JOURNAL TOPIC

1) Draft of a Domestic Arbitration Agreement after a Commercial Dispute has arisen between parties.
2) An Application to the Court for setting aside an Arbitration Award.
3) Draft of an Application to the Appropriate court to appoint an Arbitrator when parties have failed in
their attempts to appoint one according to the Arbitration Agreement.
4) An invitation for conciliation proceeding - Notice under Section 62 of the Arbitration And Conciliation
Act, 1996.
5) An Application for Enforcement of A Foreign Award:
6) Report on interaction sessions on Alternate Dispute Resolution system.
7) A Request by one party to the other party Requesting that their Commercial Dispute to be referred to
Arbitration.
8) Draft of an Application under Section 8 of the Arbitration And Conciliation Act, 1996.
9) Notice Under Section. 11 of Arbitration And Conciliation Act, 1996.
10) Draft of an application for interim relief under section 17 of the Arbitration and Conciliation act 1996.
01 . Draft of a Domestic Arbitration Agreement after a Commercial Dispute
has arisen between parties.

In the 1940 Act, the Arbitration Agreement was defined under Section
2(a) as-“A written agreement to submit present or future differences to
arbitration, whether an arbitrator is named therein or not.” The vague
definition was replaced in the 1996 Act by Section 7 which stated the
Arbitration and Conciliation Act, 1996 enumerates that an arbitration
agreement can be in the form of a separate agreement or in the form of
an arbitration clause in the contract.

Section 7. Arbitration agreement.

(1) In this Part, "arbitration agreement" means an agreement by the parties to

submit to arbitration all or certain disputes which have arisen or which may
arise between them in respect of a defined legal relationship, whether
contractual or not.

(2) An arbitration agreement may be in the form of an arbitration clause in a

contract or in the form of a separate agreement.

(3) An arbitration agreement shall be in writing.

(4) An arbitration agreement is in writing if it is contained in-

(a) a document signed by the parties;

(b) an exchange of letters, telex, telegrams or other means of telecommunication

including communication through electronic means which provide a record of
the agreement; 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.

(5) 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.

Specimen of Arbitration Agreement to Refer the Dispute to two Arbitrators

1. This arbitration agreement is made between …………………………………….

residing at the address of ………………………………… and
……………………………………… residing at the address of
………………………………………………, and the parties who have enacted the
Agreement, hereinafter shall be referred to as THE PARTIES.

2. The parties have agreed on the settlement of any dispute arising out
of or in connection with the ……………
dated………………………….subjected Agreement by arbitration through
the Arbitration Council in accordance with the Arbitration Rules. The
parties, by reading the Rules, shall declare that they have accepted
to comply with its terms, obligations and consequences. (It is
required for the parties to clearly state the subject and date of the
agreement of which the parties would like to seek the settlement of
any dispute arose out through the Arbitration process, within the
blank spaces) . If there are more than one commercial agreement
between the parties, then they should prepare and sign a separate
arbitration agreement for each of them.)
3. The parties have decided to have the arbitration conducted
at……………………… (The parties shall write the name of the city as the
place of arbitration in this section, if they wish. the Arbitration
Council shall determine the place of arbitration, if there is no such
determination of the parties.)

4. The parties have agreed on …………. as the applicable law to this

arbitration. (This clause is important for the disputes arising out of
international commercial agreements. The parties shall state the
name of the country, if they agree on whose law be applicable. If
there is no such agreement on this matter, then the arbitrator(s)
shall, by himself, determine the law to be applied. It is natural to
apply the _______ Law to the arbitration between the _________
companies.)

5. The parties each undertake to pay half of the arbitration expenses

that shall be notified subsequent to filing the suit before the
Arbitration Council as an advance payment. Each party also
undertakes to pay his share of the total expenses determined within
the Arbitral Award approved by the Council. In the case where the
defendant does not pay half of the advance payment, then the
claimant shall be obliged to pay the total advance payment amount.

6. It is determined by the parties that disputes shall be settled

by…………………… arbitrator(s). (The given blank space, depending on
the disputes settled by a sole arbitrator or more than one arbitrator,
shall be filled accordingly.)

7. i) The parties have agreed on the appointment of a sole arbitrator

by the Arbitration Council. (This clause shall be included, if the
parties agree on the disputes settled by a sole arbitrator and who is
appointed by the Arbitration Council.)

7. ii) The parties have nominated, as the sole arbitrator,

…………………………………………. residing at the address of
……………………………………………. However, in the case where the sole
arbitrator is not approved by the Arbitration Council, then the
parties accept that the arbitrator shall be appointed by the Council.
(This clause shall be included in the case of an agreement between
the parties for the sole arbitrator beforehand.)

7. iii) The parties accept to nominate the sole arbitrator by themselves

within 30 days from the notification of the arbitration request to the
defendant and the appointment of the sole arbitrator by the Council
if the parties cannot agree on the nomination of the sole arbitrator
or in the case where the nomination of the sole arbitrator by the
parties is not approved by the Council. (The provision within this
clause may be included in the agreement when the parties leave the
appointment of the sole arbitrator until after the dispute occurs.)

8. i)The parties accept to have one of the 3 arbitrators to be

nominated by the claimant in its petition of arbitration request and
the second arbitrator to be nominated by the defendant in its
response and the third arbitrator to be selected by these two
arbitrators within 15 days; The appointment of the arbitrators by
the Council if the claimant or the defendant does not state the name
of its arbitrator or if they leave the nomination of the arbitrators to
 the Council; The appointment of the third arbitrator by the Council,
when the parties’ arbitrators do not nominate the third arbitrator
within 15 days. (This clause may be included in the agreement in
the cases where it is envisaged that the disputes be settled by three
arbitrators and the appointment of the two arbitrators by the
claimant and the defendant, and the third arbitrator by the parties’
arbitrators.)

8. ii) The parties accept to have one of the 3 arbitrators to be

nominated by the claimant in its petition of arbitration request and
the second arbitrator to be nominated by the defendant in its
response and the third arbitrator to be nominated by the Council;
The arbitrators appointed by the Council in the cases where the
plaintiff or the defendant does not nominate an arbitrator or if they
leave the appointment of the arbitrators to the Council. (This clause
may be included in the agreement in the cases where the
appointment of the third arbitrator is left to the Arbitration
Council).

8. iii) The parties agree upon the appointment of all three arbitrators
by the Arbitration Council.

9. The parties accept to sign the Terms of Reference to be drawn up in

the presence of the arbitrator(s) upon the invitation of the arbitrator
(or the Chairman of the Arbitral Tribunal), that the arbitration
procedures shall still continue without interruption and be effectual
even if they abstain from signing it, and the abstention of either one
or both parties from signing the Terms of Reference shall not affect
the validity of the Arbitral Award.

10. The parties undertake to pay the arbitration expenses in accordance

with the Arbitration Rules in the case of the reconciliation of the
parties or the claimant waiving his claim after the dispute is
submitted to the Arbitration.

11. We hereby undertake to accept and to comply with the provisions of

this arbitration agreement comprising

10 clauses as above. On behalf of __________ On behalf of _________

___________ (It is necessary for parties to include the list of the
authorized signatures showing the authority for representation and to
sign.)

Having agreed to the above by both the parties, the said parties affix their signatures to this
agreement this…………..….…………. day of (month and year) at (place).

Signature I Signature II
2. An Application to the Court for setting aside an Arbitration Award

Introduction
The settlement of a dispute out of the court by bringing it to a third person is very
commonly known since the period of Ancient and Medieval India. So, the concept of
arbitration is a way back old phenomena. The modern law of arbitration was drafted
by the East India company which was developed in the regulatory framework through
which the courts refer the suits for the arbitration process.

Evolution of Arbitration System

The first Indian Arbitration Act 1899 was based on the English Arbitration Act of
1889. After this, the Indian Arbitration Act 1940 came into force and then finally the
Arbitration & Conciliation Act,1966 was enacted by the Parliament of India which
incorporated the concept of arbitration which is even internationally accepted.

Meaning of Arbitration
 Arbitration is a process in which the parties resolve their dispute
out of the court through the Arbitral Tribunal.
 An Arbitral Tribunal can be either appointed by parties to the
dispute or by the court sometimes at the request of the party.
 We can also say that arbitration is a substitute for the litigation
for the dispute resolution.
 The United Nations Commission on International Trade Law is
considered as the basis of the Indian Arbitration Law.
 The decision of the arbitrator is considered to be as legally
binding and enforceable by the court unless all the parties set
forth that the arbitration process and decisions are non-binding.

Why does Arbitration take place?

Arbitration generally occurs when any dispute involving a contract
contains an arbitration clause. Such a clause is signed to solve any future
prospective dispute through arbitration willingly. The arbitration clause
will also specify as to whether such resolving decision is binding or non-
binding. If the arbitration would be binding, then the parties would have
to consider the decision of the arbitrator as final over the arising dispute
and if it would be non-binding then the parties have the option to litigate
the issue before the court if they are discontented with the arbitrator’s
decision.
Arbitral awards

Meaning
 An arbitral/arbitration award is the award granted in the decision
made by the arbitration tribunal in an arbitration proceeding.
 An arbitral award can be monetary or non-monetary. It can be
monetary which is made for payment of a sum of money from one
party to the other and it can be non-monetary when no money
needs to be paid but it includes decisions like stopping a certain
business practice or increasing unemployment perks and
incentives.
 There are two conditions provided in the Arbitration Act, 1996 for
an award to be valid-

1. It must be certain, and

2. It must contain the decision.

 The award must be written and signed by the arbitrator and it

must contain the reasons for the passing of such award in the
particular case.
 The arbitral award should clearly state the duties and liabilities
imposed on the parties to the dispute and it should not leave any
aspect pending of the dispute for the future discussion.
 It should be very much clear and final in the context of the issues
and claims of the dispute concerned. In the case of Union of India
V. Punjab Communications, the amount which was payable by
one party to the other was not specified in the award and also the
decision was unclear and incapable of being enforced. Therefore
the arbitral award was set aside.

Application for setting aside arbitral awards

To ascertain the proper conduct of the arbitration proceedings, the law allows certain
remedies against an arbitral award. An aggrieved party may resort to the law Court for
setting aside the arbitral award on certain Grounds mentioned under Arbitration and
Conciliation Act, 1966.

Grounds
Section 34 of the Arbitration and Conciliation Act provides the provisions of certain specific
grounds on the basis of which an arbitral award rendered in India can be set aside. They are-

1. Incapacity of a party while making an application to enter the

agreement.
2. Arbitration agreement not being valid under the law.
3. Parties were not given proper notice of the appointed Arbitrators
or the Arbitral Tribunal.
4. Nature of dispute not capable of settlement by arbitration.
 5. Composition of the arbitral award was not in accordance with the
agreement of parties.
6. The Arbitral award is in the violation of the public policy of a
state.
7. The Arbitral award deals with a dispute not falling within the
terms of submissions to an arbitration.

(1). Incapacity of Parties

An application for setting aside an arbitral award can be passed if a party to the arbitration is
incapable in taking care of their interest and they are not represented by a person who can
safeguard their rights. The award can be set aside by the court if it finds that a party to a
contract is a minor or of an unsound person who is not being represented by a Guardian for
protecting his interest. Section 9 of the Arbitration and Conciliation Act,1996 provides that
the provision of appointment of a guardian for a minor of unsound mind for his/her matter’s
arbitral proceedings.

(2). The Invalidity of Arbitration Agreement under

Laws
The validity of an arbitration agreement can be challenged in the same way on the same
grounds on which the validity of a contract is challenged. In cases where the agreement
Clause is added in a contract by the parties to it, the arbitration will be considered invalid if
the contract is invalid.

(3). Notice not given to the parties of arbitration proceedings

As provided under section 34(2)(a)(iii), if the party to a dispute in arbitral proceedings was
not given proper notice regarding the appointment of an arbitrator or any other notice of
arbitral proceedings, then this would be considered as a ground for setting aside the arbitral
award of such proceedings.

Section 23(1) of Arbitration and Conciliation Act,1966 provides that the arbitral Tribunal
has to determine the time within which the statement must be filed. This must be timely
communicated to the parties by a proper notice and section 24(2) provides that an advance
notice shall be given to the parties regarding any hearing or meeting of the Tribunal for any
purpose of inspection of documents, goods or other property etc.

In Dulal podda V. Executive Engineer, Dona Canal Division, Court held that the
appointment of an arbitrator at the request of the appellant of the dispute without sending a
notice to the respondent and an ex-parte decree given by the arbitration Tribunal will be held
illegal and liable for setting aside.

(4). An Award not falling within the terms of Submission to

Arbitration
The testimonials of a dispute in an agreement determines the limits of the authority and
jurisdiction of an Arbitral Tribunal. If the jurisdiction does not come within the ambit of the
Tribunal, then the award to the extent to which it is beyond the arbitrator’s jurisdictional
powers would be considered as invalid and such award would be liable for setting aside. An
arbitrator cannot act in contradiction to the terms of the contract.
In Rajendra Krishan Kumar V. Union of India, a matter under a writ petition was referred for
arbitration proceedings. The writ petition contains no claim of compensation for damage to
the perfectibility of the land because of the opposition party releasing effluents and slurry on
that other party’s land. The court held that the award of any such compensation would be
liable to set aside as it stands outside the scope of reference.

