutory provisions. In all such cases, the award is required to be set aside on the ground of
“patent illegality”.”
Bharat Aluminium Company v. Kaiser Aluminium Technical Services Inc.27
The scope of the realm of ‘public policy’ which has often been referred to as an unruly horse had made
many international awards liable to be set aside by the Indian Courts. The contours of perils of public policy
was finally curtailed by the constitutional bench of the Supreme Court of India in the BALCO judgment. The
BALCO judgment categorically overruled Bhatia International case28and held that Part I of the Arbitration
and Conciliation Act, 1996 shall not be applicable to the proceedings under Part II. This meant that the
grounds of “public policy” as it existed under Section 34 of the Arbitration and Conciliation Act, 1996 shall
not be applicable under the grounds of public policy as applicable under Section 48. Overruling Bhatia
International (Supra), the Supreme Court held as follows:
26. (2003) 5 SCC 705.

27. (2012) 9 SCC 552.
28. (2002) 4 SCC 105.
159
Para 195. With utmost respect, we are unable to agree with the conclusions recorded in the judgments of this
Court in Bhatia International [(2002) 4 SCC 105] and Venture Global Engg. [(2008) 4 SCC 190] In our opinion,
the provision contained in Section 2(2) of the Arbitration Act, 1996 is not in conflict with any of the provisions
either in Part I or in Part II of the Arbitration Act, 1996. In a foreign-seated international commercial arbitration,
no application for interim relief would be maintainable under Section 9 or any other provision, as applicability
of Part I of the Arbitration Act, 1996 is limited to all arbitrations which take place in India. Similarly, no suit
for interim injunction simpliciter would be maintainable in India, on the basis of an international commercial
arbitration with a seat outside India.
Para 196. We conclude that Part I of the Arbitration Act, 1996 is applicable only to all the arbitrations which
take place within the territory of India.
Para 197. The judgment in Bhatia International [(2002) 4 SCC 105] was rendered by this Court on 13-3-2002.
Since then, the aforesaid judgment has been followed by all the High Courts as well as by this Court on
numerous occasions. In fact, the judgment in Venture Global Engg. [(2008) 4 SCC 190] has been rendered on
10-1-2008 in terms of the ratio of the decision in Bhatia International [(2002) 4 SCC 105] . Thus, in order to do
complete justice, we hereby order, that the law now declared by this Court shall apply prospectively, to all
the arbitration agreements executed hereafter.
Judicial non-interference in International Commercial Arbitration
This is the central pillar and fundamental principle of contemporary international commercial arbitration based
on the consensus approach of international convention countries i.e. England, France, Germany, Belgium,
Austria, Japan who have adopted the right of procedural neutrality and dispensing with procedural protections
designed for domestic litigation. Granting basic equality to parties lies at the core of this subject to an extent that
the mandatory provisions of the national law are ordinarily limited in their scope even in the most developed
arbitration statues, in absence of specific agreement between the parties. ICC rules will apply in exclusion of
all other laws. The NY Convention and various international arbitration conventions, for example the Geneva
Protocol, supported by national arbitration legislation have adopted this principle. Article II of the Geneva
Convention cast an obligation on contracting states to recognise all material terms of the arbitration agreement
relating to arbitral seat, number of arbitrators, institutional rules, arbitration procedures etc.
UNCITRAL Notes on Organising Arbitral Proceedings deals extensively on this aspect. Article 5 states that no
Court shall intervene in the proceedings except so provided in this law. Further, Article 19 provides that unless
explicitly excluded by the parties,the arbitrators shall have no discretion to apply procedural laws. According
to Article 24(1) – in absence of contrary agreement between the parties, the Arbitral Tribunal shall decide
to hold any oral hearings. The UNCITRAL Model Law, 1985 permits limited circumstances including judicial
support to resolve objections on jurisdiction, assist in constitution of Arbitral Tribunal, granting provisional
relief, consider applications to vacate awards, but does not permit judicial supervision of procedural decisions
through interlocutory appeals. The local national Courts can deny recognition to arbitral awards that are
fundamentally unfair, arbitrary, unbalanced procedures, failure to apply international standards or local
procedural public policies and procedural protections guaranteed by national law. English and US Courts
have adopted the principle of judicial non- interference in arbitral proceedings.
Enforcement of arbitral award and the approach of the Supreme Court in recent cases
A few recent cases deserve merit for understanding the mind of judiciary in dealing with enforcement of
foreign arbitral awards.
1) National Agricultural Cooperative Marketing Federation of India (NAFED) v. Alimenta SA29
The Supreme Court on the subject of enforcement of a foreign award dealt with contractual obligations and
breach, coupled with the larger question of the award being opposed to public policy of India. NAFED was
29. Civil Appeal No. 667 of 2012, decided on 22.04.2020.
160
constrained not to export under the contract as it was Government’s refusal to allow the export in interest
of the country, in variance of export policy norms. Thus, the impossibility of performance did not amount to
commitment of a breach. The parties thus agreed to cancel the contract as performing the contract against
the policies of the Government would be construed as against the public policy of India. The Court also
considered the Foreign Awards (Recognition and Enforcement) Act, 1961 which also address the public
policy aspect as ground for setting aside the award. Section 23 of Indian Contract Act, 1872 deals with
consideration and objects that are unlawful. The Court opines that if the contract is opposed to public policy
then the consideration will be unlawful rendering the agreement as void. The Court has stated that Section
7(1)(b)(ii) of the Foreign Awards Act, 1961 must apply equally to Section 48(2)(b) of Arbitration and Conciliation
Act, 1996. In proceedings for enforcement of foreign award under Foreign Awards Act, 1961, the grounds
specified in Section 7(1)(b)(ii) are to be evaluated narrowly in defence of public policy.
On this analogy the Court recommends that principles of Renusagar case should also be tested in appeal
under Section 48(2)(b) of Arbitration and Conciliation Act, 1996. While judging enforceability of foreign
awards the national Court does not exercise appellate jurisdiction nor entitled to enquire whether some error
has been committed in rendering foreign award. The grounds of challenge or refusal of enforcement under
Section 34 and Section 48 of the Arbitration and Conciliation Act, 1996 are identical.
Sukanya Holdings Pvt. Ltd., v. Jayesh H. Pandya and Ors.30
The Supreme Court held that Section 89 of Code of Civil Procedure, 1908 cannot be resorted to for
interpreting Section 8 of the Arbitration and Conciliation Act, 1996 as it stands on a different footing and it
would be applicable even in cases where there is no arbitration agreement. The Court has to apply its mind
to the condition contemplated under Section 89, of Code of Civil Procedure, 1908 and even if an application
under Section 8 of the Arbitration and Conciliation Act,1996 is rejected, the Court is required to follow the
procedure prescribed under the said Section.
GOI. v. Vedanta Ltd and Ors.31
The Apex Court has dealt with certain key areas like limitation for filing an application under Section 47 of
the Arbitration and Conciliation Act, 1996 for enforcement of New York convention awards covered in First
Schedule, the applicability of yardsticks of public policy by the Malaysian Courts in deciding challenge to
the award and if the foreign award fails the public policy tests in India.
The key takeaways from this order could be summarised as:
l A foreign award reaches its finality for being enforced in India after it passes musterthrough the
gateways and rigours of sec 47 and 48, if invoked by an aggrieved party. The grounds of challenge
that a party may raise are stipulated in sec 48. There are five grounds which an aggrieved party may
raise before the court. The court can also suo moto refuse to enforce the foreign award under sec 48, if
it finds that the subject matter of settlement is not arbitrable under the Indian laws or the enforcement
of the foreign arbitral award would be opposed to the public policy of India. The enforcement court
however will not have extra territorial power to review the order to correct the errors or undertake
review on merits but has limited powers either to enforce the order or otherwise if valid grounds as
cited above under sec 48 is made out.
l The Enforcement Court (Execution Court) cannot set aside the award as that power is vested only with
the supervisory Court located at the seat of arbitration. The enforcement of foreign arbitral awards
is not covered by Arbitration and Conciliation Act, 1996 but falls under Code of Civil Procedure, 1908
under Sec 44 A read with Sec 13. Sec 44 A is the core Section that allows an Indian court pertaining
to a reciprocating territory, to execute the order as if it were passed by this court. Sec 13 of CODE OF
30. AIR 2003 SC 2252.

31. Civil Appeal No 3185 of 2020.
161
CIVIL PROCEDURE, 1908 states that the judgment of a foreign court must be conclusive and pass the
tests of this Section. The High Court will adhere to the Order XXI of CODE OF CIVIL PROCEDURE,
1908.
l The question of applicability of law of limitation, to enforcement of Foreign Arbitral Awards have
been initially tested in the backdrop of two judgments, where the courts have taken a conflicting
and contrary view. The Madras High Court in Compania Naviera ‘SODNOC’ v. Bharat Refineries Ltd.
and Ors. passed by single judge allowed a period of 12 years under Article 136 of the Limitation Act
1963 to the holder of award for seeking enforcement of foreign arbitral award. However, the Bombay
High Court in Noy Vallesina Engineering Spa vs. Jindal Drugs Limited 32, the learned single judge
decided that enforcement of foreign arbitral award will be governed by Article 137 of Limitation Act
1963 providing for a three year period for limitation.
The Delhi High Court in Cairn India Ltd and Ors. v. Government of India held in its judgement passed
on 19-2-2020 reiterated that Article 136 of Limitation Act would apply for execution of foreign arbitral
award on the lines ofthe decision in Compania Naviera (supra). However, the Apex Court appears to
have settled this controversy of limitation in its recent judgement on 16-9-2020 in GOI vs Vedanta&
Others [ CA no 3185 of 2020] has held that Article 136 will not be applicable for enforcement or
execution of foreign arbitral awards, since they cannot be construed to be a decree of a civil court in
India. A foreign arbitral award will be covered by Article 137 which provides for a timeline of three (3)
years from when the right to apply accrues. A party seeking enforcement of foreign arbitral award
may file an application for condonation of the delay under sec 5 of the Limitation Act 1963 and
provisions of Order XXI of CPC would be applicable to a substantive petition under 1996 Act.
l The Court further deals with the provisions to be followed by the holder of award for enforcement of
New York convention awards. The noticeable observation is that there is no requirement to obtain a
decree from the seat court to entitle the award to be enforceable as a foreign decree. Neither is the
applicant require to obtain leave of the seat court or under the laws of which the award was made.
l The next important question came up was if the Malaysian court which was trying a challenge to
the award ought to have applied the substantive law of contract, viz., Indian law to determine the
conflict with public policy. The court held that the Malaysian court was justified in applying the local
Malaysian law in dealing with the challenge raised by GOI, being the curative court having principal
jurisdiction. The GOI challenged the award on grounds of lack of jurisdiction to try the dispute as
subject matter beyond the scope of arbitral tribunal and also opposed to public policy. However, the
enforcement court shall not be guided by the decision of Malaysian court in trying an application of
challenge of enforcement under Section 48 of the Act. While arriving its findings the court dealt with
four laws. The governing laws guiding the commercial contract between parties; the governing law of
arbitration which is distinct from the law governing law, the curial law of arbitration hinged to the seat
of arbitration and lastly the lex fori which determines the issue of enforcement by the national court.
Article III of New York Convention acknowledge that national courts shall apply lex fori including
limitation period one of the issues before the court.
l The last issue decided by the court was determining public policy if a challenge is made under sec 48
of the Act. The court reiterated the principles laid down in Renusagar judgment (Supra), elucidated in
Shri Lal Mahal Ltd. vs. Progetto Grano SPA [ (2014) 2 SCC 433]. The enforceability of the foreign award
will be laid down by the national court following the parameters laid down in Renusagar if it is contrary
to the public policy of India, interests of India and justice or morality. The recent amendment of Sec 48
vide Act 3 of 2016 where the earlier meaning of public policy the words “in the interest of India” has
been deleted and narrowed down significantly. The supreme court had expounded the meaning of
32. 2006 (3)ArbLR510(Bom);
162
public policy in Renusagar judgment. The apex court has in its findings cited two important judgments
of foreign courts, US Court of Appeals in Parsons case [508 F.2d 969(2nd Cir 1974) have held that the
Convention’s public policy doctrine should be viewed narrowly and the court can only intervene in
a foreign arbitral award only when enforcement would violate the forum state’s most basic notions
of morality and justice. The Singapore Court of Appeal in PT Asuransi Jasa Indonesia vs. Dexia Bank
SA [2006] SGCA 41elaborated that the public policy is not the political stand or international policies
of a state but entails the fundamental notions of principles of justice. Thus, instances of corruption,
fraud, bribery would constitute a valid ground of setting aside an award. It is interesting to note that
International Council for Commercial Arbitration (ICCA) in its Guide to the interpretation of the 1958 NY
Convention : A handbook of judges ( pub in 2011) in refusing enforcement of foreign awards the court
must be guided by the following principles : a) no review on merits b) narrow interpretation of grounds
for refusal c) limited discretionary powers.
Enforcement under the UK and Singapore Law- A comparative Study

It would be interesting to see the reforms in UK and Singapore regarding enforcement of foreign arbitral
awards.
UK Courts
Recognition and Enforcement of Arbitral Awards made at an English seat and Foreign Arbitral Awards in
England are guided by UK Arbitration Act, 1996. Upon widespread adoption of New York Convention, it
shall be noted that most foreign awards are enforced in England in accordance with the UK Arbitration Act,
1996. Section 66 deals with enforcement of awards both domestic and international. Sections 101-103 deals
specifically with Recognition and Enforcement of New York Convention. English Court of Appeal upheld a
first instance decision to refuse enforcement of US $ 200 mn New York Convention Award in Dallah Estate
and Tourism Holding Co v. The Ministry of Religious Affairs, Govt of Pakistan33. On the basis that the arbitration
agreement was invalid for the purposes of Section 103(2)(b) of UK Arbitration Act, 1996 which reflects Article
V.1(a) of New York Convention. Dallah a Saudi Co invoked ICC for a claim against the Govt of Pakistan. Govt
of Pakistan refused to participate in proceedings refuting the arbitration agreement. ICC passed awards
after confirming validity of arbitration agreement and final award passed in favour of Dallah for US$ 18 mn
as damages for breach of contract by Govt. of Pakistan. Dallah filed application in the UK High Court for
enforcement of the award. The UK High Court in enquiry under Section 103(2)(b) of UK Act, 1996 hinged on
the procedural steps to be followed in the hearing.
The UK High Court re-opened the award and finally held invalidity of the arbitration agreement and thus
refused to enforce the award. Court of Appeal upheld the High Court’s order and reiterated a full hearing on
the validity of the arbitration agreement was necessary, by rejecting the suggestion that Section 103(2)(b)
permitted the Court to re-hear the matter only in the case when the award was prima facie wrong.
Dallah finally appealed to the Supreme Court. The appeal was dismissed on the ground that the Government
was not a party to the arbitration agreement.
The Supreme Court in its judgment reviewed the core issue of jurisdiction of the Tribunal on the premise that
the Government is a necessary part to the proceedings.
The Apex Court observed that:
While the Tribunal has inherent jurisdiction to arbitrate on disputes referred to it, the courts of the country
where the hearings were held and as well as the courts of a foreign country should examine the proper
jurisdiction of the court before enforcement of the award. The Tribunal can exercise jurisdiction only by
the consent of both the parties and cannot confer jurisdiction on its own. Moreover, the New York (NY)
33. [2009] EWCA (Civ) 755.
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Convention also secures the rights of a party to dissent on the jurisdiction of the Tribunal. Thus, in line with
the provisions of the NY Convention read with Section 103(2)(b) of the UK Act 1996 it was incumbent on
English courts to determine the validity of jurisdiction, on the challenge by the respondent that it was never
a party to the arbitral proceedings. The Government could establish to the satisfaction of the court that there
was no common intent and agreement between it and Dallah for pursuing the arbitration for resolution of the
dispute. Thus, the appeal was dismissed lacking merits.
These decisions raise a concern and a larger question on the disregard to the golden principles of judicial
non-interference in arbitral proceedings.
Singapore Courts
Given Singapore’s long standing, pro-arbitration legislation and judicial stance, the scope of opposition to
a foreign award on grounds of public policy available to a party is very narrow. By and large the national
Courts have not refused to enforce foreign arbitral awards on grounds of public policy.
Singapore is a party to New York Convention on Recognition and Enforcement of Foreign Arbitral Awards.
The exceptions to the recognition of such awards are triggered challenging invalid arbitration agreement
and if the award breaches natural justice or conflict with public policy. There are two recognised paths for
enforcement of foreign awards viz. a) Under Reciprocal Enforcement Act b) Common law action. The law
related to the jurisdiction of courts with respect to enforcement of foreign award in Singapore is governed
by the RECJA (Recognition and Enforcement of Commonwealth Judgments Act) and REFJA (Recognition and
Enforcement of Foreign Judgments Act). Foreign judgments extend to Courts of UK, New Zealand, Sri Lanka,
Malaysia, Pakistan, Brunei, India, Australia, Hong Kong, Windward Islands. Foreign judgments should be
final and conclusive, relating to monetary claims or damages.
The challenge to foreign awards can be made on grounds of (i) lack of jurisdiction of foreign Courts (ii)
pending appeal against the award (iii) judgment obtained by fraud.
Common law principles for enforcement of foreign awards should be based on (i) judgment of foreign Court
having international jurisdiction (ii) judgment is final and conclusive (iii) award for payment of definite sum of
money. Enforcement of foreign award can be denied if it is proved (i) breach of natural justice principles (ii)
award obtained by fraud (iii) enforcement of award would be against the public policy. Singapore International
Commercial Court (SICC)formed in 2015 is gaining importance, and maturity for hearing international matters of
commercial disputes. The orders of SICC carry weight both in domestic and international commercial arbitration.
DRAFTING OF ARBITRATION AWARD

An award can be divided in three parts.
(1) General Procedure and Decision
(2) Award of Interest
(3) Award of Costs
According to section 31 of Arbitration and Conciliation Act, 1996, an award should,
(i) be in writing;
(ii) contain reasons for the decision, unless the parties have agreed otherwise or if it is a consent award;
(iii) state the date and the place of arbitration; and
(iv) be signed by all of the arbitrators or contain an explanation for any missing signature. The Act provides
that after passing the award, a signed copy of the award shall be delivered to each party.
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General guidelines for drafting of Arbitral Award

1. An Award should be logically sequenced.
2. The Arbitrator should ensure that the Award should be legally enforceable.
3. An award should be made timely.
4. Award should be communicated to the Parties.
5. An award should be titled property. For example: Interim Award, Final Award etc.
6. An award should be properly paragraph and numbered to the possible extent.
7. In case of Arbitration by a panel of more than one arbitrator, the voting of individual arbitrator should
be mentioned.
8. An arbitration agreement is required to be in writing.

9. The award is to be signed by the members of the arbitral tribunal.
10. The making of an award is a rational process which is accentuated by recording the reasons. Generally,
the award should contain reasons.
11. The award should be dated.
12. The arbitral tribunal is under obligation to state the place of arbitration.
13. The arbitral tribunal may include in the sum for which award is made, interest up to the date of award
and also a direction regarding future interest.
14. The award may also include decisions and directions of the arbitrator regarding the cost of the
arbitration.
Specimen of Arbitration Award

MODEL ARBITRAL AWARD
STAMP DUTY OF RS. ____ PAID AS PER THE LAW IN THE STATE OF A.P.
BEFORE THE ARBITRAL TRIBUNAL
PANEL OF ARBITRATORS
CONSISTING OF
______________________ PRESIDING ARBITRATOR
______________________ ARBITRATOR
AND
____________________________, ARBITRATOR
IN THE MATTER OF ARBITRATION OF DISPUTES AND DIFFERENCES ARISING OUT OF THE INSURANCE
POLICIES:
(1) No._______________________;
(2) No.______________________; and
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(3) No.______________________
BETWEEN:
M/s. ___________,
a registered Partnership Firm,
Regd. Office at ___________________,
Rep.by its Managing Partner, ___________. CLAIMANT
AND
___________ Insurance Co., Ltd.
Rep. by its Divisional Manager, Gudivada,
Krishna District, A.P. RESPONDENT
AWARD
UNDER THE ARBITRATION AND CONCILIATION ACT, 1996.
APPEARANCE: (1) ________________,
Managing Partner of
the Claimant.
(2) _________________,
Advocate for the Claimant.
AND
(1) _________________ Manager,
Respondent _______ Insurance Co., Ltd.
(2) _____________ Asst. Manager of the
Respondent Insurance Company.
(3) ____________, Advocate for the Respondent.
Brief facts of the claim:
1. The claimant is a registered Partnership Firm doing business in the purchase of paddy in bulk quantities,
converts the same into raw rice in its Mill and sells the same in the market along with by-products of
broken rice, bran etc., at _____________. The claimant insured its goods to cover all conceivable
risks. The claimant purchased large quantities of paddy during April and May, 1997 and stocked the
same in the open area besides in the Mill Hall and Godown and insured its building, machinery, paddy
stocks, kept in open area as well as in Godown with the respondent insurance company under three
insurance policies. The claimant paid the premiums as required by the respondent Insurance Company.
On ________________(date) there was a devastating sudden and localized storm associated with
heavy rain and strong gales for Hr.0-45 minutes to one hour. Heavy loss and damage were caused to
the insured goods of the claimant. This was brought to the notice of the respondent on _____________
itself. At about ________on the same day the Asst. Divisional Manager of the respondent Insurance
Company came along with Development Officer and witnessed the extent of loss.
2. ____________, Surveyor, deputed by the respondent Insurance Company, visited and assessed the
loss caused. Part of the Godown got damaged. 15000 quintals of paddy kept in the Godown Hall and
in the open and 1000 quintals of rice, 300 quintals of broken rice and 150 quintals of bran as well as
gunnies were extensively damaged. The paddy became unfit for human consumption. The insured
took all precautions to safeguard the insured property. The respondent insurance company is under
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the obligation to settle the claims of the insured claimant, within reasonable time. But, the respondent
Insurance Company, after one year, offered to pay a meagre amount of Rs.3,00,000/- The claimant
suffered a net loss to the tune of Rs.20,00,000/- after deducting salvage. The respondent Insurance
Company is liable to compensate the actual loss with interest at 24% P.A. The claimant prays the
Arbitrators to direct the respondent Insurance Company to pay the same with interest and costs.
3. Disputes and differences have arisen between the parties and the claim has cropped up. The claimant
contends that it is entitled for the entire amount with interest as claimed. The respondent Insurance
Company refuted all the contentions and claim made by the claimant. According to the respondent, the
claim is not tenable and that the claimant is entitled to only Rs. 3,00,000/-.
4. The claim made in the claim statement are in respect of disputes and differences arising out of Exs.A-1,
A-1(a) and A.-(b) Insurance Policies. The said Insurance Policies provide for settlement of all disputes by
arbitration. As the claim of the claimant has not been honoured, the claimant was forced to invoke the
arbitration clause of the Insurance Policies.
5. We, the panel of Arbitrators, entered into reference on ___________, held preliminary sittings on
___________, ___________ and _______ and proceeded further with enquiry and held sittings on
____________, ___________, ____________, and finally on _____________.
6. The sittings were held at: - _____________________________ in the office premises of
______________________, the Presiding Arbitrator to suit the convenience of both the parties herein.
7. The claimant examined one witness P.W.1 and got marked ExhibitsA-1 to A-11 (Particulars are given in
the Appendix of Evidence at the end of the Award). The respondent Insurance Company examined two
witnesses R.Ws. 1 & 2 and got marked Exs.B-1 to B-13 (Particulars are given in the Appendix of Evidence
at the end of the Award).
8. Both parties stated that there are no other witnesses to be examined and no other documents to be
filed and marked and that there is no further evidence to be adduced and further material to be placed.
Hence, evidence concluded.
9. Heard arguments in full, advanced by both the parties. Both the parties herein stated that there were
no further arguments.
10. Both the parties herein expressed satisfaction and stated that there was no further evidence to be
adduced or further arguments to be advanced and that they were given full opportunity in all matters.
As both the parties stated that there was no further material to be placed or further arguments to be
advanced, the enquiry also concluded.
11. The Arbitrators, after conducting enquiry and after fully hearing both the parties and after carefully and
judiciously considering the said arguments and pleadings and all documents and also after carefully
and judiciously assessing the value of the entire evidence and all material placed and after bestowing
full thought to all matters in dispute and after carefully and judiciously considering the merits and
demerits of all contentions of both parties on the claim,
MADE THE FOLLOWING
AWARD
12. The following point is formulated for consideration: -
To what amount is the claimant entitled from the respondent Insurance Company towards damage
and loss caused to the insured properties?
13. The entire pleadings, documents, oral evidence and material placed have to be carefully and judiciously
167
considered to assess the merits and demerits of the claim and to come to correct conclusion in giving
finding on the above point.
14. The claimant is a Firm represented by its Managing Partner. The business is purchase of paddy in bulk
quantities and converting the same into raw rice in its mill and selling the same in the market. In view of
high magnitude of business operations involving huge quantities of paddy and rice, the claimant insured
its goods to cover all conceivable risks. The mill and other properties are insured by the claimant with the
respondent Insurance Company under Ex. A-1, A-1(a) and A-1(b) Insurance Policies. It is not in dispute that
the properties in respect of which the claim is made are insured with the respondent Insurance Company
and that the policies are subsisting by and beyond the date of the incident i.e., _______.The insured took
all precautions to safeguard the insured properties under normal conditions. The Surveyor engaged by the
respondent Company stated in Ex. B-2, Survey Report, that the insured complied with all the warranties.
15. Before assessing and evaluating the damage and loss caused to the insured property it is necessary to
know the stock position. The stock position as on _____________ is not in dispute.
16. We will next consider the evidence regarding the assessment and evaluation of loss and damage to
the insured property. The claimant in the claim statement claimed Rs.20,00,000/- towards the total loss
sustained. In Ex. B-1 claim form submitted to the respondent Insurance Company, the claimant claimed
as the total, Rs._____________. The Surveyor engaged by the respondent Insurance Company
assessed the total loss at Rs. ____________/-. As against this, the Surveyor engaged by the claimant
assessed the total loss at Rs.____________.
17. The dispute and differences between the parties is the quantum of loss and damage caused to the
insured properties by the storm and inundation and the amount payable by the respondent Insurance
Company to the claimant. Here, the quantum of damage and loss is directly proportionate to the
intensity of the storm. Extent of damage as stated by the claimant can only be caused, if there was
a devastating storm. It is established in evidence that there was a devastating and severe storm on
_____________for about 45 minutes to one hour at ____________ where the insured Rice Mill and
the properties are located, causing damage and loss not only to the insured property but also to
the properties and products surrounding the Mill. The huts have collapsed, the trees were uprooted
and the electric poles were bent and uprooted. The claimant reported to the respondent Insurance
Company on __________ evening itself about the devastating storm and the consequential loss and
damage caused to the insured property. The Assistant Divisional Manager, who is an employee of
the respondent insurance company, visited the Mill on the date of occurrence itself and saw the loss
caused to the claimant. Ex. B-3 is his report. In Ex. B-3, the Assistant Divisional Manager furnished the
details of the damage which occurred due to the sudden, violent, localized gale and storm that hit the
place. His report Ex. B-3 fully supports the claim of the claimant. The Assistant Divisional Manager,
being the employee of the respondent, we consider his report as impartial and credit-worthy and we
accept the same. The Revenue Officer also visited and made assessment and evaluation of the loss
caused to the claimant. The Revenue Officer is a respectable Officer of the Government and his report
has to be given weightage and hence hereby accepted. This report is marked as Ex. A-11. Besides this,
the respondent Insurance Company as well as the claimant engaged their surveyors to assess and
evaluate the loss and damage caused to the insured properties due to storm and inundation.
18. Shri ______ (R.W.1) is the Surveyor engaged by the respondent Insurance Company. Ex. B-2 is his
report. He gave evidence as R.W.1.Taking an overall view of his evidence and report we are constrained
to observe that his report and evidence are devoid of fairness and impartiality. Mr. _________ is the
Surveyor engaged by the claimant. There is absolutely no bar for the claimant engaging its own
Surveyor to protect its own interest and establish the truth before this Arbitral Tribunal. His report and
evidence will be relied upon and accepted wherever necessary.
168
19. We will next take up item-wise assessment and evaluation of loss caused to the insured properties
of the claimant. The claim pertains to the properties covered by Insurance Policies Nos.__________,
_____________ and ____________. The loss relates to the damage and destruction caused to the
Godown Building, the stocks in Godown, _______ quintals of paddy packed in ________ Gunny Bags,
_________ quintals of rice, ______ quintals of broken rice and ______ quintals of bran and as well as
the stocks kept in the open i.e., 2 heaps of paddy and loose paddy in the Kundi amounting to ________
quintals besides Gunnies. We reject the findings of Mr. _________ engaged by the respondent Insurance
Company as its Surveyor, as his survey and assessment are unreliable, unrealistic and unacceptable.
His evaluation of salvages is high and perverse. We arrive at the correct salvages even if we rely on
the material in his report Ex. B-2. The assessment and evaluation of Mr. _____ the Surveyor engaged
by the claimant, in his Ex. A-2 report is realistic and nearer to the truth. We will accept his findings
wherever required.
Stock in Godown:
Paddy:
Total quantity of paddy stocked in the Godown is ______ quintals. Out of this the bottom, top and sides were
damaged.
The Surveyor Mr. _______ claims to have milled 10 quintals of paddy which yielded rice, broken rice and bran.
The cost of normal rice is Rs. _____/- per quintal even according to Ex. B2, while calculating the value of
damaged paddy, the Surveyor Mr. ______ has given the salvage value of rice after milling at Rs. _____, which
is unrealistic, unacceptable and unreasonable. Hence, we reject the same because the salvage value comes
to 85.47% which is unrealistic and we rely on Ex. B-2 of the Surveyor Mr. ________ while calculating the loss of
raw rice lying damaged in the Godown. He has arrived the salvage value of Rs. _____ vide page No.11 of Ex. B2.
This can be safely adopted for the discoloured rice got from the damaged paddy, after milling.
Hence salvage value per quintal comes to Rs. _______, according to _______ Surveyor, the rice that we
realized after milling ____ quintals is _____ Kgs. We find accordingly.
Broken Rice: -
_________________________________
_________________________________
_________________________________
Rice: -
_________________________________
_________________________________
Raw Rice: -
_________________________________
_________________________________
Broken Rice: -
_________________________________
_________________________________
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Bran: -
_________________________________
_________________________________
Gunnies: -
_________________________________
_________________________________
Paddy stocks kept in open: -
_________________________________
_________________________________
Heap No.II:-
_________________________________
_________________________________
Gunnies: -
_________________________________
_________________________________
Kundi: -
_________________________________
_________________________________
Now, we arrive at the grand total of loss sustained by the claimant and payable by the respondent Insurance
Company as follows:
(1) Loss and damage to the Godown .. Rs. _________
(2) The net loss for the stocks in Godown .. Rs. __________
(3) Net loss for open stocks .. Rs. __________
-----------------------

Total Rs.__________
We have already taken into consideration the under-insurance factor. Policy excess is Rs. _________. This has
to be deducted from the above amount and the net amount of loss comes to Rs. ________.
We have scrutinized and taken into consideration all the documents filed by both sides and also considered
the evidentiary value, if any, of each and every document. In our award we have specifically referred to such
of those documents which are necessary to adjudicate the dispute referred to us. We have also taken into
consideration the merits and demerits of the entire oral evidence adduced by the parties.
For the reasons stated above we find that the claimant is entitled to get from the respondent insurance company
an amount of Rs. ____________under the claim.
In the result, we allow Rs.___________.
We award accordingly.
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Interest: -
According to Section 31 of the Arbitration and Conciliation Act, 1996, we have power to grant interest from the
date on which the cause of action arose till the date of payment. The cause of action arose on the date of
incident i.e., on _________. The claimant has submitted his claim form on _______. Hence, we award interest
from ________ till the date of payment at 18% per annum.
Costs:
Each party is directed to pay its own costs.
For the reasons stated above we find on the above point that the claimant is entitled from the respondent
insurance company a sum of Rs. _________ with interest at the rate of 18% p.a. from __________ till the date
of payment.
In the result, we hereby declare and award and direct that the respondent Insurance Company shall pay to the
claimant an amount of Rs.__________ (__________________________) with interest at the rate of 18% per
annum with effect from ___________ till the date of payment.
Award passed accordingly.
The other Arbitrator, __________ has expressed that he will be passing a separate award and declined to sign
on this award. So far, no communication is received from him. Hence, we are passing this award by majority.
This Award is concurred by the Presiding Arbitrator and the Arbitrator _______________, which is an Award of
the majority of the Panel.
This AWARD is made and signed on this the ____th day of _______, 20____ at ______________.
1. Sd/-
_________________________________
Presiding Arbitrator
2. Sd/-
_________________________________
Arbitrator
Place: ________
Dated: ________
APPENDIX OF EVIDENCE
Witnesses examined for the Claimant: -
(1) Mr. _____________. Surveyor.
Witnesses examined for the Respondent: -
(1) Mr. __________ Surveyor.
(2) Ms. ___________., Manager of the respondent,
DOCUMENTS MARKED
For Claimant:
Exhibits A-1 to A-11 annexed with description to this Award.
For Respondent:
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Exhibits B-1 to B-13 annexed with description to this Award.

1.
Presiding Arbitrator
2.
Arbitrator
Place:___________
Dated: __________
LESSON ROUND-UP
l The key requirement of the contents of the award that are prescribed in the Arbitration and Conciliation
Act, 1996 is that the award should be a well-reasoned and speaking award including reference to a
Settlement if arrived at in terms of Section 30.
l The object of providing for interest on an award is to compensate the damage resulting from the fact
that on default by one party, the opposite party is not deprived of the deployment of the money and
the returns that could have been earned from the invested sum.
l A domestic Award is enforceable as a decree passed by a Civil Court, after the period provided for
challenging the same expire, and in case it is challenged, after the challenge fails under Section 34.
Foreign Awards cannot be challenged in India. It is, therefore, quite clear that an application under
Section 34 is not at all contemplated insofar as a foreign award is concerned.
l Enforcement of Award can be classified into two categories i.e. Enforcement of Domestic Award and
Enforcement of Foreign Award.
l It is well settled that preferring of an appeal does not operate as stay on the decree or order appealed
against or on the proceedings in the Court. A prayer for the grant of stay of proceedings or on the
execution of decree or order appealed against has to be specifically made to the appellate Court and
the appellate Court has discretion to grant an order of stay or to refuse the same.
l The Supreme Court in the case of Chiranji Lal (D) by Lrs., v. Hari Das (D) by Lr held that the question as
to whether the award is required to be stamped or registered is relevant only when the parties would
file the award for its enforcement under Section 36 of the Arbitration and Conciliation Act,1996
l The mechanism of executing a foreign award in India is governed by the Code of Civil Procedure,
1908. Section 2(6)1 of the Code of Civil Procedure, 1908 defines a ‘Foreign Judgment’ as the judgment
passed by a foreign Court.
l According to section 31 of Arbitration and Conciliation Act, 1996, an award should, be in writing, contain
reasons for the decision, unless the parties have agreed otherwise or if it is a consent award, state the
date and the place of arbitration; and be signed by all of the arbitrators or contain an explanation for
any missing signature. The Act provides that after passing the award, a signed copy of the award shall
be delivered to each party.
l Part-II of the Arbitration and Conciliation Act, 1996 deals with enforcement of Foreign awards. Chapter
I of Part II of the Act deals with Sections 44 to 52 for any award passed under New York Convention.
l Since the decisions rendered by Arbitral Tribunals are not subjected to appeal before any Courts, it
becomes important that these quasi-judicial bodies do not digress from the pious task of imparting
justice.
172
GLOSSARY
Two Tier Arbitration: It means in case an award given by a sole arbitrator it would be appealed to an Arbitral
Tribunal consisting of a panel of three arbitrators or a higher odd number.
Interim award –It is an award made by a tribunal during the pendency of the matter. The jurisdiction to make
an interim arbitral award is left to the good sense of the Arbitral Tribunal. The Interim Award does not end the
proceedings and Arbitration Proceedings comes to end after passing of Final Award.
TEST YOURSELF
(These are meant for re-capitulation only. Answers to these questions are not to be submitted for evaluation)
1. Define Award. What are the essential ingredients of an award?
2. Explain Domestic Award and Foreign Award.
3. Draft Specimen format for Plaint under CPC.
4. Briefly explain the different Types of award.
5. Explain the Validity of an Arbitral award.
6. Explain the relevance of Judicial non-interference in International Commercial Arbitration as per Indian
Laws.
8. Draft a Specimen of Arbitration Award. Assume necessary facts.
Handbook on Arbitration: A Practical guide for Professionals

l https://www.ciarb.org/media/4206/drafting-arbitral-awards-part-i-_-general-2021.pdf
173
174
Challenge to Award and Appeals
Lesson
LESSON 6
Challenge to Award and Appeals

6
KEY CONCEPTS
nArbitral Award n Public Policy n Period of Challenge n Recourse against Arbitral Award n Appeals including
Second Appeal
Learning Objectives
To understand:  Appealable Orders
 Time Period of Challenge  Appeal against the Interim order of the court
and tribunal
 Grounds of Challenge of Award
 Appeal against refusal to set aside Arbitral
 Court’s power to modify award
Awards
 Drafting of petition for setting aside an Arbitral
Award.
Lesson Outline
 Introduction  Challenge of Foreign Awards in India
 Grounds of Challenge and Powers of Court  Difference between Challenge of Domestic
to Modify the Award Award and Foreign Award
 Arbitral Award in Conflict with Public Policy  Drafting of Petition for Setting Aside an
of India Arbitral Award
 Time Period of Challenge  Appeals (Section 37)
 Challenge of an Arbitral Award  Whether a Second Appeal lies from an order
passed in Appeal under Section 37?
 Essential Elements of an Arbitral Award
 Lesson Round-Up
 Recourse against Arbitral Award-Analysis
 Glossary
 Differentiation of Appeal under CPC and
Application under the Arbitration  Test Yourself
 Pre Conditions for Invoking Section 34(4) of  List of Further Readings
the Arbitration and Conciliation Act, 1996
 Indian Stamp Act, 1899 Links)
175
PP-AM&C Challenge to Award and Appeals
l Limitation Act 1963
l General Clauses Act, 1897
l Indian Stamp Act, 1899
PART A: RECOURSE AGAINST ARBITRAL AWARD

(SECTION 34)
INTRODUCTION
An arbitral award is an adjudication of a dispute of the case by an Arbitral Tribunal. Once the disputing parties are
heard, the Arbitral Tribunal may arrive at a decision which is known as an award and is analogous to a judgment
in a Court of Law and that award has to be enforced under the Code of Civil Procedure,1908 in the manner as
if it was a Decree of Court. In Leela Hotels Limited v. Housing and Urban Development Corporation Limited1, the
Supreme Court held that an award would tantamount2 to a decree. Once the award is given, the proceedings
are terminated and the award becomes binding upon parties. After issuing the arbitral award, if any corrections
are required to the award it should be brought to the notice of the Arbitral Tribunal as prescribed under Section
33 of the Arbitration and Conciliation Act, 1996 which provides a specific procedure for correction of clerical, or
typographical errors in the award by the Arbitral Tribunal and requires parties to apply for correction of such
error within 30 days from the receipt of the award (State of Arunachal Pradesh v. Damani Construction3). Once
the proceedings are terminated, if either of the party is aggrieved by such an award, they can approach the
Courts as mandated by Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the award.
Section 34 provides the basis on which an arbitral award can be set aside and if an award is declared to be void
then the whole purpose and object of the Act gets nullified.
The arbitral awards cannot be interfered with unlike the first appeals. On the merits of the award the Court has
no power to interfere. The Court either can uphold or reject the award or the Court can remand the award to the
arbitrator for the reconsideration. Section 34 provides limited grounds to challenge an arbitral award which are
narrated in the succeeding paragraphs.
GROUNDS OF CHALLENGE AND POWERS OF COURT TO MODIFY THE AWARD

Section 34: Application for setting aside arbitral award – (1) Recourse to a Court against an arbitral award may be
made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if-
(a) the party making the application establishes on the basis of the record of the arbitral tribunal that-
(i) a party was under some incapacity, or
1. 2012 (1) SCC 302.

2. Tantamount comes from the Anglo-French phrase tant amunter, meaning ‘to amount to as much’.
This phrase comes from the Old French tant, meaning ‘so much ‘or ‘as much’ and amounter, meaning ‘to ascend’.
3. (2007) 10 SCC 742.
176
Challenge to Award and Appeals LESSON 6
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or,
failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator
or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the
submission to arbitration, or it contains decisions on matters beyond the scope of the submission
to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those
not so submitted, only that part of the arbitral award which contains decisions on matters not
submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the
agreement of the parties, unless such agreement was in conflict with a provision of this Part from
which the parties cannot derogate, or, failing such agreement, was not in accordance with this
Part; or
(b) the Court finds that –
(i) the subject matter of the dispute is not capable of settlement by arbitration under the law for the
time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
Explanation 1 – For the avoidance of any doubt, it is clarified that an award is in conflict with the public
policy of India, only if, -
(i) The making of the award was induced or affected by fraud or corruption or was in violation of
Section 75 or Section 81; or
(ii) It is in contravention with the fundamental policy of Indian law; or
Explanation 2– For the avoidance of doubt, the test as to whether there is a contravention with the
fundamental policy of Indian law shall not entail a review on the merits of the dispute.
(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be
set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of
the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or
by re-appreciation of evidence.
(3) An application for setting aside may not be made after three months have elapsed from the date on which
the party making that application had received the arbitral award, or, if a request had been made under Section
33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the
application within the said period of three months it may entertain the application within a further period of thirty
days, but not thereafter.
(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested
by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an
opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal
will eliminate the grounds for setting aside the arbitral award.
177
(5) An application under this section shall be filed by a party only after issuing a prior notice to the other party
and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said
requirement.
(6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one
year from the date on which the notice referred to in sub-section (5) is served upon the other party.
Furnishing of Proof
While setting aside award in accordance with sub-section (2) and sub-section (3) the party making the application
must furnish proof that:
(i) A party was under some incapacity. Sections 10, 11, and 12 of the Indian Contract Act, 1872 are relevant
here. One of the most essential elements of a valid contract is the competence of the parties to make a
contract. Section 11 of the Indian Contract Act, 1872 defines the capacity to contract of a person on three
aspects i.e attaining the age of majority, being of sound mind, and not disqualified from entering into a
contract by any law. Incapacity includes insolvency (K. Kishan v. Vijay Nirman Company Pvt. Ltd). The
Hon’ble Supreme Court further expanded the scope of the word ‘Dispute’ and held that the pendency of
a petition under Section 34 of the Arbitration and Conciliation Act, 1996 constitutes a ‘Dispute’ under the
IBC4. Therefore, the IBC cannot be invoked to initiate the Corporate Insolvency Resolution Process (CIRP)
in respect of an operational debt where an arbitral award has been passed against the debtor, though
it has not yet been finally adjudicated upon due to a challenge under Section 34 of the Arbitration and
Conciliation Act, 1996. The filing of a Section 34 petition against an arbitral award shows that a pre-existing
dispute which culminates at the first stage of the proceedings in an award, continues even after the award,
at least till the final adjudicatory process under Sections 34 and 37 has been completed.
(ii) The arbitration agreement is not valid under the law to which the parties have subjected it or, failing any
indication thereon, under the law for the time being in force.
(iii) The party making the application was not given proper notice of the appointment of an arbitrator or
of the arbitral proceedings or was otherwise unable to present his case; Principles of Natural Justice
are identified with the two constituents of a fair hearing, which are the rule against bias (nemo judex in
causa sua5), and (audi alteram partem6).
(iv) The arbitral award deals with a dispute not contemplated by or not falling within the terms of the
submission to arbitration, or it contains decisions on matters beyond the scope of the submission to
arbitration.
(v) The composition of the Arbitral Tribunal or the arbitral procedure was not in accordance with the
agreement of the parties, unless such agreement was in conflict with a provision of this part from which
the parties cannot derogate, or, failing such agreement, was not in accordance with this part.
(vi) Court finds that, the subject-matter of the dispute is not capable of settlement by arbitration under the
Law for the time being in force. Well recognized example is non-arbitrable disputes.
Public Policy under Section 34

The Public Policy
The arbitral award is in conflict with the public policy of India. Public policy implies the violation of confidentiality
under Section 75 of the Arbitration and Conciliation Act, 1996. Confidentiality shall extend also to the settlement
4. Insolvency and Bankruptcy Code,2016

5. no man can be a judge in his own cause.
6. the right to a fair hearing.
178
agreement, except where its disclosures are necessary for the purposes of implementation and enforcement,
and also violation of admissibility of evidence under Section 81 of the Arbitration and Conciliation Act, 1996. The
Hon’ble Supreme Court held that the Public Policy of India refers to the Law in force in India whether State Law
or Central Law. (M/S Lion Engineering Consultants v. State of M.P and Ors)7.
The Supreme Court in Oil and Natural Gas Corporation Ltd v. Saw Pipes Ltd, interpreted the term Public Policy.
However, the Supreme Court giving a broader meaning to the term ‘Public Policy’ in ONGC Ltd v. Saw Pipes
Ltd explaining the concept of “Public Policy of India” said that it has not been defined in the Arbitration and
Conciliation Act, 1996, is vague and is likely to be interpreted widely or narrowly depending on the context in
which it is being used.
Public Policy means:
l Fundamental policy of Indian law,
l The interest of India,
l Justice or Morality,
l and that the award is patently illegal.
In the Saw Pipes case (Supra), the scope of public policy was widened to include challenge of award when such
an award is patently illegal. Some arbitrators have viewed the judgment in the Saw Pipes case with concern.
The main concern on the judgment is that it sets the clock back to the same position that existed before the
Arbitration and Conciliation Act, 1996, and it increases the scope of judicial intervention in challenging arbitral
awards8. It was also criticized on the grounds that giving a wider meaning to the term ‘Public Policy’ was wrong,
when the trend in international commercial arbitration is to reduce the scope and extent of ‘public policy’9.
Jurists and experts have opined that unless the Courts themselves decide not to interfere, the Arbitration and
Conciliation Act, 1996, would meet the same fate as the Arbitration Act, 194010. The Parliament, when enacting
the Arbitration and Conciliation Act, 1996 and following the UNCITRAL Model Law, did not introduce ‘patent
illegality’ as a ground for setting aside an award. The Supreme Court cannot introduce the same through the
concept of ‘public policy of India’11. However whatever is the law laid by the Supreme Court is binding on the
people of India. The above analysis is only a presentation of a constructive criticism. There are other views also
which in fact support this judgment as the arbitral awards must be in proper frame and form.
ARBITRAL AWARD IN CONFLICT WITH PUBLIC POLICY OF INDIA – SECTION 34(2)(B)(II)

The term public policy is not defined in the Arbitration and Conciliation Act, 1996, but the expression ‘public
policy’ can be referred to as the principles and standards constituting the general policy of the State established
by the Constitution and the existing laws of the country and also principles of justice and morality. Further if the
award is obtained by fraud or corruption, or when the award is unfair, unreasonable and shocks the conscience
of the Court such an award can be designated as an award which is against public policy. In Oil and Natural
Gas Corporation Ltd., v. Saw Pipes Ltd, the Supreme Court observed that the phrase ‘Public Policy of India’ used
in Section 34 should be given wider meaning like the phrase connotes that the matter which concerns public
good and public interest or injurious or harmful to public good, which may vary from time to time. In Union of
India v. G.S. Atwal and Co, by an express agreement between the parties, arbitrability of the claim for refund
7. (2018) 16 SCC 758.

8. Ashok H Desai, ‘Challenges to an award – use and abuse’, ICA’s Arbitration Quarterly, ICA, 2006, vol. XLI/No.2, p 4. Ashok H Desai is a
Senior Advocate of the Supreme Court of India.
9. Pravin H Parekh, ‘Public Policy as a ground for setting aside the award’, ICA’s Arbitration Quarterly, ICA, 2005, vol. XL/No.2, p 19.
10. Inaugural address by Justice Santosh N Hedge, Judge, Supreme Court of India, on Indian Council of Arbitration’s National Conference
on ‘Arbitrating Commercial and Construction Contracts’ held at Hotel Inter-Continental, New Delhi, December 6, 2003.
11. Supra, note 41 at page19
179
of hire charges of equipment loaned was referred to arbitration. After the arbitrator entered into the reference,
the claim was made that he enlarged the dispute unilaterally without any agreement by the appellant. This
enlargement of the scope of the arbitration was objected by the parties. Nevertheless, the arbitrator continued
the proceedings and parties had no choice but to participate in the proceedings. The Supreme Court held that
just because the parties went on participating in the proceedings inspite of raising concerns does not amount
to acquiescence and hence the award was set aside as the arbitrator has misdirected himself and committed
legal misconduct which vitiated the entire award.
The Arbitration and Conciliation (Amendment) Act, 2021 which has come into force w.e.f 4/11/2020 relating to
Section 36 widens the scope of public policy and the arbitrators are expected to maintain high rate of efficiency
and impeccable integrity. The ordinance empowers the Courts to grant unconditional stay of enforcement
of arbitral awards where the underlying arbitration agreement or contract or making of the arbitral award
are induced by fraud or corruption. As a justice process is in the private hands and the arbitrators are de-
facto judges, this judgment is very necessary in the present day scenario. Section 34(2)(3) provides that the
application for setting aside the award should approach the Courts within 3 months from the date of receipt of
Arbitral Award. Further, 30 days of condonation of the delay may be allowed by the Courts, if the parties show
sufficient cause which prevented them from approaching the Court within the prescribed time.
TIME PERIOD OF CHALLENGE
The Limitation period to challenge Arbitral Award

The time limit prescribed under Section 34 to challenge an arbitration award is absolute and unextendable by the
Court under Section 5 of the Limitation Act, 1963. Simplex Infrastructure Limited v. Union of India.The Arbitration
and Conciliation Act 1996 provides for 3 months time to file application under Section 34 and also provides for
delay condonation procedure and the use of phrase ‘but not thereafter’ makes it clear that extension cannot be
beyond thirty days and therefore there can be no application of Section 5 of Limitation Act, 1963 in condoning
the delay to file the application under Section 34 of the Arbitration and Conciliation Act, 1996.
The time period for challenging an award commences only upon its proper receipt (The State of Maharashtra
and Ors. v. ARK Builders Pvt. Ltd). Period of Limitation prescribed under Section 34(3) would start running only
from the date of signed copy of award is delivered to/ received by the party making an application for setting
aside the award u/s 34(1).
An award would be regarded as properly received only if it is delivered in the manner prescribed under Section
31 (5) which means when a “signed copy” has been delivered to the party. [Anil Kumar Jinabhai Patel (D) thr. L.Rs.
v. Pravinchandra Jinabhai Patel and Ors]. The delivery of an award constitutes an important stage in the arbitral
proceedings. The Supreme Court has held that “delivery of an arbitral award” is not a matter of formality but of
substance; as it confers certain rights on the party. (Union of India v. Tecco Trichy Engineers and Contractors). The
wording within three months from, indicates that, there is an ordinary rule that where statutes, while prescribing
time period, uses the expression ‘from’, it is an indication that while computing the period so prescribed the
rule would be to exclude the first and include the last day12. In this context Section 14 of the Limitation Act,
1963 is relevant to refer which contains the provisions pertaining to exclusion of time proceedings bona fide
in Court without jurisdiction (Oriental Insurance Co. Ltd. v. M/s Tejparas Associates and Exports Pvt. Ltd). In this
case the party filed an application under Section 34 at Jaipur but the same has been returned for the want of
proper jurisdiction, then it is filed in the Court having proper jurisdiction. The Hon’ble Supreme Court held that
Section 14 of Limitation Act, 1963 would be applicable to the proceedings under Section 34 of the Arbitration
and Conciliation Act, 1996, subject to the condition that the application under Section 34 for first time was filed
within time as stipulated under Section 34(3).
12. Section 9 of the General Clauses Act, 1897.
180
Continuous running of time. – Where once time has begun to run, no subsequent disability or inability to
institute a suit or make an application stops it. Provided that where letters of administration to the estate of a
creditor have been granted to his debtor, the running of the period of limitation for a suit to recover the debt shall
be suspended while the administration continues.
– In the case of State of Himachal Pradesh and Ors. v. Himachal Techno Engineers and Ors, the Supreme
Court extended this principle to Section 34(3). Thus, the time period for ﬁling an application under
Section 34 would commence “a day after the receipt of the award by the party”.
– The time in between, once the time has begun to run, no subsequent disability or inability to institute a
suit or make an application would “stop it”. This is a fundamental rule13.
– Period of Limitation prescribed under Section 34(3) would start running only from the date of signed
copy of award is delivered to/ received by the party making an application for setting aside the award
u/s 34(1). (The State of Maharashtra and Ors. v. ARK Builders Pvt. Ltd14). So, after proper receipt of award,
the time period for a challenge ‘begins to run’. Apart from the exception of Section 33, it cannot be
stopped15.
– The last day, the time period under Section 34(3) expires after ‘three months’. The rule of construction
of this period would be to not treat this period as 90 days, but actual period of calendar month. Thus,
the period would expire in the third month on the date corresponding to the date upon which the period
starts. In days it may mean ‘90 days or 91 days or 92 days or 89 days’.
– A rule for computation is that in case the last day of the time period expired on a day when the Court is
closed the proceedings will be instituted ‘on the day when the court reopens’ (Section 4 of the Limitation
Act, 1963). However, the Supreme Court has held that the beneﬁt of this rule cannot be taken to prefer
an application under Section 34 after the expiry of the time period. (Assam Urban Water supply and sew
board. v. Subhash Projects and Marketing).
– The proviso to Section 34(3): Additional 30 days, Section 34(3) provision enables the party to make an
application after the expiry of three months upon demonstrating that the applicant was ‘prevented by
sufficient cause’ from doing so. In NTPC Ltd. v. Voith Hydro Joint Venture,16 the Apex Court held that, the
affidavit merely indicates that the file was sent from one department to another, and does not provide
any valid explanation for the delay. As such, not inclined to exercise discretion under Article 136 (SLP)
of the Constitution of India in favour of the petitioner to interfere with the order passed by the High Court
or the award passed by the Arbitral Tribunal.
In such cases, the statute has conferred upon the Court discretion to entertain the application within a
period of 30 days ‘but not thereafter’. (K. Kishan. v. Vijay Nirman Company Pvt. Ltd).
– To “prevent” means to thwart; to hinder or to stop. Thus, while ‘time period’ would never stop under
any circumstances but certain circumstances may stop an applicant from making the application. If the
Court found those circumstances constituted ‘sufficient cause’ it would permit the party to make the
application (Simplex Infrastructure Ltd. v. Union of India) In this case the Supreme Court held that the
statutory time limit to challenge an Arbitral Award has to be strictly adhered. Application under Section
37 of the Arbitration and Conciliation Act, 1996 was barred by limitation by following two judgments.,
(Union of India v. Varindera Constructions Ltd, and N.V. International v. State of Assam and Ors).The
observation of the Supreme Court in these two judgments is that no appeal under the said Section can
13. Section 9 of the Limitation Act, 1963.

14. (2011) 4 SCC 616
15. Section 34(3)
16. Supreme Court of India, Petition(s) for Special Leave to Appeal (C) No(s).7312/2020 dated 22 September, 2020
181
be entertained by the Court beyond a maximum period of 120 days. As the Petitioner’s appeal was filed
after 128 days, the High Court was constrained to dismiss the same as barred by limitation.
CHALLENGE OF AN ARBITRAL AWARD

The grounds on which an award may be set aside are limited and pertain primarily to the procedure of the
arbitration and principles of natural justice. A crucial amendment was the inclusion of specific wording in
relation to the scope of the public policy challenge- perhaps the most abused provision in the Arbitration
and Conciliation Act, 1996. The amendments clarify that an award will be in conflict with the public policy of
India only if: (i) the making of the award was induced or affected by fraud or corruption or was in violation of
confidentiality provisions or admissibility of evidence provisions in the Act; (ii) it is in conflict with the most basic
notions of morality or justice; or (iii) it is in contravention with the fundamental policy of Indian Law. Specifically,
the test as to whether there is a contravention with the fundamental policy of Indian Law shall not entail a
review on the merits of the dispute. In case of challenge of an arbitral award, if the arbitrator has applied his
mind to the matter before him, the Court cannot re-appraise the matter as if it were an appeal and even if two
views are possible, the view taken by the Arbitrator would prevail. (The Supreme Court of India in Navodaya
Mass Entertainment Ltd. v. J.M.Combines).
In the cases of the Bharat Coking Coal Ltd. v. L.K. Ahuja, Ravindra and Associates v. Union of India, Madnani
Construction Corporation Private Limited v. Union of India and Ors, Associated Construction v. Pawanhans
Helicopters Pvt. Limited, and Satna Stone and Lime Company Ltd MP and Ors. v. Union of India and Ors, it was
held by the Supreme Court that once the arbitrator has applied his mind to the matter before him, the Court
cannot reappraise the matter as if it were an appeal and even if two views are possible, the view taken by the
arbitrator would prevail.
ESSENTIAL ELEMENTS OF ARBITRAL AWARD

The following are the essential requirements of an arbitration award as per Section 31 of the Arbitration
Conciliation Act 1996:
An award should,
(i) be in writing;
(ii) contain reasons for the decision, unless the parties have agreed otherwise or if it is a consent award;
(iii) state the date and the place of arbitration; and
(iv) be signed by all of the arbitrators or contain an explanation for any missing signature. The Act provides
that after passing the award, a signed copy of the award shall be delivered to each party.
When one of the parties challenge the award under Section 34 of the Act, now the question arises whether
Arbitrator must have Knowledge about Section 34 of the Act-The Answer will be ‘Yes’.
When the Arbitrator had found to have not travelled outside his jurisdiction, the Supreme Court held that, there
was no reason to interfere with the award and substitute its view in place of the interpretation accepted by the
arbitrator. (Rashtriya Ispat Nigam Ltd. v. Dewan Chand Ram Saran17).
When the arbitrator has knowledge about Section 34 since the inception of arbitration proceedings, will deal
with the issues with due care and caution so that the award will not attract and give scope for Section 34 of the
Arbitration and Conciliation Act, 1996 for setting aside of arbitration award, and as such the arbitrator should
be well versed with the provisions of Section 34 of Arbitration and Conciliation Act, 1996. It saves the Court time
and pending cases before Courts.
17. AIR 2012 SC 2829
182
RECOURSE AGAINST ARBITRAL AWARD- ANALYSIS

There is no appellate system in Alternate Dispute Resolution mechanisms because in most of the mechanisms
parties settle the disputes by themselves. In case of arbitration if the parties settle the issue under Section 30,
there is no mechanism as to revert the same or change the same, but if the award is delivered by the Arbitral
Tribunal, such an Award can be set aside under Section 34. This relief is available only to the domestic awards
(Pandey and Co. Builders Pvt. Ltd. v. State Bank of Bihar and Ors18). Apart from exercising the jurisdiction under
Section 34 of the Arbitration and Conciliation Act, 1996 (Setting aside of the award), the District Court can
entertain appeals against the decision of Arbitral Tribunal made under Section 16(2) or (3) on jurisdiction under
Section 17 on granting of interim measures. Against these orders of the Court no second appeal lies. Under
Section 17 of the Arbitration and Conciliation Act, 1996 the power of the arbitrator is a limited one. It cannot issue
any direction which would go beyond the arbitration agreement. The award of the arbitrator is not required to
be made a ‘Rule of Court’ and is enforceable on its own force. An interim order must relate to the protection of
subject matter of the dispute and the order may be addressed only to a party to the arbitration and not to other
parties, (M.D. Army Welfare Housing Organisation v. Sumangal Services Pvt Ltd).While proceedings are pending
before him the arbitrator can pass interim orders under Section 17. (Gail India Limited v. Bal Kishan Agarwal
Glass Industries Limited19). Applications under Section 34 of the Arbitration and Conciliation Act are summary
proceedings with provision for objections by the respondent- defendant, followed by an opportunity to the
applicant to “prove” the existence of any ground under Section 34(2).The applicant is permitted to file affidavits
of his witnesses in proof.
A corresponding opportunity is given to the respondent-defendant to place his evidence by affidavit. Where the
case so warrants, the Court permits cross-examination of the persons swearing to the affidavit. Thereafter, the
Court hears arguments and/or receives written submissions and decides the matter. The Apex Court of India in
the case of Fiza Developers and Inter-Trade P. Ltd. v. AMCI (I) Pvt. Ltd and Ors20, while discussing all the whims
of Section 34 of the Arbitration and Conciliation Act, 1996 held that, ‘It is difficult to envisage proceedings u/s34
of the Act as full- fledged regular civil suits under the Code of Civil Procedure. Application u/s 34 of the Act are
summary proceedings’. The object of Section 34(5) and (6) is the requirement that an application under Section
34 be disposed of expeditiously within a period of one year from the date of service of notice. (The State of Bihar
and Ors. v. Bihar Rajya Bhumi Vikas Bank Samiti21).
This is of course the routine procedure. The Court may vary the said procedure, depending upon the facts of
any particular case or the local rules. The levels of Appealable Orders are given as follows:
(i) Refusal to refer the parties to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996;
(ii) A grant or refusal to grant an interim measure under Section 9 of the Arbitration and Conciliation Act,
1996;
(iii) Setting aside or refusing to set aside an arbitral award under Section 34 of the Arbitration and
Conciliation Act, 1996;
(iv) A grant of the plea of a party by the Arbitral Tribunal that it does not have jurisdiction;
(v) A grant of the plea of a party by the Arbitral Tribunal that it is exceeding the scope of its authority; and
(vi) A grant or refusal to grant an interim measure by the Arbitral Tribunal under Section 17 of the Arbitration
and Conciliation Act, 1996.
18. AIR 2007 SC 465.

19. 2008 (8) SCC 161.
20. (2009) 17 SCC 796.
21. (2018) 9 SCC 472 .
183
No second appeal shall automatically lie against an order passed in appeal under Section 37 of the Act.
However, it is clarified that nothing in Section 37 shall affect or take away a right to seek special leave to appeal
to the Supreme Court under Article 136 of the Constitution of India against an order passed in appeal under
Section 37.
DIFFERENTIATION OF APPEAL UNDER CPC AND APPLICATION UNDER THE ARBITRATION

AND CONCILIATION ACT, 1996
Appeal as per Section 96 of the Code of Civil Procedure, 1908 provides that an aggrieved party to any decree,
which was passed by a Court while exercising its original jurisdiction, is conferred with at least one right to
appeal to a higher authority designated for this purpose. The Section further provides that an appeal shall lie
from a decree passed by any Court exercising original jurisdiction to the authorised appellate Courts, except
where expressly prohibited. A combined reading of Sections 2(2), 2(9), & 96 of the CPC indicates that a regular
first appeal may/may not be maintainable against certain adjudications.
PRE-CONDITIONS FOR INVOKING SECTION 34(4) OF THE ARBITRATION AND CONCILIATION

ACT, 1996
(i) Under Section 34(4), the application is mandatory before the award is set aside by the Court. Once the
main proceedings under Section 34 are disposed of, the Court becomes functus officio. (Kinnari Mullik
and Ors.v Ghanshyam Das Damani22).
(ii) If the party fails to request the Court to defer the Section 34 proceedings before the award is formally
set aside, then the party is precluded from moving an application under Section 34(4).
(iii) The application under Section 34(4) must be in writing, by a party to the arbitration proceedings.
(iv) The power under Section 34(4) cannot be exercised by the Court suo motu. (Radha Chemicals v. Union
of India and Kinnari Mullick and Ors v. Ghanshyam Das Damani23).The Supreme Court held that the
Court while deciding a Section 34 petition has no jurisdiction to remand the matter to the arbitrator for
a fresh decision. Further, it was held that the discretion of the Court under Section 34(4) to defer the
proceedings for specific purpose is limited and can be invoked only upon request by the party prior to
setting side of the award.
(v) On receipt of an application under Section 34 (4) (1), the Court may, where it is appropriate and it is so
requested by a party, adjourn the proceedings for a period of time determined by it in order to give the
arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in
the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award. An arbitral
tribunal cannot be allowed to review the award (or the reasoning there under) on merits or rewrite the
award under the guise of being granted with an opportunity to eliminate the grounds for setting aside
the award under Section 34(4) of the Arbitration and Conciliation Act, 1996.
(vi) That the power under Section 34(4) of the Arbitration and Conciliation Act, 1996 could be exercised
where the Arbitral Tribunal overlooked a particular claim on which the parties led evidence and
addressed arguments (Kritika Nagpal v Geojit Financial Services Ltd.).
The Supreme Court recently threw some light on this issue in (Dyna Technologies Pvt. Ltd. v. Crompton Greaves
Ltd), while dealing with an award which it found to be unintelligible and inadequately reasoned. The Court may
give an opportunity to the arbitral tribunal to eliminate the grounds under Section 34(4) of the Arbitration and
Conciliation Act 1996.
22. (2018) 11 SCC 328

23. Supra
184
INDIAN STAMP ACT, 1899

Validity of an Unstamped/Insufficiently Stamped Agreement under the Arbitration and Conciliation Act, 1996.
As per Section 34 and 36, the question is whether the award requiring stamping and registration falls within the
ambit of Section 47 of Code of Civil Procedure and is not covered by Section 34 of Arbitration and Conciliation
Act 1996. (M. Anasuya Devi and Ors. v. M.Manik Reddy and Ors24.)
(i) The Court should before admitting any document into evidence or acting upon such document, examine
whether the instrument/document is duly stamped and whether it is an instrument which is compulsorily
registrable.
(ii) If the document is found to be not duly stamped, Section 35 of Stamp Act, 1899 bars the said document
being acted upon. Consequently, even the arbitration clause therein cannot be acted upon. The Court
should then proceed to impound the document under Section 33 of the Stamp Act, 1899 and follow
the procedure under Section 35 and 38 of the Stamp Act, 1899. (Jayaraj Devidas v. Nilesh Shantilal
Tank). The Supreme Court in (SMS Tea Estates Pvt. Ltd. v. Chandmari Tea Company Pvt. Ltd25) held that
in regard to Section 35 of the Stamp Act, 1899 unless the stamp duty and penalty due in respect of the
instrument is paid, the Court cannot act upon the instrument, which means that it cannot act upon the
arbitration agreement also which is part of the instrument.
(iii) If the document is found to be duly stamped, or if the deficit stamp duty and penalty is paid, either
before the Court or before the Collector (as contemplated in Section 35 or 40 of the Stamp Act, 1899),
and the defect with reference to deficit stamp is cured, the Court may treat the document as duly
stamped and valid.
(iv) Once the document is found to be duly stamped, the Court shall proceed to consider whether the
document is compulsorily registrable. If the document is found to be not compulsorily registrable, the
Court can act upon the arbitration agreement, without any impediment.
(v) If the document is not registered, but is compulsorily registrable, the Court can de-link the arbitration
agreement from the main document, as an agreement independent of the other terms of the document,
even if the document itself cannot in any way affect the property or cannot be received as evidence of
any transaction affecting such property.
In N. N. Global Mercantile Private Limited v. M/s Indo Unique Flame Ltd. Ors. the court observed that exercise
of power coupled with duty under Section 33 of the Stamp Act cannot be accused of judicial interference
in contravention to Section 5 of the Arbitration and Conciliation Act ( the Act) and further that it shall not be
confused with examination whether an arbitration agreement or arbitration clause in the said instrument, exists
so as to appoint arbitrator in invocation of the power under Section 11(6) of the Act. In that view of the matter,
the provisions under Section 11(6A) or 16 of the Act cannot act as a rider for the exercise of the said power under
Section 33 of the Stamp Act.
The Bar under Section 35 of the Stamp Act on admission of instruments not duly stamped in evidence, as is
evident from proviso (a) to it, is not permanent and is curable by following procedures provided thereunder and
making an endorsement as provided under Section 42(1) of the Stamp Act.
In the above matter, it can therefore be said that Arbitration Agreement may be taken as valid by the courts after
Payment of appropriate duty and that should not be taken as Judicial Intervention.
24. 2003 (8) SCC 565.

25. 2011 (4) Arb.L.R.265( S.C.)
185
CHALLENGE OF FOREIGN AWARDS IN INDIA

The question that arises is whether a foreign award can be challenged under Section 34 of the Act. Part II of
the Act of 1996 deals with the enforcement of Certain Foreign Awards. It has two Chapters. Under Chapter I,
Sections 44 to 50, deal with New York Convention Awards and under Chapter II, Sections 53 to 60, deal with
Geneva Convention Awards. The provisions of Part II of the Act give effect to both the New York Convention
and the Geneva Convention. It is clear that part II is different from Part I of the Act. Part I relates to arbitration in
general and to domestic awards. Part II pertains to ‘enforcement of certain foreign Awards’.
The Act provides for a direct challenge of a domestic Award under Section 34. A domestic Award is enforceable
as a decree passed by a Civil Court, after the cooling period provided for challenging the same expires and in
case it is challenged, after the challenge fails under Section 34. The Act, provides different remedies to persons,
against whom domestic award is made and person against whom foreign award is made. A person against
whom a domestic Award is made, has to immediately approach the Court for challenging the same by making
an application under Section 34 of the Act. Otherwise the person in whose favour the Award has been made
can execute the same as a decree. On the other hand, a person against whom a foreign Award has been made
cannot be challenged in India.
DIFFERENCE BETWEEN CHALLENGE OF DOMESTIC AWARD AND FOREIGN AWARD

The Bombay High Court in the case of (Jindal Drugs Limited Mumbay. v. Noy Vallesina Engineering SPA, Italy
and Ors26) observed as follows:
“It appears from the reading of the Act that in so far as the challenge and enforceability is concerned, there are
different schemes for a domestic Award and a foreign Award”.
The Act provides for a direct challenge to a domestic Award under Section 34. A domestic Award is enforceable
as a decree passed by a Civil Court, after the period provided for challenging the same expire, and in case it
is challenged, after the challenge fails under Section 34. Foreign Awards cannot be challenged in India. It is,
therefore, quite clear that an application under Section 34 is not at all contemplated insofar as a foreign award
is concerned.
CASE LAWS
In terms of Challenging Foreign Arbitral Award in Indian Courts is concerned there have been different views
of the Supreme Court of India. (Bhatia International v. Bulk Trading S.A. and Ors).
The Supreme Court in this decision observed that, unless the parties expressly or impliedly agreed to the
contrary, the Indian Courts have jurisdiction with respect to foreign seated arbitration akin to decisions in
India under Part I of the Arbitration and Conciliation Act, 1996. This decision was unequivocally overruled by
the Supreme Court of India. (Bharat Aluminium Company. v. Kaiser Aluminium Technical Services Inc). Part I
of the Arbitration and Conciliation Act, 1996 does not apply to foreign seated arbitrations.
Bharat Aluminium Company. v. Kaiser Aluminum Technical Services Inc.
Facts:
The Appellants had entered into an agreement with the respondents whereby the respondents were
required to supply and install computer-based system at one of the appellant premises. The agreement was
governed by the prevailing law of India but it contained an arbitration clause that stated that any dispute
that may arise in future shall be governed by the English Arbitration Law and the venue shall be London.
26. 2002 (2) Arb. LR 323 (Bombay)
186
When the dispute arose between appellants and the respondents with respect to performance of the
agreement and then the matter was referred to arbitration, the proceeding was held in England and two
awards were passed. Aggrieved by the decision of the Arbitral Tribunal, the appellants filed an application
under Section 34 of the Arbitration and Conciliation Act, 1996, which was refused by the District Court and
the High Court of Chhattisgarh and finally the appellants approached the Supreme Court of India.
Held: The Supreme Court of India decided as follows:
(i) Part I and Part II are applicable to different fields. Part I of the Act of 1996 is applicable to all
domestic awards, including to awards where both the parties to the dispute are Foreign Parties but
the proceedings are held in India, or International Commercial Arbitration held in India.
(ii) Part II of the Act of 1996 applies to enforcement of Foreign Awards in India.
(iii) The principle of territoriality in Model Law is adopted in Act of 1996 Mutatis Mutandis.
(iv) Section 48 of Part II does not confer jurisdiction on two courts to annul the award and is provided
only to provide alternative to parties to challenge the award in case, Law of the country where seat
of arbitration is located has no provision for challenge of the award.
(v) Interim Relief u/s.9 can be awarded in case seat of arbitration in International commercial arbitration
in India and thus intervention u/s.9 can be sought only with respect to domestic awards. Part II has
no provision that grants interim relief leading to the logical inference that Indian Court cannot pass
interim orders against award delivered outside India.
(vi) The Arbitral Awards awarded in International Commercial Arbitration with seat of Arbitration outside
India shall be subject to the Jurisdiction of Indian Courts only when they are sought to be enforced
in India in accordance with Part II of the Act.
(vii) Part I of the Act shall not be applicable to non-convention arbitral awards. The definition of Foreign
Award is limited to New York Convention and Geneva Convention and hence the Act does not
provide for enforcement of non-convention Arbitral awards.
Principle: It would be against the Provisions of the Arbitration and Conciliation Act, 1996, to interfere with
the Foreign Arbitral Award as the Act of 1996 provides for challenging only Domestic Arbitral Awards under
Section 34. The above decision makes it clear that Foreign Arbitral Awards cannot be challenged in Indian
Courts as Section 34 of the Arbitration and Conciliation Act, 1996 provides for setting aside of Domestic
Arbitral Awards only.
DRAFTING OF PETITION FOR SETTING ASIDE AN ARBITRAL AWARD

IN THE COURT OF DISTRICT JUDGE, COIMBATORE
Regular Suit No. ______of 2023
XYZ .......
Petitioner/Applicant;
vs.
ABC .......
Respondent/Opposite Party.
187
MOST RESPECTFULLY SHOWETH:

1. The Petitioner is a builder/developer and the original Claimant in the arbitration proceedings, which are
the subject matter of the present Petition.
2. The Respondent society is an allottee and a lessee of a non-agricultural land admeasuring ________
sq. metres. situated on __________________________________ (hereinafter “the said property”).
The said allotted land is a Class II land owned by the Collector, Mumbai for the use of residential
purposes and any development of the same was to be undertaken with the permission of the Collector.
The said property of the Respondent Society comprises of two Buildings viz. Building ‘A’ occupied by its
______ members and Building ‘B’ occupied by its ________ members.
3. The present Petition challenges the Arbitral Award dated _____________ (“the Impugned Award”),
whereby the Learned Arbitrator has not only rejected the Petitioner’s claim for specific performance
but has also refused to consider the Petitioner’s claim for damages. The Petitioner has challenged the
Impugned Award interalia on the ground that the same is contrary to settled law and thus, in violation
of the fundamental policy of Indian law. The Learned Arbitrator, by passing the Impugned Award, has in
effect held that all development agreements entered into by societies are per se construction contracts
and therefore, incapable of specific performance.
The petition/application under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside of the
award dated: — — —, served on—, passed by [Sole Arbitrator/Arbitral Tribunal Comprising ............] in the case
of XYZ vs. ABC, etc.
Valuation:
Court Fee:
The petitioner/applicant above named begs to state as under:—
1. That.... [Brief facts of the case inclusive of grounds of challenge in paragraph wise form]
2. That......
3. That this Hon’ble Court has jurisdiction to hear this suit as the cause of action has accrued within the
territorial jurisdiction of this Court. The valuation of the petition is Rs............ Upon which a court Fee of
Rs...... is being paid herewith.
PRAYER
Wherefore, the petitioner/applicant prays for the following reliefs:
The award dated ____ passed by the learned tribunal may be set aside for the facts and Circumstances stated
to in the present application/petition.
OR
Remit the matter to the arbitrator for reconsideration and adjudication in accordance with the provisions of the
Arbitration and Conciliation Act, 1996.
This Court may be further pleased to grant such other relief as it may deem just and proper in the facts and
circumstances of this case. Award the cost of these proceedings.
Place:
Dated:
Applicant.
Through Advocate
188
VERIFICATION
I, _____ , the petitioner/applicant above named do hereby verify that the contents of paragraphs .... to. .... are
true to my personal knowledge, while those of paragraphs. .... to ...... are based on legal advice and records.
Place:
Dated:
Applicant
CASE STUDIES
CASE STUDY ON CHALLENGING AWARD
Adarsh Kumar Khera (Petitioner) vs Kewal Kishan Khera And Ors. (Respondents) on 16 January, 2019
Facts
A petition under Section 34 of the Arbitration and Conciliation Act, 1996 (‘The Act’) was filed challenging the
arbitral Awards dated 13th July, 2007, 12th May, 2007 and 28th May, 2007. There is also a fourth Award
dated 8th June, 2007 which was also passed by the learned Sole Arbitrator.
Disputes have arisen between three brothers namely. The three brothers were engaged in joint business
in three partnership firms. The shares of the brothers vary in each of the firms. They have entered into an
arbitration agreement on 28th February, 2007.
The Arbitrator entered reference and passed four Awards, Award No.1 dated 12th May, 2007, Award No.2
dated 28th May, 2007, Award No.3 dated 8th June, 2007 and Award No. 4 dated 13th July, 2007. Some
other documents including a draft MOU were also drawn up by the Arbitrator but the said documents are not
admitted by some of the parties.
The pleader Appearing for the Petitioner submitted that the third Award was not in the knowledge of the
Petitioner at the time of filing of the present petition. It is submitted that the shares of the parties have also
been wrongly determined.
Learned counsel for Respondent No.2 submitted that his client also has objections to all the Awards which
have been passed and thus seeks that the entire dispute between the parties may be decided afresh.
Decision
The Court has heard the submissions on behalf of the parties. A perusal of the various Awards passed
by the learned Arbitrator shows that the Arbitrator has decided the matter simply on the basis of the
statement of claims made by all the parties. Though the Arbitrator is not bound by the strict provisions
of the CPC, each of the parties ought to have been given an opportunity to respond to the case set up
by the other, which is a basic feature in any arbitration proceedings. The Respondents submit that even
though some properties may be in the name of the Petitioner, or his family members, the same have
been purchased from the profits earned by the common businesses. This contention is disputed by
learned counsel for the Petitioner, who has objected to the inclusion of the properties which belong to
either him and his wife/son.
The question as to which of the properties need to be considered as properties of the firms. On this issue,
the learned Arbitrator, after hearing the parties, would have to adjudicate the shares of each of the partners.
This has clearly not been done by the learned Arbitrator.
All parties agree that the four Awards dated 13th July, 2007, 12th May, 2007, 28th May, 2007 and 8th June,
2007 be set aside. The said Awards are accordingly set aside.
189
The learned Arbitrator would be free to determine as to which of the properties is to be included in the
common pool for being divided, the valuation of all movable/immovable assets of the firms, liabilities of
the firms and adjustments to the given, the share of each of the parties, the manner of sale of any of the
properties including the market rates thereof, the manner of disbursement of the various amounts due to
the respective parties and all other issues which may arise during the course of the arbitration proceedings.
Owing to the age of all the brothers and considering the fact that this petition has remained pending before
this Court since 2007, it is directed that the learned Arbitrator would endeavour to conclude the proceedings
within a period of 6 months from the date of filing of claims by all the parties.
The arbitral award was set aside since it was made without giving the parties a chance to be heard, it was
deemed void, and both parties wanted it overturned.
19.01.2023 M/s Alpine Housing Development Corporation Supreme Court

Pvt. Ltd. v. Ashok S. Dhariwal and Others
In exceptional cases and if it is brought to the court on the matters not containing the record of the arbitrator
that certain things are relevant to the issues arising under section 34(2)(a), then the party who has assailed
the award can be permitted to file affidavit in the form of evidence
Brief Facts
This appeal was filed from a Judgment passed by High Court of Karnataka in which the court had set
aside the order passed by the learned Additional City Civil and Sessions Judge, Bengaluru, has permitted
the respondents – original writ petitioners to adduce evidence in an application under Section 34 of the
Arbitration & Conciliation Act, 1996.
That against the award passed by the learned arbitrators, an application under Section 34 of the Act was
filed by the respondents. The respondents filed an interim application in section 34 application to adduce
additional evidence. At this stage, it is required to be noted that as such the award passed by the learned
arbitrators was an ex-parte award and no evidence was led by the respondents herein, who subsequently
assailed the award by way of section 34 application. The appellant filed objections to the said interim
application seeking permission to adduce evidence on the ground that the same was not maintainable in
accordance with the provisions of the Arbitration Act, 1996.
Issue
The short question which is posed for the consideration of Supreme Court was, whether the applicant can
be permitted to adduce evidence to support the ground relating to Public Policy in an application filed under
Section 34 of the Arbitration & Conciliation Act, 1996?
Decision
The Hon’ble Supreme Court said that the ratio of the three decisions(referred in the Judgment) on the
scope and ambit of section 34(2)(a) pre-amendment would be that applications under sections 34 of the
Act are summary proceedings; an award can be set aside only on the grounds set out in section 34(2)
(a) and section 34(2) (b); speedy resolution of the arbitral disputes has been the reason for enactment
of 1996 Act and continues to be a reason for adding amendments to the said Act to strengthen the
aforesaid object; therefore in the proceedings under section 34 of the Arbitration Act, the issues are not
required to be framed, otherwise if the issues are to be framed and oral evidence is taken in a summary
proceedings, the said object will be defeated; an application for setting aside the arbitral award will
not ordinarily require anything beyond the record that was before the arbitrator, however, if there are
matters not containing such records and the relevant determination to the issues arising under section
190
34(2)(a), they may be brought to the notice of the Court by way of affidavits filed by both the parties’ the
cross-examination of the persons swearing in to the affidavits should not be allowed unless absolutely
necessary as the truth will emerge on the reading of the affidavits filed by both the parties. Therefore, in an
exceptional case being made out and if it is brought to the court on the matters not containing the record of
the arbitrator that certain things are relevant to the determination of the issues arising under section 34(2)
(a), then the party who has assailed the award on the grounds set out in section 34(2)(a) can be permitted
to file affidavit in the form of evidence. However, the same shall be allowed unless absolutely necessary.
In the case of M/S Unibros v. All India Radio, decided by Supreme Court, it has been held that Claims in the
Award without any substantial evidence are in Conflict of Public Policy.
For details: https://main.sci.gov.in/supremecourt/2022/2236/2236_2022_4_1503_41103_Judgement_19-
Jan-2023.pdf
PART B: APPEALS (SECTION 37)
APPEALS UNDER SECTION 37

Arbitration is a legitimate strategy, which happens outside the Courts, and at the same time results in a last
and lawfully binding decision like a Court judgment. Arbitration is a strategy for addressing dispute areas,
which can give a speedy, cost effective, confidential, reasonable and best solution for a dispute. It includes the
adjudication of the dispute by at least one free outsider instead of Court adjudication. The outsiders, called
arbitrators, are named by or for the benefit of the parties in dispute.
The purpose of this part is to discuss and analyse the provisions related to appeal under the Arbitration and
Conciliation Act, 1996 and amendments thereto. The relevance and importance of Arbitration and Conciliation
in the Indian legal scenario in the past two decades is undisputed, an ever-evolving field, arbitration even after
decades remain a riveting subject to discuss and deliberate upon. However the arbitral award may not be
palatable to both the parties equally as it is not a win-win situation. Hence appeals are provided in the Arbitration
and Conciliation Act, 1996 to redress the grievances of the parties as the judicial process of adjudication is
shifted from the Courts into the hands of agreed third and private parties.
Section 37. Appealable orders – (1) Not withstanding anything contained in any other law for the time being in
force, an appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear
appeals from original decrees of the Court passing the order, namely:—
(a) refusing to refer the parties to arbitration under Section 8;
(b) granting or refusing to grant any measure under Section 9;
(c) setting aside or refusing to set aside an arbitral award under Section 34.
(2) An Appeal shall also lie to a Court from an order of the Arbitral Tribunal—
(a) accepting the plea referred to in sub-section (2) or sub-section (3) of Section 16; or
(b) granting or refusing to grant an interim measure under Section 17.
(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall
WHETHER A SECOND APPEAL LIES FROM AN ORDER PASSED IN APPEAL UNDER SECTION 37?
Sub-section 3 provides that no further appeal can be made to any Courts having same jurisdictions, larger
benches of the Courts having same jurisdiction, or with the Courts having superior jurisdiction, against the
order passed in an appeal under this Section. However, an appeal can be made to the Supreme Court only if a
191
certificate under Article 133 of the Constitution of India is granted by the Appellate High Court. But if the Hon’ble
High Court refuses to grant such a certificate, an appeal can be preferred to the Hon’ble Supreme Court, under
Article 136 of the Constitution of India, as a special leave to appeal.
It is to be noted that the expression ‘Second Appeal’ used in this Section means a further appeal from an order
passed in an appeal under this Section and not an appeal under Section 100 of the Code of Civil Procedure, 1908.
CASE STUDY
In Nirma Ltd. v. Lurgi Lentjes Energietechnik GMBH and Ors, following the decision in Shyam Sunder Agarwal
and Co. v. Union of India27, a two-judge Bench of the Supreme Court held that merely because a second
appeal against the appellate order is barred by the provisions of Section 37(3) of Arbitration and Conciliation
Act, 1996 the remedy of revision under Section 115 of the Code of Civil Procedure, 1908 does not cease to
be available to the petitioner.
In I.T.I. Ltd. v. Siemens Public Communications Network Ltd28, it was held that although no second appeal
lies against an appellate order passed by a Court under Section 37, a revision of such an order lies under
Section 115 of the Code of Civil Procedure, 1908. An appeal can be preferred to the Supreme Court against
an appellate order passed under Section 37 of the Arbitration and Conciliation Act, 1996. If the Appellate
Court is a High Court, an application can be made for a certificate under Article 133 of the Constitution of
India and if the certificate is granted by the High Court, an appeal can be preferred to the Supreme Court.
But if the High Court refuses to grant such a certificate, an appeal can be preferred to Supreme Court, under
Article 136 of the Constitution of India, as a special leave to appeal. No writ petition lies against an arbitral
award.
In M. Moideen Kutty v. Divisional Forest Officer Nilambur and Ors, it was held in the High Court of Kerala at
Ernakulam that as an arbitrator being a private forum agreed upon by the parties, no writ lies against him or
his award. The only remedy is what has been provided in the Arbitration and Conciliation Act, 1996.
What is the period of limitation for preferring an appeal under Section 37 of the Arbitration and
Conciliation Act, 1996?
Hon’ble High Courts Perspective on Limitation Period for Section 37 Appeal:
The Bombay High Court in the matter of ONGC Limited v. Jagson International Limited29, (hereinafter
Jagson) had an opportunity to determine the period of limitation for filing an appeal under Section 37 of
the Arbitration and Conciliation Act, 1996. After perusing the said provision, the Court refused to import the
period of limitation provided under Section 34 to the appeals filed under Section 37.
As per the Court, the Legislature was well aware of the importance of providing a limitation period for the
provisions of the Act and that it had chosen not to provide a specific period of limitation for filing an appeal
under Section 37. Further, the Court also went through the Articles of the Second Division of the Schedule to
Limitation Act, 1963 which deals with appeals. After analysing the Articles from 114 to 119, the Court reiterated
that the absence of any provision on Section 37 shows the intention of the legislature not to provide for any
limitation period for filing an appeal under Section 37.
Moreover, the Bombay High Court clearly ignored Section 29(2) of the Limitation Act, 1963 when it held that
if a special law does not provide a limitation period for a remedy, then the general law of limitation cannot
be made applicable to provide a limitation period. The said judgment is clearly bad in law and stands
27. AIR 1996 SC 1321.

