Assignment Arbitration.
Assignment Arbitration.
Assignment Arbitration.
30 Marks
Instructions:
(The assignment consists of Two questions of equal marks and try to answer in not more
than 400 words for each question. The submissions would not be accepted through mails and
documents which show plagiarism and high similarity in safe assign report (blackboard's
Plagiarism check software), would not be considered for assessment. It’s an open book activity
and it’s the test of your understanding on the mentioned topic.)
Q.1 Write a short note on “Afcons infrastructure and Ors. v. Cherian Verkay Construction and
Ors.”
ANS.- This case has finally ended the dynamism of the ADR which is pro bono for the Indian
Judicial System. It lies with the issue of the ambiguity of the operation of Section 89(1) of the
CPC because in that the word, “may” and “shall” are used at the same time. Also, under O. 10,
R. 1 A, the word shall is used, where the court after recording admission and denial is obligated
to direct the parties to a suitable mode under sec 89(1).
Facts of the Case: The Cochin Port Trust put in charge the Afcon Constructions for the work of
construction of bridges and roads under an agreement. The Afcon Construction further sub-
contracted a part of the work to Cherian Veraky Constructions. Meanwhile, Cherain
Constructions filed an application under Section 89 of CPC to reform the terms of settlement
through Arbiration before the trial of the suit regarding the recovery of the sum of Rs. 2.25
Crore.
Issue Discussed:
1. Procedure to be followed by the court to implement section 89(1) and O. 10, R. 1 A of
CPC.
Judgment:
The Hon’ble SC with a harmonious interpretation of section 89(1) & O. 10, R. 1 A, held that it is
“mandatory” for the court to “consider” for alternative modes of settlement in every case and if
there exists such elements of settlement, it is not ‘obligated’ to refer the parties to alternative
modes of settlement. The Court further enumerated the cases which are arbitrable and which are
not in a long exhaustive list.
Q.2 Write a short note on ‘Arbitration Agreement’ as mentioned under Section 7 of Arbitration
and Conciliation Act, 1996 and Decide whether the following clause is an arbitration clause or
not?
“The parties agree that any dispute or differences arising in connection with the subject matter
may be referred to arbitration”
ANS.- Section 7 of the A&C Act, 1996 refers Arbitration Agreement as an agreement in which
the parties can refer to arbitration on all or for some disputes which have arisen or may arise
between the parties with respect to a defined legal relationship, whether contractual or not.
It also lays down that the agreement can be in the form of aseparate agreement or in the form of
an Arbitration clause in the contract.
1. Written Agreement
2. Intention
3. Signature
Opinion:- “The parties agree that any dispute or differences arising in connection with the
subject matter may be referred to arbitration”
Section 7 is an Arbitration Clause as an essential condition under arbitration is the existence of
the dispute. Where the parties have effectively settled their dispute, hence they cannot refute the
settlement and invoke the Arbitration Clause.