(5). Composition of Tribunal- Not in accordance with Agreement

Section 34(2)(a)(v) lays out that an award can be discarded or challenged if the composition
of the arbitral tribunal was not in obedience with the agreement of the parties or if the
procedure of conduct of proceedings was not followed properly. If the arbitrator passes a
decision of an award which is in deviation from the terms of reference and the arbitration
agreement, then this would lead to the award to be set aside and will amount to the
misconduct of the arbitrator.

In the case of State Trading Corporation V. Molasses Co. the Bengal Chamber of
Commerce, the Arbitral Tribunal did not allow a company who was a party to be represented
by its law officer who was a full-time employee of the company. Here, the court held that it
was the misconduct of the arbitrator as well as the violation of arbitration proceedings.

In the case of ONGC Ltd V. Saw Pipe Ltd., the Supreme Court held that the arbitral
Tribunal, while exercising its jurisdiction cannot act in breach of some provisions of
substantive law or provisions of the Arbitration and Conciliation Act, 1966.

(6). Disputes not arbitrable

The nature of the dispute should be capable of settlement by arbitration. Generally, all
disputes which can be decided by a Civil Court involving private rights can be referred to the
arbitration. Therefore, matters of criminal nature or matters of public rights cannot be
decided by arbitration proceedings.

(7). Award against public policy

Section 34 provides that an application for setting aside an arbitral award can be made if
such award is in violation of the public policy of India. The concept of public policy implies
matters which concerns public good and Public Interest. The explanation of this section
clarifies that such award which is obtained either by fraud or by corruption would be
considered against the public policy of India. Also, the award which is required by
suppressing the actual facts of the case either by misleading or tricking the arbitrator or by
bribing the arbitrator or by using force on the arbitrator etc. would be held liable for setting
aside as in contrary to the public policy.

In the case of Venture Global Engineering V. Satyam Computer Services Ltd., the Court
held that an arbitral award could be set aside if it is conflicting with the fundamental policies
of Indian laws or the justice, morality or interest of India.

Limitation
Section 34(3) states regarding the limitation period for filing an application
that an appeal to set aside an arbitration order by an aggrieved party has
to be strictly made within the period of 3 months from the date of receipt
of the same. The importance of this is set out by Section 36 which
asserts that the award becomes enforceable as soon as the limitation
period under Section 34 expires. Under section 33, the Court may,
however, allow a delay of 30 days on request made by the aggrieved
party if the court is satisfied on the evidence of the sufficient cause. In
Case of National Aluminum Co Ltd v. Presteel Fabrication (P) Ltd, proceedings were
instituted before the Supreme Court under the disbelief that it had
jurisdiction in the matter of setting aside the arbitral award passed by
Arbitral Tribunal. Time consumed on a bona fide prosecution of an
application in a wrong forum was held by the Supreme Court to be a
sufficient cause for condonation of delay.

 As in the Code of Civil Procedure, 1908, there is a general rule

that an executing Court can execute the decree if there is no stay
by the appellate court. In the same way, in Arbitration Act, once
an application of setting aside the arbitral award is done under
section 34, the executing Court has no power or authority to
effectuate the award until and unless the application gets
dismissed/refused under section 34.
As per section 34, a party to the arbitration agreement has to make an
application for setting aside the award. But a legal representative in a
case of any such party can also apply for it because he is a person
claiming under that. An award which is set aside no longer remains
applicable by law. Setting aside means that it is rejected as invalid. The
parties get back to their former position in regard to their claims in the
dispute and the matter becomes open again for decision. The parties
have the option after setting aside an order to either again go for
arbitration or to have the matter decided by the court of law.

Constitutional Validity of Sec 34

In the case of TPI Ltd. V. Union of India, in a writ petition, it was contended
by the petitioner that an inherent right to set aside an arbitral award on
the grounds provided, should be present and in the absence of the same,
section 34 should be considered as unconstitutional. Here, the court
dismissed the writ petition by stating that the arbitration is an alternate
forum for the resolution of a dispute and it is on the wish of the parties to
opt in on their free will for their matters and if they agree to the decision
of the arbitral tribunal by mutual agreement. There is no compulsion by
any statute forcing the parties to resort to the arbitration procedure.

Setting aside the foreign award

The Part 1 (Section 34) of the Indian Arbitration Act 1996 furnishes the
grounds to challenge or set aside the award to be applicable only to the
awards within a state and not to the foreign awards. On 6th September
2012, In Bharat Aluminium company V. Kaiser Aluminium Technical Service, the
Supreme Court held that the Indian Arbitration Act should be interpreted
in a way to give effect to the objective or purpose of the Indian
parliament who drafted this legislation. Such findings of the Supreme
Court are applicable only to the arbitration agreement executed after 6
September 2012.

So part 1 of the Arbitration and Conciliation Act has no application to the

arbitrations occurring in matters outside India irrespective of the fact that
whether parties chose to apply Indian Arbitration Act or not.
In Bhatia Int. V. Bulk Trading case, the Supreme Court held that even though
there was no provision in Part 2 of the act providing for the challenge to
a foreign award, a petition to set aside the same would lie under section
34 (part 1) of the act which provides provisions of the domestic award
will be applicable to the foreign awards. The court held that the property
in a dispute related to the shares in the Indian Company situated in India
necessarily needed Indian laws to be followed to execute the award. The
Court stated that in such a situation the award must be attested on the
measurement of public policy of India and the Indian public policy cannot
be affirmed through the implementation of the award on any foreign
strand/support.

Conclusion
India has a modern and efficient Arbitration Act. Section 34 and 37
provides for recourse against an arbitral award which may be set aside
by a court on certain specified grounds. All these Grounds are common to
both domestic as well as international arbitral awards. The ground of
public policy should only be interpreted as far as it aims towards
broadening the public interest and not violating the basic notions of
Indian laws. The judicial intervention should also be minimal for success
and further promotion of Arbitration in India.
3. Draft of an Application to the Appropriate court to appoint an Arbitrator
when parties have failed in their attempts to appoint one according to the
Arbitration Agreement

APPLICATION UNDER SECTION 11 OF ARBITRATION AND CONCILIATION ACT, 1996

FOR DIRECTIONS OF THE HON’BLE COURT FOR APPOINTMENT OF A SOLE
ARBITRATOR FOR RESOLUTION OF DISPUTES BETWEEN THE PARTIES.

TO,

THE HON’BLE CHIEF JUSTICE OF _______ AND HIS LORDSHIPS OTHER COMPANION
JUSTICES OF THE HIGH COURT OF JUDICATURE FOR _______ AT __________.

MAY IT PLEASE YOUR LORDSHIPS:-

The Humble Applicant submits the instant application before the Hon’ble Court as
under:-

1. That (explain the purpose on which applicant and respondent/s have entered
into a contract). Copy of the Agreement/Contract executed between the
applicant and respondent-___ is herewith enclosed as Annexure-1.
2. That (state the facts due to which dispute has arisen between the parties to
the contract)
3. That clause ____ of the agreement executed between __________ states to refer
any dispute between the parties to Arbitration. Clause 62(a)of the dealership
agreement states as under: WRITE DOWN THE ARBITRATION CLAUSE
4. That as per clause __ of the agreement any dispute that arose between the
parties to the dealership agreement has to be referred to sole arbitration to
some officer of the respondent. But the Arbitrator is an employee of the
respondent and have a direct relation with the respondent who is one of the
party in the present dispute matter thus it gives rise to the justifiable doubts
as to the independence or impartiality of the arbitrator in accordance to the
grounds mentioned in the Fifth Schedule of the Arbitration and Conciliation
Act, 1996.
5. That the appointment of any officer nominated by RESPONDENT as the
Arbitrator in the present dispute matter is a clear ground to challenge the
appointment of the arbitrator. As per section 12(3)(a) of the Arbitration and
Conciliation Act, 1996 which states that an arbitrator may be challenged only if
circumstances exists that give rise to justifiable doubts as to his independence
or impartiality. In the present dispute matter arbitrator as per the agreement is
an employee of the respondent and have a direct relation with one of the
parties to the dispute which makes a clear ground to challenge the arbitrator
to be appointed as per section 12(3)(a) of the Arbitration and Conciliation Act,
1996.
6. That the applicant sent a notice for invoking Arbitration in the matter of
dispute between the respondent through his advocate on 19 th April 2021 but
till date no reply to the aforesaid notice has been received from the
respondents’ side. Copy of the notice sent for invoking Arbitration is herewith
enclosed as .
 7. That in the aforesaid notice sent for invoking arbitration the applicant through
his advocate after becoming aware of the circumstances that the arbitration
will be referred to any officer of respondent, the applicant has clearly stated
that the arbitration cannot be referred to any officer of respondent as it raises
the justifiable doubts as to the independence or impartiality of the arbitrator
as per the the grounds mentioned in the Fifth Schedule of the Arbitration and
Conciliation Act,1996 and challenged the appointment of such Arbitrator as
per section 12(3)(a) Arbitration and Conciliation Act,1996 and challenged the
appointment of such Arbitrator in accordance to the procedure of challenge as
per section 13 of the Arbitration and Conciliation Act,1996.
8. That the respondents even after challenging the appointment of such
Arbitrator as per the rules and procedures laid down under the Arbitration and
Conciliation Act,1996 did not even bother to take a look to the assertions
made in the aforesaid notice and neither accepted/decided any point laid
down in the aforesaid notice nor they denied any of the points made in the
aforesaid notice.
9. That in view of the aforesaid facts and circumstances, it is clear that there
exists the dispute interse the applicant and the respondent and further it is
pertinent to note that the respondents have failed to appoint any learned
person who is neutral and who is not related to any party in the present
dispute matter, now it is imperative that dispute between the applicant and
respondent is to be settled through the Sole Arbitrator appointed by this
Hon’ble Court in view of the powers conferred under section 11(6) of the
Arbitration and Conciliation Act, 1996.
PRAYER

In view of the aforesaid facts and circumstances it is humbly and most respectfully
prayed that this Hon’ble Court may be pleased to:-

1. Appoint a Sole Arbitrator to decide and adjudicate upon the dispute between
the applicant and respondents arising out of __________.
2. Direct that the Sole Arbitrator so appointed with seat at __________ shall be
entitled to receive the fee and other expenses in terms of statutory provisions
in this regard.
3. Any other order/direction which this Hon’ble Court may deem just and
expedient in the facts and circumstances of the present case.
AND FOR THIS ACT OF KINDNESS AND JUSTICE, THE APPLICANT HEREIN, AS IN
DUTY BOUND SHALL EVER PRAY.

HUMBLE PETITIONER

THROUGH COUNSEL

VERIFICATION

I, ____________________ do hereby certify that the contents of the Para 1 to 15 of the

application are true and correct as per my knowledge as well as on the basis of the
legal advice rendered by my counsel. Also, the prayer so sought therein is also
correct and legally valid.

DEPONENT
Section 11 of the Arbitration and Conciliation Act, 1996 deals with the
appointment of arbitrators. A person of any nationality may be appointed
arbitrator unless the contrary intention is expressed by the parties. The
parties are free to agree on a procedure for appointment of arbitrator or
arbitrators. Where parties fail to appoint three arbitrators, each party
shall appoint one arbitrator and the two arbitrators shall appoint the third
arbitrator. Hence, appointing three arbitrators is mandatory, with the
third one being the presiding arbitrator.

Where a party fails to appoint an arbitrator in accordance with the third

arbitrator with the within thirty days from the date of receipts of a
request to do so from the other party or two appointed arbitrators fail to
agree on the third arbitrator within 30 days from the date of their
appointment, the appointment shall be made, upon a request of a party,
by the Chief Justice of the High Court or any person or institution
designated by him.

In the absence of any procedure to appoint a sole arbitrator, if the

parties fail to agree on the arbitrator within 30 days from receipt on a
request by one party from the other party to so agree, the appointment
shall be made upon request of a party, by the Chief Justice of the High
Court or any person or institution designated by him.

Where under an appointment procedure agreed upon by the

parties:

 a party fails to act as required under that procedure; or,

 the parties or two appointed arbitrators fail to reach an agreement
as required under that procedure, or
 a person including an institution fails to perform any function as
required under that procedure, a party may request the Chief
Justice of the High Court or any person or institution designated by
him to take the necessary measures in absence of an agreement for
other means of securing the appointment.

The decision of the Chief Justice of the High Court or the person or the
institution designated by him in appointing an arbitrator shall be final.
In such appointment, two considerations are to be made:
 Required qualifications of the arbitrator as provided in the
agreement of the parties, and
 independent and impartial person as an arbitrator.
These are the circumstances under which the Chief Justice of a High
Court can make an appointment.

In case of appointment of a sole or third arbitrator in international

commercial arbitration, the appointing authority is the Chief Justice of
India or a person or institution designated by him.
Important case laws:
In Indian Drugs & Pharmaceuticals Ltd. v. Indo Swiss S. Gem Mfg. Co.
Ltd., it has been held that no retired High Court Judge can be appointed
as an arbitrator by the court when the arbitration clause states
categorically that the difference/dispute shall be referred to an arbitrator
by the Chairman and Managing Director of IPDL who is the appellant in
this case.

In National Aluminium Co.Ltd v. Metalimpex Ltd., a Bangladeshi company

failed to nominate its arbitrator in terms of the arbitration agreement on
an application under S.11 of the Arbitration and Conciliation Act, 1996,
the Chief Justice of India nominated an arbitrator to act on behalf of the
Bangladeshi company.