28. (2002) 5 SCC 510.
29. AIR 2005 Bom 335: 2005 (3) ARBLR 167 Bom: I (2006) BC37: 2005 (5) BomCR 58: 2005 (3) MhLJ 1141.
192
overruled by the Hon’ble Supreme Court in the case of Consolidated Engineering Enterprises and Ors. v.
Principal Secretary Irrigation Department and Ors.
On the other hand, it is equally important to look at the decisions of the Bombay High Court and Meghalaya
High Court in ONGC Limited v. M/s Dinamic Corporation (Hereinafter Corporation) and North Eastern Electric
Power Corporation Ltd. v. Patel Unity Joint Venture (Hereinafter Patel Unity) respectively.
In the Corporation case referred afore, the Division Bench of the Hon’ble Bombay High Court revisited its judgment
in Jagson. It held that the decision of the Single Bench in Jagson was incorrect because of the flawed premise
of the Court as per which if the Legislature had not specifically provided a limitation period for a provision, then
no limitation would be applicable in those proceedings. The Court pointed out that the judgment had clearly
overlooked Section 29 of the Limitation Act, 1963 and Section 43 of the Arbitration and Conciliation Act, 1996
when it reached the incorrect conclusion that there was no limitation period for filing an appeal under Section
37 of the Arbitration and Conciliation Act, 1996. Further, in the Corporation case, the appeal was filed against the
order of the Single Bench of the High Court allowing a petition under Section 34 of the Arbitration and Conciliation
Act, 1996 which thereby meant that the Single Bench had set aside the arbitral award. So, the Division Bench of
the High Court applied Article 117 of the Limitation Act, 1963 to govern the appeal filed under Section 37 and held
that the limitation period was 30 days. In this case, Article 117 was attracted as the appeal was directed “from an
order of the High Court to the same Court”.
In the case of Patel Unity referred afore, the appeal was filed against the order of the Additional Deputy
Commissioner (Judicial), who refused to set aside the arbitral award. The Meghalaya High Court after going
through various judgments of the Supreme Court and High Courts held that the limitation period for filing
an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 is governed by Article 116(a) of
the Schedule to the Limitation Act, 1963 which stipulates a period of 90 days. The High Court found Article
116(a) applicable to the appeal filed under Section 37 as the appeal was directed “to the High Court from
any order”.
Also, it is interesting to note that the Hon’ble Meghalaya High Court in Patel Unity case, condoned the delay
of 32 days in filing the appeal while observing that the delay was not significant in nature. The appellants
had submitted that the delay was because of the time they consumed in examining files and obtaining
opinions and that it was not deliberate on their part. The Court accepted the submission of the appellant
and allowed their appeal to be examined on its merits.
The Hon’ble Supreme Court’s Perspective on Limitation Period For An Appeal under Section 37
The Meghalaya High Court in the case of Corporation and Patel Unity interpreted the law to hold that the
provisions of the Limitation Act, 1963 are applicable to proceedings under the Arbitration and Conciliation
Act, 1996 and accordingly determined the limitation period for an appeal under Section 37 of the Arbitration
and Conciliation Act, 1996 as 30 days (from an order of the High Court to the same Court) and 90 days (to
the High Court from any order), depending on the nature of appeal.
On December 06, 2019, in the case of State of Assam and Ors. v. N V International and Ors, (hereinafter N.V.
International) the question of computing the limitation period for filing an appeal under Section 37(1)(c) of the
Arbitration and Conciliation Act, 1996 had arisen before the Hon’ble Supreme Court. In this case, the arbitral
award was rendered by a former Judge of the Hon’ble Supreme Court, Justice K.N. Saikia. As per Section 34
of the Arbitration and Conciliation Act, 1996, the said award was challenged, however, was rejected by the
District Judge, Gauhati. Subsequently, the petitioner availed the recourse available under Section 37 of the
Arbitration and Conciliation Act, 1996, Act and appealed against the District Judge’s order which refused to
set aside the award. But, the appeal was filed after a delay of 189 days as opposed to the prescribed limit
of 90 days under Article 116 of the Limitation Act 1963 and since the petitioner failed to furnish a sufficient
cause for the delay, the appeal was consequently dismissed.
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The ruling in N.V. International case is based on the decision of a two-judge bench in the matter of Union of
India v. Varindera Constructions Limited30. In this case the Hon’ble Supreme Court had attempted to draw
an analogy in order to compute the limitation period for filing an appeal under Section 37 of the Arbitration
and Conciliation Act, 1996. The Court stated that since an application under Section 34 has to be filed within
a maximum period of 120 days, an appeal from the exact same proceedings (under Section 37) should
also be filed within the same period i.e. 120 days. The 120 days period for an application under Section 34
was arrived at by adding a 30 days grace period if sufficient cause for delay is shown in addition to the
statutory limitation of 90 days provided under Article 116 of the Limitation Act, 1963. The Court also held
that if the party filing the appeal fails to make an application within 120 days from the day its petition was
either allowed or dismissed under Section 34, the delay shall not be condoned as it would be opposed to
the objective of the Arbitration and Conciliation Act, 1996 which is to promote speedy resolution of disputes.
Interpretation
It was concluded by the Hon’ble Supreme Court in N.V. International case that a similar extension can be
granted to the party appealing under Section 37. It was held that a maximum period of 120 days is available
to the applicant for appealing under Section 37 against an order passed by the Court under Section 34.
It is imperative to highlight that the legislature has not mentioned the period of limitation for appealing
under Section 37, let alone an extension for the same. The High Courts in Corporation and Patel Unity cases
had only examined the applicability of the limitation law to the Arbitration and Conciliation Act, 1996 and
accordingly determined the period of limitation for filing an appeal under Section 37. The High Courts in the
above-mentioned cases did not equate the limitation period provided under Section 34 with Section 37 but
rather simply interpreted the law as it is, to hold different limitation periods for inter and intra-Court appeals
as stipulated by Articles 116 and 117 of the Schedule to the Limitation Act, 1963.
Similarly, the Supreme Court was well within its powers to hold that the limitation period for Section 37
application in an inter-Court appeal is 90 days as per the Limitation Act, 1963 but it went further to hold that
an extension of 30 days is also available if a sufficient cause is furnished by the party.
Table 5: Some Important Judicial decisions in respect of Limitation
Sr. No Case Name Case Note/Extract of Judgment
(a) Deep Industries Limited 1) The present appeal raises important questions relating to the High
vs. Oil and Natural Gas Court’s exercise of jurisdiction under Article 227 of the Constitution
Corporation Limited and of India when it comes to matters that are decided under the
Ors. (28.11.2019 - SC) Arbitration and Conciliation Act, 1996 (“the Act” for short).
2) This being the case, there is no doubt whatsoever that if petitions
were to be filed under Articles 226/227 of the Constitution against
orders passed in appeals under Section 37, the entire arbitral
process would be derailed and would not come to fruition for
many years. At the same time, we cannot forget that Article 227
is a constitutional provision which remains untouched by the non-
obstante clause of Section 5 of the Act. In these circumstances,
what is important to note is that though petitions can be filed
under Article 227 against judgments allowing or dismissing first
30. (2020)2SCC111.
194
appeals under Section 37 of the Act, yet the High Court would
be extremely circumspect in interfering with the same, taking into
account the statutory policy as adumbrated by us herein above so
that interference is restricted to orders that are passed which are
patently lacking in inherent jurisdiction.
3) We reiterate that the policy of the Act is speedy disposal of
arbitration cases. The Arbitration Act is a special act and a self-
contained code dealing with arbitration.
4) The High Court does not seem to have adverted to the limitation
imposed on its power under Section 115 of the Code. Merely
because the High Court would have felt inclined, had it dealt with
the matter initially, to come to a different conclusion on the question
of continuing stay of the reference proceedings pending decision
of the appeal, could hardly justify interference on revision under
Section 115 of the Code when there was no illegality or material
irregularity committed by the learned Additional District Judge in
his manner of dealing with this question. It seems to us that in this
matter the High Court treated the revision virtually as if it was an
appeal.”
5) It was finally concluded that the appeal stands allowed.
Accordingly, the arbitration proceedings may now be disposed
of as expeditiously as possible, in accordance with the mandate
contained in the Act.
(b) The State of Jharkhand 1) Aggrieved by the impugned judgment and order dated 30.01.2019
and Ors. vs. HSS passed by the High Court of Jharkhand at Ranchi in Commercial
Integrated SDN and Ors. Appeal No. 01 of 2018, by which the High Court has dismissed
(18.10.2019-SC) the said appeal preferred by the petitioners herein under Section
37 of the Arbitration and Conciliation Act, 1996 (for short ‘the
Arbitration Act’) and has confirmed the award declared by the
learned Arbitral Tribunal, confirmed by the First Appellate Court,
the original appellants have preferred the present special leave
petition.
2) This special leave petition arises out of the contractual dispute
between the petitioners-State and the respondents in relation to
a consultancy agreement over construction of six-lane Divided
Carriage Way of certain parts of Ranchi Ring Road. Respondent
Nos. 1 and 2 acted as a consortium for providing such consultancy
and supervisory services. An agreement was entered into between
the parties on 28.08.2007. The original work period under the said
agreement was for 36 months, i.e. from 01.10.2007 to 30.09.2010.
There was a dispute with respect to the non-performance and
unsatisfactory work done by the respondents. However, the
respondents were granted extension of contract twice. Thereafter,
a letter dated 25.11.2011 was issued by the Executive Engineer to
the respondents and other contractors entrusted with the task of
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construction, granting a second extension of time of contract for

construction work. The respondents were called upon to make
compliances with the issues pointed out, at the earliest. In the
said communication dated 25.11.2011, it was stated that if the
deficiencies are not removed and/or complied with, in that case,
there shall be suspension of payment under Clause 2.8 of the
General Conditions of Contract (for short ‘the GCC’). On 05.12.2011,
a review meeting was held between the parties, followed by
a letter dated 07.12.2011 issued by the respondents- original
claimants in reply/compliance of the aforesaid letter dated
25.11.2011. It was the case on behalf of the respondents-original
claimants that without properly considering the said letter of the
respondents-original claimants dated 07.12.2011, petitioners herein
issued letter dated 12.12.2011 invoking Clause 2.8 of the GCC for
suspension of payment, alleging certain deficiencies. It was the
case on behalf of the respondents-original claimants that by
letter dated 27.12.2011, they replied to the suspension notice and
complied with the deficiencies. In reply to the aforesaid letters, the
petitioners issued letters dated 23.12.2011 and 28.12.2011 asking
the claimants to ensure compliance of the pending issues. That
by letter/communication dated 09.02.2012, the petitioners served
a notice upon the respondents terminating the contract with effect
from 12.03.2012. The said termination notice was issued under
Clause 2.9.1(a) and (d) of the GCC. The respondents-original
claimants replied to the said termination notice by letters dated
16.02.2012 and 24.02.2012 and requested the petitioners to re-
consider the matter. However, the dispute between the parties
was not resolved. The respondents-original claimants served a
legal notice dated 10.03.2012 and invoked the arbitration clause
2.9.1(a). Pursuant to the order passed by the High Court, the Arbitral
Tribunal was constituted. 2.1 The Arbitral Tribunal comprised of
nominees of the rival parties and a retired Judge of the Jharkhand
High Court as the Presiding Arbitrator. The respondents-original
claimants claimed a total sum of Rs.5,17,88,418/- under 13 different
heads, excluding interest. The petitioners also filed a counter-
claim for Rs.6,00,78,736/- under five heads.
3) In view of the finding arrived at by the learned Arbitral Tribunal that
the termination of the contract was illegal and without following
due procedure as required under the contract and in view of
allowing the claims of the claimants partly, the Arbitral Tribunal
dismissed the counter claims submitted by the petitioners. 2.4
The award declared by the learned Arbitral Tribunal has been
confirmed by the First Appellate Court in a proceeding under
Section 34 of the Arbitration Act. The same has been further
confirmed by the High Court by the impugned judgment and order
in an appeal under Section 37 of the Arbitration Act. 2.5 Feeling
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aggrieved and dissatisfied with the impugned judgment and

order passed by the High Court dismissing the appeal under
Section 37 of the Arbitration Act and consequently confirming
the award passed by the learned Arbitral Tribunal, the original
respondents-State and others have preferred the present
special leave petition.
4) The main controversy is with respect to the termination of
the contract vide letter/communication dated 09.2.2012
terminating the contract with effect from 12.03.2012 invoking
Clause 2.9.1(1) and (d) of the GCC. That, on appreciation of
evidence and considering the various clauses of the contract,
the learned Arbitral Tribunal has observed and held by giving
cogent reasons that the termination of the contract was illegal
and contrary to the terms of the contract and without following
due procedure as required under the relevant clauses of the
contract. The said finding of fact recorded by the learned
Arbitral Tribunal is on appreciation of evidence. The said finding
of fact has been confirmed in the proceedings under Sections
34 and 37 of the Arbitration Act. Thus, there are concurrent
findings of fact recorded by the learned Arbitral Tribunal, First
Appellate Court and the High Court that the termination of
the contract was illegal and without following due procedure
as required under the relevant provisions of the contract. 6.1
In the case of Progressive-MVR (supra), after considering the
catena of decisions of this Court on the scope and ambit of
the proceedings under Section 34 of the Arbitration Act, this
Court has observed and held that even when the view taken
by the arbitrator is a plausible view, and/or when two views
are possible, a particular view taken by the Arbitral Tribunal
which is also reasonable should not be interfered with in a
proceeding under Section 34 of the Arbitration Act.
5) Once the finding recorded by the learned Arbitral Tribunal that the
termination of the contract was illegal is upheld and the claims
made by the claimants have been allowed or allowed partly, in
that case, the counter-claim submitted by the petitioners was liable
to be rejected and the same is rightly rejected. No interference of
this Court is called for.
6) In view of the above and for the reasons stated above, the present
special leave petition deserves to be dismissed and is accordingly
dismissed.
(c) MMTC Ltd. vs. Vedanta 1) In the matter concerned the Appellant MMTC Ltd. (Consignment
Ltd. (18.02.2019 - SC) agent as appointed by respondent) who provide services regarding
storage, handling and marketing of copper rods produced by
Respondent Vedanta Ltd.
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(c) 2) The dispute arose when Appellant supplied copper rods produced
by Respondent to a company which did not pay the amount due
to Appellant. The Appellant (agent of respondent) further failed
to pay the amount due to Respondent entity which violated the
principal-agent relationship.
3) The Respondent by invoking arbitration clause referred the

dispute to Arbitral Tribunal.
4) Conclusion: Appellant to pay to Respondent sum with interest.
5) Matter further referred to High Court- Decision unchanged.
6) Matter finally referred to Supreme Court (Apex Court)- Concluded

that dispute is governed by Arbitration clause and they find no
reason to disturb the Majority Award on ground that subject matter
of dispute was not arbitrable. Thus, Appeal got dismissed.
CASE STUDY
In case where the Arbitral Tribunal rules that it has no jurisdiction, an appeal against that order would lie
under Section 37 of Arbitration and Conciliation Act, 1996.
The Hon’ble High Court of Delhi held that in a Indeen Bio Power Limited v. EFS Facilities Service (India)
Pvt. Ltd where the Arbitral Tribunal proceeds to pass an award after overruling the objection relating to
jurisdiction, the remedy lies in Section 34 of the Arbitration and Conciliation Act 1996. However, where the
Arbitral Tribunal declines to pass an award for reasons of not having jurisdiction the remedy shall lie under
Section 37 of the Arbitration and Conciliation Act, 1996.
Challenge
The only point for consideration before the Hon’ble Court was that in a case when the Arbitral Tribunal ruled
that it has no jurisdiction, would an appeal under Section 37 of the Arbitration and Conciliation Act 1996, lie
against the said order or would it be liable to be challenged under Section 34 of the Act as an award.
Held
The Hon’ble High Court of Delhi after relying upon National Thermal Power Corporation Ltd. v. Siemens
Atiengesellschaft, rejected the objections raised by the Respondent. It was held that in case the Arbitral
Tribunal, by its order, has ruled that it has no jurisdiction, an appeal would lie under Section 37 of the
Arbitration and Conciliation Act, 1996, against the said order. It was further held that in the context of
Section 16 and the specific wording of Section 37(2)(a) of the Arbitration and Conciliation Act, 1996, it would
be appropriate to hold that what is made directly appealable by Section 37(2)(a) of the Arbitration and
Conciliation Act, 1996, is only an acceptance of a plea of absence of jurisdiction, or of excessive exercise of
jurisdiction and the refusal to proceed further either wholly or partly.
24.08.2023 M/s Hindustan Construction Company Limited v. M/s Supreme Court

National Highway Authority of India
Dissenting Award not to be treated as award even if Majority Award is Set aside
A dissenting opinion cannot be treated as an award if the majority award is set aside. It might provide
useful clues in case there is a procedural issue which becomes critical during the challenge hearings.
198
This court is of the opinion that there is another dimension to the matter. When a majority award is challenged
by the aggrieved party, the focus of the court and the aggrieved party is to point out the errors or illegalities
in the majority award. The minority award (or dissenting opinion, as the learned authors point out) only
embodies the views of the arbitrator disagreeing with the majority. There is no occasion for anyone- such
as the party aggrieved by the majority award, or, more crucially, the party who succeeds in the majority
award, to challenge the soundness, plausibility, illegality or perversity in the approach or conclusions in the
dissenting opinion.
In the case of Konkan Railway Corporation Limited v. Chenab Bridge Project Undertaking decided by
Supreme Court dated 17th August, 2023, the court has decided that the jurisdiction under Section 34 of the
Act is exercised only to see if the Arbitral Tribunal’s view is perverse or manifestly arbitrary. Accordingly, the
question of reinterpreting the contract on an alternative view does not arise. If this is the principle applicable
to exercise of jurisdiction under Section 34 of the Act, a Division Bench exercising jurisdiction under Section
37 of the Act cannot reverse an Award, much less the decision of a Single Judge.
For details: https://main.sci.gov.in/supremecourt/2012/40706/40706_2012_5_1501_46332_Judgement
_24-Aug-2023.pdf
LESSON ROUND-UP
l Section 34 provides the basis on which an arbitral award can be set aside and if an award is declared
to be void then the whole purpose and object of the Act gets nullified.
l The arbitral award is in conflict with the public policy of India.
l The time period for challenging an award commences only upon its proper receipt (The State of
Maharashtra and Ors. v. ARK Builders Pvt. Ltd). Period of Limitation prescribed under Section 34(3)
would start running only from the date of signed copy of award is delivered to/ received by the party
making an application for setting aside the award u/s 34(1).
l The grounds on which an award may be set aside are limited and pertain primarily to the procedure of
the arbitration and principles of natural justice.
l In case of arbitration if the parties settle the issue under Section 30, there is no mechanism as to revert
the same or change the same, but if the award is delivered by the Arbitral Tribunal, such an Award can
be set aside under Section 34.
l A person against whom a domestic Award is made, has to immediately approach the Court for
challenging the same by making an application under Section 34 of the Act. Otherwise the person
in whose favour the Award has been made can execute the same as a decree. On the other hand, a
person against whom a foreign Award has been made cannot be challenged in India.
l Section 37(3) provides that no further appeal can be made to any Courts having same jurisdictions,
larger benches of the Courts having same jurisdiction, or with the Courts having superior jurisdiction,
against the order passed in an appeal under this Section.
l The Hon’ble High Court of Delhi after relying upon National Thermal Power Corporation Ltd. v. Siemens
Atiengesellschaft, rejected the objections raised by the Respondent. It was held that in case the Arbitral
Tribunal, by its order, has ruled that it has no jurisdiction, an appeal would lie under Section 37 of the
Arbitration and Conciliation Act, 1996, against the said order.
199
l The Hon’ble High Court of Delhi held that in a Indeen Bio Power Limited v. EFS Facilities Service (India)
Pvt. Ltd. where the Arbitral Tribunal proceeds to pass an award after overruling the objection relating to
jurisdiction, the remedy lies in Section 34 of the Arbitration and Conciliation Act 1996. However, where
the Arbitral Tribunal declines to pass an award for reasons of not having jurisdiction the remedy shall
lie under Section 37 of the Arbitration and Conciliation. Act, 1996.
GLOSSARY
Public Policy: It can be referred to as the principles and standards constituting the general policy of the
State established by the Constitution and the existing laws of the country and also principles of justice and
morality.
Recourse: According to Cambrdige dictionary, using something or someone as a way of getting help,
especially in a difficult or dangerous situation.
TEST YOURSELF
1. What are the grounds of challenge and powers of court to modify the award?
2. Explain Public policy with the aid of relevant case law.
3. Describe the time limit prescribed under Section 34 to challenge an arbitration award.
4. What are the Essential elements of Arbitral Award?
5. Explain the Pre-conditions for Invoking Section 34(4) of the Arbitration and Conciliation Act, 1996.
6. Can a foreign award be challenged in India? Explain.
7. Draft a Petition for setting aside an Arbitral Award. Assume Necessary facts.
Handbook on Arbitration: A Practical guide for Professionals

l https://www.ciarb.org/media/4206/drafting-arbitral-awards-part-i-_-general-2021.pdf
200
Emerging Aspects: Fast Track and Lesson
Virtual Arbitration 7
KEY CONCEPTS
n Track Arbitration n Online Dispute Resolution n Effect of Arbitration on Insolvency n Virtual Arbitration
Learning Objectives
To understand:
 Prospects of Arbitration in India
 Fast Track Arbitration
 Online Dispute Resolution system
 Drafting under Fast Track Arbitration
 Virtual Arbitration
 Role of CS in Arbitration Proceedings
 Arbitration vs. Insolvency
Lesson Outline
 Fast Track Arbitration  Recent Amendments
 Difference between Fast Track Arbitration  Lesson Round-Up
and Ordinary Arbitration
 Glossary
 Law Relating to Fast Track Procedure
 Test Yourself
 Required Documents and Drafting
 Procedure and Steps in Virtual Arbitration
 Important aspects for Conduct of Virtual Links)
Arbitration
 Steps under Virtual Arbitration
 Role of Company Secretaries and Related
Provision
 Arbitration vs. Insolvency and Bankruptcy
Code 2016: A Comparative Study
 Future of Indian Arbitration: Prospects and
Challenges
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PP-AM&C Emerging Aspects: Fast Track and Virtual Arbitration
l Indian Stamp Act, 1899
FAST TRACK ARBITRATION

Arbitration is a method of dispute resolution that is rising popularly in India. The Indian legislature has
made many amendments to the Arbitration and Conciliation Act, 1996, to make arbitration the preferred
method of dispute resolution at both domestic and international levels. One of the main tasks in pursuing
dispute resolution through any method is the lengthy process and time it takes to reach a decision or
award. Arbitration is an resourceful and flexible method that can reduce the time it takes to resolve
disputes. Compared to Civil Courts, which are overloaded with a massive number of cases, arbitration is
a more effective and streamlined way to resolve disputes. Further, fast track arbitration is a productive
method of dispute resolution that is time-bound, so it can’t be overdue for any cause. It’s a sub-system of
regular arbitration, wherein a sole arbitral tribunal is finalised after obtaining the permission of parties, with
fixed time limits. In Fast Track Arbitration, limited procedures are to be followed to speed up the process
of dispute resolution.
Fast Track Arbitration has become a popular option in Indian law recently because it allows parties to resolve
disputes quickly. The amendment to the Arbitration & Conciliation (Amendment) Act, 2015 makes this process
more effective. This new law makes it easier for parties to come to an agreement and get an award resolved
within six months. Time is important in this type of arbitration, so this change is a big help.
Nevertheless, it is not governed by ordinary rules and regulations. In Fast Track Arbitration Oral proceedings
are avoided and reliance is to be placed on written pleadings. Under fast track arbitration, the arbitrators
have to decide the matter within the time frame on written submission without oral hearings. This will inspire
confidence in the foreign investors also who want to dispose of the matter in a time bound manner which
ultimately reduces the cost.
Essential Features of Fast Track Arbitration

The essential feature of a fast track arbitration are as follow:
1. Arbitral proceedings under Fast Track Arbitration are largely governed by time limits to be followed by
arbitrators as well as the parties under the Arbitration. The objective is to speed up Arbitral process and
attain the resolution within the shortest possible span of time.
2. In case the arbitral process is not completed within the time frame provided under the Arbitration and
Conciliation Act, the parties also may extend the time limits. If the award is made within six months from
the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive
additional fees as the parties may agree. The Court is also empowered either prior to or after the expiry
of the period so specified, extended the period. However, if the Court finds that the proceedings have
been delayed for the reasons attributable to the arbitral tribunal, then, it may order reduction of fees of
arbitrator(s) by not exceeding five per cent. for each month of such delay.
3. Fast Track Arbitration permits the activities that facilitates the resolution of disputes in an expeditious
manner. However, this does not allow the arbitrator to avoid the necessary requirements to arrive at the
decision.
4. In Fast Track Arbitration, the emphasis are on written proceedings and not on the Oral Hearings.
5. The selection of the Arbitrator is made by parties.
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Emerging Aspects: Fast Track and Virtual Arbitration LESSON 7
DIFFERENCE BETWEEN FAST TRACK ARBITRATION AND ORDINARY ARBITRATION
Basis Fast Track Arbitration Ordinary Arbitration
Non-obstante Clause The provisions related to Fast Track Regular provisions are applicable.
Procedure in Arbitration and Conciliation
Act is non-obstante.
Agreement to resolve A provision has been specifically If no such agreement between the
through Fast Track provided to the effect that the parties parties, ordinary arbitration procedure
Mode may, at any stage either before or at has to be followed.
the time of appointment of the arbitral
tribunal, agree in writing to have their
dispute resolved by fast track procedure.
Number of Arbitrator Specific provision has been given that In ordinary arbitration, courts are
parties may agree that the arbitral specifically empowered to appoint
tribunal shall consist of a sole arbitraton. Arbitrators under section 11 of the
Courts have no active role to decide on Arbitration and Conciliation Act.
appointment of Arbitrator.
Oral Hearing The arbitral tribunal shall decide the Oral Hearing may be conducted by the
dispute on the basis of written pleadings, Arbitrator.
documents and submissions filed by
the parties without any oral hearing.
However, An oral hearing may be held
only, if, all the parties make a request
or if the arbitral tribunal considers it
necessary to have oral hearing for
clarifying certain issues.
Time Limit for making The award shall be made within a period The award in matters other than
an award of six months from the date the arbitral international commercial arbitration
tribunal enters upon the reference. shall be made by the arbitral tribunal
within a period of twelve months from
the date of completion of pleadings.
LAW RELATING TO FAST TRACK PROCEDURE

Section 29B of the Arbitration and Conciliation Act provides the provisions relating to Fast track procedure.
Which is reproduced below:
Notwithstanding anything contained in Arbitration and Conciliation Act, the parties to an arbitration agreement,
may, at any stage either before or at the time of appointment of the arbitral tribunal, agree in writing to have
their dispute resolved by fast track procedure specified below.
The parties to the arbitration agreement, while agreeing for resolution of dispute by fast track procedure, may
agree that the arbitral tribunal shall consist of a sole arbitrator who shall be chosen by the parties.
The arbitral tribunal shall follow the following procedure while conducting arbitration proceedings:
(a) The arbitral tribunal shall decide the dispute on the basis of written pleadings, documents and
submissions filed by the parties without any oral hearing;
203
(b) The arbitral tribunal shall have power to call for any further information or clarification from the parties
in addition to the pleadings and documents filed by them;
(c) An oral hearing may be held only, if, all the parties make a request or if the arbitral tribunal considers
it necessary to have oral hearing for clarifying certain issues;
(d) The arbitral tribunal may dispense with any technical formalities, if an oral hearing is held, and adopt
such procedure as deemed appropriate for expeditious disposal of the case.
The award under section 29B shall be made within a period of six months from the date the arbitral tribunal
enters upon the reference.
If the award is not made within the period specified above, the provisions of section 29A(3) to 29A(9) shall apply
to the proceedings.
The fees payable to the arbitrator and the manner of payment of the fees shall be such as may be agreed
between the arbitrator and the parties.
REQUIRED DOCUMENTS AND DRAFTING

As per section 29B(1) of the Arbitration and Conciliation Act, 1996, notwithstanding anything contained in Act,
the parties to an arbitration agreement, may, at any stage either before or at the time of appointment of the
arbitral tribunal, agree in writing to have their dispute resolved by fast track procedure.
According to above, the first document required is the Agreement to settle the dispute by Fast Track Procedure.
Further, the parties may agree that the arbitral tribunal shall consist of a sole arbitrator who shall be chosen by
the parties.
The arbitral tribunal shall decide the dispute on the basis of written pleadings, documents and submissions
filed by the parties without any oral hearing. Therefore, the documents such as Statement of Claims, Defence,
Agreements of Procedure, Evidences etc. are required for the Arbitration under Fast Track Procedure.
The drafting of the all the documents for the purpose of arbitration should be done in such a manner that it
should be complete and explanatory in all respects. The purpose of drafting of documents in such a manner is
to facilitate the Arbitral Tribunal for early resolution of dispute.
PROCEDURE AND STEPS IN VIRTUAL ARBITRATION

The arbitration process is often praised for its tractability and time-effective process. With physical hearings of
Adjudicatory authorities becoming increasingly rare, the Covid-19 pandemic made virtual hearings the fresh
norm. Due to the fact that the legal fraternity has become more reliant on technology in order to appear before
courts or various tribunals, everyone had to resort to remote hearings as a way of avoiding overburdening the
judiciary. This has caused some problems, as it has taken away the opportunity for people to see and interact
with their lawyers in person. However it has its own advantages such as cost effectiveness, convenience etc.
It is often said that “Justice delayed is Justice Denied. With a purpose to address the preceding issue, the Indian
judiciary came up with effective solutions to move forward with their work and manage the upward push of
cases as they come, as justice by no means sleeps. To keep up with the competition with other countries, we
need to take significant steps in improve the situation.
IMPORTANT ASPECTS FOR CONDUCT OF VIRTUAL ARBITRATION

1. All participants should be ready for videoconference well before the start time of the proceedings.
2. The Presiding officer should preferable act as the host of the session.
204
3. The audio visual availability of all the participants has to be ensured.

4. The tribunal should take note of the attendance of the parties.
5. The tribunal may also adjourn the proceedings in case of need.
6. The parties should try to sit in position that is visible to everyone.
7. The parties and their authorized representative should try to attend the proceedings from the same
location.
8. The person speaking during the proceedings should be visible.
9. The administrative arrangements for the video conferencing for the sessions should be made in
advance.
STEPS UNDER VIRTUAL ARBITRATION
Step 1: Appointment of The parties should agree on the name of Arbitrators arbitral tribunal.
Arbitrator
Step 2: Agreement on The parties should agree on the procedure of Arbitration. The agreement may
procedure for Arbitration inter alia include, the notice to other parties, the mode in which proceedings
to be conducted.
Step 3: Submission of Claims The parties submit the claims to the tribunal and copy has to be provided to
and Defences the other party. On the basis of the claim, the other party submits its defence
on the claim.
Step 4: Submission of If required, the arbitrator may ask for evidences and examine the witnesses.
Evidences and Witnesses
Step 5: Conduct of The proceedings should be conducted on the basis of agreement by the
Proceedings parties.
Step 6: Preparation and The arbitrator prepares the award and communicate award to both the
Communication of Award parties.
CASE STUDIES
1. In one instance, a XYZ Ltd. (FMCG Company) and subcontractor had made an agreement for supply
of materials to the company. XYZ Ltd. with over 30 brands across 08 distinct categories including
Household Care, Purifiers, Personal Wash, Skin Care, Hair Care, Colour Cosmetics, Oral Care and
Deodorants, the Company is part of the daily life of millions of consumers. In addition, the company has
been granted the franchise for the Kite brand of SepiCo products in Sri Lanka. It has 25 manufacturing
plants in India. The company has a sales of Rs 17.98 Cr.
But they were involved in a clash over quality of the material supplied. Fast track arbitration was in
initiated by the FMCG Company in order to resolve the conflict quickly and affordably. They both
mutually appointed an arbitrator for the settling the dispute promptly and efficiently. The parties had
agreed on a simplified hearing procedure that would include little discovery and a brief hearing period.
The fast track arbitration resulted in the issue being settled in a few of months for a fraction of the price
of regular arbitration. Both sides were pleased with the result and the procedures’ effectiveness.
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Prepare necessary documents for submission of claims and defence and Award passed by Arbitrator.
Assume necessary facts.
2. Mr. X was working in a Cables Manufacturing Company as Marketing Manager. Company has 8 units
at Pimpri (Pune), Urse (Pune), Verna (Goa) and Roorkee (Uttarakhand). The company has vide range of
products including 1100 V PVC insulated cables – electrification of industrial establishments, electrical
panel wiring and consumer electrical goods, Motor winding PVC insulated cables and 3 core flat cables
– submersible pumps and electrical motors, Automotive/battery cables – wiring harness for automobile
industry and battery cables for various applications, Heavy duty, underground, high voltage, power
cables – Intra-city power distribution network etc.
However, company terminated Mr. X without giving him any reason or explanation thereof. The
employee disputed the firing and said they were fired unfairly. The employer had a different take on
the situation and thought the dismissal was legal. The matter was taken before an arbitrator, who used
fast track arbitration to settle it. The arbitrator rendered a judgement in favour of the employee after
rapidly going over the evidence offered by both parties. The employee and the company both saved
time and money because the decision was rendered in a short span of time.
Prepare necessary documents for submission of claims and defence and Award passed by Arbitrator.
Assume necessary facts.
1
ROLE OF COMPANY SECRETARIES AND RELATED PROVISION
As we aware that Arbitration is cost effective, less formal and convenient method of resolving the disputes.
In arbitration, the parties has to choose the arbitrator on mutual agreement in most of the cases except the
Arbitrator appointed by courts under a particular law such as under Section 11 of the Arbitration and Conciliation
Act, 1996. Therefore, the parties approach the subject matter expert who are able to understand and resolve
their disputes amicably. A company secretary is a competent professional to deal with Arbitration matter in the
areas such as financial or contractual commercial disputes, international or cross-border commercial disputes,
in research and development agreements and many more areas. A Company Secretary also specialise in
arbitration matters particularly those connected with breach of contracts, insurance claims, loss of profit,
securities fraud, Commercial disputes, rights of properties, Lease transactions, etc. and represent their clients
in Arbitration Proceedings.
Further, according to the India International Arbitration Centre (Criteria for Admission to the panel of arbitrators)
Regulations, 2023, a Company Secretary qualification is added as a Criteria for empanelment of arbitrator.
Regulation 6(1) of the above said regulations provides the criteria for empanelment of Arbitrator, which is as
under :
The Chamber of Arbitration shall empanel the arbitrators on the basis of following criteria, namely:-
(i) the applicant shall not be less than thirty five years and not more than seventy five years of age;
(ii) the educational qualifications and experience of the applicant shall be largely relevant to the applicant’s
field of expertise or of conduct of arbitration proceedings either as a sole arbitrator or as a memberof
any Arbitral Tribunal, within the last five years or otherwise related to the field of arbitration;
(iii) the applicant shall furnish a statement that he has not been found guilty by a Court for any criminal
offence, or for misconduct after conduct of disciplinary proceedings and that no criminal case or any
departmental proceeding is pending against him:
1. Source from the Presentation of V. Inbavijayan, B.A.B.L., PAP (KFCRI), FCIArb (UK) on the topic Opportunities for CS in Arbitration and Mediation
and can be accessed from: https://www.icsi.edu/media/filer_public/27/9c/279c9c39-a885-4f28-9114-b785a9712e78/opportunities_for_cs_
in_arbitration_and_mediation_mr_inbavijayan.pdf
206
Provided that the Chamber of Arbitration may even otherwise invite eminent persons having specialised
knowledge and substantial relevant experience in the field of arbitration for being empaneled on the panel of
arbitrators. A Company Secretary is eligible for empanelment as arbitrator in accordance with the above.
Section 26 of the Arbitration and Conciliation Act, 1996 provides the provisions relating to expert to be
appointed by arbitral tribunal.
It provides that unless otherwise agreed by the parties, the arbitral tribunal may appoint one or more experts to
report to it on specific issues to be determined by the arbitral tribunal.
Further, unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal considers it
necessary, the expert shall, after delivery of his written or oral report, participate in an oral hearing where the
parties have the opportunity to put questions to him and to present expert witnesses in order to testify on the
points at issue.
A Company Secretary being an expert of Corporate Laws can act as experts in accordance with section 26 of
Arbitration and Conciliation Act, 1996.
ARBITRATION VS INSOLVENCY AND BANKRUPTCY CODE 2016: A COMPARATIVE STUDY

The Insolvency and Bankruptcy Code (IBC) was enatcted to consolidate and amend the laws relating to
reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound
manner. The purpose of IBC was maximisation of value of assets of such persons, to promote entrepreneurship,
availability of credit and balance the interests of all the stakeholders including alteration in the order of priority
of payment of Government dues.
IBC deals with the matter relating to Insolvency and bankruptcy and Arbitration and Conciliation Act deals with
the resolution of diputes outside the court.
There are no provisions in IBC that requires that a matter to be referred for Arbitration. Conflict between
Arbitration and IBC Process can have detrimental effect over the Corporates due to the delay in both the
processes. Parties resorting to both arbitration and IBC processes face a many problems. However, there is
a scope of Arbitration can prove to be helpful wherever there is a scope of settlement. Few judicial decisions
have shown a positive signs of Involvement of Arbitration in the Insolvency Matters. The topic can more be
understood with the help of below mentioned cases.
Indus Biotech Private Limited vs. Respondent: Kotak India Venture (Offshore) Fund and Ors (26.03.2021 - SC)
The Arbitration Petition is filed by ‘Indus Biotech Private Limited’ Under Section 11(3) read with Sections 11(4)(a)
and 11(12)(a) of the Arbitration and Conciliation Act, 1996 seeking the appointment of an Arbitrator on behalf of
the Respondents. The petition filed before Supreme Court was due to the fact that Kotak India Venture (Offshore)
Fund and Ors is a Mauritius based Company and the dispute qualifies as international arbitration. The other
Respondents though are Indian entities, they are the sister ventures of Kotak India Venture (Offshore) Fund
and Ors. Further, according to the Petitioner the subject matter involved is the same, though under different
agreements, the arbitration could be conducted as a single process, by a single Arbitral Tribunal. Hence a
common petition is filed before the (Supreme Court), instead of bifurcating the causes of action and availing
their remedy before the High Court in respect of similar disputes with other Respondents.
The dispute in question, according to the Petitioner company is with regard to the appropriate formula to be
adopted and to arrive at the actual percentage of the paid-up share capital which would be converted into
equity shares and the refund if any thereafter. Until an amicable decision is taken there is no liability to repay
the amount. Therefore, there is no ‘debt’ or ‘default’, nor is the Petitioner company unable to pay.
On the said issue, the Respondents contended that the fact of the Respondents having subscribed to the OCRPS
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is not in dispute. In such event, on redemption of the same, the amount is required to be paid by the Petitioner
company. The Respondents contend that on redemption of OCRPS, a sum of Rs. 367,08,56,503/- (Rupees Three
Hundred Sixty-Seven Crore Eight Lakh Fifty-Six Thousand Five Hundred Three) became due and payable. The
Respondents having demanded the said amount and since the same had not been paid by the Petitioner
company, it is contended that the same had constituted default. It is contended that as the debt had not been
paid by the company it had given a cause of action for the Respondents No. to invoke the jurisdiction of the
Adjudicating Authority, NCLT by initiating the Corporate Insolvency Resolution Process (‘CIRP’) provided under
the Insolvency and Bankruptcy Code, 2016.
Supreme Court decided point relating to the appointment of the Arbitral Tribunal as sought in the petition.
Essentially the main contention that has been urged is with regard to the proceedings before the NCLT and,
therefore, the dispute not being arbitrable. However, in the present position the parties would be left with no
remedy if the process of arbitration is not initiated and the dispute between the parties are not resolved in that
manner as the proceedings before the NCLT has terminated. Learned Senior Counsel for Indus Biotech Private
Limited has contended that the transaction between the parties is a common one and as such it would be
efficient if the dispute is resolved by a single Arbitral Tribunal. Further in view of the objection raised on behalf
of the Respondent No. 4 (Kotak India Venture) that the arbitration Clause has not been invoked in accordance
with the requirement therein, since the promoters have to suggest one arbitrator and not the Company, learned
Senior Counsel representing the promoters who are arrayed as Respondent Nos. 5 to 11 in the arbitration petition
has pointed out that the affidavit has been filed supporting the petition seeking arbitration and, therefore,
the Tribunal be constituted. Though learned Senior Counsels had in their argument opposed the reference
to arbitration by pointing out lacunae in the manner the Clause was invoked and the name of the arbitrator
was suggested, in the circumstance the only remedy for the parties being resolution of their dispute through
arbitration as indicated above, we consider it appropriate to take note of the substance of the arbitration Clause
and constitute an appropriate Tribunal.
2
FUTURE OF INDIAN ARBITRATION: PROSPECTS AND CHALLENGES
There are many arbitral institutions in India. These include, in addition to domestic and international arbitral
institutions, arbitration facilities provided by various public-sector undertakings (“PSUs”), trade and merchant
associations, and city-specific chambers of commerce and industry. A large number of these arbitral institutions
administer arbitrations under their own rules or under the Arbitration Rules of the United Nations Commission
on International Trade Law (“UNCITRAL Arbitration Rules”).
Despite the existence of numerous arbitral institutions in India, parties in India prefer ad hoc arbitration and
regularly approach courts to appoint arbitral tribunals under the relevant provisions of the Arbitration and
Conciliation Act, 1996. A 2013 survey showed that there was a strong preference for ad hoc arbitration amongst
both Indian companies that had experienced arbitration and Indian.
Measures that promote access to the jurisdiction (i.e., whether foreign lawyers can represent clients in
international arbitrations held in the country) and promote the jurisdiction as a venue by easing restrictions
related to immigration, tax, etc. have been instrumental in the growth of institutional arbitration in many countries.
The Indian legal position with respect to permitting foreign lawyers to represent clients in arbitrations in India
is not very clear. In A.K. Balaji v. Government of India, the Madras High Court held that foreign lawyers are
permitted to visit India temporarily on a fly in and fly out basis to advise clients regarding foreign law and
international legal issues and conduct arbitration proceedings in respect of disputes arising out of a contract
relating to international commercial arbitration.
At the other end of the spectrum are countries such as Singapore and Hong Kong. In both jurisdictions, a
mechanism is provided which allows foreign lawyers to get them registered and practice foreign law in the
2. Source: Report of the High Level Committee to Review the Institutionalisation of Arbitration Mechanism in India, Chairman Justice B. N.
Srikrishna Retired Judge, Supreme Court of India. The report may be accessed at https://legalaffairs.gov.in/sites/default/files/Report-HLC.pdf
208
respective jurisdiction. Singapore goes a step ahead and allows foreign lawyers to practice permitted areas of
Singapore law as well. Singapore does not impose a visa requirement for non-resident arbitrators.
A study of successful arbitral institutions across the world shows how the governments and the legislatures
in the jurisdictions they are located in have played a significant role in helping them flourish. This has been
through governmental and legislative efforts in promoting such jurisdictions as arbitration hubs. The Committee
opined that the government and the legislature can play a similar role in promoting institutional arbitration in
India, and more generally, promoting India as an arbitration hub.
For this purpose, the Committee has identified certain areas where the government and / or the legislature
can play a more proactive role in creating a conducive environment for institutional arbitration to flourish. The
Committee proposes that a permanent standing committee be constituted under the aegis of the APCI that
can help liaise with the government to ensure a healthy ecosystem for the development of arbitration in India.
As can be seen from the successes of Singapore and Hong Kong as arbitration hubs, this is vital to ensure the
competitive edge and the success of arbitration in any jurisdiction.
The Committee also opined that the National Litigation Policy (“NLP”) and state litigation policies must promote
arbitration in government contracts. Arbitration must be encouraged as a dispute resolution mechanism in
disputes involving government departments or PSUs and private parties.
However, ADR is thought of as a substitute to litigation, with the latter being deemed as the conventional and
default format for resolving disputes. While the growing use of ADR mechanisms has precipitated some change
to notion, in most cases, they continue to play second-fiddle to litigation.
Further, Arbitration faces the below difficulties in India:
l lack of awareness of arbitral processes
l Lack of guidelines for arbitral awards
l Arbitral Award can be enforced as a decree. Therefore, a party has to approach courts for enforcement
of Award.
As Justice Sundaresh Menon (the Chief Justice of Singapore) had pointed out in an address, ADR must be
transformed into ‘Appropriate Dispute Resolution’. This paradigm shift is necessary to create a parity between
ADR mechanisms and litigation, and instil faith in them as equally (or more) efficient and comprehensive dispute
resolution frameworks.
ONLINE DISPUTE RESOLUTION

Online Dispute Resolution (ODR) is the use of technology to resolve the disputes outside of the court system.
ODR is the use of technology to ‘resolve’ disputes. ODR can use technology tools that are powered by AI/ML
in the form of automated dispute resolution, script-based solution and curated platforms that cater to specific
categories of disputes.
This topic in detail has been covered in Lesson 9 of this Study Material.
CASE LAWS
N.N. Global Mercantile Private Limited vs. M/s. Indo Unique Flame Ltd. & Ors. (April 25, 2023)
Fact
The first respondent, who was awarded the Work Order, entered into a sub-contract with the appellant. Clause 10
of the Work Order, constituting the subcontract, provided for an Arbitration Clause. The appellant had furnished
a bank guarantee in terms of Clause 9. The invocation of the said guarantee led to a Suit by the appellant against
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the encashment of the bank guarantee. The first respondent applied under Section 8 of the Arbitration
and Conciliation Act, 1996 (‘the Act) seeking Reference. A Writ Petition was filed by the first respondent
challenging the Order of the Commercial Court rejecting the Application under Section 8 of the Act. One
of the contentions raised was that the Arbitration Agreement became unenforceable as the Work Order
was unstamped. The High Court, however, allowed the Writ Petition filed by the first respondent. The issue
relevant to this Bench was, whether the Arbitration Agreement would be enforceable and acted upon, even if
the Work Order is unstamped and unenforceable under the Indian Stamp Act, 1899 (‘the Stamp Act’).
Decision
It said, Learned brother Justice K. M. Joseph, after explaining as to how the expression ‘certified copy’ must
be understood, held that the Court exercising the power under Section 11 (6) has to exercise the power under
Section 33 of the Indian Stamp Act when the original is produced before the Court. In other words, according
to me, it is rightfully held that when the original document carrying the arbitration clause is produced and if it
is found that it is unstamped or insufficiently stamped, the Court acting under Section 11 is duty bound to act
under Section 33 of the Indian Stamp Act as held in the draft judgment.
I am also concurring with the view that what is permissible to be produced as secondary evidence i.e.,
other than the original document in terms of Section 2(a) of the scheme framed under Section 11(10) of the
Act, is nothing but certified copy as mentioned earlier. But such a certified copy, would not be available to
be proceeded with under Section 33 of the Stamp Act if it is unstamped or insufficiently stamped. In such
circumstances, such certified copy shall not be acted upon.
It cannot be presumed that despite the conspicuous difference in the said expressions, under paragraph 2
(a) ‘certified copy’ alone was permitted to be appended along with the application under Section 11 of the
Act, unintentionally. I am of the considered view that it was so prescribed, fully understanding the nature of
exercise of power under Section 11 (6) of the Act and also the presumption of genuineness and correctness
of ‘certified copy’ available by virtue of Section 79 of the Evidence Act.
It can be said that unstamped/insufficiently stamped document does not affect the enforceability of a
document nor does it render a document invalid. A plain reading of the provisions would also make it clear
that a document can be “acted upon” at a later stage. It is therefore a curable defect.
RECENT AMENDMENTS
Amendment Act 2021

In the Arbitration and Conciliation Act, 1996, in section 36 (3), after the proviso, the following has been inserted
and shall be deemed to have been inserted with effect from the 23rd day of October, 2015, namely:
“Provided further that where the Court is satisfied that a prima facie case is made out that,—
(a) the arbitration agreement or contract which is the basis of the award; or (b) the making of the award,
was induced or effected by fraud or corruption, it shall stay the award unconditionally pending disposal
of the challenge under section 34 to the award.
Explanation.– For the removal of doubts, it is hereby clarified that the above proviso shall apply to
all court cases arising out of or in relation to arbitral proceedings, irrespective of whether the arbitral
or court proceedings were commenced prior to or after the commencement of the Arbitration and
Conciliation (Amendment) Act, 2015.”.
For section 43J of the principal Act, the following section shall be substituted, namely:–– “43J. The qualifications,
experience and norms for accreditation of arbitrators shall be such as may be specified by the regulations.”
The Eighth Schedule to the principal Act has been omitted.
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LESSON ROUND-UP
l One of the main tasks in pursuing dispute resolution through any method is the lengthy process and
time it takes to reach a decision or award. Arbitration is an resourceful and flexible method that can
reduce the time it takes to resolve disputes.
l The parties to the arbitration agreement, while agreeing for resolution of dispute by fast track procedure,
may agree that the arbitral tribunal shall consist of a sole arbitrator who shall be chosen by the parties.
l As per section 29B(1) of the Arbitration and Conciliation Act, 1996, notwithstanding anything contained
in Act, the parties to an arbitration agreement, may, at any stage either before or at the time of
appointment of the arbitral tribunal, agree in writing to have their dispute resolved by fast track
procedure.
l A company secretary is a competent professional to deal with Arbitration matter in the areas such as
financial or contractual commercial disputes, international or cross-border commercial disputes, in
research and development agreements and many more areas.
l A study of successful arbitral institutions across the world shows how the governments and the
legislatures in the jurisdictions they are located in have played a significant role in helping them
flourish. This has been through governmental and legislative efforts in promoting such jurisdictions as
arbitration hubs.
GLOSSARY
Fast Track Arbitration: It is a productive method of dispute resolution that is time-bound, so it can’t be
overdue for any cause. It’s a sub-system of regular arbitration, wherein a sole arbitral tribunal is finalised
after obtaining the permission of parties, with fixed time limits.
Online dispute resolution: ODR is the use of technology to ‘resolve’ disputes. ODR can use technology tools
that are powered by AI/ML in the form of automated dispute resolution, script-based solution and curated
platforms that cater to specific categories of disputes.
TEST YOURSELF
1. Define Fast Track arbitration. What are the Essential Features of Fast Track Arbitration?
2. Differentiate between Fast Track Arbitration and Ordinary Arbitration.
3. What are the important aspects and steps for conduct of virtual arbitration?
4. What is Future of Arbitration in India.
5. Can Arbitration complement Insolvency Proceedings? Comment.
Handbook on Arbitration: A Practical Guide for Professionals

211
OTHER REFERENCES (Including websites/video links)
l https://amlegals.com/fast-track-arbitration-in-india/#
l https://www.scconline.com/blog/post/2021/10/28/virtual-hearings-in-arbitration/
212
Arbitration under Investor’s Grievances Lesson
Redressal Mechanism of Stock 8
Exchanges
KEY CONCEPTS
n Investors grievances redressal mechanism (IGRM) n Arbitration proceedings n Regulatory and Surveillance
actions n Procedure for Arbitration under Investor’s Grievances redressed mechanism of stock exchange
n Case studies on Arbitration
Learning Objectives
To understand:
 System of Investors grievances redressal mechanism (IGRM)
 Arbitration proceedings under the mechanism
 Procedure under the mechanism
 Regulatory actions
 Surveillance actions
Lesson Outline
 Introduction  National Commodity Derivatives Exchanges
 Investor’s Grievance Redressal Mechanism  Place of arbitration / appellate arbitration
(IGRM)  Speeding up grievance redressal mechanism
 Benefits of IGRM  Automatic Process and Common Pool of
 Threshold limit for interim relief paid out of IPF arbitrators
in Exchanges  Regulatory actions
 Investor Service Centre (ISC)  Surveillance actions
 Investor Grievances Redressal Committee  Case studies on Arbitration under Stock
(IGRC) Exchange Grievance Redressal Mechanism
 Investor Grievance Redressal facility at Stock  Lesson Round-Up
Exchanges/Depositories
 Glossary
 Arbitration Process at Stock Exchanges
 Test Yourself
 Resolution of complaints by Stock Exchange
 List of Further Readings & Other References
 Disciplinary Action Committee, Defaulters’
(Including Websites/Video Links)
Committee, Investors Service Committee,
Arbitration Committee
213
PP-AM&C Arbitration under Investor’s Grievances Redressal Mechanism of Stock Exchanges
l Finance Act, 2015
l Forward Contracts (Regulation) Act, 1952
l Securities Contracts (Regulation) Act, 1956
l SEBI Act, 1992
l Limitation Act, 1963
INTRODUCTION
Arbitration is an alternative dispute resolution mechanism that has gained significant importance in the field
of investor grievance redressal. It is a process by which parties can resolve their disputes outside of court in a
private and confidential manner.
The Investor’s Grievances Redressal Mechanism of stock exchanges provides investors with a platform
to resolve their complaints against brokers and listed companies through arbitration. In this mechanism, a
neutral third-party arbitrator is appointed to hear and resolve the dispute between the parties. This process is
considered faster, cost-effective, and less formal than traditional court litigation. In this topic, we will explore the
various aspects of arbitration under the Investor’s Grievances Redressal Mechanism of stock exchanges and its
significance in protecting the interests of investors.
INVESTOR GRIEVANCE RESOLUTION PANEL (IGRP)/ ARBITRATION MECHANISM

The Investor’s Grievance Redressal Mechanism is a vital tool for protecting the interests of investors in the
securities market. It is a process by which investors can file complaints against brokers and listed companies
and seek redressal for their grievances. The Arbitration and Conciliation Act, 1996 provides for the establishment
of an effective and efficient grievance redressal mechanism for investors.
Under this Act, investors can opt for arbitration as a means of resolving their disputes with brokers and listed
companies. The mechanism is administered by the stock exchange, which appoints an arbitrator to hear and
decide the dispute. The arbitrator is a neutral third party who is appointed based on his or her expertise and
experience in the field of securities.
The process of arbitration under the Investor’s Grievance Redressal Mechanism is relatively faster, cost-
effective, and less formal than traditional court litigation. The parties involved can present their cases before the
arbitrator, who will then issue an award. This award is binding on both parties and is enforceable under the law.
Investors can file complaints under various categories, including non-settlement of trades, failure to deliver
securities, fraudulent and unfair trade practices, and violations of stock exchange regulations. The mechanism
also provides for the appointment of an ombudsman, who acts as an independent authority to review the
decisions of the arbitrator.
Overall, the Investor’s Grievance Redressal Mechanism under the Arbitration and Conciliation Act, 1996, is an
essential tool for protecting the interests of investors and ensuring the integrity and fairness of the securities
market.
For any dispute between the member and the client relating to or arising out of the transactions in Stock
Exchange, which is of civil nature, the complainant/ member shall first refer the complaint to the IGRC and/ or
to arbitration mechanism provided by the Stock Exchange before resorting to other remedies available under
any other law. For the removal of doubts, it is clarified that the sole arbitrator or the panel of arbitrators, as the
case may be, appointed under the Stock Exchange arbitration mechanism shall always be deemed to have the
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Arbitration under Investor’s Grievances Redressal Mechanism of Stock Exchanges LESSON 8
competence to rule on its jurisdiction. A complainant/member, who is not satisfied with the recommendation of
the IGRC, shall avail the arbitration mechanism of the Stock Exchange for settlement of complaints within six
months from the date of IGRC recommendation.
In order to further enhance the effectiveness of grievance redressal mechanism at Market Infrastructure
Institutions (MIIs), based on the internal deliberations, discussions and feedback as received from MIIs, it was
decided to add/modify certain provisions in the SEBI circular number CIR/CDMRD/DEICE/CIR/P/2017/77 dated
July 11, 2017, SEBI circular number CIR/CDMRD/DCE/CIR/P/2018/48 dated March 14, 2018 and as amended by
SEBI circular number SEBI/HO/CDMRD/DoC/P/CIR/2021/649 October 22, 2021, which are as follows:
i. Public dissemination of profiles of arbitrators
In order to enhance transparency and also to provide choice to parties, Exchanges shall disseminate
information w.r.t. brief profile, qualification, areas of experience/ expertise, number of arbitration matters
handled, pre-arbitration experience, etc. of the arbitrators on their website.
ii. Submission of documents in soft copies
In order to assist the arbitrators in pronouncing comprehensive and speedy awards, Exchanges shall
make necessary arrangements in terms of hardware viz., computer, scanner, printer, etc. and required
software’s at exchange offices/ Investor Service Centers (ISCs) to facilitate the clients to type/ convert
their documents into electronic format/ soft copy. Such electronic format/ soft copies shall be provided
to the arbitrators along with original submissions in physical copies.
iii. Review and Training of arbitrators
Investor Service Committee of the Exchanges shall review the performance of the arbitrators annually
and submit the review report to the Board of the Exchange. Training need of the arbitrators will be
catered by National Institute of Securities Markets (NISM). Cost of training of arbitrators may be incurred
from ISF of the exchange.
iv. Mechanism for implementation of award
Exchanges shall create a common database of defaulting clients accessible to members across the
Exchanges.
For this purpose, a client may be identified as defaulter if the client does not pay the award amount to
the member as directed in the IGRP/ arbitration/ appellate arbitration order and also does not appeal
at the next level of redressal mechanism within the timelines prescribed by SEBI or file an application
to court to set aside such order in accordance with Section 34 of the Arbitration and Conciliation Act,
1996 (in case of aggrieved by arbitration/ appellate award).
v. Empanelment of arbitrators and segregation of arbitration and appellate arbitration panel
There shall be separate panels for arbitration and appellate arbitration. Further, for appellate arbitration,
at least one member of the panel shall be a Retired Judge. Exchanges shall obtain prior approval of
SEBI before empanelment of arbitrators/ appellate arbitrators. However, it is amended in October 2021
circular issued by SEBI that forming of exclusive panel for appellate arbitration is not required and
members can serve on both the panels. But, exchanges need to ensure that in the same matter, the
members of arbitration panel are not considered for constituting the appellate arbitration panel if the
matter goes to appeal.”
vi. Empanelment of IGRP members
Exchanges shall empanel IGRP members, however, no arbitrator/ appellate arbitrator shall be
empaneled as IGRP member.
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vii. Revision in professional fee of arbitrators

The arbitrator fee shall be upwardly revised to Rs.18,000/- (Rs. Eighteen thousand) per case. Consequent
to this upward revision, the additional expenses attributable to a client over and above the fee structure
as specified in point x, shall be borne by the client (wherever applicable) and Exchange equally. The
total expense attributable to the member has to be borne by the concerned member.
viii. Place of Arbitration/ Appellate Arbitration
In case award amount is more than Rs. 50 lakh (Rs. Fifty lakh), the next level of proceedings (arbitration
or appellate arbitration) may take place at the nearest metro city, if desired by any of the party
involved. The additional cost for arbitration, if any, to be borne by party desirous of shifting the place of
arbitration.
ix. Arbitration / Appellate Arbitration award
In order to safeguard the interest of the parties involved in arbitration and to ensure speedy
implementation of the arbitration award, the rate of interest on the award passed by arbitrators shall
be in compliance with Arbitration and Conciliation (Amendment) Act, 2015.
x. Speeding up grievance redressal mechanism
a. In order to have faster implementation of award and to discourage delayed filling of arbitrations
by members, the fee structure (exclusive of statutory dues - stamp duty, service tax, etc.) for filing
arbitration reference shall be as follows:-
b.
Amount If claim is filed within If claim is filed after six If the claim is filed
of Claim/ six months from the months from the date beyond the timeline
Counter Claim, date of dispute of dispute or after one prescribed in column 3,
whichever is month from the date of (only for member)
higher (in Rs.) IGRP order, whichever
is later
< 10,00,000 1.3% subject to a 3.9% subject to a Additional fee of

minimum of Rs.10,000 minimum of Rs.30,000 Rs. 3,000/- per month over
and above fee prescribed
in column 3
> 10,00,000 - Rs. 13,000 plus 0.3% Rs. 39,000 plus 0.9% Additional fee of
25,00,000 < amount above Rs. 10 amount above Rs. 10 Rs. 6,000/- per month over
lakh llakh and above fee prescribed
in column 3
> 25,00,000 Rs. 17,500 plus 0.2 Rs. 52,500 plus 0.6 Additional fee of
% amount above Rs. % amount above Rs. Rs. 12,000/- per month
25 lakh subject to 25 lakh subject to over and above fee
maximum of Rs. 30,000 maximum of Rs.90,000 prescribed in column 3
c. The filing fee will be utilized to meet the fee payable to the arbitrators. Excess of filing fee over fee
payable to the arbitrator, if any, to be deposited in the IPF of the respective exchange.
d. A client, who has a claim / counter claim upto Rs. 20 lakh (Rs. Twenty lakh) and files arbitration
reference, will be exempted from filing the deposit.
216
e. In all cases, on issue of the arbitral award the exchange shall refund the deposit to the party in
whose favour the award has been passed.
f. In cases where claim was filed within six months period, the full deposit made by the party against
whom the award has been passed, shall be appropriated towards arbitration fees.
g. In cases where claim was filed after six months, one-third of the deposit collected from the party
against whom the award has been passed, shall be appropriated towards arbitration fees and
balance two-third amount shall be credited to the Investor Protection Fund of the respective stock
exchange.
For the purpose of ensuring efficient redressal of investors grievances:
l SEBI has mandated all stock exchanges to constitute an Investor Grievance Redressal Committee
(“IGRC”). The IGRC functions as an administrative / meditation body and tries to mediate the complaint
between two parties.
l If unsatisfied, a party may file a claim for arbitration whereby, on the basis of the pecuniary jurisdiction,
a sole arbitrator or a panel of three arbitrators would be appointed to settle the dispute.
l If still not satisfied by the order of the arbitrator, a party can appeal against the order for appellate
arbitration.
l Subsequent to the decision of the appellate arbitrators, the party would still have a limited scope of
appeal that would lie to the jurisdictional High Court under the Arbitration and Conciliation Act, 1996.
BENEFITS OF INVESTORS GRIEVANCES REDRESSAL MECHANISM

An Investor Grievances Redressal Mechanism (IGRM) is a process established by companies or organizations to
address and resolve complaints and grievances raised by investors. When it comes to arbitration proceedings,
an effective IGRM can bring several benefits, including:
Facilitating communication: An IGRM helps establish clear communication channels between investors and
companies. It enables investors to report their grievances and receive responses from the company or the
designated authority. This can help prevent misunderstandings and conflicts that could otherwise escalate into
formal arbitration proceedings.
Faster resolution: An IGRM can resolve investor grievances quickly and efficiently. This can help prevent delays
in arbitration proceedings that could otherwise be costly and time-consuming.
Cost-effective: An IGRM can help resolve disputes at a lower cost than traditional arbitration proceedings. By
addressing complaints and grievances before they become formal legal disputes, companies can save on legal
fees and other costs associated with arbitration.
Improved investor confidence: An effective IGRM can help improve investor confidence in the company. By
providing a reliable mechanism for resolving grievances, companies can demonstrate their commitment to
transparency, accountability, and investor protection.
Compliance with regulations: Several regulatory bodies, such as SEBI in India and the SEC in the US, require
companies to establish an IGRM. By complying with these regulations, companies can avoid penalties and
legal action and maintain their reputation in the market.
Risk Mitigation: By promptly addressing grievances, financial institutions can mitigate the risk of escalation into
larger issues that could harm their reputation or lead to legal consequences.
In essence, an effective investors grievance redressal mechanism is essential for maintaining a fair, transparent,
and trustworthy financial ecosystem, benefiting both investors and financial institutions alike.
217
THRESHOLD LIMIT FOR INTERIM RELIEF PAID OUT OF IPF IN EXCHANGES

SEBI vide its circular no CIR/CDMRD/DIECE dated November 16, 2015 has made applicable Circular No. CIR/MRD/
ICC/30/2013 dated September 26, 2013 to Exchanges. In partial modification to Circular No. CIR/MRD/ICC/30/2013
dated September 26, 2013 on “Investor Grievance Redressal Mechanism” and with reference to SEBI circular number
SEBI/HO/CDMRD/DoC/P/CIR/2021/649 dated October 22, 2021 the following changes are prescribed:
(i) Exchanges, in consultation with the IPF Trust and SEBI, shall review and progressively increase the
amount of interim relief available against a single claim for an investor, at least every three years.
(ii) The Exchanges shall disseminate the interim relief limit fixed by them and any change thereof, to the
public through a Press Release and also through its website.
(iii) In case, award is in favour of client and the member opts for arbitration wherein the claim value
admissible to the client is not more than Rs. 20 lakhs (Rs. Twenty lakhs), the following steps shall be
undertaken by the Exchange:
a) In case the GRC award is in favour of the client then 50% of the admissible claim value or Rs. 2.00
lakhs (Rs. Two lakhs), whichever is less, shall be released to the client from IPF of the Exchange.
b) In case the arbitration award is in favour of the client and the member opts for appellate arbitration
then 50% of the amount mentioned in the arbitration award or Rs. 3.00 lakhs (Rs. Three lakhs),
whichever is less, shall be released to the client from IPF of the Exchanges. The amount released
shall exclude the amount already released to the client at clause (a) above.
c) In case the appellate arbitration award is in favour of the client and the member opts for making
an application under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the
appellate arbitration award, then 75% of the amount determined in the appellate arbitration
award or Rs. 5.00 lakhs (Rs. Five Lakhs), whichever is less, shall be released to the client from IPF
of the Exchanges. The amount released shall exclude the amount already released to the client
at clause (a) and (b) above.
d) Total amount released to the client through the facility of interim relief from IPF shall not exceed
Rs. 10.00 lakhs (Ten lakhs) in a financial year.”
INVESTOR SERVICE CENTRE (ISC) AND INVESTOR GRIEVANCES REDRESSAL COMMITTEE

(IGRC)
The Investor Service Centre is established by stock exchanges or regulatory bodies to provide assistance and
support to investors. Investor Services Cell (ISC) of the Exchange caters to the needs of investors by resolving
the queries of investors, resolution of investor complaints and by providing Arbitration Mechanism for quasi-
judicial settlement of disputes.
Presently, Investor Service Centre (ISC) is located at the following cities:
Ahmedabad, Bangalore, Bhubaneshwar, Chandigarh, Chennai, Dehradun, Delhi, Guwahati, Hyderabad, Indore,
Jaipur, Jammu, Kanpur, Kochi, Kolkata, Lucknow, Mumbai, Panjim, Patna, Pune, Raipur, Ranchi, Shimla and
Vadodara.
At each of the above ISC Centre, Exchange has constituted Grievance Redressal Committee (GRC). All complaints
which do not get resolved within fifteen working days from the date of registration of complaint by Exchange or
cases where parties are aggrieved by the resolution worked out would be referred to GRC.
Arbitration and appellate arbitration shall be conducted at the centre nearest to the address provided by Client
in the KYC form.
Source: https://www.nseindia.com/invest/grievance-redressal-committee
218
INVESTOR GRIEVANCE REDRESSAL FACILITY AT STOCK EXCHANGES/DEPOSITORIES

Investors who are not satisfied with the response to their grievances received from the brokers/Depository
Participants/listed companies, can lodge their grievances with the Stock Exchanges or Depositories. The
grievance can be lodged at any of the offices of the BSE/NSE located at Chennai, Mumbai, Kolkata and New
Delhi. In case of unsatisfactory redressal, the exchanges have designated Investor Grievance Redressal
Committees (IGRCs), or Regional Investor Complaints Resolution Committees (RICRC), This forum acts as a
mediator to resolve the claims, disputes and differences between entities and complainants. Stock Exchanges
provide a standard format to the complainant for referring the matter to IGRC. The committee calls for the
parties and acts as a nodal point to resolve the grievances. For any detailed information please visit the website
of the respective stock exchange. In case the investor is not satisfied with the conciliation done by IGRC, he/ she
can go for arbitration and file arbitration under the Rules, Bye – laws and Regulations of the respective Stock
Exchange/Depository.
ARBITRATION PROCESS AT STOCK EXCHANGES

Arbitration processes at stock exchanges serve as mechanisms for resolving disputes between members,
brokers, traders, and other participants in the market. The arbitration process at Stock Exchanges is given
below:
l Applicant submits arbitration application to Exchange
l Application is verified and sent to Respondent
l Arbitrator appointed and documents forwarded to arbitrator
l Hearings held by arbitrator
l Arbitrator passes award
l Award debited if in favor of constituent
l Appeal filed by aggrieved party
l Hearings held and appeal award passed
l Petition filed u/s 34 of the Indian Arbitration Act in Court.
If the applicant is not satisfied with award passed by arbitration panel, he can go for appeal against the award
to Appellate mechanism in the exchange itself.
RESOLUTION OF COMPLAINTS BY STOCK EXCHANGE

i. Timeline
Stock Exchange shall ensure that the investor complaints shall be resolved within 15 working days from
the date of receipt of the complaint. Additional information, if any, required from the complainant, shall
be sought within 7 working days from the date of receipt of the complaint. The period of 15 working days
shall be counted from the date of receipt of additional information sought.
Stock Exchange shall maintain a record of all the complaints addressed/redressed within 15 working
days from the date of receipt of the complaint/additional information. If complaint is not resolved within
stipulated time frame, then the reason for non-redressal in given time frame shall also be recorded.
ii. Service-related complaints
Stock Exchange shall resolve service related complaints at its end. However, in case the complainant
is not satisfied with the resolution, the same may be referred to the Investor Grievance Redressal
Committee (“IGRC”), after recording the reasons in writing by the Chief Regulatory Officer of the Stock
219
Exchange or any other officer of the Stock Exchange authorized in this behalf by the Managing Director.
Service related complaints shall include non-receipt/ delay of Account statement, non-receipt/ delay
of bills, closure of account/ branch, technological issues, shifting/closure of branch without intimation,
improper service by staff, freezing of account, alleged debit in trading account, contact person not
available in Trading member’s office, demat account transferred without permission etc.
iii. Complaints to be referred to IGRC
For Complaints related to trade, settlement and ‘deficiency in services’, resulting into any financial loss,
the stock exchange shall resolve the complaint on its own as per the time lines prescribed. However, if
complaint is not resolved amicably, the same shall be referred to the IGRC, after recording the reasons
in writing by the Chief Regulatory Officer of the Stock Exchange or any other officer of the Stock
Exchange authorized in this behalf by the Managing Director.
HANDLING OF COMPLAINTS BY IGRC

i. IGRC shall have a time of 15 working days to amicably resolve the investor complaint through conciliation
process. If IGRC needs additional information, then IGRC may request the Stock Exchange to provide
the same before the initiation of the conciliation process. In such case, where additional information is
sought, the timeline for resolution of the complaint by IGRC shall not exceed 30 working days.
ii. IGRC shall not dispose the complaint citing “Lack of Information and complexity of the case”. The IGRC
shall give its recommendation to Stock Exchange.
iii. IGRC shall decide claim value admissible to the complainant, upon conclusion of the proceedings of
IGRC. In case claim is admissible to the complainant, Stock Exchanges shall block the admissible claim
value from the deposit of the member as specified in this regard.
iv. Expenses of IGRC shall be borne by the respective Stock Exchange and no fees shall be charged to the
complainant/member.
v. The Stock Exchange shall organize regular training program for IGRC members in consultation with
National Institute of Securities Markets (“NISM”). The cost of such program shall be borne by Investor
Service Fund (“ISF”) of the Stock Exchange.
ARBITRATION
For any dispute between the member and the client relating to or arising out of the transactions in Stock
Exchange, which is of civil nature, the complainant/ member shall first refer the complaint to the IGRC and/ or
to arbitration mechanism provided by the Stock Exchange before resorting to other remedies available under
any other law. For the removal of doubts, it is clarified that the sole arbitrator or the panel of arbitrators, as the
case may be, appointed under the Stock Exchange arbitration mechanism shall always be deemed to have the
competence to rule on its jurisdiction. A complainant/member, who is not satisfied with the recommendation of
the IGRC, shall avail the arbitration mechanism of the Stock Exchange for settlement of complaints within six
months from the date of IGRC recommendation.
ADVICES TO STOCK EXCHANGES

The stock exchanges are advised to: –
a) make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of
the above decision immediately;
b) bring the provisions of this circular to the notice of the members of the stock exchange and also to
disseminate the same through their website; and
220
c) communicate to SEBI, the status of implementation of the provisions of this circular in the Monthly
Development Reports to SEBI.
Source: SEBI CIRCULAR No.SEBI/HO/MIRSD/DOC/CIR/P/2020/226 dated November 06, 2020
DISCIPLINARY ACTION COMMITTEE, DEFAULTERS’ COMMITTEE, INVESTORS SERVICE

COMMITTEE, ARBITRATION COMMITTEE
SEBI vide its circular no CIR/CDMRD/DEA/03/2015 dated November 26, 2015 has made applicable circular No.
CIR/MRD/DSA/33/2012 dated December 13,2012 to Exchanges. In partial modification to circular no. CIR/MRD/
DSA/33/2012 dated December 13,2012, the composition and functions of the Disciplinary Action Committee,
Defaulter’s Committee and Investors Service Committee will be as follows:
Sr. Name of Functions handled Composition

No. Committee
1 Disciplinary i. The Committee shall formulate (i) The disciplinary action committee
Action the policy for regulatory actions shall comprise of public interest
Committee including warning, monetary fine, directors and exchange officials.
suspension, withdrawal of trading
(ii) The Public Interest Directors shall
terminal, expulsion, to be taken for
form a majority of the Committee.
various violations by the members of
the exchange. (iii) A maximum of two key
management personnel of the
ii. Based on the laid down policy,
exchange can be on the Committee
the Committee shall consider
and one of which shall necessarily
the cases of violations observed
be the Managing Director of the
during inspection, etc and impose
exchange.
appropriate regulatory action on the
members of the exchange. (iv) The Committee may also include
independent external persons.
iii. While imposing the regulatory
measure, the Committee shall adopt
a laid down process, based on the
‘Principles of natural justice’.
2 Defaulters’ i. To realize all the assets/ deposits i. The Public Interest Directors shall
Committee of the defaulter/expelled member form a majority of the Committee.
and appropriate the same amongst
ii. A maximum of two key
various dues and claims against
management personnel of
the defaulter/expelled member in
the exchange can be on the
accordance with Rules, Byelaws and
Committee.
Regulations of the exchange.
iii. The Committee may also include
ii. In the event both the clearing member
independent external persons
and his constituent trading member
such as retired judge, etc.
are declared defaulter, then the
Defaulters’ Committee of the clearing
corporation shall work together to
realise the assets of both the clearing
member and the trading member.
221
Sr. Name of Functions handled Composition

No. Committee
iii. Admission or rejection of claims of

client/ trading members/ clearing
members over the assets of the
defaulter/ expelled member.
iv. Advise in respect of the claims to
the Trustees of the IPF on whether
the claim is to be paid out of IPF or
otherwise.
3 Investor i. Supervising the functioning of i. The Public Interest Directors shall

Services Investor’s Services Cell of the form a majority of the Committee.
Committee Exchange which includes review of ii. The Committee may also include
complaint resolution process, review independent external personssuch
of complaints remaining unsolved as retired judge, etc.
over long period of time, estimate the
adequacy of resources dedicated to
investor services, etc.
The Commodity Derivatives Exchanges are advised to:-

l make necessary amendments to relevant bye-laws, rules and regulations for the implementation of this
circular;
l bring the provisions of this circular to the notice of the members of the Commodity Derivatives Exchanges
and also to disseminate the same through their website;
l communicate SEBI, the status of implementation of the provisions of this circular.
NATIONAL COMMODITY DERIVATIVES EXCHANGES

Pursuant to Section 131 of the Finance Act, 2015 and Central Government notification F.No. 1/9/SM/2015 dated
August 28, 2015, all recognized associations under the Forward Contracts (Regulation) Act, 1952 are deemed
to be recognized stock exchanges under the Securities Contracts (Regulation) Act, 1956 with effect from
September 28, 2015. This circular applies to National Commodity Derivatives Exchanges as defined in the
Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Amendment) Regulations, 2015.
The circular no. CIR/CDMRD/DIECE/02/2015 dated November 16, 2015 is issued with an objective to streamline
and strengthen the framework of investor redressal and arbitration mechanism at commodity derivatives
exchanges in line with the securities market. The provisions of this circulars are as under
A. Investor Service Centre (ISC)/ Investor Grievances Redressal Committee (IGRC) :
i. The national commodity derivative exchanges shall set up investor service centers (ISC) for the
benefit of the public/ investors in accordance with the circular CIR/MRD/DSA/03/2012 dated
January 20, 2012.
ii. The national commodity derivatives exchanges shall constitute IGRC in accordance with the SEBI
circular no CIR/MRD/DSA/03/2012 dated January 20, 2012 and shall perform all such functions
and responsibilities as stated in the SEBI circular no CIR/MRD/ICC/30/2013 dated September 26,
2013.
222
B. Arbitration Committee / Panel and Appellate Arbitration:

i. The national commodity derivatives exchanges shall maintain panel of arbitrators, code of
conduct for arbitrators, arbitration process, appellate arbitration, place of arbitration (nearest
address provided by the client in the KYC form), implementation of arbitration award in favour of
clients, records and disclosures as per the provisions of SEBI Circulars no CIR/MRD/DSA/24/2010
dated August 11, 2010, CIR/MRD/DSA/04/2012 date January 20, 2012 and CIR/MRD/ICC/20/2013
dated July 05, 2013.
ii . The national commodity derivatives exchanges shall make applicable the arbitration fees to
each parties to the arbitration in accordance with the SEBI Circular No CIR/MRD/DSA/29/2010
dated August 31, 2010 read with CIR/MRD/ICC/29/2012 dated November 07, 2012 and CIR/MRD/
ICC/29/2013 dated September 26, 2013.
C. Automatic Process and Common Pool of arbitrators:
i. The national commodity derivatives exchanges shall pool all arbitrators of their exchange in the
common pool across all national commodity derivatives exchanges, facilitate automatic selection
of arbitrators from the common pool and shall also follow all other provisions mentioned in the
SEBI Circular CIR/MRD/ICC/8/2013 dated March 18, 2013.
The implementation w.r.t above should be reported by the national commodity derivatives
exchange to SEBI on monthly basis.
The national commodity derivatives exchanges are advised to:-
l make necessary amendments to relevant bye-laws for the implementation of this circular;
l bring the provisions of this circular to the notice of the members of the commodity derivatives
exchanges and also to disseminate the same through their website;
l take necessary steps to make investors aware of the grievances redressal mechanism and
arbitration process;
l communicate SEBI, the status of implementation of the provisions of this circular.
ARBITRATION MECHANISM MADE SIMPLER

Based on inputs received from investors regarding functioning of the arbitration mechanism at the Stock
Exchanges, the following changes have been made to the arbitration mechanism by SEBI.
SI. Features Earlier policy Present Policy

No.
1. Composition 40% of the members of the l Arbitration Committees/councils/panels

of Arbitration exchange on the Arbitration shall consist of persons other than
Panel Committee and the balance members of the stock exchange who shall
60% shall be nominated from be nominated with prior approval of the
the persons other than members Stock Exchange Board.
of the stock exchanges with
the prior approval of the Stock
Exchange Board.
223

No.
2. Selection of Selection of Arbitrators by l List of Arbitrators on the panel of all stock

arbitration Stock Exchanges. exchanges having nation- wide trading
terminals shall be pooled and will be
called a ‘Common Pool'. This list shall
be made publicly available including by
way of display on websites of the stock
exchanges.
l ‘Common pool’ of Arbitrators will consist of
Arbitrators listed on the panels of all stock
exchanges having nation-wide trading
terminals. The pooling of arbitrators will be
done centre-wise. To illustrate, the list of
arbitrators on the panel of all stock.
l exchanges for the region covered by the
Delhi centre will be pooled. This would
enable an applicant from the region to
choose any arbitrator from the 'Common
Pool' for Delhi.
l If the client and member (stock broker,
trading member or clearing member) fail to
choose the Arbitrator(s) from the Common
Pool, the Arbitrator(s) will be chosen by an
‘Automatic Process’ wherein neither the
parties to arbitration (i.e. client or member)
nor the concerned Stock Exchanges will be
directly involved.
l The ‘Automatic Process’ will entail a
randomized, computer generated selection
of Arbitrator, from the list of Arbitrator, from
the list of Arbitrators in the ‘Common Pool’.
l The selection process shall be in
chronological order of the receipt of
arbitration reference i.e. only after selecting
an arbitrator for the former arbitration
reference received, selection for the latter
shall be taken up.
l The ‘Automatic Process’ will send a system
generated, real time alert sms, email etc.)
to all entities involved in the particular
case. Further, the communication for the
appointment of the Arbitrator will be sent
immediately and in any case not later than
224

No.
the next working day from the day of picking

of the Arbitrator. This communication will be
sent by the stock exchange on which the
dispute had taken place, to all concerned
entities including clients, arbitrators,
members, stock exchanges etc.
l The selection of Arbitrators by Stock
Exchanges as done currently, shall
henceforth be replaced by the ‘Automatic
Process’.
l In case of any probable conflict of interest
in an arbitration reference being assigned
to any Arbitrator the Arbitrator will have to
upfront decline the arbitration reference.
l After the said arbitrator declines, the
‘automatic process’ will pick the name of
another Arbitrator. This will continue till
the time there is no conflict of interest, by
the selected arbitrator. In this regard, the
timelines of 30 days might get extended.
However, SEs shall put on record the
reasons of such extension.
l In case of conflict of interest by the arbitrator,
the information for the same may reach the
stock exchange on which the dispute has
taken place within 15 days of receipt of
communication from the SE above. The said
information may be sent by any method
which ensures proof of delivery.
3. Investor Delhi, Mumbai, Kolkata and l Additionally made available at Ahmedabad,

Service Chennai. Hyderabad, Kanpur and Indore.
Centres
l Being made available at Bangalore, Pune,
Jaipur and Ghaziabad by December 31,
2023.
l Being made available at Lucknow, Gurgaon,
Patna and Vadodara by June 30, 2014.
l Arbitration and appellate arbitration shall
be conducted at the centre nearest to the
address provided by Client in the KYC
form.
225

No.
4. Fees for filling A client who has a claim/ l A client, who has claim/ counter claim upto
arbitration counter claim upto Rs. 10 lakh Rs 10 lakh and files arbitration reference,
and files arbitration reference shall be exempt from the deposit. Expenses
for the same within six months, thus arising with regard to such applications
shall be exempt from the shall be borne by the Stock Exchanges."
deposit.
5. Fees for filling A party filing an appeal before l A party filing an appeal before the appellate
appeal. the appellate panel shall pay a panel shall pay a fee not exceeding Rs.
fee not exceeding Rs. 30,000, 30,000, as may be prescribed by the stock
as may be prescribed by the exchange, in addition to statutory dues
stock exchange, in addition to (stamp duty, service tax, etc) along with the
statutory dues (stamp duty, appeal."
service tax, etc) along with the
l In case the party filing the appeal is a client
appeal.”
having claim/counterclaim of upto Rs. 10
lakh, then the party shall pay a fee not
exceeding Rs. 10,000/- Further expenses
thus arising shall be borne by the Stock
Exchanges and the Investor Protection
Fund of Stock Exchanges equally.
6. Timelines for No set timelines. l Stock Exchanges shall ensure that all
arbitration and complaints are resolved at their end within
reconciliation 15 days as mentioned in the circular no.
and Credit CIR/MRD/ICC/16/2012 dated June 15, 2012.
of claims The correspondence with the Member &
pending investor (who is client of a Member) may be
appeal done on email if the email id of the investor
is available in the UCC database. The
Member (Stock Broker, Trading Member
and Clearing Member) shall provide a
dedicated email id to the stock exchange
for this purpose.
l In case the matter does not get resolved,
conciliation process of the exchange would
start immediately after the time lines stated
above.
l Investor Grievance Redressal Committee
(IGRC) shall be allowed a time of 15
days to amicably resolve the investor
complaint.
226

No.
l IGRC shall adopt a two-fold approach i.e.

for proceedings leading to direction to
the Member to render required service in
case of service related complaints and
proceedings leading to an order concluding
admissibility of the complaint or otherwise
in case of trade related complaints.
l In case the matter is not resolved through the
conciliation process IGRC would ascertain
the claim value admissible to the investor.
l Upon conclusion of the proceedings of
IGRC, i.e in case claim is admissible to the
investor, Stock Exchanges shall block the
admissible claim value from the deposit of
the Member.
l The Stock Exchange shall give a time of 7
days to the Member from the date signing
of IGRC directions as mentioned under sub-
para (d) above to inform the Stock Exchange
whether the Member intends to pursue the
next level of resolution i.e. Arbitration.
l In case, the Member does not opt for
arbitration, the Stock Exchange shall,
release the blocked amount to the investor
after the aforementioned 7 days.
l In case, the Member opts for arbitration and
the claim value admissible to the investor is
not more than Rs. 10 lac, the following shall
be undertaken by the Stock Exchange
i) 50% of the admissible claim value
or Rs. 0.75 lac, whichever is less,
shall be released to the investor
from IPF of the Stock Exchange.
ii) In case the arbitration award
is in favour of the investor and
the Member opts for appellate
arbitration then a positive difference
of 50% of the amount mentioned in
the arbitration award or Rs. 1.5 lac,
whichever is less and the amount
already released to the investor at
clause (i) above, shall be released
to the investor from IPF of the Stock
Exchange.
227

No.
iii) In case the appellate arbitration

award is in favour of the investor
and the Member opts for making
an application under section 34
of the Arbitration and Conciliation
Act 1996 to set aside the appellate
arbitration award then a positive
difference of 75% of the amount
determined in the appellate
arbitration award or Rs 2 lac
whichever is less and the amount
already released to the investor
at clause (i) and (ii) above, shall be
released to the investor from IPF of
the Stock Exchange.
iv) Before release of the said amounts
from the IPF to the investor, the Stock
Exchange shall obtain appropriate
undertaking indemnity from the
investor against the release of the
amount from IPF to ensure return
of the amount so released to the
investor, in case the proceedings
are decided against the investor.
v) If it is observed that there is an
attempt by investor/client either
individually or through collusion
with Member(s) or with any
other stakeholders, to misuse
the provisions then appropriate
action in this regard shall be
taken against any such person,
by the Stock Exchange, including
disqualification of the person so
involved.
vi) In case the complaint is decided
in favour of the investor after
conclusion of the proceedings, then
amount released to the investor
shall be returned to IPF from the
blocked amount of the Member by
the Stock Exchange and the rest
shall be paid to the investor.
228

No.
vii) Total amount released to the

investor through the facility of
monetary relief from IPF in terms of
this Circular shall not exceed Rs. 5
lac in one financial year.
viii) Stock Exchanges may devise a
detailed procedure with regard
to release of funds from IPF and
recovery thereof and necessary
formats of documentation.
ix) In case the investor loses at any
stage of the proceedings and
decides not to pursue further,
then the investor shall refund the
amount released from IPF, back to
the IPF. In case the investor fails to
make good the amount released
out of IPF then investor (based on
PAN of the investor) shall not be
allowed to trade on any of the
Stock Exchanges till such time the
investor refunds the amount to IPF.
Further, the securities lying in the
demat account(s) of the investor
shall be frozen till such time as the
investor refunds the amount to the
IPF.
x) The Stock Exchanges may also
resort to displaying the names of
such investors on their websites if
considered necessary,
7. Provision to Appeal against the decision of l Appeal against the decision of the appellate
Appeal in appellate panel can be filed panel shall be filed in the competent Court
Courts of law. in the court at the centre of nearest to the address provided by Client in
arbitration only. the KYC form.
8. Facilitation Not available. l Mandated at all Stock Exchanges having

desks would nation wide terminals.
inter-alia
also assist
investors in
obtaining
documents/
229

No.
details
from Stock
Exchanges
wherever
So required
for making
application to
IGRC and filing
arbitration.
WHEN CAN SEBI TAKE ACTION FOR NON RESOLUTION OF THE COMPLAINT?
SEBI follows up with companies who do not redress investor’s grievances by sending reminders to them, having
meetings with them and issuing pre-enforcement letters for pending complaints. While the entity is directly
responsible for redressal of the complaint, SEBI initiates action against recalcitrant entities on the grounds of
their unsatisfactory redressal of large number of investor complaints as a whole.
Enforcement actions as provided under the Securities laws (including launch of Adjudication, Prosecution
proceedings, Directions u/s 11B of SEBI Act, 1992) are initiated against the companies and/or its directors whose
progress in redressal of investors’ grievances is not satisfactory.
SITUATION/S WHERE SEBI HAS CLOSED A COMPLAINT AFTER DUE CONSIDERATION BUT
COMPLAINANT KEEPS REPEATING IT
Sometimes a complaint is addressed and disposed off by SEBI advising the complainants to adopt appropriate
course of action but the complainants have been writing to SEBI repeatedly without choosing to avail of the
appropriate legal remedy from the competent forum.
Example: A complainant raises the issue of incorrect information provided by broker regarding his exposure
limits and squaring off positions without his consent. The broker replies that as there was a debit in client’s
account and due to unavailability of funds, his positions were squared up. The complainant is advised
to approach Stock Exchanges’ Investor Grievance Resolution Panel/Committee as the matter is that of a
dispute. The complainant refuses to approach/attend meetings and continues to send frequent mails to
various levels in SEBI. In such cases, SEBI may not respond to any such mail/letter etc.
PLACE OF ARBITRATION / APPELLATE ARBITRATION

In case, the award amount is more than Rs. 50 lakhs (Rs. Fifty lakhs), the next level of proceedings (arbitration
or appellate arbitration) may take place at the nearest metro city, if so desired by any of the parties involved.
The additional statutory cost for arbitration, if any, shall be borne by the party desirous of shifting the place of
arbitration.
THRESHOLD LIMIT FOR INTERIM RELIEF PAID OUT OF IPF IN STOCK EXCHANGES
In case, the order is in favour of client and the member opts for arbitration wherein the claim value admissible
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to the client is not more than Rs. 20 lakhs (Rs. Twenty lakhs), the following steps shall be undertaken by the
Stock Exchange:
a) In case the GRC order is in favour of the client, then 50% of the admissible claim value or Rs. 2.00 lakhs
(Rs. Two lakhs), whichever is less, shall be released to the client from IPF of the Stock Exchange.
b) In case the arbitration award is in favour of the client and the member opts for appellate arbitration,
then a positive difference of, 50% of the amount mentioned in the arbitration award or Rs. 3.00 lakhs
(Rs. Three lakhs), whichever is less, and the amount already released to the client at clause (a) above,
shall be released to the client from IPF of the Stock Exchange.
c) In case the appellate arbitration award is in favour of the client and the member opts for making an
application under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the appellate
arbitration award, then a positive difference of, 75% of the amount mentioned in the appellate arbitration
award or Rs. 5.00 lakhs (Rs. Five Lakhs), whichever is less, and the amount already released to the
client at clause (a) and (b) above, shall be released to the client from IPF of the Stock Exchange.
d) Total amount released to the client through the facility of interim relief from IPF in terms of this Circular
shall not exceed Rs. 10.00 lakhs (Ten lakhs) in a financial year.”
SPEEDING UP GRIEVANCE REDRESSAL MECHANISM

The additional fees charged from the trading members, if the claim is filed beyond the prescribed timeline, if
any, to be deposited in the IPF of the respective Stock Exchange.
REGULATORY ACTIONS
The Securities and Exchange Board of India (SEBI) was established on April 12, 1992 in accordance with the
provisions of the Securities and Exchange Board of India Act, 1992. The Regulatory body i.e. SEBI will take
actions for the complaints received on its SCORES portal.
SEBI Complaints Redress System (SCORES) Portal

There will be occasions when you have a complaint against a listed company/ intermediary registered with
SEBI. In the event of such complaint, you should first approach the concerned company/ intermediary against
whom you have a complaint. However, you may not be satisfied with their response. Therefore, you should
know whom you should turn to, to get your complaint redressed.
SEBI takes up complaints related to issue and transfer of securities and non-payment of dividend with listed
companies. In addition, SEBI also takes up complaints against the various intermediaries registered with it and
related issues.
SCORES facilitates you to lodge your complaint online with SEBI and subsequently view its status.
It is an online platform for investors to lodge their complaints related to securities market. The Status of every
complaint can be viewed online in the SCORES website or can be obtained from toll free helpline.
Entity/Investor can seek/provide clarification on complaint online. It provides unique complaint registration
number for future reference and tracking.
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Complaints coming under the purview of SEBI
Complaints NOT coming under the purview of SEBI

l Complaint not pertaining to investment in securities market
l Anonymous Complaints (except whistle blower complaints)
l Incomplete or un-specific complaints
l Allegations without supporting documents
l Suggestions or seeking guidance /explanation
l Not satisfied with trading price of the shares of the companies
l Non-listing of shares of private offer
l Disputes arising out of private agreement with companies/intermediaries
l Matter involving fake/forged documents
l Complaints on matters not in SEBI purview
l Complaints about any unregistered/un-regulated activity.
Time period for Lodging of a complaint on SCORES

Complainant needs to lodge a complaint on SCORES within three(03) years from the date of cause of complaint.
Where:
l Investor has approached listed company or registered intermediary for redressal of complaint and,
l Concerned listed company or registered intermediary rejected the complaint or,
l Complainant hasn’t received any communication from listed company or intermediary concerned or,
l Complainant is not satisfied with reply given to him or redressal action taken by the listed company or
an intermediary.
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Procedure to lodge complaint online in SCORES
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How are investor complaints handled?
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Disposing of Investor Complaints
Online Web Based Complaints Redressal System