Procedure for the appointment:

Section 11 only confers power on the High Court to appoint an arbitrator

or presiding arbitrator only when the following conditions are fulfilled:
 where there is a valid arbitration agreement;
 the agreement contains for the appointment of one or more
arbitrators;
 the appointment of the arbitrator is to be made by mutual consent
of all the parties to the dispute.
 differences have arisen between the parties to the arbitration
agreement; or between the appointed arbitrators;
 the differences are on the appointment or appointments of
arbitrators.

Appointment of a third arbitrator by the court in case of

disagreement between two arbitrators:
In ICICI Ltd. v. East Coast Boat Builders & Engineers Ltd., two arbitrators
were appointed by respective parties, but they did not agree on the
name of the third arbitrator. The petitioner made an application for
appointment of the third arbitrator by the court under s.11 of the Act.
The court accepted the prayer and appointed the third arbitrator.

Lack of jurisdiction to appoint the arbitrator:

In Kanagarani Durairaj v. Dwaragan, it was held that:
in absence of a delegation of power by the Chief Justice of High Court
under s.11 of the Act, the City Civil Court has no jurisdiction to appoint
an arbitrator under s.11 of the court.

The disagreement between arbitrators:

If there is any disagreement between the arbitrators, there is no award
and the jurisdiction of the presiding arbitrator can be invoked. In the
absence of any contrary provision in the arbitration agreement, the
presiding arbitrator can adjudicate the whole case if the arbitrators
disagree on any particular point, as held in Probodh v. Union of India.
Appointment of Presiding Officer (Umpire)
The question for the appointment of Presiding Officer arises only when
there is a conflict of opinion between an even number of arbitrators.
Appointment of the third arbitrator may be made in any one of the two
following cases:
 By the parties themselves at the time of submission, and
 by the arbitrators.

Appointment of the sole arbitrator:

Where a sole arbitrator is appointed, it must be notified to the other side,
otherwise, his appointment cannot be considered valid.

Appointment of presiding arbitrator:

As soon as the arbitrators accept their appointments and communicate
with each other the reference, they are presumed to have entered upon
the reference. When one of the arbitrators refuses to act or concur on the
appointment of a third arbitrator, there is a disagreement and in such as
case, the Chief Justice of the High Court is competent to make the
appointment of the presiding arbitrator.

Conclusion:
The arbitrator should be chosen carefully because of his special
knowledge of the subject matter which is in dispute. He should be able to
keep the atmosphere clear at the tribunal and must be free from forensic
eloquence and to see that the evidence in the manner customary in the
court of law and equity. He must give attention to the facts in dispute
placed before him and his decision should be practical and impartial and
in the best interest of justice, good conscience, and equity
4. An invitation for conciliation proceeding - Notice under Section 62 of the
Arbitration And Conciliation Act, 1996.

Arbitration and Conciliation Act 1996: All about Conciliation Proceedings

Litigation in India can be endless, therefore foreign corporations seeking to do

businesses in India takes adequate precaution at the outset. In any democratic
society for protecting and enhancing the rights of the people, Desire for quick and
affordable justice is universal. Denial of 'timely justice' amounts to denial of 'justice'
itself. Two are integral to each other. Timely disposal of cases is essential for
maintaining the rule of law and providing access to justice which is a guaranteed
fundamental right.

However, as the present report indicates, the judicial system is unable to deliver
timely justice because of huge backlog of cases for which the current judge strength
is completely inadequate. On an average a court takes more than decade to decide
a civil suit, which ultimately results in 'justice delayed is justice denied.' Since
independence, Indian judiciary has suffered from an overwhelming backlog of
cases. Further, complexities and inadequacies of court redressal mechanism leads
to zeal for Alternative Dispute Resolution Mechanism.

It is the judiciary which plays an important role besides legislative and executive
body and India is not an exception. Desire for quick and affordable justice is
universal. Justice should be speedy, simple, cheap, affective and substantial.
Conciliation is an alternative dispute resolution mechanism which has been given
statutory recognition by incorporating provisions in Sections 61 to 81 of Part III of
the Arbitration and Conciliation Act, 1996.

Meaning
Part 3rd of the Arbitration and Conciliation Act, 1996. deals with conciliation.
Conciliation means the settling of disputes without litigation. Conciliation is a
process by which discussion between parties is kept going through the participation
of a conciliator. The main difference between arbitration and conciliation is that in
arbitration proceedings the award is the decision of the Arbitral Tribunal while in the
case of conciliation the decision is that of parties arrived at with the assistance of
the conciliator.

The law relating to conciliation has been codified for the first time in India on the
pattern of UNCITRAL Conciliation Rules.

Definition
Conciliation is an alternative dispute resolution mechanism with the help of
conciliator. Conciliator assists the disputing parties to explore potential solutions and
find a mutually acceptable solution by lowering tensions and improving
communications. Conciliation is an alternative dispute resolution mechanism which
has been given statutory recognition by incorporating provisions in Sections 61 to
81 of Part III of the Arbitration and Conciliation Act, 1996.

Conciliation is a process in which the parties to a dispute, with the assistance of a

dispute resolution practitioner (the conciliator), identify the issues in dispute,
develop options, consider alternatives to reach an agreement. The term conciliation
is not defined in the Act. However, simply put conciliation is a confidential, voluntary
and private dispute resolution process in which a neutral person helps the parties to
reach a negotiated settlement.
Objective:

 The purpose of conciliation proceedings is to reach an amicable, swift and

cost-efficient settlement of a dispute.
 If the parties to a dispute formally agree to submit it to conciliation, ICMA
assigns a member of its panel of conciliators as conciliator to the case. The
members of this panel are persons of high integrity with wide experience of
the international capital market. They are appointed by ICMA's executive
committee on an annual basis.
 The place of the conciliation proceedings is to be agreed upon by the parties,
failing which it is determined by the conciliator.
 The conciliator hears the case and then recommends a settlement proposal to
the parties. Following a settlement, or, if no settlement can be reached, the
conciliator closes the conciliation proceedings and notifies ICMA and the
parties accordingly.
 The costs of conciliation proceedings, including the remuneration of and the
costs incurred by the conciliator as well as ICMA , are normally borne in equal
parts by the parties concerned.

Historical Background
Conciliation is as old as the Indian history. In Mahabharata when both parties were
determined to resolve the conflict in battle fields, Lord Krishna made efforts to
resolve the conflict. Now also, the panchayat system works in the villages. The
Indian system places a lot of importance on resolution of disputes by negotiation
which is purely conciliatory. Conciliation is essentially a consensual process. Under
the Arbitration and Conciliation Act, 1996, it has the statutory sanction.

The best example where conciliation played an integral role is of the highly
politically sensitive case of the Beagle channel dispute over the ownership of certain
islands in the entrance to the channel between Chile and Argentina. The mediator
was the Vatican. The process was remarkable because it was flexible enough to
accommodate the changing political environments in both countries and the
mediator used a range of tools to great advantage. This process served to protect a
fragile peace between the countries and ultimately allowed them to create an
agreement that has lasted until this day.

Provisions relating to Conciliation

The procedure to be followed in the conciliation proceedings are mentioned in
sections 62 to 81 of the Arbitration and Conciliation Act of 1996. We will be looking
at the few important sections to be followed in initial stage of the conciliation
proceedings.
1) The party initiating conciliation shall send to the other party a written invitation to
conciliate under this Part, briefly identifying the subject of the dispute.
2) Conciliation proceedings shall commence when the other party accepts in writing
the invitation to conciliate.

Commencement of the proceedings of Conciliation (Section 62)

Section 62 provides for the commencement of proceedings for conciliation. For the

purpose of settling the dispute through the process of conciliation all what is

required is a proposal in writing and its acceptance thereof. When a proposal is

made by one party the other party has the option of the acceptance of proposal or

its rejection.

Rejection does not always have to be expressed it may be implied. If the party who

sends the proposal does not receive any follow up or reply within a period of thirty

days or other stipulated period it shall amounts to rejection and hence the process

of conciliation will not commence.

62(1): says the party needs to send a written invitation to the other party with a brief

about the disputes and for what type of dispute the party is asking for conciliation.

62(2): says the conciliation proceeding will only take place when the other party accepts
the written invitation of being tried through conciliation.

62(3): says if the other party rejects the written invitation of being tried through
conciliation then the matter will not be decided through conciliation.

62(4): if the invitation is not accepted within 30 days of the day he (initiating party)
sends the invitation or didn’t get a reply within the time prescribed in the written
invitation then the party is free to assume that his invitation stands rejected by the party
and has to inform about the rejection of an invitation to the other party accordingly.

Number of conciliators (Section 63)

Once the proposal is accepted by the other party the next important step is to have
a conciliator. Section 63 of the 1996 act provides that there under usual
circumstances there will be only one conciliator. And in no case the number of
conciliators shall exceed three [section 63(2)] which is the maximum limit and the
general rule is that they shall act jointly

Appointment of conciliators (Section 64)

There are two ways that are provided for the appointment of conciliators:

1. First, the parties may on a mutual agreement appoint the conciliator according
to the guidelines provided in section 64 (I):

a. A sole conciliator:The parties may with their understanding mutually

agree upon the name of the sole conciliator;
 b. Two conciliators: according to this provision each of the party may
appoint one conciliator;
c. Three conciliators: according to this a third conciliator may be appointed
who will act as the presiding conciliator.

2. Second, the parties may take advice and take assistance of an institution or
person for the appointment of conciliators.

Section 65: It deals with Submission of statements by the parties to conciliator.

Section 66: This section provides that Conciliator is not bound by the procedures
envisaged in CPC , or Evidence Act.

Section 67: This section talks about the role of a Conciliator. These roles include
acting impartially, fairly, independently and strive towards reaching an amicable
resolution of the dispute.

Section 69: This section deals with the communication between the parties and the
conciliator.

Section 71: This section provides that that the parties should act in good faith and
co-operate with the Conciliator

Section 73: This section provides for the provision of the Settlement agreement and
its components.

Section 75: This sections deals with the important principle of Confidentiality.

Section 76: This section talks about the termination of proceedings which can be
done by the signing of the settlement agreement or by a declaration by a written
declaration of a party to other party.

Section 78: It talks about the costs that are included in the conciliation proceedings.

Section 81: This section deals with evidence and its admissibility of certain kinds of
evidence which cannot be used in other proceedings like proposals made by the
conciliator or the fact that the other party was willing to accept a proposal.

Sections 62: 81 of the Arbitration and Conciliation Act thus provide a complete and
a comprehensive procedure for Conciliation.From initiation of the process of
Conciliation to the settlement of dispute , evidence , roles of Conciliator etc. are
completely covered in the aforesaid sections.

Famous Conciliation Cases in India

 Case: Gujarat Ambuja Cement Pvt. Ltd. v. U.B. Gadh

 Petitioner : Gujarat Ambuja Cement Pvt. Ltd. v/s Respondent : U.B. Gadh

Facts:
The petitioner has challenged an award passed by the labour court.
Issue:
When do the conciliation proceedings begin when ambiguity is there?
Held:
There are two separate procedures for conciliation proceedings. The first instance,
where a notice of strike is given by the workers. Rule 76 and 77 provide for the
same. Under Rule 76 the conciliation officer attempts to:

 Interview both the employer and employee

 Aim to settle the dispute

Rule 11 covers conciliation proceedings in situations not covered by Rule 76 and

77.

 Case: Subhashbhai Bhanabhai Patel And Others v. State Of Gujarat And

Others
 Petitioner : Subhashbhai Bhanabhai Patel
 Respondent : State of Gujarat, Reliance Industries Limited

Facts:
The conciliation proceedings between the Union and Reliance Industries Limited did
not succeed. Then the Conciliation Officer drew a failure report. However, the report
was not submitted to the third respondent, State of Gujarat. The dispute was
pending. The statutory authority also did not act according to law. Under section
33A of the Industrial Disputes Act, the authorities refused to register the complaint.
The Industrial Tribunal was to be notified about it. Under article 226 of the
constitution, the respondents filed a writ petition.

The appellants were dismissed from the respondent's company. They were
demanding a higher amount for signing a long-term agreement. A new executive
body was elected in 2002. The appellants did not contest the said election. Thus,
they ceased to be the member of the Executive body. They also misrepresented
themselves in court to get favourable orders.

Issue:

 Whether prior approval is required to dismiss a workman who was previously

an office-bearer of Union?
Held:
The court dismissed the appeal. It was held that "if a workman ceased to be office-
bearer of Union, then his dismissal does not require approval under section 33(2)(b)
of the Act."

 Case: M/S Imi Norgren Herion (Pvt.) Ltd. v. Labour Court, U.P. Noida, And
Ors.
 Petitioner : M/S Imi Norgren Herion (Pvt.) Ltd.
 Respondent : Labour Court, U.P. Noida

Facts:
The petitioner had terminated the respondent's contract. Both the parties agreed to
reconcile. The conciliation proceedings started in 2015. The respondent withdrew
his claim in the conciliation proceedings to avoid litigation. Both the parties settled
the matter. It was also registered. Additionally, the petitioner paid Rs. 3,45,376 to
the respondent for settlement. Thus, the petitioner contended that by entering into
an agreement the respondent could not start a conciliation case.

Issue:

 Whether the respondent has any further claim after settlement?

Held:
The court referred to various sections of the Payment of Wages Act, 1936. Under
section 6-D of the Act, [4] the proceedings before the Labour Court or tribunal shall
be deemed to have commenced on the date of reference of the dispute to
adjudication and concluded on the date on which the award becomes enforceable
under section 6-A.[5]

The tribunal has the authority to decide the jurisdiction once the reference for
adjudication is made. Neither the conciliation officer has the authority to decide the
jurisdiction based on the merits of the case. The registered settlement between the
parties denotes that the dispute came to an end. There lies no merit in the instant
petition by the respondent. Thus, the court dismissed the petition.

Summary and Concluding Remarks

In any democratic society for protecting and enhancing the rights of the people, it is
the judiciary which plays an important role besides legislative and executive body
and India is not an exception. However, for any progressive society, dispute should
be resolved so far as possible at minimum cost both in terms of money and time
and justice should be speedy, simple, cheap, and substantial. Having dissatisfied
with the formal and adversarial justice system by court, alternative dispute
resolution mechanism was evolved which gives people involvement in the process
of resolving their dispute.

Conciliation is extra judicial, means to settle disputes in a friendly manner. In a

developing country like India, where the backlog of the court is keeps on mounting,
conciliation can pay an important role in reducing the burden of the courts.
However, even two decade after enactment of Arbitration & Conciliation Act 1996,
the Act has failed to serve the purpose what its legislators intended it to be. Besides
reducing the burden on the Courts and giving speedy justice to people, alternative
dispute resolution mechanism has been introduced for a number of other reasons.
Alternative disputes resolution mechanisms are relatively inexpensive in comparison
with the ordinary legal process. These mechanisms, therefore, help litigants who are
unable to meet the expenses involved in the ordinary process of dispute resolution
through Courts. Furthermore, ADR mechanisms enhance the involvement of the
community in the dispute resolution process. Conciliation offers a more flexible
alternative to arbitration as well as litigation, for resolution of disputes in the widest
range of contractual relationships, as it i is an entirely voluntary process.

Our judicial system is neither ineffective nor alone responsible for huge backlog of
pending cases. We must not forget the increased inflow of cases in all courts of the
country. Litigation is not the only means of resolving disputes. We need to re-look
and strengthen our own available alternative mechanism with positive framework.

Conciliation is unquestionably a better option than arbitration as the experience in

past few years has shown that arbitration is neither inexpensive nor time saving. In
cases where court has been given the authority to review the outcome, the
advantage does not appear to be real on account of first spending time before the
arbitration tribunals and then in courts. Conciliation is a more amicable way to settle
disputes without harming the personal relations as well. Thus, the pros of
Conciliation are categorically more than arbitration which asserts my stand that it is
for the better.
5. An Application for Enforcement of A Foreign Award

Introduction
An arbitral award refers to the decision of an arbitral tribunal, whether in
a domestic or international arbitration, including any interim awards
thereunder. In India, enforcement and execution of arbitral awards are
governed both by the Arbitration and Conciliation Act, 1996 and the Code
of Civil Procedure, 1908. This article aims to look at the manner and
procedure by which these arbitral awards, which are passed or laid down
outside our territorial limits, are enforced in India. The process for the
same is one that is mired in complexities and takes a lot of time to be
enforced and as shall be seen below, been muddled by judicial decisions
on the matter.

Frameworks for enforcement of arbitral awards

The primary framework as regards the enforcement of arbitral awards is
the 1958 United Nations Convention on the Recognition and Enforcement
of Foreign Arbitral Awards, also known as the New York Convention. The
Convention facilitates the enforcement of arbitral awards in all the
contracting states, that is, those nations which are a party to and are
signatories to the Convention, one among which is India. Prior to the
New York Convention, enforcement of arbitral awards of another country
in the jurisdiction of another State was provided for in the Geneva
Protocol on Arbitration Clauses, 1924 as well as the Geneva Convention
on the Enforcement of Awards of 1927.

The laws of India, as a result of India being a signatory to both the New
York as well as the Geneva Conventions, have primarily always provided
for enforcement, within the local territory of India, of foreign arbitral
awards. Examples of these include the laws such as the Arbitration
(Protocol and Convention) Act, 1937 and the Foreign Awards
(Recognition and Enforcement) Act, 1961 which were in tune with the
Geneva and New York Convention, in that they provided for enforcement
of foreign arbitral awards in India, provided that the parties have
consented to the dispute being settled in the as per the law of the place
chosen for the proceeding. However, today, the law that is in force is the
Arbitration and Conciliation Act of 1996, enacted both on the UNCITRAL
Model Law on Arbitration as well as to revamp and replace the 1937 and
1961 laws on the same. Thus, today, it is the 1996 Act that provides for
the enforcement of foreign arbitral awards in India.

Further, the Code of Civil Procedure of 1908 does also play in the role in
the enforcement of foreign awards in India. The arbitral award has been
accorded the status of a decree and thus the procedure that applies to
set aside or challenging of a decree applies in equal measure to an
arbitral award.
Enforcement of awards under the Arbitration and Conciliation Act,
1996.
As the Arbitration and Conciliation Act of 1996 (hereinafter referred to as
the ‘Act’), is the prime legislation behind the enforcement of foreign
awards, it is essential to understand how the awards are enforced under
the Act. One of the declared objectives of the Arbitration and Conciliation
Act, 1996 is that every final award is to be enforced in the same manner
as the decree of the Indian court would be.

The Act has two parts- Part I and Part II, each of which deal with the
enforcement of different type of foreign arbitral awards. Part I, modelled
on the UNCITRAL Model Law, provides for the enforcement of arbitral
awards that are not covered under the ambit of either the New York or
the Geneva Conventions. As laid down by the apex Court, Part I of the
Act applies to foreign awards that are governed neither by the New York
nor the Geneva Convention. Such enforcement of awards can be
challenged in cases wherein the award is contrary to either the
fundamental policy or interest of India or is patently illegal.

Part II of the Act is in tune with the provisions of the New York
Convention. As per Section 46 of the Act, the provisions of Part II applies
if the arbitral award is in pursuance of arbitration agreement under the
Convention and the award is made in those States or in within the
territorial limits of such place that has been notified by the Government
of India. Such recognition of a foreign State is done through means of a
notification by the Government of India that arbitral awards in those
places are eligible to be enforced in India with respect to the parties to
the agreement.

However, there are certain circumstances where even if the agreement is

one that is valid as per Indian law and meets the requirements, it shall
not be enforced on the following grounds if the Court is satisfied that:-

 Parties to the agreement either are incapable of being parties to

the agreement for reasons such as law applicable for the award
vis a vis the Indian law.
 Party was not given adequate notice to present his case as
regards the arbitration proceedings or the appointment of the
arbiter.
 Award deals with matters beyond the scope of the arbitration
agreement.
 Composition of the Arbitral Authority or Procedure was not in
conformity with the agreement of the parties or the law of the
land where the arbitration took place.
 Award is not binding on the parties or has been set aside by a
competent authority where the award was made.
Further, as regards the Geneva Convention. Part II of the Act still
contains provisions from the 1937 Act which provide for enforcement of
awards under the Geneva Convention, in the same manner, as the New
York Convention.
Procedure for enforcement of awards
At the outset, it is upon the losing party to object to the arbitral award
and file an application for setting it aside. However, if the objections to
the award are not sustained or if no objections are filed within the time
limit, the award itself becomes enforceable as a decree of the court.

An award can be challenged and set aside only by way of an application

under Section 36 of the Act and only the basis of the circumstances listed
under it. An application for setting aside an award must be made within
three months of receipt of the award by the applicant subject to a further
extension of 30 days on sufficient cause being shown. An application
beyond this period is time-barred and further delay cannot be condoned.
The party, after the expiry of the time for setting aside the arbitral
award, as mentioned above, can file an application for execution before
the court of the competent jurisdiction for the enforcement of the arbitral
award

The different types of awards which are enforceable include Money

Award, Award Containing Injunction and a Declaratory Award.

Jurisdiction
For the purposes of the Arbitration and Conciliation Act, 1996, ‘court’
means the principal Civil Court having original jurisdiction to decide the
question forming the subject matter of the arbitration if the same were a
subject matter of a suit. The aggrieved party can, thus, bring its
application to set aside the award before the court where the successful
party has its office or where the cause of action in whole or in part arose
or where the arbitration took place.

Time limit
Any application filed under Section 34 of the Act for setting aside the
award must be made within 3 months from receipt of the same. This
period can be extended by the court by a further period of 30 days on a
sufficient cause being shown, but not thereafter. The court normally
allows a wide scope to the meaning of what constitutes ‘sufficient cause’
and if it is convinced of the genuineness of the delay in filing an, the
delay is condoned.

Format of application filed before the court

An application is filed before the court of the competent jurisdiction
seeking enforceability and execution of the award. The application should
state all the important facts and issues framed by the arbitral tribunal
and findings of the arbitral tribunal. The claim as awarded should be
mentioned and specifically the extent to which the award for enforcement
id sought. The documents required for the same, include the original
award or authenticated copy of the award as well as an original or duly
certified copy of the original arbitration agreement.
Conclusion
At this juncture, it must be understood that although there exists a
procedure for the enforcement of foreign arbitral awards in India, such is
not a smooth and efficient one and has come in for severe criticism. One
of the main criticisms is the fact that it is not at all possible to be
enforced in a quick and speedy manner as the Act stipulates that the
award can be enforced only once the time available for the Court to
strike down the award has passed. This is extremely inconvenient and
one that leads to inordinate delays in the enforcement of arbitration
agreements as concerns Indian Parties. Further, the significant role that
the Courts play in what is essentially an alternative to the traditional
judicial system is also a bone of contention for many.

To conclude, it can be stated that the Indian Legal System does indeed
have a well laid down and established the procedure for the enforcement
of foreign awards in India. However, there is a rising need to reform the
same in order to make it more business-friendly and lessen the burden
on our already overworked judiciary.
6. Report on interaction sessions on Alternate Dispute Resolution system

Introduction
Indian judiciary is one of the oldest judicial system, a world-renowned
fact but nowadays it is also well-known fact that Indian judiciary is
becoming inefficient to deal with pending cases, Indian courts are
clogged with long unsettled cases. The scenario is that even after setting
up more than a thousand fast track Courts that already settled millions of
cases the problem is far from being solved as pending cases are still
piling up.

To deal with such a situation Alternative Dispute Resolution (ADR) can be

helpful mechanism, it resolves conflict in a peaceful manner where the
outcome is accepted by both the parties.

Alternative Dispute Resolution

The concept of Alternative Dispute Resolution (ADR) mechanism is
capable of providing a substitute to the conventional methods of
resolving disputes. ADR offers to resolve all type of matters including
civil, commercial, industrial and family etc., where people are not being
able to start any type of negotiation and reach the settlement. Generally,
ADR uses neutral third party who helps the parties to communicate,
discuss the differences and resolve the dispute. It is a method which
enables individuals and group to maintain co-operation, social order and
provides opportunity to reduce hostility.

Importance of ADR in India

To deal with the situation of pendency of cases in courts of India, ADR
plays a significant role in India by its diverse techniques. Alternative
Dispute Resolution mechanism provides scientifically developed
techniques to Indian judiciary which helps in reducing the burden on the
courts. ADR provides various modes of settlement including, arbitration,
conciliation, mediation, negotiation and lok Adalat. Here, negotiation
means self-counseling between the parties to resolve their dispute but it
doesn’t have any statutory recognition in India.

ADR is also founded on such fundamental rights, article 14 and 21 which

deals with equality before law and right to life and personal liberty
respectively. ADR’s motive is to provide social-economic and political
justice and maintain integrity in the society enshrined in the preamble.
ADR also strive to achieve equal justice and free legal aid provided under
article 39-A relating to Directive Principle of State Policy(DPSP).
Few important provisions related to ADR
 Section 89 of the Civil Procedure Code, 1908 provides that
opportunity to the people, if it appears to court there exist
elements of settlement outside the court then court formulate the
terms of the possible settlement and refer the same for:
Arbitration, Conciliation, Mediation or Lok Adalat.
 The Acts which deals with Alternative Dispute Resolution are
Arbitration and Conciliation Act, 1996 and,
 The Legal Services Authority Act, 1987

Advantages of Alternative Dispute Resolution

 Less time consuming: people resolve their dispute in short period
as compared to courts
 Cost effective method: it saves lot of money if one undergoes in
litigation process.
 It is free from technicalities of courts, here informal ways are
applied in resolving dispute.
 People are free to express themselves without any fear of court of
law. They can reveal the true facts without disclosing it to any
court.
 Efficient way: there are always chances of restoring relationship
back as parties discuss their issues together on the same
platform.
 It prevents further conflict and maintains good relationship
between the parties.
 It preserves the best interest of the parties.

Various modes of Alternative Dispute Resolution

Arbitration
The process of Arbitration cannot exist without valid arbitration
agreement prior to the emergence of dispute. In this technique of
resolution parties refer their dispute to one or more persons called
arbitrators. Decision of arbitrator is bound on parties and their decision is
called ‘Award’. The object of Arbitration is to obtain fair settlement of
dispute outside of court without necessary delay and expense.