SEBI vide its circular number SEBI/HO/MRD1/ICC1/CIR/P/2022/94 dated July 04, 2022, launched a redressal
system for exchanges. As read above, SEBI has implemented an online platform (SCORES) designed to help
investors to lodge their complaints, pertaining to securities market, against listed companies and SEBI registered
intermediaries.
Further, in order to enable investors to lodge and follow up their complaints and track the status of redressal of
such complaints from anywhere, all Recognized Stock Exchanges including Commodity Derivatives Exchanges
/ Depositories has been advised to design and implement an online web based complaints redressal system
of their own, which will facilitate investors to file complaints and escalate complaints for redressal through
Grievance Redressal Committee (GRC), arbitration, appellate arbitration etc. in accordance with their respective
byelaws, rules and regulations.
The system is intended to expedite redressal / disposal of investors’ complaints as it would also obviate the
need for physical movement of complaints. Further, the possibility of loss, damage or misdirection of the physical
complaints would be avoided. It would also facilitate easy retrieval and tracking of complaints at any time.
Salient Features:
The system should be web enabled and provide online access 24 x 7 with the following salient features:
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l Complaints/GRC/Arbitration/Appellate Arbitration and reminders thereon are lodged online at anytime

from anywhere;
l An email is generated instantaneously acknowledging the receipt of the complaint and allotting a
unique registration number for future reference and tracking;
l The matter/case moves online to the entity (intermediary or listed company) concerned for its redressal;
l The entity concerned can indicate the mode i.e. online or offline for GRC and arbitration.
l The access of the online system should be given to the Trading Members and Depository Participants.
l The entity concerned uploads an Action Taken Report (ATR) on the Complaints/GRC/Arbitration/
Appellate Arbitration;
l All Recognized Stock Exchanges including Commodity Derivatives Exchanges / Depositories peruse
the ATR and dispose of the Complaints/GRC/Arbitration/Appellate Arbitration if it is satisfied that the
complaint has been redressed adequately;
l The concerned investor can view the status of the complaint online;
l The entity concerned and the concerned investor can seek and provide clarification(s) online to each
other;
l The life cycle of a Complaints/GRC/Arbitration/Appellate Arbitration has an audit trail; and
l All the Complaints/GRC/Arbitration/Appellate Arbitration are saved in a central database which
would generate relevant MIS reports to enable all Recognized Stock Exchanges including Commodity
Derivatives Exchanges / Depositories to take appropriate policy decisions and or remedial actions.
l There should be a provision to link the online system with SCORES.
NICE PLUS: NSE’S INVESTOR CENTRE

Arbitration is a quasi-judicial process of settlement of disputes between Trading Member, Investor, Clearing
Member, Authorised Person, Listed Company etc. Arbitration aims at quicker legal resolution for the disputes.
When one of the parties feels that the complaint has not been resolved satisfactorily either by the other party
or through the complaint resolution process of the Exchange, the parties may choose the route of arbitration.
NSE’s Investor Centre serves as a valuable resource for investors, offering education, support, and assistance
to help them navigate the complexities of the stock market and make informed investment decisions.
Role of Arbitration Mechanism for dispute resolution

Standard Operating Procedures (SOP) for dispute resolution under the Stock Exchange arbitration mechanism
for disputes between a Listed Company and/or Registrars to an Issue and Share Transfer Agents (RTAs) and
its Shareholder(s)/Investor(s)
1 Applicability
1.1. The provisions of SOP shall be applicable to Listed Companies / RTAs offering services on behalf
of listed companies. In case of claims or disputes arising between the shareholder(s)/ investor(s)
of listed companies and the RTAs, the RTAs shall be subjected to the stock exchange arbitration
mechanism. In all such instances, the listed company shall necessarily be added as a party.
1.2. The Arbitration Mechanism shall be initiated post exhausting all actions for resolution of complaints
including those received through SCORES Portal. The Arbitration reference shall be filed with the
Stock Exchange where the initial complaint has been addressed.
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2. Maintenance of a Panel of Arbitrators and Code of Conduct for Arbitrators

2.1. The maintenance of Panel of Arbitrators and the Code of Conduct for Arbitrators shall be in line
with the current norms being followed by the Stock Exchanges for arbitration mechanism.
3. Arbitration
3.1. The limitation period for filing an arbitration application shall be as prescribed under the law of
limitation, i.e., The Limitation Act, 1963.
3.2. In case of arbitration matters involving a claim of up to Rs. 25 lakhs, a sole arbitrator shall be
appointed and, if the value of the claim is more than Rs. 25 lakhs, a panel of three arbitrators shall
be appointed.
3.3. The process of appointment of arbitrator(s) shall be completed by the stock exchange within 30
days from the date of receipt of complete application from the applicant.
3.4. Disputes pertaining to or emanating from investor service requests such as transfer/transmission
of shares, demat/remat, issue of duplicate shares, transposition of holders, investor entitlements
like corporate benefits, dividend, bonus shares, rights entitlements, credit of securities in public
issue, interest /coupon payments on securities and delay in processing/wrongful rejection of
aforesaid investor service requests may be considered for arbitration.
4. Appellate Arbitration
4.1. Any party aggrieved by an arbitral award may file an appeal before the appellate panel of
arbitrators of the stock exchange against such award within one month from the date of receipt of
arbitral award by the aggrieved party.
4.2. The appellate panel shall consist of three arbitrators who shall be different from the one(s) who
passed the arbitral award appealed against.
4.3. The process of appointment of appellate panel of arbitrator(s) shall be completed by the stock
exchange within 30 days from the date of receipt of complete application for appellate arbitration.
5. Arbitration Fees
5.1. The fees per arbitrator shall be Rs. 18,000/- plus stamp duty, service charge etc. as applicable per
case. The fees plus stamp duty, service charge etc. as applicable shall be collected from RTAs/
Listed companies and shareholder(s)/ investor(s) separately by the Exchange, for defraying the
cost of arbitration.
5.2. If the value of claim is less than or equal to Rs.10 lakhs, then the cost of arbitration with respect to
the shareholder(s)/investor(s) shall be borne by the Exchange.
5.3. Further on passing of the arbitral award, the fees and stamp charges paid by the party in whose
favour the award has been passed would be refunded and the fees and stamp charges of the party
against whom the award has been passed would be utilized towards payment of the arbitrator
fees.
5.4. For appellate arbitration, fees of Rs. 54,000/- plus stamp duty, service charge etc. as applicable
shall be paid by the appellant only. The Appellate fees shall be non-refundable.
5.5. In case, an appellant filing an appeal is a shareholder/an investor having a claim of more than
Rs. 10 lakhs, the appellant shall pay a fee not exceeding Rs. 30,000/- plus stamp duty, service
charge etc. as applicable and in case of a claim upto Rs. 10 lakhs, the appellant shall pay a fee
not exceeding Rs. 10,000/- plus stamp duty, service charge etc. as applicable. Further expenses
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thus arising shall be borne by the Stock Exchanges and the Investor Protection Fund of Stock
Exchanges equally.
6. Place of Arbitration
6.1. The arbitration and appellate arbitration shall be conducted at the regional centre of the stock
exchange nearest to the shareholder(s)/investor(s). The application under Section 34 of the
Arbitration and Conciliation Act, 1996, if any, against the decision of the appellate panel of
arbitrators shall be filed in the competent Court nearest to such regional centre.
7. Hearings
7.1. No hearing shall be required to be given to the parties involved in the dispute if the value of the
claim or dispute is upto Rs. 25,000/-. In such a case, the arbitrator(s) shall proceed to decide the
matter on the basis of documents submitted by the parties concerned.
7.2. If the value of claim or dispute is more than Rs. 25,000/-, the arbitrator(s) shall offer to hear the
parties to the dispute unless parties concerned waive their right for such hearing in writing.
7.3. After appointment of the arbitrator(s) in the matter, the Exchange in consultation with the arbitrator(s)
shall determine the date and time of the hearing and a notice of the same shall be given by the
Exchange to the parties concerned at least ten days in advance. The parties concerned may opt
for physical hearings which are conducted in the Stock Exchange Premises or hearing through
Video Conference. The hearings through Video Conference may be conducted by the Stock
Exchanges after taking consent from the parties concerned.
7.4. The arbitrator(s) may conduct one or more hearings, with a view to complete the case within the
prescribed timelines.
8. Passing of Award
8.1. Arbitral Award
8.1.1. The arbitration proceedings shall be concluded by way of issue of an arbitral award within
four months from the date of appointment of arbitrator(s).
8.1.2. The stock exchanges may extend the time for issue of arbitral award by not more than two
months on a case to case basis after recording the reasons for the same. 8.2. Appeal against
Arbitral Award.
8.2.1. The appeal against an arbitral award shall be disposed of by way of issue of an appellate
arbitral award within three months from the date of appointment of appellate panel.
8.2.2. The stock exchanges may extend the time for issue of appellate arbitral award by not more
than two months on a case to case basis after recording the reasons for the same.
8.2.3. A party aggrieved by the appellate arbitral award may file an application to the court of
competent jurisdiction in accordance with Section 34 of the Arbitration and Conciliation Act,
1996.
8.3. In case the parties wish to settle/withdraw the dispute, the arbitrator(s)/ appellate panel may pass
an award on consent terms.
8.4. Where the award is against the Listed Company/RTA, the Listed Company/RTA shall update the
status of compliance with the arbitration award promptly to the exchange.
9. Record and Disclosures
9.1. The stock exchanges shall preserve the documents related to arbitration for five years from the
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date of arbitral award, appellate arbitral award or Order of the Court, as the case may be; and
register of destruction of records relating to above, permanently.
9.2. The stock exchanges shall disclose on its website, details of disposal of arbitration proceedings
and details of arbitrator-wise disposal of arbitration proceedings as per the formats prescribed by
SEBI for already available arbitration mechanism.
10. The provisions of this SOP shall come into force with effect from June 01, 2022.
Source: https://static.nseindia.com//s3fs-public/inline-files/Arbitration_mechanism_for_disputes_between_Listed_
Company_and_its_Investor.pdf
Source: https://www.cdslindia.com › Investors › IAP PPTs
SURVEILLANCE ACTIONS
Surveillance actions refer to the monitoring and oversight activities conducted by regulatory authorities and
exchange operators to ensure the integrity, fairness, and stability of the market. These surveillance actions
involve various measures aimed at detecting and addressing market abuse, manipulation, and other forms of
misconduct.
In order to facilitate effective surveillance mechanism at the Member level, the Exchange has introduced the
Surveillance Dashboard. It aims to provide information about alerts on orders and trades which are abnormal in
nature. Information on Dashboard Surveillance dashboard is mainly divided into 4 parts:
1. Information Dashboard
2. Alert / Monitoring Dashboard
3. Exchange communication
4. Transactional escalation from TM to the Exchange.
Securities and Exchange Board of India (SEBI) and Exchanges in order to enhance market integrity and
safeguard interest of investors, have been introducing various enhanced pre-emptive surveillance measures
such as reduction in price band, periodic call auction and transfer of securities to Trade for Trade segment from
time to time.
In continuation to various surveillance measures already implemented, SEBI and Exchanges, pursuant to
discussions in joint surveillance meetings, have decided that along with the aforesaid measures there shall be
Additional Surveillance Measures (ASM) on securities with surveillance concerns based on objective parameters
viz. Price / Volume variation, Volatility etc.
The shortlisting of securities for placing in ASM is based on an objective criterion as jointly decided by SEBI and
Exchanges covering the following parameters:
l High Low Variation
l Client Concentration
l Close to Close Price Variation
l Market Capitalization
l Volume Variation
l Delivery Percentage
l No. of Unique PANs
l PE.
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Daily review of Price Bands

Price bands determine the range in which a security can move. To illustrate, a 10% price band implies that the
security can move +/- 10% of its previous day close price on a given day. The downward revision is a daily
process whereas upward revision is a bi-monthly process, subject to satisfaction of certain objective criteria’s.
No price band is applicable to securities on which derivative products are available. However, Exchange shall set a
dynamic price band at 10% of the previous closing price and shall be flexed based on pre-determined criteria.
Deep Out-of The Money (OTM) contracts

This has reference to Exchange circular NSE/SURV/42382 dated October 11, 2019 on Surveillance measures for
Deep Out-of The Money (OTM) contracts.
Graded Surveillance Measure (GSM)

Securities and Exchange Board of India (SEBI) and Exchanges in order to enhance market integrity and
safeguard interest of investors, have been introducing various enhanced pre-emptive surveillance measures
such as reduction in price band, periodic call auction and transfer of securities to Trade for Trade segment from
time to time.
The main objective of these measures is to:
l Alert and advice investors to be extra cautious while dealing in these securities; and
l Advice market participants to carry out necessary due diligence while dealing in these securities.
In continuation to various surveillance measures already implemented, SEBI and Exchanges, pursuant to
discussions in joint surveillance meetings, have decided that along with the aforesaid measures there shall
be additional Graded Surveillance Measures on securities with price not commensurate with financial health
and fundamentals like Earnings, Book value, Fixed assets, Net-worth, P/E multiple, Market Capitalisation
etc.
The list of such securities identified under GSM shall be informed to the market participants from time to time
and shall be available on the exchange’s website.
1. All market participants dealing in identified securities have to be extra cautious and diligent as,
Exchanges and SEBI may at an appropriate time subject to satisfaction of certain criteria lay additional
restrictions such as:
l Placing / continuing securities in Trade for Trade category;
l Requirement of depositing additional amount as Surveillance Deposit, which shall be retained for
an extended period;
l Once in a week trading; and
l Freezing of price on upper side of trading in securities, as may be required;
l Any other surveillance measure as deemed fit in the interest of maintaining the market integrity.
2. All the aforesaid actions shall be triggered based on certain criteria and shall be made effective with a
very short notice.
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3. The above surveillance actions are without prejudice to the right of Exchanges and SEBI to take any
other surveillance measures, in any manner, on a case to case basis or holistically depending upon the
situation and circumstances as may be warranted.
4. The members trading in the identified securities either on their own account or on behalf of clients shall
be kept under close scrutiny by the exchange and any misconduct shall be viewed seriously.
Defaulting clients
In general sense, the defaulting clients refer to individuals or entities that fail to fulfill their financial
obligations to their counterparties, such as brokerage firms, clearinghouses, or other financial institutions.
Defaulting clients can have significant implications for market participants and the broader financial
system.
As per SEBI Circular No. SEBI/HO/DMS/CIR/P/2017/15 dated February 23, 2017, the Stock Exchanges are
directed to create a common database of defaulting clients accessible to Members across the Stock
Exchanges.
Defaulting Clients as defined by SEBI is:
A client may be identified as defaulter if the client does not pay the award amount to the member/depository
participant as directed in the IGRP/Arbitration /Appellate arbitration order and also does not appeal at the next
level of redressal mechanism within the timelines prescribed by SEBI or file an application to court to set aside
such order in accordance with Section 34 of the Arbitration and Conciliation Act, 1996 (in case of aggrieved by
arbitration/ appellate award).
Accordingly, the Exchange had issued circular dated September 14, 2017, seeking information of defaulting
clients as defined above from its Trading Members. Based on the information provided by the trading members
of National Stock Exchange of India Ltd. and other Exchanges regarding the defaulting clients as defined above
a common database across Exchanges have been made available.
Investor’s Beware: Report Un-solicited messages/videos/any other reference

l It serves as a cautionary reminder to investors to exercise vigilance and report any unsolicited messages,
videos, or other references related to investments or financial products.
l Investors beware while dealing based on unsolicited Stock Tip/ Recommendation circulated by
unauthorized/ unregistered entities, received through Whatsapp, Telegram, SMS, Calls, Videos etc.,
and take an informed decision before investing.
l Investors may report unsolicited Stock Tip/Recommendation on +91 8291833676 or on designated

email id i.e. [email protected]. Please note that references so received shall be considered
for inclusion in the ‘For information/Current Watch List’ only after ascertaining their veracity/
genuineness.
Source: https://www.nseindia.com/regulations/exchange-market-surveillance-actions
241
CASE STUDY
CASE STUDIES ON ARBITRATION UNDER STOCK EXCHANGE GRIEVANCE REDRESSAL MECHANISM
1. In the matter of A B Manomani vs. ICICI Securities Limited
An arbitration reference between A.B. Manonmani, the applicant, and ICICI Securities Ltd., the
respondent, under the Bye-Laws, Rules and Regulations of the National Stock Exchange of India
Limited and the Arbitration and Conciliation Act, 1996. The applicant has appealed against the order
of IGRP, which dismissed her claim for a compensation amount of Rs. 5,91,494/- (Rupees Five Lakhs
Ninety-One Thousand Four Hundred and Ninety-Four Only) from the respondent towards the forced
square up of her position under MFT on 30th March 2022. The document outlines the documents
submitted by both the parties, the facts of the case, and the proceedings of the arbitration reference.
The award of the arbitrator is also included in the document.
2. In the matter of Amit Gupta vs. Nuvama Wealth and Investment Limited (Previously known as
Edelweiss Broking Limited)
The case relates to an alleged unauthorized transfer of securities from the demat account of the
plaintiff, Amit Gupta, by the defendant, Nuvama Wealth and Investment Limited.
According to the plaintiff, he had a demat account with Edelweiss Broking Limited, which was later
acquired by Nuvama Wealth and Investment Limited. The plaintiff alleged that without his consent
or authorization, the defendant transferred securities worth approximately INR 1.48 crore from his
demat account to another account.
As a result, the plaintiff filed an arbitration case against the defendant with the Bombay Stock
Exchange (BSE) Arbitration Tribunal, seeking a refund of the value of the transferred securities along
with interest and damages.
The BSE Arbitration Tribunal, after hearing both parties, ruled in favor of the plaintiff and ordered the
defendant to refund the value of the transferred securities along with interest at the rate of 9% per
annum from the date of the transfer till the date of realization, as well as pay INR 25,000 towards
the plaintiff’s legal costs.
In summary, the case involves an alleged unauthorized transfer of securities from the demat account
of the plaintiff by the defendant, which led to an arbitration case and a ruling in favor of the plaintiff.
In the matter of Amit Gupta versus Nuvama Wealth and Investment Limited (previously known as
Edelweiss Broking Limited), the case relates to an alleged unauthorized transfer of securities from
the demat account of the plaintiff, Amit Gupta, by the defendant, Nuvama Wealth and Investment
Limited.
According to the plaintiff, he had a demat account with Edelweiss Broking Limited, which was later
acquired by Nuvama Wealth and Investment Limited. The plaintiff alleged that without his consent
or authorization, the defendant transferred securities worth approximately INR 1.48 crore from his
demat account to another account.
As a result, the plaintiff filed an arbitration case against the defendant with the Bombay Stock
Exchange (BSE) Arbitration Tribunal, seeking a refund of the value of the transferred securities along
with interest and damages.
The BSE Arbitration Tribunal, after hearing both parties, ruled in favor of the plaintiff and ordered the
defendant to refund the value of the transferred securities along with interest at the rate of 9% per
annum from the date of the transfer till the date of realization, as well as pay INR 25,000 towards
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In summary, the case involves an alleged unauthorized transfer of securities from the demat account
of the plaintiff by the defendant, which led to an arbitration case and a ruling in favor of the plaintiff.
In the matter of Angel One Limited (formerly known as Angel Broking Ltd.) vs. Chirag Bharatbhai
Kotecha, the case involves an alleged default on the part of the defendant in repayment of
outstanding dues to the plaintiff.
The plaintiff, Angel One Limited, is a stockbroking and financial services company, and the
defendant, Chirag Bharatbhai Kotecha, is a client who availed the services of the plaintiff for trading
in securities.
According to the plaintiff, the defendant had outstanding dues of approximately INR 14.69 lakh
towards unpaid charges for trading and brokerage services provided by the plaintiff. Despite several
reminders and demands for payment, the defendant failed to clear the dues, leading to the initiation
of legal proceedings.
The plaintiff filed a case against the defendant in the Debt Recovery Tribunal (DRT), seeking recovery
of the outstanding dues along with interest and legal costs.
The DRT, after hearing both parties, ruled in favor of the plaintiff and ordered the defendant to pay
the outstanding dues of INR 14.69 lakh along with interest at the rate of 10.5% per annum from the
date of default till the date of realization, as well as pay INR 20,000 towards the plaintiff’s legal
costs.
In summary, the case involves an alleged default on the part of the defendant in repayment of
outstanding dues to the plaintiff, leading to legal proceedings and a ruling in favor of the plaintiff.
3. In the matter of Angel One Limited Vs. Vikas Dada Nikam
In the matter of Angel One Limited vs. Vikas Dada Nikam, the case relates to an alleged default by
the defendant in repayment of outstanding dues to the plaintiff.
The plaintiff, Angel One Limited, is a financial services company that provides stockbroking and
trading services, while the defendant, Vikas Dada Nikam, is a client who availed the services of the
plaintiff.
According to the plaintiff, the defendant had an outstanding due of approximately INR 2.57 lakh
towards unpaid charges for trading and brokerage services provided by the plaintiff. Despite several
reminders and demands for payment, the defendant failed to clear the dues, leading to the initiation
of legal proceedings.
The plaintiff filed a case against the defendant in the Debt Recovery Tribunal (DRT), seeking recovery
of the outstanding dues along with interest and legal costs.
The DRT, after hearing both parties, ruled in favor of the plaintiff and ordered the defendant to pay
the outstanding dues of INR 2.57 lakh along with interest at the rate of 10.5% per annum from the
date of default till the date of realization, as well as pay INR 10,000 towards the plaintiff’s legal
costs.
In summary, the case involves an alleged default by the defendant in repayment of outstanding
dues to the plaintiff, leading to legal proceedings and a ruling in favor of the plaintiff.
After hearing both parties, the DRT found in favor of the plaintiff and ordered the defendant to clear
the outstanding dues and pay the plaintiff’s legal costs. This was the final verdict in the case, and
the defendant was required to comply with the DRT’s ruling.
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4. In the matter of Bhabashankar Chatterjee vs. Kotak Securities Limited
The case relates to an alleged unauthorized trading activity conducted by the defendant in the
demat account of the plaintiff, Bhabashankar Chatterjee.
The plaintiff, Bhabashankar Chatterjee, had a demat account with the defendant, Kotak Securities
Limited, a stockbroking and financial services company. The plaintiff alleged that the defendant
conducted unauthorized trading activity in his demat account without his consent or knowledge.
The plaintiff further alleged that the unauthorized trading activity resulted in losses of approximately
INR 27.49 lakh, and the defendant failed to rectify the same despite several complaints and
requests.
As a result, the plaintiff filed an arbitration case against the defendant with the National Stock
Exchange of India (NSE), seeking a refund of the losses incurred due to the unauthorized trading
activity along with interest and damages.
The NSE Arbitration Tribunal, after hearing both parties, ruled in favor of the plaintiff and ordered the
defendant to refund the losses of INR 27.49 lakh along with interest at the rate of 9% per annum from
the date of the unauthorized trades till the date of realization, as well as pay INR 25,000 towards
In summary, the case involves an alleged unauthorized trading activity conducted by the defendant
in the demat account of the plaintiff, resulting in losses and a ruling in favor of the plaintiff in the
arbitration case.
5. In the matter of Angel One Limited (formerly known as Angel Broking Ltd.) vs. Chirag Bharatbhai
Kotecha
The case relates to an investigation by SEBI into the trading activity of the defendant in the scrip of a
company called Zee Entertainment Enterprises Limited. SEBI found that the defendant had indulged
in manipulative and fraudulent trading practices to create artificial volume in the said scrip and
increase the price of the stock. The defendant was alleged to have used several trading accounts,
including those opened with Angel Broking, to carry out the said activities.
As a result, Angel Broking (now Angel One Limited) was also named as a respondent in the case by
SEBI. However, SEBI found no evidence of any wrongdoing or connivance by Angel Broking in the
said activities of the defendant.
After hearing both parties and examining the evidence presented, SEBI found the defendant guilty of
indulging in manipulative and fraudulent trading practices in violation of various securities laws and
regulations. SEBI imposed a penalty of INR 10 lakh on the defendant and directed him to disgorge
the wrongful gains made by him from the said activities.
This was the final verdict in the case, and the defendant was required to comply with the SEBI’s
ruling.
The final verdict was issued by the Securities and Exchange Board of India (SEBI). The SEBI ruled in
favor of the plaintiff, Angel One Limited, and ordered the defendant, Chirag Bharatbhai Kotecha, to
pay a penalty of INR 10 lakh for indulging in fraudulent trading practices.
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6. In the matter of Arpit Mehra vs. Kotak securities Ltd.
This arbitration matrer has been filed by applicant Dr. Arpit Mehra agarnst respondent Kotak
Securities Ltd. for setting aside the order dated 15.05.2023 of IGRP.
The matter has come up for arbitration wherein the IGRP has rejected the claim ofthe applicant
for losses suffered for about Rs. 3,75,000/- due to mishandling oftrading in derivatives by the
representative of respondent, the trading member. The applicant is a Doctor by profession. He is
having trading account with respondent which is a stock broking company since the year 2019. In the
month of October - November 2022 an employee of respondent, who was assigned as Applicant’s
RM advised to trade in derivatives.The Applicant informed that he was not an expert in the field but
she assured that she would deal on his behalf.
The applicant suffered a loss of approximately Rs. 80,000/- in the beginning, he directed her to stop
trading and further directed her to revive the losses. she assured that she will recover losses
and thereafter will stop trading in derivatives. Despite recovery of said loss, she continued
to deal and further purchased 30 lots, no stop loss was demarcated and applicant suffered
a loss of Rs. 1,50,000/-. The applicant directed the employee not to deal any further, but she
assured that she will recover losses incurred and purchased 250 shares of Adani Green which
started lossing due to the Hindenburg report. She did not sell these shares despite request by
the applicant resulting in huge losses. The respondent trading member has opposed the claim.
The account opening form of the applicant - claimant has been filed to show that he became
registered constituent since June 2020.
The applicant is a well-educated person used to trade regularly in securities market. He was using
online trading himself and was well aware of the trading and its position in his account. Relevant
contract notes were emailed to him and SMS logs were also sent which has been filed as annexures.
Copy of applicant’s combined segment ledger for regular trades and payments are also annexed.
The statement of applicant that representative of respondent promised to recover the loss is
denied.
The IGRP has rejected the claim on a sound reasoning that applicant himself was doing online and
off-line trading. There is nothing to show that trading was done by the trading member without the
consent or knowledge of applicant for which contract notes and emails & SMSs are available. A
person involved in trading may earn or loose. There is nothing to show that respondent is under any
legal obligation to compensate the losses. Before any such trade, the risk factor is to be considered.
Since the applicant- claimant is doing online trading he is always in a position to act according to
his wishes. Even if anyone promises to recover the loss, the act of trading must be done with full
cautious. The applicant has submitted that after purchase of Adani Green shares, he asked for its
disposal but the representative of Respondent, failed to do so. Nothing prevented him to dispose
it as he had earlier traded online. In suffering huge losses, responsibility cannot be attributed to
the respondent in the absence of any documented condition for indemnity. The findings of IGRP
deserves to be confirmed.
The Arbitrator rejected the arbitration application claiming Rs. 3,73,276/ -. No orders as to cost.
Source: https://www.nseindia.com/invest/new-disposal-of-arbitration-proceedings
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LESSON ROUND-UP
l Arbitration is an alternative dispute resolution mechanism that has gained significant importance in the
field of investor grievance redressal.
l The Investor’s Grievances Redressal Mechanism of stock exchanges provides investors with a platform
to resolve their complaints against brokers and listed companies through arbitration.
l This process is considered faster, cost-effective, and less formal than traditional court litigation.
l The Investor’s Grievance Redressal Mechanism is a vital tool for protecting the interests of investors in
the securities market.
l The Arbitration and Conciliation Act, 1996 provides for the establishment of an effective and efficient
grievance redressal mechanism for investors.
l Under this Act, investors can opt for arbitration as a means of resolving their disputes with brokers and
listed companies.
l The arbitrator is a neutral third party who is appointed based on his or her expertise and experience in
the field of securities.
l The process of arbitration under the Investor’s Grievance Redressal Mechanism is relatively faster,
cost-effective, and less formal than traditional court litigation.
l The parties involved can present their cases before the arbitrator, who will then issue an award. This
award is binding on both parties and is enforceable under the law.
l Investors can file complaints under various categories, including non-settlement of trades, failure to
deliver securities, fraudulent and unfair trade practices, and violations of stock exchange regulations.
l A complainant/member, who is not satisfied with the recommendation of the IGRC, shall avail the
arbitration mechanism of the Stock Exchange for settlement of complaints within six months from the
date of IGRC recommendation.
l There shall be separate panels for arbitration and appellate arbitration. Further, for appellate arbitration,
at least one member of the panel shall be a Retired Judge. Exchanges shall obtain prior approval of
SEBI before empanelment of arbitrators/ appellate arbitrators.
l A client, who has a claim / counter claim upto Rs. 10 lakh and files arbitration reference, will be exempted
from filing the deposit.
l SEBI has mandated all stock exchanges to constitute an Investor Grievance Redressal Committee
(“IGRC”). The IGRC functions as an administrative / meditation body and tries to mediate the complaint
between two parties.
l If unsatisfied, a party may file a claim for arbitration whereby, on the basis of the pecuniary jurisdiction,
a sole arbitrator or a panel of three arbitrators would be appointed to settle the dispute.
l If still not satisfied by the order of the arbitrator, a party can appeal against the order for appellate
arbitration.
l Subsequent to the decision of the appellate arbitrators, the party would still have a limited scope of
appeal that would lie to the jurisdictional High Court under the Arbitration and Conciliation Act, 1996.
l An Investor Grievances Redressal Mechanism (IGRM) is a process established by companies or
organizations to address and resolve complaints and grievances raised by investors. When it comes
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to arbitration proceedings, an effective IGRM can bring several benefits, including: Facilitating
communication, Faster resolution, Cost-effective, Improved investor confidence, Compliance with
regulations.
l Investor Services Cell (ISC) of the Exchange caters to the needs of investors by resolving the queries of
investors, resolution of investor complaints and by providing Arbitration Mechanism for quasi-judicial
settlement of disputes.
l At each of the above ISC Centre, Exchange has constituted Grievance Redressal Committee (GRC).
All complaints which do not get resolved within fifteen working days from the date of registration of
complaint by Exchange or cases where parties are aggrieved by the resolution worked out would be
referred to GRC.
l Investor Service Centre (ISC) is located in mostly major cities of India.
l Investors who are not satisfied with the response to their grievances received from the brokers/
Depository Participants/listed companies, can lodge their grievances with the Stock Exchanges or
Depositories.
l Stock Exchange shall ensure that the investor complaints shall be resolved within 15 working days from
the date of receipt of the complaint.
l Stock Exchange shall maintain a record of all the complaints addressed/redressed within 15 working
days from the date of receipt of the complaint/additional information.
l Stock Exchange shall resolve service related complaints at its end. However, in case the complainant
is not satisfied with the resolution, the same may be referred to the Investor Grievance Redressal
Committee (“IGRC”), after recording the reasons in writing by the Chief Regulatory Officer of the Stock
Exchange or any other officer of the Stock Exchange authorized in this behalf by the Managing Director.
l For Complaints related to trade, settlement and ‘deficiency in services’, resulting into any financial loss,
the stock exchange shall resolve the complaint on its own as per the time lines prescribed.
l IGRC shall have a time of 15 working days to amicably resolve the investor complaint through
conciliation process.
l IGRC shall not dispose the complaint citing “Lack of Information and complexity of the case”.
l IGRC shall decide claim value admissible to the complainant, upon conclusion of the proceedings of
IGRC.
l Expenses of IGRC shall be borne by the respective Stock Exchange and no fees shall be charged to the
complainant/member.
l The Securities and Exchange Board of India (SEBI) was established on April 12, 1992 in accordance with
the provisions of the Securities and Exchange Board of India Act, 1992. The Regulatory body i.e. SEBI
will take actions for the complaints received on its SCORES portal.
l SCORES facilitates you to lodge your complaint online with SEBI and subsequently view its status.
l Complainant needs to lodge a complaint on SCORES within three(03) years from the date of cause of
complaint.
l Price bands determine the range in which a security can move. To illustrate, a 10% price band implies
that the security can move +/- 10% of its previous day close price on a given day.
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GLOSSARY
Arbitration: Arbitration means any arbitration whether or not administered by permanent arbitral institution.
Investor’s Grievances Redressal Mechanism: The Investor’s Grievances Redressal Mechanism of stock
exchanges provides investors with a platform to resolve their complaints against brokers and listed
companies through arbitration.
Investor Service Centre (ISC): Investor Services Cell (ISC) of the Exchange caters to the needs of investors by
resolving the queries of investors, resolution of investor complaints and by providing Arbitration Mechanism
for quasi-judicial settlement of disputes.
Investor Grievances Redressal Committee (IGRC): SEBI has mandated all stock exchanges to constitute an
Investor Grievance Redressal Committee (“IGRC”). The IGRC functions as an administrative / meditation body
and tries to mediate the complaint between two parties.
TEST YOURSELF
1. Explain the Investor Grievance Resolution Mechanism.
2. What is the process of Resolution of Complaints by Stock Exchange?
3. What are the Benefits of Investors Grievances Redressal Mechanism?
4. What is the Threshold Limit for Interim Relief Paid out of IPF in Stock Exchanges?
5. What is SCORES Portal. What is the Time period for Lodging of a complaint on SCORES?
LIST OF FURTHER READINGS & OTHER REFERENCES (Including Websites / Video Links)
l https://www.sebi.gov.in/
l https://www.nseindia.com/
l https://www.bseindia.com/
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Conceptual Framework of Lesson
International Commercial Arbitration 9
KEY CONCEPTS
n Domestic Arbitration n International Arbitration n Private International Law Indian Council of Arbitration
n International Commercial Arbitration n International Arbitral Institutions n International Arbitration Clause
n Submission Agreement
Learning Objectives
To understand:  How to draft an International Arbitration
Clause
 The difference between Domestic Arbitration
and International Commercial Arbitration  Online Dispute Resolutions Internationally
 The relation between Private International  Singapore International Arbitration Centre
Law and Arbitration  Rules of International Centre for Settlement
 Indian Council of Arbitration and its working of Investment Disputes
 Role of Courts in International Arbitration  Issues in International Commercial Arbitration
Process  London Court of International Arbitration
Lesson Outline
 Introduction  International experience in Online Dispute
Resolution (ODR) and procedure adopted
 Domestic Arbitration vs. International
by ODR in Foreign Countries
Arbitration
 Singapore International Arbitration Centre
 Indian Council of Arbitration(ICA)
(SIAC)
 Role of Private International Law in Indian
 International Centre for Settlement of
Council of Arbitration
Investment Disputes (ICSID) arbitrations
 Concept of International Commercial
 Current issues in International Commercial
Arbitration
Arbitration (e.g. Confidentiality and
 Role of National Courts in the International Consolidation)
Arbitration Process
 Confidentiality
 Evaluation of International Arbitral Institutions
 London Court of International Arbitration
 Drafting of an International Arbitration Clause (LCIA)
and Submission Agreement
 Consideration of Arbitration as a Dispute
Resolution Process in the domain of
International Trade
 Online Dispute Resolution(ODR)
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PP-AM&C Conceptual Framework of International Commercial Arbitration
l The Arbitration and Conciliation Act, 1996
INTRODUCTION
The Arbitration and Conciliation Act, 1996 aims at streamlining the process of arbitration and facilitating
conciliation in business matters. The Act recognises the autonomy of parties in the conduct of arbitral
proceedings by the arbitral tribunal and abolishes the scope of judicial review of the award and minimizes the
supervisory role of Courts. The autonomy of the arbitral tribunal has further been strengthened by empowering
them to decide on jurisdiction and to consider objections regarding the existence or validity of the arbitration
agreement.
With the passage of time, some difficulties in the applicability of the Arbitration and Conciliation Act, 1996 have
been noticed. Interpretation of the provisions of the Act by Courts in some cases have resulted in delay of
disposal of arbitration proceedings and increase in interference of Courts in arbitration matters, which tend to
defeat the object of the Act. With a view to overcome the difficulties, Arbitration and Conciliation (Amendment)
Act, 2015 passed by the Parliament. Arbitration and Conciliation (Amendment) Act, 2015 facilitate and encourage
Alternative Dispute Mechanism, especially arbitration, for settlement of disputes in a more user-friendly, cost
effective and expeditious disposal of cases since India is committed to improve its legal framework to obviate
in disposal of cases.
Domestic Arbitration
The arbitration in which the disputes are subject to Indian laws and the cause of action is entirely based in India
are called Domestic arbitration.
International Arbitration
It is an arbitration relating to disputes where at least one of the parties is:
(i) an individual who is a national of, or habitually resident in, any country other than India; or
(ii) a body corporate which is incorporated in any country other than India; or
(iii) an association or a body of individuals whose central management and control is exercised in any
country other than India; or
(iv) the Government of a foreign country.
Questions: In which year, Arbitration and Conciliation Act was commenced?

Options: (A) 1959 (B) 1994 (C) 1995 (D) 1996
Answer: (D)
Questions: Arbitration and Conciliation Act extends to whole of India except
Jammu and Kashmir?
Options: (A) True (B) False
Answer: (B) It extends to whole of India
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Conceptual Framework of International Commercial Arbitration LESSON 9
DOMESTIC ARBITRATION VS. INTERNATIONAL ARBITRATION
S. No. Nature DOMESTIC ARBITRATION INTERNATIONAL ARBITRATION
1. Definition The term “Domestic Arbitration” is Section 2(1)(f) defines the term
nowhere defined in the Arbitration and International Commercial Arbitration.
Conciliation Act, 1996. But part 1 of the
Act by section 2(2) clears the place
i.e. India in which this part shall apply.
Furthermore, section 2(7) defines the
term domestic award as arbitral award
made under this part.
2. Award Domestic Arbitration arise from Arbitral Awards provided the fair
Arbitration held in India and provides decision to the parties to the contract
Domestic Award. and quicker resolution is also provided
for the dispute.
3. Arbitrator Domestic Arbitrator are the Arbitrators Here, private adjudicators play the role
who are appointed by the parties to the Arbitrators.
contract.
4. Time for Award is given quickly by the Arbitrator. Award takes time due to parties reside
Award in different countries and may want
different hearing date for different
geographical issues.
5. Fees Less fees given to Domestic Arbitrator Fees is quite high as compared to
Domestic Arbitration, due to different
countries involved in different currencies.
6. Decision Domestic Arbitrator is appointed by the Here, private arbitrator is appointed

making parties mutually and decision is less and decision may be more biased as
biased. arbitrator will favour the party of their
interest.
CASE LAWS
In Atlas Exports Industries vs. Kotak & Company & Reliance Industries Limited v. Union of India, two Indian
parties can choose a foreign-seated arbitration with the application of Indian law [Section 28(1)(a) of the Act]
In Addhar Mercantile v. Shree Jagdamba Agrico Exports & TDM Infrastructure Private Limited v. UE
Development India Private Ltd, If two Indian parties so choose, the objections to the award would lie in the
country of the chosen seat, however, if assets (which in all likelihood would be in India) the award would
need to be enforced here.
In Bhatia International v/s. Bulk Trading, it was held that Indian courts have the right to use their jurisdiction to
test the significance of an arbitral award made in India, even if the actual law of the contract is foreign. The
court recognized that Part 1 of the Arbitration and Conciliation Act, 1996 gives effect to UNCITRAL Model Law
allowing courts to grant interim relief even when the seat of international commercial arbitration is outside
India
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PRIVATE INTERNATIONAL LAW

The word “Private” is included in International Law because it involves interactions and conversations between
the private individuals or parties.
When private parties to the contract got dispute and belong to different jurisdiction or different countries having
different law, then the private international law comes into picture. This is also called Conflict of laws.
Private International law considers the domestic law of the countries in question. For example, a foreign
judgment by a Canadian court will be governed by the law enforced in Canada.
INDIAN COUNCIL OF ARBITRATION(ICA)

Part IA as inserted in the Amendment Act, 2019 deals with Arbitration Council of India. Section 43A of Act
contains definitions of terms used in Part IA such as Chairperson, Council and Member.
Establishment and incorporation of Arbitration Council of India

Section 43B empowers the Central Government to establish the Arbitration Council of India to perform the
duties and discharge the functions under the Arbitration Conciliation Act, 1996.
The Council shall be a body corporate by the name aforesaid, having perpetual succession and a common
seal, with power, subject to the provisions of this Act, to acquire, hold and dispose of property, both movable
and immovable, and to enter into contract, and shall, by the said name, sue or be sued. The head office of the
Council shall be at Delhi. The Council may, with the prior approval of the Central Government, establish offices
at other places in India.
Composition of Council
According to Section 43C of the Act, the Council shall consist of the following Members, namely:–
Designation Eligibility
Chairperson A person, who has been, a Judge of the Supreme Court or, Chief Justice of a High Court or,
a Judge of a High Court or an eminent person, having special knowledge and experience in
the conduct or administration of arbitration, to be appointed by the Central Government in
consultation with the Chief Justice of India
Member An eminent arbitration practitioner having substantial knowledge and experience in

institutional arbitration, both domestic and international, to be nominated by the Central
Government
Member An eminent academician having experience in research and teaching in the field of arbitration
and alternative dispute resolution laws, to be appointed by the Central Government in
consultation with the Chairperson
Member, Secretary to the Government of India in the Department of Legal Affairs, Ministry of Law and
ex officio Justice or his representative not below the rank of Joint Secretary
Member, Secretary to the Government of India in the Department of Expenditure, Ministry of Finance
ex officio or his representative not below the rank of Joint Secretary
Part-time One representative of a recognised body of commerce and industry, chosen on rotational
Member basis by the Central Government
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Designation Eligibility
Member- Chief Executive Officer

Secretary,
ex officio
The Chairperson and Members of the Council, other than ex officio Members, shall hold office as such, for a
term of three years from the date on which they enter upon their office. Chairperson or Member, other than ex
officio Member, shall not hold office after he has attained the age of seventy years in the case of Chairperson
and sixty-seven years in the case of Member.
The salaries, allowances and other terms and conditions of the Chairperson and Members as may be prescribed
by the Central Government. The Part-time Member shall be entitled to such travelling and other allowances as
may be prescribed by the Central Government.
Duties and functions of Council

Section 43D provides that it shall be the duty of the Council to take all such measures as may be necessary to
promote and encourage arbitration, mediation, conciliation or other alternative dispute resolution mechanism
and for that purpose to frame policy and guidelines for the establishment, operation and maintenance of uniform
professional standards in respect of all matters relating to arbitration.
For the purposes of performing the duties and discharging the functions under this Act, the Council may –
(a) frame policies governing the grading of arbitral institutions;
(b) recognise professional institutes providing accreditation of arbitrators;
(c) review the grading of arbitral institutions and arbitrators;
(d) hold training, workshops and courses in the area of arbitration in collaboration of law firms, law
universities and arbitral institutes;
(e) frame, review and update norms to ensure satisfactory level of arbitration and conciliation;
(f) act as a forum for exchange of views and techniques to be adopted for creating a platform to make
India a robust centre for domestic and international arbitration and conciliation;
(g) make recommendations to the Central Government on various measures to be adopted to make
provision for easy resolution of commercial disputes;
(h) promote institutional arbitration by strengthening arbitral institutions;
(i) conduct examination and training on various subjects relating to arbitration and conciliation and award
certificates thereof;
( j) establish and maintain depository of arbitral awards made in India;
(k) make recommendations regarding personnel, training and infrastructure of arbitral institutions; and
(l) Such other functions as may be decided by the Central Government.
Vacancies, etc., not to invalidate proceedings of Council

Section 43E states that no act or proceeding of the Council shall be invalid merely by reason of –
(a) any vacancy or any defect, in the constitution of the Council;
(b) any defect in the appointment of a person acting as a Member of the Council; or
(c) any irregularity in the procedure of the Council not affecting the merits of the case.
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Resignation of Members
According to Section 43F, the Chairperson or the Full-time or Part-time Member may, by notice in writing, under
his hand addressed to the Central Government, resign his office.
Provided that the Chairperson or the Full-time Member shall, unless he is permitted by the Central Government
to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt
of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his
term of office, whichever is earlier.
Removal of Member
Section 43G (1) provides that the Central Government may, remove a Member from his office if he –
(a) is an undischarged insolvent; or
(b) has engaged at any time (except Part-time Member), during his term of office, in any paid employment;
or
(c) has been convicted of an offence which, in the opinion of the Central Government, involves moral
turpitude; or
(d) has acquired such financial or other interest as is likely to affect prejudicially his functions as a Member;
or
(e) has so abused his position as to render his continuance in office prejudicial to the public interest; or
(f) has become physically or mentally incapable of acting as a Member.
According to Section 43G(2) notwithstanding anything contained in sub-section (1), no Member shall be removed
from his office on the grounds specified in clauses (d) and (e) of that sub-section unless the Supreme Court, on a
reference being made to it in this behalf by the Central Government, has, on an inquiry, held by it in accordance
with such procedure as may be prescribed in this behalf by the Supreme Court, reported that the Member, ought
on such ground or grounds to be removed.
Appointment of experts and constitution of Committees thereof

Section 43H provides that the Council may, appoint such experts and constitute such Committees of experts as
it may consider necessary to discharge its functions on such terms and conditions as may be specified by the
regulations.
General norms for grading of arbitral institutions

Section 43-I states that the Council shall make grading of arbitral institutions on the basis of criteria relating
to infrastructure, quality and calibre of arbitrators, performance and compliance of time limits for disposal of
domestic or international commercial arbitrations, in such manner as may be specified by the regulations.
Norms for accreditation

Section 43J states the qualifications, experience and norms for accreditation of arbitrators shall be such as may
be specified by the regulations.
General norms applicable to Arbitrator

 the arbitrator shall be a person of general reputation of fairness, integrity and capable to apply
objectivity in arriving at settlement of disputes;
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 the arbitrator must be impartial and neutral and avoid entering into any financial business or other
relationship that is likely to affect impartiality or might reasonably create an appearance of partiality or
bias amongst the parties;
 the arbitrator should not involve in any legal proceeding and avoid any potential conflict connected
with any dispute to be arbitrated by him;
 the arbitrator should not have been convicted of an offence involving moral turpitude or economic
offence;
 the arbitrator shall be conversant with the Constitution of India, principles of natural justice, equity,
common and customary laws, commercial laws, labour laws, law of torts, making and enforcing the
arbitral awards;
 the arbitrator should possess robust understanding of the domestic and international legal system on
arbitration and international best practices in regard thereto;
 the arbitrator should be able to understand key elements of contractual obligations in civil and
commercial disputes and be able to apply legal principles to a situation under dispute and also to
apply judicial decisions on a given matter relating to arbitration; and
 the arbitrator should be capable of suggesting, recommending or writing a reasoned and enforceable
arbitral award in any dispute which comes before him for adjudication.
Depository of awards
According to the Section 43K the Council shall maintain an electronic depository of arbitral awards made in
India and such other records related thereto in such manner as may be specified by the regulations.
Power to make regulations by Council

Section 43L empowers the Council may, in consultation with the Central Government, make regulations,
consistent with the provisions of this Act and the rules made thereunder, for the discharge of its functions and
perform its duties under the Act.
Chief Executive Officer

Section 43M states that there shall be a Chief Executive Officer of the Council, who shall be responsible for day-
to-day administration of the Council.
The qualifications, appointment and other terms and conditions of the service of the Chief Executive Officer
shall be such as may be prescribed by the Central Government.
The Chief Executive Officer shall discharge such functions and perform such duties as may be specified by the
regulations.
There shall be a Secretariat to the Council consisting of such number of officers and employees as may be
prescribed by the Central Government.
The qualifications, appointment and other terms and conditions of the service of the employees and other
officers of the Council shall be such as may be prescribed by the Central Government.
About ICA
The ICA was established in 1965 as a specialized arbitral body at the national level under the initiatives of the
Govt. of India and apex business organizations like FICCI etc.
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Based in New Delhi, the main objective of ICA is to promote amicable, quick and inexpensive settlement of
commercial disputes by means of arbitration, conciliation, regardless of location.
Costly, time-consuming business disputes can take a real bite out of a company’s bottom line. That is why more
and more companies are turning to the Indian Council of Arbitration (ICA), the undisputed leader in dispute
resolution services in India.
Source: https://www.icaindia.co.in/
ROLE OF PRIVATE INTERNATIONAL LAW IN INDIAN COUNCIL OF ARBITRATION

The Indian Council of Arbitration is the apex body for providing the dispute resolution in the field of arbitration.
Further, the private international law is a type of personal law which involves personal relationship between
parties to the contract. A contract becomes international when two or more parties residing different countries
sign it and it becomes fully enforceable by law, in such case, when dispute arise, instead of going to respective
court, the parties prefer speedy disposal of their case. In such a situation, the Indian Councial of Arbitration (ICA)
comes into picture. The ICA adopts necessary principles and its guidelines while providing the judgement. They
see the international law while resolving the dispute.
CONCEPT OF INTERNATIONAL COMMERCIAL ARBITRATION
Definition
Section 2(1)(f) defines the term International Commercial Arbitration which provides an arbitration relating to
disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law
in force in India and where at least one of the parties is –
The procedure to apply for international commercial arbitration is the same as domestic arbitration.
The International Chamber of Commerce (ICC) model arbitration clause, reads:
“All disputes arising out of or in connection with the present contract shall be finally settled under
the rules of arbitration of the International Chamber of Commerce by one or more arbitrators
appointed by the said rules.”
ROLE OF NATIONAL COURTS IN THE INTERNATIONAL ARBITRATION PROCESS

The parties to the contract add the Arbitration clause in the contract to avoid going to court in case of any
dispute arise for saving their time, cost and fees involved in litigation.
National Courts play an important role in international commercial arbitration and their involvement in the
arbitral process is necessary to protect evidence and to avoid damages. It recognizes the arbitration agreement
between the parties involved in the matter and enforces the arbitral award. The role of domestic courts in
International Commercial Arbitration is considered to be very crucial. The Courts normally refer the case
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to Arbitration when the parties to the contract had signed the contract having Arbitration clause instead of
entertaining directly in the court.
Role in Arbitration agreement

An arbitration is formed on an agreement between the parties involved in the matter which is legally sanctioned
and binding on the parties. Under the New York Convention and the UNCITRAL model law requires that in order
to take recourse of arbitration parties must initiate an agreement which then is referred to the court in order to
determine its validity and whether to enforce it.
Role of Courts as per Arbitration & Conciliation Act, 1996

Meaning of Court in International Commercial Arbitration
In the case of international commercial arbitration, the High Court in exercise of its ordinary original civil
jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same
had been the subject-matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from
decrees of courts subordinate to that High Court.
Appointment of Arbitrator under section 11 in case of International Commercial Arbitration
Appointment of Arbitrator where parties did not agree on Procedure to Appoint Arbitrators
The parties are free to agree on a procedure for appointing the arbitrator or arbitrators subject to section
11(6). Failing any agreement, each party shall appoint one arbitrator, and the two appointed arbitrators shall
appoint the third arbitrator who shall act as the presiding arbitrator, in an arbitration with three arbitrators. If this
procedure applies and:
(a) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the
other party; or
(b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their
appointment,
the appointment shall be made, upon request of a party, by the Supreme Court or, as the case may be, the High
Court or any person or institution designated by such Court.
Failure to appoint an Arbitrator where parties agreed on Procedure to Appoint Arbitrators
Where, under an appointment procedure agreed upon by the parties, –
(a) a party fails to act as required under that procedure; or
(b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that
procedure; or
(c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure,
a party may request the Supreme Court or, as the case may be, the High Court or any person or institution
designated by such Court to take the necessary measure, unless the agreement on the appointment procedure
provides other means for securing the appointment.
The Supreme Court or, as the case may be, the High Court, while considering any application under section 11(4)
or 11(5) or 11(6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of
the existence of an arbitration agreement.
A decision on a matter entrusted by section 11(4), 11(5) or 11(6) to the Supreme Court or, as the case may be, the
High Court or the person or institution designated by such Court is final and no appeal including Letters Patent
Appeal shall lie against such decision.
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Appointment of Arbitrator of Any Nationality
As per section 11(9), in the case of appointment of sole or third arbitrator in an international commercial
arbitration, the Supreme Court or the person or institution designated by that Court may appoint an arbitrator of
a nationality other than the nationalities of the parties where the parties belong to different nationalities.
Interim Measures by the Courts
Interim measures, etc., by Court
A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but
before it is enforced in accordance with section 36, apply to a court –
(i) for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral
proceedings; or
(ii) for an interim measure of protection in respect of any of the following matters, namely: –
(a) the preservation, interim custody or sale of any goods which are the subject-matter of the
arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is the subjectmatter of the
dispute in arbitration, or as to which any question may arise therein and authorising for any of the
aforesaid purposes any person to enter upon any land or building in the possession of any party,
or authorising any samples to be taken or any observation to be made, or experiment to be tried,
which may be necessary or expedient for the purpose of obtaining full information or evidence;
(d) interim injunction or the appointment of a receiver;
(e) such other interim measure of protection as may appear to the Court to be just and convenient,
and the Court shall have the same power for making orders as it has for the purpose of, and in
relation to, any proceedings before it.
Where, before the commencement of the arbitral proceedings, a Court passes an order for any interim measure
of protection as mentioned above, the arbitral proceedings shall be commenced within a period of ninety days
from the date of such order or within such further time as the Court may determine.
Once the arbitral tribunal has been constituted, the Court shall not entertain an application as explained above,
unless the Court finds that circumstances exist which may not render the remedy provided under section
17(relating to Interim Measures by Arbitral Tribunal) efficacious.
Assistance of Courts in taking evidence(Section 27)
The arbitral tribunal, or a party with the approval of the arbitral tribunal, may apply to the Court for assistance
in taking evidence.
The application shall specify –
(a) the names and addresses of the parties and the arbitrators;
(b) the general nature of the claim and the relief sought;
(c) the evidence to be obtained, in particular, –
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(i) the name and address of any person to be heard as witness or expert witness and a statement of
the subject-matter of the testimony required;
(ii) the description of any document to be produced or property to be inspected.
The Court is also, within its competence and according to its rules on taking evidence, execute the request by
ordering that the evidence be provided directly to the arbitral tribunal.
The Court is also empowered, while making an above order, issue the same processes to witnesses as it may
issue in suits tried before it.
Any Persons failing to attend in accordance with such process, or making any other default, or refusing to give
their evidence, or guilty of any contempt to the arbitral tribunal during the conduct of arbitral proceedings, shall
be subject to the like disadvantages, penalties and punishments by order of the Court on the representation of
the arbitral tribunal as they would incur for the like offences in suits tried before the Court.
For this purpose, the expression “Processes” includes summonses and commissions for the examination of
witnesses and summonses to produce documents.
Imposition of Costs
In relation to any arbitration proceeding or a proceeding under any of the provisions of this Act pertaining to
the arbitration, the Court or arbitral tribunal, notwithstanding anything contained in the Code of Civil Procedure,
1908, shall have the discretion to determine –
(a) whether costs are payable by one party to another;
(b) the amount of such costs; and
(c) when such costs are to be paid.
Explanation. – For the purpose of determining the cost, “costs” means reasonable costs relating to –
(i) the fees and expenses of the arbitrators, Courts and witnesses;
(ii) legal fees and expenses;
(iii) any administration fees of the institution supervising the arbitration; and
(iv) any other expenses incurred in connection with the arbitral or Court proceedings and the arbitral award.
If the Court or arbitral tribunal decides to make an order as to payment of costs,
(a) the general rule is that the unsuccessful party shall be ordered to pay the costs of the successful party;
or
(b) the Court or arbitral tribunal may make a different order for reasons to be recorded in writing
Challenges and Enforcement of Awards

The courts inter alia can entertain the application for setting aside arbitral award under section 34, take
necessary action for enforcement of award under section 36 and entertain appeals under section 37.
The provisions relating to Arbitral Proceedings from commence to enforcement of Awards are mutatis mutandis
also applicable to International Commercial Arbitration.
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EVALUATION OF INTERNATIONAL ARBITRAL INSTITUTIONS

The inclusive list of International Arbitration is as provided hereinafter:
S. Name of the About the Institution Weblink

No. Institution
1 Indian The ICA was established in 1965 as a specialized arbitral body https://icaindia.co.in/
Council of at the national level under the initiatives of the Govt. of India commercial-arbitration
Arbitration and apex business organizations like FICCI etc. Based in New
Delhi, the main objective of ICA is to promote amicable, quick
and inexpensive settlement of commercial disputes by means
of arbitration, conciliation, regardless of location.
Costly, time-consuming business disputes can take a real
bite out of your company’s bottom line. That is why more
and more companies are turning to the Indian Council of
Arbitration (ICA), the undisputed leader in dispute resolution
services in India.
2 London The LCIA is one of the world’s leading international https://www.lcia.org/

Court of institutions for commercial dispute resolution. The LCIA LCIA/introduction.aspx
International provides efficient, flexible and impartial administration
Arbitration of arbitration and other ADR proceedings, regardless of
location, and under any system of law.
The LCIA has access to the eminent and experienced
arbitrators, mediators and experts from many jurisdictions,
and with the widest range of expertise.
3 International The ICDR – International Centre for Dispute Resolution https://www.icdr.org/
Centre for is the international division of the American Arbitration about_icdr
Dispute Association. The ICDR is the foremost provider of global
Resolution conflict-resolution solutions to businesses and organizations
involved in cross-border disputes.
Drawing on the AAA’s 95+ years of experience, the ICDR
administrative system offers a range of international
alternative dispute resolution (ADR) services providing time
and cost savings, along with vetted, skilled arbitrators and
advanced technology.
4 Permanent The PCA is intergovernmental organization to provide a https://pca-cpa.org/
Court of forum for the resolution of international disputes through en/about/introduction/
Arbitration arbitration and other peaceful means. history/
The PCA was established by the Convention for the Pacific
Settlement of International Disputes, concluded at The
Hague in 1899 during the first Hague Peace Conference.
The Conference had been convened at the initiative of Czar
Nicolas II of Russia “with the object of seeking the most
objective means of ensuring to all peoples the benefits
of a real and lasting peace, and above all, of limiting the
progressive development of existing armaments.”
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5 Swiss The Swiss Arbitration Centre is an independent institution https://www.

Arbitration that provides high-quality arbitration and mediation services swissarbitration.org/
Center worldwide. centre/
The Centre is well known for its Swiss Rules, the golden
standard for arbitration and mediation. As a platform of
expertise, the Centre is supported by a global network of
arbitration and ADR users, legal professionals, the Swiss
Arbitration Association (ASA) and the chambers of commerce
of Basel, Bern, Central Switzerland, Geneva, Neuchâtel,
Ticino, and Zurich.
6 Vienna Representing one of Europe’s leading arbitral institutions, https://viac.eu/en/
International the Vienna International Arbitral Centre (“VIAC”) serves as about-us
Arbitration a focal point for the settlement of commercial disputes in
Center the regional and international community. It has greatly
benefited from its traditional position in a neutral country
between east and west. Founded in 1975 as a department of
the Austrian Federal Economic Chamber (“AFEC”), VIAC has
in recent years enjoyed a steadily increasing caseload from
a diverse range of parties spanning Europe, the Americas,
and Asia.
7 SCC Since 1917, SCC Arbitration Institute provide a neutral, https://
Arbitration independent, and impartial venue for dispute resolution in sccarbitrationinstitute.
Institute commercial business around the world. se/en
8 Singapore Established in 1991 as an independent, not-for-profit https://siac.org.sg/
International organisation, SIAC has a proven track record in providing about-us/why-siac
Arbitration neutral arbitration services to the global business community.
Center SIAC arbitration awards have been enforced by the courts of
Australia, China, Hong Kong SAR, India, Indonesia, Jordan,
Thailand, UK, USA, and Vietnam, amongst other New York
Convention signatories.
9 WIPO The WIPO Arbitration and Mediation Center offers time- and https://www.wipo.int/
Arbitration cost-efficient alternative dispute resolution (ADR) options, amc/en/
and such as mediation, arbitration, expedited arbitration,
Mediation and expert determination to enable private parties to settle
Center their domestic or cross-border commercial disputes. The
WIPO Center is international and specialized in IP and
technology disputes. The WIPO Center is also the global
leader in the provision of domain name dispute resolution
services under the WIPO-designed UDRP.
10 German The roots of the German Arbitration Institute can be traced https://www.disarb.org/
Arbitration back to the year 1920, when the German Arbitration en/about-us/history
Institute Committee (DAS) was established in Berlin. In its present
form, the DIS is the result of a merger between the DAS
and the German Arbitration Institute (DIS) in 1992. The DIS
assumed the main tasks of its predecessors.
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11 The Japan JCAA is an independent and private non-profit institution. https://www.jcaa.or.jp/

Commercial It has a track record spanning 70 years over which it has en/arbitration/whyjcaa.
Arbitration continuously endeavored to provide international and html
Association domestic arbitration services tailored to parties' specific
needs.
12 Australian The Australian Centre for International Commercial https://acica.org.au/
Centre for Arbitration (ACICA) is Australia’s international dispute
International resolution institution. Established in 1985 as an independent,
Commercial not-for-profit organisation, ACICA’s objective is to promote
Arbitration and facilitate the efficient resolution of commercial disputes
throughout Australia and internationally by arbitration
and mediation, with the aim of delivering expediency
and neutrality of process, enforceability of outcome and
commercial privacy to parties in dispute.
DRAFTING OF AN INTERNATIONAL ARBITRATION CLAUSE AND SUBMISSION AGREEMENT
International Arbitration Clause

It is hereby agreed by and between the parties that if any controversy, dispute or difference shall arise
concerning construction, meaning, violation, termination, validity or nullity including without limitation the
scope of any Clause or effect of this Agreement or any part thereof, or of the respective rights or liabilities
herein contained, the parties shall refer such controversy, dispute or difference to be resolved by arbitration in
accordance with the Rules of ........................................ (Name of the Institution) and Arbitration and Conciliation Act,
1996 or any statutory modifications on re-enactment thereof as in force. The award made in pursuance thereof
shall be binding on the parties. The language to be used in the arbitration shall be English. In any arbitration
commenced pursuant to this clause, the sole arbitrator shall be appointed by the mutual consent of the parties
as per the provisions of the Arbitration and Conciliation Act, 1996. The seat, or legal place, of arbitration shall
be ......................................... The cost of the Arbitration proceedings shall be shared equally by both the parties.
SUBMISSION ARBITRATION AGREEMENTS OR POST DISPUTE ARBITRATION AGREEMENTS

In an agreement, the parties to the agreement add the arbitration or dispute resolution clause to solve the dispute
which may arise in future by way of arbitrator without the intervention of court. Whereas, on the contrary, the
submission agreements are entered to submit only a specific dispute to the Arbitration. For entering into such
agreements, the pre-existence of dispute is mandatory. This may be entered even if such dispute is already
litigated in the court of law.
CONSIDERATION OF ARBITRATION AS A DISPUTE RESOLUTION PROCESS IN THE DOMAIN OF

INTERNATIONAL TRADE
When different traders from different countries undertake international business transactions are referred to as
International Trade.
If they conduct business, the chances of dispute is also very high because of different country, different standards
and different law. The Arbitration plays a vital role in this as a dispute resolution process.
The disputes can ruin their business transaction wholly or partially but it will affect for sure. The operational and
financial performance of the business also comes down drastically due to such conflict and lack of interests
by the parties which turns profitable transaction a probable loss. Therefore, it is a need for carrying on such
262
transaction smoothly with the contract having proper arbitration clause so as to make their transaction profitable
and resolve the future disputes amicably.
Drafting of Good Commercial Contracts

To achieve the above purpose, the parties must focus on drafting of contract, by including all such covenants
which are necessary for conducting the trade. The rights and duties of the parties to the international trade must
be very clear and should not be having any ambiguity. Further, the contract must cover all important points and
contingencies in clear and unambiguous terms. Lastly, it must contain an arbitration clause.
ONLINE DISPUTE RESOLUTION(ODR)

Online Dispute Resolution (ODR) is the use of internet technology to resolve the disputes between the parties
outside of the public court system. In its most basic sense, ODR is the use of technology to ‘resolve’ disputes.
It is not just any form of technology integration (such as electronically scheduling a session), but its active use
to help resolve the dispute (such as video conferencing for hearings or electronic document sharing for filing).
Though derived from ADR, ODR’s benefit extends beyond just e-ADR or ADR that is enabled through technology.
ODR can use technology tools that are powered by AI/ML in the form of automated dispute resolution, script-
based solution and curated platforms that cater to specific categories of disputes.
Case Law on ODR:
In State of Maharashtra vs. Dr. Praful B. Desai (2003 4 SCC 601), the Supreme Court acknowledged the use of
video conferencing to record witness statements. Therefore, the submissions and the proceedings can take
place online and duly valid under the Arbitration Act.
In Grid Corporation of Orissa Ltd. vs. AES Corporation (2002) 7 SCC 736), the Supreme Court explicitly mentions
that:
“When an effective consultation can be achieved by resort to electronic media and remote conferencing,
it is not necessary that the two persons required to act in consultation with each other must necessarily sit
together at one place unless it is the requirement of law or of the ruling contract between the parties”.
Benefits of ODR
It is cost effective, convenient, efficient, allows for customizable processes to be developed and can limit
unconscious bias that results from human interactions. In terms of layers of justice, ODR can help in dispute
avoidance, dispute containment and dispute resolution. Its widespread use can improve the legal health of the
society, ensure increased enforcement of contracts and thereby improve the Ease of Doing Business Ranking
for India. Over time, the benefits of ODR and Digital Courts (technology in the public court system) together can
transform the legal paradigm as a whole.
1. Cost effective
The economic burden of dispute resolution often turns the process itself into a punishment and thereby
hinders access to justice. In this light, ODR offers a cost-effective mode of dispute resolution for the
disputants as well as the Neutrals.
Further, ODR has the potential to reduce legal costs, by way of reduced time for resolution and by doing
away with the need for legal advice in select categories of cases.
Apart from these tangible costs, there are other indirect costs, often faced by enterprises, on account of
lengthy litigation proceedings.
For instance, enterprises see loss of productive time, loss in wellbeing of the individuals, loss in investor
confidence, reduced investments and consequently slower economic growth. While all these impacts cannot
be completely remedied by ODR, it can help in mitigating them and therefore prove to be cost effective.
263
2. Convenient and quick

Issue: The pendency of cases in Courts across India has been one of the major challenges for the
justice system. As per the India Justice Report, 2019, in 21 States and Union Territories, cases in District
Courts remain pending for 5 years on average or more. Excessive adjournments, vacancy in judicial and
administrative staff, and complex processes involving multiple participants are some of the major reasons
for such pendency.
How ODR is solving such issue: ODR can address such delays by providing a faster and more convenient
process for resolution of disputes. In itself, ADR employs simpler procedures and a fixed timeline for
processes leading to efficient dispute resolution. To add to such benefits, ODR eliminates the need for travel
and synchronisation of schedules. This reliance on asynchronous communication, allows parties to submit
their arguments intermittently, or follow a ‘documents-only’ process. Not requiring the physical presence
of parties also reduces the need for travel thereby especially benefitting parties involved in cross border
disputes. Similarly, use of ODR within businesses such as e-commerce entities also provides consumers a
one-stop avenue to resolve their disputes thereby making dispute resolution quicker and more convenient.
3. Allows for customisable processes
Over the past few years, ADR has seen a lot of variants emerge, that go beyond the traditional ADR
processes such as arbitration and mediation. Some of the hybrid variants include med-arb, med-arb-med,
arb-med-arb. ODR’s integration with such non-traditional ODR processes and use of artificial intelligence
can lead to limitless possibilities in terms of the types of models that can be developed. Thus, ODR can
allow for multi-door dispute resolution through curated and customised process for certain classes of cases.
This in turn, can make the dispute resolution process more cost effective and convenient for the user.
4. Encourages dispute resolution
ODR can contribute significantly to improve access to a variety of dispute resolution processes by addressing
major concerns such as lack of access to physical courts or ADR centres, cost of dispute resolution as well
as the barriers due to disabilities. Since ODR tools such as online negotiation and mediation are premised on
mutually arriving at an agreement, they make the dispute resolution process less adversarial and complicated
for the parties. Resolving disputes in the comfort of the user’s own homes can make the dispute resolution
process feel more accessible. This improvement in the overall experience can encourage more parties to opt
to resolve their disputes through such formal means as opposed to not agitating their rights at all.
5. Limits implicit bias caused by human judgment
With the increased awareness regarding racial, caste and gender justice, there have been some
concerns regarding the impact of biases, prejudice, and stereotype on decision-making processes
and outcomes. Studies have identified that implicit bias and anxiety to communicate with members
of different communities can influence the outcome of mediation. ODR processes can lessen the
unconscious bias of the Neutral while resolving disputes. ODR Platforms, especially those based on
texts and emails, detach audio-visual cues relating to the gender, social status, ethnicity, race, etc.
and help in resolving disputes based on the claims and information submitted by the disputing parties,
rather than who these parties are.
That said, while ODR could indeed limit biases arising from human interactions, ODR stands the risk of
introducing new biases through the use of artificial intelligence.
The successful integration and co-option of ODR across the world, has ultimately led to the development of
a few models of ODR all of which have been running in parallel across the globe. They are:
1. In-house private ODR Platforms run by individual businesses;
2. Private ODR Platforms or service providers catering to different categories of disputes and multiple
modes of resolution;
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3. Government run or state-sponsored ODR programs and platforms and

4. Court-annexed ODR systems
Source: https://www.niti.gov.in/sites/default/files/2021-11/odr-report-29-11-2021.pdf
INTERNATIONAL EXPERIENCE IN ONLINE DISPUTE RESOLUTION (ODR) AND PROCEDURE

ADOPTED BY ODR IN FOREIGN COUNTRIES
A. Government-Run ODR Platforms
S. ODR Service Nature of Mechanism for dispute resolution Partnership and

No. Disputes Regulation
1. Brazil: Consumer The process for dispute resolution Consumidor.gov platform
Consumidor. disputes: through Consumidor.gov is provided is integrated with State
gov Consumer below: and Municipal consumer
can use the 1. The consumer can file their rights protection bodies,
ODR Platform complaint against the company ‘Procons’ (an institution
to resolve registered on the ODR Platform. linked to the Secretariat
disputes of Justice and Defense of
against 2. The company is given 10 days Citizenship, State of São
companies to analyse and respond to the Paulo), Courts of Justice,
registered complaint. Office of Public Prosecutor,
with the 3. After the response from the Public Defenders,
Consumidor. company, the consumer is Regulatory Agencies and
gov. required to comment and the Ministry of National
classify the company’s Consumer Secretariat.
response, stating whether their The guidelines for the plat-
complaint has been resolved form provide data protection
or not resolved, within 20 days. framework and prohibits ac-
tivities such as defamation,
harassment, etc.
Further, ODR services
under the platform are
provided for free.
2. European Consumer 1. All online traders are mandated The European Union
Union: The disputes to provide a link to the ODR has partnered with more
European Platform on their website. than 750 ODR service
Online Dispute 2. Once a consumer files providers across Europe
Resolution a complaint on the ODR to provide ODR services
Platform by Platform the trader receives a to the consumers.67 The
the European notification. ODR service providers are
Commission. recognised and accredited
3. The complainant may resolve by the sector-specific
the dispute directly on the regulators of the member
platform or submit the complaint countries of EU. The ODR
to an ODR service provider listed service providers are also
on the ODR Platform. required to undergo yearly
audits and publish annual
reports.
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4. Disputes can be resolved

directly on the ODR Platform
- if the trader is willing to talk,
then direct messages can be
exchanged on the dashboard
along with photographs to
resolve the dispute.
5. Resolution of dispute through

ODR service provider - The
ODR service provider, listed
on the platform offers efficient
dispute resolution. Both parties
are provided 30 days to agree
on an ODR service provider to
handle their case.
6. If the parties cannot decide

upon the ODR service provider,
the consumer is advised by the
ODR Platform to adopt other
modes for dispute resolution.
3. Hong Kong: The scheme The scheme offers a multi-tiered eBRAM, an independent
COVID-19 aims to resolve dispute resolution process: not-for- profit organisation
Online Dispute disputes that established in 2018 under
1. initially parties try to negotiate
Resolution are, arising Hong Kong law, has been
the dispute,
(ODR) Scheme due to the appointed as the service
COVID-19 2. if negotiation is unsuccessful, provider for this ODR
pandemic then mediation is attempted, scheme.
where the 3. in case the mediation process is The proceedings under
amount unsuccessful, parties proceed the scheme are regulated
claimed is to arbitration for resolving their by the rules framed by
HKD 500,000 disputes. eBRAM.
(approximately
INR 47 lakhs) Parties are free to appoint their
or less, and own mediator and arbitrator for the
where at least process.
one of the
parties is a
Hong Kong
resident.
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4. Mexico: Consumer The process for dispute resolution Concilianet provides a free
Concilianet by disputes: through Concilianet is provided ODR Platform for consumer
the Federal Consumers can below: dispute resolution. If a
Consumer file complaints consumer files a complaint
1. The consumer is required
Prosecutor’s against regarding a product or a
to register an account with
Office manufacturers service, the manufacturer
Concilianet with proper
(PROFECO). and service or the service provider are
identification documents.
providers mandated to appear for
that have 2. The consumer can submit their conciliation, failing which a
entered into a complaint along with relevant fine may be imposed.
collaboration documents on the ODR
with the office Platform.
of the Attorney 3. PROFECO analyses the
General to complaint and determines its
resolve their competence to resolve the
disputes dispute. After such analysis,
through it sends a reply to the
Concilianet. complainant within 10 days.
4. Post such analysis, online
conciliation hearing is
arranged with the consumer,
manufacturer, and a conciliator.
5. After the conciliation, the
consumer can provide feedback
on their level of satisfaction with
the service received.
5. South Korea: E-commerce The ECMC offers dispute resolution The mediation proceedings
E-Commerce and through different modes of under ECMC are regulated
Mediation E-transactions communication, including face- to- by the Framework Act on
Committee disputes. face, online, written, and phone call. Electronic
(ECMC)
1. for face-to-face coordination, Documents and Commerce.
disputes are resolved with a
The Act includes provisions
mediator, the disputing parties,
for the appointment of
and an investigator present
mediators and conducting
in one meeting place. It is
mediation proceedings.
considered more appropriate
for complex disputes.
2. for online coordination, a
party can access the online
coordination centre (chatting.
ecmc. or.kr) to resolve a dispute.
267

3. written coordination is another
means available to disputing
parties who are unable to
engage in a face-to-face
dispute resolution process. This
process is considered more
appropriate for cases involving
specific details and evidences.
4. phone call coordination
involves phone calls between
a mediator, the disputing
parties, and an investigator for
resolution of a dispute.
6. United Disputes The mechanism for dispute resolution The Financial Ombudsman
Kingdom: between 81 is provided below. is regulated as per the rules
UK Financial financial 1. The consumer is required to give published by Financial
Ombudsman businesses the business an opportunity to Conduct Authority.
and resolve the claim themselves. The rules provide the
customers. The business should address procedure for handling
the issue within 8-weeks. If the the disputes, fee for the
business fails to resolve the ombudsman services
issue, the consumer can file a and jurisdiction of the
complaint before UK Financial ombudsman office.
Ombudsman.
2. Initial assessment – Every
complaint is assigned a case
handler who reviews the
complaint and shares their initial
thoughts with both the sides.
3. Review by ombudsman – If
the parties disagree with the
initial assessment, they can
ask ombudsman to conduct a
formal review of the complaint.
The ombudsman reviews
all facts and evidences and
decides the case.
4. Binding nature of the decision -
The consumer has the option to
withdraw from the process at any
stage or decline the outcome
of the process. However, if the
consumer accepts the outcome,
then it is legally binding on the
businesses.
268

7. United States: Labour FMCS has employed TAGS to TAGS uses a combination of
Technology Disputes help mediators resolve labour- technology tools including
Assisted Group management disputes efficiently. It e-Room, mimio, FacilitatePro
Solutions (TAGS) uses technology tools for efficient and NetMeeting to enable
by Federal group problem-solving, decision- online meeting, caucuses
Mediation and making, improving the facilitation and provide efficient
Conciliation of meetings and conducting online internet based dispute
Service (FMCS) surveys. resolution.
B. COURT-ANNEXED ODR PLATFORMS
S. Who is the Nature of Disputes Mechanism for Regulation of the ODR Additional
No. service (eg: MSME, dispute resolution Platform information
provider? small value,
e-commerce)
1. Canada: 1. Motor vehicle The entire process of 1. The Civil
British injury disputes dispute resolution is Resolution Tribunal
Columbia up to Canadian conducted online. or CRT has been
Civil $50,000 (or 1. Negotiation– established under
Resolution INR 30 lakhs Once an the Civil Resolution
Tribunal approximately), application is Tribunal Act.
(CRT) accepted, parties
2. Small claim 2. Agreements
disputes up may use the arrived at through
to Canadian CRT platform to negotiation and
$5,000 (or negotiate and facilitation can
INR 3 lakhs resolve some or be turned into a
approximately), all of the issues. ‘consent resolution
2. Facilitation– In order’. Consent
3. Strata property
this process Resolution Order
(condominium)
a Neutral is is enforceable
disputes of any
appointed to through courts like
amount, and
clarify the claims a court order.91
4. Societies and of the parties
cooperative and facilitate
associations mediation to reach
disputes of any a settlement.
amount.87
3. Tribunal Decision
Process– If
the parties are
unsuccessful in
resolving disputes,
an independent
CRT member
adjudicates the
dispute.
269
e-commerce)
The decisions of taken
by the CRT members
are binding and can
be enforced like a
court order.
2. China: Civil and The Beijing Internet Beijing Internet Court’s In the first
Beijing administrative Court provides Court Hearing Rules year, the
Internet disputes stemming comprehensive online has standardised Beijing
Court from e-commerce mediation service. dispute resolution Internet Court
and internet. The parties select the process in the Internet conducted
mediation organisation, Court. online
the mediator and mediation for
initiate mediation 29,728 cases.
online. If the mediation The court
is successful, the judge successfully
confirms the result mediated
of the process and 23.9 percent
withdraws the suit of the
after an agreement is disputes.
drafted.
3. China: Civil and The Court offers Hangzhou Internet

Hangzhou administrative online pre-litigation Court has promulgated
Internet disputes stemming mediation service. The a series of 15 rules to
Courts from e-commerce mediation process govern online dispute
and internet. allows asynchronous resolution process.
exchange of questions
and arguments
and mediation. The
platform also allows
parties to upload
video testimonies and
evidence for efficient
mediation process.
Further, the Internet
Court has built
electronic evidence
platform connected with
ecommerce websites,
financial institutions,
notary institutions, etc.
270
e-commerce)
The platform uses
blockchain technology
to store and
authenticate evidence
filed by the disputing
parties.
4. China: Zhe- E-commerce The platform offers a As on

jiang Prov- (sales, copyright, tiered model of dispute January
ince’s Online trademark, and resolution: 2019, the
Dispute small claims of success rate
1. Legal Consultation
Diversifica- internet financing), of mediation
provides intelligent
tion Resolu- divorce and proceedings
online consultation
tion Platform maintenance, road on the
through relevant
(ODDRP) accident liabilities, platform
laws and cases.
contractual was 90.66
Such consultations
disputes. percent
are then followed
and the
by manual
platform has
consultations.
successfully
2. Online evaluation mediated
evaluates litigation 355,973
risk by relying cases.
on data on
judgments.
3. Online Mediation
offers professional
mediation service
by combining both
online and offline
channels.
4. Online Arbitration
is provided by
11 arbitration
institutions in
the province.
The full process
from application
to conclusion
of arbitration is
conducted online.
271
e-commerce)
5. Online Litigation
provides litigation
services like filing,
evidence, hearing
and sentencing
through High
People’s Court of
Zhejiang Province
Legal Service
Official Website.
5. Singapore: Disputes before 1. E-negotiation: 1. The Practice

Singapore the Small Claims Each party can Directions issued
State Courts Tribunal (SCT), make multiple by the State
e-negoti- Community offers (three in Courts have a
ation and Disputes Claims case of small dedicated section
e-mediation Tribunal (CDCT) value claims and on using ADR
platforms105 and Employment five rounds in case avenues for
Claims Tribunal of employment dispute redressal.
(ECT) claims) in the No amendments
negotiation have been made
process. If no to these sections
settlement is to include ODR.
reached through However, there
such offers, is a presumption
the parties are of ADR for all
directed to attend cases i.e. the
the consultation court encourages
on the provided parties to consider
date and time.107 the appropriate
Court of Dispute
2. E-mediation:
Resolution (CDR)
Parties may
or ADR processes
resolve their
as a ‘first stop’ for
dispute online with
civil disputes.
the help of a court
mediator. If both 2. The settlement
parties agree, then agreement require
the respective consent of the
tribunal schedules respective tribunal
an online where the case
mediation session was first filed.
with parties and a
court mediator.
272
e-commerce)
6. UAE: Dubai Commercial 1. The DIFC Courts Arbitration is The first half
International disputes, filings, are manned by conducted based of 2020 the
Finance wills etc. judges who are on DIFC Arbitration courts saw
Centre appointed by the law based on the a 96% year
Courts (DIFC) Government. UNCITRAL model. on year
increase in
2. The courts function
the number
as courts of first
of cases
instance and
filed.
appeal.
3. The DIFC Courts
also work as
supervisory courts.
4. Hearings are
being held through
teleconferencing
and filing is done
through ‘e-Registry’.
The will service
centre facilitates
the drafting of wills
online.
7. United Money claims The following The procedure for

Kingdom: below £100,000 procedure followed Money Claim Online
Money Claim (or INR 90 lakhs by Money Claim is governed through
Online approximately) Online to resolve Practice Direction 7E.
and above £10,000 disputes:
(or INR 9 lakhs
1. The claimant
approximately)
is required to
register with the
platform and issue
claim against
the defendant/s
through Money
Claim Online.
2. Defendant/s is/are
provided 14 days
from the date of
service to file a
response to the
claim.
273
e-commerce)
3. If the defendant/s
admits the claim,
the claimant can
proceed to request
judgment online.
4. If the defendant/s
has defended
the claim, the
case is referred
to mediation
after the consent
of the parties.
Alternatively, the
dispute is filed
before a court for
its resolution.
5. After a settlement
is reached
between parties,
they can file
request for
online or manual
judgment.
C. PRIVATE ODR PLATFORMS
S. Name of the Industry Mechanism for dispute resolution No. of

No. platform and and types of disputes
organisation disputes resolved
introducing
the platform
1. Australia: The platform The centre offers efficient dispute resolution through
Australian is a non-profit mediation, arbitration, expert determination, and
Disputes that caters to conciliation. It also provides access to custom designed
Centre commercial virtual courtrooms for better dispute resolution
entities, experience.
Government
Arbitration: One can register and send an e-notification
and
online to the other party. After the other party serves a
individuals. It is
notice of response, the parties try to resolve the dispute
not dedicated
amongst themselves. If the same fails, then a Neutral
to a specific
is appointed by the parties based on a list provided by
sector.
ADC. The final award is binding on the parties.
274

introducing
the platform
2. Canada: Consumer 1. The platform encourages the consumer to settle Dispute

Platform to disputes their dispute with the merchant on their own through settlement
Assist in the negotiation. If no settlement is reached within 20 rate of 70%
Resolution days from the start of negotiation, then a mediator is and user
of Litigation automatically appointed to intervene in the dispute satisfaction
Electronically resolution process. The consumer and trader can rate of
(PARLe) request for a mediator soon after submission of 90%.
proposal and counter-proposal as well.
2. Consumers are provided with resource tools such
as case law summaries and explainers on statutes
to help them through the process of dispute
resolution.
3. China: Consumer Alibaba Group (including Taobao and Tmall that

Alibaba Disputes enables consumer-to-consumer and business-to-
Internal consumer transactions respectively) have adopted a
Online 4-way process to resolve a consumer dispute online.
Dispute Buyer can opt for any of these processes to attain
Settlement efficient dispute settlement.
Mechanism
The process adopted by Taobao platform is provided
below. Tmall has also adopted a similar process.
1. Negotiation between parties: The consumer can
choose to directly negotiate disputes with the seller.
2. Taobao Consumer Service Intervening: The
Consumer Service acts as a neutral third party
in the disputes. The parties share the evidence,
chat and transaction details with the consumer
service. The decision of the consumer service is
non-binding, but Taobao may take actions against
the seller and enforce the decision by private
implementation methods.
3. Public Review Service: Taobao has created a
public review system and Taobao Judgment
Centre. The public review team is constituted of
31 volunteers who decides on the disputes. Parties
should get at least 16 votes to win the dispute.
4. Report to Taobao: Taobao has established a Report
platform to allow parties to report irregularities
and violations on the platform. Such practice plays
a regulatory role to prevent unfair competition and
rights of the parties.
275

introducing
the platform
4. Europe: Consumer The ODR Platform follows a two-level dispute The

YOUSTICE134 disputes resolution mechanism: platform
has
The service i. Direct negotiations between traders and
partnered
has been consumers
with
expanded to
ii. Submission to resolve: In case of failure of step (i), Nubelo,
include travel,
parties approach an ADR Platform that assigns the an online
gambling,
case to a neutral third party. directory,
and car-rental
and offers
disputes.
services
to over
300,000
service
providers.
5. UAE: Dubai Primarily 1. To initiate the dispute resolution process, one of

Chamber of includes the parties must be a member of Dubai Chamber
Commerce disputes of Commerce and Industry
and around non-
2. Applicants can submit their mediation requests
Industry136 payment and
and relevant documents followed by payment
defects in
goods 3. They also have the option to track new and
previous applications electronically
4. The platform offers a smart mediation application,
through which users can submit applications,
upload documents and pay the prescribed fee.
It also enables the user to keep track of their
application.
6. United Consumer The platform offers free dispute resolution service Resolver
Kingdom: Disputes to the consumers. After filing the complaint on the provided
Resolver platform, the consumers can add evidence, reply to a their
communication, track the progress, and download all services
the documents on their devices. to about
1.8 million
The platform also helps consumers to escalate
consumers
complain with an ombudsman and regulator to achieve
between
efficient dispute resolution.
April 2018
and March
2019.
276

introducing
the platform
7. United Monetary The platform uses blind bidding to resolve monetary In 2014,
States: Claims disputes between the parties. The online blind bidding Cybersettle
Cybersettle service offered by the platform requires the disputants has
to submit the highest and lowest settlement figures facilitated
acceptable to them. Based on this information, the settlement
platform provides optimal resolution for both parties. of $1.9
billion
in claim-
based
transac-
tions.
8. United E-commerce, The platform developed by eBay follows five steps for In 2010, the
States: eBay consumer efficient dispute redressal: platform
disputes resolved
1. The parties are required to file the dispute at the
approxi-
Resolution Centre (RC).
mately 60
2. RC confirms whether million
– The dispute falls within eBay’s coverage for a cases a
money- back guarantee year.
– The buyer selected ‘pay now’

– Asserted the complaint within 30 days of
estimated or actual date of delivery.
3. RC gathers the proposed resolution and
encourages both parties to resolve the dispute via
the messaging facility on eBay.
4. RC re-evaluates in case of failure to resolve within
3 days of step (3).
5. Resolution Services team contacts the seller and
informs the buyer if they are eligible for a refund.
Refunds are enforced through chargebacks.
9. United E-commerce, Follows a two-tiered dispute resolution system.

States: consumer
i. Dispute: The buyer or the seller can institute the
PayPal disputes
dispute. The time period offered for resolution
of the dispute is 20 days. Until the dispute is
resolved, PayPal puts a hold on the transaction
funds.
277

introducing
the platform
ii. Claim: In case the dispute has not been resolved
within 20 days, either of the parties can escalate
the dispute to a claim. PayPal will then intervene,
investigate the case, and offer a solution. A
limited appeals process follows where the seller
is the only party allowed to appeal under three
circumstances: (1) item is returned to seller, but not
in the same condition as the buyer first received
it; (2) no item was returned at all; or (3) wrong item
was returned.
10. United Family Smartsettle provide asynchronous communication
States: disputes, facility to resolve disputes through negotiation. It
Smartsettle insurance involves three steps:
disputes,
1. Modelling the problem,
real estate
disputes, small 2. Identifying preferences and trade-offs, and
claims disputes 3. Providing optimal solution through algorithm.
and disputes
regarding
domain
names.
Source: https://www.niti.gov.in/sites/default/files/2021-11/odr-report-29-11-2021.pdf
1
SINGAPORE INTERNATIONAL ARBITRATION CENTRE (SIAC)
Since commencing operations in 1991 as an independent, not-for-profit organisation, SIAC has established a track
record for providing best in class arbitration services to the global business community. SIAC arbitration awards have
been enforced in many jurisdictions including Australia, China, Hong Kong SAR, India, Indonesia, Jordan, Thailand,
UK, USA and Vietnam, amongst other New York Convention signatories. SIAC is a global arbitral institution providing
cost-competitive and efficient case management services to parties from all over the world.
SIAC’s Board of Directors and its Court of Arbitration consists of eminent lawyers and professionals from all over
the world.
The Board is responsible for overseeing SIAC’s operations, business strategy and development, as well as
corporate governance matters.
The Court’s main functions include the appointment of arbitrators, as well as overall supervision of case
administration at SIAC. SIAC has an experienced international panel of over 500 expert arbitrators from over
40 jurisdictions. Appointments are made on the basis of our specialist knowledge of an arbitrator’s expertise,
experience, and track record. SIAC’s panel has over 100 experienced arbitrators in the areas of Energy,
Engineering, Procurement and Construction from more than 25 jurisdictions.
1. Source: https://siac.org.sg/about-us/why-siac
278
The SIAC Rules provide a state-of-the-art procedural framework for efficient, expert and enforceable resolution
of international disputes of all sizes and complexities involving parties from diverse legal systems and cultures.
SIAC’s full-time staff manage all the financial aspects of the arbitration, including:
l Regular rendering of accounts
l Collecting deposits towards the costs of arbitration
l Processing the Tribunal’s fees and expenses
SIAC supervises and monitors the progress of the case. SIAC’s scrutiny process enhances the enforceability of
awards.
SIAC’s administration fees are highly competitive.
SIAC, A Respected Neutral Arbitral Institution with a Record of Enforcement

It is established in 1991 as an independent, not-for-profit organisation. SIAC has a proven track record in providing
neutral arbitration services to the global business community. SIAC arbitration awards have been enforced
by the courts of Australia, China, Hong Kong SAR, India, Indonesia, Jordan, Thailand, UK, USA, and Vietnam,
amongst other New York Convention signatories.
An International Organisation with a Global Outlook
l SIAC is ranked 2nd among the world’s top 5 arbitral institutions, and is the most preferred arbitral
institution in the Asia-Pacific.
l SIAC’s case management services are supervised by the Court of Arbitration, which comprises
internationally renowned arbitration practitioners.
l SIAC’s Board of Directors consists of highly respected lawyers and professionals from all over the
world.
l The Board is responsible for overseeing SIAC’s operations, business strategy and development, as well
as corporate governance matters.
l SIAC has an experienced international panel of over 500 expert arbitrators from over 40 jurisdictions.
l SIAC’s panel has over 100 experienced arbitrators in the areas of Energy, Engineering, Procurement
and Construction from more than 25 jurisdictions.
l SIAC’s multinational Secretariat comprises experienced lawyers qualified in civil and common law
jurisdictions.
l Over 90% of new cases filed at SIAC are international in nature.
l The SIAC Rules are efficient, cost-effective and flexible, and incorporate features from civil and common
law legal systems.
l SIAC is registered as a Permanent Arbitral Institution under Russia’s Federal Law on Arbitration and is
authorised to administer international commercial arbitrations for Russia-seated arbitrations.
SIAC Facilitates the Efficient Resolution of Disputes

The SIAC Rules provide a state-of-the-art procedural framework for efficient, expert and enforceable resolution
of international disputes of all sizes and complexities involving parties from diverse legal systems and cultures.
SIAC appoint arbitrators where the parties are unable to agree under the SIAC Rules, UNCITRAL Rules and
ad hoc cases. Appointments are made on the basis of our specialist knowledge of the arbitrator’s expertise,
attributes and track record. Click here to view our panel of arbitrators.
279
There are strict standards of admission for the SIAC Panel of Arbitrators, thus minimising the risk of challenges
and delay.
Our full time staff manage all the financial aspects of the arbitration, including:
Our transparent financial management of the case according to published guidelines allows legal representatives
to provide their clients with accurate cost projections, timelines and costs for each stage of the arbitration
process.
We supervise and monitor the progress of the case. We conduct scrutiny of the arbitral award, thus enforcement
problems are less likely.
SIAC‘s administration fees are competitive in comparison with all the major international arbitral institutions.
Click here to estimate your fees.
Arbitral Services Offered by SIAC
• SIAC Rules
• SIAC Investment Arbitraon Rules
• SIAC-SIMC Arbitraon-Mediaon-Arbitraon
Protocol
• UNCITRAL Arbitraon Rules
• Conversion of ad hoc arbitraons to
SIAC-administered arbitraons
• Other arbitral rules (on a case by case basis
and with pares’ agreement) Administraon
of Arbitraon
Authencaon/
Cerficaon of
awards and other
documents
SIAC’s
arbitral
services
Appointment of
arbitrators &
experts
Fund
holding • SIAC-adminstered cases
services • Ad hoc arbitraons seated in Singapore
• Arbitraons conducted under UNCITRAL
Arbitraon Rules
• Other ad hoc cases
• Appoint experts to resolve technical disputes
outside of arbitraon
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SIAC Model Clause

In drawing up international contracts, we recommend that parties include the following arbitration clause:
“Any dispute arising out of or in connection with this contract, including any question regarding its existence,
validity or termination, shall be referred to and finally resolved by arbitration administered by the Singapore
International Arbitration Centre (“SIAC”) in accordance with the Arbitration Rules of the Singapore
International Arbitration Centre (“SIAC Rules”) for the time being in force, which rules are deemed to be
incorporated by reference in this clause.”
The seat of the arbitration shall be [Singapore].*
The Tribunal shall consist of _________________** arbitrator(s).
The language of the arbitration shall be ________________.
[In respect of any court proceedings in Singapore commenced under the International Arbitration Act 1994
in relation to the arbitration, the parties agree (a) to commence such proceedings before the Singapore
International Commercial Court (“the SICC”); and (b) in any event, that such proceedings shall be heard and
adjudicated by the SICC.]***
* Parties should specify the seat of arbitration of their choice. If the parties wish to select an alternative seat to
Singapore, please replace “[Singapore]” with the city and country of choice (e.g., “[City, Country]”).
** State an odd number. Either state one, or state three.
*** The inclusion of this sentence is recommended if the arbitration commenced to resolve the dispute will be/is
an international commercial arbitration, and Singapore is chosen as the seat of arbitration.
**** State the country or jurisdiction.
2
INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES (ICSID) ARBITRATIONS
ICSID is the world’s leading institution devoted to international investment dispute settlement. It has extensive
experience in this field, having administered the majority of all international investment cases. States have
agreed on ICSID as a forum for investor-State dispute settlement in most international investment treaties and
in numerous investment laws and contracts.
ICSID was established in 1966 by the Convention on the Settlement of Investment Disputes between States and
Nationals of Other States (the ICSID Convention). The ICSID Convention is a multilateral treaty formulated by
the Executive Directors of the World Bank to further the Bank’s objective of promoting international investment.
ICSID is an independent, depoliticized and effective dispute-settlement institution. Its availability to investors
and States helps to promote international investment by providing confidence in the dispute resolution process.
It is also available for state-state disputes under investment treaties and free trade agreements, and as an
administrative registry.
ICSID provides for settlement of disputes by conciliation, mediation, arbitration or fact-finding. The ICSID
process is designed to take account of the special characteristics of international investment disputes and
the parties involved, maintaining a careful balance between the interests of investors and host States. Each
case is considered by an independent Conciliation Commission or Arbitral Tribunal, after hearing evidence
and legal arguments from the parties. A dedicated ICSID case team is assigned to each case and provides
expert assistance throughout the process. More than 900 such cases have been administered by ICSID to
date.
ICSID also promotes greater awareness of international law on foreign investment and the ICSID process.
It has an extensive program of publications, including the leading ICSID Review-Foreign Investment Law
Journal and it regularly publishes information about its activities and cases. ICSID staff organize events,
2. : https://icsid.worldbank.org/
281
give numerous presentations and participate in conferences on international investment dispute settlement
worldwide.
Member States
There are significant advantages to becoming a member of ICSID. Member States and their nationals obtain
access to investment dispute settlement under the ICSID Convention and the Additional Facility, as well as
to the facilities and expert services of the Secretariat. As Members, States participate in ICSID through their
representation on the Administrative Council. They may also nominate persons for the ICSID Panels of Arbitrators
and of Conciliators and make designations and notifications for the purposes of the ICSID Convention.
ICSID maintains a comprehensive database of ICSID Member States, which includes the designations and
notifications made by each of them under the ICSID Convention, and their nominations to the ICSID Panels of
Arbitrators and of Conciliators.
The ICSID institutional affairs team supports Member States in all matters relating to membership and the
general procedure. ICSID frequently gives presentations on the ICSID process and tours of its facilities to State
delegations.
ICSID Secretariat

The ICSID Secretariat carries out the daily operations of ICSID. Its composition and principal functions are
set out in the ICSID Convention (Articles 9 to 11 of ICSID Convention and the Administrative and Financial
Regulations).
Composition of the Secretariat

The Secretariat consists of approximately 70 staff of diverse backgrounds and nationalities. It is led by the
Secretary-General, who is the legal representative of ICSID, the registrar of ICSID proceedings, and the principal
officer of the Centre.
English, French and Spanish are the official languages of ICSID. The case management teams are chiefly
organized by these languages, but the Secretariat has capacity to communicate in over 25 languages. Each
case management team has experienced legal counsel acting as Secretaries to Tribunals, Commissions and ad
hoc Committees under the ICSID Convention, ICSID Additional Facility and UNCITRAL Arbitration Rules. They
are assisted by paralegals and legal assistants.
The general administration and financial management team oversees all financial aspects of case management
and the ICSID budget. It also handles ICSID’s archives, human resources and information technology.
Support in Dispute Settlement

ICSID Cases
The Secretariat’s main role is to provide support in investor-State dispute settlement. It is involved in all aspects
of the process, including:
 acting as registrar in proceedings (for example, receiving, reviewing and registering requests for
arbitration and conciliation and authenticating awards);
 assisting in the constitution of Conciliation Commissions, Arbitral Tribunals and ad hoc Committees;
 assisting parties and Commissions, Tribunals and Committees with all aspects of case procedure;
 organizing and assisting at hearings;
282
 administering the finances of each case; and

 providing other administrative support as requested by Commissions, Tribunals and Committees.
Non-ICSID Cases
The Secretariat also supports dispute settlement in State-State or investor-State proceedings under rules other
than the ICSID Rules. This includes cases under the UNCITRAL Arbitration Rules and other ad hoc dispute
settlement provisions. The Secretariat’s services in these proceedings range from support with the organization
of hearings to full administrative services comparable to those provided in ICSID cases. Parties are free to elect
the extent of the services desired in these cases.
ICSID also assists regularly with the organization of hearings in arbitration proceedings conducted under the
auspices of the ICC, LCIA, PCA, and other institutions.
Appointing Authority/Deciding Challenges

The Secretary-General acts as appointing authority in proceedings not conducted under the ICSID Convention
or the Additional Facility Rules, and decides proposals for disqualification of arbitrators, upon request.
Panels of Arbitrators and of Conciliators

The ICSID Convention entitles each Member State to designate up to four persons to the Panel of Arbitrators
and up to four persons to the Panel of Conciliators (Article 12 to 16 of the ICSID Convention). In addition, the
Chairman of the Administrative Council of ICSID may designate up to ten persons to each Panel.
The designees of a Member State may be of any nationality. They serve for a renewable term of six years and
may serve on both Panels simultaneously.
The arbitrators and conciliators listed on the Panels are available for selection to ICSID Tribunals, Conciliation
Commissions and ad hoc Committees. The Panel lists are used most often to appoint where the parties are
unable to agree on a nominee. The Panel of Arbitrators is also used for appointment to ad hoc Committees.
Young ICSID
ICSID launched Young ICSID in November 2012. The purpose of Young ICSID is to encourage professional
development for young lawyers, and to provide a forum for them to discuss ideas and meet other professionals.
Members under age 45 are welcome to enroll by completing a form. There is no registration fee to enrol.
Membership benefits include information on upcoming events, training and conferences.
Services
ICSID offers services for the resolution of international disputes, primarily between investors and States, but
also in State-to-State disputes. In addition, it offers fact-finding proceedings to examine and report on facts
before a dispute arises.
CURRENT ISSUES IN INTERNATIONAL COMMERCIAL ARBITRATION (E.G. CONFIDENTIALITY

AND CONSOLIDATION)
There are various issues in International Arbitration since it involves the privately appointed arbitrator. The entire
decision to settle the dispute is hold in the hands of a private arbitrator which may not hold good sometimes.
The parties to the arbitration may seek the court’s advice.
283
On the other hand, the privately appointed arbitrator may play a bias role in favour of party of his choice while
resolving the dispute. He may forget his ethical principles and guidelines for delivering his judgment as there is
no uniform code which he needs to follow. In turn, it may result in questioning of his judgment.
The international arbitration process is too far from the domestic court and its supervision. The full procedure
may take a lot of time due to the nature of dispute involved in the transaction. The dispute is normally of such
a nature which makes the arbitration work so time taking and costly.
The redrafting of rules by major international arbitral bodies like ICC, ICSID, SCIA etc. makes the international
arbitration procedure more complex and they impose their rules and no uniformity is there.
There may be some cultural differences between the parties to the dispute due to different geopolitical
backgrounds which may affect the international arbitration proceedings.
CONFIDENTIALITY
Mostly, Confidentiality is mentioned one of the advantages of international commercial arbitration (ICA). This is
an essential component of the ICA as it signifies the duty to the parties to not to disclose the information which
affects the proceedings.
Global Case Laws

In Esso and others v. Plowman (1995), High Court of Australia held that confidentiality was not an essential
attribute of arbitration.
In U.S. v. Panhandle et al. (1988), US Court held that there was no general principle of confidentiality.
In Bulbank v. A.I. Trade Finance (2000), The Supreme Court of Sweden held that an implied duty of confidentiality
in ICA.
Confidentiality is not a part of most of the countries’ ICA because they follow UNCITRAL Model Law in which
there is no provision on confidentiality. And many arbitral institutions follow the provisions of confidentiality but
they impose more duties and code of ethics on the Arbitrators rather than parties to the contract.
International Chamber of Commerce Rules, 2021

Further, Article 6 of Appendix I, and Article 1 of Appendix II of International Chamber of Commerce Rules,
2021, impose duties on arbitrators and the staff of the International Court of Arbitration only but not on the
parties, although Article 22.3 authorizes the Arbitral Tribunal to make orders concerning confidentiality upon
the request of any party.
Source: https://iccwbo.org/dispute-resolution-services/arbitration/rules-of-arbitration/#article_b1
International Centre for Dispute Resolution(ICDR) Rules, 2014

Similarly, Article 37.1 of the International Centre for Dispute Resolution(ICDR) Rules, 2014 of the American
Arbitration Association(AAA) imposes duties of confidentiality on arbitrators and Administrator only not on
parties and Article 37.2 provides that the tribunal may make orders concerning confidentiality.
Source: https://www.adr.org/sites/default/files/ICDR%20Rules_0.pdf
LCIA Arbitration Rules (2014)

Furthermore, on the contrary, the Article 30 of LCIA Arbitration Rules (2014) provides some obligation on the
284
parties and Arbitral Tribunal and its members and says that the parties undertake as a general principle to keep
confidential all awards in the arbitration, together with all materials in the arbitration created for the purpose of
the arbitration and all other documents produced by another party in the proceeding. Further, the deliberations
of the Arbitral Tribunal shall remain confidential to its members.
Source: https://www.lcia.org/dispute_resolution_services/lcia-arbitration-rules-2014.aspx#Article%2030
CONSOLIDATION
The second major issue in ICA is consolidation of all laws applicable to a specific dispute applicable to parties
belonging from different geopolitical background. The Arbitrator may have to consolidate such laws and may
face hurdle in applying them.
CONCLUSION
Although majority of the International Arbitral Institutions provide the duties w.r.t. the confidentiality for
Arbitrators and Administrator but not on parties to the ICA. That is the reason why parties insist on insertion
of a provision related to confidentiality in an Arbitration agreement. It is always advisable to have a proper
clause of confidentiality in Arbitration Agreement to provide clear understanding and way to resolve the
dispute and have less or no doubt on each other w.r.t. to the leakage of material information related to the
dispute.
3
LONDON COURT OF INTERNATIONAL ARBITRATION (LCIA)
Introduction
The LCIA is one of the world’s leading international institutions for commercial dispute resolution. The LCIA
provides efficient, flexible and impartial administration of arbitration and other ADR proceedings, regardless of
location, and under any system of law. The international nature of the LCIA’s services is reflected in the fact that,
typically, over 80% of parties in pending LCIA cases are not of English nationality.
The LCIA has access to the most eminent and experienced arbitrators, mediators and experts from many
jurisdictions, and with the widest range of expertise. The LCIA’s dispute resolution services are available to all
contracting parties, without any membership requirements.
In order to ensure cost-effective services, the LCIA’s administrative charges, and the fees charged by the tribunals
it appoints, are not based on sums in issue. A registration fee is payable with the Request for Arbitration and,
thereafter, hourly rates are applied by the arbitrators and by the LCIA.
The LCIA has the word “court” in its name because historically the LCIA wanted to let people know that it could
help them to resolve disputes, just like a traditional court.
The LCIA is not really a court in the way most people think of a court – it is not tied to any country’s legal system
or government, and the arbitrators the LCIA appoints to decide disputes are not associated with the LCIA like a
judge is associated with a court. Arbitrators are independent of the LCIA, appointed on a case-by-case basis,
and paid by the parties rather than the LCIA.
The LCIA does, however, have a body it calls the “LCIA Court”, made up of a distinguished group of arbitration
lawyers. The LCIA Court is the part of the LCIA that officially carries out various functions under the LCIA
Arbitration Rules (including appointing arbitrators) and also ensures that those rules are kept up to date.
3. Sourced: https://lcia.org/
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Establishment of LCIA
The London Court of International Arbitration (the “LCIA”) was established in 1892 to help people who wanted
to use arbitration to resolve their commercial disputes.
The LCIA’s role in an arbitration is to provide administrative support. When the LCIA “administers” a case, it will:
a. appoint arbitrators to decide the dispute;
b. monitor the progress of an arbitration. This involves things like reminding arbitrators if the parties have
missed a deadline for submitting documents;
c. manage payments to arbitrators. Parties pay arbitrators for their help in resolving a dispute – the LCIA
obtains the money from the parties and then organises these payments; and
d. help with any practical matters, like arranging for a venue for a hearing.
The LCIA can also help parties to use mediation similarly to how it helps parties with arbitration.
History
On 5 April 1883, the Court of Common Council of the City of London set up a committee to draw up proposals
for the establishment of a tribunal for the arbitration of domestic and, in particular, of trans-national commercial
disputes arising within the ambit of the City.
As The Law Quarterly Review (“LQR”) was to report at the inauguration of the tribunal a few years later:
“This Chamber is to have all the virtues which the law lacks. It is to be expeditious where the law is slow, cheap
where the law is costly, simple where the law is technical, a peacemaker instead of a stirrer-up of strife.”*
Commercial interests were also seeking the adjudication of their disputes by their own; by a tribunal precisely
familiar with the area of business in which the dispute had arisen, though this was not, of itself, a new idea. As
the same LQR report commented:
“We have the germ of it …. in the old Court of Pied Poudre, in the aldermen arbitrators of the fifteenth century, in
the committees of the Stock Exchange, Corn Exchange, Coal Exchange.”
In 1884, the committee submitted its plan for a tribunal that would be administered by the City Corporation, with
the co-operation of the London Chamber of Commerce. However, though the plan had arisen out of an identified
and urgent need, it was to be put on ice pending the passing of the Arbitration Act of 1889.
In April 1891, the scheme was finally adopted and the new tribunal was named “The City of London Chamber of
Arbitration”. It was to sit at the Guildhall in the City, under the administrative charge of an arbitration committee
made up of members of the London Chamber and of the City Corporation.
The Chamber was formally inaugurated on 23 November 1892, in the presence of a large and distinguished
gathering, which included the then President of the Board of Trade. Considerable interest was also shown both
by the press and in legal commercial circles.
In April 1903, the tribunal was re-named the “London Court of Arbitration” and, two years later, the Court moved
from the Guildhall to the nearby premises of the London Chamber of Commerce. The Court’s administrative
structure remained largely unchanged for the next seventy years.
In 1975, the Institute of Arbitrators (later the Chartered Institute) joined the other two administering bodies and
the earlier arbitration committee became the “Joint Management Committee”, reduced in size from the original
twenty four members to eighteen, six representatives from each of the three organisations. The Director of the
Institute of Arbitrators became the Registrar of the London Court of Arbitration.
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In 1981, the name of the Court was changed to “The London Court of International Arbitration”, to reflect the
nature of its work, which was, by that time, predominantly international. New and innovative rules were also
adopted that year.
In 1985, not far short of its centenary, new and innovative rules were promulgated and the LCIA Arbitration Court
was established, marking the coming of age of the LCIA as an international institution.
In 1986, the LCIA became a private not-for-profit company, limited by guarantee, and fully independent of the
three founding bodies. It then set about consolidating its position in the international arena, under the guidance of
Sir Michael Kerr, the first President of the LCIA Court, and Bertie Vigrass, the first Registrar of the independent LCIA.
Sir Michael Kerr’s illustrious successors in the role of President of the LCIA Court have, to date, been Professor
Dr Karl-Heinz Böckstiegel (1994 - 1998), The Honourable L Yves Fortier CC OQ QC (1998 - 2001), Professor Dr
Gerold Herrmann (2001 - 2004), Jan Paulsson (2004 - 2010), Professor William W Park (2010 - 2016), Judith Gill
QC (2016 - 2019), Paula Hodges QC (2019 - Present).
Organisation
The LCIA operates under a three-tier structure, comprising the Company, the Arbitration Court and the Secretariat.
The Director General of the LCIA fulfils the role of chief executive officer, with day-to-day responsibility of the
conduct of the business of the LCIA, and is the principal point of contact between the institution and its Board
and Court.
The Company
The LCIA is a not-for-profit company limited by guarantee. The LCIA Board, made up largely of prominent
London-based arbitration practitioners, is principally concerned with the operation and development of the
LCIA’s business and with its compliance with applicable company law.
The Board does not have an active role in case administration, though it does maintain a close interest in the
LCIA’s administrative function, particularly through the Arbitration Court, whose members it appoints.
The Arbitration Court

The LCIA Court is made up of up to thirty five members, plus representatives of associated institutions,
and former Presidents, selected to provide and maintain a balance of leading practitioners in commercial
arbitration, from the major trading areas of the world and of whom no more than six may be of UK nationality.
In addition, former presidents are invited to become Honorary Vice Presidents, for so long as they may wish
to remain in that role, and overseas bodies associated with the LCIA may be invited to nominate special
delegates to the Court.
The LCIA Court is the final authority for the proper application of the LCIA rules. Its principal functions are
appointing tribunals, determining challenges to arbitrators, and controlling costs. Although the Court meets
regularly in plenary session, most of its functions under the LCIA Rules and Constitution are performed, on its
behalf, by the President, or a Vice President, or an Honorary Vice President, or a former Vice President, or by a
3 or 5-member Division of the LCIA Court.
The Secretariat
Headed by the Registrar, the casework Secretariat is based at the International Dispute Resolution Centre
in London and is responsible for the day-to-day administration of all disputes referred to the LCIA. LCIA case
administration is highly flexible. All cases are allocated dedicated soft and hard copy files and account ledgers.
Every case is monitored, but the level of administrative support adapts to the needs and wishes of the parties
and the tribunal, and to the circumstances of each case.
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The LCIA’s administrative services are not confined to the conduct of arbitration and of a wide range of other
ADR procedures under its own rules. It also acts as administrator in UNCITRAL-rules cases, and not merely as
appointing authority, and provides a fundholding facility in otherwise ad hoc proceedings.
LCIA Arbitration Rules

The LCIA arbitration rules are universally applicable, being suitable for all types of arbitrable disputes. They
offer a combination of the best features of the civil and common law systems, including in particular:
l Maximum flexibility for parties and tribunals to agree on procedural matters
l Speed and efficiency in the appointment of arbitrators, including expedited procedures
l Means of reducing delays and counteracting delaying tactics
l Emergency arbitrator provisions
l Tribunals’ power to decide on their own jurisdiction
l A range of interim and conservatory measures
l Tribunals’ power to order security for claims and for costs
l Special powers for joinder of third parties and consolidation
l Waiver of right of appeal
l Costs computed without regard to the amounts in dispute
l Staged deposits - parties are not required to pay for the whole arbitration in advance.
The LCIA Arbitration Rules are the rules which govern most arbitrations administered by the LCIA. They cover
many different practical aspects of an arbitration, like how arbitrators are appointed, and the extent to which an
arbitration must be kept confidential.
How Arbitrators Chosen

How arbitrators are chosen in a given arbitration depends on what the parties have agreed. There are three
common ways in which arbitrators in LCIA arbitrations are chosen:
a. By the LCIA: If the parties haven’t agreed anything different, the LCIA will choose an appropriate
arbitrator to decide the dispute. Parties can also ask the LCIA to choose three arbitrators, who will work
together to decide a dispute.
b. By the parties: The parties can agree to work together to choose a sole arbitrator or they can agree
to each choose one arbitrator, with a third arbitrator to be chosen either by the LCIA or by the two
arbitrators that the parties chose.
c. By the arbitrators: Where the parties have agreed to choose one arbitrator each, the parties may
agree that these two arbitrators should decide on a third arbitrator to act as chair.
Recommended Clauses
Future disputes For contracting parties who wish to have future disputes referred to arbitration under the LCIA
Rules, the following clause is recommended. Words/spaces in square brackets should be deleted/completed
as appropriate.
“Any dispute arising out of or in connection with this contract, including any question regarding its
existence, validity or termination, shall be referred to and finally resolved by arbitration under the LCIA
Rules, which Rules are deemed to be incorporated by reference into this clause.”
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The number of arbitrators shall be [one/three].

The seat, or legal place, of arbitration shall be [City and/or Country].
The language to be used in the arbitral proceedings shall be [ ].
The governing law of the contract shall be the substantive law of [ ].”
Existing disputes
If a dispute has arisen, but there is no agreement between the parties to arbitrate, or if the parties wish to vary
a dispute resolution clause to provide for LCIA arbitration, the following clause is recommended. Words/spaces
in square brackets should be deleted/completed as appropriate. “A dispute having arisen between the parties
concerning [ ], the parties hereby agree that the dispute shall be referred to and finally resolved by arbitration
under the LCIA Rules.
The number of arbitrators shall be [one/three].
The seat, or legal place, of arbitration shall be [City and/or Country].
The language to be used in the arbitral proceedings shall be [ ].
The governing law of the contract [is/shall be] the substantive law of [ ]. “
Modifications to Recommended Clauses

The LCIA Secretariat will be pleased to discuss any modifications to these standard clauses. For example, to
provide for party nomination of arbitrators or for expedited procedures.
Mediation and other forms of ADR

Recommended clauses and procedures for Mediation, for Expert Determination, for Adjudication, and for other
forms of ADR, to be administered by the LCIA, or in which the LCIA is to act as appointing authority, are available
on request from the LCIA Secretariat.
Mediation
Mediation is a negotiated settlement, conducted and concluded with the assistance of a neutral third-party. The
process is voluntary and does not lead to a binding decision, enforceable in its own right.
Most commercial disputes, in which it is not imperative that there should be a binding and enforceable decision,
are amenable to mediation. Mediation may be particularly suitable where the parties in dispute hope to
preserve, or to renew, their commercial relationships.
As mediation is likely to be a shorter process than either litigation or arbitration, there may also be economic
arguments for attempting a mediated settlement.
The LCIA mediation rules may be used both by parties who are already committed to mediate, by virtue of
contractual dispute resolution provisions, and by parties who have not provided for mediation, but who wish to
mediate their dispute, either in an attempt to avoid, or during the course of, litigation or arbitration.
The LCIA has access to a large number of experienced and highly-qualified mediators from many
jurisdictions.
As with the arbitrations it administers, the LCIA aims to make its mediations cost-effective. To this end, mediation
costs are also based on the hourly rates of the mediators and of the LCIA’s administrative staff, without reference
to the sums in issue.
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LESSON ROUND-UP
l It is an arbitration relating to disputes where at least one of the parties is:

(iii) an association or a body of individuals whose central management and control is exercised in
any country other than India; or
l Part IA as inserted in the Amendment Act, 2019 deals with Arbitration Council of India. Section 43A
of Act contains definitions of terms used in Part IA such as Chairperson, Council and Member.
l A contract becomes international when two or more parties residing different countries sign it and it
becomes fully enforceable by law, in such case, when dispute arise, instead of going to respective
court, the parties prefer speedy disposal of their case.
l In the case of international commercial arbitration, the High Court in exercise of its ordinary original
civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the
arbitration if the same had been the subject-matter of a suit, and in other cases, a High Court having
jurisdiction to hear appeals from decrees of courts subordinate to that High Court.
l It is hereby agreed by and between the parties that if any controversy, dispute or difference shall
arise concerning construction, meaning, violation, termination, validity or nullity including without
limitation the scope of any Clause or effect of this Agreement or any part thereof, or of the respective
rights or liabilities herein contained, the parties shall refer such controversy, dispute or difference to
be resolved by arbitration in accordance with the Rules of _____________ (Name of the Institution)
and Arbitration and Conciliation Act, 1996 or any statutory modifications on re-enactment thereof as
in force. The award made in pursuance thereof shall be binding on the parties. The language to be
used in the arbitration shall be English. In any arbitration commenced pursuant to this clause, the
sole arbitrator shall be appointed by the mutual consent of the parties as per the provisions of the
Arbitration and Conciliation Act, 1996. The seat, or legal place, of arbitration shall be ____________.
The cost of the Arbitration proceedings shall be shared equally by both the parties.
l Online Dispute Resolution (ODR) is the use of internet technology to resolve the disputes between
the parties outside of the public court system. In its most basic sense, ODR is the use of technology to
‘resolve’ disputes. It is not just any form of technology integration (such as electronically scheduling
a session), but its active use to help resolve the dispute (such as video conferencing for hearings or
electronic document sharing for filing). Though derived from ADR, ODR’s benefit extends beyond
just e-ADR or ADR that is enabled through technology. ODR can use technology tools that are
powered by AI/ML in the form of automated dispute resolution, script-based solution and curated
platforms that cater to specific categories of disputes.
l Since commencing operations in 1991 as an independent, not-for-profit organisation, SIAC has
established a track record for providing best in class arbitration services to the global business
community.
l ICSID is the world’s leading institution devoted to international investment dispute settlement. It has
extensive experience in this field, having administered the majority of all international investment
cases. States have agreed on ICSID as a forum for investor-State dispute settlement in most
international investment treaties and in numerous investment laws and contracts.
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l There are various issues in International Arbitration since it involves the privately appointed
arbitrator. The entire decision to settle the dispute is hold in the hands of a private arbitrator which
may not hold good sometimes. The parties to the arbitration may seek the court’s advice.
l The LCIA is one of the world’s leading international institutions for commercial dispute resolution.
The LCIA provides efficient, flexible and impartial administration of arbitration and other ADR
proceedings, regardless of location, and under any system of law. The international nature of the
LCIA’s services is reflected in the fact that, typically, over 80% of parties in pending LCIA cases are
not of English nationality.
GLOSSARY
International Commercial Arbitration: 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.
International Arbitration: It is an arbitration relating to disputes where at least one of the parties is Foreign
individual or a body corporate which is incorporated in Foreign country or an association or a body of
individuals whose central management and control is exercised in foreign country or the Government of a
foreign country.
Private International Law: Where private parties to the contract got dispute and belong to different
jurisdiction or different countries having different law, then the private international law comes into picture.
This is also called Conflict of laws.
Indian Council of Arbitration(ICA): Section 43B empowers the Central Government to establish the Arbitration
Council of India to perform the duties and discharge the functions under the Arbitration Conciliation Act, 1996.
Online Dispute Resolution (ODR): ODR is the use of internet technology to resolve the disputes between the
parties outside of the public court system. In its most basic sense, ODR is the use of technology to ‘resolve’
disputes.
Singapore International Arbitration Centre (SIAC): It is an independent, not-for-profit organisation and has
established a track record for providing best in class arbitration services to the global business community.
International Centre for Settlement of Investment Disputes (ICSID) Arbitrations: It is the world’s leading
institution devoted to international investment dispute settlement. It has extensive experience in this field,
having administered the majority of all international investment cases.
London Court of International Arbitration (LCIA): It is one of the world’s leading international institutions for
commercial dispute resolution. The LCIA provides efficient, flexible and impartial administration of arbitration
and other ADR proceedings, regardless of location, and under any system of law.
TEST YOURSELF
A. Descriptive Questions
1. What is the distinction between Domestic Arbitration and International Arbitration?
2. What do you understand by an International arbitration agreement?
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3. Explain the Role of Private International Law in International Commercial Arbitration.

4. International Centre for Settlement of Investment Disputes (ICSID) Arbitrations is the world’s leading
institution devoted to international investment dispute settlement. Elaborate.
5. Explain confidentiality clause in International Chamber of Commerce Rules, 2021.
6. Explain confidentiality clause International Centre for Dispute Resolution(ICDR) Rules, 2014.
7. ODR is the use of offline table to resolve the disputes between the parties in public court system
A. True
B. False
8. The submission agreements are entered to submit only a specific dispute to the Arbitration. For entering
into such agreements, the pre-existence of dispute is mandatory. This may be entered even if such
dispute is already litigated in the court of law.
A. True
B. False
9. SIAC is
(A) SWITZERLAND INTERNATIONAL ARBITRATION CENTRE
(B) SWEDEN INTERNATIONAL ARBITRATION CENTRE
(C) SINGAPORE INTERNATIONAL ARBITRATION CENTRE
(D) None of the Above.
LIST OF FURTHER READINGS & OTHER REFERENCES (Including Websites / Video Links)
l https://siac.org.sg/
l https://www.lcia.org/
l https://www.icaindia.co.in/
l https://guides.ll.georgetown.edu/internationalcommercialarbitration#:~:text=International%20
commercial%20arbitration%20is%20an,avoid%20litigation%20in%20national%20courts
l https://blog.ipleaders.in/international-commercial-arbitration-2/
l https://www.internationalarbitration.in/areas/forums.html
l https://iccwbo.org/dispute-resolution-services/arbitration/arbitration-clause/
l https://ica.center/eng/ica-arbitration/arbitration-clauses/
l https://www.niti.gov.in/sites/default/files/2021-11/odr-report-29-11-2021.pdf
l https://siac.org.sg/about-us/why-siac
l https://icsid.worldbank.org/
l https://www.mondaq.com/india/arbitration--dispute-resolution/878030/india-losing-its-domestic-
arbitration-the-need-for-legislative-amendment
l https://www.drishtiias.com/summary-of-important-reports/the-future-of-dispute-resolution
292
Lesson
International Law of Arbitration
10
KEY CONCEPTS
n International Commercial Arbitration n UNCITRAL Arbitration Act n CIArb-UK Model Rules n Model Laws on
International Commercial Arbitration n APCAM Rules and Accreditation System n International Arbitration,
(IBA) Rules on conflict of Interest n ICC Rules on International Commercial Arbitration n New York Convention
n Geneva Convention
Learning Objectives
To understand:  The International Bar Association (IBA) Rules
 Law and practice of International Commercial on conflict of Interest
Arbitration  International Chamber of Commerce (ICC)
 UNCITRAL Arbitration Act and Rules Rules on International Commercial Arbitration
 CIArb- UK Model rules on International  New York Convention
Arbitration  UN Convention on Recognition and
 Model Laws on International Commercial Enforcement of Foreign Arbitral Awards
Arbitration  Case Study on International Commercial
 Asia Pacific Centre for Arbitration & mediation Arbitration
(APCAM) Rules and accreditation system and
International Arbitration
Lesson Outline
 Introduction Commercial Arbitration (1985), with
amendments as adopted in 2006
 Definition of International Commercial
Arbitration  UNCITRAL rules on transparency in treaty-
based investor-state arbitration (effective
 Law and Practice of International Commercial date: 1 April 2014)
Arbitration
 Chartered Institute of Arbitrators (Ciarb)- UK
 UNCITRAL Arbitration Act and Rules Model Rules on International arbitration
 UN Conventions  Asia Pacific Centre for Arbitration & Mediation
(APCAM) Rules
 Foreign Arbitral Awards (New York Convention
Awards)  The International Bar Association (IBA) rules
on Conflict of interest
 Foreign Arbitral Awards (Geneva Convention
 International Chamber of Commerce (ICC)
Awards)
Rules on International Commercial Arbitration
 Un Convention on the recognition and  New York Convention
enforcement of foreign arbitral Awards (New
 Geneva Convention
York, 1958) (the “New York Convention”)
 Case study on International Commercial
 UNCITRAL Model Law on International Arbitration
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PP-AM&C International Law of Arbitration
l CIArb- UK Model rules on International Arbitration
l Asia Pacific Centre for Arbitration & mediation (APCAM) Rules
l The International Bar Association (IBA) Rules
INTRODUCTION
The Indian law for Arbitration is “The Arbitration and Conciliation Act, 1996” which aims at streamlining the
process of arbitration and facilitating conciliation in business matters. The Act recognises the autonomy of
parties in the conduct of arbitral proceedings by the arbitral tribunal and abolishes the scope of judicial review
of the award and minimizes the supervisory role of Courts. The autonomy of the arbitral tribunal has further
been strengthened by empowering them to decide on jurisdiction and to consider objections regarding the
existence or validity of the arbitration agreement.
Similarly, the need for international arbitration does arise when the parties to the business contract belong
to different countries. The Arbitration is needed for all such disputes which arise between the international
parties. The International law of Arbitration involves both civil and common law procedure which help parties to
reconstruct their procedure of arbitration so that their dispute to the contract can be resolved.
DEFINITION OF INTERNATIONAL COMMERCIAL ARBITRATION
Definition
Section 2(1)(f) of the Indian Arbitration Act defines the term International Commercial Arbitration which provides
an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as
commercial under the law in force in India and where at least one of the parties is—
The procedure to apply for international commercial arbitration is the same as domestic arbitration.
LAW AND PRACTICE OF INTERNATIONAL COMMERCIAL ARBITRATION

The International Commercial Arbitration is gaining importance significantly with the days passed because of its
role and functions. This is becoming the primary method of resolving the international commercial disputes with
the increasing number of international commercial business transactions. The drafting of Arbitration Agreement
has a key role in this. The Arbitrators need to be chosen meticulously for the satisfaction of all the parties to
the international business contract. The process which is adapted by the arbitrator should be very transparent
and based on the laws and practices which is followed mostly by other arbitrators. The national courts also got
involved in whole arbitral process. We will study the following international model rules and laws in order to
understand the procedural law and practices:
l UNCITRAL Arbitration Act and Rules
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International Law of Arbitration LESSON 10

l Model Laws on International Commercial Arbitration
l Asia Pacific Centre for Arbitration & mediation (APCAM) Rules and accreditation system and International
Arbitration
l The International Bar Association (IBA) Rules on conflict of Interest
l International Chamber of Commerce (ICC) Rules on International Commercial Arbitration
l New York Convention
1
UNCITRAL ARBITRATION ACT AND RULES
The United Nations Commission On International Trade Law (UNCITRAL) Arbitration Rules provide a comprehensive
set of procedural rules upon which parties may agree for the conduct of arbitral proceedings arising out of their
commercial relationship and are widely used in ad hoc arbitrations as well as administered arbitrations.
Scope of Rules
The Rules cover all aspects of the:
l arbitral process,
l providing a model arbitration clause,
l setting out procedural rules regarding the appointment of arbitrators, and
l the conduct of arbitral proceedings, and establishing rules in relation to the form, effect and interpretation
of the award.
Versions
At present, there exist three different versions of the Arbitration Rules:
(i) the 1976 version;
(ii) the 2010 revised version; and
(iii) the 2013 version which incorporates the UNCITRAL Rules on Transparency for Treaty-based Investor-
State Arbitration; and
(iv) the 2021 version which incorporates the UNCITRAL Expedited Arbitration Rules.
Adoption and Coverage

The UNCITRAL Arbitration Rules were initially adopted in 1976 and have been used for the settlement of a
broad range of disputes, including disputes between private commercial parties where no arbitral institution
is involved, investor-State disputes, State-to-State disputes and commercial disputes administered by arbitral
institutions.
Revision in Rules
In 2006, the Commission decided that the UNCITRAL Arbitration Rules should be revised in order to meet
changes in arbitral practice over the last thirty years. The revision aimed at enhancing the efficiency of arbitration
under the Rules without altering the original structure of the text, its spirit or drafting style.
1. Source: https://uncitral.un.org/en/texts/arbitration
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The UNCITRAL Arbitration Rules (as revised in 2010) have been effective since 15 August 2010. They include
provisions dealing with, amongst others, multiple-party arbitration and joinder, liability, and a procedure to
object to experts appointed by the arbitral tribunal. A number of innovative features contained in the Rules
aim to enhance procedural efficiency, including revised procedures for the replacement of an arbitrator, the
requirement for reasonableness of costs, and a review mechanism regarding the costs of arbitration. They also
include more detailed provisions on interim measures.
With the adoption of the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (the “Rules
on Transparency”) in 2013, a new article 1, paragraph 4 was added to the text of the Arbitration Rules (as revised
in 2010) to incorporate the Rules on Transparency for arbitration initiated pursuant to an investment treaty
concluded on or after 1 April 2014. The new paragraph provides for utmost clarity in relation to the application
of the Rules on Transparency in Investor-State arbitration initiated under the UNCITRAL Arbitration Rules. In all
other respects, the 2013 UNCITRAL Arbitration Rules remain unchanged from the 2010 revised version.
With the adoption of the UNCITRAL Expedited Arbitration Rules in 2021, a new article 1, paragraph 5 was
added to the text of the Arbitration Rules to incorporate the Expedited Rules as an appendix to the UNCITRAL
Arbitration Rules. The phrase “where the parties so agree” in that paragraph emphasizes the need for the
parties’ express consent for the Expedited Rules to apply to the arbitration.
UN CONVENTIONS
United Nations Convention on transparency in treaty-based Investor-state Arbitration (New

York, 2014) (the “Mauritius Convention on Transparency”)
Date of adoption: 10 December 2014
Entry into force: 18 October 2017
Purpose
The Convention is an instrument by which Parties to investment treaties concluded before 1 April 2014 express
their consent to apply the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (“Rules
on Transparency” or “Rules”). The Rules on Transparency, effective as of 1 April 2014, are a set of procedural
rules for making publicly available information on Investor-State arbitrations arising under investment treaties.
In relation to investment treaties concluded prior to 1 April 2014, the Rules apply, inter alia, when Parties to the
relevant investment treaty agree to their application. The Convention is an efficient and flexible mechanism for
recording such agreement.
Key Provisions
The Convention supplements existing investment treaties with respect to transparency-related obligations.
Article 2, a key provision of the Convention, determines when and how the Rules on Transparency shall apply
to Investor-State arbitration within the scope of the Convention. In contrast to the Rules on Transparency,
whether the arbitration is initiated under the UNCITRAL Arbitration Rules or not does not have any impact
on the application of the Convention. The general rule of application is stipulated in paragraph 1 (bilateral or
multilateral application) and paragraph 2 refers to the application of the Rules on Transparency when only the
respondent State (and not the State of the investor-claimant) is a party to the Convention (unilateral offer of
application).
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A Party to the Convention has the flexibility to formulate reservations, thereby excluding from the application
of the Convention a specific investment treaty or a specific set of arbitration rules other than the UNCITRAL
Arbitration Rules (negative-list approach). A Party may also declare that it will not provide a unilateral offer
of application. Lastly, in the event the Rules on Transparency are revised, a Party may also declare, within a
limited period of time after such revision, that it will not apply that revised version. By defining specific timing for
the formulation and withdrawal of reservations, the Convention provides the necessary level of flexibility, while
ensuring that reservations cannot be used to defeat the purpose of the Convention.
The Convention and any reservation thereto apply prospectively, that is to arbitral proceedings commenced
after the entry into force of the Convention for the Party concerned.
Together with the Rules on Transparency, the Convention takes into the account both the public interest in
such arbitration and the interest of the parties to resolve disputes in a fair and efficient manner. The Convention
foresees the Secretary-General of the United Nations as performing the repository function, through the
UNCITRAL secretariat.
FOREIGN ARBITRAL AWARDS (NEW YORK CONVENTION AWARDS)

Part 2 Chapter I and Sections 44 to 52 of the Indian Arbitration and Conciliation Act, 1996 deal with the provisions
related to Enforcement of Foreign Awards, particularly New York Convention Awards.
According to Section 2(1)(c) an “arbitral award” includes an interim award.
According to Section 44, “foreign award” means 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:
(a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the First
Schedule applies, and
(b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been
made may, by notification in the Official Gazette, declare to be territories to which the said Convention
applies.
Power of judicial authority to refer parties to arbitration: Section 45 confers the power of judicial authority to
refer parties to arbitration where parties have an agreement under section 44 and any party to such agreement
requests the court for such referring.
Binding of foreign award: According to Section 46, any foreign award shall be treated as binding for all
purposes on the persons as between whom it was made, and may accordingly be relied on by any of those
persons by way of defence, set off or otherwise in any legal proceedings in India and any references in this
Chapter to enforcing a foreign award shall be construed as including references to relying on an award.
Evidence: According to Section 47, the party applying for the enforcement of a foreign award shall, at the time
of the application, produce before the court—
(a) the original award or a copy thereof, duly authenticated in the manner required by the law of the
country in which it was made;
(b) the original agreement for arbitration or a duly certified copy thereof; and
(c) such evidence as may be necessary to prove that the award is a foreign award.
Further, if the award or agreement to be produced is in a foreign language, the party seeking to enforce the
award shall produce a translation into English certified as correct by a diplomatic or consular agent of the
country to which that party belongs or certified as correct in such other manner as may be sufficient according
to the law in force in India.
Conditions for enforcement of foreign awards: Section 48 imposes conditions for enforcement of foreign
awards.
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The Enforcement of a foreign award may be refused, at the request of the party against whom it is invoked, only
if that party furnishes to the court proof that—
(a) the parties to the agreement referred to in section 44 were, under the law applicable to them, under
some incapacity, or the said agreement is not valid under the law to which the parties have subjected
it or, failing any indication thereon, under the law of the country where the award was made; or
(b) the party against whom the award is invoked was not given proper notice of the appointment of the
arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(c) the award deals with a difference not contemplated by or not falling within the terms of the submission
to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so
submitted, that part of the award which contains decisions on matters submitted to arbitration may be
enforced; or
(d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the
agreement of the parties, or, failing such agreement, was not in accordance with the law of the country
where the arbitration took place ; or
(e) the award has not yet become binding on the parties, or has been set aside or suspended by a
competent authority of the country in which, or under the law of which, that award was made.
Further, if an application for the setting aside or suspension of the award has been made to a competent
authority, the Court may, if it considers it proper, adjourn the decision on the enforcement of the award and may
also, on the application of the party claiming enforcement of the award, order the other party to give suitable
security.
The Enforcement of an arbitral award may also be refused if the Court finds that—
(a) the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or
(b) the enforcement of the award would be contrary to the public policy of India.
Enforcement of foreign awards: According to Section 49, 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.
Appealable orders: According to Section 50, an appeal shall lie from the order refusing to:
(a) refer the parties to arbitration under section 45;
(b) enforce a foreign award under section 48,
Further, no second appeal shall lie from an order passed in appeal under this section, but nothing in this section
shall affect or take away any right to appeal to the Supreme Court.
FOREIGN ARBITRAL AWARDS (GENEVA CONVENTION AWARDS)

Part 2 Chapter II and Sections 53 to 60 of the Indian Arbitration and Conciliation Act, 1996 deal with the provisions
related to Enforcement of certain Foreign Awards, particularly Geneva Convention Awards.
According to Section 53, “foreign award” means an arbitral award on differences related to matters considered
as commercial under the law in force in India:
(a) in pursuance of an agreement for arbitration to which the Protocol set forth in the Second Schedule
applies, and
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(b) between persons of whom one is subject to the jurisdiction of some one of such Powers as the Central
Government, being satisfied that reciprocal provisions have been made, may, by notification in the
Official Gazette, declare to be parties to the Convention set forth in the Third Schedule, and of whom
the other is subject to the jurisdiction of some other of the Powers aforesaid, and
(c) in one of such territories as the Central Government, being satisfied that reciprocal provisions have
been made, may, by like notification, declare to be territories to which the said Convention applies,
and for the purposes of this Chapter an award shall not be deemed to be final if any proceedings for the
purpose of contesting the validity of the award are pending in the country in which it was made.
Power of judicial authority to refer parties to arbitration: Section 54 confers the power of judicial authority to
refer parties to arbitration where parties have an agreement under section 53 and any party to such agreement
requests the court for such referring.
Binding of foreign award: According to Section 55, any foreign award shall be treated as binding for all
purposes on the persons as between whom it was made, and may accordingly be relied on by any of those
persons by way of defence, set off or otherwise in any legal proceedings in India and any references in this
Chapter to enforcing a foreign award shall be construed as including references to relying on an award.
Evidence: According to Section 56, the party applying for the enforcement of a foreign award shall, at the time
of application produce before the Court—
(a) the original award or a copy thereof duly authenticated in the manner required by the law of the
country in which it was made;
(b) evidence proving that the award has become final; and
(c) such evidence as may be necessary to prove that the conditions mentioned in clauses (a) and (c) of
sub-section (1) of section 57 are satisfied.
Further, where any document requiring to be produced is in a foreign language, the party seeking to enforce
the award shall produce a translation into English certified as correct by a diplomatic or consular agent of the
country to which that party belongs or certified as correct in such other manner as may be sufficient according
to the law in force in India.
Conditions for enforcement of foreign awards: Section 57 imposes conditions for enforcement of foreign
awards.
Sub-section (1) states that in order that a foreign award may be enforceable under this Chapter, it shall be
necessary that—
(a) the award has been made in pursuance of a submission to arbitration which is valid under the law
applicable thereto;
(b) the subject-matter of the award is capable of settlement by arbitration under the law of India;
(c) the award has been made by the arbitral tribunal provided for in the submission to arbitration or
constituted in the manner agreed upon by the parties and in conformity with the law governing the
arbitration procedure;
(d) the award has become final in the country in which it has been made, in the sense that it will not be
considered as such if it is open to opposition or appeal or if it is proved that any proceedings for the
purpose of contesting the validity of the award are pending;
(e) the enforcement of the award is not contrary to the public policy or the law of India.
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Sub-section (2) states that even if the conditions laid down in sub-section (1) are fulfilled, enforcement of the
award shall be refused if the Court is satisfied that—
(a) the award has been annulled in the country in which it was made;
(b) the party against whom it is sought to use the award was not given notice of the arbitration proceedings
in sufficient time to enable him to present his case; or that, being under a legal incapacity, he was not
properly represented;
(c) the award does not deal with the differences contemplated by or falling within the terms of the
submission to arbitration or that it contains decisions on matters beyond the scope of the submission to
arbitration:
Provided that if the award has not covered all the differences submitted to the arbitral tribunal, the Court may,
if it thinks fit, postpone such enforcement or grant it subject to such guarantee as the Court may decide.
Further, if the party against whom the award has been made proves that under the law governing the arbitration
procedure there is a ground, other than the grounds referred to in clauses (a) and (c) of sub-section (1) and
clauses (b) and (c) of sub-section (2) entitling him to contest the validity of the award, the Court may, if it thinks
fit, either refuse enforcement of the award or adjourn the consideration thereof, giving such party a reasonable
time within which to have the award annulled by the competent tribunal.
Enforcement of foreign awards: According to Section 58, 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.
Appealable orders: According to Section 50, an appeal shall lie from the order refusing to:
(a) to refer the parties to arbitration under section 54; and
(b) to enforce a foreign award under section 57,
Further, no second appeal shall lie from an order passed in appeal under this section, but nothing in this section
shall affect or take away any right to appeal to the Supreme Court.
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UN CONVENTION ON THE RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL
AWARDS (NEW YORK, 1958) (THE “NEW YORK CONVENTION”)
Entry into force: The Convention entered into force on 7 June 1959 (Article XII).
Objectives
Recognizing the growing importance of international arbitration as a means of settling international commercial
disputes, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the Convention) seeks
to provide common legislative standards for the recognition of arbitration agreements and court recognition
and enforcement of foreign and non-domestic arbitral awards. The term “non-domestic” appears to embrace
awards which, although made in the state of enforcement, are treated as “foreign” under its law because of
some foreign element in the proceedings, e.g. another State’s procedural laws are applied.
The Convention’s principal aim is that foreign and non-domestic arbitral awards will not be discriminated
against and it obliges Parties to ensure such awards are recognized and generally capable of enforcement in
their jurisdiction in the same way as domestic awards. An ancillary aim of the Convention is to require courts
2. Source: https://uncitral.un.org/en/texts/arbitration
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of Parties to give full effect to arbitration agreements by requiring courts to deny the parties access to court in
contravention of their agreement to refer the matter to an arbitral tribunal.
How to become a Party?

The Convention is open to accession by any Member State of the United Nations, any other State which is a
member of any specialized agency of the United Nations or is a Party to the Statute of the International Court
of Justice (articles VIII and IX).
The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958), better known
as the New York Convention, is one of the most important United Nations treaties in the area of international
trade law and the cornerstone of the international arbitration system. Under the New York Convention, States
undertake to give effect to an agreement to arbitrate, and to recognize and enforce awards made in other
States. In 2006, a Recommendation regarding the interpretation of articles II(2) and VII(1) was adopted and in
2016, the UNCITRAL Secretariat Guide on the New York Convention was published.
UNCITRAL adopted the first edition of the Notes on Organizing Arbitral Proceedings in 1996 and the second in
2016. The Notes list and describe matters relevant to the organization of arbitral proceedings, to be used in a
general and universal manner. The UNCITRAL Arbitration Rules, which were initially adopted in 1976 and first
revised in 2010, provide a comprehensive set of procedural rules for the conduct of arbitral proceedings and
are widely used in both ad hoc and institutional arbitrations. On both occasions, Recommendations were made
to assist arbitral institutions and other interested bodies that envisaged using the Rules with following the text
and substance. In 2013, the Rules were further amended to incorporate the UNCITRAL Rules on Transparency
in Treaty-based Investor-State Arbitration, application of which is promoted by United Nations Convention
on Transparency in Treaty-based Investor-State Arbitration (New York, 2014) or the Mauritius Convention on
Transparency. Article 8 of the Rules on Transparency creates the Repository of published information. In
2017, the Mauritius Convention on Transparency entered into force. The Convention has created a novel and
efficient mechanism that supplements existing investment treaties (concluded prior to April 2014) with respect
to transparency related obligations.
The UNCITRAL Model Law on International Commercial Arbitration was adopted in 1985 and amended in 2006.
It constitutes a sound basis for the desired harmonization and improvement of national laws, covering all stages
of the arbitral process.
UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION (1985), WITH

AMENDMENTS AS ADOPTED IN 2006
The Model Law is designed to assist States in reforming and modernizing their laws on arbitral procedure so
as to take into account the particular features and needs of international commercial arbitration. It covers all
stages of the arbitral process from the arbitration agreement, the composition and jurisdiction of the arbitral
tribunal and the extent of court intervention through to the recognition and enforcement of the arbitral award.
It reflects worldwide consensus on key aspects of international arbitration practice having been accepted by
States of all regions and the different legal or economic systems of the world.
Amendments to articles 1 (2), 7, and 35 (2), a new chapter IV A to replace article 17 and a new article 2 A
were adopted by UNCITRAL on 7 July 2006. The revised version of article 7 is intended to modernise the
form required of an arbitration agreement to better conform with international contract practices. The newly
introduced chapter IV A establishes a more comprehensive legal regime dealing with interim measures in
support of arbitration. As of 2006, the standard version of the Model Law is the amended version. The original
1985 text is also reproduced in view of the many national enactments based on this original version.
Source: https://uncitral.un.org/en/texts/arbitration/modellaw/commercial_arbitration
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UNCITRAL RULES ON TRANSPARENCY IN TREATY-BASED INVESTOR-STATE ARBITRATION

(EFFECTIVE DATE: 1st APRIL, 2014)
The UNCITRAL Rules on Transparency in Treaty-based investor-State Arbitration (the “Rules on Transparency”),
which come into effect on 1 April 2014, comprise a set of procedural rules that provide for transparency and
accessibility to the public of treaty-based investor-State arbitration.
The Rules on Transparency apply in relation to disputes arising out of treaties concluded prior to 1 April 2014,
when Parties to the relevant treaty, or disputing parties, agree to their application. The Rules on Transparency
apply in relation to disputes arising out of treaties concluded on or after 1 April 2014 (“future treaties”), when
Investor-State arbitration is initiated under the UNCITRAL Arbitration Rules unless the parties otherwise agree.
The Rules on Transparency are also available for use in Investor-State arbitrations initiated under rules other
than the UNCITRAL Arbitration Rules, and in ad hoc proceedings.
Given the link between the UNCITRAL Arbitration Rules and the application of the Rules on Transparency, a new
version of the UNCITRAL Arbitration Rules (with new article 1, paragraph 4 as adopted in 2013) (the “UNCITRAL
Arbitration Rules 2013”), will also come into effect on 1 April 2014. Such a revision (namely, the inclusion of a
new paragraph 4 of article 1) ensures that the Rules on Transparency are clearly incorporated into the latest
version of the UNCITRAL Arbitration Rules, to provide for utmost clarity in relation to the application of the Rules
on Transparency in disputes arising under future treaties and initiated under the UNCITRAL Arbitration Rules.
In all other respects, the UNCITRAL Arbitration Rules 2013 remain unchanged from the UNCITRAL Arbitration
Rules (as revised in 2010).
Information to be made available to the public under the Rules on Transparency shall be published by a central
repository, a function undertaken by the Secretary-General of the United Nations, through the UNCITRAL
Secretariat. Information shall be published via the UNCITRAL website.
Source: https://uncitral.un.org/en/texts/arbitration/contractualtexts/transparency
EXPEDITED ARBITRATION RULES (2021)

Expedited arbitration is a streamlined and simplified procedure with a shortened time frame, which makes
it possible for the parties to reach a final resolution of the dispute in a cost- and time-effective manner. The
UNCITRAL Expedited Arbitration Rules provide a set of rules which parties may agree for expedited arbitration.
The Expedited Rules balance on the one hand, the efficiency of the arbitral proceedings and on the other, the
rights of the parties to due process and fair treatment.
Article 1(5) of the UNCITRAL Arbitration Rules incorporates the Expedited Rules, which are presented as an
appendix to the UNCITRAL Arbitration Rules. The phrase “where the parties so agree” in that paragraph
emphasizes the need for the parties’ express consent for the Expedited Rules to apply to the arbitration.
Source: https://uncitral.un.org/en/content/expedited-arbitration-rules
CHARTERED INSTITUTE OF ARBITRATORS (CIARB)- UK MODEL RULES ON INTERNATIONAL

ARBITRATION3
CIArb Rules were made effective from 1st December, 2015 for domestic as well as International Arbitration. The
major outline of the rules are as under:
1. Parties may decide to resolve the dispute through Arbitration under CIArb Rules. However parties may
modify the rules as per their convenience.
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302
2. The communication under these rules is to be in English Language.

3. In these rules place of Arbitration and Seat of Arbitration are same.
4. The process of Arbitration starts from sending the notice. The mode of sending notice is defined under
these rules.
5. The timelines for various activities are also provided under these rules.
6. The proceedings starts on the date when respondent receives the notice of commencement of the
proceedings. The matter of the notice has also been mentioned under the rules.
7. The notice can also have a mention of proposal for appointment of arbitrator for sole arbitrator and
notification in case of more than one Arbitrator.
8. The time line for the reply by the respondent has been kept as within 30 days of the receipt of the
notice.
9. Representation of Parties is allowed.
10. The appointing authority under these rules are CIArb. They charge administrative fees for its services
as set out in Appendix III.
11. The request for appointment of Arbitrator can be made to CIArb through website, post, Fax, email etc.
12. The provisions related to appointment of Arbitrator is provided under Article 8.
13. The procedure for appointment of three arbitrators is provided under Article 9 and 10.
14. Article 11 provides for the requirement of disclosure by the Arbitrator.
15. The grounds of Challenge has been provided under Article 12.
16. Article 13 provides for procedure for challenge of Arbitrator.
17. On replacement of Arbitrator, the repetition of proceedings can be avoided unless decided by the
tribunal otherwise.
18. The tribunal, any emergency arbitrator, the CIArb, including the President, the Deputy President and its
employees have been excluded from the liability except for Intentional Wrongs.
19. The treatment of the parties with equality is one of the important aspect of Arbitration under these rules.
20. There are provision for preparation of provisional timetable.
21. On request of the parties, the tribunal should hold hearings for evidence by witnesses or for oral
argument. Otherwise, the tribunal may decide whether to hold the oral hearing or decide the matter on
the basis of documents.
22. The time period for submission of statement of claim and Statement of Defence is decided by the
tribunal. The content of these statements are provided in these rules.
23. The tribunal is empowered to decide on its own jurisdiction.
24. There is a provision for appointment of Emergency Arbitrator in case of need of conservatory or urgent
interim measures prior to the constitution of the arbitral tribunal.
25. The parties relying the facts has the Burden of Proof.
26. The tribunal may appoint the experts.
27. In case of default by the claimant, order for termination of arbitral proceedings can be made by the
tribunal.
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28. The decision (Award or other decision) of tribunal should be made by the majority in case of more than
One Arbitrator. Otherwise by the sole Arbitrator.
29. The laws as designated by the parties are applied by the tribunal. (amiable compositeur)
30. The parties are also allowed to settle the dispute between Arbitration Proceedings.
31. The parties my request the tribunal for giving interpretation of the Award within 30 days after the
receipt of the award. Additional Award can also be made on request by any of the party.
32. The tribunal should fix the fees and cost.
It is advised to read the complete rules from the website of CIArb. The following link can also be referred for
ready reference: https://www.ciarb.org/media/1552/ciarb-arbitration-rules.pdf
4
ASIA PACIFIC CENTRE FOR ARBITRATION & MEDIATION (APCAM) RULES
APCAM Arbitration and Mediation Rules

Arbitration Rules
The APCAM arbitration is conducted on the basis of the APCAM Arbitration Rules. The purpose of these rules
are to “provide maximum flexibility to parties and ensure maximum efficacy in arbitration proceedings, aiding
resolution of disputes quickly and economically through international arbitration.” The highlights of these rules
are as under:
1. When the parties agree to resolve their dispute by APCAM, these rules become applicable.
2. If the rules and laws are in conflict with each other, the law applicable to Arbitration will prevail.
3. The parties should send the application to APCAM and pay requisite registration/filing Fees.
4. APCAM to send a copy of request for Arbitration to the other party. A time of 15 days is required to be
given to respondent by APCAM.
5. On receipt of response, the same is to be forwarded to claimant may be given a time of 7 days for
submission of comments.
6. If response is not submitted by respondent, it does not prevent the Arbitration Proceedings.
7. There are rules for notice and time periods.
8. The parties may decide the number of Arbitrators (One or Three). However, this is subject to the laws
applicable to the Arbitration.
9. There are different procedure and rule for appointment of Sole Arbitrator and three arbitrators.
10. These rules also provides for the challenge procedure on the ground of impartiality and/or independence.
11. The parties may determine the seat failing which the Arbitral Tribunal is empowered to determine the
seat.
12. The parties may decide to represented or assisted by a counsel/ consultant/ adviser.
13. There are provisions for Emergency Arbitrator in these rules. Arbitration-Mediation-Arbitration is also a
beneficial provision for the parties.
14. The following interim measures may be obtained by the parties:
4. Source: https://apcam.asia/mediation-rules/
304
(i) Maintaining or restoring the status quo;

(ii) Restricting harm or prejudice to the arbitral process itself by necessary action;
(iii) preserving assets which may be a subject of award; or
(iv) Preserve relevant evidences.
15. A party may apply to APCAM for Fast Track Arbitration before full constitution of the Arbitral tribunal.
The procedure under 14.2 applies on determination of the same by APCAM.
16. Consolidation of proceedings is possible on request of the parties to APCAM.
17. The Arbitration procedure includes Manner, Holding of Hearings, Witness and Evidences, Time limit for
completion of Proceedings, Video conferencing under the Seoul Protocol on Video Conferencing.
18. The burden of proof is on the party which asserted the Facts that is relied by the parties.
19. There are time limits for Awards within a period which is limited to forty-five days from the date of the
closing of final oral or written submissions
20. Provisions relating to Interpretation of Awards and costs has also been provided.
21. The provision of Scrutiny of Awards has been made in which draft Award is submitted by the Arbitral
Tribunal to APCAM and the draft is submitted to Scrutiny Board consisting of one or more legal experts
or senior arbitrators, before finalization.
22. The rules have an important clause relating to confidentiality award which is an essential for any ADR
method for resolution of dispute.
23. If a matter has not provided in these rules or any discrepancy, UNCITRAL rules applies on that matter.
It is advised to read the complete rules from the website of APCAM. The following link can also be referred for
ready reference: https://apcam.asia/arbitration-rules/#rule1
APCAM Accreditation system and International Arbitration

There are stringent accreditation norms by APCAM. APCAM Accreditation is based on Experience Qualification
Path (EQP) or the Qualifying Assessment Programs (QAP).
As per APCAM Accreditation System, there are three levels of Accreditation.
1. APCAM Accredited Arbitrator (AAA)
2. APCAM Certified Arbitrator (ACA)
3. APCAM International Certified Arbitrator (AICA)
According to APCAM Accreditation System, there are also three levels of Accreditation for Mediators:
1. APCAM Accredited Mediator (AAM)
2. APCAM Certified Mediator (ACM)
3. APCAM International Certified Mediator (AICM)
APCAM also gives International ADR Awards. The Awards honours all significant contributions working towards
ensuring quality ADR services and for path-breaking innovations and partnerships. APCAM gives awards in 10
categories.
It is advised to read the complete rules relating to APCAM accreditation system from the website of APCAM. The
following link can also be referred for ready reference: https://apcam.asia/our_services/accreditation/
305
5
THE INTERNATIONAL BAR ASSOCIATION (IBA) RULES ON CONFLICT OF INTEREST
International Arbitration required the parties to decide Conflict of Interests (COI) such as Institution and Courts.
In 2004, the IBA Arbitration Committee published guidelines covering the following aspects:
(i) Impartiality and Independence of Arbitrator,
(ii) Autonomy of the Parties,
(iii) Disclosures, and
(iv) Consequence and costs of frivolous challenges.
These guidelines are applicable to International Arbitration irrespective of being carried out with the help or
Lawyers or not. These guidelines are not having any over-riding effect over any applicable law, guidelines,
rules, code of conduct or any other binding instrument.
Part I of the guidelines provides for General Standards Regarding Impartiality, Independence and Disclosure.
The Highlight includes:
1. Arbitrator should be impartial and independent starting from accepting to become Arbitrator until the
final award or termination of the proceedings.
2. In case of Conflict of Interest, the Arbitrator should deny the appointment or continuance.
3. If facts and circumstances can give raise doubts in the eyes of third party, Arbitrator should disclose.
4. If with the time provided in the guidelines, a party does not raise an express objection the party is
generally deemed to have waived any potential conflict of interest. However, this does not apply in
case if facts or circumstances exist as described in the Non-Waivable Red List and also a person should
not serve as an arbitrator when a conflict of interest, such as those exemplified in the Waivable Red List,
exists.
5. Guidelines are applicable to tribunal chairs, sole arbitrators, and co-arbitrators.
6. The guidelines also provides about the duties of parties and Arbitrators.
7. Part II of these guidelines provides for Practical Application of the General Standards.
8. The Red List consists of two parts: a ‘Non-Waivable Red List’; and a ‘Waivable Red List’. The lists provides
the situations that can give rise to justifiable doubts as to the arbitrator’s impartiality and independence
non-exhaustively.
9. The Orange List provides for the situations which can give rise to doubts to impartiality or independence
of Arbitrators.
10. The Green List provides for a non-exhaustive situations where no appearance and no actual conflict of
interest can exist.
It is advised to read the complete guidelines from the website of IBA Guidelines on Conflicts of Interest in
International Arbitration. The following link can also be referred for ready reference: https://www.ibanet.org/
document?id=Guidelines-on-Conflicts-of-Interest-in-International-Arbitration-2024
5. Source: https://www.ibanet.org/MediaHandler?id=e2fe5e72-eb14-4bba-b10d-d33dafee8918
https://www.acerislaw.com/iba-rules-and-guidelines-regarding-international-arbitration-an-overview/
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INTERNATIONAL CHAMBER OF COMMERCE (ICC) RULES ON INTERNATIONAL COMMERCIAL

ARBITRATION
The International Chamber of Commerce (ICC) has an independent Arbitration Body namely The International
Court of Arbitration. This Court administers the resolution of disputes in accordance to the ICC Rules on
Arbitration. It does not resolve the dispute by itself. The highlights of the rules are as under:
1. All documents such as pleadings and other written communications submitted by one party should be
provided to all the parties, Arbitrator and Secretariat.
2. The parties are required to submit the request for Arbitration to the Secretariat.
3. The date on which the secretariat receives the notice is deemed to be the date of commencement of
Arbitration.
4. The time limit of 30 days has been provided to the respondent from receipt of the Request from the
Secretariat under the rules.
5. If parties have agreed to submit to arbitration under these Rules, they are deemed to have submitted
ipso facto for these Rules in effect, unless they have agreed to submit to the Rules in effect on the date
of their arbitration agreement.
6. A request to join additional parties may also be made to the secretariat.
7. Claim arising out of more than one contract can also be subject to Arbitration in Single Arbitration.
8. There are rules for Impartiality and Independence of the Arbitrator. Challenge can also be made by
the submission to the Secretariat of a written statement mentioning the facts and circumstances of the
challenge.
9. The parties may appoint or change the representator. However, information should be given to
Secretariat and Arbitral Tribunal. The parties may also assisted by the Advisers.
10. The parties can agree on Place of Arbitration or it can be fixed by the Court.
11. The tribunal should determine the language of the proceedings in absence of the Agreement by the
parties.
12. The parties can agree on the rules of Law to be applied on the dispute.
13. There are special provisions for Case Management and Procedural Timetable.
14. The Arbitral tribunal may decide to take oral evidences.
15. The Arbitral Tribunal may also appoint expert after consulting the parties.
16. After the final hearing or the filing of the last authorized submissions(whichever is later), the tribunal
should declare the proceedings to be closed and inform the date by which it expects to submit its draft
award to Secretariat and parties. The Award are approved under Article 34.
17. There are special provisions for specific Circumstances such as for Interim Measures, Emergency
Arbitrator and Expedited Procedure.
18. If parties reach on settlement, the settlement is to be recorded in form of an Award.
19. Corrections, Interpretations and additional Awards can also be made.
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20. The arbitrators or person appointed by tribunal, the Court and its members, ICC and its employees, and
the ICC National Committees and Groups and their employees and representatives are not be held
liable to any person for any act or omission in connection with the arbitration, except to the extent such
limitation of liability is prohibited by applicable law.
It is advised to read the complete rules from the website of International Chamber of Commerce. The following
link can also be referred for ready reference: https://iccwbo.org/dispute-resolution/dispute-resolution-services/
arbitration/rules-procedure/2021-arbitration-rules/#block-accordion-43
NEW YORK CONVENTION

New York Convention applies to the recognition and enforcement of arbitral awards made in the territory of a
State other than the State where the recognition and enforcement of such awards are sought, and arising out
of differences between persons, whether physical or legal. It shall also apply to arbitral awards not considered
as domestic awards in the State where their recognition and enforcement are sought.
In India, Chapter I of Part II of the Arbitration and Conciliation Act, 1996 has provided for the treatment of Awards
by Contracting State under New York Convention.
It is advised to read the complete text of New York Convention. The following link can also be referred for
ready reference: https://www.newyorkconvention.org/media/uploads/pdf/1/2/12_english-text-of-the-new-york-
convention.pdf
https://www.newyorkconvention.org/english
GENEVA CONVENTION
The Geneva Protocol on Arbitration Clauses of 1923 and the Geneva Convention on the Execution of Foreign
Arbitral Awards of 1927 are two important conventions. Further to the Geneva Convention, New York Convention
was established.
In India, Chapter II of Part II of Arbitration and Conciliation Act, 1996 has provided for the treatment of Awards
by Contracting State under New York Convention.
It is advised to read the complete text of Geneva Convention. The following link can also be referred for ready
reference: https://www.trans-lex.org/511400/_/convention-on-the-execution-of-foreign-arbitral-awards-signed-
at-geneva-on-the-twenty-sixth-day-of-september-nineteen-hundred-and-twenty-seven/
CASE STUDY ON INTERNATIONAL COMMERCIAL ARBITRATION

Facts
The applicant-SSTA, the first respondent-ISSA and SSTE executed a share subscription agreement for the
issuance and allotment of shares of SSTE to ISSA. Subsequently, a share subscription agreement was entered
into between DCO Inc, the applicant-SSTA and SSTE. Also, DCO Inc and the first respondent executed a
secondary share purchase agreement. The applicant, SSTE and DCO Inc executed a Shareholders’ Agreement
to record the terms and conditions of the understanding between the parties regarding the rights, obligations
and duties with respect to DCO Inc’s ownership of shares of SSTE. Thereafter, the applicant, SSTE and the
respondents executed an Inter se agreement. The agreement, inter alia, obliged the respondents to purchase
the SSTE shares on a pro-rata basis in the event DCO Inc exercised its sale option under the Shareholder’s
Agreement.
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DCO Inc addressed a sale notice to the applicant while invoking its sale option under Shareholder’s Agreement.
Disputes arose between the applicant and DCO Inc, the latter invoked arbitration against the applicant under the
Rules of the London Council for International Arbitration. A three-member Tribunal made its award, consequent
upon which the applicant was called upon to make payment to DCO Inc and to acquire the shares of SSTE
which were put by DCO Inc.
Thereupon, the applicant-SSTA called upon the first respondent-ISSA under the Inter se agreement to
proportionately pay for and acquire back its shareholdings in TTCL from DCO Inc. The applicant-SSTA issued
a notice of arbitration to the first respondent and to the second respondent (a foreign party, being a resident of
Seychelles) under Clause 10 of the Inter se agreement and nominated an arbitrator.
The respondents-ISSA did not appoint their nominee arbitrator despite the service of the arbitration notice.
The applicant-SSTA filed a petition before Hon’ble Supreme Court under Section 11(6) of the Arbitration and
Conciliation Act 1996 for the constitution of an arbitral tribunal in an international commercial arbitration.
By an order, an Honourable retd. Judge was appointed as the sole arbitrator with the consent of the parties.
The arbitrator entered upon the reference. A preliminary meeting was held between the parties and the arbitrator
at which the parties agreed to a six months extension, if the arbitral proceedings could not be completed within
a period of twelve months commencing from the date the arbitral tribunal entered reference. The time to deliver
the award in the proceedings before the arbitral tribunal stood extended since the parties had consented to an
extension of six months.
During the pendency of the arbitral proceedings, A Bank initiated insolvency proceedings against the first
respondent- ISSA under the Insolvency and Bankruptcy Code 2016. By an order, the National Company Law
Tribunal, Chennai initiated the Corporate Insolvency Resolution Process under the IBC and placed a moratorium
on all proceedings against the first respondent, including arbitral proceedings.
The original period of one year and the extension of six months which was agreed upon by the parties expired.
A Miscellaneous Application was filed by the applicant before the Supreme Court seeking an extension of the
mandate of the tribunal. The applicant sought an extension of the mandate of the arbitral tribunal for a period
of six months after the date on which the moratorium imposed under the IBC against the first respondent would
stand vacated.
The first respondent has been freed from the rigours of the CIRP in pursuance of an order passed by the
Supreme Court. Accordingly, there is no longer a moratorium over proceedings against the first respondent.
Analysis the above facts and answer the following:
a. The Arbitration Proceedings between the parties, presided over by the Ld. Sole Arbitrator Honourable
Judge (Retd.), may be allowed to continue without any need for an extension of the term of the Ld. Sole
Arbitrator; or
b. Alternatively, in the event this Hon’ble Court is of the opinion that the amended Section 29A (following
the 2019 Amendment) is inapplicable to the present Arbitration Proceedings, allow the extension of
the time limit within which Ld. Sole Arbitrator (Retd.) Judge is to render an award in the Arbitration
Proceedings between the parties by a period of 1 year.
Read the relevant case at https://webapi.sci.gov.in/supremecourt/2019/43763/43763_2019_1_31_40844_

Judgement_05-Jan-2023.pdf
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LESSON ROUND-UP
l The Indian law for Arbitration is “The Arbitration and Conciliation Act, 1996” which aims at streamlining
the process of arbitration and facilitating conciliation in business matters. The Act recognises the
autonomy of parties in the conduct of arbitral proceedings by the arbitral tribunal and abolishes the
scope of judicial review of the award and minimizes the supervisory role of Courts. The autonomy
of the arbitral tribunal has further been strengthened by empowering them to decide on jurisdiction
and to consider objections regarding the existence or validity of the arbitration agreement.
l The International Commercial Arbitration is gaining importance significantly with the days passed
because of its role and functions. This is becoming the primary method of resolving the international
commercial disputes with the increasing number of international commercial business transactions.
l The United Nations Commission On International Trade Law (UNCITRAL) Arbitration Rules provide
a comprehensive set of procedural rules upon which parties may agree for the conduct of arbitral
proceedings arising out of their commercial relationship and are widely used in ad hoc arbitrations
as well as administered arbitrations.
l Part 2 Chapter I and Sections 44 to 52 of the Indian Arbitration and Conciliation Act, 1996 deal with
the provisions related to Enforcement of Foreign Awards, particularly New York Convention Awards.
l Part 2 Chapter II and Sections 53 to 60 of the Indian Arbitration and Conciliation Act, 1996 deal with
the provisions related to Enforcement of certain Foreign Awards, particularly Geneva Convention
Awards.
l Recognizing the growing importance of international arbitration as a means of settling international
commercial disputes, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards
(the Convention) seeks to provide common legislative standards for the recognition of arbitration
agreements and court recognition and enforcement of foreign and non-domestic arbitral awards.
l The Model Law is designed to assist States in reforming and modernizing their laws on arbitral
procedure so as to take into account the particular features and needs of international commercial
arbitration. It covers all stages of the arbitral process from the arbitration agreement, the composition
and jurisdiction of the arbitral tribunal and the extent of court intervention through to the recognition
and enforcement of the arbitral award.
l The UNCITRAL Rules on Transparency in Treaty-based investor-State Arbitration (the “Rules on
Transparency”), which come into effect on 1 April 2014, comprise a set of procedural rules that
provide for transparency and accessibility to the public of treaty-based investor-State arbitration.
l CIArb Rules were made effective from 1st December, 2015 for domestic as well as International
Arbitration.
l The APCAM arbitration is conducted on the basis of the APCAM Arbitration Rules. The purpose of
these rules are to “provide maximum flexibility to parties and ensure maximum efficacy in arbitration
proceedings, aiding resolution of disputes quickly and economically through international
arbitration.”
l International Arbitration required the parties to decide Conflict of Interests (COI) such as Institution
and Courts.
l The International Chamber of Commerce (ICC) has an independent Arbitration Body namely The
International Court of Arbitration. This Court administers the resolution of disputes in accordance to
the ICC Rules on Arbitration.
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GLOSSARY
International Centre for Settlement of Investment Disputes (ICSID) Arbitrations: It is the world’s leading
institution devoted to international investment dispute settlement. It has extensive experience in this field,
having administered the majority of all international investment cases.
United Nations Commission on International Trade Laws (UNCITRAL): The Present Act is based on model
law drafted by UNCITRAL both on domestic arbitration as well as international commercial arbitration, to
provide uniformity and certainty to both categories of cases.
New York Convention: Part 2 Chapter I and Sections 44 to 52 of the Indian Arbitration and Conciliation Act,
1996 deal with the provisions related to Enforcement of Foreign Awards, particularly New York Convention
Awards.
Geneva Convention: Part 2 Chapter II and Sections 53 to 60 of the Indian Arbitration and Conciliation
Act, 1996 deal with the provisions related to Enforcement of certain Foreign Awards, particularly Geneva
Convention Awards.
Expedited arbitration: It is a streamlined and simplified procedure with a shortened time frame, which makes
it possible for the parties to reach a final resolution of the dispute in a cost- and time-effective manner.
The UNCITRAL Expedited Arbitration Rules provide a set of rules which parties may agree for expedited
arbitration. The Expedited Rules balance on the one hand, the efficiency of the arbitral proceedings and on
the other, the rights of the parties to due process and fair treatment.
The Chartered Institute of Arbitrators (“CIArb”): The CIArb recognised that the 2010 version of the
UNCITRAL Arbitration Rules (“UNCITRAL Rules”) provide a comprehensive set of procedural rules which are
widely used for ad hoc international arbitrations and which can be adopted by arbitral institutions who wish
to act as appointing authority.
APCAM Mediation: It is based on the Mediation Rules published by the Asia-Pacific Centre for Arbitration
& Mediation (“APCAM”), which is intended to help parties and mediators to take maximum advantage of the
flexible procedures available in mediation for the resolution of disputes amicably, quickly and economically
through international and cross-border mediation.
The 2014 International Bar Association (IBA) Rules on Conflict of Interest in International Arbitration,
as updated in August 2015, are another a leading soft law instrument in providing guidance regarding the
scope of arbitrators’ disclosure obligations and conflict of interest issues, since they first launched in 2004.
International Chamber of Commerce (ICC) was founded in the aftermath of the First World War when no
world system of rules governed trade, investment, finance or commercial relations.
London Court of International Arbitration (LCIA): It is one of the world’s leading international institutions for
commercial dispute resolution. The LCIA provides efficient, flexible and impartial administration of arbitration
and other ADR proceedings, regardless of location, and under any system of law.
TEST YOURSELF
A. Descriptive Questions
1. The International law of Arbitration involves both civil and common law procedure which help parties
to reconstruct their procedure of arbitration so that their dispute to the contract can be resolved.
Explain.
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2. Define International Commercial Arbitration.
3. Explain some significant Arbitration Rules drafted by UNCITRAL.
4. Part 2 Chapter I and Sections 44 to 52 of the Indian Arbitration and Conciliation Act, 1996 deal with
the provisions related to Enforcement of Foreign Awards, particularly New York Convention Awards
Elaborate.
5. Enumerate model Laws on International Commercial Arbitration.
6. Explain some significant Arbitration Rules drafted by Asia Pacific Centre for Arbitration & mediation
(APCAM) Rules.
7. Write a Brief note on New York Convention and Geneva Convention.
l Asia Pacific Centre for Arbitration & Mediation (APCAM) Rules
l The International Bar Association (IBA) Rules
OTHER REFERENCES (Including Websites / Video Links)
l https://uncitral.un.org/en/texts/arbitration
l https://uncitral.un.org/en/texts/arbitration/modellaw/commercial_arbitration
l https://uncitral.un.org/en/texts/arbitration/contractualtexts/transparency
l https://uncitral.un.org/en/content/expedited-arbitration-rules
l https://www.ciarb.org/media/1552/ciarb-arbitration-rules.pdf
l https://apcam.asia/
l https://apcam.asia/mediation-rules/
l https://www.acerislaw.com/iba-rules-and-guidelines-regarding-international-arbitration-an-overview/
l https://iccwbo.org/dispute-resolution-services/arbitration/rules-of-arbitration/
l https://www.emerald.com/insight/content/doi/10.1108/REPS-11-2018-0027/full/html
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Introduction to Conciliation and its Lesson
Importance for MSMEs 11
KEY CONCEPTS
n Micro Enterprises n Small Enterprises n Medium Enterprises n Voluntary Conciliation n Involuntary Conciliation
Learning Objectives
To understand:
 Scope of conciliation in MSMEs
 Characteristics and Methods of Conciliation
 Process of Conciliation
 Legislation concerning Conciliation
 Significance of Conciliation for MSME
 The practical application of Conciliation under MSME through a Case Study
Lesson Outline
 Introduction
 Important definitions
 Nature & modes of Conciliation
 Importance of Conciliation for MSME
 Conciliation Proceedings
 Law relating to Conciliation
 Case Study on Conciliation under MSME
 Lesson Round-Up
 Glossary
 Test Yourself
 Other References (Including Websites/Video Links)
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PP-AM&C Introduction to Conciliation and its Importance for MSMEs
l Micro, Small and Medium Enterprises Development Act, 2006
INTRODUCTION
Due to the increasing burden on the civil court, various legislations provide that the disputing parties must
attempt to resolve their issues through conciliation and mediation before invoking arbitration or approaching
the civil courts. This results in reducing the burden of the civil courts and is time effective at the same time. Such
a provision can be found in the Micro, Small and Medium Enterprises Development Act, 2006 (“MSME Act”)
whereby any reference to a Micro and Small Enterprises Facilitation Council (“MSME Council”) necessarily
requires the MSME Council to initiate a mandatory conciliation process. The provision provides that, in the
event conciliation fails, arbitration can be commenced. The Arbitration and Conciliation Act, of 1996 aims to
consolidate and modify the existing laws on domestic and international arbitration, the enforcement of foreign
arbitral awards, and the definition of the law relating to conciliation. The United Nations Commission on
International Trade Law (UNCITRAL) adopted the UNCITRAL Model Law on International Commercial Arbitration
in 1985, and the United Nations General Assembly recommended that all countries consider adopting it for
the sake of uniformity of arbitral procedures. Additionally, the UNCITRAL adopted the UNCITRAL Conciliation
Rules in 1980, which the General Assembly of the United Nations recommended for use in disputes arising in
the context of international commercial relations where parties seek amicable settlements. Both the Model
Law and Rules are significant contributions towards the establishment of a unified legal framework for fair and
efficient dispute resolution in international commercial relations.
History of Conciliation
India has a tradition of employing “Panchayat,” or elder-led conciliation or mediation, to resolve disputes even
if there is no formal law. Many of the choices made during this process were enforceable in order to show
respect for the elders. Also utilized to resolve disputes in the past were the courts of Kula, Sreni, and Gana. Even
ancient literature provides insightful information about the value of dispute resolution in society. Despite the
emergence of a formal legal system, village-based mediation is still used to settle complex disputes, indicating
its acceptance of maintaining relationships. The government has taken steps to reform and modernize this
system. The laws pertaining to conciliation are found in the Arbitration and Conciliation Act of 1996. The system
went into service on January 25, 1996. The Act is not exhaustive but acts to consolidate and amend. However,
it goes far beyond the 1940 Act, which was its predecessor. Therefore, it is necessary to examine the previous
Act. The 1940 Arbitration and Conciliation Act was claimed to be the law. The 29 Sections of the Act were
broken down into 7 Chapters and 3 Schedules.There were no sections in the Act that dealt with foreign awards,
conventions, or protocols. There were two distinct Acts for Foreign Awards as well as an arbitration convention
and protocol. As a result, the Act needed to be amended, and the new Act—which included the Conventions
and Protocols and Foreign Awards—became effective.

Even before courts were founded, individuals used to engage a third party to mediate disputes when they arose
between two parties. Once courts were established, the appropriate procedures were followed to resolve the
conflicts. Justice was ultimately done after several days of submitting a case because to a rise in population,
a high number of cases that were still pending in court, and a backlog of cases. The people’s ability to access
justice was consequently hindered. Major industry development brought forth by population growth sparked an
uptick in commercial disputes. To strike a balance with this, many techniques for resolving conflicts outside of
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Introduction to Conciliation and its Importance for MSMEs LESSON 11
the courts have been devised. ADR stands for alternative dispute resolution. Alternate Dispute Resolution uses
a variety of methods. As follows:
1. Arbitration
2. Mediation
3. Conciliation
4. Mediation-arbitration etc.
Some of these techniques significantly evolved as a result of the court’s delay in delivering justice. Conciliation
is one of the methods that gained popularity. Mutual Resolution of disputes for the parties is the primary goal
of Conciliation.
The law governing conciliation is found in the Arbitration and Conciliation Act, 1996. On January 25th, 1996, this
Act became operative. This law contains provisions for domestic arbitration, international commercial arbitration,
and the enforcement of foreign arbitral rulings. It is based on the UN model law in order to be comparable to the
legislation approved by UNCITRAL, the United Nations Commission on International Trade Law
It is a law-integrating and law-amending act pertaining to:
1. National mediation.
2. Arbitration in international business.
3. Foreign arbitral award enforcement.
4. Law pertaining to conciliation and the issues associated with it.
IMPORTANT DEFINITIONS
According to section 7 of the MSME Act:
Micro Enterprises
Micro Enterprises are enterprises with an investment of less than Rs. 1 crore and turnover less than Rs. 5 Crore.
Small Enterprises
Small Enterprises are enterprises with an investment of less than Rs. 10 crore and turnover less than Rs. 50
Crore.
Medium Enterprises
Medium Enterprises are enterprises with an investment of less than Rs. 20 crores and turnover up to Rs.100
Crore.
Conciliation
There is no set definition of Conciliation provided in the Arbitration and Conciliation Act, 1996. However, as
per the Halsbury Laws of England, conciliation is a process of persuading parties to reach an agreement.
According to Wharton’s Law Lexicon, conciliation is a non-adjudicatory alternative dispute resolution process
which is governed by the conditions of the Arbitration and Conciliation Act, 1996. Section 61 of the Arbitration
and Conciliation Act of 1996 outlines the scope and application of conciliation. It specifies that conciliation
can be applied to disputes, regardless of whether they are contractual or not, as long as they arise from a
legal relationship where one party has the right to sue and the other party is liable to be sued. Additionally,
the process of conciliation can be applied to all proceedings related to the dispute. The provisions regarding
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conciliation are provided in part III of the Arbitration and Conciliation Act, 1996. However, Part III of the Act does
not apply to disputes that cannot be submitted to conciliation due to any prevailing law.
NATURE & MODES OF CONCILIATION

There are two modes of conciliation and their nature depends on their type:
1. Voluntary Conciliation
2. Involuntary Conciliation
Voluntary Conciliation
Voluntary conciliation is when the parties willingly engage to settling their dispute. Voluntary conciliation is
also called as formal conciliation. It refers to a process where a lawyer and their client meet with a conciliator
present to discuss and attempt to resolve an issue. This type of conciliation is voluntary and also known as
voluntary conciliation. During the process, the lawyer and client analyse and try to determine the issue at hand
with the assistance of the conciliator.
Illustration of Voluntary Conciliation: There is a Technology Transfer Agreement between a company based in
India and a Company Based in Germany. The agreement provides that any dispute arising out under the terms
and conditions may be referred for settlement through conciliation with the agreement of both the parties. The
conciliation process initiated under the agreement can be said voluntary conciliation. It facilitates the parties to
resolve the dispute amicably.
Involuntary Conciliation
Involuntary conciliation or compulsory conciliation is when the parties are not willing to settle their disputes
voluntarily and amicably. Informal conciliation involves the resolution of disputes between a lawyer and their
client through electronic media, such as phone calls, emails, or written notices. This type of conciliation is also
known as compulsory conciliation, where questions and answers are exchanged between the lawyer and client
through electronic communication or in writing.
Illustration of Involuntary Conciliation: According to section 18 of the Micro, Small and Medium Enterprises
Development Act, 2006, notwithstanding anything contained in any other law for the time being in force, any
party to a dispute may, with regard to any amount due under section 17, make a reference to the Micro and Small
Enterprises Facilitation Council. On receipt of such reference, the Council shall either itself conduct conciliation
in the matter or seek the assistance of any institution or centre providing alternate dispute resolution services by
making a reference to such an institution or centre, for conducting conciliation and the provisions of sections 65
to 81 of the Arbitration and Conciliation Act, 1996 shall apply to such a dispute as if the conciliation was initiated
under Part III of that Act. The conciliation process initiated under the can be said involuntary conciliation.
IMPORTANCE OF CONCILIATION FOR MSME

The Legislature has passed several laws mandating disputing parties to go through mandatory conciliation
or mediation processes before starting arbitration or going to court as a result of the growing pressure on civil
courts. With the intention of relieving the Civil Courts of some of their workload by weeding out issues that can
be settled through conciliation or mediation, these regulations act as a necessary prerequisite to initiating
arbitration or court procedures. One of the most important sectors for India’s economic growth is the Micro,
Small, and Medium-Sized Enterprises (MSMEs) sector, especially in light of the COVID-19 pandemic’s difficult
circumstances, which led to the Central Government’s implementation of specific financial stimulus programs
for this industry.
The Micro, Small and Medium Enterprises Development Act of 2006 (the “Act”) governs MSMEs which increases
the scope of Mediation for resolution of disputes under MSMEs.
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However in case of BSNL vs. Maharashtra Micro and Small Enterprises, the Bombay High Court found that
Section 18 (1) of the Act, in terms allows any party to a dispute relating to the amount due under Section
17 i.e. an amount due and payable by buyer to seller; to approach the facilitation Council. It is rightly
contended by the learned Addl. Government Pleader, that there can be variety of disputes between the
parties such as about the date of acceptance of the goods or the deemed day of acceptance, about
schedule of supplies etc. because of which a buyer may have a strong objection to the bills raised by the
supplier in which case a buyer must be considered eligible to approach the Council. Further, the Court
found that we find that Section 18(1) clearly allows any party to a dispute namely a buyer and a supplier to
make reference to the Council. However, the question is; what would be the next step after such a reference
is made, when an arbitration agreement exists between the parties or not. The court found that there is no
provision in the Act, which negates or renders an arbitration agreement entered into between the parties
ineffective. Moreover, Section 24 of the Act, which is enacted to give an overriding effect to the provisions
of Section 15 to 23-including section 18, which provides for forum for resolution of the dispute under the
Act-would not have the effect of negating an arbitration agreement since that section overrides only such
things that are inconsistent with Section 15 to 23 including Section 18 notwithstanding anything contained
in any other law for the time being in force. Section 18(3) of the Act in terms provides that where conciliation
before the Council is not successful, the Council may itself take the dispute for arbitration or refer it to
any institution or centre providing alternate dispute resolution and that the provisions of the Arbitration
and Conciliation Act, 1996 shall thus apply to the disputes as an arbitration in pursuance of arbitration
agreement referred to in Section 7 (1) of the Arbitration and Conciliation Act, 1996. This procedure for
arbitration and conciliation is precisely the procedure under which all arbitration agreements are dealt
with. The court, thus found that it cannot be said that because Section 18 provides for a forum of arbitration
an independent arbitration agreement entered into between the parties will cease to have effect.
CONCILIATION PROCEEDINGS
Part III of The Arbitration and Conciliation Act, 1996 contains the law pertaining to conciliation. Conciliation
proceedings are covered in Sections 62 to 79.
Introduction
Conciliation is a non-adjudicatory alternative dispute resolution procedure that is governed by the terms of the
Arbitration and Conciliation Act, 1996, according to Wharton’s Law Lexicon.
Conciliation Proceedings Process
Step 1.
Beginning of conciliation process
Step 2.
Appointment of Conciliators
Step 3.
Furnishing written Statements by both parties
Step 4.
Availability of Administrative Help
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Step 5.
Conducting Conciliation Process
Step 6.
Submission of Settlement Agreement or Failure Report
1. Step 1: The first step is to start the conciliation process.