Any party to a contract where arbitration clause is there, can invoke

arbitration clause either himself or through their authorized agent which
refer the dispute directly to the arbitration as per the Arbitration clause.
Here, arbitration clause means a clause that mention the course of
actions, language, number of arbitrators, seat or legal place of the
arbitration to be taken place in the event of dispute arising out between
the parties.
  Initially, applicant initiates an arbitration by filing a statement of
claim that specifies the relevant facts and remedies. The
application must include the certified copy of arbitration
agreement.
 Statement of claim is a written document filed in the court or
tribunal for judicial determination and a copy also send to the
defendant in which claimant described the facts in support of his
case and the relief he seeks from the defendant.
 The respondent reply to the arbitration by filing an answer against
the arbitration claim of claimant that specifies the relevant facts
and available defenses to the statement of claim.
 Arbitrators selection is the process in which the parties receive
lists of potential arbitrators and select the panel to hear their
case.
 Then there is the exchange of documents and information in
preparation for the hearing called ‘Discovery’.
 The parties meet in persons to conduct the hearing in which the
parties present the arguments and evidences in support of their
respective cases.
 After the witnesses examined and evidences are presented, then
there in conclusion arbitrator gives an ‘Award’ which is binding on
the parties.
Now the intricacies of the proceedings vary with the arbitration
agreement. For example, there could be a timeline which must be
followed. This timeline would be stipulated in the agreement.

Section 8 of Arbitration and Conciliation Act, 1996 provides if any party

disrespects the arbitral agreement and instead of moving to arbitration,
moves that suit to civil court, other party can apply the court for
referring the matter to arbitration tribunal as per the agreement but not
later the submission of the first statement. The application must include
a certified copy of arbitration agreement and if courts satisfy with it, the
matter will be referred to arbitration.

Mediation
Mediation is an Alternative Dispute resolution where a third neutral party
aims to assist two or more disputants in reaching agreement. It is an
easy and uncomplicated party centered negotiation process where third
party acts as a mediator to resolve dispute amicably by using appropriate
communication and negotiation techniques. This process is totally
controlled by the parties. Mediator’s work is just to facilitate the parties
to reach settlement of their dispute. Mediator doesn’t impose his views
and make no decision about what a fair settlement should be.

THE PROCESS OF MEDIATION WORKS IN VARIOUS STAGES. THESE

ARE ,
 Opening statement
 Joint session
  Separate session and,
 Closing
At the commencement of mediation process, the mediator shall ensure
the parties and their counsels should be present.

 Initially in the opening statement he furnishes all the information

about his appointment and declares he does not have any
connection with either of parties and has no interest in the
dispute.
 In the joint session, he gathers all the information, understand
the fact and issues about the dispute by inviting both the parties
to present their case and put forward their perspective without
any interruption. In this session, mediator tries to encourage and
promote communication and manage interruption and outbursts
by the parties.
 Next is separate session, where he tries to understand the dispute
at a deeper level, gathers specific information by taking both the
parties in confidence separately.
 Mediator asks frequent questions on facts and discusses strengths
and weaknesses to the parties of their respective cases.
 After hearing both the sides, mediator starts formulating issues
for resolution and creating options for settlement.
 In the case of failure to reach any agreement through negotiation
in mediation, mediator uses different Reality check technique
like:

Best Alternative to Negotiated Agreement (BATNA)

It is the best possible outcome both the party come up with or has in
mind. Its suitable situation as each party thinks about their most
favorable scenario looks like.

Most Likely Alternative to Negotiated Agreement (MLATNA)

For a successful negotiation the result always lies in the middle, mediator
after considering both the parties comes up with most likely outcome.
Here result is not always in the middle but little left or right of the center
depending on negotiation situation.

Worst Alternative to Negotiated Agreement (WATNA)

It the worst possible outcome a party has in their mind for what could
happen during negotiation.

It may be helpful to the parties and mediator to examine the alternative

outside the mediation(specifically litigation) and discusses the
consequences of failing to reach agreement like: effect on the
relationship of the parties or effect on the business of the parties. It is
always important to consider and discuss the worst and most probable
outcomes, it’s not always people get the best outcome.
Mediator discusses the perspective of the parties about the possible
outcome at litigation. It is also helpful for the mediator to work with
parties and their advocates to come to a proper understanding of the
best, worst and most probable outcome to the dispute through litigation
as that would help the parties to acknowledge the reality and prepare
realistic, logical and workable proposals.
Conciliation
Conciliation is a form of arbitration but it is less formal in nature. It is the
process of facilitating an amicable resolution between the parties,
whereby the parties to the dispute use conciliator who meets with the
parties separately to settle their dispute. Conciliator meet separately to
lower the tension between parties, improving communication,
interpreting issue to bring about a negotiated settlement There is no
need of prior agreement and cannot be forced on party who is not
intending for conciliation. It is different from arbitration in that way.
Actually, it is not possible for the parties to enter into conciliation
agreement before the dispute has arisen. It is clear in Section 62
of The Arbitration and Conciliation Act, 1996 which provides,

 The party initiating conciliation shall send to the other party a

written invitation to conciliate under this part, briefly identifying
the subject of the dispute.
 Conciliation proceedings shall commence when the other party
accepts in writing the invitation to conciliate.
 If the other rejects the invitation, there will be no conciliation
proceedings.
Above provision clearly states conciliation agreement should be an
extemporary agreement entered into after the dispute has but not
before. Parties are also permitted to engage in conciliation process even
while the arbitral proceedings are on(section 30).

Lok Adalat
Lok Adalat is called ‘People’s Court’ presided over by a sitting or retired
judicial officer, social activists or members of Legal profession as the
chairman. National Legal Service Authority(NALSA) along with other
Legal Services Institutions conducts Lok Adalats on regular intervals for
exercising such jurisdiction. Any case pending in regular court or any
dispute which has not been brought before any court of law can be
referred to Lok Adalat. There is no court fees and rigid procedure
followed, which makes the process fast. If any matter pending in court of
referred to the Lok Adalat and is settled subsequently, the court fee
originally paid in the court when the petition filed is also refunded back to
the parties.
Parties are in direct interaction with the judge, which is not possible in
regular courts. It depends on the parties if both the parties agree on case
long pending in regular court can be transferred to Lok Adalat. The
persons deciding the cases have the role of statutory conciliators only,
they can only persuade the parties to come to a conclusion for settling
the dispute outside the regular court in the Lok Adalat. Legal Services
Authorities (State or District) as the case may be on receipt of an
application from one of the parties at a pre-litigation stage may refer
such matter to the Lok Adalat for which notice would then be issued to
the other party. Lok Adalats do not have any jurisdiction to deal with
cases of non-compoundable offenses.
7. A Request by one party to the other party Requesting that their Commercial
Dispute to be referred to Arbitration.

CHAPTER IV. JURISDICTION OF ARBITRAL TRIBUNAL

Article 16. Competence of arbitral tribunal to rule on its

jurisdiction

(1) The arbitral tribunal may rule on its own jurisdiction, including any
objections with respect to the existence or validity of the arbitration
agreement. For that purpose, an arbitration clause which forms part of a
contract shall be treated as an agreement independent of the other terms
of the contract. A decision by the arbitral tribunal that the contract is null
and void shall not entail ipso jure the invalidity of the arbitration clause.

(2) A plea that the arbitral tribunal does not have jurisdiction shall be
raised not later than the submission of the statement of defence. A party
is not precluded from raising such a plea by the fact that he has
appointed, or participated in the appointment of, an arbitrator. A plea
that the arbitral tribunal is exceeding the scope of its authority shall be
raised as soon as the matter alleged to be beyond the scope of its
authority is raised during the arbitral proceedings. The arbitral tribunal
may, in either case, admit a later plea if it considers the delay justified.

(3) The arbitral tribunal may rule on a plea referred to in paragraph (2)
of this article either as a preliminary question or in an award on the
merits. If the arbitral tribunal rules as a preliminary question that it has
jurisdiction, any party may request, within thirty days after having
received notice of that ruling, the court specified in article 6 to decide the
matter, which decision shall be subject to no appeal; while such a
request is pending, the arbitral tribunal may continue the arbitral
proceedings and make an award.

Article 17. Power of arbitral tribunal to order interim measures

Unless otherwise agreed by the parties, the arbitral tribunal may, at the
request of a party, order any party to take such interim measure of
protection as the arbitral tribunal may consider necessary in respect of
the subject-matter of the dispute. The arbitral tribunal may require any
party to provide appropriate security in connection with such measure.

CHAPTER V. CONDUCT OF ARBITRAL PROCEEDINGS

Article 18. Equal treatment of parties

The parties shall be treated with equality and each party shall be given a
full opportunity of presenting his case.

Article 19. Determination of rules of procedure

(1) Subject to the provisions of this Law, the parties are free to agree on
the procedure to be followed by the arbitral tribunal in conducting the
proceedings.
(2) Failing such agreement, the arbitral tribunal may, subject to the
provisions of this Law, conduct the arbitration in such manner as it
considers appropriate. The power conferred upon the arbitral tribunal
includes the power to determine the admissibility, relevance, materiality
and weight of any evidence.

Article 20. Place of arbitration

(1) The parties are free to agree on the place of arbitration. Failing such
agreement, the place of arbitration shall be determined by the arbitral
tribunal having regard to the circumstances of the case, including the
convenience of the parties.

(2) Notwithstanding the provisions of paragraph (1) of this article, the

arbitral tribunal may, unless otherwise agreed by the parties, meet at
any place it considers appropriate for consultation among its members,
for hearing witnesses, experts or the parties, or for inspection of goods,
other property or documents.

Article 21. Commencement of arbitral proceedings

Unless otherwise agreed by the parties, the arbitral proceedings in

respect of a particular dispute commence on the date on which a request
for that dispute to be referred to arbitration is received by the
respondent.

Article 22. Language

(1) The parties are free to agree on the language or languages to be

used in the arbitral proceedings. Failing such agreement, the arbitral
tribunal shall determine the language or languages to be used in the
proceedings. This agreement or determination, unless otherwise specified
therein, shall apply to any written statement by a party, any hearing and
any award, decision or other communication by the arbitral tribunal.

(2) The arbitral tribunal may order that any documentary evidence shall
be accompanied by a translation into the language or languages agreed
upon by the parties or determined by the arbitral tribunal.

Article 23. Statements of claim and defence

(1) Within the period of time agreed 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 such statements.
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.

(2) 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 such amendment having regard to the delay in making it.

Article 24. Hearings and written proceedings

(1) Subject to any contrary agreement 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. However,
unless the parties have agreed that no hearings shall be held, the arbitral
tribunal shall hold such hearings at an appropriate stage of the
proceedings, if so requested by a party.

(2) The parties shall be given sufficient advance notice of any hearing
and of any meeting of the arbitral tribunal for the purposes of inspection
of goods, other property or documents.

(3) All statements, documents or other information supplied to the

arbitral tribunal by one party shall be communicated to the other party.
Also any expert report or evidentiary document on which the arbitral
tribunal may rely in making its decision shall be communicated to the
parties.

Article 25. Default of a party

Unless otherwise agreed by the parties, if, without showing sufficient

cause,

(a) the claimant fails to communicate his statement of claim in

accordance with article 23(1), the arbitral tribunal shall terminate the
proceedings;

(b) the respondent fails to communicate his statement of defence in

accordance with article 23(1), the arbitral tribunal shall continue the
proceedings without treating such failure in itself as an admission of the
claimant's allegations;

(c) any party fails to appear at a hearing or to produce documentary

evidence, the arbitral tribunal may continue the proceedings and make
the award on the evidence before it.

Article 26. Expert appointed by arbitral tribunal

(1) 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;

(b) may 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 a 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.

Article 27. Court assistance in taking evidence

The arbitral tribunal or a party with the approval of the arbitral tribunal
may request from a competent court of this State assistance in taking
evidence. The court may execute the request within its competence and
according to its rules on taking evidence.

CHAPTER VI. MAKING OF AWARD AND TERMINATION OF

PROCEEDINGS

Article 28. Rules applicable to substance of dispute

(1) The arbitral tribunal shall decide the dispute in accordance with such
rules of law as are chosen by the parties as applicable to the substance
of the dispute. Any designation of the law or legal system of a given
State shall be construed, unless otherwise expressed, as directly
referring to the substantive law of that State and not to its conflict of
laws rules.

(2) Failing any designation by the parties, the arbitral tribunal shall apply
the law determined by the conflict of laws rules which it considers
applicable.

(3) The arbitral tribunal shall decide ex aequo et bono or as amiable

compositeur only if the parties have expressly authorized it to do so.

(4) In all cases, the arbitral tribunal shall decide in accordance with the
terms of the contract and shall take into account the usages of the trade
applicable to the transaction.

Article 29. Decision making by panel of arbitrators

In arbitral proceedings with more than one arbitrator, any decision of the
arbitral tribunal shall be made, unless otherwise agreed by the parties,
by a majority of all its members. However, questions of procedure may
be decided by a presiding arbitrator, if so authorized by the parties or all
members of the arbitral tribunal.

Article 30. Settlement

(1) If, during arbitral proceedings, 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.

(2) An award on agreed terms shall be made in accordance with the

provisions of article 31 and shall state that it is an award. Such an award
has the same status and effect as any other award on the merits of the
case.

Article 31. Form and contents of award

(1) The award shall be made in writing and shall be signed by the
arbitrator or arbitrators. In arbitral proceedings with more than one
arbitrator, the signatures of the majority of all members of the arbitral
tribunal shall suffice, provided that the reason for any omitted signature
is stated.
(2) The award shall state the reasons upon which it is based, unless the
parties have agreed that no reasons are to be given or the award is an
award on agreed terms under article 30.

(3) The award shall state its date and the place of arbitration as
determined in accordance with article 20(1). The award shall be deemed
to have been made at that place.

(4) After the award is made, a copy signed by the arbitrators in

accordance with paragraph (1) of this article shall be delivered to each
party.

Article 32. Termination of proceedings

(1) The arbitral proceedings are terminated by the final award or by an

order of the arbitral tribunal in accordance with paragraph (2) of this
article.