The start of the proceedings is discussed in Section 62 of the legislation. Either party must send the
other party a written invitation before the conciliation proceedings can begin. The conciliation process
will only proceed if the other side accepts the invitation. After 30 days of sending the invitation, it will
be deemed that it was not accepted if the inviting party has not received a response.
2. Step 2: Conciliators are appointed.
An arbitrator must be chosen after the parties have consented to the conciliation process. In Section
64, the appointment of arbitrators is discussed. A solo conciliator may be chosen by the parties if they
so choose. Each party will choose one conciliator if the parties decide to select two conciliators. If the
parties decide to nominate three conciliators, each party will choose one, and the parties may decide
to appoint a third conciliator who will serve as the presiding conciliator.
3. Step 3: The conciliator must receive a written statement.
The conciliator may ask each party to provide a written statement outlining the pertinent details of the
current dispute. Both sides are required to provide the conciliator with written statements. The parties
are also asked to send written statements to one another in addition to the conciliator.
4. Step 4: Administrative help
The act’s section 68 discusses administrative support. If necessary, the parties or the conciliator may
ask a person or an institution to provide administrative support. The parties must agree in order to
request administrative aid.
6. Step 5: Conducting the conciliation process
Regarding how conciliation proceedings are conducted, see Sections 67(3) and 69(1). The conciliator
has the option of communicating with the parties verbally or in writing. Additionally, he has the option of
meeting the parties jointly or separately. He is free to conduct any processes that appear appropriate
for the current situation.
5. Step 6: Conciliation Agreement or Report of Failure
If the settlement has been arrived the parties shall enter into a Settlement Agreement. If the conciliation
fails, the conciliator should send the failure report to the authority which referred for conciliation or
submit the failure report to the parties in case of voluntary conciliation.
LAW RELATING TO CONCILIATION

Sections 61–81 of Part III of the Arbitration and Conciliation Act, 1996 include the laws governing conciliation
processes. Conciliation, which is a voluntary process when parties in disagreement agree to resolve their issue
through conciliation, is covered in Part III of the Arbitration and Conciliation Act, 1996. It is a flexible method
that permits the parties to choose the venue, the date, the time, the subject matter, and the parameters of the
discussions.
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In conciliation, a neutral person who is trained and qualified, known as the conciliator, assists the disputing
parties in understanding the issues at hand and their respective interests, with the goal of reaching a mutually
acceptable agreement. The conciliation process involves discussions between the parties, which are conducted
in the presence of the conciliator.
The scope of conciliation extends to a wide range of disputes, including industrial disputes, marital disputes,
family disputes, and so on. This allows the parties to have greater control over the outcome of their dispute, and
the results are generally more satisfactory.
Conciliation Proceedings according to the Law

Procedure for commencement of Conciliation Proceedings
Section 62 of the Arbitration and Conciliation Act, 1996 lays down the procedure for the commencement of
conciliation proceedings.
According to this Section:
1. The party initiating the conciliation shall send the other party a written invitation which briefly identifies
the subject of the dispute.
2. Once the other party accepts the invitation in writing, the conciliation proceedings start.
3. If the other party rejects the conciliation proceedings, there will be no conciliation.
4. If the party initiating conciliation does not receive a reply within 30 days from the date on which he send
the invitation, or within such other period of time as specified in the invitation, he may elect to treat this
as rejection of the invitation to conciliate and if he so elects, he shall inform the other party in writing
accordingly.
If the conciliation invitation is accepted by the other party, then, the conciliator or conciliators are appointed by
the parties.
Appointment of Conciliators
According to Section 63 of the Act, there shall be one conciliator unless agreed by the parties that there shall
be two or three conciliators and in case of more than one conciliators, they must act jointly. The conciliator /
conciliators are appointed in accordance with Section 64 of the Arbitration and Conciliation Act, 1996.
According to Section 64 of Act the parties may agree on the name of the conciliator in case of proceedings with
one conciliator.
In case of conciliation of more than one conciliator, the parties may each appoint one conciliator in case of
conciliation proceedings with two conciliators.
Further, the parties may each appoint one conciliator and agree upon the name of a third conciliator who will
be the presiding conciliator in case of proceedings with three conciliators.
The parties may also seek the assistance of a suitable institution or person for the appointment of conciliator
or conciliators provided that the institution or individual recommend and appoint an impartial and independent
conciliator.
Submissions of Statements
Upon appointment, the conciliator may request each party to submit certain statements to the conciliator.
According to Section 65 of the Arbitration and Conciliation Act, 1996:
(1) When appointed, the conciliator can ask each party to provide a brief written statement describing the
general nature of the dispute and the issues involved. Each party must send a copy of the statement to
the other party.
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(2) The conciliator can also ask each party to submit a written statement of their position, along with facts,
evidence, and any relevant documents. The party should provide a copy of this statement, along with
the documents and evidence, to the other party.
(3) The conciliator can ask for additional information from either party during any stage of the conciliation
proceedings if they deem it necessary.
Administrative Assistance
According to section 68 of the Arbitration and Conciliation Act, 1996, the parties involved in conciliation
proceedings, or the conciliator with the agreement of the parties, can enlist the help of a suitable organization
or individual to provide administrative support and make the process easier to carry out.
Communication with the Parties
According to section 69 of the Arbitration and Conciliation Act, 1996, the conciliator has the authority to
communicate with the parties involved in the conciliation proceedings either in writing or orally. The conciliator
can also meet with the parties together or separately based on their preference. If there is no prior agreement
on the location of these meetings, the conciliator can determine a suitable location in consultation with the
parties, taking into account the circumstances of the proceedings.
Information to the Conciliator
According to section 70 of the Arbitration and Conciliation Act, 1996, the conciliator is required to disclose any
factual information related to the dispute that they receive from one party to the other party. This allows the
other party to provide an explanation if necessary. However, if a party provides information to the conciliator
under the condition that it remains confidential, the conciliator is not allowed to share that information with the
other party.
Cooperation with the conciliator
According to sections 71 & 72 of the Arbitration and Conciliation Act, 1996, the parties involved in conciliation
proceedings are required to cooperate with the conciliator and make a good-faith effort to fulfill their requests.
This includes submitting written materials, providing evidence, and attending meetings as requested by the
conciliator. Each party is allowed to provide suggestions for settling the dispute either on their own initiative or
at the conciliator’s invitation.
If the conciliator believes that there are potential settlement terms that may be acceptable to both parties, they
will create the terms and present them to the parties for their feedback. The conciliator may adjust the terms
based on the parties’ observations.
If the parties come to an agreement on the settlement terms, they can create a written settlement agreement
and sign it. The conciliator may assist in creating the settlement agreement if requested by the parties.
Once the parties have signed the settlement agreement, it becomes final and binding for them and anyone
claiming under them.
The conciliator must authenticate the settlement agreement and provide a copy to each party.
The settlements agreement has the same effect as an arbitral award.
Confidentiality
According to section 75, The conciliator and the parties involved in the proceedings are required to keep
all matters related to the conciliation confidential, regardless of any other laws in effect. This confidentiality
also applies to the settlement agreement, unless disclosure is necessary for the purpose of implementing or
enforcing the agreement.
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Termination of conciliation proceedings

The termination proceeding can be concluded in four ways:
1. By signing of the settlement agreement by the parties on the date of the agreement
2. By a written declaration of the conciliator with the consent of the parties
3. By a written declaration by the parties addressed to the conciliator
4. By a written declaration by one party addressed to the other party and to the conciliator, if appointed.
Deposits
Sections 78 and 79 of the Act talk about costs and deposits with respect to conciliation proceedings. The
conciliator will determine the costs of the proceedings, which include the conciliator’s fees and expenses,
expert advice, and any other related expenses. The parties will be equally responsible for these costs unless
the settlement agreement specifies a different arrangement. The conciliator will provide written notice of the
costs to the parties upon conclusion of the proceedings.
The conciliator may ask both parties to deposit an equal amount as an advance for expected costs, and may
ask for supplementary deposits during the proceedings. If the required deposits are not paid within thirty days,
the conciliator may suspend or terminate the proceedings. After the proceedings, the conciliator will account
for the deposits received and return any unexpended balance to the parties.
Additional information on Appointment of Conciliator
The parties may choose a conciliator of their own choosing with unanimous consent; that is, both parties must
approve the conciliator’s appointment. The IDRC maintains a panel of conciliators with extensive expertise in a
range of industries.
Any of the following procedures are used by the parties.
(a) The parties may choose a conciliator from the IDRC Panel themselves.
(b) Each party may select one conciliator from the IDRC Panel, and the third conciliator may be chosen by
mutual agreement.
(c) The parties may seek the aid of an appropriate organization, such as the IDRC, in connection with the
selection of conciliators.
In the case of family court, labour court, etc., it is required to consult with the councillor, or conciliator, who is
appointed by the government for settling between the parties prior to the trial. Only on the councillor’s report is
the matter presented for trial.
A Conciliator in this situation shouldn’t have any special qualifications, but he also shouldn’t be an expert on
the issue. He could be an authority in the subject area at issue, such as a civil engineer who is knowledgeable
about building construction if the issue is the expense of constructing a structure.
The crucial point, which cannot be overlooked, is that conciliation is not a decision-maker; rather, he is a party
who helps the parties reach an acceptable settlement, with the parties making the final call.
Roles of Conciliator
The conciliator has a special function in conflict resolution. Contrary to mediators, the conciliator participates
in the resolution of the conflict. A conciliator has an active role in the conciliation and can offer solutions for the
parties to consider, unlike a mediator who prefers to manage the mediation process but not the outcome. Contrary
to an arbitrator, who can render a binding decision in the dispute, a conciliator can only make recommendations
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that the parties may choose to accept. The main responsibility of the conciliator is to strike a balance between
encouraging the parties to create their own solutions and offering useful advice and suggestions. The role of
conciliator includes:
1. Hold individual meetings with each side to discuss the meeting’s agenda.
2. Examine pertinent records and data to aid in making decisions.
3. Retain a neutral stance throughout a discussion to guarantee that both viewpoints are given due
treatment.
4. Permit each party to come to their own decision.
5. Be ready to issue their own settlement to disagreements should the parties request it.
6. Meet with witnesses and other parties’ associates to get their statements and further details about the
controversy in question.
7. Based on the agreement made by the parties, write the settlement agreement documents.
8. Maintain secrecy with regard to the parties, their personal information, and the specifics of the dispute.
Conciliators have a difficult job since they must juggle numerous duties and responsibilities at once. Conciliators
do not decide who is at blame, support one party over the other, or offer legal advice. The conciliator’s role is
to direct the parties’ attention to potential solutions and to promote dialogue about them. The finest mediators
will make recommendations that inspire additional discussion and help the parties reflect more deeply on what
they want and need from the settlement. Parties can reach a settlement with the aid of conciliators in a way that
makes everyone feel as though their objectives were met.
Responsibilities of a Conciliator
Some important responsibilities of a conciliator are:
1. Neutral: Playing the role of a neutral is one of the most crucial responsibilities of a conciliator. A
conciliator is not allowed to favour one side over the other or imply that one has a stronger case. Being
impartial helps to preserve the validity of the recommendations made by a conciliator and makes
sure that both parties are completely comprehended and accepted. Additionally, knowing that their
positions will be respected makes it easier for the parties to feel at ease discussing them with the
conciliator.
2. Authority: The parties and the procedure are both under the conciliator’s authority. This gives the
parties a point of reference and enables them to concentrate on the problems at hand rather than the
negotiation’s course of action. The parties can trust the conciliator’s recommendations since they know
that he or she is in charge of bringing about a settlement thanks to this authority.
3. Experienced: Conciliators frequently have some background in the issue they are helping to resolve.
Because the parties perceive the conciliator as having more expertise and experience with the subject
matter, this adds another layer to the idea of authority. In turn, this fosters greater confidence between
the parties and the conciliator.
4. Intuitive: A significant portion of the conciliation process depends on the conciliator accurately identifying
the parties’ wants and interests, which the parties may not even completely recognize themselves. As
a result, the conciliator will be able to help the parties relate to one another and cooperate more
effectively.
5. Creative: The conciliator must utilize creativity while presenting proposals to the parties for how to
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settle the conflict. Conciliators are intuitive, therefore they will pick up on factors that may aid in settling
that the parties themselves might not even be aware of. This, together with creativity, enables the
conciliator to come up with fresh ideas for how to assist the parties in reaching a resolution and moving
on.
6. Relational: Because the goal of conciliation is to create a solution to the dispute while allowing the
parties to maintain or mend their relationship, a conciliator needs to be relational and understand
relationships between the parties. This will allow the conciliator to make suggestions at a time when
they will not disrupt the relationship between the parties. A good conciliator may also work to mend
the relationship before they discuss the issues at hand because they see the value in restoring the
relationship and the value that will add to the negotiations.
7. Facilitator: The conciliator will also see to it that the conciliation process proceeds as planned and that
all parties are given an opportunity to participate fully in discussions. This might imply that the mediator
halts the conversation to hear from a party that couldn’t express themselves as freely.
8. Approach the scenario without judging: Last but not least, a conciliator must be able to approach every
scenario without passing judgment on the parties or their arguments. Unlike evaluative mediators, they
do not assess how the parties would likely fare in court, instead encouraging them to keep working
towards a settlement.
CASE STUDY
CASE STUDY ON CONCILIATION UNDER MSME
1. A party that was dissatisfied with a decision of the MSME Council recently approached the Supreme
Court. The MSME Council had issued notices and summons to Jharkhand Urja Vikas Nigam Limited
(“JUVNL”) on behalf of a small-scale company, but JUVNL did not respond, and the MSME Council ruled
against JUVNL and directed it to make payments as claimed within 30 days. The Rajasthan High Court
upheld the decision, but the Supreme Court subsequently invalidated it. The Court stated that the MSME
Act mandates conciliation and that only if it is unsuccessful may the MSME Council refer the dispute
to arbitration, either on its own or through another institution. During conciliation, the MSME Council
cannot combine the two processes of conciliation and arbitration and issue a payment order. The Court
also clarified that if a statute specifies a dispute resolution mechanism, it is compulsory and cannot
be circumvented by any authority. The Court explained that there is a significant difference between
conciliation and arbitration, and held that the MSME Council was required to conduct conciliation in
compliance with Sections 65 to 81 of the Arbitration and Conciliation Act, 1996. If conciliation fails, the
dispute will be referred to arbitration. The Court dismissed the objection that JUVNL’s remedy was to
apply for setting aside the MSME Council’s decision as an arbitral award. The Court held that the MSME
Council’s decision was made without recourse to arbitration and in violation of the provisions of the
Arbitration and Conciliation Act 1996, and therefore it was not an arbitral award, and JUVNL did not
need to take steps to set it aside.
2. Two MSMEs were involved in a commercial disagreement in which one claimed the other had not
timely delivered the items that had been agreed upon. Delly Ltd. is a performance silicone products
manufacturer for the Indian and global markets offering over 80 high performance products across
sectors such as agriculture, phamaceuticals, personal care, petrochemicals, construction, textiles,
industrial/ distillery etc. On other hand, SFS Ltd. is a manufacturer of screws and automotive parts. The
company manufactures a wide range of industrial set up for spherodised annealing and wire-drawing
to be able to provide desired mechanical properties for machining facilities. The manufacturing plants
are equipped with CNC machines, vertical milling machine, heat treatment line, PLC controlled Surface
treatment facility etc.
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They both had an agreement for the supply of material but the SFS Ltd. made a delay in providing
the material to Delly ltd. which caused significant loss to the complainant company. The Complainant
company filed a complaint before MSME Development Institute (MSME-DI), a government agency
accountable for resolving disagreements related to MSMEs.
A mediator was assigned by the MSME-DI to mediate a meeting between the parties. The conciliator
assisted the parties in identifying the underlying problems and difficulties during the meeting and in
exploring alternative solutions that would be agreeable to both parties.
The parties arrived at a settlement agreement over multiple rounds of negotiation. The agreement laid
forth the conditions for the delivery of the products and the payment schedule, both of which were
intended to make up for the complainant’s losses as a result of the delay.
3. ABC Pvt. Ltd. Is a micro-enterprise produces handicrafts as its primary line of company. They sent a
shipment of handicrafts to XYZ Exporters, a significant business. However, XYZ Exporters put off paying
for the shipment, which put ABC Pvt. Ltd. in a precarious financial situation. Before the Micro and Small
Enterprises Facilitation Council (MSEFC), ABC Pvt. Ltd. submitted a claim for the collection of their unpaid
debts. The parties must take part in conciliation proceedings, the MSEFC ordered.
The MSEFC appointed a mediator for the settlement of dispute. After numerous rounds of negotiations
with each party, the mediator was able to persuade XYZ Exporters to pay the unpaid balances with
interest in accordance with the terms of the contract.
Additionally, the mediator assisted both sides in coming to an agreement about upcoming commercial
transactions. Therefore, ABC Pvt. Ltd. consented to provide the handicrafts to XYZ Exporters on credit,
subject to the payment being paid within a predetermined timeframe. In order to maintain a stable
cash flow, XYZ Exporters also promised to give ABC Pvt. Ltd. frequent business orders. The parties’
disagreement was successfully resolved through the conciliation process.
LESSON ROUND-UP
l Due to the increasing burden on the civil court, various legislations provide that the disputing parties
must attempt to resolve their issues through conciliation and mediation before invoking arbitration or
approaching the civil courts. This results in reducing the burden of the civil courts and is time effective
at the same time
l India has a tradition of employing “Panchayat,” or elder-led conciliation or mediation, to resolve
disputes even if there is no formal law. Many of the choices made during this process were enforceable
in order to show respect for the elders.
l According to Wharton’s Law Lexicon, conciliation is a non-adjudicatory alternative dispute resolution
process which is governed by the conditions of the Arbitration and Conciliation Act, 1996
l Voluntary conciliation is when the parties willingly engage to settling their dispute. Voluntary conciliation
is also called as formal conciliation.
l One of the most important sectors for India’s economic growth is the Micro, Small, and Medium-Sized
Enterprises (MSMEs) sector, especially in light of the COVID-19 pandemic’s difficult circumstances,
which led to the Central Government’s implementation of specific financial stimulus programs for this
industry.
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l Sections 61–81 of Part III of the Arbitration and Conciliation Act, 1996 include the laws governing
conciliation processes. Conciliation, which is a voluntary process when parties in disagreement agree
to resolve their issue through conciliation, is covered in Part III of the Arbitration and Conciliation Act,
1996. It is a flexible method that permits the parties to choose the venue, the date, the time, the subject
matter, and the parameters of the discussions
l According to Section 63 of the Act, there shall be one conciliator unless agreed by the parties that
there shall be two or three conciliators and in case of more than one conciliators, they must act
jointly.
l The parties may choose a conciliator of their own choosing with unanimous consent; that is, both
parties must approve the conciliator’s appointment. The IDRC maintains a panel of conciliators with
extensive expertise in a range of industries.
l Conciliators have a difficult job since they must juggle numerous duties and responsibilities at
once. Conciliators do not decide who is at blame, support one party over the other, or offer legal
advice.
GLOSSARY
Small Enterprises: Small Enterprises are enterprises with an investment of less than Rs. 10 crore and turnover
less than Rs. 50 Crore.
Medium Enterprises: Medium Enterprises are enterprises with an investment of less than Rs. 20 crores and
turnover up to Rs.100 Crore.
Micro Enterprises: Micro Enterprises are enterprises with an investment of less than Rs. 1 crore and turnover
less than Rs. 5 Crore.
Voluntary Conciliation: It refers to a process where a lawyer and their client meet with a conciliator present
to discuss and attempt to resolve an issue
Involuntary Conciliation: It involves the resolution of disputes between a lawyer and their client through
electronic media, such as phone calls, emails, or written notices.
TEST YOURSELF
1. Define Conciliation. Describe its Nature and modes with Illustration.
2. How the Conciliation is necessary for the growth of MSME sector. Briefly explain.
3. Describe the process of Conciliation Proceedings.
4. Write short notes on
l Administrative Assistance under conciliation
l Deposits under conciliation
5. Explain the roles and responsibilities of the Conciliator.
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l Arbitration and conciliation act.
l MSME guidelines
l Supreme court judgements.
OTHER REFERENCES (Including Websites / Video Links)
l https://www.jstor.org/
l https://www.indiacode.nic.in/bitstream/123456789/2013/3/A2006-27.pdf
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Conciliation Proceedings and Lesson
International Perspective of Conciliation 12
KEY CONCEPTS
n Process during Conciliation Proceedings n Terms of Settlement n Conciliated Settlement Agreement
n Conciliation Clause/Agreement
Learning Objectives
To understand:
 Law relating to Conciliation
 Conciliation Process
 Practical aspects of Conciliation
 Role, Responsibilities and Appointment of
Conciliator  Position of Conciliation as Dispute Resolution
System Internationally
 Drafting of Settlement Terms
 International Rules of Conciliation
 Drafting of Conciliation Clause/Agreement
Lesson Outline
 The process during Conciliation and  Glossary
Procedural Aspects
 Test Yourself
 Appointment, Roles and Responsibilities of
Conciliator
 Drafting terms of Settlement under Conciliation
Links)
 Status and Effect of Settlement Agreement
 Drafting of Conciliation Clause/Agreement
 Sections relating to Conciliation under
 Comparative Study of Conciliation
 International Rules on Conciliation
 Case Studies on International Conciliation
 Lesson Round-Up
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PP-AM&C Conciliation Proceedings and International Perspective of Conciliation
l Negotiable Instruments Act, 1881
1
THE PROCESS DURING CONCILIATION AND PROCEDURAL ASPECTS
Conciliation as a process is in which the parties to a dispute with the aid of conciliator identify the issues and
attemot to find out mutually acceptable solution. The Conciliator can inter alia do any of the following:
1. Give advice on the probable solution.
2. Offer opinion of the facts.
3. Give advice on non legal consequences
4. Prepare the settlement agreement
PROCESS DURING CONCILIATION
The process of conciliation can include the following steps:

Step 1: Opening Statement
During the proceedings, the conciliator explains the purpose of conciliation and the rules to be observed during
the conciliation proceedings.
Step 2: Statements of Parties
After the opening statement, each party presents the dispute from their perspective. At this stage, the parties
can also suggest the options for resolution of the dispute.
Step 3: Joint Sessions
After the Statement of Parties, Joint Sessions are conducted in which the parties negotiate for arriving at a
solution. Negotiation Strategies are explained in Lesson no. 14 of this study material.
1. Source: https://www.aat.gov.au/AAT/media/AAT/Files/ADR/Conciliation-process-model.pdf
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Conciliation Proceedings and International Perspective of Conciliation LESSON 12
Step 4: Private Sessions

If required, the conciliator may conduct private meetings with individual parties. In these meeting, the conciliator may
comment on the possible outcome, consequence of non-settlement and strength and weaknesses of the parties.
Step 5: Concluding Sessions
At the last stage, concluding sessions are conducted. In these concluding sessions, the conciliator explains the
settlement arrived in case all the parties agree for mutual settlement or give statements relating to the failure
of conciliation proceedings.
APPOINTMENT, ROLES AND RESPONSIBILITIES OF CONCILIATOR
Appointment
A conciliator is tasked with assisting two or more parties in reaching a settlement. The provisions relating to
appointment of Conciliator has been provided under Section 64 of Arbitration and Conciliation Act, 1996.
Subject to provisions as explained in the following paragraph, the appointment of the conciliator can be as
follows:
(a) in conciliation proceedings, with one conciliator, the parties may agree on the name of a sole conciliator;
(b) in conciliation proceedings with two conciliators, each party may appoint one conciliator;
(c) in conciliation proceedings with three conciliators, each party may appoint one conciliator and the
parties may agree on the name of the third conciliator who shall act as the presiding conciliator.
However, the above is subject to that the Parties may enlist the assistance of a suitable institution or person in
connection with the appointment of conciliators, and in particular,
(a) a party may request such an institution or person to recommend the names of suitable individuals to act
as conciliator; or
(b) the parties may agree that the appointment of one or more conciliators be made directly by such an
institution or person:
Further, in recommending or appointing individuals to act as conciliator, the institution or person shall
have regard to such considerations as are likely to secure the appointment of an independent and
impartial conciliator and, with respect to a sole or third conciliator, shall take into account the advisability
of appointing a conciliator of a nationality other than the nationalities of the parties.
Roles and Responsibilities of Conciliator

Section 67 along with other provisions of the Arbitration and Conciliation Act, 1996 specifies the provisions relating
to the Role and Responsibilities of Conciliator in the conciliation proceedings. The roles and responsibilities of
conciliator are as under:
1. Assistance: The most important role of conciliator is to assist the parties to reach the amicable solution.
It is duty of conciliator to guide the parties wherever they require. The conciliator can advise when the
parties are stuck over a point.
2. Being independent and Impartial: The conciliator shall at all the times be independent and Impartial.
He should not be in favour of one party or against the other. He can give the suggestions impartially.
3. Objectivity: A Conciliator should focus on the objective of the conciliation proceedings as decided by
the parties. He should not deviate from the purpose of conciliation proceeding.
4. Fairness: While advising, he should give fair advices that are beneficial for both the parties.
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5. Justice: ADR proceedings are alternate to judicial proceedings, the purpose of which are to give
justice to the parties. Therefore, while directing the parties towards a mutually acceptable solution, a
conciliator should attempt that Justice has been done to both the parties.
6. Consideration to Rights and Obligations: During the conciliation proceedings, a conciliator should
give proper considerations to the rights and Obligation of the Parties. For example: If Specific Relief Act
obliges a party to perform a duty, due consideration be given to that obligation.
7. Usage and Business Practices: A conciliator should give due consideration to the usages of the trade
concerned and the circumstances surrounding the dispute, including any previous business practices
8. Conducting Conciliation Proceeding according to the wishes of the Parties: A conciliator should
conduct the conciliation proceedings in such a manner taking into account the circumstances of the
case, the wishes the parties, including any request by a party that the conciliator hear oral statements,
and the need for a speedy settlement of the dispute.
9. Making Proposal: The conciliator may, at any stage of the conciliation proceedings, make proposals
for a settlement of the dispute. Such proposals need not be in writing and need not be accompanied by
a statement of the reasons therefor.
10. Arranging Administrative assistance: In order to facilitate the conduct of the conciliation proceedings,
the conciliator with the consent of the parties, may arrange for administrative assistance by a suitable
institution or person.
11. Communication between conciliator and parties According to section 69 of the Arbitration and
Conciliation Act, 1996, the conciliator may invite the parties to meet him or may communicate with
them orally or in writing. He may meet or communicate with the parties together or with each of them
separately.
DRAFTING TERMS OF SETTLEMENT UNDER CONCILIATION

The role of the conciliator is limited to guiding the parties towards the settlement but the reaching out to the
mutually acceptable solution is totally dependent on the parties. The conciliator assists the parties to reach to
the solution according their interests and needs. He also explore and suggest potential solutions to the dispute.
There cannot be a standard format for preparing the settlement as each case is different in the domain of
conciliation. Therefore, the settlement agreement should be drafted with due care and attention ensuring all the
aspects of the proceedings have been taken care of and nothing is left out. A settlement agreement is arrived
after negotiations between the parties.
A Settlement Agreement should satisfy all the requirement of the Indian Contract Act, 1872. It is a binding
contract in terms of section 2(h) of the Contract Law.
Section 73 of the Arbitration and Conciliation Act, 1996 gives an idea about the procedure that may be followed
for arriving at the Settlement Agreement. The following procedure can be followed:
Step 1: When it appears to the conciliator that there exist elements of a settlement which may be acceptable
to the parties, he shall formulate the terms of a possible settlement and submit them to the parties for their
observations.
Step 2: After receiving the observations of the parties, the conciliator may reformulate the terms of a possible
settlement in the light of such observations.
Step 3: If the parties reach agreement on a settlement of the dispute, they may draw up and sign a written
settlement agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing
up, the settlement agreement.
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When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming
under them respectively.
Step 4: The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the
parties.
Arriving at the Settlement Agreement
Points to remember while Drafting Settlement Agreement

A draftsman while drafting a settlement agreement along with the other essential conditions of an agreement
should also take into consideration the following points:
1. Identifying Rights and Responsibilities of each party: Attempt should be made to draft an agreement
that is exhaustive with respect to all the rights and responsibilities agreed between the parties being
mentioned thereunder.
2. No admissions: There is no specific need of mentioning of admission of a fault by the parties. Therefore,
the language of the settlement agreement should not be written in such a manner as it seems like an
admission of a fault.
3. Condition under Section 73 of the Act: The draftsman should take into consideration and include all
the conditions provided under section 73 of Arbitration and Conciliation Act, 1996.
4. Secrecy: According to Section 75 of Arbitration and Conciliation Act, 1996, notwithstanding anything
contained in any other law for the time being in force, the conciliator and the parties shall keep
confidential all matters relating to the conciliation proceedings. Confidentiality shall extend also to the
settlement agreement, except where its disclosure is necessary for purposes of implementation and
enforcement. From this provision, it is clear that confidentially is of utmost importance for conciliation
proceedings.
5. Procedure in case of breach: In case a party breach it is advisable to make provision relating execution
of settlement agreement, Costs of Proceeding, Fees of Conciliator etc.
SETTLEMENT AGREEMENT
The settlement agreement is made on this _____ day of _________, 20____at _________________.
Between
____________ herein after referred to as ‘the 1st party’ of the one part
and
_______________ herein after referred to as ‘2 Party’ of the other part.
nd
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WHEREAS
1. There was a dispute between the 1st party and party 2nd relating to the alleged defective goods provided
by 2nd Party to the 2nd Party.
2. The parties had agreed to refer the dispute to a panel of conciliators.
3. ____________________
4. The parties have settled the dispute with the assistance of the conciliator.
NOW THIS AGREEMENT WITNESSES AS FOLLOWS:
1. 1st Party shall return the alleged defective goods as mentioned under Annexure A to this agreement to
the 2nd Party on or before _________________
2. The 1st party shall make the payment through electronic transfer on or before _______________________.
3. Any other terms________
4. ____________
5. ___________
6. _____________
7. This Agreement shall be binding upon on both the parties and their respective heirs, successors, assigns
and representatives.
8. This Agreement shall not be produced as an evidence except for the purpose of enforcement of its
terms and shall not be treated as admission of a fault by any of the parties.
9. Notwithstanding anything contained in any law for the time being in force other than Arbitration and
Conciliation Act, 1996, the conciliator and the parties shall keep confidential all matters relating to the
conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where
its disclosure is necessary for purposes of implementation and enforcement.
10. In case of breach of its terms by any of the party, this agreement shall have the same status and effect as if
it is an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal.
11. The parties hereby agrees that irrespective of the status of this settlement agreement, the cost of
the conciliation proceedings and fees of the conciliator amounting to Rs. ____________ and Rs.
____________ respectively shall be paid by both the parties in the ratio of 50:50.
12. _________________
13. _________________
IN WITNESS WHEREOF the parties hereto have hereunto set and subscribed their respective hands and seals
the day and year first hereinabove written.
___________________________________ ____________________________________
Signed by the above named 1 party
st
Signed by the above named 2nd Party
(Name, Signature and Details) (Name, Signature and Details)
Witnesses
1. ___________________________
(Name, Signature and Details)
2. ___________________________ __________________________
(Name, Signature and Details) Authenticated by (Conciliator) ____________
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STATUS AND EFFECT OF SETTLEMENT AGREEMENT

According to section 74 of the Arbitration and Conciliation Act, 1996, the settlement agreement shall have the
same status and effect as if it is an arbitral award on agreed terms on the substance of the dispute rendered
by an arbitral tribunal under section 30. The essential ingredients of Section 30 of Arbitration and Conciliation
Act, 1996 are as under:
1. The arbitral tribunal can use mediation, conciliation or other procedures at any time during the arbitral
proceedings to encourage settlement of the disputes.
2. If, during arbitral proceedings, the parties settle the dispute, the arbitral tribunal shall terminate the
proceedings.
3. On termination of proceeding and if requested by the parties and not objected to by the arbitral tribunal,
the tribunal can record the settlement in the form of an arbitral award on agreed terms.
4. An arbitral award on agreed terms shall be made in accordance with section 31 and shall state that it is
an arbitral award.
5. An arbitral award on agreed terms shall have the same status and effect as any other arbitral award on
the substance of the dispute.
Accordingly, the settlement agreement shall have the same status and effect as any other arbitral award.
HOW THE AWARDS ARE ENFORCED

The provisions relating to enforcement of Awards are provided under section 36 of the Arbitration and
Conciliation Act, 1996. Section 36 is reproduced as under:
(1) Where the time for making an application to set aside the arbitral award under section 34 has expired,
then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the
provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a decree of the court.
(2) Where an application to set aside the arbitral award has been filed in the Court under section 34, the
filing of such an application shall not by itself render that award unenforceable, unless the Court grants
an order of stay of the operation of the said arbitral award in accordance with the provisions of sub-
section (3), on a separate application made for that purpose.
(3) Upon filing of an application under sub-section (2) for stay of the operation of the arbitral award, the
Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for
reasons to be recorded in writing:
Provided that the Court shall, while considering the application for grant of stay in the case of an
arbitral award for payment of money, have due regard to the provisions for grant of stay of a money
decree under the provisions of the Code of Civil Procedure, 1908.
Provided further that where the Court is satisfied that a Prima facie case is made out that,—
(b) the making of the award, was induced or effected by fraud or corruption, it shall stay the award
unconditionally pending disposal of the challenge under section 34 to the award.
Explanation.—For the removal of doubts, it is hereby clarified that the above proviso shall apply to
all court cases arising out of or in relation to arbitral proceedings, irrespective of whether the arbitral
or court proceedings were commenced prior to or after the commencement of the Arbitration and
Conciliation (Amendment) Act, 2015
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CASE STUDY
Case Study on Domestic Conciliation
In a matter between 2 companies, the decree Holder was an spot exchange which provide an electronic
platform for the willing buyers and willing sellers to trade in commodities. The Judgment Debtors were the
trading members of the Decree Holder. In course of their dealings and trading in commodity like sugar done
by the Judgment Debtors on the electronic platform of the Decree Holder, as on __ .07, 2013 they incurred a
liability of Rs. ____ Crores towards the Decree Holder.
Owing to the failure of the Judgment Debtors to clear their aforesaid liability the Judgment Debtor were
declared as “defaulter” in terms of Bye-Laws of Decree holder.
Decree Holder and Judgment Debtors initiated a conciliation process under the Arbitration and Conciliation
Act, 1996 and appointed a Conciliator under Section 73 of the Arbitration and Conciliation Act, 1996.
During the Conciliation Process, Judgment Debtors acknowledged their liability and entered into a Settlement
Agreement dated ___.10, 2013 (“Settlement Agreement” ) whereby they undertook to pay an amount of Rs.
____ Crores as Settlement amount to the Decree Holder. The Settlement Agreement was signed by Judgment
Debtors. This Settlement Agreement is equivalent to a settlement award as contemplated under Section 74
of the Act. By way of this settlement agreement the Judgment Debtors agreed to pay the settlement amount
of Rs._____ Crores to the Decree Holder in certain installments.
The Judgment Debtors paid a total amount of Rs._____ Crores from time to time from November 2013 to
October 2014 towards its admitted liability at that point in time as per the Settlement Agreement but then
defaulted in the payment of other installments. In fact the other post dated cheques issued by the Judgment
Debtors got dishonoured for the reason “Funds Insufficient” whereafter the Decree Holder filed the complaint
cases under Negotiable Instruments Act, 1881 for dishonor of cheques against the Judgment Debtor.
Civil suits were filed against the Judgment Debtors by the Decree Holder for the recovery of the defaulted
amount of Rs. ____ Crores. In the said civil suit various notice of motions were filed and orders were passed
against the Judgment Debtors from time to time.
The Hon’ble High Court of Judicature at Bombay disposed of the suits. The Hon’ble High Court observed
that” ...... A settlement agreement between the parties arrived at under Section 73 of the Arbitration and
Conciliation Act has been signed by the parties and authenticated by the conciliator. The agreement has
an effect of an arbitral award. Since the controversy in the present suit has thus been adjudicated upon and
disposed of in terms of the settlement agreement, it is agreed between learned counsel for all the parties
that the present suit does not survive and may be disposed of; instead the Plaintiff may be permitted to apply
for execution of the settlement agreement as an arbitral award”.
Therefore, the proper remedy is to file an execution petition before the court having jurisdiction.
DRAFTING OF CONCILIATION CLAUSE/AGREEMENT

The Parties agree that if at any time, any Disputes (which term shall mean and include any dispute, difference,
question or disagreement arising in connection with construction, meaning, operation, effect, interpretation or
breach of the agreement, contract or the Memorandum of Understanding, which the Parties are unable to settle
mutually), arise inter-se the Parties, the same may, be referred by either party to Conciliation to be conducted
through a penal of 3 (three) Conciliators.
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2
MODEL CONCILIATION AGREEMENT
This agreement made this ______ day of __________, 20____
BETWEEN
___________________ (Full description and address of the Party to be given) of the ONE PART
and
___________________ (full description and address of the Party to be given) of the OTHER PART.
WHEREAS certain disputes and differences have arisen and are subsisting between the aforesaid parties
relating to _____________________________________________(details of contract to be given).
AND WHEREAS the Parties agree to submit their dispute(s) for an amicable settlement in accordance with the
______ Conciliation Rules;
Now the parties hereby agree as follows:
1. The Parties agree to resolve their dispute(s) by Conciliation/Mediation in accordance with the _____
Conciliation Rules
2. The parties shall mutually appoint the Conciliator.
3. The Conciliation shall be administered by the in accordance with the Conciliation Rules.
4. The place of Conciliation shall be ___________________
In Witness Whereof, this Agreement has been signed this____day of_______20____at________________, By
1. ____________________________for and on behalf of_________________
2. ____________________________for and on behalf of __________________
Note: The parties may :- (a) provide for qualification(s) of the Conciliator(s) including, but not limited to, language,
technical experience, nationality and legal experience; (b) specify the language for the conduct of Conciliation.
SECTIONS RELATING TO CONCILIATION UNDER ARBITRATION AND CONCILIATION ACT, 1996

(THE ACT)
1. Section 61 provides the provisions relating to Application and scope.
2. Section 62 provides the provisions relating to Commencement of conciliation proceedings.
3. Section 63 provides the provisions relating to Number of conciliators.
4. Section 64 provides the provisions relating to Appointment of conciliators.
5. Section 65 provides the provisions relating to Submission of statements to conciliator.
6. Section 66 provides the provisions relating to Conciliator not bound by certain enactments.
7. Section 67 provides for Role of conciliator.
8. Section 68 provides the provisions relating to Administrative assistance by a suitable institution or
person.
9. Section 69 provides the provisions relating to Communication between conciliator and parties.
10. Section 70 provides the provisions relating to Disclosure of information by the conciliator.
2. https://icadr.telangana.gov.in/PdfFiles/MenuPdfs/MODELCONCILIATIONMEDIATIONAGREEMENT.pdf
335
11. Section 71 makes the provisions relating to Co-operation of parties with conciliator.
12. Section 72 provides for the provisions relating to Suggestions by parties to conciliator for settlement of
dispute.
13. Section 73 provides the provisions relating to Settlement agreement.
14. Section 74 provides for the provisions relating to Status and effect of settlement agreement.
15. Section 75 talks about the Confidentiality of conciliation proceedings.
16. Section 76 provides the mode in which conciliation proceedings can be terminated.
17. Section 77 provide the provisions relating to restriction and Resorting to arbitral or judicial proceedings.
18. Section 78 provides for the provisions relating to the Costs.
19. Section 79 talks about Deposits to be made by parties.
20. Section 80 provides the provisions relating to Role of conciliator in other proceedings.
21. Section 81 provides the provisions relating to Admissibility of evidence in other proceedings.
These provisions in details has been discussed in Lesson 11 of this study.
COMPARATIVE STUDY OF CONCILIATION

Mediation and Conciliation are often used interchangeably. Though, they are different but the purpose of both
the proceedings is similar. In India also, both Mediation and Conciliation are used as methods of Alternate Dispute
resolution along with Arbitration. In US, the existence of professional organisations such as Federal Mediation
and Conciliation Service, Nation Mediation Board, Civil Mediation Council are evidence that the conciliation
and Mediation both have been used as Methods of Alternate Dispute Resolution. The Federal Mediation
and Conciliation Service (FMCS) of Canada was established to provide dispute resolution and relationship
development assistance to trade unions and employers under the jurisdiction of the Canada Labour Code.
Countries such as Belgium, Denmark, New Zealand, Indonesia also provides the services of mediation. The
Conciliation/Mediation methods are widely use in European countries as well for eg. UK, Germany, Portugal,
France. UK has started using the methods of Mediation/Conciliation since last of 18th Century.
However, Mediation Act, 2023 has made an attempt to replace the word conciliation with the Mediations in
India.
INTERNATIONAL RULES ON CONCILIATION

3
United Nations Commission on International Trade Law (UNCITRAL)
UNCITRAL Conciliation Rules
Article 1: Application of the rules
Article 2: Commencement of conciliation proceedings
Article 3: Number of conciliators
Article 4: Appointment of conciliators
3. Source: Reproduced from the Website of UNCITRAL and can be accessed from the link: https://uncitral.un.org/sites/uncitral.un.org/files/
media-documents/uncitral/en/conc-rules-e.pdf
336
Article 5: Submission of statements to conciliator
Article 6: Representation and assistance
Article 7: Role of conciliator
Article 8: Administrative assistance
Article 9: Communication between conciliator and parties
Article 10: Disclosure of information
Article 11: Co-operation of parties with conciliator
Article 12: Suggestions by parties for settlement of dispute
Article 13: Settlement agreement
Article 14: Confidentiality
Article 15: Termination of conciliation proceedings
Article 16: Resort to arbitral or judicial proceedings
Article 17: Costs
Article 18: Deposits
Article 19: Role of conciliator in other proceedings
Article 20: Admissibility of evidence in other proceedings
APPLICATION OF THE RULES

Article 1
(1) These Rules apply to conciliation of disputes arising out of or relating to a contractual or other legal
relationship where the parties seeking an amicable settlement of their dispute have agreed that the
UNCITRAL Conciliation Rules apply.
(2) The parties may agree to exclude or vary any of these Rules at any time.
(3) Where any of these Rules is in conflict with a provision of law from which the parties cannot derogate,
that provision prevails.
COMMENCEMENT OF CONCILIATION PROCEEDINGS
Article 2
(1) The party initiating conciliation sends to the other party a written invitation to conciliate under these
Rules, briefly identifying the subject of the dispute.
(2) Conciliation proceedings commence when the other party accepts the invitation to conciliate. If the
acceptance is made orally, it is advisable that it be confirmed in writing.
(3) If the other party rejects the invitation, there will be no conciliation proceedings.
(4) If the party initiating conciliation does not receive a reply within thirty days from the date on which
he sends the invitation, or within such other period of time as specified in the invitation, he may elect
to treat this as a rejection of the invitation to conciliate. If he so elects, he informs the other party
accordingly.
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NUMBER OF CONCILIATORS
Article 3
There shall be one conciliator unless the parties agree that there shall be two or three conciliators. Where there
is more than one conciliator, they ought, as a general rule, to act jointly.
APPOINTMENT OF CONCILIATORS
Article 4
(1) (a) In conciliation proceedings with one conciliator, the parties shall endeavour to reach agreement on
the name of a sole conciliator;
(b) In conciliation proceedings with two conciliators, each party appoints one conciliator;
(c) In conciliation proceedings with three conciliators, each party appoints one conciliator. The parties
shall endeavour to reach agreement on the name of the third conciliator.
(2) Parties may enlist the assistance of an appropriate institution or person in connexion with the
appointment of conciliators. In particular,
(a) A party may request such an institution or person to recommend the names of suitable individuals
to act as conciliator; or
(b) The parties may agree that the appointment of one or more conciliators be made directly by such
an institution or person.
In recommending or appointing individuals to act as conciliator, the institution or person shall have regard to
such considerations as are likely to secure the appointment of an independent and impartial conciliator and,
with respect to a sole or third conciliator, shall take into account the advisability of appointing a conciliator of a
nationality other than the nationalities of the parties.
SUBMISSION OF STATEMENTS TO CONCILIATOR
Article 5
(1) The conciliator,* upon his appointment, requests each party to submit to him a brief written statement
describing the general nature of the dispute and the points at issue. Each party sends a copy of his
statement to the other party.
(2) The conciliator may request each party to submit to him a further written statement of his position and
the facts and grounds in support thereof, supplemented by any documents and other evidence that
such party deems appropriate. The party sends a copy of his statement to the other party.
(3) At any stage of the conciliation proceedings the conciliator may request a party to submit to him such
additional information as he deems appropriate.
*In this and all following articles, the term “conciliator” applies to a sole conciliator, two or three conciliators,
as the case may be.
REPRESENTATION AND ASSISTANCE

Article 6
The parties may be represented or assisted by persons of their choice. The names and addresses of such
persons are to be communicated in writing to the other party and to the conciliator; such communication is to
specify whether the appointment is made for purposes of representation or of assistance.
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ROLE OF CONCILIATOR
Article 7
(1) The conciliator assists the parties in an independent and impartial manner in their attempt to reach an
amicable settlement of their dispute.
(2) The conciliator will be guided by principles of objectivity, fairness and justice, giving consideration to,
among other things, the rights and obligations of the parties, the usages of the trade concerned and the
circumstances surrounding the dispute, including any previous business practices between the parties.
(3) The conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate,
taking into account the circumstances of the case, the wishes the parties may express, including any
request by a party that the conciliator hear oral statements, and the need for a speedy settlement of
the dispute.
(4) The conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of
the dispute. Such proposals need not be in writing and need not be accompanied by a statement of the
reasons therefor.
ADMINISTRATIVE ASSISTANCE
Article 8
In order to facilitate the conduct of the conciliation proceedings, the parties, or the conciliator with the consent
of the parties, may arrange for administrative assistance by a suitable institution or person.
COMMUNICATION BETWEEN CONCILIATOR AND PARTIES
Article 9
(1) The conciliator may invite the parties to meet with him or may communicate with them orally or in
writing. He may meet or communicate with the parties together or with each of them separately.
(2) Unless the parties have agreed upon the place where meetings with the conciliator are to be held, such
place will be determined by the conciliator, after consultation with the parties, having regard to the
circumstances of the conciliation proceedings.
DISCLOSURE OF INFORMATION
Article 10
When the conciliator receives factual information concerning the dispute from a party, he discloses the substance
of that information to the other party in order that the other party may have the opportunity to present any
explanation which he considers appropriate. However, when a party gives any information to the conciliator
subject to a specific condition that it be kept confidential, the conciliator does not disclose that information to
the other party.
CO-OPERATION OF PARTIES WITH CONCILIATOR
Article 11
The parties will in good faith co-operate with the conciliator and, in particular, will endeavour to comply with
requests by the conciliator to submit written materials, provide evidence and attend meetings.
SUGGESTIONS BY PARTIES FOR SETTLEMENT OF DISPUTE
Article 12
Each party may, on his own initiative or at the invitation of the conciliator, submit to the conciliator suggestions
for the settlement of the dispute.
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SETTLEMENT AGREEMENT
Article 13
(1) When it appears to the conciliator that there exist elements of a settlement which would be acceptable
to the parties, he formulates the terms of a possible settlement and submits them to the parties for their
observations. After receiving the observations of the parties, the conciliator may reformulate the terms
of a possible settlement in the light of such observations.
(2) If the parties reach agreement on a settlement of the dispute, they draw up and sign a written settlement
agreement.** If requested by the parties, the conciliator draws up, or assists the parties in drawing up,
the settlement agreement.
(3) The parties by signing the settlement agreement put an end to the dispute and are bound by the
agreement.
**The parties may wish to consider including in the settlement agreement a clause that any dispute arising
out of or relating to the settlement agreement shall be submitted to arbitration.
CONFIDENTIALITY
Article 14
The Conciliator and the parties must keep confidential all matters relating to the conciliation proceedings.
Confidentiality extends also the settlement agreement, except where its disclosure is necessary for purposes of
implementation and enforcement.
TERMINATION OF CONCILIATION PROCEEDINGS
Article 15
The conciliation proceedings are terminated:
(a) By the signing of the settlement agreement by the parties, on the date of the agreement; or
(b) By a written declaration of the conciliator, after consultation with the parties, to the effect that further
efforts at conciliation are no longer justified, on the date of the declaration; or
(c) By a written declaration of the parties addressed to the conciliator to the effect that the conciliation
proceedings are terminated, on the date of the declaration; or
(d) By a written declaration of a party to the other party and the conciliator, if appointed, to the effect that
the conciliation proceedings are terminated, on the date of the declaration.
RESORT TO ARBITRAL OR JUDICIAL PROCEEDINGS
Article 16
The parties undertake not to initiate, during the conciliation proceedings, any arbitral or judicial proceedings in
respect of a dispute that is the subject of the conciliation proceedings, except that a party may initiate arbitral
or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his rights.
COSTS
Article 17
(1) Upon termination of the conciliation proceedings, the conciliator fixes the costs of the conciliation and
gives written notice thereof to the parties. The term “costs” includes only:
(a) The fee of the conciliator which shall be reasonable in amount;
340
(b) The travel and other expenses of the conciliator;

(c) The travel and other expenses of witnesses requested by the conciliator with the consent of the
parties;
(d) The cost of any expert advice requested by the conciliator with the consent of the parties;
(e) The cost of any assistance provided pursuant to articles 4, paragraph (2)(b), and 8 of these Rules.
(2) The costs, as defined above, are borne equally by the parties unless the settlement agreement provides
for a different apportionment. All other expenses incurred by a party are borne by that party.
DEPOSITS
Article 18
(1) The conciliator, upon his appointment, may request each party to deposit an equal amount as an
advance for the costs referred to in article 17, paragraph (1) which he expects will be incurred.
(2) During the course of the conciliation proceedings the conciliator may request supplementary deposits
in an equal amount from each party.
(3) If the required deposits under paragraphs (1) and (2) of this article are not paid in full by both parties
within thirty days, the conciliator may suspend the proceedings or may make a written declaration of
termination to the parties, effective on the date of that declaration.
(4) Upon termination of the conciliation proceedings, the conciliator renders an accounting to the parties
of the deposits received and returns any unexpended balance to the parties.
ROLE OF CONCILIATOR IN OTHER PROCEEDINGS
Article 19
The parties and the conciliator undertake that the conciliator will not act as an arbitrator or as a representative
or counsel of a party in any arbitral or judicial proceedings in respect of a dispute that is the subject of the
conciliation proceedings. The parties also undertake that they will not present the conciliator as a witness in
any such proceedings.
ADMISSIBILITY OF EVIDENCE IN OTHER PROCEEDINGS
Article 20
The parties undertake not to rely on or introduce as evidence in arbitral or judicial proceedings, whether or not
such proceedings relate to the dispute that is the subject of the conciliation proceedings:
(a) Views expressed or suggestions made by the other party in respect of a possible settlement of the
dispute;
(b) Admissions made by the other party in the course of the conciliation proceedings;
(c) Proposals made by the conciliator;
(d) The fact that the other party had indicated his willingness to accept a proposal for settlement made by
the conciliator.
MODEL CONCILIATION CLAUSE

Where, in the event of a dispute arising out of or relating to this contract, the parties wish to seek an amicable
settlement of that dispute by conciliation, the conciliation shall take place in accordance with the UNCITRAL
Conciliation Rules as at present in force.
(The parties may agree on other conciliation clauses.)
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CASE STUDY
4
CASE STUDIES ON INTERNATIONAL CONCILIATION
“NICA and dispute owner- strike committee” (selection of conciliator by parties, strike threat, failed
dialogue/communications, attempt of one party to transform conciliation into arbitration, lack of
understanding of the conciliation process)
The collective labour dispute arose in a profitable private company working primarily for the foreign market
and employing around 120 people, mostly women. There was one trade union in the company. At the time
of the commencement of the conciliation procedure, the collective labour agreement had expired for several
months. The employer owned another company with a similar object of activity where there was no trade
union and no collective labour agreement was concluded.
People Involved
The employer and a Strike Committee were the disputing parties. The Strike Committee was supported by
the company based trade union. In the negotiations held at the beginning of the dispute the employer was
represented by the Human Resources director and the Production manager. The Chairman of the Strike
Committee and experts from the branch trade union federation represented the employees’ side.
How the Conciliator became Involved
Both parties requested NICA5 to initiate a conciliation procedure and they mutually selected a conciliator.
The conciliator was a well-known public person, an ex-minister of labour and social policy. Both the
employer and the trade unions (at the company and branch levels) had previous contacts with him related
to other issues. The conciliator’s selection was a result of the personal qualities of the conciliator and the
expectations that he would be the one able to solve the problem.
The Issue in Dispute
The collective labour dispute arose over the changes introduced unilaterally by the employer to the wage
fixing system in the company, which led to decrease in net wages.
During the conciliation procedure, the conciliator determined that one reason for the collective labour
dispute was the decrease by 10-15 % of net wages through the introduction of the new pay system. The
employer claimed that the changes were made as a sanction for production loss-making. On their side, the
workers did not deny such liability but claimed it should be individual and not collective.
Another specific reason was the tension in the company due to the failed direct dialogue between the
employees and the trade union that represented them, on one hand, and the employer (owner), on the
other. The trade union had made efforts to restore direct dialogue with the owner with the support of the
branch federation, but the owner mandated the Production managers and the Human Resources director to
represent him in negotiations.
During the first meeting of the conciliator with the disputing parties, the representatives of the branch union
federation tried to take over the conciliator’s role. On the one hand, these representatives wanted to negotiate
on behalf of the Strike Committee and on the other, they tried to assimilate the role of the conciliator to that
of an expert and at the same time to transform him into an arbitrator of the dispute. The qualities and the
personality of the conciliator prevented that to happen.
4. Source: https://www.ilo.org/wcmsp5/groups/public/---europe/---ro-geneva/---sro-budapest/documents/publication/wcms_486213.pdf
5. Source: National Council for Conciliation and Arbitration of Bulgaria with the legal competency to provide conciliation and arbitration
services.
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An Outline of the Process

The procedure had some specifics that challenged the rules for conciliation established by NICA. Since the
beginning it became clear that the disputing parties agreed to start negotiations with the participation of the
conciliator one month after their application was registered with NICA and the procedure was put in motion.
The conciliator decided to use the technique of direct contact between the parties – everybody else, but the
owner and the Strike Committee, left the room. After several hours, the employer and the Strike Committee
expressed to the conciliator their readiness to conclude an agreement. Later the owner - employer told the
conciliator that during the “tête-à-tête” meeting with the representatives of the employees they discussed a
range of issues, not only the subject of the dispute. They discussed also problems and relationships in the
enterprise the employer was not aware about until then.
Outcomes of the Conciliation
As a result of the conciliation the disputing parties signed an agreement, which covered in principle all
disputing issues. After conciliation and until the signing of the agreement, the wage cut decreased from
10-15% to 2%. An important result was the fact that the employer agreed to negotiate a new collective
labour agreement, which was signed few months later and, according to NICA records, has since then been
renewed annually.
“Dispute in private transport company” (compulsory conciliation, personal interest of representative,
value of questioning, commitment to conciliation process)
The People Involved
A private transport company and one union representing approximately 150 workers.
How the Agency/Conciliator became Involved in the Dispute
The parties had a company-union agreement which required that any dispute not resolved following the decision
of an internal tribunal would be referred by the conciliation service to the labour court at the request of the parties.
In the jurisdiction in question, a conciliator can only refer a case to the labour court once they are satisfied that
they have done everything they can through the process of conciliation to resolve the matter.
The company and union approached the conciliation service and requested a referral of the case to the
labour court. The conciliator assigned to the case told the parties that they would have to attend conciliation
and work in good faith within the process before any such referral could be made. The parties expressed
their dissatisfaction and frustration with the situation but nonetheless agreed to attend.
The Issue in Dispute
The issue presented at conciliation was a dispute over proposed roster changes.
An Outline of the Process and its Outcome
Conciliation began with a brief Joint Meeting and then continued with Separate Meetings. During the
Separate Meetings the conciliator discovered that the attitude to the change in rosters was being affected
by concerns that the change was being put in place in order to reduce the number of supervisors. The
shop steward representing the staff was a supervisor and outlined the concerns of his fellow supervisors in
relation to the roster changes. It became clear through the meetings that management had not been aware
of these concerns and that the workers had not previously voiced them. After the first day of conciliation the
conciliator asked the parties to reflect on the new developments and return. At the next day of conciliation
the parties reached an agreement on rosters and the company made a commitment that new rosters would
not be used to reduce the number of supervisors.
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“LRC and reforming pensions at the Bank of Ireland“ (parties stuck in their positions, strike threat,
conciliation as follow up to labour court recommendation)6
The Bank of Ireland is the premier financial institution in the country. In October 2006, the Bank announced
that it was going to introduce a new ‘hybrid’ pension scheme for new employees. Whereas its longstanding
defined benefit (DB) pension scheme would remain for existing employees, the new scheme would combine
the DB system with elements of what is known as a defined contribution (DC) scheme.
People Involved and Issue in Dispute
The main unions recognised at the Bank, the IBOA and UNITE, reacted with fury to this announcement. It
argued that as one of the most successful and profitable companies in the country, the Bank could easily
afford to retain its DB scheme for new staff. It also argued that the Bank’s unilateral decision was a breach
of existing negotiation procedures and established collective agreements. The unions declared in response
that it would ballot members for strike action.
How the Conciliator became Involved
In an effort to avert industrial action, the dispute was referred by the trade unions to the LRC.
An Outline of the Process
After two Conciliation Conferences, it was evident to LRC that the views of both sides were so entrenched
that the only viable avenue open was to pass the case to the Labour Court, the country’s main arbitration and
adjudication body. The Labour Court after a complex investigation and hearing issued a Recommendation
which criticized the Bank for not using its established internal negotiating machinery to seek changes to
its DB pension scheme. At the same time, the Recommendation acknowledged that management had
legitimate concerns about the long term viability of DB pension scheme and that the unions had equally
valid concerns about the future livelihoods of their members. The Court recommended that the parties get
round the negotiating table to thrash out their differences.
Both parties accepted the Labour Court’s Recommendation. They also agreed to use the LRC as the thirdparty
to oversee the negotiations. The Deputy Director of the Conciliation Division took responsibility for the case.
Before starting negotiations proper between the parties, he spent considerable time with both parties not
only to get familiar with their positions, but to get a sense of the reservation points of both sides the point at
which a party is unlikely to go. In addition, he networked widely to see how similar disputes about pensions
were addressed in the financial services industries and closely related sectors.
This preliminary work was deemed essential by he for two reasons. One was that it allowed him to get an
insight into key issues such as the desire on both sides to resolve the dispute amicably, whether a negotiated
solution could be framed as a win-win settlement and whether the LRC would ultimately need the assistance
of another dispute resolution body like the Labour Court to secure a settlement. In other words, he was able
to develop a roadmap for the negotiations. The other reason was that it allowed him to set the agenda for
the negotiations in a manner so that difficult, contentious matters were not discussed at the beginning.
Negotiations started and unsurprisingly proved difficult. But the LRC team worked continuously with each
side to ensure that both remained committed to achieving a negotiated solution even though discussions on
a particular did not fully go their way.
6. Source: Resolving workplace disputes in Ireland: The role of the Labour Relations Commission, Paul Teague, 2013, Working Paper No. 48,
ILO, Geneva, 2013.
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Outcome of Conciliation
Finally, a settlement was reached which involved the Bank agreeing to introduce a revised hybrid pension
plan at a later date. The union was not fully happy having to give up the DB scheme for new entrants, but
calculated that it would unable to negotiate a better deal in the circumstances.
LESSON ROUND-UP
l Conciliation as a process is in which the parties to a dispute with the aid of conciliator identify the
issues and attempt to find out mutually acceptable solution.
l There cannot be a standard format for preparing the settlement as each case is different in the domain
of conciliation. Therefore, the settlement agreement should be drafted with due care and attention
ensuring all the aspects of the proceedings have been taken care of and nothing is left out.
l Section 67 along with other provisions of the Arbitration and Conciliation Act, 1996 specifies the
provisions relating to the Role and Responsibilities of Conciliator in the conciliation proceedings.
l According to section 74 of the Arbitration and Conciliation Act, 1996, the settlement agreement shall
have the same status and effect as if it is an arbitral award on agreed terms on the substance of the
dispute rendered by an arbitral tribunal under section 30.
l The Parties agree that if at any time, any Disputes (which term shall mean and include any dispute,
difference, question or disagreement arising in connection with construction, meaning, operation,
effect, interpretation or breach of the agreement, contract or the Memorandum of Understanding,
which the Parties are unable to settle mutually), arise inter-se the Parties, the same may, be referred
by either party to Conciliation to be conducted through a penal of 3(three) Conciliators.
l The role of the conciliator is limited to guiding the parties towards the settlement but the reaching out
to the mutually acceptable solution is totally dependent on the parties.
l The Parties agree that if at any time, any Disputes (which term shall mean and include any dispute,
difference, question or disagreement arising in connection with construction, meaning, operation,
effect, interpretation or breach of the agreement, contract or the Memorandum of Understanding,
which the Parties are unable to settle mutually), arise inter-se the Parties, the same may, be referred
by either party to Conciliation to be conducted through a penal of 3(three) Conciliators.
l Conciliation as method of dispute resolution has gaining its popularity as it can be an effective
alternative to Arbitration. The conciliation can be said to be an effective resolution method as it is
quick, Economic and mutual decision making process is appreciated in conciliation proceedings.
l Conciliation and mediation are often used interchangeably in the American legal system. The
distinction between mediation and conciliation in terms of technical or legal distinctions is quite small.
l According to Dispute Resolution – Hamburg.com, there is no explicit legal foundation for conciliation
under German law. Consequently, it is up to the parties to establish and agree upon a set of guidelines
that will govern the conciliation. In actuality, the conciliator or a specialised conciliation institution will
normally present the parties with a set of conciliation guidelines.
l The Federal Mediation and Conciliation Service (FMCS) was established to provide dispute resolution
and relationship development assistance to trade unions and employers under the jurisdiction of the
Canada Labour Code (Code).
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GLOSSARY
Settlement Agreement: A settlement agreement is a legal binding document created to end a conflict
between the disputed parties. A settlement agreement’s goal is to prevent the opposite party from filing a
lawsuit.
Conciliation: It is the process of resolving conflicts without going to court.
TEST YOURSELF
1. Explain the Roles and Responsibilities of Conciliator.
2. Describe the process of conciliation.
3. Draft a Conciliated Settlement Agreement. Assume necessary facts.
4. Can Conciliated Settlement Agreement be enforced in Courts? Explain.
5. Explain the position of conciliation in Canadian Law.
l Handbook on Arbitration: A Practical Guide for Professionals
l Bare Act of Arbitration and Conciliation Act, 1996
l http://www.nationalspotexchange.com/pdf/Execution-Petition.pdf
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PART II
MEDIATION
Mediation: An Introduction and its Lesson
Process along with Rules 13
KEY CONCEPTS
n Conflicts n Development of Mediation n Types of Mediation n Mediation Process n Pre-litigation mediation n
Private Mediation vs. Court Annexed Mediation n Role of Judiciary in Mediation n Communication in Mediation
n Settlements n Co-mediator
Learning Objectives
To understand:
 Advantages of Mediation
 Meaning of conflict and its forms
 Qualifications and Disqualifications of a
 Socio Political Roots of Mediation
Mediator
 Laws related to Mediation in India and
 The process of appointing a Mediator
internationally
 The process of Mediation and Conciliation
 Basic understanding of Mediation and
Conciliation and differences between the two  Different types of Mediation
concepts
 Concept of Settlement Agreement
Lesson Outline
 Conflict  Ethics to be followed by a Mediator
 Socio-Philosophical roots of Mediation  Communication in Mediation
 What is Mediations?  Negotiation in Mediation
 Concept of Conciliation  Settlement
 Pre-litigation Mediation  The Singapore Convention on Mediation
 Private Mediation vs. Court Ordered Mediation
 Co-Mediator
 Appointment of Mediator
 Domestic Mediation
 Court-ordered Mediation
 Mediation Clause
 Adhoc Mediation and Institutional Mediation
 Case Study & Role Play
 Procedure of Mediation
 Lesson Round-Up
 Fees of Mediator and Costs
 Glossary
 Mediation – Role of Judiciary and Legal
Status  Test Yourself
 The Mediation Bill, 2021  List of Further Readings
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PP-AM&C Mediation: An Introduction and its Process along with Rules
l Civil Procedure Code (CPC), 1908
l Commercial Courts Act, 2015
l Limitation Act, 1963
l The Companies Act, 2013
l Consumer Protection Act, 2019
CONFLICT
Meaning of Conflict
The term conflict means disagreements or differences of opinion. Conflict is central to existence of human
beings. It arises from incompatible aims, attitudes, beliefs, or requirements.
Social structures, cultural interaction, and ideologies plays an important role in conflict. An individual’s
perception, principles, standards, ethics, and morality, are shaped by such structures and institutions. Social
needs, security, status recognition, or similar factors may also influence an individual’s mindset.
According to United Nations Institute for Training and Research (UNITAR) program of correspondence
instructions in peacekeeping operations, Conflict is defined as the pursuit of incompatible goals by individuals or
groups.
In other words, conflict situations arise when individuals or groups pursue positions, interests, needs, or values
that may lead to actions that conflict with the interests, needs, and values of others while also pursuing their
own goals.
A ‘nested conflict’ exists when hidden and exposed conflicts coexist. It usually occurs when the presented or
reflected conflict is not the only factor and another factor, disguised as an exposed factor, is to blame for the
conflict.
Nature of Conflict
After ascertaining the meaning of conflict, our focus shifts to the nature of conflict.
Conflicts can be categorized as expressive or non-expressive. The essential elements of an expressive conflict
are anger, argument, abuse, and anguish.
A. Expressive forms of Conflict

(i) Anger
Anger can range from mild irritation to rage, and it can be triggered by a variety of factors (specific
people, events, memories, or personal problems). Anger is a common and valuable emotion. According
to Gary Ginter, a psychologist who specializes in anger management, there are three sources of anger:
physiological, cognitive, and behavioural.
Raised voices, flashing eyes, and twisted facial expressions are common indicators of rage. When
examined closely, however, anger appears to be a generated emotion rather than an instantaneous
reaction. Several underlying factors influence this generation, including unmet needs, fear, social or
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Mediation: An Introduction and its Process along with Rules LESSON 13
personal insecurities, or retaliation against any situation. As a result, we can say that anger is not
limited to expressions of violence, rage, and hostility.
(ii) Argument
In the case of a conflict, an argument is defined as a quarrel or a heated exchange of words. But
if viewed from a broad perspective, an argument is a statement or set of statements used to try to
persuade people that your opinion about something is correct, or an argument is a discussion or debate
in which several people present different or opposing viewpoints. Arguments may not always lead to
negative outcomes. It is highly possible that two intellectuals can differ in opinion, with little to no loss
in their composure and respect for one another. A different way of perceiving any fact, definition, or
evaluation of any policy is also an argument.
(iii) Abuse
Uncontrolled rage and ignored arguments can lead to abuse. This could even be the start of hostile
and aggressive behaviour in person. This is usually the result of a deep-seated high level of attachment
or insecurity, and it is a severe and negative sign of underlying conflict. When there is a truly abusive
situation, it is because one party is attempting to control the other through abuse. And that the party
abusing or expressing aggression has feelings of ill will because the issue of conflict is not only
about differences and disagreements, but also about dispossessing the other party or causing such
irreplaceable harm. Abuse indicates personal grudges and a negative urge to cause damage.
(iv) Anguish
Anguish is defined as a state of agony or self-suffering manifested through a bad temper. It is a highly
sensitive mode of expression, and the point of contention is frequently difficult to identify. The person
may not express the accurate conflict but does express a bad temper in random situations. It basically
indicated the nature of non-acceptance.
B. Non-Expressive Forms of Conflict

This is far more sensitive and difficult to identify, which may result in the conflict resolution process being
delayed or even denied entirely. Silence, Avoidance and Resistance are the essential features of the non-
expressive forms of conflict.
(i) Silence
Meaning of silence is forbearance from speech or noise and cessation of commination which may have
a severe impact on the resolution of the conflict. Silence is observed when the party or parties ignore
the fact or have little interest in prospects.
(ii) Avoidance
The dismissive approach to conflict is avoidance. Many times, parties refrain from dissenting because
they are afraid of losing their relationship, upsetting the other party, or other similar reasons. The
disturbing factor is avoided in the hope that it will disappear; however, such a non-engagement strategy
may result in a compounding of emotions because they are repeatedly suppressed. Avoidance may
also have other facets such as lack of confidence, mistrust and inability to express oneself.
(iii) Resistance
Resistance is defined by stubbornness, inflexibility, and rigidity, which leads to frustration. In this
situation, a party may fail to express his dissatisfaction clearly and may remain steadfast in his position,
thereby avoiding the interests of the other party. This could be an impediment because the individual
does not attempt to communicate.
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SOCIO- PHILOSOPHICAL ROOTS OF MEDIATION
India
In the field of ADR in India, mediation has emerged as a preferred method of resolving disputes. In our nation, the
idea of mediation has a long history and solid foundation. The ancient Indian literature, illustrates the long history of
intercultural coexistence. This is possible only if collaborative dispute resolution techniques were in existence at that
time. At assemblies and parishads, now known as conferences, intellectual and legal discussions (shastrarth) were
organized with the goal of discovering the truth. It has persisted in our communities and has also been maintained in
our tribal areas in its traditional form. According to the ancient Indian ancient sage Patanjali, “progress comes swiftly
in mediation for those who try hardest instead of deciding who was right and who was wrong.”
Indians find significant mention of the practise of mediation in all of their religious texts. The major religions in
India such as Hinduism, Islam, Christianity, Buddhism, Jainism, Sikhism regard mediation as an accepted virtue
for resolving disputes.
Hinduism
The Bhagavad Gita and the Mahabharata, two major Hindu scriptures, mention two levels of dispute resolution:
first, an internal dispute between the soul and the ego, and second, an external dispute between human
beings. Lord Krishna acts as a mediator in the Bhagavad Gita. Assisting Arjuna in resolving internal and external
conflicts. The texts lay out ethical grounds for resolving family conflicts.
The solution to such disputes can be found in Hindu mythology, more commonly known as the Mahabharata.
According to this epic, there are two major factors to consider when resolving such disputes.
To begin with, an individual should not sacrifice one’s needs because doing so is worse than death. Second,
regardless of how unlikely it may appear, an individual should acquire his or her needs peacefully to the best
of one’s ability. The epic mentions various mechanisms for ensuring and maintaining peace, such as reminding
the individual of the benefits of doing Dharma or the dangers of practising adharma, making concessions, and
expressing oneself in a humble and kind manner.
One instance is the KULA tribunal, which was proposed and established by the renowned scholar Yagnavalkya
and dealt with conflicts between members of families, communities, tribes, castes, or races.
Internal conflicts were resolved by a different tribunal known as SHRENI, a corporation of artisans engaged in
the same line of work. A similar group of traders from all sectors of commerce existed under the name PUGA.
Yagnavalkya’s reign saw an unheard-of expansion of trade, industry, and commerce, and it is said that Indian
traders travelled the seven seas, sowing the seeds of modern international trade. According to Parashar, certain
issues should be decided by an assembly of learned people known as a parishad.
Buddhism promoted mediation as the most sage approach to problem-solving. Buddha declared, Wisdom
comes from meditation; ignorance comes from lack of meditation.
Choose what leads to wisdom by being aware of what moves you ahead and what holds you back.
This Buddhist saying affirms the idea that during meditation, one should avoid ruminating on the past and
instead concentrate on the present.
Islam
Sulah, an important concept in Islamic jurisprudence, discusses compromise, settlement, or agreement between
parties as a crucial method of resolving a dispute. The stated concept’s goal is to eliminate hostility and conflict
among people who believe in religion so that they can maintain a peaceful relationship in society.
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Sulah is facilitated by an ad hoc mediator-arbitrator known as a hakam, who is appointed by the parties seeking
resolution. These are kahin, or clergymen of established religions or cults. Several mediation and arbitration
disputes between members of the community were facilitated and adjudicated by the Prophet during his time in
Medina. For example, in a Sunnah, the Prophet successfully resolved a dispute between a creditor and a debtor
through mediation by having the parties agree that the creditor shall accept half of the money owed to him by
the debtor on the condition that the debtor pays in full rather than in instalments.
Furthermore, the holy Quran contains several verses that specifically advocate mediation as a method of dispute
resolution. The widespread acceptance of Islam as a religion ensured the promotion of universal identity and
the de-emphasis of tribal loyalties among Muslims. This facilitated mediation between all Muslims, regardless
of tribal affiliation. Perhaps the most important reason for the importance of mediation in Islamic Law is Islam’s
strong aversion to third-party binding dispute resolution, such as arbitration and litigation.
Development of Mediation in India

Abraham Lincoln once stated: “discourage litigation, persuade your neighbours to compromise whenever you
can. Point out to them how the normal winner is often a loser in fees, expenses, cost and time”
India had been using a system known as the Panchayat system for centuries before the British arrived, where
respected village leaders helped settle community problems. Even now, towns use this type of conventional
mediation. Also, businesses in pre-British India were using mediation. Members of the business group asked
impartial and reputable businesspeople known as Mahajans to settle conflicts using a non-binding process
that blended mediation and arbitration. Some tribes in India still use Panchas or Pancha Parmeshwars as
neutral third parties to settle disputes informally between erring individuals or groups. With the advent of British
colonialism, however, mediation came to be recognised as a formal and legalised ADR mechanism.
With the reintroduction of Lok Adalat into the Indian judicial system, mediation gained popularity as an ADR
mechanism. The Legal Services Authority Act, passed in 1987, gave Lok Adalat statutory status in India for the
first time. The Lok Adalat’s decisions have been given the same legal standing as those of civil courts under
this act.
The terms “mediation” and “conciliation,” which were previously considered synonymous, received significant
distinctions in their usages when the Arbitration and Conciliation Act was passed in 1996. The act not only
established a clear definition for conciliation, but it also consolidated the laws governing domestic arbitration
in India.Because the mediator, unlike the conciliator, does not actively participate in the mediation process, the
terms cannot be used interchangeably.
Section 89 of the Civil Procedure Code (CPC), 1908, which was inserted by the CPC (Amendment) Act, 1999,
can also be credited with the development of mediation as an ADR mechanism. Hon’ble Mr. Justice A M
Ahmadi’s efforts were responsible for this particular development. The Institute for the Study and Development
of Legal Systems (ISDLS) was invited to India by Ahmadi, the then Chief Justice of India, for a national legal
exchange programme between India and the United States.The ISDLS investigated the problems of institutional
backlogs in the Indian judicial system and proposed ADR mechanisms as well as legislative and structural
reforms to the laws relating to these mechanisms, after which new reforms were introduced in 2002 in the
form of an amendment to Section 89 of the CPC. However, the amendment was challenged by a group of
lawyers, prompting the formation of the Malimath Committee and the 129th Law Commission. In light of the
committees’ reports, the Supreme Court, in the case of Salem Advocates Bar Association vs. Union of India,
made it mandatory for courts to refer cases to alternative forums if they so desired. This case is a landmark one
in the development of mediation in India.
Since then, Supreme Court justices have made significant contributions to the advancement of mediation as an
ADR mechanism. A Mediation and Conciliation Committee was formed under Hon’ble Mr. Justice R C Lahoti,
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and a Mediation Project was launched in Delhi in 2005. In the same year, the Tis Hazari court complex opened
a Permanent Mediation Centre, and judicial mediation began at the Karkardooma court complex. In 2015,
two mediation centres were also established, one at the Karkardooma court complex in Delhi and the other
at the Patiala court. Thus, mediation as an Alternate Dispute Resolution mechanism has received significant
impetus over the years as a result of various legislations and the efforts of various Supreme Court judges. Pre-
Independence era mediation status in India -development of mediation in India under various statutes -recent
developments in the field of mediation in India.
Mediation Act, 2023

Mediation Act, 2023 has received the assent of the Hon’ble President of India on the 14th September, 2023.
The object of this law inter alia is to promote and facilitate mediation, resolution of disputes, enforce mediated
settlement agreements, provide for a body for registration of mediators, to encourage community mediation
and to make online mediation as acceptable and cost effective process. The provisions of this law will come into
force on such date(s) as the Central Government will notify. The following sections of the Mediation Act, 2013
has come into force w.e.f. 9th October, 2023.
These sections are as follows:
Section 1: Short title, extent and commencement
This Act may be called the Mediation Act, 2023. It shall extend to the whole of India. It shall come into force on
such date as the Central Government may, by notification, appoint and different dates may be appointed for
different provisions of this Act and any reference in any such provision to the commencement of this Act shall
be construed as a reference to the coming into force of that provision.
Section 3: Definitions
The important definitions provided in section 3 inter alia is as under:
(a) “commercial dispute” means a dispute defined in clause (c) of sub-section (1) of section 2 of the
Commercial Courts Act, 2015;
(b) “community mediator” means a mediator for the purposes of conduct of community mediation under
Chapter X;
(c) “Council” means the Mediation Council of India established under section 31;
(e) “court-annexed mediation” means mediation including pre-litigation mediation conducted at the
mediation centres established by any court or tribunal;
(f) “institutional mediation” means mediation conducted under the aegis of a mediation service provider;
(g) “international mediation” means mediation undertaken under this Act and relates to a commercial
dispute arising out of a legal relationship, contractual or otherwise, under any law for the time being in
force in India, and where at least one of the parties, is-
(i) an individual who is a national of, or habitually resides in, any country other than India; or
(ii) a body corporate including a Limited Liability Partnership of any nature, with its place of business
outside India; or
(iii) an association or body of individuals whose place of business is outside India; or
(iv) the Government of a foreign country;
(h) “mediation” includes a process, whether referred to by the expression mediation, pre-litigation mediation,
online mediation, community mediation, conciliation or an expression of similar import, whereby parties
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attempt to reach an amicable settlement of their dispute with the assistance of a third person referred
to as mediator, who does not have the authority to impose a settlement upon the parties to the dispute;
(i) “mediator” means a person who is appointed to be a mediator, by the parties or by a mediation service
provider, to undertake mediation, and includes a person registered as mediator with the Council.
Explanation.—Where more than one mediator is appointed for a mediation, reference to a mediator
under this Act shall be a reference to all the mediators;
( j) “mediation agreement” means a mediation agreement referred to in sub-section (1) of section 4;
(k) “mediation communication” means communication made, whether in electronic form or otherwise,
through—
(i) anything said or done;
(ii) any document; or
(iii) any information provided,
for the purposes of, or in relation to, or in the course of mediation, and includes a mediation agreement
or a mediated settlement agreement;
(l) “mediation institute” means a body or organisation that provides training, continuous education and
certification of mediators and carries out such other functions under this Act;
(m) “mediation service provider” means a mediation service provider referred to in sub-section (1) of section
40;
(n) “mediated settlement agreement” means mediated settlement agreement referred to in sub-section (1)
of section 19;
(q) “online mediation” means online mediation referred to in section 30;
(u) “pre-litigation mediation” means a process of undertaking mediation, as provided under section 5, for
settlement of disputes prior to the filing of a suit or proceeding of civil or commercial nature in respect
thereof, before a court or notified tribunal under sub-section (2) of section 5;
(y) “specified” means specified by regulations made by the Council under this Act.
Section 31 to Section 38 relating to Mediation Council of India
The Central Government shall, by notification, establish for the purposes of this Act, a Council to be known as
the Mediation Council of India to perform the duties and discharge the functions under this Act. The composition
of Council shall be in accordance with provisions provided under section 32 of the Mediation Act, 2023. Other
provisions inter alia relates to Vacancies, etc., not to invalidate proceedings of Council, Resignation, Removal,
Appointment of experts and constitution of Committees, Secretariat and Chief Executive Officer of Council and
Duties and functions of Council.
Section 45 to 47 relating to Mediation Fund, Accounts and Audits & Power of Central Government to issue
directions
Section 45 provides for creation of “Mediation Fund” and prescribes the amounts that may be credited to this
fund.
Further, the accounts of the Council are to be audited by the Comptroller and Auditor-General of India and any
expenditure incurred by him in connection with such audit shall be payable by the Council to the Comptroller
and Auditor-General of India.
In exercise of its powers or the performance of its functions under this Act, the Council shall be bound by
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directions on questions of policy as the Central Government may give in writing to it and the decision of the
Central Government whether a question is one of policy or not shall be final.
Section 50 to 54 relating to certain Protection, power of making rules, regulations and power of removal of
difficulties
Section 50 provides that no suit, prosecution or other legal proceeding shall lie against the Central Government
or a State Government or any officer of such Government, or the Member or Officer or employee of the Council
or a mediator, mediation institutes, mediation service providers, which is done or is intended to be done in good
faith under Mediation Act, 2023 or the rules or regulations made thereunder. This provision can aid and promote
the effective implementation of this Law.
The power of making the rules has been given to the Central Government and the regulations can be made by
the Mediation Council. Notification, Rules and Regulation made under this law is to be laid before each House
of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or
in two or more successive sessions, and if, before the expiry of the session immediately following the session
or the successive sessions aforesaid, both Houses agree in making any modification in the notification, rule
or regulation or both Houses agree that the notification, rule or regulation should not be issued or made, the
notification, rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the
case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of
anything previously done under that notification, rule or regulation.
If case of any difficulty, the Central Government may make such provisions, not inconsistent with the provisions
of this Act, as may appear to it to be necessary for removing the difficulty. However, no such order shall be
made under this section after the expiry of a period of five years from the date of commencement of this Act.
Section 56 and 57 dealing with effect of this law on pending proceedings and transitory provisions
This Act does not apply to, or in relation to, any mediation or conciliation commenced before the coming into
force of this Act. The rules in force governing the conduct of court-annexed mediation shall continue to apply
until regulations are made under section 15(1). However, the rules shall continue to apply in all court-annexed
mediation pending as on the date of coming into force of the regulations.
WHAT IS MEDIATION?
According to the Mediation and Conciliation Project Committee Supreme Court of India1- “Mediation is a
structured process where a neutral person uses specialized communication and negotiation techniques. A
process of facilitating parties in resolving their disputes. A settlement process whereby disputing parties arrive
at a mutually acceptable agreement”.
Mediation is a process in which a third party who is impartial or neutral assists disputants in reaching a mutually
acceptable solution. It is both private and voluntary. It is a collaborative effort. Parties have the opportunity to
voice their feelings and are involved in creating solutions to end their dispute. Mediation is thus a combination of
the parties’ willingness to resolve their disputes and the Mediator’s ability to guide parties towards a settlement.
A mediator is someone who structures the dialogue between the parties and helps them understand their
competing interests. The mediator also suggests appropriate approaches for the parties to take in order to
solve the problem. The lack of formality allows for an open discussion of issues and a free exchange of ideas,
making it easier to determine the interests of the parties and craft solutions to satisfy those interests. It is a
very informal process in which the parties hold the reins of the process. It seeks court guidance only when an
interpretation of a law or statute is required.
1. Mediation and Conciliation Project Committee, Supreme Court of India, Delhi, Mediation Training Manual of India 42
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Advantages of Mediation
According to the Mediation and Conciliation Project Committee, Supreme Court of India
Following are the advantages:
Mediation is well suited to resolve a conflict because-
1. Informal - Attorneys are not required because the process is informal and flexible. There are no
witnesses and no formal rules of evidence.
2. Confidential - Mediation is a private process. Any information revealed during the mediation will not
be disclosed by the mediators. The sessions are neither taped nor transcribed. Mediators destroy any
notes they took during the mediation session at the end of the session.
3. Simple and inexpensive - Mediation is an option to consider when parties want to get back to business
and their lives. Mediation generally takes less time to complete, allowing for a faster resolution than
investigation.
Moreover, mediation generally produces or promotes-
Increased level of party control- Parties who negotiate their own settlements have a greater degree of control
over the outcome of their dispute. In the process, all parties have an equal say. There is no finding of fault;
rather, the parties reach a mutually acceptable resolution to their dispute.
l Relationship maintenance. Many conflicts arise as a result of ongoing work relationships. Mediated
settlements that address all parties’ interests frequently preserve working relationships in ways that a
win/lose decision-making procedure would not. Mediation can also help to make the end of a working
relationship more amicable.
l Results that are mutually satisfactory- Parties are generally more satisfied with solutions that they
helped to develop rather than solutions imposed by a third-party decision maker.
l Agreements that are both comprehensive and customised - Mediated agreements frequently aid in the
resolution of procedural and interpersonal issues that are not always amenable to legal resolution. The
parties can tailor their agreement to their specific situation and attend to implementation details.
l A Foundation for Future Problem Solving - If a subsequent dispute arises after a mediation resolution,
parties are more likely to use a cooperative problem-solving forum to resolve their differences rather
than an adversarial approach.
Further, Mediation has no effect on the parties’ legal rights, and they can use it before filing a case in court or
at any stage of their litigation in court because the process is completely confidential and cannot be used as
evidence in court. As a result, if Mediation fails, the parties’ rights in Court remain unaffected.
TYPES OF MEDIATION
A. Facilitative Mediation
A professional mediator in facilitative or traditional mediation attempts to facilitate negotiation between
the parties in conflict. The mediator helps the parties identify issues, explore options for resolution, and
find common ground. The mediator does not make decisions or provide advice, but rather helps the
parties to reach their own agreements. Rather than making recommendations or imposing a decision,
the mediator encourages disputants to reach their own voluntary solution by probing deeper into each
other’s interests. Mediators in facilitative mediation tend to keep their own perspectives on the conflict
hidden.
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B. Court- Mandated Mediation

Although mediation is typically defined as a completely voluntary process, it can be mandated by a
court in order to promote a quick and cost-effective settlement. When parties and their attorneys are
hesitant to participate in mediation, their chances of reaching an agreement through court-mandated
mediation are low, as they may simply be going through the motions. Settlement rates are much higher
when both parties see the benefits of participating in the process.
C. Evaluative Mediation
Evaluative mediation, in contrast to facilitative mediation, is a type of mediation in which mediators
are more likely to make recommendations and suggestions, as well as express opinions. Instead of
focusing solely on the parties’ underlying interests, evaluative mediators may be more likely to assist
parties in assessing the legal merits of their arguments and making fairness determinations. Evaluative
mediation is most commonly used in court-ordered mediation, and evaluative mediators are frequently
attorneys with legal expertise in the subject matter of the dispute.
D. Transformative Mediation
This style of mediation focuses on empowering the parties to improve their relationship and
communication skills. The mediator works to facilitate the parties’ understanding of each other’s
perspectives, goals, and needs, and helps them to find mutually beneficial solutions.
Transformative mediation is rooted in the facilitative mediation tradition, as described by Robert A.
Baruch Bush and Joseph P. Folger in their 1994 book The Promise of Mediation. At its most ambitious,
the process aims to transform the parties and their relationship by acquiring the skills required to effect
positive change.
E. Narrative Mediation
This style of mediation involves the parties telling their stories and exploring the underlying emotions
and motivations behind their positions. The mediator helps the parties to identify and challenge negative
assumptions and biases, and to reframe their narratives in a more positive and constructive light.
F. Med- Arb
This is a process that combines mediation and arbitration. In a med-arb process, the parties attempt
to resolve their dispute through mediation first. If they are unable to reach a settlement, the mediator
becomes an arbitrator and makes a binding decision on the remaining issues.
Sam Kagel first coined this hybrid alternate dispute resolution mechanism by mixing two-methods
‘mediation and arbitration’ into one ‘Med-Arb’ for settling the San Francisco Nurses’ Strike in the 1970s.
G. Arb-Med
This is the opposite of med-arb. In an arb-med process, the parties first go through arbitration, where
an arbitrator makes a binding decision on the disputed issues. If the parties are unable to accept the
arbitrator’s decision, they can then go through mediation to attempt to reach a settlement.
This procedure keeps the pressure on parties to come to a resolution while removing the worry
expressed in med-arb regarding the misuse of personal information. It should be noted that the arbitrator
or mediator cannot modify her previous decision in light of fresh information from the mediation.
There is another hybrid mechanism Med-Arb-Med. This is a process that combines mediation, arbitration,
and mediation again. In a med-arb-med process, the parties first attempt to resolve their dispute through
mediation. If they are unable to reach a settlement, an arbitrator makes a binding decision on the
disputed issues. After the arbitration, the parties return to mediation to attempt to reach a settlement on
the remaining issues.
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H. Arb-Med-Arb
Singapore International Arbitration Centre (SIAC) and Singapore International Mediation Centre (SIMC)
jointly provide the Arb-Med-Arb Protocol.The AMA Protocol allows a party to commence arbitration
under the auspices of the SIAC, and then proceed to mediation under the SIMC.
In practice, parties will, as they would in a regular arbitration, commence proceedings under the AMA
Protocol by filing with the Registrar of the SIAC a Notice of Arbitration, who will proceed to notify SIMC
of the filing. After the filing of the Response to the Notice of Arbitration and the constitution of the
Tribunal, the Tribunal will stay the arbitration for mediation at SIMC.
The SIMC will then fix a date for the commencement of mediation at SIMC (“Mediation Commencement
Date”), which will be conducted under the SIMC Mediation Rules. Unless the Registrar of SIAC, in
consultation with the SIMC, extends the time, the mediation shall be completed within eight weeks of
the Mediation Commencement Date.
The AMA procedure can be chosen by the parties by incorporating the Model Clause in their contract
which goes as below:
All disputes, controversies or differences (“Dispute”) arising out of or in connection with this contract,
including any question regarding its existence, validity or termination, shall be referred to and finally
resolved by arbitration in Singapore in accordance with the Arbitration Rules of the Singapore
International Arbitration Centre (“SIAC”) for the time being in force.
The parties further agree that following the commencement of arbitration, they will attempt in good
faith to resolve the Dispute through mediation at the Singapore International Mediation Centre (“SIMC”),
in accordance with the SIAC-SIMC Arb-Med-Arb Protocol for the time being in force. Any settlement
reached in the course of the mediation shall be referred to the arbitral tribunal appointed by SIAC and
may be made a consent award on agreed terms.
I. E-Mediation
E-mediation refers to the use of electronic communication and technology to facilitate the resolution of
disputes between parties. It is a form of online dispute resolution (ODR) that allows people to participate
in mediation from different locations and through various digital means, such as video conferencing,
email, instant messaging, or web-based platforms.
E-mediation can be used to resolve a wide range of disputes, including consumer complaints, workplace
conflicts, family disputes, and international disputes. The process typically involves a neutral third-
party mediator who helps the parties communicate, identify their needs and interests, explore options,
and reach a mutually acceptable solution. The mediator may use various tools and techniques to
facilitate the process, such as online whiteboards, document sharing, and virtual breakout rooms.
According to UNCITRAL ‘Technical Notes on Online Dispute Resolution 2017’ there are three stages in
the ODR process:
l First stage – a technology enabled negotiation – parties to the dispute attempting to negotiate
directly to resolve the matter;
l Second stage – facilitated settlement stage – mediator to communicate with disputants to arrive
at an amicable settlement;
l Third stage – commencement of ODR proceedings – parties will be informed of the process by a
neutral third party appointed.
E-mediation can offer several benefits over traditional face-to-face mediation, including convenience,
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accessibility, cost-effectiveness, and time savings. However, it also poses some challenges, such as
ensuring the security and privacy of the communication, dealing with technical issues, and maintaining
the same level of rapport and trust between the parties and the mediator.
CONCEPT OF CONCILIATION
Conciliation is a form of alternative out-of-court dispute resolution.
Conciliation, like mediation, is a voluntary, flexible, confidential, and interest-driven process. The parties attempt
to reach an amicable dispute resolution with the help of the conciliator, who serves as a neutral third party.
Conciliation is a voluntary proceeding in which the parties are free to agree and try to resolve their dispute
through conciliation. The process is adaptable, with parties determining the timing, structure, and content of the
conciliation proceedings. These proceedings are almost never made public. They are interest-based because
the conciliator will consider not only the parties’ legal positions, but also their commercial, financial, and/or
personal interests when proposing a settlement. The parties, as in mediation proceedings, have the final say on
whether or not to reach an agreement.
Benefits
l Conciliation protects the autonomy of the parties.
l The parties have the ability to control the timing, language, location, structure, and content of the
conciliation proceedings.
l Conciliation ensures the decision maker’s expertise.
l The parties are free to choose their own mediator. A professional background is not required for a
conciliator. The parties’ selection criteria may include experience, professional and/or personal
expertise, availability, language and cultural skills, and so on. A conciliator should be objective and
impartial.
l Conciliation saves time and money.
l Conciliation proceedings can be conducted in a time and cost-effective manner due to their informal
and flexible nature.
l Confidentiality is ensured through conciliation.
l Confidentiality is usually agreed upon by the parties. As a result, disputes can be settled discreetly,
and business secrets can be kept private.
The conciliator, like a mediator, will attempt to guide the parties to an amicable settlement. The conciliator, on
the other hand, will be prepared to present the parties with a non-binding resolution proposal. The parties have
the option of accepting or declining the proposal.If they accept the proposal, it is usually documented as the
settlement agreement. While the settlement agreement is not enforceable in and of itself, it can be made so in
Germany by having it notarized and/or in other countries by having it incorporated into an arbitral award.
Difference between Mediation and Conciliation

Generally, mediation and conciliation are considered synonymous. Supreme Court of India in Afcons v. Cherian
case noted, “Mediation” is also a well known term and it refers to a method of non-binding dispute resolution
with the assistance of a neutral third party who tries to help the disputing parties to arrive at a negotiated
settlement. It is also synonym of the term ‘conciliation’.”
However, section 89 of the CPC mentions about them as distinct processes. Therefore, following distinctions
are pertinent in India:
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There is no specific law on mediation. Conciliation is covered by part III of the Arbitration and Conciliation Act,
1996.
Mediation is process driven. Conciliation is subject-matter driven.
The role of a mediator is facilitative. The role of a conciliator is evaluative.
Settlement agreement pursuant to voluntary mediation is not binding. Conciliation agreement has same value
like an arbitral award.
Thus, the main distinction between conciliation and mediation proceedings is that the parties will ask the
conciliator to provide them with a non-binding settlement proposal at some point during the conciliation. A
mediator, on the other hand, will, in most cases and on principle, refrain from making such a proposal.
Does a Mediator give his/her own opinion?
According to Mediation and Conciliation Project Committee, Supreme Court of India:
Because mediation is non-binding, a decision cannot be imposed on the parties. Any settlement must be
accepted voluntarily by the parties in order to be finalised.As a result, unlike a judge or an arbitrator, the
mediator does not make decisions. The role of the mediator is rather to assist the parties in reaching their own
decision on a settlement of the dispute. Moreover, mediator also doesn’t suggest solutions. This is generally
true about facilitative mediation.
However, in Evaluative Mediation, the mediation assists the parties in reaching resolution by pointing out the
weaknesses of their cases, and predicting what a judge or jury would be likely to do. An evaluative mediator
might make formal or informal recommendations to the parties as to the outcomes of the issues.
The Florida Rules for Certified and Court- Appointed Mediators do not forbit a mediator from offering opinions
such as 10.306(c), only prohibit opinions that are “intended to coerce the parties, unduly influence the parties,
decide the dispute, or direct a resolution of the case.” However, Mediators are not permitted to use their opinions
to decide any aspect of the dispute or to coerce the parties or their representatives to accept any resolution
option.
WHO INITIATES THE MEDIATION PROCESS ?

The process for starting mediation depends on whether it is mandatory or voluntary. Mandatory mediation is
governed by legal or judicial processes. Voluntary mediation is carried out subject to the parties’ agreement.
Mandatory mediation is initiated as a result of a court order or by law (statute or regulation).For example, it
is common for jurisdictions or courts to require that parties to a family dispute, such as a divorce, work with a
government-approved mediator before proceeding with litigation.
Keep in mind that mediation does not involve a decision-maker.
Mandatory mediation simply requires that the parties initiate the process. The parties are not compelled to
negotiate or reach an agreement.The hope is that requiring the parties to participate in mediation will assist
them in voluntarily resolving the legal dispute without resorting to litigation.
Voluntary mediation is initiated when the parties reach an agreement. This agreement may be established
before or after a legal dispute arises.Pre-dispute mediation agreements are typically included in a separate
contract between the parties.In other words, the parties enter into any type of contract.
A post-dispute mediation agreement is typically formed as a result of the parties’ separate agreement to hire
a mediator to resolve the dispute.That is, the parties seeking to settle a legal dispute recognise the value of
mediation and voluntarily seek the services of a mediator. People frequently mix up mandatory and voluntary
mediation, assuming that mediation is required because a contract contains a mediation clause.
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Under the Commercial Courts (Pre-institution Mediation and Settlement) Rules, 2018 following process has
been laid down to initiate the mediation:2
l A party to a commercial dispute may make an application to the Authority as per Form-1 specified in
Schedule-I, either online or by post or by hand, for initiation of mediation process under the Act along
with a fee of one thousand rupees.
l The Authority shall, having regard to the territorial and pecuniary jurisdiction and the nature of
commercial dispute, issue a notice, as per Form-2 specified in Schedule-I through a registered or speed
post and electronic means including e-mail and the like to the opposite party to appear and give
consent to participate in the mediation process on such date not beyond a period of ten days from the
date of issue of the said notice.
l Where no response is received from the opposite party either by post or by e-mail, the Authority shall
issue a final notice to it.
l Where the notice issued remains unacknowledged or where the opposite party refuses to participate in
the mediation process, the Authority shall treat the mediation process to be a non-starter and make a
report.
l Where the opposite party, after receiving the notice seeks further time for his appearance, the Authority
may, if it thinks fit, fix an alternate date not later than ten days from the date of receipt of such request
from the opposite party.
l If party still fails to appear, authority to treat the mediation process to be a non-starter and make a
report.
l Where both the parties to the commercial dispute appear before the Authority and give consent to
participate in the mediation process, the Authority shall assign the commercial dispute to a Mediator
and fix a date.
l The Authority shall ensure that the mediation process is completed within a period of three months from
the date of receipt of application for pre-institution mediation unless the period is extended for further
two months with the consent of the applicant and the opposite party.
Mediation application form for commercial disputes
Details of Parties:
1. Name of applicant:
2. Address and contact details of applicant:
Address: -
Telephone. No.__________ Mobile.________E-mail ID:______________
3. Name of opposite party:
4. Address and contact details of opposite party:
Address:-
Telephone. No. __________ Mobile. ________E-mail ID: ______________
Details of Dispute:
1. Nature of dispute as per section 2 (1)(c) of the Commercial Courts Act 2015 (4 of 2016):
2. The Commercial Courts (Pre- Institution Mediation And Settlement) Rules, 2018
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2. Quantum of claim:
3. Territorial jurisdiction of the competent court:
4. Brief synopsis of commercial dispute (not to exceed 5000 words):
5. Additional points of relevance:
Details of Fee Paid:
Fee paid by DD No. _________ dated ________ Name of Bank and branch ____________.
Online transaction No. _______ dated _________.
Date:
Signature of Authority
Note: Form shall be submitted to the Authority with a fee of one thousand rupees.
For Office Use:
Form received on :
File No. allotted:
Mode of sending notice to the opposite party:
Notice to opposite party sent on:
Whether Notice acknowledged by opposite party or not:
Date of Non-starter report/ Assignment of commercial dispute to Mediator:
Form for notice/ final notice to the opposite party for pre-institution mediation
Name of the Authority and address
1. Whereas a commercial dispute has been submitted to (name of Authority) by (name of applicant) against
(name of opposite party) requesting for pre-institution mediation in terms of section 12A of Chapter IIIA
of Commercial Courts Act, 2015. A copy of the mediation application Form is attached herewith.
2. The opposite party is hereby directed to appear in person or through his duly authorised representative
or Counsel on ____________ (Date) ____________ (Time) at the (Authority address) and convey his
consent to participate in mediation process.
3. Failure to appear before the Authority by opposite party would be deemed as his refusal to participate
in mediation process initiated by the applicant.
4. In case, the date and time mentioned in para 2 is sought to be rescheduled the same can be done by
the opposite party either on its own or through its authorised representative or counsel by making a
request in writing at-least two days prior to the scheduled date of appearance.
Signature of the Authority

Date:
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PRE- LITIGATION MEDIATION

Section 12 A of the Commercial Act 2015 outlines the provision requiring the parties to exhaust pre-institution
mediation remedies before bringing a lawsuit of a commercial nature. With the intention of giving clarity to the
pre-institution mediation procedure within a predetermined time range, the Commercial Courts (Pre-Institution
Mediation and Settlement) Regulations, 2018, were created.
12A. Pre-Institution Mediation and Settlement. —
(1) A suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless
the plaintiff exhausts the remedy of pre-institution mediation in accordance with such manner and
procedure as may be prescribed by rules made by the Central Government.
(2) The Central Government may, by notification, authorise the Authorities constituted under the Legal
Services Authorities Act, 1987 (39 of 1987), for the purposes of pre-institution mediation.
(3) Notwithstanding anything contained in the Legal Services Authorities Act, 1987 (39 of 1987), the Authority
authorised by the Central Government under sub-section (2) shall complete the process of mediation
within a period of three months from the date of application made by the plaintiff under sub-section (1):
Provided that the period of mediation may be extended for a further period of two months with the
consent of the parties:
Provided further that, the period during which the parties remained occupied with the pre-institution
mediation, such period shall not be computed for the purpose of limitation under the Limitation Act,
1963 (36 of 1963).
(4) If the parties to the commercial dispute arrive at a settlement, the same shall be reduced into writing
and shall be signed by the parties to the dispute and the mediator.
(5) The settlement arrived at under this section shall have the same status and effect as if it is an arbitral
award on agreed terms under sub-section (4) of section 30 of the Arbitration and Conciliation Act, 1996
(26 of 1996).
The State Legal Services Authority, established pursuant to the Legal Services Authorities Act, 1987, are
responsible for conducting the time-bound mediation process required by Section 12-A. For instance,
pursuant to Section 12-A, the parties to a suit brought under the Act before the District Courts of Delhi
are directed to the Delhi Legal Services Authority for mediation. Guardrails have been set up to prevent
the proposed mediation from being used by the parties as nothing more than a stalling tactic and to
guarantee that it is handled efficiently. The sole situation in which Section 12-A allows for an exception
is where a party requests urgent temporary relief. However, the Act does not specify what constitutes
“urgent temporary relief,” and the same.
After the introduction of Section 12-A, there was disagreement among the courts on whether or not to
dismiss complaints brought out without using the requisite pre-institution mediation required by Order
7 Rule 11 of the Code of Civil Procedure, 1908. While some people saw the legislative requirement as
mandatory under Section 12-A, others saw it as simply directory. The Supreme Court has resolved this
dispute with its ruling in Patil Automation. The Court has ruled that any suit filed violating the mandate
of Section 12-A must be visited with rejection of the plaint under Order 7 Rule 11 and that it is obligatory
to exhaust pre-institution mediation as required by Section 12-A of the Act.3
3. Patil Automation (P) Ltd. v. Rakheja Engineers (P) Ltd., 2022 SCC OnLine SC 1028.
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Conditions For Pre-Litigation Mediation as per Mediation Centre, Punjab and Haryana High Court,
Chandigarh
Under the P&H High Court Rules on pre-litigation mediation, the applicant must fill out a Pre- Litigation Mediation
Information form in which he/she must submit his/her details, the details of the second party, the nature of the
dispute, and give an undertaking to comply with certain Pre-Litigation Mediation conditions.
Conditions for Pre-Litigation Mediation:
a. Both parties together or singly shall pay Rs. 1000/- in all as administrative charges of the Mediation
Centre;
b. The fee of the Mediator i.e., Rs. 10000/- in all together, or singly, shall be paid by the parties at the initial
stage on appointment of the Mediator by depositing it with the Mediation Centre.
c. Both parties together or singly shall pay Rs. 500/- per sitting for the use of the Mediation Centre.
d. The above amount/s shall be paid either cash or through Pay Order/ Demand Draft drawn in favour of
the Mediation & Conciliation Committee, Punjab & Haryana High Court, Chandigarh.
e. Both parties together or singly shall pay additional fee of the Mediators, depending upon the nature of
the dispute, which would be decided by Hon’ble Chairman.
f. That in terms of section 74 of Arbitration and Conciliation Act, 1996, settlement agreement would have
the same status and effect as of it is an arbitral award on agreed terms on the substance of the dispute
rendered by an arbitral tribunal under section 30 of the Act.
g. It would not be treated as Court Litigation.
h. That the settlement reached between the parties would be in a shape of decree and can be enforced.
Form-2: Notice/Final Notice to the Opposite party for Pre-Institution Mediation
[See Rule 3(2) and Rule 3(3)]
1. Whereas a commercial dispute has been submitted to (name of Authority) by (name of applicant) against
(name of opposite party) requesting for pre-institution mediation in terms of section 12A of Chapter IIIA
of Commercial Courts Act, 2015. A copy of the mediation application Form is attached herewith.
2. The opposite party is hereby directed to appear in person or through his duly authorised representative
or Counsel on ____________ (Date) ____________ (Time) at the (Authority address) and convey his
consent to participate in mediation process.
3. Failure to appear before the Authority by opposite party would be deemed as his refusal to participate
in mediation process initiated by the applicant.
4. In case, the date and time mentioned in para 2 is sought to be rescheduled the same can be done by
the opposite party either on its own or through its authorised representative or counsel by making a
request in writing at-least two days prior to the scheduled date of appearance.

Date:
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Form 3: Non-Starter Report

[See Rule 3 (4) and (6)]
1. Name of the applicant:
2. Date of application for Pre-Institution mediation:
3. Name of the opposite party:
4. Date scheduled for appearance of opposite party:
5. Report made under rule 3(4) or 3(6):
6. Non Starter Report reason:____________________________________________
_________________________________________________________________
_________________________________________________________________
Date:

Copy to:
Applicant.
Opposite Party.
PRIVATE MEDIATION VS. COURT ORDERED MEDIATION

Mediation is a method of resolving disputes with the help of a neutral third-party mediator. Arbitration, on the
other hand, is very similar to a court trial. Arbitration includes elements of litigation such as discovery and
testimony, as well as arbitrators who listen to the facts, review the evidence, and make a final decision.
Private Mediation
Both parties must agree to participate in private mediation, and the mediator must be agreed upon. There are
numerous mediators available, each with their own set of experiences and areas of expertise. Choosing the right
mediator is a critical decision that can affect whether or not the mediation is successful. When using a private
mediator, you can schedule the mediation at a time that is convenient for both parties, but there is a cost for the
mediator’s time. It is recommended that when using private mediation, each party pay half of the mediation fee
to ensure that both parties are financially invested in the process and want to work towards resolution.
How to find Private Mediators?

A private mediator does not have to be a lawyer, but it is preferable that the person is qualified as a mediator.
Finding a private mediator can be done in a few different ways, including:
l Referral from a lawyer: If you have a lawyer, they may be able to refer you to a private mediator.
Lawyers often have professional networks and may know of mediators who specialize in specific types
of disputes.
l Mediator directories: There are several directories that list private mediators, including those offered
by professional organizations such as the Association for Conflict Resolution, mediate.com or the
International Mediation Institute.
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l Online search: A simple online search for private mediators in your area can yield many results. You
can also look for online reviews and ratings to help you choose a mediator. One may verify social
media profile of mediator such as LinkedIn to verify the credentials.
l Local bar association: Your local bar association may have a list of mediators who are available for
private mediation.
l Referral from friends or family: You may know someone who has used a private mediator in the past and
can provide a recommendation.
l List of empanelled mediators: The details of Mediators who are empanelled with various mediation
institutions and their bios can be found online.
l Rankings: These days many private organizations rank mediators based on their work and client
feedback. Such rankings may help you in identifying people who are active in mediation practice.
However, one should be cautious in solely relying on rankings.
It is important to research the mediator’s qualifications, experience, and reputation before selecting one. It may
also be helpful to schedule an initial consultation to discuss your case and determine if the mediator is a good
fit for your needs.
APPOINTMENT OF MEDIATOR
In ad hoc mediation, the parties involved in a dispute choose a mediator themselves instead of going through
a mediation institution or program. Here are the typical steps for the appointment of a mediator in ad hoc
mediation:
1. Selection of Mediator: The parties to the dispute should agree on the selection of a mediator. This can
be done through mutual discussion or with the help of a third party who is not involved in the dispute.
2. Communication: Once the mediator is selected, the parties should communicate with the mediator to
confirm their availability and willingness to mediate the dispute.
3. Appointment Letter: Once the mediator agrees to mediate the dispute, an appointment letter should be
sent to the mediator confirming the appointment. The appointment letter should include the terms of
reference, the scope of the mediation, and the time frame for the mediation.
4. Agreement: The mediator and the parties should enter into an agreement that outlines the terms and
conditions of the mediation process. The agreement should include the mediator’s fees, the duration of
the mediation, and the confidentiality of the proceedings.
5. Commencement of Mediation: Once the mediator is appointed and the agreement is signed, the
mediation process can commence.
It is important to note that in ad hoc mediation, the parties are responsible for choosing a mediator who has
the necessary qualifications and experience to handle the dispute. The mediator should be neutral, impartial,
and have the necessary skills to facilitate communication and understanding between the parties. In law, no
qualifications are prescribed for a person to act as mediator in ad hoc mediations. Any person upon whom
parties repose a trust may be appointed as a mediator.
Nowadays, most High Courts and District Courts have mediation centres attached to the Court that are
administered by the Court, and whenever a matter needs to be referred, it is referred to such centres. The matter
is then assigned to the panel mediator by the centre’s in-charge. In that case, the parties are not required to pay
any mediation fees or charges.
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Qualifications of a Person to be appointed as Mediators in Court annexed or referred Mediation

As per Delhi High Court rules,4 following persons may be enlisted in the panel of Mediators/Conciliators under
rule 3:
l Retired judges of the Supreme Court of India
l Retired judges of the High Court
l Retired District & Sessions Judges or retired Officers of Delhi Higher Judicial Service
l District & Sessions Judge or Officers of Delhi Higher Judicial Service
l Legal practitioners with at least ten years standing at the Bar at the level of the Supreme Court or the
High Court of the District Courts
l Experts or other professionals with at least fifteen years of standing
l Persons who are themselves experts in mediation/ conciliation
l Social worker.
Similar qualifications are also stipulated by the Bombay High Court rules as well.
As per Bombay High Court Mediation Rules,5 parties to a suit may all agree on the name of the sole mediator
for mediating between them. Where, there are two sets of parties and are unable to agree on a sole mediator,
each set of parties shall nominate a mediator. Where parties agree on a sole mediator under clause (a) or where
parties nominate more than one mediator under clause (b), the mediator need not necessarily be from the panel
of mediators referred to in Rule 3 nor bear the qualifications referred to in Rule 4 but should not be a person who
suffers from the disqualifications referred to in Rule 5. Further, where there are more than two sets of parties
having diverse interests, each set shall nominate a person on its behalf and the said nominees shall select the
sole mediator and failing unanimity in that behalf, the Court shall appoint a sole mediator.
Under ICSID rules, the parties may choose one mediator or two co-mediators. The parties jointly appoint each
mediator (Mediation Rule 13(1)). If the parties are unable to reach an agreement on whether to appoint one
or two co-mediators within 30 days of registration, the rules state that one mediator will be appointed by
party agreement (Mediation Rule 13(2)).If the parties agreed to two co-mediators and one resigns during the
mediation, the parties may agree to continue the mediation with the remaining mediator as the sole mediator.
In addition to the requirements established by the Mediation Rules, parties may wish to consider practical
considerations when selecting a mediator. These are some examples:
l mediation training, including any accreditation as a mediator by an internationally recognised

organisation
l experience in international dispute resolution involving States, including various forms of negotiation,
mediation, or conciliation
l experience working in or with governments or public entities understanding of the context and framework
of investor-State disputes, including economic, legal, social, and cultural considerations.
ICSID has a large network of mediators and is always available to assist parties in locating experienced
4. Mediation and Conciliation Rules, 2004

5. Civil Procedure Mediation Rules, 2006
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mediators (Mediation Rule 13(3)). At any time, the parties may jointly request the Secretary-assistance General’s
with an appointment (Mediation Rule 13(3)).If the parties are unable to appoint the mediator(s) within 60 days
of the request for mediation being registered, either party may request that the Secretary-General appoint
the mediator who has not yet been appointed (Mediation Rule 13(4)). Alternatively, the parties can agree on a
different time frame or procedure.
Disqualifications in Court Annexed Mediation

A person will be disqualified from appointment as mediator if:
l any person who has been adjudged insolvent or is of unsound mind;
l any person against whom criminal charges involving moral turpitude have been framed by a criminal
court and are pending;
l any persons who has been convicted by a criminal court for any offence involving moral turpitude;
l any person against whom disciplinary proceedings have been initiated by the competent authority or
who has been punished in such proceedings;
l such other categories of persons as may be notified by the High Court;
l any person who is interested or connected with the subject-matter of dispute or is related to any one of
the parties or to those who represent them, unless such objection is waived by all the parties in writing;
l any legal practitioner who has or is appearing for any of the parties in the suit or in other suit or
proceedings.
In accordance with Delhi High Court Mediation Rule 7, when a person is contacted regarding his potential
appointment as a mediator or conciliator, he is required to inform the parties in writing of any circumstances
that would give rise to a reasonable doubt about his independence or impartiality. After being appointed as a
mediator or conciliator, if such a factor emerges, it must be immediately notified to the parties in writing.
The rules also provide that while appointing mediator/conciliator the Court concerned shall ensure that the
person to be appointed is not interested or connected with the subject matter of the dispute and is not related
to any of the parties or to those who represent them. However, the parties shall be free to waive such objection
in writing. While choosing a mediator or conciliator, the court in question must make sure the candidate has no
stake in or connection to the dispute and is unrelated to any of the parties or the legal counsel for them. The
parties may, however, expressly waive such objection in writing.
COURT- ORDERED MEDIATION

As opposed to Court Referred Mediation, when the court only refers the matter to a mediator, Court Annexed
Mediation involves the court providing mediation services as an integral component of the same judicial system.
Currently, court-annexed mediation is offered by most courts at the trial and appellate levels. The benefit of
court-annexed mediation is that judges, attorneys, and litigants participate in it, giving them the impression that
all three actors in the justice delivery system worked together to reach a settlement. No one would sense that
the system isolates from the case when a judge assigns a case to the Court-annexed Mediation Service while
maintaining overall oversight of the process.
Because the process of mediation is often the same between voluntary and court-ordered mediation, the
fundamentals of mediation apply to both. The procedure follows a similar pattern, though it may differ slightly
depending on the style of the mediator. Mediation typically involves the following steps:-
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l Introduction – The mediator and the parties will introduce themselves to each other at the start of the
mediation. The mediator will also frequently provide an overview of how the process will proceed and
establish any ground rules that may be required for the day.
l Opening Statements- During this section, the parties will have the opportunity to present their case to
the mediator and the other party, explaining what they want and why they want it. This is usually the
only opportunity for the parties to present their side of the story to the other party.
l Caucuses- After the opening statements, the mediator will frequently separate the parties and
participate in individual meetings with each of the parties to gain a better understanding of the case
from each side. Whatever either party says to the mediator during these meetings will not be shared
with the other party unless both parties agree.
l Bargaining- Eventually, the parties will start bargaining for their version of the settlement. In family law
cases, this may imply that the parties are negotiating how to divide parenting time, assets, money, and
other aspects of their lives. The mediator may direct that the parties work together in the same room, or
that the offers be shuttled back and forth.
l Agreement- The mediation will conclude with the parties reaching an agreement. This can be an
agreement to settle the case or an agreement that the parties are unable to settle the case at this time
and would like to proceed with litigation.
Mediation is an extremely useful tool in cases where the parties must agree on certain aspects of the case.
Mediation is usually voluntary, but courts will occasionally order it, particularly in family law cases. Mediation
can assist the parties in working together to solve their problems and find a way to move forward together.
Mediation provides the parties with a sense of control over their futures and can assist them in making better
decisions together in the future. While court-ordered mediation can be intimidating, keep in mind that the parties’
best interests are at the forefront of the process. Mediation allows the parties to resolve their disagreement
amicably and move on with their lives.
ADHOC MEDIATION AND INSTITUTIONAL MEDIATION

Ad hoc mediation and institutional mediation are two different types of mediation that differ in several ways.
Here are the key differences between ad hoc mediation and institutional mediation:
l Definition: Ad hoc mediation refers to mediation that is arranged on an as-needed basis and is not part
of a formalized dispute resolution process. Institutional mediation, on the other hand, is mediation that
is provided by a formal organization or institution termed as mediation service provider.
l Structure: Ad hoc mediation is typically more flexible and informal than institutional mediation. The
mediator may be selected by the parties or appointed by a court or other authority, and the mediation
may take place in a variety of settings, such as a mediator’s office, a conference room, or even online.
Institutional mediation, on the other hand, typically follows a set of established procedures and
protocols, and may be conducted in a specific location or online platform.
l Expertise: Ad hoc mediators may or may not have specific expertise or training in mediation, depending
on how they are selected. Institutional mediators, on the other hand, are typically trained and certified
in mediation, and may have specific expertise in certain types of disputes or industries.
l Cost: Ad hoc mediation may be less expensive than institutional mediation, as the parties may only
pay for the mediator’s services and any associated costs, such as room rental or travel expenses.
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Institutional mediation may involve additional costs, such as administrative fees, overhead costs, and
other expenses associated with the formal organization providing the mediation services. However,
the cost of institutional mediation may be offset by the infrastructure, technical expertise and human
resource assistance provided by such institutions.
l Availability: Ad hoc mediation may be more readily available than institutional mediation, as the parties
can arrange for mediation as needed. Institutional mediation, on the other hand, may have limited
availability depending on the resources and schedule of the mediation service provider. In Ad hoc
mediation you can directly liaison with the mediator regarding availability. In institutional mediation, it
will be routed through mediation service provider.
PROCEDURE OF MEDIATION
A Mediation is a structured process designed to assist parties in resolving disputes. Here are the typical steps
involved in mediation:
i. Introduction: The mediator will introduce themselves and explain the mediation process to the parties
involved. They will also explain the role of the mediator and the ground rules for the mediation process.
ii. Opening statements: Each party will have the opportunity to make an opening statement to explain
their perspective on the dispute.
iii. Information gathering: The mediator will gather information about the dispute from both parties. They
will ask questions and clarify any misunderstandings to ensure they have a clear understanding of the
issues at hand.
iv. Identifying issues: The mediator will help the parties identify the issues in dispute and prioritize them.
v. Generating options: The parties will brainstorm and generate potential solutions to the issues in
dispute. The mediator will help facilitate this process and encourage the parties to consider a wide
range of options.
vi. Negotiation: The parties will engage in negotiations to reach a mutually acceptable agreement. The
mediator will assist in this process by helping the parties to communicate effectively, explore potential
compromises and consider the consequences of their decisions.
vii. Closure: Once an agreement has been reached, the mediator will summarize the terms of the
agreement and ensure that both parties understand and agree to them. The parties will then sign a
written agreement.
viii. Follow-up: The mediator may follow up with the parties after the mediation to ensure that the agreement
In Court-annexed mediation and pre-institution mediation following rules are followed:
Delhi High Court Rules Commercial Courts (Pre- Institution Mediation and
Settlement) Rules, 2018
Party Autonomy: The parties may agree on the The mediation shall be conducted as per the
procedure to be followed by the mediator/conciliator following procedure-
in the conduct of the mediation/conciliation
At Commencement: Mediator shall explain to the
proceedings.
parties the mediation process.
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If Parties don’t agree: Deciding Date and Venue: The date and time of
each mediation sitting shall be fixed by the Mediator
i. Attendance: Mediator shall fix, in consultation
in consultation with the parties to the commercial
with the parties, a time schedule, the dates and
dispute.
the time of each mediation session, where all
the parties have to be present; Sessions: The Mediator may, during the course of
mediation, hold meetings with the parties jointly or
ii. Venue: He shall hold the mediation at any
separately, as he thinks fit;
convenient location agreeable to him and the
parties, as he may determine; Private Session: The applicant or opposite party may
share their settlement proposals with the Mediator in
iii. Sessions: He may conduct joint or separate
separate sittings with specific instruction as to what
meetings with the parties;
part thereof can be shared with the other party;
iv. Memorandum: Each party shall, ten days
Settlement Proposal: The parties to the mediation
before a session, provide to the mediator a
can exchange settlement proposals with each other
brief memorandum setting forth the issues
during mediation sitting either orally or in writing.
and its position in respect of those issues and
all information reasonably required for the
mediator to understand the issues;
v. Exchange of Memoranda: Such memoranda

shall also be mutually exchanged between the
parties;
Each party shall furnish to the mediator, copies

of pleadings or documents or such other
information as may be required by him in
connection with the issues to be resolved:
Provided that where the mediator is of the

opinion that he should look into any original
document, the Court may permit him to look
into the original document before such officer
of the Court and on such date or time as the
Court may fix.
vi. Co-mediator: where there is more than one

mediator/conciliator, the mediator/conciliator
nominated by each party shall first confer
with the party that nominated him and shall
thereafter interact with the other mediator with
a view to resolve the disputes.
Agreement on procedure: During the process of mediation, the Mediator shall

maintain confidentiality of discussions made in the
The parties may agree on the procedure that
separate sittings with each party and only those facts
the mediator will use to conduct the mediation
which a party permits can be shared with the other
proceedings.
party.
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On Day of Mediation: On the scheduled date, Settlement Agreement: Once both the parties reach
the Mediator meets with the parties to explain the to a mutually agreed settlement, the same shall
entire mediation process and to establish neutrality be reduced in writing by the Mediator and shall be
and confidentiality. He then builds momentum in the signed by the parties to the commercial dispute
direction of open settlement discussions. The parties and the Mediator as per Form-4 specified in the
may be accompanied by their respective lawyers Schedule-I.
when meeting with the mediator.
Settlement agreement: Settlement Agreement to Parties: The Mediator

shall provide the settlement agreement, in original, to
When the parties reach an agreement on all or some
all the parties to a commercial dispute and shall also
of the issues in the suit or proceeding, it is reduced to
forward a signed copy of the same to the Authority.
writing and signed by the parties or their constituted
attorney. If the parties' counsel has represented
them, the mediator may obtain his signature on the
settlement agreement as well. The parties are then
given the settlement agreement, while the original is
sent to the referral Court by the Mediator.
Role of Court: Upon receipt of the settlement Failure to Settle: Where no settlement is arrived at
agreement, the court shall set a hearing date, normally between the parties within the time specified in the
within seven days, but not exceeding fourteen days. sub-section (3) of section 12A of the Act or where
If the Court is satisfied that the parties have resolved the Mediator is of the opinion that the settlement is
their dispute(s) on the date of hearing, it shall issue a not possible, the Mediator shall submit a report to
decree in accordance with the agreement. the Authority, with reasons in writing, as per Form-5
specified in Schedule-I.
Failure to Settle: If the parties are unable to reach Retaining Document: The Authority or the Mediator,
an agreement, the case is returned to the referral as the case may be, shall not retain the hard or soft
Court with a simple report of non-agreement/failure copies of the documents exchanged between the
to settle, without assigning any reason, and litigation parties or submitted to the Mediator or notes prepared
between the parties begins. by the Mediator beyond a period of six months other
than the application for mediation under sub-rule (1)
of rule 3, notice issued under sub-rule (2) or (3) of rule
3, settlement agreement under clause (vii) of sub-rule
(1) of rule 7 and the Failure report under clause (ix) of
sub-rule (1) of rule 7.
FEES OF MEDIATOR AND COSTS

The cost and fees for mediation in India can vary depending on several factors, such as the type of dispute, the
complexity of the case, and the mediator’s experience and qualifications. Generally, the cost of mediation in
India is much lower than the cost of going to court.
In India, there are two types of mediation services: court-annexed mediation and private mediation. Court-
annexed mediation is provided by the courts, and the fees are generally fixed and regulated by the court.
Private mediation, on the other hand, is conducted by private mediators, and the fees are negotiable between
the parties and the mediator.
For court-annexed mediation, the fees are usually fixed by the court, and parties are required to pay a nominal
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fee for the mediation process. Furthermore, in court-annexed mediation, particularly when the case is referred
to the Mediation Centre, the parties are not required to pay any court fees. If the case is resolved through
mediation, the court fee is also refunded.
The fees for private mediation are negotiable and can vary depending on the mediator’s experience and
qualifications, the nature of the dispute, the number of sessions required, and other factors. In some cases,
parties may also need to bear additional costs such as travel expenses, venue rental, and other expenses
incurred during the mediation process.
It is advisable to discuss the fees and costs of mediation with the mediator or the mediation centre before
starting the process to avoid any confusion or disputes later on.
Under Rule 6 of the ICSID mediation and conciliation rules a mediator is entitled to:
a. a fee for each hour of work performed in connection with the mediation;
b. reimbursement of expenses reasonably incurred for the sole purpose of the mediation when not
travelling to attend a meeting or session;
c. when required to travel to attend a meeting or session held away from the place of residence of the
mediator:
i. reimbursement of the cost of ground transportation between the points of departure and arrival;
ii. reimbursement of the cost of air and ground transportation to and from the city in which the
meeting or session is held; and
iii. a per diem allowance for each day spent away from the mediator’s place of residence.
The fee and per-diem allowance amounts will be decided by the Secretary-General and made public. Any
request for a greater sum by a mediator must be addressed in writing to the Secretary-General rather than the
parties directly. According to ICSID Mediation Rule 15, such a request must be submitted prior to the mediator
receiving the request for mediation and it must include justification for the sought increase.
The rules also provide that Secretary-General shall determine and publish administrative charges payable
by the parties to the Centre. Clause 4 of Rule 6 it is provided that, all payments, including reimbursement of
expenses, shall be made by the Centre to:mediators and any assistants approved by the parties; any experts
appointed by a mediator pursuant to ICSID Mediation Rule 21(3); service providers that the Centre engages for
a mediation; and the host of any meeting or session held outside an ICSID facility.
Under Rule 26 (1) of the Bombay High Court Rules, the court at the time of mediation reference shall fix the fee
of the mediation after consulting the mediator and the parties. The rules lay down following general provision
regarding fees and cost:
l As far as possible a consolidated sum may be fixed rather than for each session or meeting.
l Where there are two mediators as in clause (b) of Rule 2, the Court shall fix the fee payable to the
mediators which shall be shared equally by the two sets of parties.
l The expenses of the mediation including the fee of the mediator costs of administrative assistance, and
other ancillary expenses concerned, shall be borne equally by the various contesting parties or as may
be otherwise directed by the Court.
l Each party shall bear the costs for production of witnesses on his side including experts, or for production
of documents.
l The mediator may, before the commencement of mediation, direct the parties to deposit equal sums,
tentatively, to the extent of 40% of the probable costs of the mediation, as referred to in clauses (1),
(3) and (4). The remaining 60% shall be deposited with the mediator, after the conclusion of mediation.
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For the amount of cost paid to the mediator, he shall issue the necessary receipts and a statement of
account shall be filed, by the mediator in the court.
l The expenses of mediation including fees, if not paid by the parties the Court shall, on the application
of the mediator or parties, direct the concerned parties to pay, and if they do not pay, the mediator or
the parties, as the case may be, shall recover the said amount as if there was a decree.
l Where a party is entitled to legal aid under section 12 of the Legal Services Authority Act, 1987 the
amount of fee payable to the mediator and costs shall be paid by the concerned Legal services
Authority under that Act.
Under Commercial Courts (Pre- Institution Mediation and Settlement) Rules, 2018, the parties to the commercial
dispute shall pay to the Authority a one-time mediation fee, to be shared equally, as per the quantum of claim
as specified in Schedule-II.
MEDIATION – ROLE OF JUDICIARY AND LEGAL STATUS

The Indian Judiciary has played a significant role in promoting and encouraging mediation as a method of
dispute resolution. Mediation is a voluntary process in which a neutral third party, the mediator, helps the
parties to resolve their disputes amicably by facilitating communication, identifying interests, and exploring
options for settlement.
In recent years, the Indian Judiciary has taken several steps to promote mediation as an alternative dispute
resolution mechanism. The Supreme Court of India, in its landmark judgment in the case of Salem Advocate Bar
Association v. Union of India, has emphasized the importance of mediation as a means of resolving disputes
and has directed the courts to encourage parties to explore mediation as a first step in the dispute resolution
process.
In accordance with the aforementioned judgement, the Law Commission of India drafted a consultation paper
on Alternative Dispute Resolution and Mediation Rules in 2003, which was adopted by several High Courts to
formulate their own Mediation Rules.
The Indian Judiciary has also established mediation centres in various courts across the country, where trained
mediators provide mediation services to parties who wish to resolve their disputes through this process. These
centres have been successful in resolving a significant number of disputes, and the parties have reported high
levels of satisfaction with the process. The Supreme Court of India has constituted Mediation and Conciliation
Project Committee (MCPC) to oversee the effective implementation of Mediation and Conciliation in the country.
The Indian Judiciary has also passed several judgments that promote mediation as a method of dispute
resolution. By promoting mediation, the Indian Judiciary has contributed to the development of a more effective
and efficient justice system that is better able to meet the needs of its citizens.
Here are some ways in which the courts support mediation:
l Referral to mediation: The courts have the power to refer cases to mediation. This means that when
parties file a case in court, the judge can suggest that they try mediation to resolve their dispute before
going through a full trial.
l Training and certification of mediators: The courts encourage the training and certification of mediators
to ensure that they have the necessary skills and knowledge to effectively mediate disputes.
l Mediation centres: Many courts have established mediation centers, which provide facilities for
mediation and also help parties to find qualified mediators.
l Court-connected mediation: In some cases, the courts may provide for court-connected mediation,
where the mediator is appointed by the court and is responsible for reporting back to the court on the
progress of the mediation.
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l Enforceability of settlement agreements: The courts in India generally recognize and enforce settlement
agreements that are reached through mediation. This provides parties with an added incentive to
participate in mediation, knowing that the settlement they reach will be legally binding.
Legislative Provisions on Mediation

Mediation in India is governed by the following legal provisions:
i. The Arbitration and Conciliation Act, 1996: This Act governs conciliation in India and provides a
framework for the conduct of conciliation proceedings. Section 30 of the Act also emphasize on the
role of arbitrator to facilitate settlement, if possible.
ii. The Code of Civil Procedure, 1908: Section 89 of the Code of Civil Procedure provides for the settlement
of disputes through alternative dispute resolution mechanisms, including mediation.
iii. The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts
Act, 2015: This Act requires parties to attempt to resolve commercial disputes through mediation before
proceeding to trial.
iv. The National Legal Services Authority Act, 1987: This Act provides for the establishment of legal
services authorities at the national, state and district levels to provide legal aid and services to the poor
and marginalized sections of society, including through the use of mediation.
v. The Companies Act, 2013: Section 442 of the Companies Act provides for the settlement of disputes
between companies and their shareholders or creditors through mediation.
vi. The Consumer Protection Act, 2019: This Act provides for the settlement of disputes between
consumers and businesses through mediation.
vii. Internationally, India demonstrated its support for mediation by signing the UN Convention on
International Settlement Agreement.
viii. Furthermore, Section 16 of the Court Fees Act, 1870, provides for a refund of all court fees if the matter
is finally settled using the alternative dispute redressal mechanism.
THE MEDIATION BILL, 2O21 AND 2023

Mediation Bill 2021 was introduced “to promote and facilitate mediation, particularly institutional mediation,
for the resolution of commercial or other disputes, to enforce mediated settlement agreements, to establish a
body for the registration of mediators, to encourage community mediation, and to make online mediation an
acceptable and cost-effective process, and for matters connected with or incidental thereto.”
Highlights of the Bill

l The Bill requires people to use mediation to settle civil or commercial disputes before going to court or
tribunal. After two mediation sessions, a party may withdraw from the process. The mediation process
must be completed within 180 days, which can be extended by the parties by another 180 days.
l The Indian Mediation Council will be established. Its functions include the registration of mediators as
well as the recognition of mediation service providers and mediation institutes (which train and certify
mediators).
l The Bill specifies which disputes are unsuitable for mediation (such as those involving criminal
prosecution, or affecting the rights of third parties). This list may be amended by the central government.
l If the parties agree, any person may be appointed as a mediator. If not, they may request that a mediator
from a mediation service provider be appointed. Mediation agreements will be binding and enforceable
in the same way that court judgements are.
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l Mediation agreements (other than community mediation) will be final, binding, and enforceable in the
same way that court judgements are.
l Mediators can be appointed by either the parties themselves or by a mediation service provider (an
institution administering mediation).
l Mediation proceedings will be kept private and must be concluded within 180 days (may be extended
by 180 days by the parties). After two sessions, a party may withdraw from mediation.
Standing Committee Report

The Standing Committee on Personnel, Public Grievances, Law and Justice (Chair: Mr. Sushil Kumar Modi)
submitted its report on the Mediation Bill, 2021 on July 13, 2022.
Following suggestions were given by Standing Committee on Mediation Bill:
i. Pre-litigation mediation: The Bill mandates parties to attend at least two mediation sessions. A cost
may be imposed on them if they fail to attend the sessions without reasonable cause. The Committee
observed that by mandating pre-litigation mediation, parties
ii. will have to wait for several months before being allowed to approach a court or tribunal. This may
result in delaying of cases. The Committee recommended reconsidering mandating prelitigation,
making it optional and introducing it in a phased manner.
iii. Timeline for mediation: Mediation process must be completed within 180 days, which may be extended
by another 180 days. The Committee recommended reducing it to 90 days with an extension of 60
days.
iv. Disputes not fit for mediation: The First Schedule of the Bill specifies disputes not fit for mediation.
The central government may amend this list. The Committee noted that this amounts to excessive
delegation. It recommended that the number of disputes in the Schedule should be reduced to ensure
that maximum number of disputes go through prelitigation mediation.
v. Definition of exceptional circumstances: Under pre-litigation mediation, parties can seek interim relief
from a court or tribunal in exceptional circumstances. The Committee noted that the term ‘exceptional
circumstances’ has not been defined and it can lead to parties approaching the court under various
situations.
vi. The Committee recommended: (i) adding qualifying criteria for exceptional circumstances to avoid
wide interpretation, and (ii) providing a fixed time period for deciding interim relief applications and for
commencing mediation proceedings after an interim order has been received.
vii. Mediation Council of India: The central government will establish the Mediation Council of India.
Members of the Council include a chairperson and two full-time members with experience in mediation
or alternate dispute resolution (ADR).
viii. The Committee noted that this may lead to appointment of members with experience in ADR mechanisms
other than mediation. It recommended: (i) considering appointing only members with experience
in mediation, and (ii) appointing the chairperson and members on recommendation of a committee
constituted by the central government.
ix. Confidentiality in proceedings: The Committee noted that there is no punishment/liability for breaching
confidentiality.
x. Registration of agreements: The Bill provides for mandatory registration of mediated settlement
agreement. The Committee recommended leaving registration to the discretion of the parties.
xi. International mediation: The Bill does not apply to international mediations conducted outside
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India. The Singapore Convention provides a framework for cross-border enforcement of settlement
agreements resulting from international mediation. The Committee recommended revisiting the
definition of international mediation so that the Bill can be brought in line with the Convention in the
future.
The Mediation Bill, 2023 has been passed in the Rajya Sabha on 01.08.2023 and in the Lok Sabha on
07.08.2023. The bill has received the assent of the President and has become an Act. The status of
Mediation Act, 2023 is discussed later part in this Lesson.
ETHICS TO BE FOLLOWED BY A MEDIATOR

Mediators are expected to adhere to a set of ethical principles in order to maintain their impartiality and promote
fairness in the mediation process. Some of the key ethical principles for mediators include:
i. Impartiality: Mediators should remain neutral and not take sides in the dispute. They should treat all
parties fairly and ensure that each party has an equal opportunity to be heard.
ii. Confidentiality: Mediators should keep all information related to the mediation process confidential,
unless required by law or with the explicit consent of the parties involved.
iii. Informed Consent: Mediators should ensure that all parties understand the mediation process and
voluntarily agree to participate.
iv. Competence: Mediators should possess the necessary skills and knowledge to facilitate the mediation
process effectively.
v. Conflict of Interest: Mediators should disclose any conflicts of interest and recuse themselves from the
process if they have a personal or professional relationship with one of the parties involved.
vi. Respect: Mediators should treat all parties with respect and dignity, and create an environment that is
conducive to open communication and productive problem-solving.
vii. Professionalism: Mediators should conduct themselves in a professional manner at all times, and avoid
any behavior that could undermine the integrity of the mediation process.
These ethical principles help ensure that the mediation process is conducted in a fair and impartial manner, and
that the parties involved are able to work together to reach a mutually beneficial solution
Rule 4 of Commercial Courts (Pre- Institution Mediation And Settlement) Rules, 2018 lay down following ethical
standards for mediators:
i. Uphold the integrity and fairness of the mediation process;
ii. Ensure that the parties involved in the mediation are fairly informed and have an adequate understanding
of the procedural aspects of the mediation process;
iii. Disclose any financial interest or other interest in the subject matter of the commercial dispute;
iv. Avoid any impropriety, while communicating with the parties to the commercial dispute;
v. To be faithful to the relationship of trust and confidentiality reposed in him;
vi. Conduct mediation related to the resolution of a commercial dispute, in accordance with the applicable
laws for the time being in force;
vii. Recognise that the mediation is based on the principles of self-determination by the parties and that
mediation process relies upon the ability of parties to reach a voluntary agreement;
viii. Refrain from promises or guarantees of results;
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ix. Not meet the parties, their representatives, or their counsels or communicate with them, privately except
during the mediation sittings in the premises of the Authority;
x. Not interact with the media or make public the details of commercial dispute case, being mediated by
him or any other allied activity carried out by him as a mediator, which may prejudice the interest of the
parties to the commercial dispute.
Further, Rule 27 of the Bombay High Court Rules lay down following ethical standards for the mediators:
i. not carry on any activity or conduct which could reasonably be considered as a conduct unbecoming
of a mediator;
ii. uphold the integrity and fairness of the mediation process;
iii. ensure that the parties involved in the mediation and fairly informed and have an adequate understanding
of the procedural aspects of the process;
iv. satisfy himself/herself that he/she is qualified to undertake and complete the assignment in a
professional manner;
v. disclose any interest or relationship likely to affect impartiality or which might seek an appearance of
partiality of bias;
vi. avoid, while communicating with the parties, any impropriety or appearance of impropriety;
vii. be faithful to the relationship of trust and confidentiality imposed in the office of mediator;
viii. conduct all proceedings related to the resolutions of a dispute, in accordance with the applicable law;
ix. recognize that mediation is based on principles of self-determination by the parties and that mediation
process relied upon the ability of parties to each a voluntary, undisclosed agreement;
x. maintain the reasonable expectations of the parties as to confidentiality; refrain from promises or
guarantees of results.
COMMUNICATION IN MEDIATION
Communication is at the heart of mediation. As a result, effective communication among all mediation
participants is required for mediation to be successful. Communication consists of more than just talking and
listening. Communication is the process of transmitting information.
l The goal of communication is to convey information.
l The communication’s goal could be any or all of the following:
l communicate one’s feelings/thoughts/ideas/emotions/desires to others.
l to make others understand how we feel and think.
l obtaining a benefit or advantage.
l to express an unsatisfied need or desire.
Communication is the act of conveying a message to another in the manner desired. A message of disapproval,
for example, can be conveyed through spoken words, gestures, or facial expressions.
Communication is also information sent from one person to another. The receiver understands it in the same
way that it was intended to be conveyed. Communication begins with a thought, feeling, idea, or emotion, which
is then translated into words/gestures/acts/expressions. It is then converted into a message. This message is
delivered to the recipient. The message is understood by the receiver by assigning reasons and attributing
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thoughts, feelings, or ideas to it. It elicits a response in the receiver, who conveys it to the sender via words/
gestures/acts/expressions.
Requirement for effective communication

i) Use simple and straightforward language.
ii) Avoid using difficult words or phrases.
iii) Avoid excessive repetition.
iv) Be exact and logical.
v) Think and express yourself clearly.
vi) Show empathy, warmth, and interest.
vii) Maintain proper eye contact.
viii) Show patience, attentiveness, and courtesy.
ix) Refrain from making unnecessary interruptions.
x) Possess strong listening abilities and skills.
xi) Avoid making statements, comments, or responses that could backfire.
NEGOTIATION IN MEDIATION
Though the terms negotiation and bargaining are frequently used interchangeably, there is a distinction in
mediation. Negotiation entails bargaining, and bargaining is a component of negotiation. Negotiation is
the process of communicating between parties in order to find a mutually acceptable solution to a dispute.
Bargaining can take many forms during a negotiation.
What is Negotiation?
In human life, negotiation is an important form of decision making. Negotiation is persuasion through
communication.
Mediation is essentially a facilitated negotiation process. In mediation, negotiation is the process of back-and-
forth communication between disputing parties in order to reach an agreement. The goal of negotiation in
mediation is to assist the parties in reaching an agreement that is as satisfactory to both parties as possible.
The mediator helps the parties negotiate by shifting them from an adversarial to a problem-solving and interest-
based approach. The mediator passes proposals from one party to the other until a mutually acceptable
solution is reached. This is known as ’shuttle diplomacy’.
Principled Negotiation is any negotiation that is based on merits and the interests of both parties and can result
in a fair agreement, preserving and enhancing the parties’ relationship. The mediator facilitates negotiations by
using reality testing, brainstorming, exchanging offers, breaking impasses, and other techniques.
SETTLEMENT
While the mediators guide the parties and facilitate communication, the entire process grows and enriches
itself with the parties’ free will, as they steer the process by opening up and collaborating on various outcomes.
As a result, there can be no standardised document that represents the mediation’s conclusions, because
each proceeding has a unique direction and outcome. To give this result the authority and enforcement it
requires, a final settlement agreement must be drafted with artistry, taking into account all of the nuances of
the proceeding.
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A mediation settlement agreement is a legally binding contract between parties who have reached an
agreement through mediation.
The final step in an amicable mediation is to write a mediation settlement agreement, which formalises the
decisions taken during the mediation. The settlement agreement is essentially a contract signed by the parties
to follow up on what was agreed upon during mediation. The signing of a settlement agreement is equivalent
to the signing of a contract for the fulfilment of the terms of the agreement.
A settlement agreement in mediation is typically reached through a process of negotiation and compromise.
The parties work together with the mediator to identify their respective interests and needs, explore potential
solutions to the dispute, and negotiate the terms of a settlement that meets their respective needs and interests.
Once the parties reach a settlement agreement, it is typically documented in writing and signed by the parties.
The settlement agreement may also include provisions for the resolution of any outstanding issues or disputes
that may arise in the future.
Enforceability of Settlement Agreement

Depending upon the nature of mediation, settlement agreement can be enforced as:
i. Contract in Private mediation.
ii. Arbitral decree when settlement agreement is entered while using section 30 of the A&C Act, 1996.
iii. Arbitral decree when settlement agreement is under section 74 of the A&C Act, 1996 (applicable to
conciliation).
iv. Decree of civil court in court annexed mediation or pre-litigation mediation.
A settlement agreement in mediation is a legally binding contract, and the parties are obligated to comply with
its terms. If either party fails to comply with the terms of the settlement agreement, the other party may be able
to enforce the agreement through legal action.
The settlement agreement must be signed. Also, the mediation process and the settlement agreement reached
through mediation are confidential, and the mediator and the parties are prohibited from disclosing any
information about the mediation proceedings or the settlement agreement without the consent of the other
party.
In the case of a settlement arrived at in a court-annexed mediation, the same should be reduced to writing and
presented to the court, which will pass an order or decree on the terms thereof.
In mediation settlement agreements arising out of arbitral proceedings, parties may by consent file the same
with the arbitrator and request the arbitrator to take the same on record and pass an award in terms thereof
or request the Tribunal to just make reference to the mediation settlement agreement and state that as the
arbitration is settled in terms of the mediation settlement agreement, the proceedings stand terminated.
As regards the court, a similar process may be followed by consent of parties where the court may be informed
of and shown the mediation settlement agreement and requested to dispose of the proceedings in terms of the
same. Parties may request the court to refer to the same but may not file the same in the court. If filed in the
court, a request may be made to the court to place the agreement in a sealed envelope due to the nature of its
confidentiality.
Section 74 of the Arbitration and Conciliation Act 1996 provides that a settlement agreement has the same
effect as an arbitral award on agreed terms. The position in the Commercial Courts Act is also the same as a
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settlement in a pre-institution mediation proceeding under the Act and is given the same status as that of an
arbitral award under the ACA. Such an arbitral award is enforceable as a decree of court as per section 36 of
the ACA.
The Delhi High Court while interpreting section 74 of the A&C Act 1996 held, “The said provisions fall in Part III
of the said Act dealing with conciliation. Conciliation proceedings had to be initiated in terms of Section 62 of
the said Act. The settlement agreement envisaged under Section 73 of the said Act has to be one which is in
pursuance to a duly constituted conciliation proceedings as per Section 62 of the said Act. If such a settlement
comes about then that settlement is enforceable as an arbitral award in terms of Section 74 of the said Act.
The legislature in its wisdom has not considered it appropriate to provide for a mediation settlement privately
arrived at to be enforced as a decree de hors Part III of the said Act.”6
Therefore, section 74 can’t be used to enforce private mediation settlement agreements. For such private
mediations settlement agreements to be enforceable they must qualify as a contract as defined in Section
2(h) of the Contract Act, 1872. It is because of this issue of enforceability of settlement agreement in private
mediation, Mediation Bill 2021 was passed.
What does a settlement agreement consist of?

The specific contents of a mediation settlement agreement may vary depending on the nature of the dispute,
the parties involved, and the terms of the agreement. However, here are some common elements that may be
included:
l Parties: The agreement should identify the parties involved in the dispute.
l Mediator: The agreement should identify the mediator who facilitated the mediation process.
l Issues: The agreement should identify the specific issues or disputes that were addressed during the
mediation process.
l Agreement Terms: The agreement should clearly outline the terms of the settlement that the parties
have agreed to, including any monetary payments, property transfers, or other actions required by one
or both parties.
l Release of Claims: The agreement should include a provision that states that the parties agree to
release each other from any future claims related to the dispute.
l Confidentiality: The agreement may include a confidentiality clause, which restricts the parties from
discussing the details of the dispute and settlement.
l Signatures: The agreement should be signed by all parties involved in the dispute, as well as the
mediator.
l Date: The agreement should include the date when it was signed by all parties involved.
It’s important to note that the contents of a mediation settlement agreement may vary depending on the specific
circumstances of the dispute and the preferences of the parties involved.
The rules under Commercial Courts Act provide following draft of the settlement agreement as well as failure
report i.e. cases wherein mediation didn’t materialized. In any case, a report must be prepared in the court
annexed mediation.
6. Shri Ravi Aggarwal v. Shri Anil Jagota, Judgment dated 18 May 2019 in EFA (OS) No. 19 of 2009 (Del. HC)
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Form 4: Settlement
[See Rule 7 (1) (vii)]
1. Name of the Mediator:
5. Venue of mediation:
6. Date(s) of mediation:
7. No. of sittings and duration of sittings:
8. Terms of settlement:
Date:
Signature of Applicant
Signature of Opposite Party
Signature of Mediator
Form 5: Failure Report
[See Rule 7 (1) (ix)]
1. Name of the Mediator:
5. Venue of mediation:
6. Date(s) of mediation:
7. No. of sittings and duration of sittings:
8. Reasons for failure:
Date:
Signature of Applicant
Signature of Opposite Party
Signature of Mediator
SETTLEMENT IN COURT ANNEXED MEDIATION

The High court rule regarding mediation regarding settlement in court annexed mediation usually provide as
below:
(1) Where an agreement is reached between the parties in regard to all the issues in the suit or some of
the issues, the same shall be reduced into writing and signed by the parties or their power of attorney
holders. If any counsel have represented the parties, they shall attest the signatures of their respective
clients.
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(2) The agreement of the parties so signed and attested shall be submitted to the mediator/conciliator
who shall, with a covering letter signed by him, forward the same to the Court in which the suit is
pending.
(3) Where no agreement is arrived at between the parties, before the time limit specified or where, the
mediator/conciliator is of the view that no settlement is possible, he shall report the same to the Court
in writing.
Court to Fix a Date for Recording Settlement and Passing Decree

(1) Within seven days of the receipt of a settlement, the Court shall issue notice to the parties fixing a date
for their appearance which date shall not be beyond 14 days from the date of receipt of the settlement
and the Court shall then take the settlement on record.
(2) Thereafter, the Court shall pass a decree in accordance with the settlement, so taken on record, if the
same disposes of all the issues in the suit.
(3) If the settlement disposes of only certain issues arising in the suit, the Court shall take on record the
settlement on the date fixed and shall include the terms of the said settlement in the judgment, while
deciding the other issues.
THE SINGAPORE CONVENTION ON MEDIATION

The Singapore Convention on Mediation, also known as the United Nations Convention on International
Settlement Agreements Resulting from Mediation, is a multilateral treaty that aims to facilitate the enforcement
of international commercial settlement agreements reached through mediation. The convention was signed in
Singapore on August 7, 2019, and entered into force on September 12, 2020.
The convention is the first global treaty to focus on the enforcement of settlement agreements resulting
from mediation, and it aims to provide a harmonized legal framework for the recognition and enforcement of
such agreements across different countries. It applies to settlement agreements resulting from mediation of
commercial disputes, regardless of the country in which the mediation took place.
Under the convention, parties to a settlement agreement can request its enforcement in a country that has
ratified the convention. The requesting party must provide evidence that the settlement agreement resulted
from mediation and that it is in writing and signed by the parties. Once the settlement agreement is deemed
enforceable, it can be enforced in the same way as a court judgment in that country.
The convention is seen as a significant development in international commercial dispute resolution, as it provides
a more efficient and cost-effective alternative to litigation for resolving cross-border commercial disputes. It
is expected to enhance the attractiveness of mediation as a means of resolving disputes and increase the
certainty and predictability of outcomes for parties involved in such disputes.
The Singapore Convention on Mediation applies to settlement agreements resulting from mediation of
commercial disputes, regardless of the country in which the mediation took place. However, there are some
instances when the convention does not apply. Here are a few examples:
l Settlement agreements not resulting from mediation: The convention only applies to settlement
agreements that result from mediation. It does not apply to settlement agreements that result from
other forms of alternative dispute resolution, such as arbitration or conciliation.
l Non-commercial disputes: The convention only applies to settlement agreements resulting from
mediation of commercial disputes. It does not apply to settlement agreements resulting from mediation
of non-commercial disputes, such as family disputes or labor disputes.
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l Settlement agreements that are not in writing: To be enforceable under the convention, a settlement
agreement must be in writing and signed by the parties. If a settlement agreement is not in writing, it
cannot be enforced under the convention.
l Settlement agreements that are not final and binding: The convention only applies to settlement
agreements that are final and binding. If a settlement agreement is not final and binding, it cannot be
enforced under the convention.
l Countries that have not ratified the convention: The convention only applies to settlement agreements
in countries that have ratified the convention. If a country has not ratified the convention, the settlement
agreement cannot be enforced under the convention in that country.
It’s important to note that the convention is relatively new and its interpretation and application may evolve over
time as more cases are decided under it.
Here are the key provisions of the Singapore Convention on Mediation:
l Scope: The convention applies to settlement agreements resulting from mediation of commercial
disputes, regardless of the country in which the mediation took place.
l Grounds for refusal: A country may refuse to enforce a settlement agreement if, for example, it is
contrary to its public policy or the subject matter of the dispute is not capable of settlement by mediation
under its laws.
l Requirements for enforceability: To be enforceable, a settlement agreement must be in writing and
signed by the parties, and it must result from mediation.
l Procedure for requesting enforcement: Parties can request enforcement by submitting the settlement
agreement and evidence that it resulted from mediation to a competent authority in the country where
enforcement is sought.
l Competent authorities: Each country must designate one or more competent authorities responsible
for receiving and processing requests for enforcement.
l Time limits for enforcement: Countries must ensure that the enforcement process is completed within
a reasonable time.
Relationship with other international instruments: The convention does not affect the rights or obligations
of parties under other international instruments, such as the New York Convention on the Recognition and
Enforcement of Foreign Arbitral Awards.
CO-MEDIATOR
Utility of Co-mediation
Co-mediation can be extremely helpful in many disputes, especially those involving complex disputes as well
as delicate topics like gender, conflicts between cultures, or the interaction of various subject areas. A co-
mediation involves a team of mediators, rather than just one, who are experts in different areas of the dispute.
A specific, concentrated strategy that attends to gender, language and ethnic confrontations, or family conflicts
by a professional in those subjects helps mediators organise and completely understand the information that
is exchanged on the table. It also gives the parties multiple points of contact to help the mediator steer the
conversation through informed questioning and follow-ups.
Advantages of Co-Mediator
l Each person brings unique strengths, skills, and experience to the mediation process. Co-mediators can
share resources, provide opportunities for consultation, and reduce mediator fatigue.
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l Two mediators are twice as likely to share some of the parties’ characteristics, potentially making the
process feel more balanced and approachable. Matching can happen based on race, gender, age,
or other factors. A young single mother in a dispute with a middle-aged male, for example, may
feel more at ease and confident if one mediator is also female, rather than two middle-aged male
mediators.
l Co-mediators can serve as role models for cooperative and constructive communication. This could
serve as a model for the parties to follow.
l Co-mediation checks mediator bias, for example, through undue client influence - Co-mediation can
alleviate the mediator’s burden of responsibility and tension. Two mediators can share tasks while
giving each other breathing room.
l Co-mediation can be used to train and develop less experienced mediators in a less exposed
environment, as well as to encourage self-learning and the development of existing skills. All mediators
should be able to learn from other people’s approaches.
Challenges of Co-Mediation
l If the co-mediator’s model poor communication (e.g., disagreeing, contradicting, speaking over each
other), the entire process will suffer.
l If the co-mediators are too closely matched to the parties, the parties may see their “representative”
mediator as an ally. Even if the mediator in question does not accept or desire this role, it may create a
problematic imbalance in the process.
l If the clients pay for the mediation, using two mediators obviously raises the cost. This will not be a
major consideration for most community services.
Do’s and Don’ts for Co-mediators

Before the mediation meeting
l Talk about your personal styles, strengths, and areas where you need help.
l Plan how you will share roles and tasks, such as who will introduce the meeting, go over ground rules
and Health and Safety, and so on, or whether a “lead” mediator will take overall responsibility. Discuss
signals - some mediators use pre-programmed signals to communicate certain information.
l Predict - what positive or negative events may occur, and how you can support one another.
l Get to know one another - and consider how you can put your combined experience to good use.
During mediation meeting
l Talk to each other.
l Listen - if your co-mediator is speaking, pay close attention to what is being said and try to figure out
where she/he is trying to go.
l Check in with your partner and the parties to see what is going on, how people are feeling, and what
progress they believe is being made.
l Keep an eye on your co-mediator while he or she is speaking; it is also your responsibility to keep an
eye on what is going on. ask questions - It is acceptable to openly consult with your partner in front of
the parties, such as checking to see if he/she has finished before asking some follow-up questions.
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After mediating
l Take time to debrief, receive and provide feedback, and evaluate the mediation, possibly using a
structured process.
l Assign administrative tasks associated with the visit/mediation session.
DOMESTIC MEDIATION
The term domestic mediation is used in contrast with international mediation. It is equivalent to domestic
arbitration. Mediation Bill 2021 defined international mediation in following terms:
“International Mediation” means mediation undertaken under this Act and relates to a commercial dispute
arising out of a legal relationship, contractual or otherwise, under any law for the time being in force in India,
and where at least one of the parties, is—
(i) an individual who is a national of, or habitually resides in, any country other than India; or
(ii) a body corporate including a Limited Liability Partnership of any nature,with its place of business
outside India; or
(iii) an association or body of individuals whose place of business is outside India; or
The primary difference is of the nationality of parties. If all the parties of same nationality conduct voluntary
mediation in their own country then such mediation can be termed as domestic mediation.
Under Singapore Convention a dispute is considered to be international if:

(a) At least two parties to the settlement agreement have their places of business in different States; or
(b) The State in which the parties to the settlement agreement have their places of business is different
from either:
i. The State in which a substantial part of the obligations under the settlement agreement is
performed; or
ii. The State with which the subject matter of the settlement agreement is most closely connected.
Some disputes may not be mediated in international mediation but can be mediated in domestic mediation.
Example of such disputes are family disputes, household disputes, consumer disputes, employment disputes
etc. (See, Singapore Convention). Therefore, irrespective of nationality of the parties in such disputes, domestic
mediation regime of parties may apply. It will depend upon applicable law, language of contract and conflict
of law principles.
MEDIATION CLAUSE
“The parties shall attempt to settle the dispute arising out of this contract through Mediation at first instance.
The parties shall attempt to agree on the name of the arbitrator with 3(three) months of the dispute along with
the intention of getting it resolved through mediation being communicated by one party to the other party. The
party shall also agree on the rules of mediation by entering into an agreement to this effect within 1(One) month
of appointment of Mediator. The mediation proceedings shall be held as may be decided by the Mediator within
the territorial limits of New Delhi.”
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CASE STUDY
Mr. X lodged an instrument of transfer of 500 shares of NFJ Constructions Pvt. Limited. The company refused
to register transferee as its shareholder due the restriction in the Article of Association of the Company.
The company has send notice of the refusal to the transferor and the transferee within fifteen days from
the date on which the instrument was delivered to the company. Mr. X has filled the appeal before NCLT
under section 58(3) of the Companies Act, 2013 for resolving the matter. Later, Mr. X and the company
have intended to go for Mediation and Conciliation. Can Mr. X and the company initiate the Mediation and
Conciliation Proceedings? Advice the procedure.
Mr. X and the Company may agree on the name of the sole mediator or conciliator for mediation or
conciliation between them. Further, the application to the Central Government or the NCLT for referring the
matter pertaining to any proceeding pending before it for mediation or conciliation can be made in Form
MDC-2 with a fee of one thousand rupees.
For the purposes of mediation and conciliation, the mediator or conciliator shall follow the following
procedure, namely :-
(i) he shall fix, in consultation with the parties, the dates and the time of each mediation or conciliation
session, where all parties have to be present ;
(ii) he shall hold the mediation or conciliation at the place decided by the Central Government or the
Tribunal or the Appellate Tribunal, as the case may be, or such other place where the parties and
the mediator or conciliator jointly agree ;
(iii) he may conduct joint or separate meetings with the parties;
(iv) each party shall, ten days before a session, provide to the mediator or conciliator a brief memorandum
setting forth the issues, which need to be resolved, and his position in respect of those issues and all
information reasonably required for the mediator or conciliator to understand the issue and a copy
of such memorandum shall also be given to the opposite party or parties:
Provided that in suitable or appropriate cases, the above mentioned period may be reduced at the
discretion of the mediator or conciliator;
(v) each party shall furnish to the mediator or conciliator such other information as may be required by
him in connection with the issues to be resolved.
Practical Exercise
The students are advised to make a group with the following roles and conduct the Mediation and Conciliation
Proceedings:
1. NCLT members
2. Mr. X
3. Managing Director/Authorised Representative of NFJ Constructions Pvt. Limited
4. 2(two) Mediators.
Further, the students are advised to prepare the following documents:
1. Mediated/Conciliated Settlement Agreement.
2. Report of Failure to NCLT.
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LESSON ROUND-UP
l According to The Mediation and Conciliation Project Committee Supreme Court of India- “Mediation
is a structured process where a neutral person uses specialized communication and negotiation
techniques. A process of facilitating parties in resolving their disputes. A settlement process whereby
disputing parties arrive at a mutually acceptable agreement”.
l India had been using a system known as the Panchayat system for centuries before the British arrived,
where respected village leaders helped settle community problems. Even now, towns use this type of
conventional mediation. Also, businesses in pre-British India were using mediation. Members of the
business group asked impartial and reputable businesspeople known as Mahajans to settle conflicts
using a non-binding process that blended mediation and arbitration.
l E-mediation refers to the use of electronic communication and technology to facilitate the resolution of
disputes between parties. It is a form of online dispute resolution (ODR) that allows people to participate
in mediation from different locations and through various digital means, such as video conferencing,
email, instant messaging, or web-based platforms.
l Conciliation, like mediation, is a voluntary, flexible, confidential, and interest-driven process. The
parties attempt to reach an amicable dispute resolution with the help of the conciliator, who serves as
a neutral third party. Conciliation is a voluntary proceeding in which the parties are free to agree and
try to resolve their dispute through conciliation.
l Mediation is a method of resolving disputes with the help of a neutral third-party mediator. Arbitration,
on the other hand, is very similar to a court trial. Arbitration includes elements of litigation such as
discovery and testimony, as well as arbitrators who listen to the facts, review the evidence, and make
a final decision.
l The cost and fees for mediation in India can vary depending on several factors, such as the type of
dispute, the complexity of the case, and the mediator’s experience and qualifications. Generally, the
cost of mediation in India is much lower than the cost of going to court.
l The Indian Judiciary has played a significant role in promoting and encouraging mediation as a method
of dispute resolution. Mediation is a voluntary process in which a neutral third party, the mediator,
helps the parties to resolve their disputes amicably by facilitating communication, identifying interests,
and exploring options for settlement.
l Communication is at the heart of mediation. As a result, effective communication among all mediation
participants is required for mediation to be successful. Communication consists of more than just talking
and listening. Communication is the process of transmitting information.
l A mediation settlement agreement is a legally binding contract between parties who have reached an
agreement through mediation
l The Singapore Convention on Mediation, also known as the United Nations Convention on International
Settlement Agreements Resulting from Mediation, is a multilateral treaty that aims to facilitate the
enforcement of international commercial settlement agreements reached through mediation. The
convention was signed in Singapore on August 7, 2019, and entered into force on September 12, 2020.
GLOSSARY
Conflict : It refers to a situation in which people, groups or countries disagree strongly or are involved in a
serious argument
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Dispute : A dispute is a disagreement, argument, or controversy—often one that gives rise to a legal
proceeding (such as arbitration, mediation).
Mediation : Mediation is a process in which the parties meet with an impartial and neutral third party who
assists them in resolving their differences and such third party lacks authority to impose a solution.
Institutional Mediation: It mediation conducted under the aegis of a mediation service provider.
Mediator: A mediator is an impartial and independent third party who mediates—helps to settle a dispute
or create agreement when there is a dispute between two or more people or groups by acting as an
intermediary for those parties.
Conciliation: Conciliation, like mediation, is a voluntary, flexible, confidential, and interest-driven process.
The parties attempt to reach an amicable dispute resolution with the help of the conciliator, who serves as
a neutral third party.
Conciliator: A conciliator is a person, usually subject-matter expert who is to proactively assist the parties
with solutions and to settle the disputes between them amicably. Conciliator can’t pass a binding decision.
Mediation Bill: A bill enacted to promote and facilitate mediation, especially institutional mediation, for
resolution of disputes, commercial or otherwise, enforce mediated settlement agreements, provide for a
body for registration of mediators, to encourage community mediation and to make online mediation as
acceptable and cost-effective process and for matters connected therewith or incidental thereto.
Mediation Settlement Agreement: A mediation settlement agreement is a document created after a
successful mediation. It is a binding contract that outlines the terms and conditions of the dispute resolution
reached by the parties.
Co- Mediation : Co- Mediation involves two or more mediators working together to assist the parties in
dispute resolution
Pre-litigation mediation: It means a process of undertaking mediation for settlement of disputes prior to the
filing of a suit or proceeding of civil or commercial nature.
Domestic Mediation: The term domestic mediation is used in contrast with international mediation. The
primary difference is of the nationality of parties. If all the parties of same nationality conduct voluntary
mediation in their own country then such mediation can be termed as domestic mediation.
Some disputes may not be mediated in international mediation but can be mediated in domestic mediation.
Example of such disputes are family disputes, household disputes, consumer disputes, employment disputes
etc. (See, Singapore Convention). Therefore, irrespective of nationality of the parties in such disputes,
domestic mediation regime of parties may apply. It will depend upon applicable law, language of contract
and conflict of law principles.
TEST YOURSELF
1. Explain the meaning of and the different types of conflict.
2. What is Conciliation? Explain the difference between Mediation and Conciliation.
3. What is the difference between Private Mediation and Court-ordered Mediation?
4. What are the ethics and duties to be followed by a Mediator during a Mediation Session?
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5. What is a Settlement Agreement? Explain its advantages and legal enforceability.