(2) The arbitral tribunal shall issue an order for the termination of the
arbitral proceedings when:

(a) the claimant withdraws his claim, unless the respondent objects
thereto and the arbitral tribunal recognizes a legitimate interest on his
part in obtaining a final settlement of the dispute;

(b) the parties agree on the termination of the proceedings;

(c) the arbitral tribunal finds that the continuation of the proceedings has
for any other reason become unnecessary or impossible.

(3) The mandate of the arbitral tribunal terminates with the termination
of the arbitral proceedings, subject to the provisions of articles 33 and
34(4).
8. Draft of an Application under Section 8 of the Arbitration And
Conciliation Act, 1996
Before the Court of Civil Judge, (Place)

Suit No ………of (Year)

In the matter of the Arbitration and Conciliation Act, 1996

AND
In the matter of the Arbitration Agreement dated the ……………ay of………20 …..

BETWEEN

A son of…………………………resident of…………………………Plaintiff, and

B son of…………………………resident of…………………………Defendant

The petition of above named defendant B sheweth

1. The plaintiff A has filed the above suit against this defendant for…………………………
The said dispute is, subject of an arbitration, agreement dated…………………………

2. By an agreement in writing dated …………………………and entered into by and

between the Plaintiff and Defendant above named at Bombay within the jurisdiction of
this Honourable Court, certified copy whereof is hereto annexed, it was agreed that the
manors in dispute or difference arising between the parties will be referred to the
arbitration of Shri ………………son of …………………resident of…………………
and Shri………………son of ………………resident of …………………………
(State the matters in difference between the parties)

3. This defendant has not filed his first statement before this court in the matter.

Your petitioner, therefore, prays for an order staying the proceeding of the suit and direct
the plaintiff to get the matter settled by arbitration in accordance with the arbitration
agreement.

I, A son of …………………………resident of………………………… solemnly affirm

and state that the
matters referred to in paragraphs 1 to 2 are true to my personal knowledge and belief.

Verified at…………………………………………day of……………20 ………

Defendant’s Advocate
Introduction
Section 8 of the Arbitration and Conciliation Act, 1996 deals with the
power of the judicial authority to refer the parties to arbitration. The crux
of the provision is that if there is an arbitration agreement between the
parties and a dispute arises between the parties which is a subject
matter of arbitration, then the judicial authority before whom either of
the parties has brought the case is obligated under Section 8 of the
Arbitration and Conciliation Act, 1996 to direct the parties to resolve their
dispute through arbitration. To amplify the scope of arbitration, the 2015
Amendment to Section 8 of the said Act mandates the judicial authority
to refer the parties to arbitration irrespective of any decree/court
order/judgment. This section is based on Section 34 of the
erstwhile Arbitration Act, 1940.

Nature of Section 8 of Arbitration and Conciliation Act,1996

Since the language of the provision is peremptory in nature, which means it cannot
be appealed, it is therefore mandatory for the civil court to refer the parties to the
arbitration. If there is any objection to the validity of the arbitration clause or
agreement, then the same can be challenged in the arbitration proceeding. This was
held by the Supreme Court in Hindustan Petroleum Corporation Ltd. vs. Pink City
Midway Petroleums (2003).

Essential ingredients of Section 8 of Arbitration and

Conciliation Act,1996
By the plain reading of the Section, it can be inferred that the following
are the essential ingredients of it-

1. There should be a valid arbitration agreement between the

parties.
2. Action should be brought before the judicial authority and that
action should be a subject matter of the arbitration.
3. Either of the parties or any person related to the dispute should
invoke the arbitration clause or agreement before the date of
submitting their first statement on the substance of the dispute
before the judicial authority.
4. The application of the party to refer the case to arbitration should
be filed with the original arbitration agreement or its duly certified
copy.

Meaning of ‘Party’
Section 2(1)(h) of the Arbitration and Conciliation Act, 1996 defines the
term “party” as a party to an arbitration agreement. These parties can
also be bodies of persons or incorporated persons like a company. For
the purpose of Section 8 of the said Act, the party should be the
disputing party/parties who have submitted their dispute for resolution
before the judicial authority.

Valid arbitration agreement between parties

Section 7(1) of the Arbitration and Conciliation Act, 1996 defines an
arbitration agreement as an agreement through which parties can resolve
their dispute which has arisen or may arise, by way of arbitration.

Essentials for the Arbitration agreement

1. According to Section 7(2) of the Arbitration and Conciliation Act,

1996, an arbitration agreement can be in the following forms:

1. As an arbitration clause in the agreement or

2. In a form of a separate agreement.
2. The arbitration agreement should be in writing [Section 7(3)]

3. In a contract where there’s a reference to a document that

contains the arbitration clause will be regarded as an arbitration
agreement only if the contract is in writing.

In the case of Garware Wall Ropes Ltd vs. Coastal Marine Construction
and Engineering Ltd. (2019) the court iterated that to examine the prima
facie validity of an arbitration agreement, the judicial authority needs to
determine the following:

1. Whether the arbitration agreement is in writing?

2. Whether the arbitration agreement was contained in the exchange
of letters, telecommunication, etc?
3. Whether the core contractual ingredients of the arbitration
agreement are satisfied?
4. Also, determine the arbitrability of the subject matter, which will
be discussed in the paragraph below.

Arbitrability of the subject matter of dispute

The Supreme Court of India in 2011 enlisted 6 categories of dispute
which are not arbitrable in the case of Booze Allen & Hamilton Inc. vs.
SBI Home Finance Ltd. and Ors.(2011) The list is as follows:

1. Disputes related to criminal offence or fraud,

2. matrimonial disputes,
3. guardianship matters,
4. insolvency and winding-up matters,
5. testamentary matters, and
6. eviction or tenancy matters.
Post the 2015 amendment, the Hon’ble Supreme Court of India further
added another category of matter which was non-arbitrable in the case
of Shri Vimal Kishor Shah & Ors vs. Mr. Jayesh Dinesh Shah &
Ors, (2016), the category is- disputes arising out of a Trust Deed. The
reasoning given by the court is that, since the execution of the trust deed
is done by the testator and not the beneficiaries, which makes the
beneficiaries non-parties to the trust deed, there exists no arbitration
agreement between them even though the trust deed had an arbitration
clause.

For determining the arbitrability of the subject matter, the Supreme

Court laid down the following test in the case of Vidya Drolia vs Durga
Trading Corporation (2020)-

“A. Disputes which relate to actions in rem, and do not pertain to

subordinate rights in personam that arise from rights in rem;

B. Disputes which affect third party rights; have erga

omnes (towards all) effect; require centralised adjudication, and mutual
adjudication would not be appropriate and enforceable;

C. Disputes relating to inalienable sovereign and public interest

functions of the State; and

D. Disputes which are expressly or by necessary implication non-

arbitrable as per mandatory statute”

Maintainability of a Section 8 application in Insolvency

Suits
Even before the enactment of the Insolvency and Bankruptcy Code,
2016 in India, the Apex Court in the case of Haryana Telecom Ltd. vs.
Sterlite Industries (India) Ltd (1999) held that the power to order the
winding up of a company of a commercially insolvent company is vested
in the Companies Act, 1956 and therefore concluded that
notwithstanding any agreement between the parties, an arbitrator has no
power to order the company to wind up.

Recently a landmark judgment was passed by the Supreme Court bench

of 3 judges, namely- CJI SA Bobde, Justices AS Bopanna and V.
Ramasubramanian in the matter of Indus Biotech Private Limited vs.
Kotak India Venture (Offshore) Fund(2021).

The court observed that during the pendency of proceedings

under Section 7 of the Insolvency and Bankruptcy Code, 2016 which
deals with the initiation of corporate insolvency resolution process by a
financial creditor, if the adjudicating authority is satisfied that the
corporate debtor has in fact defaulted, then any application for referring
the dispute to arbitration under Section 8 of the Arbitration and
Conciliation Act, 1996 would not be maintainable before the court.

Maintainability of a Section 8 application where fraud has

been alleged
In the case of Booz Allen, we saw that matters related to criminal
offences and fraud are not arbitrable. The question with regard to the
arbitrability of matters involving alleged fraud came up before the
Supreme Court of India in 2016 in the case of A Ayyasamy vs. A
Paramasivam & Ors.(2016). The Court held that a mere allegation of
fraud cannot be a ground to reject the application for reference to
arbitration under Section 8 but where the allegation is serious, then only
the civil courts will have jurisdiction to adjudicate it. Since in the
aforesaid case the allegations were not that serious, the hon’ble court,
reversing the order of the lower courts, allowed the application for
reference to arbitration.

First statement on the substance of dispute

and the limitation with respect to it
Section 8 provides that the party to arbitration merely needs to insinuate
the judicial authority about the arbitration clause before the filing of the
first statement. Thereafter, the judicial authority has to compulsorily
refer the parties to the arbitration. For invoking the arbitration
clause, Section 8 provides a time limit and within that limit, the parties
need to intimate the judicial authority about the arbitration clause, the
said limitation is described in the provision as “not later than the date of
submitting his first statement on the substance of the dispute.”

For analysing the aforementioned expression, let’s break it into two

parts-

1. ‘first statement on the substance of dispute’ [The first part]

2. ‘not later than the date of submitting’ [The second part]

‘First statement on the substance of dispute’

The Hon’ble Supreme Court of India in Rashtriya Ispat Nigam Ltd. vs.
Verma Transport Company (2006) deduced that the ‘First statement’
with respect to Section 8 should be different from the expression ‘written
statement’. Further, the court goes on to say that it is the duty of the
judicial authority to find whether the party has waived its right to invoke
arbitration by filing the first statement.

Whereas the High Court of Delhi in the case of Sharad P. Jagtiani vs.
Edelweiss Securities Limited(2014) held that in a suit generally the first
statement on the substance of the dispute is the ‘written statement’ filed
by the defendant in reply to the plaint and therefore, the written
statement could be regarded as the first statement on the substance of
the dispute.

Further, in the case of Greaves Cotton Ltd. vs. United Machinery and
Appliances (2016), the Apex Court held that an application for seeking an
extension of time for filing the written statement would not amount to
the ‘ First statement of the substance of dispute’.
In MI2C Security Facilities Pvt. Ltd. vs. North Delhi Municipal
Corporation (2018) the Delhi High Court adjudicated that if the party
has filed its first statement without any intimation of the arbitration
clause before the judicial authority then it would be presumed that the
party has waived off its right to invoke the arbitration clause as
per Section 8 of the Arbitration and Conciliation Act, 1996. In this case,
the defendant had filed a short affidavit as a reply to the writ petition
filed, the court held that since the affidavit filed was a reply, therefore it
was the first statement.

Through the analysis of the above judicial precedents, it can be deduced

that to constitute a statement as the first statement on the substance of
the dispute, the judicial authority needs to analyse the components of
the statement so filed by the defendant and the intention thereof. If the
statement is of the nature that it is defending the parties against the
plaint, then it would be the first statement, and where there’s no mention
of an arbitration clause or agreement in the first statement, it is implied
that the parties have submitted to the jurisdiction of the judicial
authority, relinquishing their right to arbitration.

‘Not later than the date of submitting’

The above expression sets a limit on the period within which the parties
must invoke the arbitration clause/agreement before the judicial
authority, which should be prior to the date of submitting the first
statement. The nitty-gritty of the expression can be understood clearly
with the help of some case laws.

In the matter of SSIPL Lifestyle Pvt. Ltd. vs. Vama Apparels (India) Pvt.
Ltd(2020), the Delhi High Court decided on the issues related to the time
limit for filing an application under Section 8. The court clarified that the
‘written statement required to be filed by the defendant party according
to Order VIII Rule 1 of the CPC would be the first statement on the
substance of the dispute, and the court further proceeded to state that
that limitation for filing of the written statement under CPC for non-
commercial suits, and for commercial suits under the Commercial Courts
Act, 2015 would be 90 days and 120 days respectively from the date of
summons. In that matter, the party intimated the court about the
arbitration clause after the expiry of 120 days. Hence, the court rejected
the reference to arbitration.

Previously the Supreme Court of India had iterated in M/s SCG Contracts
India Pvt. Ltd. vs. K.S. Chamankar Infrastructure Pvt. Ltd. & Ors (2019)
that in commercial suits the limit of 120 days is mandatory in nature and
not discretionary.

Conclusively, Section 8 fixes a time limit for the parties to file the first
statement, which is 90 days for civil original suits and 120 days for
commercial suits. It is during this period that the parties need to apply
for arbitration before the court, and if the parties fail to do so, it will be
deemed that they have waived off their right to arbitration. The intention
behind fixing the limit is to avoid unnecessary delay in commencing the
arbitral proceedings because the sole purpose of arbitration is to provide
a swift resolution of a dispute.
Obligation of the Judicial Authority to refer
the parties to arbitration
The words in Section 8-“Judicial authority… notwithstanding any
judgment, decree or order of the Supreme Court or any court, refer the
parties to arbitration unless it finds that prima facie no valid agreement
exists.” indicate that if all the conditions precedent are satisfied, then the
judicial authority is obligated to refer the parties to arbitration, and
subsequently ceasing the jurisdiction of the civil court in action brought
before it.

The same was iterated in the case of Agri Gold Exims Ltd. vs. Sri
Lakshmi Knits & Wovens Ltd (2007).

Requirement of original arbitration

agreement or its certified copy
Section 8(3) makes it mandatory for the parties to submit the original
arbitration agreement along with the application under Section 8 to seek
reference to arbitration.