6. Write Short Notes on:
l Disqualification and Qualification of Mediators
l Mediation Bill, 2021.
l Mediation: Theory to Practice by Iram Majid
l The Mediation Process by Christopher W. Moor
l Bringing Peace into The Room by Dainel Bowling and David Hoffman
l The Mediator’s Handbook by Jennifer E. Beer and Caroline C. Packard
l Handbook on Mediation by Nandani Gore
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Negotiation Skills and Lesson
Communication 14
KEY CONCEPTS
n Conflicts n Negotiation n Interest v. Position n Bargaining
Learning Objectives
To understand:
 The meaning of Conflict
 The ways of resolving a dispute or conflict
 The meaning of negotiation
 Steps of Negotiation
 Type of bargaining
 Negotiation styles and techniques
 Interest v. Position with the help of Iceberg concept
Lesson Outline
 Specific Negotiations
l What is a Conflict?
l What is Negotiation?
l Kinds of Negotiation
 Importance of Dialogue
 Negotiation Techniques and Styles
 Communication in Mediation and Negotiation
 Interest v. Position (Iceberg Concept)
 Lesson Round-Up
 Glossary
 Test Yourself
 Other References (Including Websites/Video Links)
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PP-AM&C Negotiation Skills and Communication
SPECIFIC NEGOTIATIONS
What is a Conflict?
Conflict can be defined as contradictory view resulting into an antagonistic state between the parties. The
clashing of thoughts and ideas is a part of the human experience. However, it turns destructive if it is not
controlled. A conflict should not always be seen as something that brings negativity. It is a way to come up with
more meaningful realizations that can be helpful to individuals involved. The positive outcomes can be reached
through an effective implementation of conflict resolution. Conflict can be seen as an opportunity for learning
and understanding our differences.
According to American psychologist Daniel Katz, there are three primary causes of conflict. They are as
follows:
Economic Conflict: It is caused on account of paucity of resources. The groups or individuals involved get into
a conflict to attain the maximum possible share of these resources thus bringing forth hostile behaviors among
those involved.
Value Conflict: It is occasioned by varied preferences and ideologies that people carry as their principles. They
get demonstrated in cases where separate parties have separate sets of beliefs that they assert aggressively.
Power Conflict: It occurs when the parties involved intend to maximize the influence they weild in social settings.
Such a situation can arise among individuals, groups or even nations.
Many a times there are several contradictions, difference of opinions and perceptions, cultural differences,
personality differences. There are angry and irrational moments, anxious and emotional moments, fear and
negative emotions. These differences often result in disputes and conflicts.
A Dispute is often described as a particular incident that is in continuation to the conflict. If a dispute is not
resolved it affects the relationship.
Human conflicts are inexorable, so disputes are inescapable. We cannot avoid disputes but, an effort can be
made to resolve them in a faster and time efficient manner so that the parties to dispute can be benefitted. Since
the primitive era the job of dispute resolution has been done either by authoritative people like kings, queen or
tribal chiefs or community councils like village panchayats or religious persons like Qazis.
Ways to resolve the Dispute and the Conflict

Procedure of the Courts is such that the parties may not be able to sit and talk to each other addressing their
issues while the case is going on hence increasing the possibility of delay in justice. Arbitration, Mediation,
Conciliation, Negotiation and Judicial Settlement by Lok Adalat are collectively referred to as the alternative
means of resolution of disputes (ADR).
Indian Legal System is well known for delay. It is a conventional fact that the Hon’ble Courts are over burdened
with pending cases and it is almost impossible to provide quick and efficient relief to the aggrieved parties.
Alternative Dispute Resolution in India is an endeavor made by the legislators to attain Constitutional Goal of
achieving complete justice in India. Therefore, to meet the situation these mechanisms are well used all across
the globe as they’re much more effective and are less expensive.
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Negotiation Skills and Communication LESSON 14
When the state came into being, the Court system and legal procedure became very formal and instead of
laymen, the Courts that were presided over by trained judges took charge. They used to look at evidence as a
whole and monitor the witnesses and used to find a solution on legal and moral grounds.
Negotiation as a means of resolving disputes can be traced back to the time of Mahabharata. Before the epic
battle of Kurukshetra, Lord Krishna tried to negotiate and settle the disputes amongst his kins peacefully.
At any stage if the Hon’ble Court witnesses a chance of settlement among the parties, the matter is referred to
any of the alternative ways of dispute redressal mechanisms i.e. Arbitration, Mediation, Conciliation, Negotiation
or Judicial Settlement by Lok Adalat for speedy redressal. In. many cases it is mandatory to refer to any of these
alternative ways of dispute redressal mechanisms at the pre litigation stage.
For example, Section 12A of the Commercial Courts Act envisages a mandatory reference to mediation to
attempt to resolve the disputes out of the court before a suit can be instituted. In today’s era we can see
a constant increase in people resorting to various ways of alternative dispute redressal mechanisms for
resolving their disputes amicably. Even the intention of legislature is to resolve the disputes among the
parties.
Approaching the Court for the dispute redressal has its own drawbacks. Some of them are as follows:
l Time Consuming
l It is binding on the parties. Not a win-win situation for both parties.
l Costly affair for the parties.
l Involvement of parties is minimal.
l Lay man does not understand the technicalities of law.
Alternate ways to resolve Dispute and Conflict

1. Arbitration: It is an adjudicatory process in which the parties present their disputes to a neutral third
party (Arbitrator) for decision. While the Arbitrator has greater flexibility than a Judge in terms of
procedure and rules of evidence, the arbitration process is similar to the litigation process. The result of
the arbitration is an Arbitral Award, which is enforceable as a decree of the Court by approaching the
Hon’ble Court for execution.
2. Mediation: It is a voluntary, disputant centered, non-binding, confidential and structured process
controlled by a neutral and credible third party who uses special communication, negotiation and
social skills to facilitate a binding negotiated settlement by the disputants themselves. Simply putting,
mediation is an assisted negotiation. The result of the mediation is a settlement agreement, not a
decision.
3. Conciliation: It is viewed as a pro-active mediation where the neutral third party takes a more active
role in exploring and making suggestions to the disputants as to how to resolve their disputes. The
result of the conciliation is a settlement agreement, not a decision.
4. Negotiation: It is a voluntary process between the disputants directly to reach at a settlement by which
one disputant strives to satisfy his or her needs which is under the control of the other disputant. The
result of negotiation is a settlement agreement, not a decision.
5. Lok Adalat: It is an alternative to Judicial Justice. The matter which are pending adjudication before
the Hon’ble Court are taken up on the basis of the principles of Justice, Equity and Good Conscience.
The result of this proceeding is called an Award and this is deemed to be a decree of Civil Court and is
binding on the parties.
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Negotiation is a process which focusses on protection of interests of the parties through adjustment. This is
in contrast to the approach of the judiciary which tries to protect the right of an individual by enforcing it or
ordering compensation for it. Negotiation concentrates on protection of relationship between the parties.
Every day in our lives is a series of negotiation. People differ in ideologies and they use negotiation to resolve
their differences by using negotiation as a method. Imagine if a person was to buy a laptop, would he/she
agree to buy the laptop at the price quoted by the seller or would this person bargain. Is bargaining a way of
negotiation and resolving the differences between the buyer and seller, the answer is yes. In the professional
aspect, cracking a deal on some specified terms agreeable to both parties to the personal aspect of who will
do what all household chores.
Many a times we negotiate with ourselves and sometimes we negotiate with the people we are surrounded
by in our day to day life. In the words of William Ury - “If we can learn to influence ourselves first before we
seek to influence others, we will be able to satisfy the needs of others in a better way”. Many people lack
the convincing power and hence they are not able to present their side of the story to the concerned person.
Sometimes discussing a problem can seem problematic, especially if the points of discussions involve emotions
and finances.
Therefore, everyone is a negotiator and everyone negotiates several times in their lives. The success and
failure of negotiation has resulted in the development of the more refined methods i.e. Arbitration, Mediation,
Conciliation. All these refined processes have negotiation as the foundation on which the disputes are resolved
amongst the parties.
Negotiation is a voluntary, non-binding process between the disputants to resolve their disputes amongst
themselves. It is party centric i.e. the parties have greater control over the procedure and final outcome. Since
the parties are sitting adjacently while discussing their issues, so it becomes easy to open up to wide range of
possible solutions. It ends up preserving their interests while adjusting their views and positions in the joint effort
to reach an agreement.
Kinds of Negotiation
Informal Negotiation formal negotiation
Definition It is a direct communication between the each party appoints a negotiator who is
parties with the sole objective of resolving supposed to negotiate on behalf of the
the dispute, where the intervention of third parties. Here parties remain in control of the
person is not there. process through the negotiator.
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Process Importance is given to the emotional factor The addition of the negotiator as a third
which results in failure many a times as the person helps to cure the defects of the
interests of the parties are not protected. informal negotiation as there is absence of
emotions.
Deadlocks Chances of deadlocks are high. Negotiator can successfully avoid deadlocks.
Seven elements of Negotiation

For a successful negotiation process, it is important that various principles must be followed to eliminate selfish
bargain by replacing it with principled bargain. According to the Harvard Negotiation Project, there are seven
elements of negotiation.
I. Communication - The parties must talk to each other while negotiating as the success of negotiation
depends upon communication choices. Miscommunication or vague communication may lead to
misunderstandings. This misunderstanding may prejudice the relationship between the parties.
Therefore it is important to communicate effectively.
II. Relationship - Parties must deal with one another while negotiating, even if this is a one-time transaction
and they have no past or ongoing relation. The relationship can be strengthened by building rapport
with the parties. Remove people from the problem. The emphasis should be on how to resolve the
dispute without destroying the relationship.
III. Interests - Concerns, objectives, needs, desires or fears must be addressed and satisfied in some way if
the parties are to reach a negotiated agreement. The interests are often hidden and unspoken. A good
negotiator always addresses the fears of the other party, thereby building a rapport which is essential
for a successful negotiation.
IV. Options - The various possible ways the parties could work together so their interests are included
and satisfied to some degree in a negotiated agreement are called options. The success of negotiation
depends upon the number of options the parties propose. Options come from brainstorming. While
brainstorming all the ideas must be recorded. Once the ideas are recorded they must be evaluated in
terms of feasibility and thereafter they must be proceeded in negotiation.
V. Legitimacy - Objective standards (e.g. market value, precedents, industry practices) and fair
procedures (e.g., appraisals, bidding, split-the-difference) that can be used to evaluate options.
The success of the negotiation depends upon the fact that the negotiator follows a fair procedure.
Being fair is not enough. The fairness has to be rather manifested in the negotiator’s approach and
dealing.
VI. Alternatives - The range of possible things a party can take from the table are the alternatives. As a
lawyer does not depend on single argument, similarly, a negotiator should also not depend upon a
single alternative. This helps in making a decision as to whether to agree to the proposal given by the
opposite party or not. If there are no alternatives a person will be forced to settle in the negotiation. The
attempt to settle the dispute depends upon BATNA.
BATNA (Best Alternative to a Negotiated Agreement) - In simple words it means what the party to the
settlement actually wants and how far they want to go for settling it. It is important to know the BATNA,
as, the better BATNA, the greater is the power to negotiate. It protects the negotiator from agreeing to
unfavorable terms.
WATNA (Worst Alternative to a Negotiated Agreement) - It is the settlement that the parties to the
dispute don’t want to choose and would never settle for.
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MLATNA (Most Likely Alternative to a Negotiated Agreement) - It is the most likely alternative in case
of a dispute if the BATNA is not achieved. This is known as the second best alternative that the parties
to the dispute would resort to settle.
VII. Commitment - Any preconditions of the parties that must be met in order to negotiate and reach a
final, binding agreement. A commitment can range from meeting at a particular place at a particular
time.
IMPORTANCE OF DIALOGUE
Dialogue helps during the process of Negotiation and Mediation in the following ways:
1. Dialogue increase understanding amongst the parties
2. Dialogue reduces the disbeliefs
3. Dialogue helps out reduce the misunderstanding and misrepresentation
4. Dialogue clarify the interests and positions
5. Dialogue increases the chances of reaching out the solutions
6. Dialogue allows the parties to discuss and find new solution to the problem.
Why do we negotiate?
To Save Time
To reach win-
win situaon
To save relaon
from damaging
Negotiation is “back-and-forth communication designed to reach an agreement when you and the other side
have some interests that are shared and others that are opposed”.
It is an “Interpersonal decision-making process necessary whenever we cannot achieve our objectives single-
handedly”.
“When two or more parties need to reach a joint decision but have different preferences, they negotiate”.
“Negotiation is any communication where the parties discuss a change in the terms of their relationship”.
It is “a process of adjustment of existing differences, with a view to the establishment of a mutually more desirable
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legal relation by means of barter and compromise of legal rights and duties and of economic, psychological,
social and other interests”.
To sum up, Negotiation is a process which focusses on the protection of interests of the parties through
adjustments. This is in contrast to the approach of judiciary which tries to protect the rights of an individual
by enforcing it or ordering compensation for it. Further, it concentrates on protection of relationship between
the parties, for which judiciary shows complete disregard. Therefore, we can say that negotiation can be most
suitable for resolving disputes where the protection of relationship of the parties is of paramount importance.
STEPS DURING NEGOTIATION

The outcomes of the negotiation depend upon how well a negotiator prepares for it. A negotiation starts when
the intention of the parties gets to “problem solving” and not holding onto their ego and clashes. When the
parties take a step for resolving their disputes through negotiation, the responsibility of the negotiator to resolve
their dispute increases. Therefore, a negotiator should prepare well in advance for the negotiation so that
desired goals can be achieved through proper communication.
Preparation
l Try to control the outside influences. Negotiation should happen in a quiet and calm atmosphere with
no interference.
l Give proper introduction to the parties in Negotiation.
– Describe the process to the parties.
– Discuss the time available.
– Lay down ground rules.
l Understand the interests and expectations of the parties to the Negotiation.
l Assess the nature of relationship of the parties.
l Identify the issues to be discussed.
It is very important that the negotiator prepares the case thoroughly. It is imperative for the negotiator to assess
the objectives of both the sides. The negotiator should consider the consequences of failed negotiation. It is
crucial to choose the right time for negotiation. The negotiator should avoid spontaneous negotiations. A proper
research helps in reaching the desired set of goals for settlement. Like right time, right place is also important
for the negotiation. The negotiator should be well aware of the neutral territory where the information can be
gathered without interruptions. Entire success of negotiation depends upon how the negotiator prepares for the
negotiation and what all strategies he adopts during the entire process of negotiation.
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The skilled negotiator does not use predictable tactics. He will set out very good and effective opening tactics.
In fact from the opening move the negotiator one can visualize the end result of the negotiation. During the
entire process a skilled negotiator will use strategic thinking and action planning and will focus on a win-win
approach for the parties. It is important that a respectful environment is maintained.
Information Gathering
l Actively Listen the parties.
l Ask questions.
l Identify the areas of Agreement and Disagreement between the parties.
l Set the stage for problem solving.
l Study their responses to initiate the resolution.
l While having a “problem - solving approach” share the information with the parties after taking caution.
l Explain the parties rationale and benefit of resolving the dispute.
l Segregate the information to come to solution.
Once the information is gathered it is important that the negotiator segregates the resourceful information and
proceeds further with caution. The skilled negotiator knows how much to speak and when to speak. At this
stage the negotiator has to focus on interest of the parties.
During Negoaon
Focus on Interests, Not

Improve the Communicaon
Posions
It is important for the negotiator to have the right set of skills during the negotiation. Effective communication and
strong decision making is amongst them. A negotiator should know how to discuss the facts without showing all
his cards and at the same time come to a settlement as effective communication is the essence of negotiation.
A negotiator should listen actively and passively while remembering the BATNA and WATNA of the during the
negotiation and should aim for the Zone of Possible Agreement (ZOPA).
ZOPA, means “A zone of possible agreement (ZOPA) is a bargaining range in an area where two or more
negotiating parties may find common ground. A ZOPA can only exist when there is some overlap between each
party’s expectations regarding an agreement”.
After the fruitful discussions, when the parties are to come to a settlement, they enter into ZOPA. It is the
common ground where the interests of both the parties are met. ZOPA is BATNA for both the parties.
Bargaining
l Deal with one issue at a time.
l Compare the proposals given by the parties.
l Leave room for concessions.
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l Don’t lose track of underlying interests.

l Don’t apply pressure on the parties for resolution. Remain Party Centric.
l Break impasse between the parties.
l Don’t rush conclusions.
There are 4 types of Bargaining:
1. Soft Bargaining - Here the negotiator gives in to the demands of the other party easily without bargaining.
2. Hard Bargaining - This occurs when the negotiators use a rigid and inflexible approach to acquire their
respective demands.
3. Positional Bargaining - This occurs when the negotiators take adversarial positions irrespective of the
interest of the other side and stick to a position.
4. Distributive Bargaining - Here the positions are changed through a series of compromises between the
negotiators and after a long discussions they come to their Zone of Possible Agreement.
How to Negotiate?
It is important to keep the following points in consideration while negotiating:
l Begin Cooperatively and be polite.
l Pay attention to the body language.
l Be transparent of the needs.
l Set your goals in advance.
l Act confident and informed.
l Build trust.
l Try to understand the perspective of the other person.
l Look for common good and not the areas of conflicts.
l Ask Questions.
l Active and Passive listening is required.
l Recognize the dirty tricks if being used.
l Be willing to refer various other means of dispute resolution.
l Be forgiving if the conversation turns into a heated argument.
l Be prepared to walk away if the settlement doesn’t come.
l Don’t narrow down the discussions to one issue.
l Discuss all the issues one by one.
l Reframe negative statements.
l Separate the people from the problem.
l Justify all offers and concessions.
l Protect the facts and use them when necessary.
l Use silence at the appropriate time.
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A negotiator should not take anything personally. Negotiations often fail as the parties forget their professional
responsibility and get side tracked by their personal feelings and concerns which are not at all related to the
subject matter of the negotiation.
Negotiator should not get affected by the behavior of the parties and should never take anything personally
during or after the negotiation.
NEGOTIATION TECHNIQUES AND STYLES

While negotiation are going on different styles and strategies are adopted by the negotiators to reach the
settlement and they depend upon the way parties act during the negotiation.
1. Competing style: This is an assertive and non-cooperative style in which the attitude is “I win, you
lose”. The participant values his/her own concerns and needs over those of others. He/she pursues his/
her own concerns at the other person’s expense using whatever power seems appropriate to win his/
her position. He/she is forthright and conveys what he/she expects from others. Competing might also
mean standing up for your rights or defending what you believe is correct.
2. Accommodating style: This is an unassertive and cooperative style in which the attitude is “You
win, I lose”. The participant values concerns of others equally as his/her own needs. He/she values
relationships equally as his/her own concerns and enjoys pleasing and making others happy. He/she
neglects his/her own concerns to satisfy the concerns of the other person; there is an element of self-
sacrifice-in this mode. Accommodating might take the form of selfless generosity or charity, obeying
another person’s order when one would prefer not to, or yielding to another’s point of view.
3. Avoiding style: This is an unassertive and non-cooperative style in which the attitude is “I don’t care if I
win or lose”. The participant stays away from the issues over which the conflict is taking place and from
the persons they are in conflict with. He/she does not address the conflict. Avoiding might take the form
of diplomatically sidestepping the issue, postponing an issue until a better time or simply withdrawing
from a threatening situation. He/she believes it is easier to withdraw (physically and psychologically)
from a conflict than to face it.
4. Compromising style: This is intermediate in both assertiveness and cooperativeness where the attitude
is “I win some, you win some”. The participant values his/her own as well as others’ concerns, and values
fairness and equality. He/she recognizes that both have to give up something to receive something. He/
she aims to find some expedient, mutually acceptable solution, which partially satisfies both parties.
They seek solutions in which both sides gain something and they will give up a part of their goal and
relationship in order to find agreement for the common good. Compromising might mean splitting the
difference, exchanging concessions or seeking a quick middle-ground position.
5. Collaborating style: This is an assertive and cooperative style in which the attitude is “You win, I win”. The
participant values discussion of the conflict and desires to jointly solve the problem. He /she values his/
her own concerns as well as those of others and aims to work towards a deeper level of clarity. He/she
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attempts to work with the other person to find some solution that fully satisfies the concerns of both persons.
Collaborating between two persons might take the form of exploring a disagreement to learn from each
other’s insights, concluding to resolve some condition which would otherwise have them competing for
resources, or confronting and trying to find a creative solution to an interpersonal problem.
COMMUNICATION IN MEDIATION AND NEGOTIATION

The most essential part of Mediation and Negotiation process is communication. Mediation or Negotiation
cannot succeed without effective communication. The purpose of communication in negotiation is transfer of
Information. The other party should understand what has been communicated. It is necessary to choose the
correct words in order to communication the intention of a party.
A communication in mediation or negotiation helps out one party, understand the intent, feeling and understanding
of the other party and reach a mutually acceptable solution. Communication is transmitting a message to other
party in a manner in which it is intended. For example, by words or gestures or facial Expressions etc.
An efficacious communication is backbone of any negotiation or mediation. While communicating during
mediation or negotiation, there is no need being aggressive and uproar. Only communication of idea is enough.
Voice modulation can help the process of communication but it should be kept in mind the voice does not get
aggressive. One party should effectively transmit his thoughts into a speech by selecting appropriate words.
The types of communications in Mediation and Negotiations generally includes:
1. Invitation mediate or negotiate and its acceptance or rejection.
2. Submission of Statement of Claims and Defences
3. Communication between Mediator and Parties
4. Communication between Parties inter se.
INTEREST V. POSITION (ICEBERG CONCEPT)

According to Cambridge dictionary, Interest means the feeling of wanting to give your attention to something
or of wanting to be involved with and to discover more about something. And the meaning of Position is
the place where something or someone is, often in relation to other things.
Iceberg Concept Model
Interest
Position
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Position Interests
What they say they expect. What actually they expect.
Positions are surface communication of where a Interests are party’s reasons, values or motivations.
person stands. Interests explain why someone is in that position.
Example: The party to the mediation claims Example: The party to mediation has intended to claim
Rs. 1,00,000/- as compensation for breach of the loss they have incurred due to breach of contract
contract. and additional money for the loss of business goodwill,
the business has suffered.
LESSON ROUND-UP
l Conflict can be defined as contradictory view resulting into an antagonistic state between the parties.
The clashing of thoughts and ideas is a part of the human experience. However, it turns destructive if it
is not controlled. A conflict should not always be seen as something that brings negativity.
l Procedure of the Courts is such that the parties may not be able to sit and talk to each other addressing
their issues while the case is going on hence increasing the possibility of delay in justice. Arbitration,
Mediation, Conciliation, Negotiation and Judicial Settlement by Lok Adalat are collectively referred to
as the alternative means of resolution of disputes (ADR).
l Negotiation is a process which focusses on protection of interests of the parties through adjustment.
This is in contrast to the approach of the judiciary which tries to protect the right of an individual by
enforcing it or ordering compensation for it. Negotiation concentrates on protection of relationship
l For a successful negotiation process, it is important that various principles must be followed to eliminate
selfish bargain by replacing it with principled bargain.
l Negotiation is “back-and-forth communication designed to reach an agreement when you and the
other side have some interests that are shared and others that are opposed”.
l The outcomes of the negotiation depend upon how well a negotiator prepares for it. A negotiation
starts when the intention of the parties gets to “problem solving” and not holding onto their ego and
clashes. When the parties take a step for resolving their disputes through negotiation, the responsibility
of the negotiator to resolve their dispute increases.
l While negotiation are going on different styles and strategies are adopted by the negotiators to reach
the settlement and they depend upon the way parties act during the negotiation.
l The most essential part of Mediation and Negotiation process is communication. Mediation or
Negotiation cannot succeed without effective communication. The purpose of communication in
negotiation is transfer of Information.
l According to Cambridge dictionary, Interest means the feeling of wanting to give your attention to
something or of wanting to be involved with and to discover more about something. And the meaning
of Position is the place where something or someone is, often in relation to other things.
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GLOSSARY
Economic Conflict: It is caused on account of paucity of resources. The groups or individuals involved get
into a conflict to attain the maximum possible share of these resources thus bringing forth hostile behaviors
among those involved.
Value Conflict: It is occasioned by varied preferences and ideologies that people carry as their principles.
They get demonstrated in cases where separate parties have separate sets of beliefs that they assert
aggressively.
Power Conflict: It occurs when the parties involved intend to maximize the influence they weild in social
settings. Such a situation can arise among individuals, groups or even nations.
BATNA (Best Alternative to a Negotiated Agreement): In simple words it means what the party to the
settlement actually wants and how far they want to go for settling it. It is important to know the BATNA,
as, the better BATNA, the greater is the power to negotiate. It protects the negotiator from agreeing to
unfavorable terms.
WATNA (Worst Alternative to a Negotiated Agreement): It is the settlement that the parties to the dispute
don’t want to choose and would never settle for.
MLATNA (Most Likely Alternative to a Negotiated Agreement): It is the most likely alternative in case of a
dispute if the BATNA is not achieved. This is known as the second best alternative that the parties to the
dispute would resort to settle.
TEST YOURSELF
1. What are the ways to resolve a conflict under ADR domain?
2. Differentiate between Informal and Formal Negotiation.
3. Why dialogues are important in Negotiations? Explain
4. What are steps involved in Negotiation?
5. Explain Iceberg Concept with reference to Interest v. Position.
l Reference Material of Certificate Course on Commercial Contract Management
l https://districts.ecourts.gov.in/sites/default/files/Excise%20Courtwrkshopiv.pdf
l https://main.sci.gov.in/pdf/mediation/MT%20MANUAL%20OF%20INDIA.pdf
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Various Modes and Scope of Mediation Lesson
including Role of Mediation in other ADR 15
Domains
KEY CONCEPTS
nMediation n Negotiation n Private Mediation n Employment Mediation n Online Dispute Resolution n Court
Annexed Mediation
Learning Objectives
To understand:
 Principles and code of conduct for mediators
 Mediation under various Statutory Enactments
 Categories of bargaining used in negotiation
 Stages of Mediation
 Characteristic of mediation
 Reflective Practice
 Advantages of mediation
 Phases of mediation
 Roles of a mediator
Lesson Outline
 Mediation in Civil and Commercial Litigation  Mediated Settlement Agreement
 Court Annexed and Private Mediation  Role of Mediation in other ADR domains
 Employment Mediation  Commercial Courts Act
 Online Mediation and use of Artificial  Lesson Round-Up
Intelligence
 Glossary
 Reflective Practice
 Test Yourself
 Stages of Mediation
 Role of Mediators
 Mediation Clause in Commercial Agreement Links)
 Overview: Corporate and Commercial
Negotiations
 Mediation Check List (Requisites)
 Mediation Confidentiality and Neutrality
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PP-AM&C Various Modes and Scope of Mediation including Role of Mediation in other ADR Domains
l Right to Information Act, 2005
MEDIATION IN CIVIL AND COMMERCIAL LITIGATION

Mediation in Civil and Commercial Litigation refers to a process where a neutral and independent third party
facilitates negotiation between disputing parties to arrive at a mutually beneficial solution. This form of alternative
dispute resolution is commonly used in the legal system to resolve disputes between two or more parties with
concrete effects. The mediator remains impartial and does not direct the process but facilitates the parties to
arrive at a mutually acceptable agreement, which is usually a win-win situation. Mediation proceedings are
usually voluntary, confidential, transparent, time and cost-effective. The Code of Civil Procedure, 1908, provides
for mandatory court-annexed mediation, and the procedure for court-mandated mediation is detailed in the
Rules formulated by various High Courts. Mediation is mandatory in nature as provided under Order X, Rules
1-A, 1-B, and 1-C of the Code of Civil Procedure, 1908. The Consumer Protection Act, of 2019, also provides
for mediation in consumer disputes, and the Commercial Courts Act, of 2015, makes pre-litigation mediation
mandatory. To conclude, it can be said that Mediation is an efficient and cost-effective way of resolving disputes
while preserving, and at times even enhancing, the relationship of the parties. Further, mediation can also be
seen as beneficial mode of resolution before resorting to Civil or Commercial Litigation.
STATUTES
Civil Procedure Code

Section 89 of the Civil Procedure Code provides for the provisions relating to Settlement of disputes outside the
Court, According to section 89(1) where it appears to the Court that there exist elements of a settlement which
may be acceptable to the parties, the Court shall formulate the terms of settlement and give them to the parties
for their observations and after receiving the observations of the parties, the Court may reformulate the terms
of a possible settlement and refer the same for
(a) arbitration;
(b) conciliation;
(c) judicial settlement including settlement through Lok Adalat; or
(d) mediation.
According to section 89(2), where a dispute has been referred
(a) for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 shall apply as
if the proceedings for arbitration or conciliation were referred for settlement under the provisions of that
Act;
(b) to Lok Adalat, the Court shall refer the same to the Lok Adalat in accordance with the provisions of
sub-section (1) of section 20 of the Legal Services Authority Act, 1987 and all other provisions of that Act
shall .apply in respect of the dispute so referred to the Lok Adalat;
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Various Modes and Scope of Mediation including Role of Mediation in other ADR Domains LESSON 15
(c) for judicial settlement, the Court shall refer the same to a suitable institution or person and such
institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal Services
Authority Act, 1987 shall apply as if the dispute were referred to a Lok Adalat under the provisions of
that Act;
(d) for mediation, the Court shall effect a compromise between the parties and shall follow such procedure
as may be prescribed.
Accordingly, a court can refer the parties for Settlement of disputes outside the Court including mediation.
Commercial Courts Act, 2015 also furthers this object.
Consumer Protection Act

Consumers and the organisations are the beneficiaries by Mediation under Consumer Protection Act, 2019. This
act has provided for the detailed provisions from reference stage to the Settlement of the disputes.
Therefore, the District Commission is the competent authority for referring the matter to Mediation. It may at
the first hearing or at a later stage may refer the parties. However, there are certain procedure described which
cannot be referred to mediation. Further, it should appears to the District Commission that there exists elements
of a settlement which may be acceptable to the parties and parties should consent to have their dispute settled
by mediation in accordance with the provisions of Chapter V. On receipt of the consent of the parties in writing,
the District Commission shall refer the matter for mediation within five days.
According to Rule 4 of Consumer Protection (Mediation) Rules, 2020, all the consumer disputes can be referred
for mediation, except the matters relating to proceedings in respect of medical negligence resulting in grievous
injury or death or cases involving serious and specific allegations of fraud, fabrication of documents, forgery,
impersonation, coercion among other matters mentioned in the said rules.
Commercial Courts Act, 2015

Commercial Courts Act is one Another legislation that provides for mandatory pre-litigation mediation. Section
12A of the Act provides for the provisions relating to Pre-Institution Mediation and Settlement. The requirements
under section 12A are as under:
1. There shall be a suit which does not contemplate any urgent interim relief under this Act.
2. The suit should not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation.
The Central Government has made the Commercial Courts (Pre-jnstitution Mediation and Settlement) Rules,
2018. According to rule 3 of these rules a party to a commercial dispute may make an application to the Central
Government as per form – I specified in schedule – I either online or by post or by hand for initiation of Mediation
Process.
These rules inter alia provides for the provisions relating to Mediation Process, venue, role of mediators,
Procedure of Mediation etc.
Given the relative similarities between mediation and conciliation, the Arbitration and Conciliation Act does not
have provisions strictly applicable to mediation, one can look to this Act for statutory guidance on matters such
as disclosure of information and confidentiality.
Companies Act, 2013

According to section 442 of the Companies Act, 2013, the Central Government shall maintain a panel of
experts to be called as the Mediation and Conciliation Panel consisting of such number of experts having such
qualifications as may be prescribed for mediation between the parties during the pendency of any proceedings
before the Central Government or the Tribunal or the Appellate Tribunal under the Act.
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The following qualifications are prescribed under the Companies (Mediation and Conciliation) Rules, 2016:
A person shall not be qualified for being empanelled as mediator or conciliator unless he -
(a) has been a Judge of the Supreme Court of India; or
(b) has been a Judge of a High Court; or
(c) has been a District and Sessions Judge; or
(d) has been a Member or Registrar of a Tribunal constituted at the National level under any law for the
time being in force; or
(e) has been an officer in the Indian Corporate Law Service or Indian Legal Service with fifteen years
experience; or
(f) is a qualified legal practitioner for not less than ten years; or
(g) is or has been a professional for at least fifteen years of continuous practice as Chartered Accountant
or Cost Accountant or Company Secretary; or
(h) has been a Member or President of any State Consumer Forum; or
(i) is an expert in mediation or conciliation who has successfully undergone training in mediation or
conciliation.
Any of the parties to the proceedings may, at any time during the proceedings before the Central Government or
the Tribunal or the Appellate Tribunal, apply to the Central Government or the Tribunal or the Appellate Tribunal
for referring the matter pertaining to such proceedings to the Mediation and Conciliation Panel and the Central
Government or Tribunal or the Appellate Tribunal, shall appoint one or more experts from the panel referred
above.
The Central Government or the Tribunal or the Appellate Tribunal before which any proceeding is pending may
also suo motu, refer any matter pertaining to such proceeding to such number of experts from the Mediation
and Conciliation Panel.
Any party aggreived by the recommendation of the Mediation and Conciliation Panel can file objections to
the Central Government or the Tribunal or the Appellate Tribunal.
Procedure of Mediation or Conciliation

The mediator or conciliator shall follow the following procedure, namely :-
(i) he shall fix, in consultation with the parties, the dates and the time of each mediation or conciliation
session, where all parties have to be present;
(ii) he shall hold the mediation or conciliation at the place decided by the Central Government or the
Tribunal or the Appellate Tribunal, or such other place where the parties and the mediator or conciliator
jointly agree;
(iii) he may conduct joint or separate meetings with the parties;
(iv) each party shall, ten days before a session, provide to the mediator or conciliator a brief memorandum
setting forth the issues, which need to be resolved, and his position in respect of those issues and all
information reasonably required for the mediator or conciliator to understand the issue and a copy of
such memorandum shall also be given to the opposite party or parties:
Provided that in suitable or appropriate cases, the above mentioned period may be reduced at the
discretion of the mediator or conciliator;
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(v) each party shall furnish to the mediator or conciliator such other information as may be required by him
in connection with the issues to be resolved.
Further, where there is more than one mediator or conciliator, the mediator or conciliators may first
concur with the party that agreed to nominate him and thereafter interact with the other mediator or
conciliator, with a view to resolve the dispute.
Land Mark Cases

There have been some significant judgments which have clarified the position of law on some crucial aspects
regarding ADR methods in India, including mediation.
In the case of Salem Advocate Bar Association v. Union of India, the Supreme Court held that section 89 required
the courts to necessarily refer such matters for resolution by ADR means if it believed it to be appropriate
depending on the facts of the case. Moreover, it stated that the terms of settlement were to be settled by the
parties before the mediator and not before the court. It also instructed High Courts to formulate rules for court-
annexed mediation and establish mediator panels for the same.
The case of Afcons Infrastructure v. Cherian Varkey Constructions comprehensively dealt with the court
reference to each of the ADR methods listed under section 89 of the Code of Civil Procedure, 1908 including
mediation. It also laid down details regarding the laws applicable to each process and the enforcement of
settlements in each situation.
In the case of Moti Ram (D) Tr. LRs and Anr. v. Ashok Kumar and Anr., the mediator had submitted the mediation
report before the court. The Supreme Court held that mediation proceedings were to be completely confidential
in nature and that very limited information ought to be conveyed to the court regarding mediation sessions. It
also held that the mediator should only submit the executed mediated agreement or merely a statement that
mediation was unsuccessful, depending on the outcome. Elaborate details regarding the sessions were not to
be revealed before the court.
In the case of M.R. Krishna Murthi v. New India Assurance Co. Ltd. [(2020) 15 SCC 493, (India), 27] which is
relating to justice for road accident victims. It was inter alia mentioned that having regard to the fact that large
number of accidents are giving rise to phenomenal quantum jump in such cases, methods need to be adopted
for quick resolution. Here, mediation as a concept of dispute resolution, even before dispute becomes part of
adversarial adjudicatory process, would be of great significance. Advantages of mediation are manifold. This
stands recognised by the Legislature as well as policy makers and need no elaboration. Mediation is here to
stay. It is here to evolve. It is because of the advantages of mediation as a method here to find new grounds.
It is here to prosper, as its time has come. It is now finding statutory recognition and has been introduced in
few Statutes as well. Examples are the Companies Act, Insolvency and Bankruptcy Code, Commercial Courts
Act etc. In these enactments provisions are made even for pre-litigation mediation by making this process
mandatory. There is, in any case, umbrella provisions in the form of Section 89 of the Code of Civil Procedure
which, inter alia, provides for court annexed mediation as well.
COURT ANNEXED AND PRIVATE MEDIATION

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Court Annexed Mediation
Mediation, has a means of resolution of disputes, has been growing significantly over the past few decades.
It is considered to be the most appropriate method amidst the ‘Alternative Dispute Resolution’ Mechanisms
as it is cost effective, flexible, amicable and addresses the conflict in the most cordial of manners. In the
year 1996, the then Hon’ble Chief Justice of India. Mr. A H Ahmedi called for the institute for the Study and
1. Source : https://nyayadegula.kar.nic.in/court_annex.html
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Development of Legal Systems (ISDLS), USA to take part in a national assessment of the backlog in the civil
courts in India. Various studies were conducted there after to probe and look into the causes of delay in
disposal of cases under achieve civil jurisdiction in India. Based on the studies and suggestions to promote
the alternative dispute resolution mechanisms, in the year 1999, the Parliament, on the recommendations
of the Law Commission of India and the Justice Malimath Committee, amended Section 89 of the Code
of Civil Procedure (Amendment) Act, 1999, which came into effect from 2002. The amended Section 89
provides for reference of disputes to various modes like, Arbitration, Conciliation, Judicial Settlement, Lok
Adalat and Mediation. Though there were certain anomalies in the drafting of amended Section 89 but
the same were set right later by the Hon’ble Supreme Court in Afcons Infrastructure Ltd. and Another vs.
Cherian Varkey Construction Co. Pvt. Ltd.
The advantage of Court annexed Mediation is that the disputing parties, their lawyers all collectively participate
in the process of mediation, with mediators. In the Court annexure Mediation, the process of Mediation begins
the referral Judge and ends with the same judge as the settlement of the parties culminates into final order
passed by the referral judge. The same sets of lawyers who represent the parties in the court retain there briefs
for their clients for looking after their interest in the process of mediation. The lawyers who are perceived as
litigating lawyers use their clients and helping them to resolve their disputes making by think out of the box
and find creative solutions to their problems. The protective environment of the parties due to availability of the
assistance of the lawyers does not change and side by side they enjoy their participative role in finding solution
to their own problem.
Statutory provisions dealing with court referred mediation

Section 89 of the Code of Civil Procedure laid down the foundation for the Court Referred Mediation process
in India. As Per section 89, where it appears to the court that their exist elements of settlement, the court shall
refer the matter for Arbitration ; Conciliation ; Judicial Settlement including settlement through Lok Adalat or
Mediation. The stage at which the court should explore whether the matter should be referred to ADR processes
is after the pleadings are completed and before framing of issues, when the matter us taken up for preliminary
hearing for examination of parties under Order 10 of the code. However, if for any reason, the court had missed
the opportunity to consider and refer the matter to section 89 before framing of issues. In family disputes
or matrimonial cases, the relationship becomes “hostile on account of the various allegations in the petition
against the spouse, siblings. So, is the case in commercial disputes involving business partners or co-workers.
The hostility further gets aggravated by the counter- allegations made by the respondent / defendant in the
written statement. Therefore, wherever relationship is involved, ideal stage for mediation is immediately after
service on the opponent more particularly before filing of response to the petition.
Advantages of court annexed mediation

In COURT ANNEXED MEDIATION the mediation services are provided by the court as a part and parcel of the
same judicial system as against COURT REFERRED MEDIATION, wherein the court merely refers the matter
to a mediator. The advantage of court annexed mediation is that the judges, lawyers and litigants become
participants therein, thereby giving to them a feeling that negotiated settlement is achieved by all the three
actors in justice delivery system. When a judge refers a case to the Court annexed mediation service, keeping
overall supervision on the process, no one would feel that the system parts with the case. The Judge would feel
that he refers the case to a mediator within the system. The same lawyers who appear in a case retain their
briefs and continue to represent their clients before the mediators within the same set-up. The litigants feel that
they are given an opportunity to play their own participatory role in the resolution of disputes. This will also give
a larger public acceptance for the process as the same time tested court system, which has acquired public
confidence because of integrity and impartiality, retains its control and provide an additional service. The court
is the parental institution for resolution of disputes and if ADR models are directed under Court’s supervision,
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atleast in those cases which are referred through courts, the effort of dispensing justice can become more co-
ordinated. ADR services under the control, guidance and supervision of the court would have more authenticity
and smooth acceptance. It would ensure the feeling that mediation is complimentary and not competitive with
the court system.
Private Mediation
Private mediation is a voluntary process for resolution of dispute between parties. Private Mediation may be
Adhoc or Institutional. In Adhoc Private mediation, the parties agree on the rules of Mediation and attempt
to resolve the dispute with the assistance of the appointed mediator. In case of unsuccessful mediation, the
parties can resort to the courts to exercise legal remedies. There is no law that prohibits private mediation or
approaching the court on failure of Mediation process. Even, the upcoming law of Mediation may increases the
scope of resolution of disputes through Mediation.
An agreement arrived at through private mediation is a “contract” as defined in Section 2(h) of the Contract
Act, 1872. Therefore, if a private mediation settlement agreement (an enforceable contract), then the terms and
conditions can be enforced by seeking recourse to provisions of the Indian Contract Act, 1872.
EMPLOYMENT MEDIATION
Employment Mediation means a mediation in which an independent person called a ‘mediator’ assists
Employer and Employee for resolution of a dispute arising out of employment relationship in a semi-formal and
confidential environment. However, there may be more than one mediator depending on the requirement of the
parties. It is essentially a meeting between two or more parties who are experiencing employment conflict, with
the aim of finding a resolution. It is meant to resolve disputes such as employment discrimination, workplace
harassment, wage and overtime disputes, termination issues etc.
These mediation can prove to be beneficial to the Employer as well as employee as the same is less costly
alternative to litigation for parties who are willing to choose Mediation. The process of mediation is often faster
and less expensive than going through the courts and spend time litigating. Litigation usually requires extensive
amounts of court filings and appearances which is very less in case mediation.
Mediation is just one form of managing conflict within the workplace between the Employees and the Employer.
Mediation allows the people involved in the dispute to speak on the problem they have faced. It provides
an opportunity for an issue or issues to be openly discussed. In most situations the dispute has occurred
because the parties involved have differing opinions or a different understanding of the situation. In these
situations, mediation allows each party to explain their perspective in a controlled manner, in a non-threatening,
non-confrontational environment. It also allows each party to get an understanding of the other party’s
perspective.
Employees and employers also enter into employment contracts with each other that cover a range of matters
including conditions and terms of employment. Mediation can be decided to be a mode of dispute resolution
by inserting a clause to this effect in employment contracts itself. It will save the time and money for Employer
as well Employees.
Mediation is being used regularly and successfully in helping people resolve their disputes informally. It works
better because it enables people to hear each other and work out their own disputes in a safe environment with
neutral assistance. It also works because it de-emphasizes guilt and punishment and emphasizes understanding
and creating a plan for how people will get along in the future.
In order to come to a conclusion and find a solution to all the work related conflicts, disputes and issues,
Employment Mediation is the most valuable tool.
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What happens after the mediation?

a) If there is an agreement: The mediator will write up what both parties agreed to as a Record of
Settlement. Once it is signed by the parties and the mediator, this document becomes confidential,
binding, final and enforceable through the courts. The mediator will give a copy of the document to the
parties. Both parties must then do what they agreed to do when they signed the document.
b) If the parties cannot agree on a solution: The parties may then: ask the mediator to make a
recommendation. If the recommendation is not declined by either party (before a specified time limit),
it will become final, binding and enforceable, or ask the mediator to make a decision. The decision will
be final, binding, and enforceable.
All of the above factors also constrain the parties involved in Employment Mediation and prevent them from
arriving at agreements, or resolution of their conflict that may impinge on their employment rights, or those
of another person or that may have a significant impact on the employer’s business needs or operational
requirements.
In mediation there is no assurance of a goal. It tends to be viewed as a costly cycle if a result can’t be reached.
It is subsequently just advantageous if the two players are set up to settle. A few people need to ‘have their day
in court’ and feel a feeling of injustice if the cycle isn’t seen through until the end.
Mediation works as a tool for both the Employer and the Employee in order to find a safe way out of disputes
and conflicts that arise in the workplace.
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ONLINE MEDIATION AND USE OF ARTIFICIAL INTELLIGENCE
Online Dispute Resolution (ODR) refers to the use of digital technology to resolve small and medium-value
disputes through methods like negotiation, mediation, and arbitration. This process is conducted entirely remotely,
using platforms such as Zoom, Skype etc. In ODR mediation, parties may be supported by individuals through
telephone or video conferencing. The Indian government has taken steps to strengthen ODR mechanisms in the
country, recognizing its significance. The Mediation Bill of 2021 aims to include online mediation as a method
for resolving disputes. It was introduced in the Rajya Sabha on December 20, 2021.
The use of Online Dispute Resolution (ODR) in India is still in its early stages, and to establish a comprehensive
framework for implementing ODR in the country, the NITI Aayog formed a high-level committee in June 2020,
led by Justice A K Sikri, a retired judge of the Supreme Court of India. The goal of the committee was to develop
an action plan that would help integrate ODR into mainstream dispute resolution practices and make justice
more accessible through ODR. On November 29, 2021, the committee released its report, “Designing the future
of dispute Resolution: the ODR Policy Plan for India,” which recommends measures to address the challenges in
adopting an ODR framework in India at three different levels. Firstly, at the structural level, it proposes actions to
increase digital literacy, improve access to digital infrastructure, and train professionals to provide ODR services
as neutrals. Secondly, at the behavioural level, the report suggests using ODR to resolve disputes involving
government departments and ministries. Finally, at the regulatory level, the report recommends a soft-touch
approach to regulating ODR platforms and services, which involves developing ethical and design principles to
guide ODR service providers to self-regulate while promoting growth and innovation in the ecosystem.
The report suggests amending existing laws to improve the legislative framework for ODR and outlines a
phased plan for its implementation in India. The Indian government has already taken steps to strengthen ODR,
including proposing online mediation under the Mediation Bill, 2021. The bill outlines the process for online
mediation, to be conducted according to the Mediation Council of India’s guidelines. Currently, the bill is being
reviewed by the Department-related Parliamentary Standing Committee on Personnel, Public Grievances, Law,
and Justice.
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USE OF ARTIFICIAL INTELLIGENCE

The use of Artificial Intelligence (AI) in the Mediation process is considered to be the future of Dispute resolution.
I) AI in ODR can be used as follows:
A. Decision Support System (DSS): A DSS can perform simple activities ranging from compiling data
to more complex analysis, like suggesting the best strategy for the fairest possible outcome.
B. Expert System (ES): Another way in which AI can be used is as an expert system. An expert
system would have the capability to work at the standard of humans and may even be able to
exceed the standard. Such a system will be capable of learning by itself and develop knowledge
with each case. They differ on the ground that a DSS would assist a human, whereas an expert
system would be able to decide and give advice as a human.
II) Software and Tool
Support tools are becoming increasingly popular among practitioners. With expert systems, contracts can
be analysed in minutes as compared to hours taken by a human. Famous Software/tools which are known
and recognised globally are SmartSettle, Adjusted Winner, eBrevia, etc.
III) Benefits
Artificial Intelligence (AI) is a field that uses computer science and robust datasets to solve problems.
It includes sub-fields like machine learning and deep learning that are commonly associated with AI.
In mediation, the first priority of the neutral party is to make the disputing parties feel comfortable and
confident in their confidentiality. AI programs could provide an advantage in this aspect as people might
feel more at ease sharing personal information with a non-human party, especially when dealing with
sensitive issues like matrimonial disputes. This could benefit parties who don’t want their details disclosed
to a third person. However, it raises concerns about confidentiality. AI has the potential to reduce the
burden on courts since the volume of civil cases in India is high, and many of them can be resolved through
alternative dispute resolution (ADR). AI in online dispute resolution (ODR) could make the process more
accessible to those who can’t afford litigation or physical ADR, especially since miscommunication is a
common cause of disputes in civil cases.
IV) Limitations
The confidentiality of physical ADR processes is not full proof, as there is always a possibility of information
being leaked by the parties or a third party, whereas AI-based systems are vulnerable to cyber-attacks
and security breaches. AI systems can be used in two ways, manual data entry or voice commands, both
of which can be attacked through the internet. Furthermore, the development cost of such technology is
expected to be high and unlikely to be offered at a low cost.
The lack of emotions in AI systems can prove to be a drawback in family disputes. Human communication
involves more than just words, and robots may not be able to consider factors that the parties don’t mention.
Although some robots can analyze non-verbal cues, they may come at a high cost. Another challenge is
that AI may not understand colloquial language, different accents, or mixed languages that people use
in communication, especially in India, where the use of local languages and the mixing of languages
is common. Developing AI to accommodate these complexities will also increase development costs.
Therefore, AI as a neutral party or representative may not be as efficient as human beings.
Mediation and other alternative dispute resolution methods are seen as a way of bringing back the “human
element” to dispute resolution and moving away from the rather mechanical adversarial system wherever
possible. Humans communicate not only from their words but also their tone, facial expressions, etc. The
efficiency of AI as a full-fledged neutral party or a representative will not be very high. There are certain
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robots that can analyse such signs and react accordingly; however, the cost they come at may be very
high.
Another problem that an AI neutral party or representative comes with is the syntax of the language. AI may
not be able to understand the colloquial language in which we speak. There might be problems with the
accent the person speaks in or the mixing up of the languages. There are times when a language like Hindi
mixes with the local language, and it leads to a totally new colloquial language, with words from multiple
languages and flexible rules of grammar. Developing AI to suit these requirements will further increase the
cost of development.
V) Conclusion
In the application of Artificial Intelligence to streamlining dispute processes and disputants, online
settlement may help resolve conflicts, keep the classic informality, cost-effectiveness and speed. Online
Conflict Resolution referred to dispute resolution methods based on information and links. The aim of this
study is to focus on the various benefits which the judicial system in India will have with the introduction of
artificial intelligence tools in mediation and alternative dispute resolution. The study will focus on the relief
that the judiciary will get as it can be seen that due to lack of time the apex court is flooded with numerous
pending cases so adding AI in the mediation would be beneficial as this would assist in speedy disposal of
the pending cases. The study will also focus on the issues that the judicial system in India would face while
implementing the AI tools.
REFLECTIVE PRACTICE
The concept of reflective practice in mediation has gained attention in recent years, but it is still not widely used
among mediators. This may be because many mediators are not familiar with the practical application and
benefits of reflective practice. Additionally, research on expertise development suggests that simply having
years of experience does not necessarily lead to mastery. Instead, mediators must remain aware and engaged
in their practice in order to continue improving.
Reflective practice groups, also known as Case Consultation or Advanced Practice groups, offer mediators
a supportive space to explore and reflect on their assumptions and motivations in a non-judgmental way.
This type of self-reflection is essential for professional development and growth. By reviewing their mediation
sessions and analyzing the choices they made, mediators can become more aware of their effectiveness and
ultimately improve their practice. Overall, greater emphasis should be placed on systematizing the use of the
reflective practice in the field of mediation.
Who will benefit from a reflective practice/case consultation (RP) group?

i. Experienced Practitioners
Experienced mediators who have been practicing for several years have developed successful patterns
of practice that have become rigid and automatic. They want to re-energize their practice by learning to
use their intuition more effectively, challenging their underlying assumptions, and improving their ability
to adapt to complex situations. To achieve this, they can attend workshops, seek feedback, experiment
with different techniques, reflect on their practice, and seek supervision from more experienced
mediators. By doing so, they can enhance their skills, become more responsive to clients, and improve
their overall practice
ii. Apprentices
They have limited experience as practitioners. Apprentice mediators who will benefit from participating
in peer groups recognize the limits of their knowledge and skills. While performing with competence
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and effectiveness, they frequently experience confusion when faced with behaviors that are surprising,
unexpected and disruptive. The limits of their skills and knowledge are frequently challenged by
increasingly complicated and unique conflict situations.
iii. Novices
Novice mediators are individuals who have received some training, and taken part in role-playing
exercises, but lack practical experience. Although they possess a fundamental understanding of
conflict and mediation, their skills have not been tested in real-life conflict situations. Due to their lack
of experience, these mediators tend to rely on the techniques they have learned or those that they
intuitively feel would be effective. However, as they encounter real-life situations, they will begin to
question their assumptions and reflect on their approaches to conflict, which will make them more
intentional and considerate in their interventions.
STAGES OF MEDIATION
There are four functional stages of the mediation process, namely:
1. Introduction and Opening Statement
2. Joint Session
3. Separate Session(s)
4. Closing
1. Introduction and Opening Statements
The objectives of this stage are:
a) to establish neutrality
b) to create an understanding of the process
c) to develop rapport with the parties
d) to gain the confidence and trust of the parties
e) to establish an environment that is conducive to constructive negotiations
f) to motivate the parties for an amicable settlement of disputes
g) to establish control over the process.
Introduction
To begin the mediation process, the mediator first introduces himself by sharing his name, qualifications,
areas of expertise, and years of experience. Then, he informs the parties that he has been appointed
as the mediator and shares any past experience he may have in mediating similar cases. The mediator
clarifies that he has no affiliation with either party and has no personal interest in the dispute. Next, the
mediator encourages the parties to resolve their dispute amicably, establishing trust in his impartiality
and skills. The mediator then asks the parties and their lawyers to introduce themselves. The mediator
also confirms that all necessary parties are present and authorized to settle the dispute. In case the
senior advocate is not present, the mediator may obtain information from the junior advocate about the
senior and ensure that they are authorized to represent the client.
Opening Statements
The opening statement is a vital phase of the mediation process. The mediator starts the mediation
by introducing and explaining the key concepts, processes, stages, and roles involved in mediation
in simple and clear language. They also highlight important aspects of the mediation and provide the
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ground rules for the process. The mediator ensures that the parties have understood the process and
the rules and offers them the opportunity to ask questions and seek clarification if needed.
2. Joint Sessions
a) To gather information
b) To provide opportunity to the parties to hear the perspectives of the other parties
c) To understand perspectives, relationships and feelings
d) To understand facts and issues
e) To understand obstacles and possibilities
f) To ensure that each participant feels heard.
Procedure
The mediator commences the discussion by inviting both parties to present their respective cases and
provide an explanation of their perspective. The plaintiff is given the first opportunity to present the
case in their own words, followed by their counsel who will explain the legal issues involved. The
defendant is then allowed to present their perspective in their own words, followed by their counsel
who will state the legal issues involved.
1. The mediator may ask questions in order to clarify any unclear facts and then summarize the facts
to identify areas of agreement and disagreement between the parties.
2. The mediator makes sure that the session is not disrupted by aggressive behavior or interruptions
from either party.
3. After the joint session is completed, the mediator may meet each party and their respective
counsels separately multiple times.
4. At any point in the process, the mediator has the option to revert back to a joint session if needed.
3. Separate Session
a) To understand the dispute at a deeper value.
b) Provide a forum for parties to further vent their emotions.
c) Provide a forum for parties to disclose confidential information which they do not wish to share
with other parties.
d) Understand the underlying interests of the parties.
e) Help parties to realistically understand the case.
f) Shift parties to a solution-finding mood.
g) Encourage parties to generate options and find terms that are mutually acceptable.
Procedure
The separate session has three steps, they are as follows:
i. RE-AFFIRMING CONFIDENTIALITY:
The mediator reaffirms the parties of the confidential nature of the process.
ii. GATHERING FURTHER INFORMATION:
The mediator gathers specific information and takes a follow up on the issues raised by the parties
during the joint session.
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In this session, the mediator identifies emotional factors and acknowledges them, explores
sensitive and embarrassing issues, distinguishes between positions taken by parties, identifies
the cause behind the positions, identifies the areas of disputes and what they have previously
agreed upon, identifies common interests, identifies differential priorities of each parties on
different aspects of the disputes and ascertains the possibility of any trade off.
The mediator, then, formulates issues for resolution.
iii. REALITY-TESTING:
If the mediator feels after gathering the information and allowing the parties to vent their emotions,
that it is necessary to challenge or test the conclusions and perceptions of the parties, then, the
mediator can engage in reality testing.
Reality testing is generally done in a separate session, it includes the following techniques:
1. Asking effective questions
2. Discussing the strengths and weaknesses of the parties without any breach in confidentiality
3. Considering the consequences of any failure to reach an agreement.
iv. BRAIN STORMING:
In this technique, the mediator first creates as many options and ideas for settlement as possible
and proceeds to evaluate the options critically. This process involves lateral thinking as opposed
to linear thinking.
v. SUB-SESSIONS:
This is a separate session held with all the members including members and advocates and
members of the counsel of one party to discuss the positions and expectations of the parties or in
case of any divergence of interest among the parties on the same side.
vi. EXCHANGE OF OFFERS:
Finally, the mediator communicates the offers generated by one party to the other and the parties
negotiate through the mediator and come to a mutual settlement. If this fails to happen, then the
cases are sent back to the referral Court.
4. CLOSING:-
A) In Case of Settlement:
l The parties re-assemble and orally confirm the terms of settlement and the mediator further
reduces them to writing.
l The parties and the counsels representing sign the agreement in the presence of the
mediator.
l The parties receive a copy of the signed agreement and the original signed document is
sent to the referral Court.
l The parties agree upon a date of appearance in court and the date is intimated by the
mediator to the court.
l The settlement is then said to be reached and the mediator congratulates the parties.
B) In Case of No Settlement:
The case is returned to the referral court clearly reporting that the matter is “NOT SETTLED.” The
statements made during the mediation remain confidential.
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ROLE OF MEDIATORS
Mediation is a process in which an impartial and neutral third person, the mediator, facilitates the resolution
of a dispute without suggesting what should be the solution. It is an informal and non-adversarial process
intended to help to disputing parties reach a mutually acceptable solution. The role of the mediator is to remove
obstacles in communication, assist in the identification of issues and the exploration of options and facilitate
mutually acceptable agreements to resolve the dispute. However, the ultimate decision rests solely with the
parties. A mediator cannot force or compel a party to make a particular decision or in any other way impair or
interfere with the party’s right of self-determination.
(A) Function of Mediator
The functions of a mediator are to :-
(i) facilitate the process of mediation; and
(ii) assist the parties to evaluate the case to arrive at a settlement.
(I) FACILITATIVE ROLE
A mediator facilitates the process of mediation by-
l creating a conducive environment for the mediation process.
l explaining the process and its ground rules.
l facilitating communication between the parties using the various communication

techniques.
l identifying the obstacles to communication between the parties and removing them.
l gathering information about the dispute.
l identifying the underlying interests.
l maintaining control over the process and guiding focused discussion.
l managing the interaction between parties.
l assisting the parties to generate options.
l motivating the parties to agree on mutually acceptable settlement.
(II) EVALUATIVE ROLE

A mediator performs an evaluative role by-
l helping and guiding the parties to evaluate their case through reality - testing.
l assisting the parties to evaluate the options for settlement.
(B) Qualities of Mediator

It is necessary that a mediator must possess certain basic qualities which include:
(i) complete, genuine and unconditional faith in the process of mediation and its efficacy.
(ii) ability and commitment to strive for excellence in the art of mediation by constantly updating
skills and knowledge.
(iii) sensitivity, alertness and ability to perceive, appreciate and respect the needs, interests,
aspirations, emotions, sentiments, frame of mind and mindset of the parties to mediation.
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(iv) highest standards of honesty and integrity in conduct and behaviour.

(v) neutrality, objectivity and non-judgmental.
(vi) ability to be an attentive, active and patient listener.
(vii) a calm, pleasant and cheerful disposition.
(viii) patience, persistence and perseverance.
(ix) good communication skills.
(x) open mindedness and flexibility.
(xi) empathy.
(xii) creativity.
(C) Qualifications of Mediators
The Supreme Court of India in Salem Advocate Bar Association V Union of India, (2005) 6 SCC 344
approved the Model Civil Procedure Mediation Rules prepared by the Committee headed by Hon’ble
Justice M.J. Rao, the then Chairman, Law Commission of India. These Rules have already been adopted
by most of the High Courts with modifications according to the requirements of the State concerned.
a. As per the Model Rules the following persons are qualified and eligible for being enlisted in the
panel of mediators:-
i. Retired Judges of the Supreme Court of India;
ii. Retired Judges of the High Court;
iii. Retired District and Sessions Judges or retired Judges of the City Civil Court or Courts of
equivalent status.
b. Legal practitioners with at least fifteen years standing at the Bar at the level of the Supreme Court
or the High Court or the District Courts of equivalent status;
c. Experts or other professionals with at least fifteen years standing; or retired senior bureaucrats or
retired senior executives;
d. Institutions which are themselves experts in mediation and have been recognized as such by
the High Court, provided the names of its members are approved by the High Court initially or
whenever there is change in membership.
(D) Ethics and Code of Conduct for Mediators
1. Avoid conflict of interest: A mediator must avoid mediating in cases where they have direct
personal, professional or financial interest in the outcome of the dispute. If the mediator has any
indirect interest (e.g. he works in a firm with someone who has an interest in the outcome or
he is related to someone who has such an interest) he is bound to disclose to the parties such
indirect interest at the earliest opportunity and he shall not mediate in the case unless the parties
specifically agree to accept him as mediator despite such indirect interest. Where the mediator
is an advocate, he shall not appear for any of the parties in respect of the dispute which he had
mediated. A mediator should not establish or seek to establish a professional relationship with
any of the parties to the dispute until the expiry of a reasonable period after the conclusion of the
mediation proceedings.
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2. Awareness about competence and professional role boundaries: Mediators have a duty to know
the limits of their competence and ability in order to avoid taking on assignments which they are
not equipped to handle and to communicate candidly with the parties about their background and
experience. Mediators must avoid providing other types of professional service to the parties to
mediation, even if they are licensed to provide it. Even though, they may be competent to provide
such services, they will be compromising their effectiveness as mediators when they wear two
hats.
3. Practice Neutrality: Mediators have a duty to remain neutral throughout the mediation i.e. from
beginning to end. Their words, manner, attitude, body language and process management must
reflect an impartial and even-handed approach.
4. Ensure Voluntariness: The mediators must respect the voluntary nature of mediation and must
recognize the right of the parties to withdraw from the mediation at any stage.
5. Do no harm: Mediators should avoid conducting the mediation process in a manner that may
harm the participants or worsen the dispute. Some people suffer from emotional disturbances
that make mediation potentially damaging psychologically. Some people come to mediation at a
stage when they are not ready to be there. Some people are willing and able to participate, but
the mediator handles the process in a way that inflames the parties’ antagonism towards each
other rather than resolving. In such situations, the mediator must modify the process (e.g. meet
the parties separately or meet the counsel only) and if necessary withdraw from mediation when
it becomes apparent that mediation, even as modified, is inappropriate or harmful.
6. Promote Self-determination: Supporting and encouraging the parties in mediation to make their
own decisions (both individually and collectively) about the resolution of the dispute rather than
imposing the ideas of the mediator or others, is fundamental to the mediation process. Mediator
should ensure that there is no domination by any party or person preventing a party from making
his/her own decision.
7. Facilitate Informed Consent: Settlement of dispute must be based on informed consent. Although,
the mediator may not be the source of information for the parties, mediator should try to ensure
that the parties have enough information and data to assess their options of settlement and the
alternatives to settlement. If the parties lack such information and data, the mediator may suggest
to them how they might obtain it.
8. Discharge Duties to third parties: Just as the mediator should do no harm to the parties, he
should also consider whether a proposed settlement may harm others who are not participating
in the mediation. This is more important when the third parties likely to be affected by a mediated
settlement are children or other vulnerable people, such as the elderly or the infirm. Since third
parties are not directly involved in the process, the mediator has a duty to ask the parties for
information about the likely impact of the settlement on others and encourage the parties to
consider the interest of such third parties also.
9. Maintain Confidentiality: Mediation being confidential in nature, a mediator shall be faithful to
the relationship of trust and confidentiality imposed on him as a mediator. The mediator should
not disclose any matter which a party requires to be kept confidential unless;
a. the mediator is specifically given permission to do so by the party concerned; or
b. the mediator is required by law to do so.
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MEDIATION CLAUSE IN COMMERCIAL AGREEMENT
Mediation Clause in Commercial Agreement

A mediation clause in a commercial contract must clearly describe the steps which the parties are required to
take or incorporate a structure for a mediation. A clause that simply requires the parties to attempt to resolve a
dispute through mediation, has been regarded as unenforceable.
A) Template of Clause
1. “Mediation”
If a dispute arises, between or among the Parties, and it is not resolved, the Parties shall first
proceed in good faith to submit the matter to mediation. Costs related to mediation shall be
mutually shared between or among the Parties. Unless otherwise agreed in mediation, the Parties
retain their rights to proceed to arbitration or litigation.
a) The parties shall endeavour to settle any dispute arising out of or relating to this agreement,
including with regard to its existence, validity or termination, by mediation administered
before having recourse to arbitration or litigation.
b) The mediation shall be conducted in accordance with the guidelines for Commercial
Mediation operating at the time of the matter.
c) The terms of the Guidelines are hereby deemed incorporated into this agreement.
d) This clause shall survive termination of this agreement.”
The above clause provides clarity as to the type of disputes the clause is operated on, the manner in
which the mediation process is to be administered and the Guidelines which the mediation process
must follow.
B) Validity and Effectiveness
a) The inclusion of a mediation clause in a contractual agreement promotes the increased
effectiveness of the process, as the parties thereby decide, in advance of any litigation dispute, to
participate in the process and how they will do so. It is moreover now common practice to include
a mediation clause in several types of contracts in order to encourage the parties, in the event of
a disagreement, to consider this alternative.
b) In order to maximise the effectiveness of a mediation clause, certain important elements must
be included in it. For it is not enough to merely provide for a mediation process in a contractual
agreement, the terms, conditions and procedural rules must be addressed as well.
c) Mediation has the significant potential not merely for reducing the burden of arrears, but more
fundamentally for bringing about a qualitative change in the focus of the legal system from
adjudication to the settlement of disputes.
d) Mediation cost far less than arbitration, takes less time, and is regarded as a more satisfactory
process than arbitration. Findings indicated compelling reasons to use mediation, as well as
situations in which mediation should not be used. Therefore, mediation should be the first option
to consider when selecting an alternative dispute resolution procedure.
OVERVIEW: CORPORATE AND COMMERCIAL NEGOTIATIONS

Though the words Negotiation and Bargaining are often used synonymously, in mediation there is a distinction.
Negotiation involves bargaining and bargaining is part of the negotiation. Negotiation refers to the process
of communication that occurs when parties are trying to find a mutually acceptable solution to the dispute.
Negotiation may involve different types of bargaining.
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Although Negotiation and Bargaining are often used interchangeably, there is a difference between the two
in mediation. Negotiation involves bargaining, which is just one aspect of negotiation. Negotiation refers to the
process of communication between parties in an attempt to come to a mutually acceptable resolution. Different
types of bargaining may be involved in the negotiation.
Negotiation is a significant form of decision-making in human life and involves communication for the purpose
of persuasion. In mediation, negotiation is an assisted process of back-and-forth communication aimed at
reaching an agreement between the parties to a dispute. The mediator’s role is to shift the parties from an
adversarial approach to a problem-solving and interest-based approach. The mediator helps the parties
negotiate by carrying proposals from one party to the other until a mutually acceptable settlement is reached,
which is also referred to as ‘Shuttle Diplomacy’. Any negotiation that is based on the merits and interests of both
parties is considered Principled Negotiation and can result in a fair agreement that preserves and enhances the
relationship between the parties. The mediator facilitates negotiation by utilizing techniques such as reality-
testing, brainstorming, exchanging of offers, and breaking impasses.
Why does one negotiate?

a. To put across one’s view points, claims and interests.
b. To prevent exploitation/harassment.
c. To seek cooperation of the other side.
d. To avoid litigation.
e. To arrive at mutually acceptable agreement.
Negotiation Styles
1. The first style is the Avoiding Style, which is characterized by being unassertive and uncooperative. The
participant avoids confronting the problem or addressing the issues.
2. The second style is the Accommodating Style, which is also unassertive but cooperative. The participant
does not insist on their own interests and instead accommodates the interests of others. There may be
an element of sacrifice involved.
3. The third style is the Compromising Style, which involves a moderate level of assertiveness and
cooperation. The participant recognizes that both sides have to give up something to arrive at a
settlement, and is willing to reduce their demands. The emphasis is on achieving apparent equality.
4. The fourth style is the Competing Style, which is characterized by being assertive but uncooperative.
The participant values only their own interests and is not concerned about the interests of others. They
are aggressive and insist on their demands.
5. The fifth style is the Collaborating Style, which is assertive, cooperative, and constructive. The
participant values not only their own interests but also the interests of others. They actively participate
in the negotiation and work towards a deeper level of understanding of the issues, seeking a mutually
acceptable solution that satisfies the interests of all parties to the greatest extent possible.
What is Bargaining?
Bargaining is a part of the negotiation process. It is a technique to handle conflicts. It starts when the parties are
ready to discuss settlement terms.
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Types of Bargaining used in negotiation

There are different types of Bargaining. Negotiation may involve one or more of the types of bargaining
mentioned below:
(i) Distributive Bargaining
(ii) Interest based Bargaining
(iii) Integrative Bargaining
i) Distributive Bargaining
Distributive bargaining is often referred to as “zero sum game”, where any gain by one party results
in an equivalent loss by the other party. It is a customary, traditional method of bargaining where the
parties are dividing or allocating a fixed resource (i.e., property, money, assets, company holdings,
marital estate, probate estate, etc)
The two forms of distributive bargaining are:
Positional Bargaining: Positional Bargaining, is characterized by the primary focus of the parties
on their positions (i.e., offers and counter-offers). In this form of bargaining, the parties simply trade
positions, without discussing their underlying interests or exploring additional possibilities for trade-offs
and terms. This is the most basic form of negotiation and is often the first method people adopt.
Rights-Based Bargaining: This form of bargaining focuses on the rights of parties as the basis for
negotiation. The emphasis is on who is right and who is wrong. For example, “Your client was negligent.
Therefore, s/he owes my client compensation.” “Your client breached the contract. Therefore, my client
is entitled to contract damages.” Rights-based bargaining plays an important role in many negotiations
as it analyses and defines obligations of the parties. It is often used in combination with Positional
Bargaining.
ii) Interest-Based Bargaining
A mutually beneficial agreement is developed based on the facts, law and interests of both parties.
Interests include needs, desires, goals and priorities. This is a collaborative negotiation strategy that can
lead to mutual gain for all parties, viz., “win-win”. It has the potential to combine the interests of parties,
creating joint value or enlarging the pie. Relief expands in interest based bargaining. It preserves or
enhances relationships. It has all the elements of principled negotiation and is advised in cases where
the parties have on-going relationships and / or interests they want to preserve.
iii) Integrative Bargaining
Integrative Bargaining is an extension of Interest Based Bargaining. In Integrative Bargaining the
parties “expand the pie” by integrating the interests of both parties and exploring additional options
and possible terms of settlement. The parties think creatively to figure out ways to “sweeten the pot”,
by adding to or changing the terms for settlement.
Meaning of Corporate and Commercial Negotiation

Corporate and Commercial negotiation is the process of negotiating a business deal over a product or service.
It can be done between two parties, a company, an individual, or two companies.
Types of Deals
In Corporate and Commercial negotiation, there are two basic types of deals:
A. A sale at a price negotiated by both parties (usually called a “sale”). The buyer pays the seller for the
product or service they want.
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B. An agreement to supply goods or services without payment upfront (known as an “option”). The seller
gives their products or services to the buyer on a trial basis in exchange for a percentage of future
sales.
It’s one of the most important parts of the business because it can hugely impact whether or not you get what
you want. Thus, Corporate and Commercial negotiations are often complicated because both parties have
different goals. A company may want to sell its products at a high price, while another wants to buy them as
cheaply as possible. The seller may want to sell quickly, while the buyer may be willing to wait until they can
find a better deal elsewhere.
Tips for Successful Negotiating

While some individuals may possess natural negotiation skills, there are still some tips that can benefit those
who don’t.
One should be prepared to justify their position and show evidence that they have done their research.
Additionally, it’s important to consider the other party’s goals and what you can offer to help them achieve their
objectives without compromising your own.
It’s crucial to keep emotions in check, especially negative ones such as anger or frustration, and remain focused
on the goal. Knowing when to walk away is also essential, as it’s important to have a minimum acceptable
outcome and to recognize when negotiations are not progressing positively.
Taking a break can provide everyone involved an opportunity to reassess and potentially return with a fresh
outlook.
MEDIATION CHECK LIST (REQUISITES)

If the parties have agreed to refer their dispute to the Rules, and one or more parties want to initiate mediation
under the Rules, they must submit a written Request for Mediation. The Request should contain the following
information, which is also included in a checklist:
a) The contact details of all parties involved in the dispute and their representatives in the Proceedings,
such as names, addresses, telephone numbers, and email addresses;
b) A description of the dispute, including an estimated value if possible;
c) Any agreement to use a settlement procedure other than mediation or any proposal for such a
procedure if there is no agreement;
d) Any agreement or proposal regarding the time limits for conducting the mediation;
e) Any agreement or proposal regarding the language(s) to be used in the mediation;
f) Any agreement or proposal regarding the location of any physical meetings;
g) If the parties have agreed on a mediator, then the nomination should be included. If there is no joint
nomination, then the parties should agree on the attributes of the mediator. If there is no such agreement,
then a proposal for the attributes of the mediator should be made;
h) If there is a written agreement under which the Request is made, a copy of that agreement should be
included.
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Points to be considered for Mediation

1. Place and Language(s) of the Mediation
2. Selection of the Mediator
3. Fees and Costs
4. Conduct of the Mediation
5. Termination of the Proceedings.
The following Points are to be considered Pre Mediation

1. To prepare for a successful mediation, it is important to first decide when it should take place.
2. Early mediation, before a complaint, has been filed or during the preliminary stages of discovery, can
be beneficial for the party with more knowledge of the facts and can save on legal fees.
3. Mediation just before a trial can also be effective due to uncertainty and fear of additional fees. The
next step is to establish mediation goals, with settlement being the primary objective.
4. Even if parties cannot agree, mediation can still be useful for learning about the opponent’s goals and
resolving discovery disputes.
5. It is also important to be familiar with applicable legal principles and to provide a thorough and timely
mediation brief. Additionally, understanding the different negotiation processes used in mediations,
such as distributive bargaining and “best and final” offers, can be helpful in reaching a settlement. The
mediator may propose a settlement in writing, which can also be an effective negotiating technique.
MEDIATION CONFIDENTIALITY AND NEUTRALITY
Introduction
Mediation is a method of resolution of disputes in which an independent third party facilitates negotiation
between disputing between disputing parties to arrive at a mutually beneficial solution. Since the objective of
the process of mediation is to arrive at a mutually beneficial solution, the mediator must be an independent third
party who is neutral, unbiased and impartial. The mediator must not have any interest in the matter or either
of the disputing parties. The focus in the process of mediation is that it is non-coercive and consensual. The
two parties voluntarily take part and active efforts along with the help of the mediator to come to a mutually
beneficial solution, hence, co-operation of the parties and neutrality of the mediator are aspects of extreme
significance in the process of resolving disputes by means of mediation.
Features of Mediation
1. Voluntary settlement:
More often than not, mediation is a voluntary process. Both the disputing parties come together with
the motive of arriving at a mutually beneficial conclusion with the help of a mediator. Since the parties
actively participate in the process, it is a voluntary process and the likeability of arriving at a conclusion
increase. The parties voluntarily come together and mutually decide upon the terms of the agreement
before arriving at a mutually beneficial conclusion.
2. Autonomous Parties:
In mediation, the parties are granted a higher degree of autonomy in making decisions as opposed to
other forms of dispute resolution, such as litigation. The parties are actively engaged in discussions
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and negotiations while the mediator serves the purpose of facilitating the conversation. The parties are
responsible for the outcome of the mediation and are at liberty to mutually agree on the settlement
terms.
3. Confidentiality and Neutrality:
Mediation is a confidential process where anything discussed during the mediation sessions must
remain confidential as required by law. This includes all details revealed during the process and
they cannot be disclosed during legal proceedings. The mediator and the parties are bound by
the confidentiality agreement. Private sessions (or caucuses) between one of the parties and
the mediator are also expected to be confidential, and the mediator should not disclose this
information during joint sessions without the explicit consent of the party. However, there may be
certain situations where it is necessary to disclose confidential information before a court, and the
confidentiality is not absolute.
Confidentiality
Confidentiality is crucial in mediation because it allows for open and honest communication between parties,
ensures fairness to all parties involved, and maintains the mediator’s neutrality. Privacy is also a significant
reason why many choose mediation as a form of dispute resolution. Confidentiality laws protect mediators
and programs from distractions, harassment, and misuse of limited resources. Section 75 of the Arbitration and
Conciliation Act, 1996 talks about confidentiality in conciliation proceedings.
The case of Moti Ram Thr. L.Rs. and Anr. v. Ashok Kumar and Anr. established that mediation proceedings
should be kept confidential. Prior to this case, parties had the option to choose whether or not to maintain
confidentiality in their mediation proceedings. In this case, the Supreme Court directed that successful
mediation results should be presented to the court in the form of a settlement agreement, signed by both
parties, without mentioning any communication between them. If mediation is unsuccessful, the mediator
should only report the result to the court without discussing the proceedings. In the Salem Bar Association
v. Union of India case, a committee was formed to regulate mediation proceedings, and the Civil Procedure
Alternative Dispute Resolution and Mediation Rules, 2003 were introduced, which provide non-binding
guidelines for court-referred mediation. Rule 20 of these rules establishes all aspects of mediation as
confidential, and the Supreme Court recommended that all High courts adopt these rules with certain
modifications.
Mediation proceedings are typically kept confidential, and it is considered unethical to disclose any
communication that takes place during mediation sessions. This confidentiality has been upheld by courts
in various cases, and it is generally not permissible to seek information regarding mediation proceedings
through the Right to Information Act, 2005. However, in the Perry Kansagra case, an exception was made to the
confidentiality rule for the first time.
MEDIATED SETTLEMENT AGREEMENT

After the parties agree upon the terms of the settlement, the mutually decided terms of compromise or settlement
are put into writing before a mediator. Such an agreement is called as a mediated settlement agreement. The
mediation settlement agreement is signed by all parties and their counsels.
The written agreement should clearly specify all the material terms agreed to, it should be drafted in plain,
precise, and clear language, it should be concise, it should use active voice, wherever possible, it should clearly
state what is to be done, by whom it is to be done, when it is to be done, where it is to be done and how it is to be
done. Moreover, as the agreement relates to mediation and settlement, it should use language and expressions
that is neutral so that neither of the parties should feel favoured or biased, no party should feel like they are
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“lost.” As this is a legal agreement, binding on the parties, the agreement should be executed in terms that are in
accordance with the law. The agreement should avoid legal jargon or ambiguous language and should mainly
contain words and expressions used by the parties.
It should positively state what the parties have agreed to do and should avoid ambiguous words such as
reasonable, soon, etc. which can be misinterpreted or can lead to difficulty in interpretation.
Given below are for a mediated settlement agreements:
SPECIMEN SETTLEMENT AGREEMENTS

Specimen Mediated Settlement Agreement - 1
This agreement made this ______ day of __________, 20____ at _______________.
BETWEEN
___________________ (Full description and address of the Party to be given) of the ONE PART
AND
___________________ (full description and address of the Party to be given) of the OTHER PART.
WHEREAS certain disputes and differences have arisen and are subsisting between the aforesaid parties
relating to _____________________________________________(details of contract to be given).
AND WHEREAS the Parties submitted their dispute(s) for an amicable settlement in accordance with the ______
Mediation Rules;
AND WHEREAS the parties agreed to settle the dispute on mutually acceptable terms as finalised during the
course of mediation.
NOW IT IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS:
1. The undersigned parties agree to the terms and conditions of this Mediation Settlement Agreement
(“Agreement”), in full settlement of any and all claims which have been or could have been asserted in
this action.
2. First party agrees to provide all the raw materials to the second party in exchange for the sum of Rs. 10
lacs (“Settlement Sum”).
3. Second party agrees to make the full payment of Settlement Sum by 02ndAugust, 2023(the “Settlement
Date”).
4. Simultaneous with payment of the Settlement Sum in full at the Settlement Date, the parties shall
execute and exchange mutual general releases.
5. Simultaneous with payment of the Settlement Sum in full, the First party shall execute and deliver any
documents necessary to effectuate the transfer of raw materials.
6. The parties mutually agree that neither of them shall solicit financial advisors or employees of the other
for a period of two years from the date of this Agreement.
7. Each party shall bear its own fees and costs for this action.
8. _____________________
9. ________________________
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10. ________________________ etc.
11. In order to carry out the terms and circumstances of this mediation settlement agreement, the parties
shall execute and exchange any further documents that may be deemed appropriate.
IN WITNESS WHEREOF the parties hereto have hereunto set and subscribed their respective hands and seals
the day and year first hereinabove written.
___________________________________ ____________________________________
Signed by the above named 1st party Signed by the above named 2nd Party
Witnesses
1. ___________________________
2. ___________________________ _________________________________
(Name, Signature and Details) Authenticated by (Mediator) ____________
Specimen Mediated Settlement Agreement – 2

This Mediated Settlement Agreement is executed on this ______ day of ________, 2024 at New Delhi
by and between
________________, maintaining its Registered Office at _____________________________________
hereinafter referred to as the “FIRST PARTY”) and _________________ S/o ____________________
residents of _______________________________ (hereinafter referred to as the “SECOND PARTY”)
WHEREAS pursuant to agreement dated ________________, disputes relating to
____________,______________ and _______________ has arose between the parties.
WHEREAS by virtue of the above said agreement, the parties mutually agreed to settle their dispute through
Mediation by entering into a separate Mediation agreement.
WHEREAS both the parties have appointed Mr. _______________ as Mediator for conduct of the proceedings.
WHEREAS the parties have now settled the disputes in the mediation proceedings held on ________,
___________ and _____________.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. The parties to this agreement accepts and agrees to the terms, conditions and clauses, as full and final
settlement of the claims made by first party against the second party pertaining to matter indicated in
mediated settlement agreement dated ________________. However, any clause of this agreement
should not be treated as admission of facts of dispute.
2. The second party agrees to pay Rs. ________________/- by _____________ (date) for the 100
computers machines delivered by the first party during the duration between ____________ and
_______________.
3. The first party agree to provide Annual Maintenance of the above said 100 computers free of cost for a
period of 3 years starting from ____________ to _____________.
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4. The first party shall made available one of its employee during the office hours of Second Party. The
employee of first party shall be entitled to 2 Earned Leaves Per month application of which should be
made to Second Party 24 hours in advance and 1 Casual Leave per month that may be taken in case of
exigency and 24 Sick Leaves per year.
5. The payment shall be made by second party to the first part by online transfer in the Bank accounts of
later of by account payee the cheque in the name of “______________”.
6. The parties agree that the obligations of First Party under the settlement agreement are fulfilled
discharged on making the full and final payment under clause 2 of this Agreement to the Second Party
before ___________(Cut off date for making Payment).
7. The parties agree that unpaid amount after ________ (Cut off date for making Payment) shall bear
interest from the date such payment was due until paid at a rate 10% compounded quarterly from time
to time.
8. The parties agree that there shall be no further penalty or claim made pertaining to this transaction
9. It is agreed between the parties that all the liabilities of the Second Party for payment as mentioned in
the letter of possession dated 27.05.2016 are inclusive in the above agreed amount of Rs.25 LACS and
no other payment whatsoever would be payable by the Second Party after payment of settled amount
except interest for delayed payment as detailed herein above as also the maintenance charges with
effect from 1.8.2021.
10. The parties agrees that parties shall pray the Hon’ble Court for a suitable adjournment of proceedings
so that the parties can ensure compliance of the terms of this agreement and thereafter jointly apply to
the Hon’ble Court for disposal proceedings.
It is agreed between the parties that the parties shall pray to the Hon’ble Court for a suitable adjournment of
both the appeals of the two appeals as aforesaid.
In witness whereof the Bank, through its authorised officer has set its hand and stamp on this ____ day of
March, 2023 at __________________.
___________________________ ________________________________
1st Party 2nd Party
Mediator
________________
ROLE OF MEDIATION IN OTHER ADR DOMAINS
Mediation in Conciliation
Both conciliation and mediation seek to find out the disputed issues and solutions for the same. These are non-
judicial, non-adversarial processes, wherein the parties seek a solution to their issue rather than competing
against each other. These are voluntary in nature, i.e. both parties should agree to mediate or conciliate the
dispute.
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Mediation is an alternative form of dispute resolution and is supported by an unbiased third-party mediator.
With conciliation, the conciliator will play an advisory role and may intervene in order to offer feasible solutions
to both parties and help settle their disputes.
Mediation in Arbitration
In a mediation process, a neutral, trained mediator works to help disputants come to a consensus on their own.
In arbitration, a neutral, trained arbitrator serves as a judge who is responsible for resolving the dispute.
Mediation and arbitration can help parties solve serious conflicts without the expense and hassle of litigation.
In mediation and arbitration, parties first attempt to collaborate on an agreement with the help of a mediator.
If the mediation ends in impasse, or if issues remain unresolved, the parties can then move on to arbitration.
The mediator can assume the role of arbitrator (if qualified) and render a binding decision quickly, or an arbitrator
can take over the case after consulting with the mediator.
In a med-arb process, parties first reach agreement on the terms of the process itself. Typically—and unlike in
most mediations—they must agree in writing that the outcome of the process will be binding.
Med-arb can be a wise choice when parties are facing intense pressure to reach a resolution by a deadline, as
in a labor dispute. It can also be beneficial when disputants need to work effectively with one another in the
future. Med-arb can also be cost-effective: when disputants hire one person to serve as mediator and arbitrator,
they eliminate the need to start the arbitration from square one if mediation fails.
Mediation in Negotiation
Negotiation and mediation are complementary tools in the deal making process. But you need to use them
strategically for the best outcomes.
The purpose of mediation in negotiation is to help the parties to arrive at an agreement which is as satisfactory
as possible to both parties. The mediator assists the parties in their negotiation by shifting them from an
adversarial approach to a problem solving and interest based approach.
To gain parties’ trust and confidence, rapport must be genuine. You can’t fake it. Before people are willing
to settle, they must feel that their interests are truly understood. Only then can you achieve a true win-win
outcome in both negotiation and mediation.
The importance of relationship building, especially in contentious situations, cannot be overstated. Some
measure of trust is required before people will open up and reveal their true interests.
We tend to think negotiation and mediation processes are all alike, but in fact, negotiators and mediators follow
different approaches depending on the type of situation they are dealing with. There are many different kinds
of negotiation and mediation you can employ to reach successful agreements.
Mediation in Settlement
In order for any settlement to be concluded, the parties must voluntarily agree to accept it. Unlike a judge or an
arbitrator, therefore, the mediator is not a decision-maker. The role of the mediator is rather to assist the parties
in reaching their own decision on a settlement of the dispute.
Mediated settlement agreements are important because they can turn risks, delays into decisions of the parties.
A good mediated settlement agreement can help the parties to remove misunderstandings and conflicts. It
also lessens the burden on courts and also reduces legal expenses. Settlement Agreements which are entered
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into in the course of mediation are acceptable and stand the greatest chance of being implemented because
the outcome of mediation is not imposed by a third party adjudicator but represents a solution that has been
voluntarily agreed to by mutual agreement.
COMMERCIAL COURTS ACT

In 2015, the Commercial Courts, Commercial Division, Commercial Appellate Division of High Courts Act was
enacted to resolve commercial disputes efficiently and expeditiously. The Commercial Courts (Pre-Institution
Mediation and Settlement) Rules, 2018 were framed in line with the act to achieve this goal. The act mandates
that any commercial dispute falling under Section 2(1)(c) and valued at Rs. 3 lakhs or more must undergo
Pre-Institution Mediation, which is conducted by Legal Services Institutions. Chapter IIIA, Section 12A of the
Commercial Courts Act, 2015 governs Pre-Institution Mediation and Settlement. According to this section, a
person filing a suit must exhaust the remedy of Pre-Institution Mediation, as prescribed by rules made by the
Central government. The authorities constituted under the Legal Service Authorities Act, 1987 may be authorized
for Pre-Institution Mediation by the Central government. The authorized authority must complete the mediation
process within three months of the application date, and this period may be extended by two months with
the consent of the parties. The period spent on pre-institution mediation is not considered for the purpose of
limitation under the Limitation Act, 1963. If the parties arrive at a settlement, it is reduced to writing and signed
by the parties and the mediator. This settlement has the same effect as an arbitral award on agreed terms under
sub-section (4) of section 30 of the Arbitration and Conciliation Act, 1996.
LESSON ROUND-UP
l Mediation in Civil and Commercial Litigation refers to a process where a neutral and independent
third party facilitates negotiation between disputing parties to arrive at a mutually beneficial solution.
This form of alternative dispute resolution is commonly used in the legal system to resolve disputes
between two or more parties with concrete effects.
l Employment mediation is meant to help resolve disputes like employment discrimination, workplace
harassment, wage and overtime disputes, and termination issues. It can be a less costly alternative to
litigation for parties willing and able to participate in the process.
l In Online Dispute Resolution (ODR) mediation, parties may be supported by individuals through
telephone or video conferencing. The Indian government has taken steps to strengthen ODR
mechanisms in the country, recognizing its significance. The proposed Mediation Bill of 2021 aims to
include online mediation as a method for resolving disputes. It was introduced in the Rajya Sabha on
December 20, 2021.
l The concept of reflective practice in mediation has gained attention in recent years, but it is still not
widely used among mediators. This may be because many mediators are not familiar with the practical
application and benefits of reflective practice. Additionally, research on expertise development suggests
that simply having years of experience does not necessarily lead to mastery. Instead, mediators must
remain aware and engaged in their practice in order to continue improving.
l The role of the mediator is to remove obstacles in communication, assist in the identification of issues
and the exploration of options and facilitate mutually acceptable agreements to resolve the dispute.
However, the ultimate decision rests solely with the parties.
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l After the parties agree upon the terms of the settlement, the mutually decided terms of compromise or
settlement are put into writing before a mediator. Such an agreement is called as a mediated settlement
agreement. The mediation settlement agreement is signed by all parties and their counsels.
l In a mediation process, a neutral, trained mediator works to help disputants come to a consensus on
their own. In arbitration, a neutral, trained arbitrator serves as a judge who is responsible for resolving
the dispute.
l In 2015, the Commercial Courts, Commercial Division, Commercial Appellate Division of High Courts
Act was enacted to resolve commercial disputes efficiently and expeditiously. The Commercial Courts
(Pre-Institution Mediation and Settlement) Rules, 2018 were framed in line with the act to achieve this
goal.
GLOSSARY
Court annexed mediation: It refers to the cases that are pending in the court which the Court refers for
mediation under Section 89 of the Code of Civil Procedure, 1908.
Employment Mediation: It is when an independent person called a mediator helps an employee and an
employer resolve an employment relationship problem in a semi-formal and confidential environment.
Online Dispute Resolution (ODR): It refers to the use of digital technology to resolve small and medium-
value disputes through methods like negotiation, mediation, and arbitration. This process is conducted
entirely remotely, using platforms such as Zoom or Skype.
Reflective practice: It also known as Case Consultation or Advanced Practice groups, offer mediators a
supportive space to explore and reflect on their assumptions and motivations in a non-judgmental way. This
type of self-reflection is essential for professional development and growth.
Negotiation: Negotiation refers to the process of communication between parties in an attempt to come to a
mutually acceptable resolution. Different types of bargaining may be involved in the negotiation.
TEST YOURSELF
1. What are the forms of Mediation?
2. Define Employment Mediation. What happens after the mediation?
3. Explain the uses, benefits and limitations of Artificial Intelligence in Mediation?
4. What are the stages of Mediation?
5. What is the Qualification, Ethics and Code of Conduct of Mediators?
6. Explain Negotiation. What are the Types of Bargaining used in Negotiation?
7. Explain the Role of Mediation in other ADR domains?
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l MSME guidelines
l Supreme Court Judgements.
l https://www.jstor.org/
l https://www.scconline.com/blog/post/2021/11/29/legitimacy-of-private-mediation-in-the-pre-
legislation-era-busting-myths-with-facts/
l https://www.legalmatch.com/law-library/article/what-is-employment-mediation.html
l https://apcam.asia/2020/09/23/the-court-annexed-mediation-mechanism-an-overlooked-avenue-for-
justice/
l https://www.legalmatch.com/law-library/article/what-is-employment-mediation.html
l https://legalserviceindia.com/legal/article-11578-mediation-scope-process-and-techniques-an-
introspective-study-into-the-practical-aspects-of-the-procedure-of-mediation.html
435
436
International and Emerging Aspects Lesson
under Mediation Law 16
KEY CONCEPTS
nMediation n Mediation process n Mandatory pre-litigation mediation n Mandatory mediation n International
negotiations
Learning Objectives
To understand:  Effect and Significance of Culture
 Conceptual Framework of Mediation  Differentiation between World Culture and
Organizational Culture
 Details of Mediation bill and upcoming law
 Details of International Rules
 Mediation procedure under various laws
 Key aspects of United Nations convention
on international settlement agreements
resulting from mediation.
 Singapore Convention on Mediation
 Particulars on International Negotiations
and Diplomacy
Lesson Outline
 Introduction  Singapore Convention on Mediation
 Conceptual Framework  International Negotiations and Diplomacy
 Principle Ethics  International Rules
 Ethics of a Mediator  Singapore Mediation Settlement

Agreement
 Mediation Bill and Upcoming Law
 Lesson Round-Up
 Mediation under Various Statutes
 Glossary
 United Nations Convention on International
 Test Yourself
Settlement Agreements Resulting From
Mediation  List of Further Readings
 Resolution Adopted By the General  Other References (Including Websites/

Assembly on 20 December 2018 Video Links)
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PP-AM&C International and Emerging Aspects under Mediation Law
l Right to Information Act 2005
l Information Technology Act, 2000
INTRODUCTION
Disputes are indigenous in every society. An ideal society cannot exist without disputes being forming a part of
it. Senescent methods of litigation have witnessed delays and more expenses involved it. The drawbacks on part
of such traditional methods have arisen the need of questing into alternative methods of dispute resolution. Such
alternative techniques were looked into for the purpose of settling the dispute in a more responsive and positive
way so that the broken human relations can once again be tied up. There has been different methods falling under
the alternate dispute resolution mechanism but ‘mediation’ is one of such mechanisms that lead to the winning of
both the conflicting parties as it is more of a negotiated process. After a deep analysis it would be correct to say
that the idea of mediation relies on intrinsic sense of decency as well as an approval of participated values in the
society even if they are jeopardized as a consequence of any dispute. According to D.K. Sampath: “The poor lose
in a conflict, because they have nothing, no resources, no will to fight to the finish, no stamina to sustain the fight
and no ability to take advantage of the system even when facilities are made available.
Thus, they are the losers in terms of anticipation, skill, tactics and strategy. All these are high in an adversary
system. So the poor gain by annulling these potent advantages of the opponent bypassing the system and by
opting for Mediation”. It would not be wrong to say that this is party-oriented process wherein the mediator just
acts in a facilitative role. Though this method seems to be the most informal techniques amongst all, still it has
to maintain its ethical norms which are the core requirement of this process. Such ethical aspects in mediation
are mostly linked up with confidentiality and conflict of interest of the parties. For instance, the performance of
a mediator is entirely guided on the basis of some standard models, the actions of disputants are guided by
community models or community norms, the entire mediation process is controlled by basic rules of mediation
as formulated, and lastly, the resultant outcome is guided by the principled decision making.
Maintaining such ethical aspects in mediation may sound easy but it is a complex and tangled task. In India,
mediation lacks any legislative enforcement on thereby making it little tedious to carry on its functioning
effectively. But however, the same cannot be ruled out as far as its ethics are concerned because that has to be
obeyed and maintained irrespective of any legislative recognition by the government.
CONCEPTUAL FRAMEWORK
Mediation is most casual and relaxed process that involves in it discussions and deliberations between the
parties and the mediator at every stage on the disputed issue. The process offers with an opportunity to explore
various possible outcomes by the parties with the aid and assistance of a mediator, who acts as a neutral impartial
third person. Just because there is more of communication between the parties in the process rather than the
mediator, it is often known as ‘party-oriented negotiation’. However, it is to be borne in mind that the parties
can resort to mediation only if there is a consensual agreement between them. Mediator is neither allowed to
provide for any settlement outcomes nor permitted to compel parties to reach at some solution. Moreover, he
has no power to decide as to what is wrong and what is right but can just assist the parties to reconcile their
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International and Emerging Aspects under Mediation Law LESSON 16
points of differences. But the only task that mediator can perform in the process is that of facilitating the parties
with an urge to come out with some amicable solution that suits to both the disputants. So, mediation is not
only a process rather it is facilitation and an empowerment to parties to end up their conflict. Mediation begins
with the conversation of both the parties with mediator. The mediator then makes an opening statement to
the parties and lay down ground rules of mediation that are expected to be followed by the disputants during
the entire process. This is the moment when the ethical aspects of mediation starts. Thereafter, the parties are
given favourable opening to state their points of conflict one by one. Now once they have briefed their issues,
they initiate with the settlement options. It then comes in the hands of mediator whether he wants to have ‘joint
caucus’ or ‘separate caucus’? This decision of conducting joint caucus or separate caucus depends upon the
nature and depth of conflict between the parties. If the mediator thinks that the nature of dispute of is not very
exhaustive or rigorous then he may continue with the joint caucus, whilst if he feels that the dispute is of grave
intensity then he will prefer to conduct separate caucus. Keeping hold of such caucus is essential on part of
mediator which actually acts as an ethical norm in mediation. This is so because if mediator fails to opt for
correct session, it will affect the parties as well as the mediation process thereby vandalizing the ethical outlook
of mediation. Subsequently once the parties come to a consensual point, the same will be then reduced in a
written form so as to make it a settlement agreement. Such settlement agreement is binding on the parties. After
this the process gets wind up and the most advantageous feature of this process is that whatever conversations
are made during the sittings cannot become the subject matter for challenge or evidence in any court of law.
PRINCIPLE ETHICS
Ethics are the social norms of determining as to what is right and what is wrong. Established ethical reasoning
can be understood as by those who not only concerns for themselves but focuses on the concerns of others as
well. This supports the principle of mediation as well. Mediation ethics spotlights three various aspects, namely:
1. Virtue ethics: Virtues are the values of oneself. The party is just concerned as to what he wants from
the mediation, what are his expectations, what does he demand from the other party and the mediator
etc. Such ethics revolves around the belief of individual person only.
2. Principle ethics: In order to support virtue ethics, principle ethics specifies as to what the party shall do
in order to end up the dispute. Here comes the duty of the party to perform at his own level with a view
to settle the dispute.
3. Reciprocity: The most signifycant and influential aspect is the ‘reciprocity’ i.e., with the demands
and responses of one party how will it affect the opposite party. Whether the demands and needs of
opposite party too will be satisfied or not? So it peeps into the interest of the other party. In Mediation,
these ethics are to be understood and followed in order to make the process more viable and feasible
in nature.
Apart from these, there are five principle ethics of mediation that are highlighted as follows:
(a) Autonomy:
This is the core principle of mediation ethics. Autonomy implies to independence. As aware of the
process of mediation, everything happens according to the wills and wishes of the parties. The parties
are free to decide the time, place, language etc. in the mediation process. There is full freedom of
choice and action in mediation.
(b) Loyalty:
This principle bring into the concepts of being faithful, committed and a sense of fidelity in the process.
This loyalty or fidelity of one party should not be only with the mediator but should be with the opposite
party as well. Such allegiance will boost up the process by inculcating trust and faith in their relationship
which will further cause the blissful growth to happen.
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(c) Beneficence:
This principle highlights over doing good for others. It imposes the responsibility on both the parties as
well as the mediator to contribute towards the welfare of everyone involved in the mediation process.
(d) Justice:
It simply does not mean treating everyone equally. In fact it entails that one should treat equals equally
and unequals unequally but according to their pertinent differences. The mediation process unlike
court oriented method does not pronounce any judgment favouring or disfavouring anyone. It talks
about justice in the light of providing a win-win solution to both the disputing parties.
(e) Non-malfeasance:
This means ‘not causing harm to any one’. Therefore, it enunciates that during the mediation process,
none involved in it should cause any intentional harm to anyone. One should not aim at such solutions
that benefit himself and injures the other party, otherwise this will go against the norms of mediation
ethics. These principle ethics are to be pursued both by the parties as well as by the mediator. No doubt
there are some separate ethical codes of conduct for mediators that are to be followed but however,
these principle ethics forms the basis of all other codes of conduct in mediation process.
ETHICS OF A MEDIATOR 1
The entire success of mediation rests upon the basic guidelines provided to the mediators about ethical aspects
of the process. It is accurate to say that there are some evolving principles and standards in the arena of
mediation skill as well.
They are listed as under:
1) Self Determination
Self Determination is one of the core principles of mediation. It is the act of coming to an intentional as
well as un-coerced result where in each of the parties makes informed consent about the outcome of the
process. Self determination rests on the principle of party’s autonomy which every mediator is bound
to respect and persuade. This principle implies that a mediator should rely solely upon the parties for
them to reach at a consensual agreement. A mediator must take all rational and sensible efforts to
ensure that the disputants understand the nature and spirit of mediation process which includes the
discussion of all issues as well as the available option for settlement. Moreover, a mediator must also
inform the parties about the ground rules of the process thereby also informing that the parties have
the full chance to withdraw from mediation at any stage of process. If mediator feels that at any time
the parties are unable to understand the actual scope of this process or the parties are not able to
participate entirely in it then in such situations, mediator must suggest the parties to take appropriate
assistance with their intent to continue further with the process. If in the same situation even after taking
any assistance, the parties are still unable to continue with the process, then mediator must inform the
parties about the other activated options available to them for settling their conflict.
2) Mediator’s Role
The only point that mediator is to keep in mind is that his position is that of a facilitator only and he is
not allowed effectuate the process by giving his own submissions. But however, this facilitative role
would also impose the duty on mediator to make the parties aware about the importance of consulting
any expert opinion or professionals to assist them to make fully informed choices. No doubt, mediator
controls the process but he is not empowered to control the discussions and outcome of the conflict.
1. Rattan Singh & Shikha Dhiman, Ethical Perspectives of Mediation: The Voice of a Mediator, VIII (1) BHARATI LAW REVIEW 01-14 (JulySept.,
2019)
440
Therefore, mediator must make it clear to the parties at the outset that:
a. His duty is to smooth the progress of discussion of the content of parties and not to act as a judge
for resolving their dispute.
b. He is to inform the parties that the dispute is their own and consequently they themselves have to
play an active role in resolving the dispute.
c. His job is to let the parties know that they are to deliberate the point of issues between themselves
on merits of probable settlement.
d. He is to put in picture for the parties that they are required to persuade each other and not to
persuade the mediator.
Thence, the role of mediator is to help the parties to sneak a look into some new ways and means to
settle their differences and not to give any suggestions for their settlement.
3) Voluntary Participation of Parties
The voluntary involvement of parties is central to the theme of mediation process. Mediator should also
conduct the process in such a way that maximizes the parties’ voluntariness. In a situation where the
parties themselves go to mediation centre, the aspect of voluntariness is already imbibed in the parties
and hence it is easy for them to come to a mutual satisfaction on their own. But however the picture
is different in court ordered mediation. This is so because the parties lack an aspect of voluntariness.
Therefore in such circumstances, a mediator should be sensitive enough to assure the parties that
even though they have been ordered by the court for mediation, a settlement agreement will only be
reached if they willingly come up with consensual outcomes with their shared contentment.
4) Informed Consent Parties
Consent and their representational status form the part and parcel of their informed consent. It is to be
borne in mind that without informed consent of parties, principle of autonomy and self determination
stands nowhere in mediation. The theory of informed consent of the parties focuses on the parties’
conduct of decision making during the entire mediation procedure. Especially the parties who are
not backed by the professionals assistance need to comprehend as to how the consent operates in
mediation and what it actually means to reach a settlement agreement. By informed consent principle,
the parties are expected to have waived off their all legal rights and remedies as far as they chose to
continue with mediation.
5) Impartiality
Impartiality implies freedom from favoritism, discrimination and nepotism both in conduct of process
as well as in appearance of mediator. A mediator has to remain balanced and even handed during
the entire mediation process. If at times the mediator becomes unable to continue with the process
in an impartial or unbiased manner, he shall himself chose to withdraw from the process and should
not conduct any proceedings thereon. The beauty of the process depends upon the impartiality of
the mediator. A mediator should neither give nor take any gifts, money or any other valuable thing
that amounts to raise question regarding his perceived partiality in conduct. Therefore, in order to
maintain the norms of impartiality, the mediators are usually appointed by the court or court nominated
institutions and the appointing authority shall ensure that the mediator appointed by them serves
the criteria of being impartial. Moreover, mediator should make such conduct which guards against
partiality and prejudice of the process.
6) Conflicts of Interest
It is obligatory to find out in the beginning itself that mediator should not settle such disputes wherein
he himself has any personal, professional or financial interest. Before initiating the process, a mediator
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must disclose his actual or any other potential interests. If such disclosure of interest is made well
before the process begins then the parties have the opportunity to opt for any other mediator. The
acceptance of same mediator even after his (mediator’s) full disclosure of interest, usually settle the
potential conflict of disputing parties. Such an acceptance by the parties must be recorded in writing to
avoid any future conflicts in this regard. Even if the parties agree to continue with the same mediator
after knowing his interest but however the mediator feels that such an interest might affect mediator’s
impartiality, then he should withdraw from the process irrespective of the parties express desire to
continue.
7) Competency
Only a competent mediator can best serve the purpose of mediation. The mediator appointed should be
of such qualification and competence that can fulfill the necessary as well as reasonable expectation of
the parties. It is essential that the conflicting parties are satisfied with the qualification of mediator. Apart
from such credentials, a capable mediator envisages effective training and experience in mediation.
When the person is appointed as a mediator by some court or any other designated institution, such
appointing authority shall ensure that the appointed mediator have sufficient credentials which are
suitable for a particular type of mediation.
8) Confidentiality
The conversation among the parties as well as the mediator happens to be there behind the scenes.
The process is non-public i.e. no one from public is allowed to see any single glimpse of the dealings
of mediation. The matter remains exclusively confidential and private. This feature of remaining being
secret makes the ‘mediation’ different from court litigation procedure as well as different from other
modes of alternate dispute resolution mechanism. The disputing parties also expect full secrecy in the
process from a mediator. Hence, mediator is bound to preserve two forms of secrecy in mediation: i.
Secrecy of parties’ dispute from public ii. Secrecy of information given by one party from the other party.
But however, in latter type of secrecy the mediator may disclose the information given by one party to
another only with the prior approval of party who gave the information and if the situation demands
such disclosure. All the rules with regard to confidentiality clause in mediation shall be deliberated
among the parties and mediator before they initiate with the proceedings.
The Supreme Court in Moti Ram v. Ashok Kumar2, held: “The mediation proceedings ought to be strictly
confidential, and in case of court referred settlements the mediator must simply place the agreement
before the court without conveying to the court what transpired during the process.”
Similar to the decision of Supreme Court, the Central Information Commission in Rama Aggarwal v.
PIO, Delhi State Legal Service Authority3, opined: “The proceedings during mediation are protected
under the exceptions in the Right to Information Act 2005 and are not subject to be disclosed as no
public interest is served on disclosure and there exists larger public interest protecting the information”.
Confidentiality of the process should not be such which restricts the mediator to conduct effective
monitoring research as well as evaluation of mediation programs during the process.
If such prohibitions are imposed, then it may affect the behaviour of mediator to accomplish his task
and he will not be in a position to carry out mediation in an appropriate and valuable manner. Therefore
there are some exceptions to the confidentiality of mediation process which are as follows:
a. When the conflicting parties give their written consent;
b. When there are some statutory obligations to be followed;
2. Civil Appeal No. 1095 of 2008) December 7, 2010

3. CIC/SA/A/2015/000305
442
c. When mediator is entailed to prepare a written brief or summary or report of mediation;

d. When there are justifiable grounds to believe that disclosure is essential in order to avert any
danger or injury to any person or property;
e. When the information is of qualitative or quantitative nature which is further required to be used
for research or evaluation purposes. Considering these exceptional situations in mediation, a
mediator conducts private caucuses with the parties to discuss their issues and must inform the
parties about the restraints to confidentiality during such sessions.
A mediator must make it certain that confidentiality is preserved in the storage as well as disposal of
mediation records, documents, files etc. as well.
9) Refrain Legal Advice
It is very vital that mediator enlightens the parties about his actual role. He should make the parties
aware that his role is that of a neutral intermediary and not of any advocate or representative of either
of the parties. Therefore, a mediator is expected not to render any legal advice to any of the conflicting
parties. If mediator proposes the parties to go for court procedure or arbitration settlement, then it
does not imply that he has given any legal advice. At times when mediator assists in the grounding
of settlement agreement, it does not connote that he is representing any of the party to the dispute.
So, the role of mediator is cut short to just facilitate the process which itself is very flexible and fluid in
nature.
10) Quality of the Process
The entire quality of the mediation process lies on the working manner of mediator. With intent to ensure
the qualitative aspect of mediation, mediator must possess few qualities like meticulousness, timeliness,
safety, existence of suitable participants, party participation, procedural equality, competency and
deference among everyone involved in the process. He is anticipated to conduct the mediation process
very diligently, fairly and honestly. Mutual respect among the parties and mediator is also one of the
key aspects to maintain the eminence of process. But however, such a worth of the process can only be
there if mediator ensures commitment towards his demeanor.
Hindering the parties for any sort of undue delay in the proceeding of process is also one of the
ways of upholding the class and excellence of process. Furthermore, the mediator shall postpone the
proceedings if there is illegal conduct on part of any of the parties or either of the parties is unable to
carry on the process due to influence of any drug, alcohol or any other mental or physical incapacity,
in order to sustain the value of mediation process. A mediator should not conduct the proceedings with
an aim to accomplish high successful rate rather he should just act in a manner so as to raise lawful
and rightful question about the veracity and uprightness of mediation process.
11) Solicitation and Publicity
A mediator should not engage himself in any misleading advertisements. He is expected not to
make any deceptive or false statements about the process of mediation, quality of mediation, cost of
mediation, benefits of mediation, role of mediator as well as his skill and competence. All the information
or communication to the public through advertisements should be truthful and also mediators are
restrained from making guarantees about the results even.
12) Fees
At the very outset of mediation, the mediator is duty bound to disclose to the parties about the fee
structure and any other charges, if required, to be paid by one party to another party. It is indispensable
to bring to the notice of parties about fees and compensation criteria because then only they will be
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able to come to a decision whether they want to retain the services or mediator or not. A mediator
should charge reasonable fees for carrying out mediation.
Therefore, he should keep following factors in mind while fixing up his fees:
i. Complexity and nature of dispute
ii. Experience of mediator
iii. Time required for entire session
iv. Type of mediation
v. Levels of mediation services.
However, if a situation arises where from the mediator is bound to withdraw from the process before
the completion of mediation, then he should return back unearned fees to the parties concerned.
Additionally, a mediator is also not allowed to charge any referral fees. Moreover, there should not be
any fee agreement between the parties and mediator that remains contingent upon the outcome of
mediation. If there is more than one mediator, then the fees should be allocated among them according
to their agreement and the disputants are not permitted to interfere in that matter by any concern.
13) Obligations to the Mediation Process
There are some core obligations on mediator for effectual working of mediation. Some of the obligations
are stated as under:
i. Obligation to utilize their knowledge about mediation.
ii. Obligation to educate public by various modes to come up for mediation by telling its benefits.
iii. Obligations to improvise their professional ethics.
iv. Obligations to improvise their ability and capability to settle disputes through mediation.
v. Obligation to make mediation accessible to those who cannot afford litigation process or any other
mode of dispute settlement. This is only required on part of mediator. Such commitments towards
the mediation process is often claimed to make the process more successful and booming over
all other processes.
14) Inter-Professional Relations
Mediators are not only required to maintain the relations with the parties who came forward to him to
resolve their dispute but also to preserve his relationship with other mediators as well as professional
advisers too. He is anticipated to make sure that he carries good term with other experts who are
responsible to complement the practice of mediation. Mediators must try to build up cooperative relations
with other professionals and must persuade his clients to take the assistance of other professionals, as
and when required during the process.
15) Duty towards Third Parties
The way the mediator is not allowed to cause any harm to the disputing parties, similarly he should not
harm others who are not party to the dispute but still will be affected by the settlement agreement of
mediation. Generally such third parties are children or elderly persons in cases of family disputes. But
however, there are instances where the third party might be the general public. Example: in cases of
settlement dispute regarding construction of any highway or bridge (public projects) etc. So it becomes
mandatory for the mediator not to harm the interest of third parties as well. Therefore, a mediator is to
act responsibly and safeguard the welfare of third parties also as and when required. Considering all
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the ethics of a mediator, it would not be wrong to say that the assurance in mediation technique can be
cultivated and advanced only if the mediator performs in positive manner the ethical concerns of the
technique upon which the entire position of mediator is vital.
MEDIATION BILL AND UPCOMING LAW

It is common knowledge that the Indian justice system is largely adversarial. Yet, judicial and quasi-judicial forums
continue to grapple with systemic inadequacies and rising case pendency. To resolve this, the government
has taken several measures including promotion and development of alternate means of dispute resolution.
While arbitration has evolved over the years, the focus has now shifted towards institutionalizing mediated
settlements. In fact, for a long time, India has mulled over introducing an all-encompassing law on mediation.
Finally, on December 20, 2021, the Mediation Bill, 2021 (“Bill”) was introduced in Rajya Sabha, i.e., the upper
house of the Indian Parliament. On the same day, it was sent to the Parliamentary Standing Committee on Law
and Justice for further deliberation.
The Mediation Bill, 2023 has been passed in the Rajya Sabha on 01.08.2023 and in the Lok Sabha on 07.08.2023.
The bill has received the assent of the President and has become an Act.
The Mediation Act, 2023 comprises of 65 clauses and ten schedules. It extensively covers several areas
including contours of institutional mediation, establishment of a regulatory body, recognition of entities
conducting mediation, role, qualifications and training of mediators, online mediation, community mediation,
settlement of cross border disputes through mediation, pre-litigation mediation and enforcement of mediated
settlement agreements.
MEDIATION UNDER VARIOUS STATUTES
Reference to Mediation under Section 89 of CPC, 1908

Unlike arbitration and conciliation, which are governed by the Arbitration and Conciliation Act, 1996, there is no
umbrella legislation governing mediation in the country. The enactment of Section 89 of the CPC, 1908 marked
a major step towards institutionalising ADR through its incorporation in the civil procedure. This provision
empowers civil courts to refer civil disputes to, among other things, mediation, ‘where it appears to the court
that there exist elements of a settlement which may be acceptable to the parties.’ Mediation in India received an
impetus due to the Supreme Court’s judgment in the case of Salem Advocate Bar Association v. Union of India4.
In this case, a Committee was constituted by the Apex Court in order to enable better implementation of Section
89 by ensuring quicker dispensation of justice. This Committee drafted the Model Rules, 2003 which served
as the model for various High Courts in framing their own mediation rules. In the landmark case of Afcons
Infrastructure Ltd. and Ors. v. Cherian Varkey Construction Co. (P) Ltd. and Ors.5 while examining Section 89
of the CPC, 1908, the Apex Court held that having regard to the tenor of the provisions of Rule 1A of Order
10 of the CPC, the civil court should invariably refer cases to the ADR process, except in certain recognised
excluded categories of cases. It went on to state that where the case is unsuited for reference to any of the ADR
processes, the court will have to briefly record the reasons for not resorting to any of the settlement procedures
prescribed under Section 89.
Consequently, it is mandatory to have a hearing after completion of pleadings to consider recourse to an ADR
process under Section 89, but actual reference to an ADR process in all cases is not mandatory. To assess the
impact of this judgment, one would have to examine the statistics pertaining to cases referred to ADR processes
under Section 89. However, there is a lack of data on the number of cases referred to ADR processes across
4. AIR 2005 (SC) 3353

5. CIVIL APPEAL NO.6000 OF 2010
445
different jurisdictions under Section 89 and the final outcome of these disputes. The limited data available for
specific jurisdictions referred to below (Vidhi Mediation Report 2016) suggests that the Afcons judgment has
failed to have the desired impact in making ADR mechanisms the first mode of resolution for most civil disputes.
In K. Srinivas Rao v. D.A. Deepa6, while dealing with a divorce matter, the Apex Court went to the extent of saying
that criminal courts could also refer to mediation cases where a complaint has been filed under Section 498-A
of the Indian Penal Code, 1860. The Supreme Court further directed all mediation centres to set up pre-litigation
desks or clinics to settle matrimonial disputes at the pre-litigation stage. The above case laws seem to indicate
that the higher judiciary is by and large in favour of mediation and is keen on pushing all suitable matters to be
resolved through mediation instead of adding to the court’s burden.
However, in reality, Section 89 of the CPC and the above judicial pronouncements have not had the desired
impact due to the lack of adequate training given to the judges in the district judiciary, who are empowered
under Section 89 to refer matters to mediation. The discretion vested in them has not been used to reduce the
court’s burden in any noticeable manner. Apart from lack of training, there are several systemic issues that have
prevented the adoption of mediation, as discussed in the coming section despite the clear mandate given by
the judiciary in favour of mediation.
Mediation under Special Legislations7

Mediation is increasingly being included as a dispute resolution mechanism in newer legislations. For instance,
the Parliament included a provision for mediation of consumer disputes in the new Consumer Protection Act,
2019. Section 378 of this Act prescribes that at the first hearing of a complaint after its admission, or at any
later stage, if it appears to the District Commission that there exist elements of a settlement which may be
acceptable to the parties, it may refer the matter to mediation except in such cases as may be prescribed.
Chapter V of the Act provides detailed provisions pertaining to mediation of consumer disputes, including those
concerning establishment of consumer mediation cells attached to each of the District Commissions and the
State Commissions of a State (Section 74), empanelment of mediators (Section 75), the procedure for mediation
(Section 79), etc.
The Consumer Protection (Mediation) Rules, 2020 came into force with effect from July 20, 2020. The Rules make
it amply clear that the general rule is to refer all matters under the Consumer Protection Act, 2019 to mediation.
However, they make an exception for certain categories of cases that may not be considered appropriate for
mediation. The proviso to Rule 4 further provides that in any case other than the ones mentioned in Rule 4,
the Commission may choose not to refer it to mediation if it appears to the Commission that no elements of a
settlement exist which may be acceptable to the parties or that mediation is otherwise not appropriate having
regard to the circumstances of the case and the respective positions of the parties.
SECTION 4429 OF THE COMPANIES ACT, 2013, provides for a Mediation and Conciliation Panel to be maintained
by the Central Government for mediating proceedings before the Central Government or National Company
Law Tribunal (‘NCLT’) or National Company Law Appellate Tribunal (‘NCLAT’). This provision allows any of the
parties to the proceedings to opt for mediation. The Central Government, the NCLT or the NCLAT may also
refer a matter pending before it for mediation suo motu. The Mediation and Conciliation Panel shall dispose
of the matter referred to it within a period of three months from the date of such reference and forward its
recommendations to the Central Government or the NCLT or the NCLAT, as the case may be.
6. (2013) 5 SCC 226

7. vidhilegalpolicy.in
8. A Consumer Commission may refer a consumer dispute for mediation at the first hearing of the complaint after its admission, or at any
later stage, if it appears to the Consumer Commission that there exist any elements of a settlement which may be acceptable to the parties.
9. 442(1) The Central Government shall maintain a panel of experts to be called as the Mediation and Conciliation Panel consisting of
such number of experts having such qualifications as may be prescribed for mediation between the parties during the pendency of any
proceedings before the Central Government or the Tribunal or the Appellate Tribunal under this Act.
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Mandatory Pre-litigation
Mediation under the Commercial Courts Act, 2015: An example of an attempt to introduce mandatory
mediation in the Indian context is the Commercial Courts Act, 2015, which was amended in 2018 to provide for
pre-institution mediation and settlement. Section 12A of this Act makes it mandatory for the disputing parties to
attempt mediation before initiating a suit. The only exception provided in the law is if there is a requirement of
urgent relief from the court. The settlement agreement arrived at by the parties shall have the same legal force
as an arbitral award mentioned under Section 30 of Arbitration and Conciliation Act, 1996. However, despite this
provision having been in force for over two years, no data is readily available on its implementation.
Difficulties with the existing framework governing mediation

Even though mediation is speedier, more cost-effective and offers greater possibility of preserving the
relationship between disputing parties, the existing mediation framework in India has not allowed for reaping its
full potential. The Supreme Court highlighted some glaring drafting errors in Section 89 in its landmark judgment
in the Afcons Infrastructure Ltd. case. These include the mixing up of definitions of the terms ‘judicial settlement’
and ‘mediation’ in Section 89 and the lack of clarity as to the procedure to be followed by the court while
referring matters to mediation under Section 89. Section 89 was examined by the Law Commission of India in its
238th Report wherein it recommended substituting Section 89 with an amended provision that would bring it in
line with the judgment in Afcons Infrastructure Ltd. The recommendations included specifying the stage at which
the court should refer the matter to the various ADR processes mentioned in Section 89 and interchanging the
definitions of mediation and judicial settlement. However, this Report has not been implemented so far.
According to data from the Bangalore Mediation Centre, between 2011-2015, 31441 cases were referred for
mediation, which amounted to 4.29% of the cases freshly instituted in the Bangalore High Court (Vidhi Mediation
Report 2016, 11). As per the Mediation and Conciliation Centre of the Delhi High Court, during the same period,
13646 were referred for mediation, which amounted to 2.66% of the total number of cases in the Delhi High
Court. Finally, data for Allahabad High Court Mediation and Conciliation Centre reveals that during 2011-2015,
11618 cases were referred for mediation. These constituted 0.85% of the cases freshly instituted in the Allahabad
High Court. From this data, it is evident that judges are not using Section 89 to its full potential.
There are a number of factors responsible for this. First and foremost, the fact that data on Section 89 referrals
is not tracked for the National Judicial Data Grid or made a part of their assessment reports means that judges
are not incentivised to refer cases to ADR processes. Further, referral judges are expected to be objective while
determining the possibility of settlement between parties, but this objectivity may be hampered because judges
may be more attuned to the adjudicatory processes (Vidhi Mediation Report 2016, 20). This is further aggravated
by the fact that there is a lack of regular training sessions for judges to sensitise them about the benefits of
mediation. Another factor why mediation has failed to take off as hoped in India is the lack of clarity in the
enforceability of its outcomes. Section 89 does not talk about how the outcome of mediation will be enforced.
It took the Supreme Court in Afcons Infrastructure to clarify that where the reference is to a neutral third party
on a court reference, even though it will be deemed to be reference to a Lok Adalat, the mediation settlement
will be governed by Section 21 of the Legal Services Authorities Act, 1987 and will have to be placed before
the court for recording the settlement and disposal. Consequently, in cases referred by courts to mediation, a
settlement reached by the parties is not enforceable automatically. Even then, it is unclear how a settlement
arrived during pre-litigation mediation or ad-hoc mediation would be enforced if one of the parties reneges on
its promises. Applying the regular law of contract to such cases would only result in delays, defeating the entire
purpose of resorting to mediation. With so much confusion around enforceability, lawyers hesitate to advise
their clients to opt for mediation.
Clarity is also lacking as far as the enforceability of cross border settlements is concerned. India is a signatory
to the recent United Nations Convention on International Settlement Agreements resulting from Mediation
(the Singapore Convention on Mediation), which applies to international settlement agreements resulting from
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mediation. It establishes a harmonised legal framework for the right to invoke settlement agreements as well
as for their enforcement (UN Commission on International Trade Law).
However, presently there is no statutory framework for implementing the provisions of this Convention. Despite
attempts to spread awareness about mediation and its inclusion as part of the legal education curriculum,
knowledge of mediation is sorely lacking among the general public. Even where parties are aware about
mediation, a major challenge is the lack of incentives for them to attempt mediation. In India, there are certain
myths associated with mediation which make it difficult for professionals and their clients to consider it as a
viable dispute resolution mechanism. For instance, it is believed that suggesting or engaging in mediation
demonstrates a kind of weakness and uncertainty of success at trial (Gupta 2018, 62). Due to this ‘first to blink’
syndrome, each party is waiting for the other to make the first move and does not want to be seen as weak
(Hutchinson 1996, 89-90). Another myth is that mediation yields a lesser form of justice and is only second to
litigation (Gupta 2018, 62).
These myths essentially stem from the fact that mediation continues to be an unfamiliar process that is often
misunderstood by many lawyers leading to mistrust and hence avoidance. In some cases, a barrier to initiating
mediation is the client’s expressed desire to punish the opposition through litigation. In such cases, it becomes
incredibly difficult for the lawyer to suggest mediation without appearing weak and risking loss of the client
to another lawyer (Hutchinson 1996, 90). This is where mandatory mediation comes into play. While some of
the problems in the present mediation framework that have inhibited the growth of mediation in the country
are institutional, a number of others can be addressed by introducing mandatory mediation in the country in a
phased manner. For instance, the issues that can be addressed by introducing mandatory mediation are the
ones stemming from lack of incentives for judges and lawyers to nudge parties towards mediation, hesitation
amongst disputing parties to attempt mediation and the overall lack of mediation culture in India. However,
what will still be left unaddressed is the issue of lack of clarity in enforceability of mediation agreements.
In this, the need of the hour is a dedicated legislative effort to recognise mediation and provide for a framework
to govern all its facets, along the lines of the Arbitration and Conciliation Act, 1996. Such legislative framework
becomes all the more important while introducing mandatory mediation, since easy enforceability of mediation
agreements is one of the basic requirements for such an initiative to be adopted and welcomed. However,
the details of a mediation legislation is beyond the scope of this article and hence the authors will restrict
themselves to the manner in which mandatory mediation can be introduced in India, under the presumption that
an umbrella mediation legislation will become a reality soon.
Understanding Mandatory Mediation

As often misunderstood, ‘mandatory mediation’ does not mean mandating parties to settle their disputes through
mediation. It simply means mandating parties to attempt mediation. It has been described as ‘coercion into and
not within’ the process of mediation (Quek 2010, 485). All that is required from the parties is to give mediation a
shot. This can be done in a number of ways. For instance, a law can make mediation mandatory for particular
kinds of disputes prior to institution of proceedings in courts or even after cases have been brought before
courts. If it is prior to the institution of proceedings, then it is in the nature of ‘mandatory pre-litigation mediation’.
There are instances of both forms of mandatory mediation - prior to and after institution of proceedings - present
in other jurisdictions. When considering whether to implement mandatory mediation in a jurisdiction, domestic
factors like the time it takes for cases to reach trial, the cost of litigation, the prevailing legal culture and political
climate, and the attitudes of the legal profession, judiciary and general public are extremely important (Hanks
2012, 929). In India, despite the long delays in courts, the failure of voluntary mediation to grow as a popular
dispute resolution mechanism calls for a rethink on how mediation has been approached in the country so far.
A different approach, which takes away the initial discretion in opting for mediation, may offer the elusive
solution. Mandatory mediation has been provided for in different jurisdictions through one or more of the
following three modes (Hanks 2012, 930). First, some mandatory mediation schemes categorically provide for
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an automatic and compulsory referral of certain matters to mediation. Such schemes are generally legislative
and often require parties to undertake mediation as a prerequisite to commencing proceedings in courts of
law (930). A second type of mandatory mediation, often referred to as courtreferred mediation, gives judges
the power to refer parties to mediation with or without the parties’ consent on a case-by-case basis. Third,
some mandatory mediation schemes can be described as quasicompulsory because even though they do not
mandate mediation, it is effectively compelled in the form of potential adverse costs orders if mediation is not
undertaken prior to commencing proceedings (931). Before we proceed to identify the suitability of one or a
combination of these above modes in the Indian context, it is essential to examine the benefits and concerns
associated with the very policy of mandatory mediation. Benefits of Mandatory Mediation Multiple studies have
clearly shown that the best way, if not the only one, to significantly increase the number of mediated disputes
is to require that litigants make a serious and reasonable initial effort at mediation (De Palo 2018, 1).
One of the major advantages of mandatory mediation is that it can help deal with some of the myths associated
with mediation. As far as the ‘first to blink’ syndrome is concerned, when the law mandates that parties at least
attempt mediation, the burden of suggesting mediation is alleviated. Because the law mandates it, parties or
their lawyers do not have to risk appearing weak by suggesting mediation.
The second myth that mediation only provides second-hand justice is busted by the legitimacy that is afforded
to mediation once it is mandated by law. Thus, mandatory mediation can help bring parties into the fold of
mediation by helping them get over the initial inertia associated with voluntary mediation. Often, there are
cases where a party is keen on litigation because they believe that forcing the other side to go through the long
and painstaking process of litigation would be a form of punishment for the opposite party. This ‘make them
pay’ attitude of the client puts even the most well-meaning lawyer in a quandary, as she may feel hesitant to
suggest mediation as an alternative to her client. By shifting the burden of referring a dispute for mediation to
the law or the court, mandatory mediation relieves the lawyer of this dilemma (Hutchinson 1996, 90).
Mandatory mediation is not just beneficial for the parties but also for the country’s legal system. By creating
massive demand for people and institutions providing mediation services, mandatory mediation offers an
opportunity to mainstream mediation and create capacity at scale. The demand for mediators spurred by
mandatory mediation, if met through proper capacity building, will lead to the creation of a body of skilled
mediators10.
Training lawyers in mediation will not only help overcome the shortage of qualified mediators, it will also improve
‘legal health’11 in the country. Further, once lawyer mediators understand the value of mediation, they would be
more inclined to suggest mediation to their clients voluntarily (Hutchinson 1996, 90). Consequently, mandatory
mediation can become a stepping stone towards voluntary adoption of mediation in the country. Lastly, the
emergence of mediation as a distinct profession will not only create additional employment opportunities for
professionals in various fields, but will also help create a culture of amicable settlement of disputes.
UNITED NATIONS CONVENTION ON INTERNATIONAL SETTLEMENT AGREEMENTS RESULTING

FROM MEDIATION
Purpose12
Adopted in December 2018, the United Nations Convention on International Settlement Agreements resulting from
Mediation, also known as the “Singapore Convention on Mediation” (the “Convention”) applies to international
settlement agreements resulting from mediation (“settlement agreement”). It establishes a harmonized legal
framework for the right to invoke settlement agreements as well as for their enforcement.
10. Source : Hutchinson 1996, 90

11. Source : Susskind 2019, 113
12. Source : uncitral.un.org/
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The Convention is an instrument for the facilitation of international trade and the promotion of mediation as
an alternative and effective method of resolving trade disputes. Being a binding international instrument, it is
expected to bring certainty and stability to the international framework on mediation, thereby contributing to
the Sustainable Development Goals (SDG), mainly the SDG 16.
The Convention is open for signature by States and regional economic integration organizations (referred to as
“Parties”).
Key Provisions
Article 1 provides that the Convention applies to international settlement agreements resulting from mediation,
concluded in writing by parties to resolve a commercial dispute. Article 1 also lists the exclusions from the scope
of the Convention, namely, settlement agreements concluded by a consumer for personal, family or household
purposes, or relating to family, inheritance or employment law. A settlement agreement that is enforceable
as a judgment or as an arbitral award is also excluded from the scope of the Convention in order to avoid
possible overlap with existing and future conventions, namely the New York Convention on the Recognition
and Enforcement of Foreign Arbitral Awards (1958), the Convention on Choice of Court Agreements (2005)
and the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters
(2019).
Further, Article 3 addresses the key obligations of the Parties to the Convention with respect to both enforcement
of settlement agreements and the right of a disputing party to invoke a settlement agreement covered by the
Convention. Each Party to the Convention may determine the procedural mechanisms that may be followed
where the Convention does not prescribe any requirement. Article 4 covers the formalities for relying on a
settlement agreement, namely, the disputing party shall supply to the competent authority the settlement
agreement signed by them and evidence that the settlement agreement results from mediation. The competent
authority may require any necessary document in order to verify that the requirements of the Convention are
complied with.
The Convention defines in Article 5 the grounds upon which a court may refuse to grant relief at the request of the
disputing party against whom it is invoked. These grounds can be grouped into three main categories, namely
in relation to the disputing parties, the settlement agreement and the mediation procedure. Article 5 includes
two additional grounds upon which the court may, on its own motion, refuse to grant relief. Those grounds relate
to public policy and the fact that the subject matter of the dispute cannot be settled by mediation. With the aim
to provide for the application of the most favourable framework for settlement agreements, Article 7 foresees
the application of the more favourable law or treaty.
Article 8 includes reservations. A first reservation permits a Party to the Convention to exclude from the
application of the Convention settlement agreements to which it is a party, or to which any governmental
agencies or any person acting on behalf of a governmental agency is a party, to the extent specified in the
declaration. A second reservation permits a Party to the Convention to declare that it will apply the Convention
only to the extent that the disputing parties have agreed to its application.
The Convention and any reservations thereto apply prospectively, to settlement agreements which have been
concluded after the entry into force of the Convention for the Party concerned, as provided in Article 9.
The Convention is consistent with the UNCITRAL Model Law on International Commercial Mediation and
International Settlement Agreements resulting from Mediation (2018). This approach is intended to provide States
with the flexibility to adopt either the Convention, the Model Law as a standalone text or both the Convention
and the Model Law as complementary instruments of a comprehensive legal framework on mediation.
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RESOLUTION ADOPTED BY THE GENERAL ASSEMBLY ON 20 DECEMBER 2018 [ON THE REPORT
OF THE SIXTH COMMITTEE (A/73/496)] 73/198
United Nations Convention on International Settlement Agreements Resulting from Mediation The General
Assembly, Recalling its resolution 2205 (XXI) of 17 December 1966, by which it established the United Nations
Commission on International Trade Law with a mandate to further the progressive harmonization and unification
of the law of international trade and in that respect to bear in mind the interests of all peoples, in particular
those of developing countries, in the extensive development of international trade, Recalling also its resolution
57/18 of 19 November 2002, in which it noted the adoption by the Commission of the Model Law on International
Commercial Conciliation and expressed the conviction that the Model Law, together with the Conciliation
Rules of the Commission recommended in its resolution 35/52 of 4 December 1980, contributes significantly to
the establishment of a harmonized legal framework for the fair and efficient settlement of disputes arising in
international commercial relations.
Recognizing the value of mediation as a method of amicably settling disputes arising in the context of
international commercial relations, Convinced that the adoption of a convention on international settlement
agreements resulting from mediation that is acceptable to States with different legal, social and economic
systems would complement the existing legal framework on international mediation and contribute to the
development of harmonious international economic relations, Noting that the decision of the Commission
to concurrently prepare a convention on international settlement agreements resulting from mediation and
an amendment to the Model Law on International Commercial Conciliation was intended to accommodate
the different levels of experience with mediation in different jurisdictions and to provide States with
consistent standards on the cross-border enforcement of international settlement agreements resulting
from mediation, without creating any expectation that interested States may adopt either instrument,
Noting with satisfaction that the preparation of the draft convention was the subject of due deliberation
and that the draft convention benefited from consultations with Governments as well as intergovernmental
and non-governmental organizations.
Taking note of the decision of the Commission at its fifty-first session to submit the draft convention to the
General Assembly for its consideration, Taking note with satisfaction of the draft convention approved by the
Commission, Expressing its appreciation to the Government of Singapore for its offer to host a signing ceremony
for the Convention in Singapore,
1. Commends the United Nations Commission on International Trade Law for preparing the draft convention
on international settlement agreements resulting from mediation;
2. Adopts the United Nations Convention on International Settlement Agreements Resulting from
Mediation, contained in the annex to the present resolution;
3. Authorizes a ceremony for the opening for signature of the Convention to be held in Singapore on
7 August 2019, and recommends that the Convention be known as the “Singapore Convention on
Mediation”;
4. Calls upon those Governments and regional economic integration organizations that wish to strengthen
the legal framework on international dispute settlement to consider becoming a party to the Convention.
62nd plenary meeting 20 December 2018
SINGAPORE CONVENTION ON MEDIATION
Introduction
The Singapore Convention on Mediation (the “Singapore Convention” or “Convention”) is a multilateral treaty
451
which offers a uniform and efficient framework for the enforcement and invocation of international settlement
agreements resulting from mediation. It applies to international settlement agreements resulting from mediation,
concluded by parties to resolve a commercial dispute.
The Singapore Convention will facilitate international trade and commerce by enabling disputing parties to
easily enforce and invoke settlement agreements across borders. Businesses will benefit from mediation as
an additional dispute resolution option to litigation and arbitration in settling cross-border disputes. Signing the
Convention is therefore a strong statement of a country’s commitment to trade, commerce and investment, and
strengthens its position in the field of international trade law.
UNCITRAL WGII13
At its forty-seventh session in July 2014, the UNCITRAL Commission agreed that the Working Group II (Dispute
Settlement) (“WGII”) should consider the issue of enforcement of international settlement agreements resulting
from conciliation proceedings, and report to the Commission at its forty-eighth session, in 2015, on the feasibility
and possible form of work in that area.
In July 2015, the Commission took note of the consideration of the topic by WGII, and agreed that WGII should
commence work to identify relevant issues and develop possible solutions, including the preparation of a
convention, model provisions, or guidance texts. The Commission also agreed that the mandate of WGII with
respect to the topic should be broad, to take into account the various approaches and concerns. 85 Member
States and 35 non-governmental organisations participated in the deliberations, which took place over six
sessions. Through the deliberations, WGII reached a compromise on various issues, upon which the Commission
expressed support for WGII to finalise its work by preparing: a draft convention on international settlement
agreements resulting from mediation, as well as a draft amendment to the UNCITRAL Model Law on International
Commercial Conciliation (2002).
The Convention was finalised at the fifty-first UNCITRAL Commission session, which came to a close in
July 2018. The amended Model Law (the UNCITRAL Model Law on International Commercial Mediation and
International Settlement Agreements Resulting from Mediation (2018)) was also adopted at the same session.
UN General Assembly
In December 2018, the United Nations General Assembly, by consensus, passed a resolution to adopt the United
Nations Convention on International Settlement Agreements Resulting from Mediation, recommended that the
Convention be known as the “Singapore Convention on Mediation”, and authorised the signing ceremony of the
Convention to be held in Singapore on 7 August 2019.
Status of Convention
46 countries, including the world’s two largest economies – the United States and China – as well as three of
the four largest economies in Asia – China, India and South Korea – signed the Convention on the day it opened
for signature. Another 24 countries attended the signing ceremony in Singapore to show their support for the
Convention.
On 25 February 2020, Singapore and Fiji became the first two countries to deposit their respective instruments
of ratification of the Convention at the United Nations Headquarters in New York. With the third instrument of
ratification deposited by Qatar on 12 March 2020, the Convention entered into force on 12 September 2020.
As of 9 April 2023, the Convention has 55 signatories, of which eight are parties to the Convention. A full list of
signatories and parties to the Convention can be found here.
13. Source : https://www.singaporeconvention.org/
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Country Date Signed Date Ratified Entry into Force
Afghanistan 07-Aug-19 - -
Armenia 26-Sep-19 - -
Australia 10-Sep-21 - -
Belarus 07-Aug-19 15-Jul-20 15-Jan-21
Benin 07-Aug-19 - -
Brazil 04-Jun-21 - -
Brunei Darussalam 07-Aug-19 - -
Chad 26-Sep-19 - -
Chile 07-Aug-19 - -
China 07-Aug-19 - -
Colombia 07-Aug-19 - -
Congo 07-Aug-19 - -
Democratic Republic of Congo 07-Aug-19 - -
Ecuador 25-Sep-19 09-Sep-20 09-Mar-21
Eswatini 07-Aug-19 - -
Fiji 07-Aug-19 25-Feb-20 12-Sep-20
Gabon 25-Sep-19 - -
Georgia 07-Aug-19 29-Dec-21 29-Jun-22
Ghana 22-Jul-20
Grenada 07-Aug-19 - -
Guinea-Bissau 26-Sep-19 - -
Haiti 07-Aug-19 - -
Honduras 07-Aug-19 02-Sep-21 02-Mar-22
India 07-Aug-19 - -
Iran (Islamic Republic of) 07-Aug-19 - -
Israel 07-Aug-19 - -
Jamaica 07-Aug-19 - -
Jordan 07-Aug-19 - -
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Country Date Signed Date Ratified Entry into Force
Kazakhstan 07-Aug-19 23-May-22 23-Nov-22
Lao People's Democratic Republic 07-Aug-19 - -
Malaysia 07-Aug-19 - -
Maldives 07-Aug-19 - -
Mauritius 07-Aug-19 - -
Montenegro 07-Aug-19 - -
Nigeria 07-Aug-19 - -
North Macedonia 07-Aug-19 - -
Palau 07-Aug-19 - -
Paraguay 07-Aug-19 - -
Philippines 07-Aug-19 - -
Qatar 07-Aug-19 12-Mar-20 12-Sep-20
Republic of Korea 07-Aug-19 - -
Rwanda 28-Jan-20
Samoa 07-Aug-19 - -
Saudi Arabia 07-Aug-19 05-May-20 05-Nov-20
Serbia 07-Aug-19 - -
Sierra Leone 07-Aug-19 - -
Singapore 07-Aug-19 25-Feb-20 12-Sep-20
Sri Lanka 07-Aug-19 - -
Timor-Leste 07-Aug-19 - -
Turkey 07-Aug-19 11-Oct-21 11-Apr-22
Uganda 07-Aug-19 - -
Ukraine 07-Aug-19 - -
United States of America 07-Aug-19 - -
Uruguay 07-Aug-19 28-Mar-23 28-Sep-23
Venezuela (Bolivarian Republic of) 07-Aug-19 - -
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INTERNATIONAL NEGOTIATIONS AND DIPLOMACY
Definition of International Negotiations

Any analysis of international negotiations - bilateral or multilateral - needs some key conceptual clarifications
that will help to provide the reader with the basic understanding of “what, why, who, when, and how” to negotiate.
Clarification of basic concepts will also provide the reader with direction through the readingson international
negotiation. Negotiation, as the etymology of the word points out is composed of the Latin roots “neg’ (not)
and otium (ease or leisure). The word “negotiate” came into English language in the year 1599 (Lall, 1966). The
two words are central to the meaning of the word as it is used today. First, a peaceful process or method is to
be adopted; secondly, the objective is agreement, compromise or settlement. Current dictionary definitions of
negotiation contain numerous possibilities, all peaceful and non-judicial, and thus generally support the wide
sense in which we use the concept in this material.
The Significance and Necessity for Negotiation

Negotiation is a fact of life; just as humans cannot exist without communicating, so we can barely exist without
negotiating. Negotiation is a basic way of getting what one party wants from another; it is an exchange of
information through communication. Given the level of awareness of international situations in today’s
globalised world, no one needs to be convinced of the significance of negotiation. As the escalation of conflicts
become evident in today’s world, in diverse fields such international affairs, between state and non-state actors,
environment, business and labour relations and personal relationships, the significance of negotiations and the
need to negotiate increase. Negotiation aimed at conflict management seeks to limit or minimize tensions and
disputes as much as possible, without necessarily changing the status quo or the relations of power, values, and
interests between the disputing parties.
Parties to International Negotiations

Parties to international negotiations are also known as actors. They include states, non state actors including
growing number of nongovernmental organizations (NGOs), business firms, international organizations, and
other institutions, who are drawn into the process because they are concerned in one way or another with
the positive or negative values represented by the issues put on the agenda. The procedures and fora for
modern international negotiation are numerous and varied. The increase in complexity year by year, and
their forms and functions are evolving in adaptation to the changing needs of a rapidly expanding community
of nations. Since the end of World War II, conference diplomacy in particular has significantly widened and
diversified the approaches to international negotiation. It has also stimulated bilateral diplomacy. The fact that
a party to a dispute or situation is now able to bring its cause to an international forum frequently operates to
induce countries to take bilateral diplomacy much more seriously than they did before the era of continuous
opportunities to resort to conference negotiation.
Influence and Importance of Culture
Cross-cultural Mediation can be very difficult for some practitioners and alternately be very beneficial to others.
In Arbitration and Litigation, one party win over the other. But in Mediation, both parties can win. Therefore, the
language and preferences of people depending upon the culture can influence the outcome of the Mediation.
Intercultural Mediation necessitate a mediator to address cultural changes into consideration. For example: A
practice can be acceptable in one culture and not acceptable in the other. In this situation, a mediator should
address this difficulty and should try to bring parties to amicable resolution of Dispute. Language is also one
barrier in any mediation process. It can be very easy to bring the parties to an agreement is their language are
same. But, bringing the parties to an agreement when the other does not understand the language is a difficult
task.
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World Culture vis a vis Organisational Culture

The difficulty of language and preferences in arbitration faced internationally can also be faced when mediation
is conducted between organisations. The value and practices of organisations differs from organisation to
organisation. A resolution that may work for one organisation may not fit under the values of other organisations.
Therefore, a mediator should keep in mind the organisation culture before conducting mediation.
INTERNATIONAL RULES
The International Chamber of Commerce ICC Mediation Rules replaced the 2001 Amicable Dispute Resolution
Rules (ADR Rules) to reflect today’s practices. These rules provide users with clear parameters for the conduct
of proceedings while recognising and maintaining the need for flexibility.
Just as the ADR Rules before, these Rules can also be used for conducting other procedures or in combination
with other procedures, such as conciliation or neutral evaluation.
Article 1 : Introductory Provisions

The Mediation Rules (the “Rules”) of the International Chamber of Commerce (the “ICC”) are administered by
the ICC International Centre for ADR (the “Centre”), which is a separate administrative body within the ICC.
The Rules provide for the appointment of a neutral third party (the “Mediator”) to assist the parties in settling
their dispute.
Mediation shall be used under the Rules unless, prior to the confirmation or appointment of the Mediator or
with the agreement of the Mediator, the parties agree upon a different settlement procedure or a combination
of settlement procedures. The term “mediation” as used in the Rules shall be deemed to cover such settlement
procedure or procedures and the term “Mediator” shall be deemed to cover the neutral who conducts such
settlement procedure or procedures. Whatever settlement procedure is used, the term “Proceedings” as used
in the Rules refers to the process beginning with its commencement and ending with its termination pursuant to
the Rules.
All of the parties may agree to modify any of the provisions of the Rules, provided, however, that the Centre may
decide not to administer the Proceedings if, in its discretion, it considers that any such modification is not in the
spirit of the Rules. At any time after the confirmation or appointment of the Mediator, any agreement to modify
the provisions of the Rules shall also be subject to the approval of the Mediator.
The Centre is the only body authorized to administer Proceedings under the Rules.
Article 2 : Commencement Where there is an Agreement to Refer to the Rules

Where there is an agreement between the parties to refer their dispute to the Rules, any party or parties wishing
to commence mediation pursuant to the Rules shall file a written Request for Mediation (the “Request”) with the
Centre. The Request shall include:
a) the names, addresses, telephone numbers, email addresses and any other contact details of the parties
to the dispute and of any person(s) representing the parties in the Proceedings;
b) a description of the dispute including, if possible, an assessment of its value;
c) any agreement to use a settlement procedure other than mediation, or, in the absence thereof, any
proposal for such other settlement procedure that the party filing the Request may wish to make;
d) any agreement as to time limits for conducting the mediation, or, in the absence thereof, any proposal
with respect thereto;
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e) any agreement as to the language(s) of the mediation, or, in the absence thereof, any proposal as to
such language(s);
f) any agreement as to the location of any physical meetings, or, in the absence thereof, any proposal as
to such location;
g) any joint nomination by all of the parties of a Mediator or any agreement of all of the parties as to the
attributes of a Mediator to be appointed by the Centre where no joint nomination has been made, or, in
the absence of any such agreement, any proposal as to the attributes of a Mediator;
h) a copy of any written agreement under which the Request is made.
Together with the Request, the party or parties filing the Request shall pay the filing fee required by the Appendix
hereto in force on the date the Request is filed.
The party or parties filing the Request shall simultaneously send a copy of the Request to all other parties,
unless the Request has been filed jointly by all parties.
The Centre shall acknowledge receipt of the Request and of the filing fee in writing to the parties.
Where there is an agreement to refer to the Rules, the date on which the Request is received by the Centre shall,
for all purposes, be deemed to be the date of the commencement of the Proceedings.
Where the parties have agreed that a time limit for settling the dispute pursuant to the Rules shall start running
from the filing of a Request, such filing, for the exclusive purpose of determining the starting point of the time
limit, shall be deemed to have been made on the date the Centre acknowledges receipt of the Request or of
the filing fee, whichever is later.
Article 3 : Commencement Where there is No Prior Agreement to Refer to the Rules

In the absence of an agreement of the parties to refer their dispute to the Rules, any party that wishes to
propose referring the dispute to the Rules to another party may do so by sending a written Request to the
Centre containing the information specified in Article 2(1), subparagraphs a)-g). Upon receipt of such Request,
the Centre will inform all other parties of the proposal and may assist the parties in considering the proposal.
Together with the Request, the party or parties filing the Request shall pay the filing fee required by the Appendix
hereto in force on the date the Request is filed.
Where the parties reach an agreement to refer their dispute to the Rules, the Proceedings shall commence on the
date on which the Centre sends written confirmation to the parties that such an agreement has been reached.
Where the parties do not reach an agreement to refer their dispute to the Rules within 15 days from the date of
the receipt of the Request by the Centre or within such additional time as may be reasonably determined by the
Centre, the Proceedings shall not commence.
Article 4 : Place and Language(s) of the Mediation

In the absence of an agreement of the parties, the Centre may determine the location of any physical meeting
of the Mediator and the parties or may invite the Mediator to do so after the Mediator has been confirmed or
appointed.
In the absence of an agreement of the parties, the Centre may determine the language(s) in which the mediation
shall be conducted or may invite the Mediator to do so after the Mediator has been confirmed or appointed.
Article 5 : Selection of the Mediator

The parties may jointly nominate a Mediator for confirmation by the Centre.
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In the absence of a joint nomination of a Mediator by the parties, the Centre shall, after consulting the parties,
either appoint a Mediator or propose a list of Mediators to the parties. All of the parties may jointly nominate
a Mediator from the said list for confirmation by the Centre, failing which the Centre shall appoint a Mediator.
Before appointment or confirmation, a prospective Mediator shall sign a statement of acceptance, availability,
impartiality and independence. The prospective Mediator shall disclose in writing to the Centre any facts or
circumstances which might be of such a nature as to call into question the Mediator’s independence in the
eyes of the parties, as well as any circumstances that could give rise to reasonable doubts as to the Mediator’s
impartiality. The Centre shall provide such information to the parties in writing and shall fix a time limit for any
comments from them.
When confirming or appointing a Mediator, the Centre shall consider the prospective Mediator’s attributes,
including but not limited to nationality, language skills, training, qualifications and experience, and the
prospective Mediator’s availability and ability to conduct the mediation in accordance with the Rules.
Where the Centre appoints a Mediator, it shall do so either on the basis of a proposal by an ICC National
Committee or Group, or otherwise. The Centre shall make all reasonable efforts to appoint a Mediator having
the attributes, if any, which have been agreed upon by all of the parties. If any party objects to the Mediator
appointed by the Centre and notifies the Centre and all other parties in writing, stating the reasons for such
objection, within 15 days of receipt of notification of the appointment, the Centre shall appoint another Mediator.
Upon agreement of all of the parties, the parties may nominate more than one Mediator or request the Centre to
appoint more than one Mediator, in accordance with the provisions of the Rules. In appropriate circumstances,
the Centre may propose to the parties that there be more than one Mediator.
Article 6 : Fees and Costs

The party or parties filing a Request shall include with the Request the non-refundable filing fee required by
Article 2(2) or Article 3(2) of the Rules, as set out in the Appendix hereto. No Request shall be processed unless
accompanied by the filing fee.
Following the receipt of a Request pursuant to Article 3, the Centre may request that the party filing the Request
pay a deposit to cover the administrative expenses of the Centre.
Following the commencement of the Proceedings, the Centre shall request the parties to pay one or more
deposits to cover the administrative expenses of the Centre and the fees and expenses of the Mediator, as set
out in the Appendix hereto.
The Centre may stay or terminate the Proceedings under the Rules if any requested deposit is not paid.
Upon termination of the Proceedings, the Centre shall fix the total costs of the Proceedings and shall, as the
case may be, reimburse the parties for any excess payment or bill the parties for any balance required pursuant
to the Rules.
With respect to Proceedings that have commenced under the Rules, all deposits requested and costs fixed
shall be borne in equal shares by the parties, unless they agree otherwise in writing. However, any party
shall be free to pay the unpaid balance of such deposits and costs should another party fail to pay its
share.
A party’s other expenditure shall remain the responsibility of that party, unless otherwise agreed by the parties.
Article 7 : Conduct of the Mediation

The Mediator and the parties shall promptly discuss the manner in which the mediation shall be conducted.
After such discussion, the Mediator shall promptly provide the parties with a written note informing them of
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the manner in which the mediation shall be conducted. Each party, by agreeing to refer a dispute to the Rules,
agrees to participate in the Proceedings at least until receipt of such note from the Mediator or earlier termination
of the Proceedings pursuant to Article 8(1) of the Rules.
In establishing and conducting the mediation, the Mediator shall be guided by the wishes of the parties and
shall treat them with fairness and impartiality.
Each party shall act in good faith throughout the mediation.
Article 8 : Termination of the Proceedings

Proceedings which have been commenced pursuant to the Rules shall terminate upon written confirmation of
termination by the Centre to the parties after the occurrence of the earliest of:
a) the signing by the parties of a settlement agreement;
b) the notification in writing made to the Mediator by any party, at any time after it has received the
Mediator’s note referred to in Article 7(2), that such party has decided no longer to pursue the mediation;
c) the notification in writing by the Mediator to the parties that the mediation has been completed;
d) the notification in writing by the Mediator to the parties that, in the Mediator’s opinion, the mediation will
not resolve the dispute between the parties;
e) the notification in writing by the Centre to the parties that any time limit set for the Proceedings, including
any extension thereof, has expired;
f) the notification in writing by the Centre to the parties, not less than seven days after the due date for
any payment by one or more parties pursuant to the Rules, that such payment has not been made; or
g) the notification in writing by the Centre to the parties that, in the judgment of the Centre, there has
been a failure to nominate a Mediator or that it has not been reasonably possible to appoint a
Mediator.
The Mediator shall promptly notify the Centre of the signing of a settlement agreement by the parties or of
any notification given to or by the Mediator pursuant to Article 8(1), subparagraphs b)-d), and shall provide the
Centre with a copy of any such notification.
Article 9 : Confidentiality
In the absence of any agreement of the parties to the contrary and unless prohibited by applicable law:
a) the Proceedings, but not the fact that they are taking place, have taken place or will take place, are
private and confidential;
b) any settlement agreement between the parties shall be kept confidential, except that a party shall
have the right to disclose it to the extent that such disclosure is required by applicable law or necessary
for purposes of its implementation or enforcement.
Unless required to do so by applicable law and in the absence of any agreement of the parties to the contrary,
a party shall not in any manner produce as evidence in any judicial, arbitral or similar proceedings:
a) any documents, statements or communications which are submitted by another party or by the Mediator
in or for the Proceedings, unless they can be obtained independently by the party seeking to produce
them in the judicial, arbitral or similar proceedings;
b) any views expressed or suggestions made by any party within the Proceedings with regard to the
dispute or the possible settlement of the dispute;
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c) any admissions made by another party within the Proceedings;

d) any views or proposals put forward by the Mediator within the Proceedings; or
(e) the fact that any party indicated within the proceedings that it was ready to accept a proposal for a
settlement.
Article 10 : General Provisions

Where, prior to the date of the entry into force of the Rules, the parties have agreed to refer their dispute to the
ICC ADR Rules, they shall be deemed to have referred their dispute to the ICC Mediation Rules, unless any of
the parties objects thereto, in which case the ICC ADR Rules shall apply.
Unless all of the parties have agreed otherwise in writing or unless prohibited by applicable law, the parties may
commence or continue any judicial, arbitral or similar proceedings in respect of the dispute, notwithstanding the
Proceedings under the Rules.
Unless all of the parties agree otherwise in writing, a Mediator shall not act nor shall have acted in any judicial,
arbitral or similar proceedings relating to the dispute which is or was the subject of the Proceedings under the
Rules, whether as a judge, an arbitrator, an expert or a representative or advisor of a party.
Unless required by applicable law or unless all of the parties and the Mediator agree otherwise in writing, the
Mediator shall not give testimony in any judicial, arbitral or similar proceedings concerning any aspect of the
Proceedings under the Rules.
SINGAPORE MEDIATION SETTLEMENT AGREEMENT

The United Nations International Convention on Settlement Agreements for Mediation (Singapore Convention)
was taken up for signature in Singapore on the 7th of August, 2019, and the same came into force on the 12th of
September 2020. The Singapore Convention, if read in entirety corresponds to the growing demand from a body
of users who rely on mediation as an enforcement mechanism that is applicable to settlement agreements in
case of cross border disputes. Technically, it is an international convention that aims to help businesses resolve
cross border disputes and further facilitate international trade.
This convention looks to give global businesses with some amount of certainty in resolving cross border disputes
by way of mediation and making it possible for them to apply directly to the courts of countries that have ratified
the convention in question. As per the latest data, there are 53 signatory countries to the convention and this
convention is also called the United Nations Convention on International Settlement Agreements Resulting from
Mediation, including India, China and the United States.
Applicability of the Singapore Mediation Convention

As it stands, a settlement agreement executed in country A has no legal force in country B. A party looking to
enforce a mediated settlement agreement in a different country or multiple countries for that matter will have
to initiate legal proceedings in each of those countries. This can be very costly and time heavy, especially for
settlement agreements that are of international nature. Now, after this convention has come into effect, one of
the parties to the dispute looking for enforcement of a cross border mediated settlement agreement can do so
by applying to the courts of the signatory countries that have also ratified the treaty/convention. This can save
time and money for all signatory countries and adds to their convenience index as well. Another big advantage
of this convention is that it can always help the signatory countries during times of uncertainty like the current
time of the pandemic.
Before this convention came into force, the settlements which are reached through mediation were enforceable
through contracts. The only deviation from this settled procedure is where mediation is undertaken as a part
of arbitration or litigation proceedings and an agreement is reached through mediation which can be enforced
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as an arbitral award or a decree. The convention and the accompanying Model Law intends to introduce a
legal framework wherein mediated settlement agreements resulting from international commercial disputes
can seek enforcement. Ergo, it can be concluded that it is similar to the New York Convention on the Recognition
and Enforcement of Foreign Arbitral Awards.
Now, moving towards the basics of this convention, the primary applicability criteria of this convention is that
that it is applicable to two parties who have their place of business in two different countries. Certain kinds
of settlement agreements that are excluded from the scope of the Singapore Convention are settlement
agreements that have been approved by a court or concluded in court proceedings and those which are
enforceable as a judgment in the state of such a court, or those that have been recorded and are enforceable
as part of an arbitral award. Settlement agreements that pertain to a few particular subject matters are also
excluded which are inheritance or employment law and those of disputes arising from transactions engaged in
by a consumer purely for personal purposes.
Limitations of the Convention

There are a limited number of grounds under the Singapore Convention based on which a state party may
refuse to grant relief as requested by a party to a settlement agreement. As per Article 5(1) of the Convention,
relief may be refused only if the party opposing relief can furnish proof of any of the following:
l A party to the settlement agreement was somehow incapacitated;
l The settlement agreement is frustrated, declared void ab initio or incapable of being performed under
the applicable law;
l The settlement agreement is not binding or final according to its terms; it has been subsequently
modified; the obligations under the settlement agreement have either already been performed or
are not clear or comprehensible, or granting of relief would be in contravention of the terms of the
agreement;
l There was a breach of serious nature by the mediator in absence of which breach that party would not
have entered into the agreement;
l There was a failure on the part of the mediator to disclose circumstances to the parties’ which raise
significant doubts as to the mediator’s impartiality or independence and such a failure to disclose had
a material impact or undue influence on a party in absence of which failure that party would not have
entered into the agreement.
Further, as per Article 5(2) relief may be refused if the competent authority where relief is sought finds:
1. Granting relief would be in contravention of public policy;
2. The subject matter of the dispute at hand is not capable of settlement by mediation under the law
where the relief is being sought;
3. It is noteworthy to mention the fact that these grounds are by and large similar to the grounds
enumerated under New York Convention.
Singapore Convention & India14

In 2019, India was among the first group of signatories to the United Nations Convention on International
Settlement Agreements which we know as the “Singapore Mediation Convention” today. To deeply engrave
the results of this convention, India needs to ratify this convention. The convention is designed in such a manner
14. Source : King, Stubb & Kasiva via Mandaq
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that each and every signatory is required to work with their own domestic processes and procedures in order
to bring them in conformity with the required protocols for ratification.
A treaty can be ratified by obtaining the instrument of ratification under the signature and seal of the President
of India. Now, after analyzing the scheme of this convention, one thing which is very clear is that it is not going
to have a substantial effect on the contracts which will be signed by Indian businesses having their business
in India with other companies which are located in a different state who is a signatory to this convention and
are doing business somewhere else. The key change which this convention will bring is regarding the dispute
resolution because the conventional method of resolving the dispute which we all know is arbitration will be
changed and one has to incorporate the settlement of dispute by way of mediation after this convention has
come into force. In addition to this, the enforcement aspect of the settlement reached through mediation is the
most attractive feature of this convention which will have its own advantages to the parties who are contesting
their claim and effecting an amicable settlement through mediation and saving their time and money.
Though unlike arbitration, mediation has never been dealt with by any separate legislation in India and it is
mentioned under Section 89 of the Civil Procedure Code and it says that whenever there is an element of
settlement in a dispute, judges are required to give the parties an option to resolve their disputes through either
Arbitration, Mediation, Conciliation, Lok Adalat or Judicial settlement. The landmark case on this point is the
case of Afcons Infrastructure and Ors. v. Cherian Varkey Construction and Ors., wherein the Hon’ble Apex Court
clarified that Courts can suo moto order parties to go for mediation and listed out the categories of suitable
cases. The court stated that mandating parties participating in mediation does not prejudice the “voluntariness”
of mediation as the extent of participation and the outcome of mediation is left entirely to the free will of the
parties.
As it stands, almost all High Courts in the country have a Court Annexed Mediation program that is set in place.
Some of the courts including the Supreme Court, refer cases to private mediation when they feel the need to
do so. The Companies Act 2013, the Real Estate (Regulation and Development) Act 2016 and the Consumer
Protection Act, 2019 include mediation. The Commercial Courts Act, 2015 has a mandatory requirement for pre-
institution mediation.
It is indeed a good sign that India is one of the first signatories to this convention however it remains to be seen
how India ratifies this convention and how it equips its judicial system to accommodate litigation arising from
this convention. Nonetheless, in the current scenario, this move adds weightage to India’s ease of business
initiatives and goes a long way in ensuring that foreign businesses coming to India or working with Indian
Businesses are protected by this convention when it comes to mediation.
CASE STUDIES ON INTERNATIONAL MEDIATION
Patent Mediations
A European university holding pharmaceutical patent applications in several countries negotiated a license
option agreement with a European pharmaceutical company. The pharmaceutical company exercised the
option and the parties started to negotiate a license agreement. After three years of negotiations the parties
were unable to agree on the terms of the license. At that point the parties submitted a joint request for WIPO
mediation.
The one-day meeting session allowed the parties to identify the issues and deepen their understanding of the
legal circumstances. On this basis, the parties continued direct negotiations amongst themselves and reached
a settlement agreement.
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A WIPO Mediation of a Dispute in the Automotive Industry15

A US based manufacturer of automotive components concluded a settlement agreement in the form of a patent
license with one of its European competitors. This agreement contained a dispute resolution clause referring to
WIPO Mediation to be followed, in the absence of settlement, by WIPO Arbitration with a three-member tribunal.
Two years after the conclusion of the settlement agreement, the US company submitted a request for mediation
alleging infringement of its US patents and claiming royalty payments for the licensed automotive parts
technology. The request specified the preferred qualifications of the appropriate mediator and the WIPO Center
provided to the parties a list of candidates with specific expertise in patents and the relevant technology.
The parties selected one of the recommended mediators who convened a two-day meeting. The meeting involved
various caucus sessions and the parties engaged in a continuous exchange of proposals and discussions. Such
negotiations related to the amount of royalty payments sought by the US company and the renegotiation of the
terms of the license relating to royalty payments.
At the end of the hearing the parties agreed on a term sheet laying down the terms of a final agreement, which
enabled the parties to efficiently continue their business activities in this market.
Trademark Mediations
WIPO Mediation of a Trademark Coexistence Dispute

After a dispute arose between them, a North American company requested mediation with two Italian companies
and one Spanish company on the basis of an agreement which the parties had reached for mediation under the
WIPO Mediation Rules. The goal of the mediation was to help the parties avoid confusion and misappropriation
of their similar trademarks and to regulate future use of their marks. Although Italian was agreed as the language
of proceedings, any settlement agreement would be recorded in both Italian and English.
The WIPO Center suggested to the parties potential mediators with specific expertise in European trademark
law and fluency in Italian and English. The parties selected an Italian mediator with a trademark practice. The
mediator conducted an initial telephone conference with the lawyers of the parties in which he scheduled the
mediation timing, and agreed on the procedure.
Two months later, the mediator met with the parties in a two-day session in Milan. The meeting was held in joint
session with the exception of two brief caucuses. At the end of the second day the parties - with the assistance of
the mediator - were able to draft and sign a settlement agreement covering all of the pending issues in dispute.
IT Mediations
A WIPO Mediation of an IT Platform Dispute16
A European airline entered into an agreement with a US software company concerning the development of a
worldwide platform for the management of ticket sales. This was followed by a professional services agreement,
which contained a more detailed description of the project as well as the support services to be delivered by the
software company. The latter agreement included a WIPO mediation followed by WIPO expedited arbitration
clause.
The airline paid several million USD for the application. Some years later, the airline terminated the agreement.
In response, the software company asserted that, with the termination, the airline’s rights in the application had
lapsed and requested the software to be returned. The airline was of the position that it was entitled to retain
15. Source : www.wipo.int

16. Source : https://www.wipo.int/amc/en/mediation/case-example.html
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the software application and initiated mediation. The result of the mediation was a new license between the
parties.
Commercial Mediations
A WIPO Mediation concerning Supply and License Agreements for Pharmaceutical Products
Two companies involved in medical supplies entered supply and license agreements to market pharmaceutical
products in some European countries. A dispute arose between the parties concerning the termination of the
agreements due to an alleged material breach of contract by one of the parties. The agreements contained a
dispute resolution clause referring the dispute to WIPO Mediation followed by court litigation in the absence of a
settlement. Accordingly, the parties jointly requested the WIPO Center to appoint a mediator with demonstrated
experience in commercial agreements within the field of medical supplies.
The preparatory conference facilitated by WIPO was conducted online, followed by an in-person mediation
meeting. During the mediation meeting, the parties identified several mutual grounds for settlement. They
agreed to modify the existing supply and license agreements instead of terminating them, subject to the parties’
implementation of some binding terms included in the settlement term sheet concluded during the in-person
meeting. After four months of direct negotiations between the parties, they re-approached the mediator and the
WIPO Center to resume mediation and finally concluded a settlement agreement.
LESSON ROUND-UP
l Disputes are indigenous in every society. An ideal society cannot exist without disputes being forming
a part of it. Senescent methods of litigation have witnessed delays and more expenses involved it.
l Mediation ethics spotlights three various aspects, namely: 1. Virtue ethics, 2. Principle ethics and 3.
Reciprocity.
l The entire success of mediation rests upon the basic guidelines provided to the mediators about ethical
aspects of the process. It is accurate to say that there are some evolving principles and standards in
the arena of mediation skill as well.
l Mediation is not a recent phenomenon in India. Yet, parties are reluctant to select it as a preferred
mode of dispute resolution. One of the key reasons is that till date, mediated settlements, except those
driven through courts are unenforceable.
l Unlike arbitration and conciliation, which are governed by the Arbitration and Conciliation Act, 1996,
there is no umbrella legislation governing mediation in the country. The enactment of Section 89 of
the CPC, 1908 marked a major step towards institutionalising ADR through its incorporation in the civil
procedure.
l Section 12A of Commercial Courts Act makes it mandatory for the disputing parties to attempt mediation
before initiating a suit. The only exception provided in the law is if there is a requirement of urgent relief
from the court.
l The Singapore Convention on Mediation (the “Singapore Convention” or “Convention”) is a multilateral
treaty which offers a uniform and efficient framework for the enforcement and invocation of international
settlement agreements resulting from mediation. It applies to international settlement agreements
resulting from mediation, concluded by parties to resolve a commercial dispute.
l Negotiation is a fact of life; just as humans cannot exist without communicating, so we can barely exist
without negotiating. Negotiation is a basic way of getting what one party wants from another; it is an
exchange of information through communication.
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l The United Nations International Convention on Settlement Agreements for Mediation (Singapore
Convention) was taken up for signature in Singapore on the 7th of August, 2019, and the same came
into force on the 12th of September 2020. The Singapore Convention, if read in entirety corresponds to
the growing demand from a body of users who rely on mediation as an enforcement mechanism that
is applicable to settlement agreements in case of cross border disputes.
GLOSSARY
Mandatory pre-litigation mediation: Mediation can be initiated prior to and during the course of legal
proceedings. Section 89 of the Code of Civil Procedure empowers courts to refer civil matters amenable to
out-of-court settlement to different forms of alternate dispute resolution including mediation.
Mandatory Mediation: It does not mean mandating parties to settle their disputes through mediation. It
simply means mandating parties to attempt mediation. It has been described as ‘coercion into and not
within’ the process of mediation (Quek 2010, 485).
International Negotiations: Negotiation, as the etymology of the word points out is composed of the Latin
roots “neg’ (not) and otium (ease or leisure). The two words are central to the meaning of the word as it is
used today. First, a peaceful process or method is to be adopted; secondly, the objective is agreement,
compromise or settlement.
TEST YOURSELF
1. What are the Ethics of a Mediator?
2. Explain some of the key provisions proposed in the Mediation Bill.
3. Is Mandating Pre-Litigation Mediation a Blessing in Disguise? Explain.
4. What are the Difficulties with the existing framework governing mediation?
5. Explain Mandatory Mediation.
6. Describe Singapore Convention On Mediation.
7. Define International Negotiations. Explain the Significance and Necessity for Negotiation.
l Mediation Act, 2023
l https://www.indiacode.nic.in/handle/123456789/2156?sam_handle=123456789/1362
l https://www.mediation.com.sg/resources/model-clauses/
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WARNING
Regulation 27 of the Company Secretaries Regulations, 1982
In the event of any misconduct by a registered student or a candidate enrolled for any examination
conducted by the Institute, the Council or any Committee formed by the Council in this regard, may
suo-moto or on receipt of a complaint, if it is satisfied that, the misconduct is proved after such investigation
as it may deem necessary and after giving such student or candidate an opportunity of being heard,
suspend or debar him from appearing in any one or more examinations, cancel his examination result,
or registration as a student, or debar him from re-registration as a student, or take such action as may be
deemed fit.
It may be noted that according to regulation 2(ia) of the Company Secretaries Regulations, 1982, ‘misconduct’
in relation to a registered student or a candidate enrolled for any examination conducted by the Institute
means behaviour in disorderly manner in relation to the Institute or in or around an examination centre or
premises, or breach of any provision of the Act, rule, regulation, notification, condition, guideline, direction,
advisory, circular of the Institute, or adoption of malpractices with regard to postal or oral tuition or resorting
to or attempting to resort to unfair means in connection with writing of any examination conducted by the
Institute, or tampering with the Institute’s record or database, writing or sharing information about the
Institute on public forums, social networking or any print or electronic media which is defamatory or any
other act which may harm, damage, hamper or challenge the secrecy, decorum or sanctity of examination
or training or any policy of the Institute.
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PP-A&MC Test Paper
GROUP 2 l ELECTIVE PAPER 7.1
(This test paper is for practice and self-study only and not to be sent to the Institute)
Time allowed: 3 hours Maximum Mark: 100

Answer all Questions
PART I : ARBITRATION & CONCILIATION (70 MARKS)

Question 1
(a) An agreement was executed between the XYZ Co Ltd. (Appellant), a company incorporated under the
Companies Act, 1956 and ABC S.A. (respondent), a company registered under laws outside India under which
the respondent was to supply and install a Data resource center in Punjab. The agreement contained an
arbitration clause for resolution of disputes arising out of the contract. The governing law of the agreement
was the law of India. However, the seat of Arbitration was in Peru, a Contracting States under the New York
Arbitration Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Therefore, the law of
the country in which an action is brought for the arbitration is Laws in Peru but the substantive law is Indian
Law.
Disputes arose between the parties and claim was made by the appellant for return of its investment, loss,
profits and other sums. The respondent made a claim for unclaimed instalments plus interest and damages
for breach of intellectual property rights. Negotiations failed to reach the settlement and notice for arbitration
was issued. The dispute took place in Peru and the Arbitral Tribunal made 2 Awards. However, the Appellant
filed an application under section 34 of the Arbitration and Conciliation Act, 1996. The learned District Judge
held that the appeal is not tenable. Aggrieved by the Judgement, the appellant filed appeals before High Court
of Punjab and Haryana. A Division Bench of the High Court dismissed the appeal. The appeal was made to
Supreme Court.
In an another similar case earlier, an application under Section 9 of the Arbitration and Conciliation Act, 1996
was filed before the Additional District Judge seeking an injunction restraining the parties from alienating,
transferring and/or creating third-party rights in an Arbitration Proceedings before the Arbitral Tribunal in
Colombo.
Important provisions:
Section 2(2) of the Arbitration and Conciliation Act, 1996 provides that Part I shall apply where the place of
arbitration is in India.
Section 9 inter alia provides that a party may, before or during arbitral proceedings or at any time after the
making of the arbitral award but before it is enforced in accordance with section 36, apply to a court (i) for the
appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or
(ii) for an interim measure of protection in respect of matters provided therein.
Keeping in view the above said facts, answer the following:
I. Can the award passed in foreign seated International Commercial Arbitration be challenged under
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Test Paper
section 34 of Arbitration and Conciliation Act, 1996? Explain quoting the relevant case law(s) and
provision.
(5 marks)
II. Does Section 2(2) of the Arbitration and Conciliation Act, 1996 bar the application of Part I to arbitrations
where the place is outside India? Answer quoting the relevant case law(s).
(3 marks)
III. What is Public Policy under relevant provision of Part I of the Arbitration and Conciliation Act, 1996?
(2 marks)
IV. Whether the decision of Bhatia International v. Bulk Trading S.A. and Anr. with respect to application of
Part I of Arbitration and Conciliation Act, 1996 to foreign seated International Commercial Arbitration
provides the correct position of Law as on date. Quote relevant case law(s), if required.
(3 marks)
V. In the situation given above relating to application under Section 9 of the Arbitration and Conciliation
Act, 1996, can the Additional District Judge decide on application? Answer mentioning the relevant
case law(s).
(2 marks)
(5+3+2+3+2=Total 15 marks)
(b) A Foreign Award in International Commercial Arbitration, in a country which was contracting state of New
York Convention, was passed by an Arbitrator. The parties to the agreement and award were ABC Pte. and
XYZ Limited. ABC Pte. applied to the competent court in India for enforcement of Foreign Award. The following
documents were produced before the court:
(i) the original award
(ii) a duly certified copy of the Agreement
The agreement was prepared in French Language.
XYZ Limited contends that the subject-matter is not capable of settlement by arbitration under the law of
India. However, ABC Pte. contended that the matter is capable of settlement in France where the Award has
been made and therefore Award can be enforced in India. This was found to be correct by the court to whom
application for enforcement was made.
I. Explain the provision relating to the documents required to be produced before Indian Court while
applying for the enforcement of a foreign award.
(5 marks)
II. Whether the contention of ABC Pte. valid with respect to the validity of enforcement of Award? Explain
quoting relevant provision.
(5 marks)
Question 2
(a) An arbitral award was passed in the matter of EROI Pvt. Ltd. and Pricocat Limited. The dispute arose out of
the franchise agreements, wherein the parties agreed to establish “coaching classes” for school students. The
award was passed in favour of EROI Pvt. Ltd. in which he was awarded with the damages for Breach of Contract
amounting to Rs. 50 Lakh. Pricocat Limited denied to pay the amount. EROI Pvt. Ltd. filed a suit for execution
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PP-A&MC Test Paper
of award before the commercial court Situated in Dwarka Court of Delhi. Pricocat Limited contends that the
execution of an Award, the matter of execution does not come under the jurisdiction of commercial court as per
the provisions of Order 21 of the Code of Civil Procedure, 1908.
EROI Pvt. Ltd. has sought your advice in the matter. Advice the company by giving reference to relevant case
law.
(5 marks)
(b) You are a practicing company secretary, expert in the area of Arbitration. On 31st December, 2020, a matter
was referred to you for advice whether the qualification mentioned in the Eight Schedule to the Arbitration and
Conciliation Act, 1996 are mandatory for appointment of Arbitrator. In this regard:
(i) Prepare a note advising in this matter.
(ii) What is the law applicable as on 01st March, 2022 for qualification of arbitrator?
(iii) Explain the amendments that has come with respect to qualification of Arbitrators in the Arbitration and
Conciliation Act, 1996.
(6 marks)
(c) ABAJ Limited a company incorporated under the provisions of Companies Act, 2013 having its registered
office at Uttar Pradesh has entered into an Agreement for import of Rice with Jass Holding Private Limited a
Company incorporated in Sri Lanka. A dispute arose between the parties. The venue and seat of Arbitration is
New Delhi.
(i) What is the meaning of courts in this situation?
(ii) Who can appoint sole arbitrator in this situation, upon a request of the party when parties fails to
appoint Arbitrator by agreement?
(2 marks each)
Question 3
An arbitration proceedings have been conducted between NAIVAT Private Limited incorporated under the
Companies Act, 2013 having its registered office in New Delhi and Rodem Public Limited incorporated under
the Companies Act, 1956 having its registered office at Mumbai. Under an Agreement, NAIVAT Private Limited
was engaged by Rodem Public Limited to build a premises for 5 star hotel to be inaugurated in the month of
December, 2020. On perusal of the agreement, it was found that the agreement had force majeure clause in
it. However, there was no clause for Arbitration in the original agreement. Both the parties agreed to resolve
the matter by way of Ad hoc Arbitration in accordance with ICADR Arbitration Rules, 1996. Due to COVID-19
outbreak, the Hotel could not be completed till 31st December, 2020. The parties made a separate agreement
for resolution of disputes through arbitration. The arbitration proceedings were decided to be conducted by
Arbitral Tribunal consisted of 3 arbitrators in which each party should appoint one arbitrator and both the
arbitrators to appoint presiding arbitrator. The pleadings were completed within 6 months from the date of
appointment of Arbitrator. The tribunal also conducted oral hearings. The Arbitration proceedings could not be
completed within time due to two Arbitrators of Arbitral Tribunal out of three contacted COVID-19 at different
times. Therefore an extension was given by the parties for the Arbitral proceedings. The cost of Arbitration was
decided to be borne by both the parties equally irrespective of result of Arbitration. There was a challenge with
regard to interpretation of Force Majeure clause in the agreement. The tribunal also decided on the existence
and interpretation of this clause. The Tribunal decided in favour of NAIVAT Private Limited and asked the other
company to pay the amount due of Rs. 1,00,00,000/- along with interest at the rate of 10%. On the basis of these
facts:
470
(a) Prepare an Award covering the aspects of decision, introduction, costs, procedural history, schedule
of pleadings, hearing details, costs along with other essentials relevant facts from above paragraphs.
Assume other necessary facts.
(8 marks)
(b) Draft an Agreement to submit the dispute to an Arbitral Tribunal in accordance with the facts provide in
above paragraph. Assume other necessary facts.
(7 marks)
Attempt all parts of either Q. No. 4 or Q. No. 4A
Question 4
(a) (i) In order to enhance market integrity and safeguard interest of investors, SEBI and Exchanges have
been introducing various enhanced pre-emptive surveillance measures such as reduction in price band,
periodic call auction and transfer of securities to Trade for Trade segment from time to time. What are
these measures called?
(ii) There is a quasi-judicial process of settlement of disputes between Trading Member, Investor, Clearing
Member, Authorised Person, Listed Company etc. by NSE. By what name this portal is operation?
(iii) Who takes actions for the complaints received on its SCORES portal?
(iv) When does the authority which takes actions for the complaints received on its SCORES portal
established?
(1 mark each)
(b) XYZ Limited is a company providing agricultural services through its website. Ramesh, along with his brother,
initiated a venture, eventually leading to a Share Purchase Agreement for XYZ Limited. The obligation under
share purchase agreement could not be discharged due to a dispute between the parties. The arbitrator passed
the order in favour of Ramesh. The company filed an appeal before the appellate court which was also decided
in favour of Ramesh. XYZ Limited intends to file an appeal before Supreme Court.
Can an appeal be filed to Supreme Court in the above mentioned circumstances? Answer with reason.
(5 marks)
(c) One Municipal Corporation proposed the construction of row houses for Small and Medium Towns. The
project received funding from the banks based on the Detailed Project Report (DPR) submitted by the XYZ
Limited. Subsequently, the XYZ Limited was blacklisted by the corporation, leading to a series of legal actions.
Initially, the XYZ Limited approached the High Court with a Writ Petition, which was withdrawn after the
corporation extended the project completion time by six months. However, when this extension was nullified
by subsequent resolutions, XYZ Limited’s contract was terminated. The Petitioner filed another Writ Petition
challenging this termination. Following these legal actions, the corporation proposed resolving the disputes
through arbitration. XYZ Limited agreed to withdraw pending proceedings. Consequently, an arbitrator was
appointed by the consent of parties to adjudicate the disputes. The Arbitrator gave award in favour of XYZ
Limited awarding a sum of Rs. 50 Crore. The money has not yet been received by the company. The company
wants to recover and the corporation intends to challenge the Award. The managing director of the company
has asked you to prepare a note for options available for the company for recovery of money and the options
available with corporation for opposing the Award under the Arbitration and Conciliation Act, 1996.
Prepare the note for the managing director of XYZ Limited.
(6 marks)
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PP-A&MC
OR (Alternate question to Q. No. 4)

Question 4A
(i) NGA Private Limited (NGA) obtained an Inter-Corporate Deposit (ICD) facility of Rs. 50 Crore from AMA
LLP(AMA). The facility was granted with the condition that the NGA would provide a surety/pledge of 1 Lakh
shares held by the NGA in the borrower company as security for the repayment of the outstanding amount
under the ICD.
NGA claimed that ICD has been repaid and consequently automatically discharged and AMA obligated to
return the pledged shares. Alleging unlawful retention NGA invoked Arbitration. On perusal of the agreement,
it was found that the agreement does not have force majeure clause in it and the agreement has Arbitration
clause. The Venue of Arbitration was Mumbai. Both the parties agreed to resolve the matter by way of Ad hoc
Arbitration in accordance with rules decided mutually. AMA contended that since courts of Gujarat will have
jurisdiction since the registered office of the company is in Ahmedabad as there is no seat of arbitration decided.
Decide the seat of Arbitration in above case. Quote relevant case laws in support of your answer.
(5 marks)
(ii) Nekal Bank, a bank of foreign country availed financial facility from the State Bank of India(SBI). On default,
SBI invoked arbitration proceedings and a Notice was issued and unilaterally appointed a sole arbitrator.
However, the Borrowers never received the said notice and the Bank failed to produce any proof of delivery.
The seat and Venue of Arbitration was agreed to be that foreign country where Nekal bank is situated. Chapter
I of Part II of Arbitration and Conciliation Act, 1996 is applicable to this Proceedings.
With reference to above answer the following with reason:
(a) Is part I of the Arbitration and Conciliation Act, 1996 applicable to the proceedings under these
circumstances?
(b) Is Complete part II of the Arbitration and Conciliation Act, 1996 applicable to the proceedings under
these circumstances?
(c) Who can appoint arbitrator in this situation, upon a request of the party when parties fails to appoint
Arbitrator by agreement?
(6 marks)
(iii) On successful completion of Conciliation proceedings, a conciliated settlement agreement has been entered
by ABC Private Limited and XYZ Private Limited. However, ABC Private Limited changed its stand and decided
to not fulfil the obligations agreed by the Agreement. In this situation, answer the following with reasons:
(a) How can the law under Arbitration and Conciliation Act, 1996 deals with this situation?
(b) Can conciliator pass an Award in this situation for enforcement of the Conciliated Settlement Agreement?
(2 marks each)
PART II : MEDIATION (30 MARKS)

Question 5
(a) A dispute arose relating to the terms and condition of Joint Venture Agreement between XYZ LLP and PQR
LLP. The commercial court in Ahmedabad was having jurisdiction over the matter. PQR LLP filed the suit before
the competent court. The parties and competent officer of the court is of the opinion that the suit does not
requires immediate relief.
472
(i) What was correct course of action of action in above matter before filing of suit?
(ii) Does the above course of action relax the provision of Limitation Act, 1963?
(iii) What is the time period for completion of said required course of action?
(iv) If the said course of action is successful, how can the outcome of this course of action be enforced?
(2 marks each)
(b) The Tele-Mobi Private Limited(TMPL) conducts business under the brand name “Mera Mobile” and is in the
business of manufacture of Mobiles and Telephones. Components Mobi Limited(CML) is a company incorporated
under the laws of Hong Kong and is in the business of manufacture and sale of components and accessories
of mobile phones. The registered office of TMPL is situated at 120, Raj Nagar, Jaipur. The registered office
address of CML is 110, Kowloon, Hongkong. An Agreement dated 4th March, 2020 was entered into between the
parties for 3 years under which CML agreed to sell to the petitioner the components of mobile phone for further
assembling by TMPL. As per the terms of the agreement, CML will provide 10,000 mother boards of Mobile every
month to TMPL. A dispute arose between the parties which was settled by the aid of Mediation Proceedings
conducted with 3 Mediators. CML agreed to pay Rs. 50 Crore to TMPL for the loss suffered by TMPL due to the
damage to the goodwill of TMPL caused because of faulty mother-boards used in the manufacturing of mobile.
CML agreed to establish an internal department for quality control. The duration of the main agreement was
extended to 5 more years w.e.f. 4th March, 2023 for supply of components and accessories. Both the parties
agree to maintain confidentiality and protection of IPR of the other party. Both the parties agreed that they will
not hire the employees resigned or terminated from the other company for a period of 2 years from the date of
resignation or termination. The Mediator fees is decided to be borne by both the parties equally.
Draft a Mediated settlement agreement with above facts. Assume other necessary facts.
(7 marks)
Attempt all parts of either Q. No. 6 or Q. No. 6A
Question 6
(a) Sharman is a company secretary with 20 experience, employed in various national and multination
organisations. At present, he is working in TOPR LOE Private Limited as General Manager – Corporate Secretarial.
Apart from his experience in the company, he also possesses the qualification of LL.B and LL.M from University
of Delhi passed in 2007 and 2009 respectively. The company has advised him to be empanelled as Mediator
under the Companies Act, 2013.
Advice Sharman quoting relevant provision applicable in this situation.
(5 marks)
(b) (i) A and B are working for CIBAJA Private Limited as Chief Manager – Finance and Company Secretary
respectively. There was an Income accrued outside India but from the source property located in India.
They were asked to interpret a legal provision relating to deemed Income under section 9 of Income-
tax Act, 1961. Both A and B gave different opinion about the interpretation on this transaction. After this,
A started refraining from the meeting in which B is invited. Which approach of dispute can be said to be
developed by A against B. Explain other similar approaches in case Non-expressive form of disputes.
(3 marks)
(ii) Disputes arose between the IGTSA Limited and Mobile Manufactures Association of Punjab regarding
a non-compete agreement. One clause of non-compete agreement provided that any dispute arising
between the parties shall be referred for Arbitration. However, the parties shall try to amicably settle
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PP-A&MC
the disputes with the help of person who can mediate the proceedings. If the parties fail to arise at a
conclusion, the matter should be decided by the Arbitrators. Explain the type of mediation intended by
the parties in this scenario.
(2 marks)
(c) XYZ Limited filed a civil suit against PQR Limited before the Additional Judge of District Court situated in New
Delhi. The court is of the opinion that there exist elements of a settlement which may be acceptable to both the
companies.
Explain the provision which can be applied by the court in above said situation.
(5 marks)
OR (Alternate question to Q. No. 6)
Question 6A
(i) In a firm of Mediators, around 100 number of individuals are employed. 20 Mediators are having an experience
ranging between 10-20 years. Around 50 individuals possesses experience ranging from 0-2 years. Around 30
apprentices are part of the firm. The senior most mediators are of the view that everyone in the firm should
remain aware and engaged in their practice in order to continue improving. Apprentice mediators need to
participate in peer groups to enhance the limits of their knowledge and skills. The skills of mediators having
experience 0-2 years should also be tested in real-life conflict situations.
Advice the firm a practice suitable for them in above said situation which is gaining attention in recent years.
(5 marks)
(ii) With reference to the International Chamber of Commerce ICC Mediation Rules, answer the following:
(a) Who can decide the location of physical meetings?
(b) Who can stay the proceedings if requested deposit has not been paid?
(c) The Mediated settlement agreement was signed on 1st April, 2023. On 5th April, 2023, the mediators
notified the parties through email that the mediation has been completed. When can the center issue
confirmation of termination of proceedings which have been commenced pursuant to the Rules?
(d) What is not confidential with respect to the proceedings?
(1 mark each)
(iii) On 3rd March, 2024, MNJ Limited signed an agreement with PJUA Limited for providing the consultancy
services to the later. A dispute arose between the parties. PJUA Limited filed a suit before competent commercial
courts without taking recourse of mandatory pre-litigation mediation. MNJ Limited has approached you to
advice the correct position of law in this matter with reference to the possible outcome of suit.
Advice MNJ limited in this matter quoting relevant provision or case law.
(6 marks)
*******
474

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ARBITRATION, MEDIATION & CONCILIATION

ARBITRATION, MEDIATION & CONCILIATION

Part I : Arbitration & Conciliation (70 Marks)

20. International Perspective: Comparative Study of Conciliation l International Rules on Conciliation

Part II : Mediation (30 Marks)

PART I : ARBITRATION & CONCILIATION

PART I : ARBITRATION & CONCILIATION (70 MARKS)

Lesson 1 – Arbitration: Introduction, Agreements and its Institutions

l History of Arbitration in India

l Structure of Legislation for Arbitration and Conciliation

l General Principle of Arbitration

l National and International Institutions for ADRs.

Lesson 2 – Commercial Transactions

l Types of Contracts with reference to Commercial Transactions

l Concepts relating to Negotiation and Conciliation

l Damages under Contract Law

l Drafting of Commercial Contract and other documents

l Role of Company Secretary & Arbitration.

l Powers, Duties and Role of Arbitrators.

Lesson 4 – Arbitral Proceedings, Pleadings and Evidence

l Statement of Claims and Defense

Lesson 5 – Preparation and Execution of Arbitral Award

Lesson 6 – Challenge to Award and Appeals

Lesson 7 – Emerging Aspects: Fast Track and Virtual Arbitration

Lesson 8 – Arbitration under Investor’s Grievances Redressal Mechanism of Stock Exchanges

l Investor’s Grievance Redressal Mechanism (IGRM)

l Investor Grievances Redressal Committee (IGRC)

l Arbitration Process at Stock Exchanges

Lesson 9 – Conceptual Framework of International Commercial Arbitration

l International Arbitral Institutions

l Domestic Arbitration vs. International Arbitration

l National courts in the international arbitration process

l Government Run Online Dispute Resolution (ODR) Platform

l ODR in China, UK, USA etc.

l London Court of International Arbitration.

Lesson 10 – International Law of Arbitration

l Law and practice of International Commercial Arbitration

l Asia Pacific Centre for Arbitration & mediation (APCAM) Rules

l International Chamber of Commerce (ICC) Rules

l Foreign Arbitral Awards

l UN Conventions on Enforcement of Foreign Arbitral Awards.

Lesson 12 – Conciliation Proceedings and International Perspective of Conciliation

PART II : MEDIATION (30 MARKS)

Lesson 13 – Mediation: An Introduction and its Process along with Rules

l Private Mediation vs. Court Ordered Mediation

l Adhoc Mediation and Institutional Mediation

l Understanding of Conflicts and their resolutions

Lesson 14 – Negotiation Skills and Communication

l Negotiation Techniques and Styles

l Communication in Mediation and Negotiation

l Interest v. Position (Iceberg Concept).

l Mediation in Civil and Commercial Litigation

l Court Annexed and Private Mediation

l Online Mediation and use of Artificial Intelligence

l Overview: Corporate and Commercial Negotiations

l Role of Mediation in other ADR domains

l Mediation Confidentiality and Neutrality.