The proviso to the above clause provides that when the party applying
for arbitration does not have the original agreement or the certified copy
thereof, but the other party has retained the agreement, then the onus
falls on the arbitration seeking party to file a petition before the court to
make the other party produce the original agreement.

Conditions precedent under Section 8 of Arbitration

and Conciliation Act,1996
Section 8(1) and 8(2) provides for the conditions that need to be
satisfied to refer the parties to arbitration, and if the conditions are
fulfilled, the court is obliged to stay the court proceedings and refer the
parties to the arbitration.

The following conditions were given by the Hon’ble Supreme Court of

India in the matter of

P. Anand Gajapathi Raju & Ors. vs. P.V.G. Raju (Died) & Ors (2000):

1. There must be an arbitration agreement or an arbitration clause

between the parties;
2. A party to the arbitration agreement files a case against the
other party before the judicial authority;
3. The subject matter of the case so filed must be the same as the
subject matter of the arbitration agreement;
4. The defendant or any other party related to the case moves the
Court seeking a reference of the parties to arbitration before the
submission of first statement on the substance of the dispute.
The above conditions stand true for both the pre-2015 and post-2015
amended versions of the provision.

Judicial precedents providing the factors to be considered before

entertaining an application under Section 8 of Arbitration and
Conciliation Act
Below are some issues that have been taken up by the courts that the
judicial authority can keep in mind before accepting any application
under Section 8–

 Whether Section 8 is applicable for civil disputes:

The Supreme Court in H. Srinivas Pai and Anr. vs. H.V. Pai (D) thr. L.Rs.
and Ors. (2010), said that “the applicability of the Act does not depend
upon the dispute being a commercial dispute and arbitrability depends
upon the existence of an arbitration agreement, and it does not matter
whether the dispute is a civil dispute or commercial dispute. There can
be arbitration agreements in non-commercial civil disputes”

 Whether the parties need to attach the original arbitration

agreement or its certified copy in accordance with Section 8(2)
for the grant of reference:
the Supreme Court held in Magma Leasing and Finance Limited and Anr.
vs. Potluri Madhavilata and Anr (2009). said that the original arbitration
agreement is a mandate.

 Another factor that the judicial authority might want to look into
would be whether the validity of the arbitration clause can be
challenged before the Court:
The aforesaid issue was raised before the Supreme Court in Hindustan
Petroleum Corpn. Ltd. vs. Pinkcity Midway Petroleums(2003). The Court
held that if the existence of the arbitration clause is notified to the court
then, the courts ought to refer the dispute to arbitration.

Grounds for rejection of the application under Section

8 of Arbitration and Conciliation Act, 1996
Apart from the unfulfillment of the condition precedent required
under Section 8, the judicial authority can reject the application on the
following grounds –

1. When it appears that the party has waived his right to invoke the
arbitration clause before submission of the first statement on the
substance of the dispute.
2. When the Judicial authority is of the view that no adequate relief
would be available to the party.
3. When the Court or the Judicial authority is satisfied that no
contract has been concluded between the parties.
4. When the contract itself is fraudulent in nature.
5. When the main contract is void ab initio or illegal or non-existent.
 6. Where the suits or claim is based on Hundies or on Negotiable
Instruments

2015 amendment to Section 8 of Arbitration and

Conciliation Act,1996
After receiving the assent of the President of India on 31 December
2015, the Arbitration and Conciliation (Amendment) Act, 2015 came into
force with effect on 23rd October 2015. Via this amendment the time
limit with respect to the filing of an application for seeking a grant of
reference to arbitration was set.

Prior to the 2015 amendment, the provision stated that “A judicial

authority before which an action is brought in a matter which is the
subject of an arbitration agreement shall, if a party so applies not later
than when submitting his first statement on the substance of the dispute,
refer the parties to arbitration.” Post amendment, the words ‘not later
than when submitting’ were replaced by ‘not later than the due date of
submitting’

The Delhi High Court in the case of Parasramka Holdings (P) Ltd. vs.
Ambience (P) Ltd. & Anr. (2018) analyzed in detail the difference
between the pre-amended provision and the post amended provision and
stated that although the pre-amendment act did have a limit for the
parties seeking arbitration, the limit was not certain and created a lot of
confusion. After the 2015 amendment, a definite time limit was set and
within that stipulated time limit, the parties need to apply for Section 8 of
the Arbitration and Conciliation Act, 1996.

Conclusion
Section 8 of the 1996 Act demonstrates a provision that limits judicial
intervention in the arbitration process. Through various judicial
precedents, it is clear that where there is a valid arbitration clause or
agreement between the parties and a party to the dispute notifies the
judicial authority regarding the same, then nobody can stop the party
from taking their matter to arbitration. The intent of the legislature
behind framing this statute is to encourage more and more parties to
resolve their disputes by way of arbitration.
9. Notice Under Section. 11 of Arbitration And Conciliation Act, 1996

Introduction
Section 11 of the Arbitration and Conciliation Act, 1996, deals with the provision of
appointment of arbitrators in an arbitration settlement. It provides for different
courses of action that parties to a dispute can take in order to appoint arbitrators.
Section 11 allows the parties to choose arbitrators by themselves by agreeing upon a
procedure for appointment. In case the parties cannot appoint arbitrators by
themselves, they can get arbitrators appointed through any one of the procedures
prescribed in Section 11. Over the years, the section has gone through several
changes via amendments in the years 2015 and 2019, substantially reducing the
influence of the judiciary in arbitration.

What is arbitration
Arbitration is essentially one of the methods of Alternative Dispute
Resolution (ADR) whereby a dispute between two parties is heard and
determined by a third party without involving the court. It allows parties
to seek an expeditious settlement of disputes in a manner similar to that
of litigation. However, unlike litigation, it takes place outside of the court
and the decision is final and cannot be reexamined. It results in the
declaration of an award which is similar to an order given by the court.
Matters concerning arbitration are governed by the Arbitration and
Conciliation Act, 1996.

Appointment of arbitrators under Section 11 of the Arbitration and

Conciliation Act

Clauses
1. The nationality of an arbitrator is not essential unless the parties
otherwise agree upon it.
2. The parties can also form an agreement on the procedure for
appointing arbitrators.
3. In case of failure to reach an agreement on the procedure of
appointment, clause (3) prescribes the following procedure for the
appointment of three arbitrators:
1. Each party appoints an arbitrator.
2. The two arbitrators then jointly appoint the third arbitrator, who
acts as the presiding arbitrator.
4. The Supreme Court and high courts have the power to designate
arbitral institutions. The arbitral institutions are graded by the
Arbitration Council of India under Section 43-I of the Act. If a high
court has no graded arbitral institution, the Chief Justice of the
concerned high court may maintain a panel of arbitrators and also
review it from time to time.
5. Clause 4 states that when the procedure mentioned in clause (3) is
applied, there are two conditions, which are the following:
 1. Each party must appoint an arbitrator within thirty days of
receiving the request from the other party to do so.
2. The two arbitrators must reach an agreement on appointing
the third arbitrator within thirty days from the date of their
appointment.
In case of failure of either of the two conditions, the
appointment shall be made by the arbitral institution
designated by the Supreme Court or a high court upon the
application or request of a party.

6. Clause 5 provides that in case of failure to reach an agreement on

the procedure of appointment, the parties must agree on appointing
a sole arbitrator within thirty days of receipt of the request by either
party.
If there is no such appointment within thirty days, an appointment
shall be made by the arbitral institution designated by the Supreme
Court or a high court upon the application or request of a party.

7. Clause 6 states that where an agreement on the appointment

procedure has been made by the parties, if
1. A party fails to act as prescribed by the procedure, or
2. The parties or the appointed arbitrators fail to reach an
agreement as prescribed by the procedure, or
3. The person or institution entrusted with a function by the
procedure fails to perform it, then the parties may
perform the alternative steps provided by the agreement,
if any. Or, an appointment shall be made by the arbitral
institution designated by the Supreme Court or a high
court upon the application or request of a party.

8. Designation by the Supreme Court or the high court shall not be

treated as a delegation of judicial power.
9. When the decision is given by the arbitral institution, it should be
done while considering the following factors:
1. Qualifications required for an arbitrator as per the
agreement of the parties,
2. Contents of disclosure and other considerations for
appointing an independent and impartial arbitrator
10. In cases where the parties belong to multiple nationalities and there
is a need to appoint a sole arbitrator or a third arbitrator, the
arbitral institution designated by the Supreme Court or a high court
may appoint an arbitrator of a nationality other than the
nationalities of the parties.
11. If there has been more than one request or application made to
several arbitral institutions during the application of any of the
aforementioned provisions, the arbitral institution receiving the first
request alone will be competent.
12. In matters concerning international commercial arbitration, only the
arbitral institution of the Supreme Court gets involved and not those
of the high courts.
13. An application or request for the appointment of arbitrators shall be
disposed of expeditiously by the arbitral institution. It shall be
disposed of within thirty days from the date of service of notice on
the opposite party.
14. When there is an involvement of a high court, it is always the high
court within whose local limits the principal civil court of the district
is situated.
15. The arbitral institution shall determine the fee and manner of its
payment to the arbitral tribunal after considering the rates
prescribed in the Fourth Schedule of the Act. However, the
explanation of this subsection provides that in the case of
international arbitration in non-commercial matters, the parties may
agree to determine fees as per the rules prescribed by an arbitral
tribunal.

Evolution of clauses in Section 11 of Arbitration and

Conciliation Act
1. Before the 2015 Amendment Act

 In situations where the parties did not make the appointment, it was made
by the Chief Justices of high courts or their designates. In matters of
international commercial arbitration, it was the Chief Justice of India who
made the appointments.

2. Important changes brought by the 2015 Amendment Act

 The amendment struck down the word “Chief Justice” with “Supreme Court
or high court”.
 By inserting Clause 6A and 6B, the role of judicial involvement was reduced
at the pre-arbitration stage. As per the new clause 6A, the Chief Justices had
to reduce their role to the examination of the existence of an arbitration
agreement. Clause 6B clarifies that designation does not amount to
delegation of judicial capacity.
 Through an amendment of Clause 7, it was added that it is not possible to
appeal against the decision of the court or its designate in any form. The
section had only stated that the decision is “final”, prior to this amendment.
The amendment made the finality of the orders more rigid compared to the
section prior to the amendment.
 The amendment specifically expressed contents of disclosure as a
requirement while appointing an arbitrator.
 Two new clauses were also added. Clause 13 provides for the expeditious
settlement of the application within sixty days, and Clause 14 provides that
the concerned high court has the power to determine the fees.

3. Changes brought by the 2019 Amendment Act

 The amendment made a significant change where it shifted the power of

appointment from the courts to the arbitral institutions designated by the
courts, thus institutionalising arbitration in India.
 It reduced the time period for expeditious settlement from sixty days to
thirty days.
 Clauses 6A and 7 were removed. Clause 6A was concerned with the judicial
examination of the existence of an arbitral agreement. Clause 7 provides
that the order of the court would be final and that there would be no appeal
against it.
  With the deletion of Clause 6A, it is clear that the arbitral institutions do not
have to confine their examination to the existence of an arbitral agreement
while appointing arbitrators.
 With the deletion of Clause 7, it can be interpreted that the order of
appointment given by the arbitral institutions can be challenged.

Scope of judicial intervention

1. Pre-2015 amendment

 In the case of National Insurance Co. Ltd. v. Boghara Polyfab (2008), the
Supreme Court categorised issues pertaining to arbitration into what the court
can interfere in and what the court may interfere in. The judgement also
specified the third category of issues that can only be decided by the arbitral
tribunal, which is essentially the sole arbitrator or panel of arbitrators appointed
as per Section 11. The categories of issues are listed below:

1. Issues that are to be decided by the Chief Justice or his designate:

1. Whether the high court approached by the party is appropriate.

2. Whether an arbitration agreement exists and whether the party making the application
is a party to the agreement.

2. Issues that may or may not be decided upon by the Chief Justice or his
designate:
1. Whether the claim is long barred or alive.

2. Whether the parties have concluded the transaction by recording their satisfaction or
receiving payment with no objection.

3. Issues to be decided solely by the arbitral tribunal:

1. Whether the claim is within the ambit of the arbitration clause.

2. Merits of any claim.

 In the cases of Deepak Galvanising & Engg Industries (P) Ltd v. Government of
India, (1997) and Continental Constructions Ltd v. National Hydroelectric Power
Corpn Ltd, (1998), it was held that once the parties fail to appoint arbitrators by
themselves, it leads to the forfeiture of their right to appoint. This gives the
right of appointment to the Chief Justice or his designate.

2. Post – 2015 amendment

 Judicial intervention was reduced by the insertion of 6A, whereby the courts had
to confine their role to the examination of the existence of an arbitration
agreement. The new section does not allow the court to conduct an examination
of its validity. This provision helps to avoid delays in the proceedings.
 In the case of Duro Felguera, S.A. v. Gangavaram Port Limited (2017), the
literal interpretation of Clause 6A was adopted, restricting the judicial
examination to the existence of an agreement. Additionally, the judgement laid
down the key to the determination of its existence, which is to examine whether
the agreement contains a clause providing for arbitration in case of dispute on
the agreement.
 Despite the restrictive nature of Clause 6A, the courts seem to have ignored it in
several judgements.
 In Garware Wall Ropes Ltd. v. Coastal Marine Constructions & Engg. Ltd. (2019),
the Supreme Court held that the agreement must be sufficiently stamped.
 In the case of Prime Market Reach Pvt. Ltd. v. Supreme Advertising Ltd. (2019),
the Delhi High Court refused to refer the parties to arbitration after finding that
the agreement was invalid as it did not abide by the requirements laid down in
Section 7 of the Act.
 3. Post-2019 amendment

 This amendment brought in significant change by shifting the responsibility of

appointment to arbitral institutions. This amendment significantly reduced
judicial intervention and institutionalised the system of arbitration.
 The reduction in the time period given for disposing of the applications not only
provides for expeditious settlement but also reduces the judicial involvement in
such applications.
 However, the drafting of this Amendment Act suffers a few deficiencies. There is
a lack of clarity regarding the power of the courts to review the panel of
arbitrators, and whether it extends to the ones maintained by the arbitral
institutions.

Other relevant judgements

 In the case of Vishram Varu and ors. v. Union of India (2022), the Supreme
Court held that an application made under Clause 6 of Section 11 is barred by
limitation. In this case, the arbitration clause was invoked nearly thirty-two
years after the emergence of the dispute.
 In the case of New Eureka Travels Club v. South Bengal State Transport
Corporation (2022), the Calcutta High Court held that an interested party can
neither be the arbitrator to a dispute or appoint an arbitrator to a dispute under
Section 11.

Conclusion
The appointment of arbitrators under Section 11 started with significant
involvement from the judiciary. However, it has now become the
responsibility of the arbitral institutions. It is evident that the 2019
Amendment Act has been a milestone in the evolution of Section 11,
which institutionalised the system of arbitration and which helped in truly
achieving the objective of reducing judicial intervention. However, the
drafting of the Act suffers from a few flaws. The amendments in 2015
and 2019 could be clearer in their wording, as the ambiguity leaves room
for more judicial intervention
10. Draft of an application for interim relief under section 17 of the Arbitration and
Conciliation act 1996

DEEDS & DRAFTS

APPLICATION FOR INTERIM RELIEF UNDER SECTION 17

Before the Hon'ble Sole Arbitrator/Arbitral Tribunal

In the Matter of Arbitration
Between
......................... Claimants;

Vs.

......................... Opposite Party.

Application for Interim Relief under Section 17 of the Arbitration &

Conciliation Act, 1996
The applicants/claimants above named beg to state as under:—
1. That the aforesaid arbitration proceedings were commenced pursuant to order
dated _____ of the Hon'ble Chief Justice appointing the Learned Arbitrator as
the sole arbitrator in the present case. Statement of claims was filed by the
claimants before this Hon'ble Arbitral Tribunal on _____. The claim is for a
sum of Rs ____, in exclusion to the pendentelite interest and future interest.
2. That ever since the respondents have put in appearance, a lame and hyper-
technical defense has been raised; and has been vigorously adhered to that
this Hon'ble Arbitral Tribunal lacks jurisdiction to adjudicate the claims.
3. That the applicant/claimant has reason to say so in as much as the
respondents are passing through a very grave financial crisis and due publicity
has been given in a section of the press that the liabilities of the respondents
far exceeds their assets.
4. That if during the pendency of the present arbitral proceedings the
respondents are able to succeed in their endeavour, the petitioner will be left
in the lurch, in case of an award being granted in its favour for which it has a
very sanguine hope.
5. That in the circumstances it is absolutely necessary that the respondents be
directed to furnish security by providing a fixed deposit receipts against the
amount of claims of the claimants and to deposit the same with this Arbitral
Tribunal otherwise these proceedings might be rendered futile. Significantly till
date there has been no denial by the respondents on merits of the claims of
the claimants.
PRAYER
Wherefore it is respectfully prayed that this Hon'ble Arbitral Tribunal may be
pleased to direct the respondents to furnish security in the form of fixed
deposits of like amount of the claims of the claimant/applicant with this Hon'ble
Arbitral Tribunal during the pendency of these arbitral proceedings and as per
the mandate of Section 17 of the Arbitration & Conciliation Act, 1996 in the
interest of justice.

(Name of Place)

Dated:

ADVOCATE

1. Introduction
Section 17 of the Arbitration and Conciliation Act, 1996 ("the Act") prescribes a
mechanism for parties to an arbitration, to seek interim reliefs from the arbitral
tribunal during the pendency of the arbitral proceedings. 1 Parties to an arbitration
may seek the said reliefs after invocation of the arbitration proceedings till the
passing of the award. The present article discusses the applicability, principles for
seeking interim reliefs and enforceability of orders under Section 17 of the Act,
pursuant to the amendments to the Act in 2015 and subsequently in 2019.

2. Amendments to Section 17 of the Act

Before the amendment of the Act by the Arbitration and Conciliation (Amendment)
Act, 2015 ("2015 Amendment Act"), an arbitral tribunal was like a toothless tiger as
its powers to pass orders were restricted in comparison to the wide powers vested
to courts under Section 9 of the Act. The limited scope of the unamended provision
of the Act has been discussed by the Supreme Court of India ("SCI") in Managing
Director, Army Welfare Organisation vs. Sumangal Services Pvt. Ltd.2, wherein
the SCI states, "that the power of the arbitrator is a limited one as it cannot issue
any direction which would go beyond the reference or the arbitration agreement.
Furthermore, an award of the arbitrator under the 1996 Act is not required to be
made a rule of court; the same is enforceable on its own force. Even under Section
17 of 1996 Act, an interim order must relate to the protection of subject matter of
dispute and the order may be addressed only to a party to the arbitration. It cannot
be addressed to other parties."

Section 17 of the Act was amended vide the 2015 Amendment Act and
implemented on 23 October 2015. The amended Section 17 of the Act specified the
types of reliefs which a party could seek, inter alia, appointment of a guardian,
securing the amount of dispute in the arbitration, preservation, interim custody or
sale of any goods or property which are the subject matter of the arbitration
agreement.3 The objective of amending Section 17 of the Act was to empower the
tribunal with the same powers as a civil court under Section 9 of the Act in relation
to the grant of interim measures. In this regard, the High Court of Judicature at
Madras ("MHC") in the matter decided on 17 September 2019, observed that the
power to pass interim measures imposes a discretion vested in the tribunal which
has to be exercised in consonance with the well settled principles governing the
grant of such reliefs by the civil court.4

The 2015 Amendment Act further provides that an order passed by the arbitral
tribunal under Section 17 of the Act would be deemed to be an order of the court
and is enforceable under the provisions of the Code of Civil Procedure, 1908
("CPC").5
It may also be noted that Section 17(1) of the Act empowered the arbitral tribunal to
pass an interim order even after it has made the award but before it is enforced
under Section 36 of the Act. However, upon passing of the award, the tribunal would
become functus officio, and cannot pass an interim order.6

Noticing this incongruity, the High Level Committee to Review the Institutionalisation
of Arbitration Mechanism in India under the chairmanship of Justice B.N. Srikrishna
in 2018, recommended the deletion of the expression "or at any time after making of
the arbitral award but before it is enforced in accordance with Section 36" from the
text of Section 17(1). This recommendation was implemented vide the Arbitration
and Conciliation (Amendment) Act, 2019 ("2019 Amendment Act") with effect from
30 August 2019.

Thus, the position post the 2019 Amendment is that the power under Section 17(1)
of the Act, though identical to Section 9(1) of the Act in content, is subject to the
restriction that it can be exercised by a tribunal only during the pendency of
proceedings before it.

3. Principles governing exercise of powers under Section 17 of the Act

Section 9 of the Act allows a party to seek interim measures from the court before
the invocation of arbitration, during the pendency or at any time after the award is
passed, but before it is enforced in accordance with Section 36 of the Act. Similarly,
Section 17 of the Act contains similar provisions for seeking interim reliefs before an
arbitral tribunal during the pendency of arbitral proceedings. Further, Section 19 of
the Act provides that the arbitral tribunal is not bound by the CPC, which is primarily
to allow an arbitral tribunal certain flexibility in its operation. However, the principles
governing the grant of injunctions, appointments of receiver etc. are a part of the
substantive law of the country. By virtue of Section 28(1)(a) of the Act, the tribunal is
bound to decide in accordance with the substantive law of India for the time being in
force. The various types of reliefs under Section 17 of the Act and the interplay of
provisions of the CPC have been in enunciated by MHC in Flywheel Logistics
Solutions Pvt. Ltd. vs. Hinduja Leyland Finance Ltd. & Ors. (supra) and are
discussed herein below:

i. Interim injunctions– The principles governing grant of interim injunctions are

no longer res integra. The SCI in Dorab Cawasji Warden vs. Coomi Sorab
Warden & Ors7 has set out the general guidelines for granting interim
injunctions:

a. The plaintiff has a strong case for trial. That is, it shall be of a higher
standard than a prima facie case that is normally required for a
prohibition injunction.
b. It is necessary to prevent irreparable or serious injury which normally
cannot be compensated in terms of money.
c. The balance of convenience is in favour of the one seeking such relief.

The MHC observed that these principles are law under Article 141 of the
Indian constitution and the arbitral tribunal as well as the courts would be duty
bound to follow them in letter and spirit.

ii. Appointment of Receivers- The SCI in Parmanand Patel vs. Sudha A.

Chowgule8 held that a receiver will be appointed under Order XL Rule 1 of the
CPC when the applicant establishes a prima facie case and presents a case
which would not only show the adverse and conflicted claims of property but
also an emergency, danger or loss demanding an immediate action. The
element of danger is an important consideration. A receiver would not be
appointed unless a case has been made out which may deprive the defendant
of a de facto possession. For the said purpose, conduct of the parties would
also be relevant. The SCI in Dev Prakash and Ors. vs. Indra and Ors,9 held
 that the very purpose of a temporary injunction and receivership is to protect
the property from acts of waste, damage and alienation during the pendency
of the suit. The SCI in Adhunik Steels Ltd. vs. Orissa Manganese and
Minerals Pvt. Ltd.10 has settled the law that the appointment of a receiver in
exercise of powers under Section 9 of the Act can be done only if the case is
brought within the accepted principles under the CPC. Similarly, the MHC
in Flywheel Logistics (supra) noted that the above would be applicable to
arbitral tribunals under Section 17 of the Act.
iii. Power to order sale of property - Section 9(1)(ii)(a) of the Act empowers the
court to order the sale of the goods which are the subject matter of an
agreement. An identical power is available to the arbitral tribunal under
Section 17(1)(ii)(a). In L & T Finance Ltd. vs. G.G. Granites 11 the MHC
observed that these powers are akin to those granted under Order XXXIX
Rule 6 of the CPC, and that the principles laid down therein must guide the
exercise of power under Section 9. A fortiori, post the 2015 Amendment Act,
these observations would apply equally to arbitral tribunals under Section 17
of the Act.
iv. Orders directing furnishing of security - The power under Section 9(1)(ii)(b)
and Section 17(1)(ii)(b) of the Act is analogous to power under Order XXXVIII
Rule 5 of the CPC. The applicability of the provisions of the CPC to an
application to furnish security under Section 9(1)(ii)(b) is no longer res-integra.
Recently, the High Court of Delhi in Pearl Hospitality & Events Pvt. Ltd. vs.
OYO Hotels and Homes Pvt. Ltd12 noted that the principles governing Order
XXXVIII Rule 5 would, generally, be applicable, while considering a prayer for
furnishing of security, under Section 9(1)(ii)(b) or Section 17(1)(ii)(b). The
principle, enunciated by the SCI in Raman Tech & Process Engineering Co.
& Ors. vs. Solanki Traders13 that, before being entitled to a relief by way of
furnishing of security of the amount in dispute in the arbitration, the petitioner
has to satisfy the court that the respondent is attempting to remove, or
dispose of its assets, with the intention of defeating the decree that may be
passed, has, generally, been regarded as a guiding factor.

4. Enforceability of orders passed by the arbitral tribunal

Section 37 of the Act provides a recourse to parties in case an application under
Section 17 of the Act is accepted or rejected by the arbitral tribunal. Prior to the
2015 Amendment Act, an order passed by an arbitral tribunal was not
enforceable proprio vigore, however, the tribunal could always apply to the Court to
take action for contempt under Section 27(5) of the Act. This view was also upheld
by the SCI in Alka Chandewar vs. Shamshul Ishrar Khan.14 The SCI also
observed that pursuant to the 2015 Amendment Act, Section 17(2) was added, so
that the cumbersome procedure of an arbitral tribunal having to apply every time to
the courts for contempt of its orders would no longer be necessary. Such orders
would now be deemed to be orders of the court for all purposes and would be
enforced under the CPC in the same manner as if they were orders of the court.
Hence, failure to abide by the directions of the tribunal would amount to non-
compliance of amounting to contempt and triable under the Contempt of Courts Act,
1971. However, such an order would be appealable under the requisite provisions
of the Contempt of Courts Act, 1971.

5. Conclusion
In the author's opinion, the evolution of Section 17 of the Act makes it evident that
the arbitral tribunals are now empowered to deal with interim measures
independently without any intervention of the courts. This allows the parties to
divulge in a pro-arbitration stance rather than referring their disputes and then
seeking interim orders before the courts. Further, the interplay of provisions of the
CPC show that while the arbitral tribunal has adequate power to operate
independently, it may follow the underlying principles which would provide
assistance to it for passing a decision. Considering the above, a sub-provision
maybe inserted to Section 17 of the Act which shall allow the Tribunal to adjudicate
the contempt thereby increasing the flexibility of the arbitrators and reducing the
burden from the courts.

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