ARBITRATION AND CONCILIATION ACT, 1996
(1) This Act may be called the Arbitration and Conciliation Act, 1996.
(2) It extends to the whole of India:
1 * * * * *
(3) It shall come into force on such date 2 as the Central Government may, by notification in the Official Gazette, appoint.
---------------------------------------------
1. The proviso and Explanation omitted by the Jammu and Kashmir Reorganization (Adaptation of Central Laws) Order, 2020, vide notification No. S.O. 1123(E) dated (18-3-2020) and vide Union Territory of Ladakh Reorganisation (Adaptation of Central Laws) Order, 2020, notification No. S.O. 3774(E), dated (23-10-2020).
2. 22nd August, 1996, vide notification No. G.S.R 375(E), dated 22nd August, 1996, see Gazette of India, Extraordinary, Part II, sec. 3(i).
Section 1 of the Arbitration and Conciliation Act, 1996, lays down the preliminary provisions regarding the title, extent, and commencement of the Act. It sets the framework for the application of the Act to various types of arbitration, both domestic and international, and establishes its jurisdictional scope. The section aims to consolidate the law relating to arbitration in India, emphasizing its role in promoting alternative dispute resolution mechanisms.
Section 1 states that the Act may be called the Arbitration and Conciliation Act, 1996, and extends to the whole of India. It specifies that the Act shall come into force on such date as the Central Government may, by notification, appoint. The section also clarifies that the Act applies to both domestic and international commercial arbitration, with different parts governing each. It emphasizes the objective of providing a legal framework for arbitration and conciliation, promoting speedy resolution of disputes outside the judiciary.
Section 1 itself does not prescribe any punishment. However, violations of the provisions—such as unilaterally appointing arbitrators contrary to the Act or failing to adhere to procedural requirements—may attract penalties or nullification of arbitral awards under other provisions of the Act, such as Sections 34 and 37, which deal with setting aside awards and appeals.
Note: The references are indicative, based on the provided sources, and support the legal commentary above.
(1) In this Part, unless the context otherwise requires,—
(b) “arbitration agreement” means an agreement referred to in section 7;
(c) “arbitral award” includes an interim award;
(d) “arbitral tribunal” means a sole arbitrator or a panel of arbitrators;
1[(e) “Court” means—
(i) in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil
(1) Unless otherwise agreed by the parties,—
(b) if none of the places referred to in clause (a) can be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee's last known place of business, habitual residence or mailing address by registered letter or by any other means which provides a record of the attempt to deliver it.
(2) The communication is deemed to have been received on the day it is so delivered.
(3) This section does not apply to written communications in respect of proceedings of any judicial authority.
A party who knows that—
(b) any requirement under the arbitration agreement, has not been complied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or, if a time limit is provided for stating that objection, within that period of time, shall be deemed to have waived his right to so object.
Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.
In order to facilitate the conduct of the arbitral proceedings, the parties, or the arbitral tribunal with the consent of the parties, may arrange for administrative assistance by a suitable institution or person.
(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—
(b) an exchange of letters, telex, telegrams or other means of telecommunication 1 [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 denie
The Arbitration and Conciliation Act, 1996, serves as a comprehensive framework for arbitration in India, promoting the resolution of disputes through arbitration rather than litigation. Section 7 specifically addresses the arbitration agreement, which is fundamental to the arbitration process.
Section 7 defines an "arbitration agreement" as an agreement between parties to submit to arbitration all or certain disputes that have arisen or may arise. It emphasizes that such agreements must be in writing and can take various forms, including clauses within contracts or separate agreements.
Section 7 encompasses various forms of arbitration agreements, including those inferred from correspondence or conduct, as long as they provide a record of the agreement. It allows for flexibility in how parties can express their intent to arbitrate.
Section 7 does not prescribe specific punishments; however, the absence of a valid arbitration agreement can lead to the dismissal of arbitration applications and the inability to enforce arbitral awards.
This commentary provides a comprehensive overview of Section 7 of the Arbitration and Conciliation Act, 1996, highlighting its significance in establishing arbitration agreements and the legal principles surrounding them.
1[(1)A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, 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 arbitration agreement exists.]
(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof:
Section 8 of the Arbitration and Conciliation Act, 1996, provides a framework for judicial authorities to refer parties to arbitration when there exists a valid arbitration agreement. This section aims to minimize judicial intervention in disputes that the parties have agreed to resolve through arbitration, thereby promoting the efficacy and autonomy of the arbitration process.
Section 8 mandates that a judicial authority must refer parties to arbitration if an action is brought before it concerning a matter that is subject to an arbitration agreement. The court's role is limited to determining the existence of such an agreement.
There are no specific punitive measures outlined in Section 8 for non-compliance. However, if a court fails to refer a matter to arbitration when it is required to do so, such an order may be subject to appeal.
1[(1)]A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court—
(ii) for an interim measure of protection in respect of any of the following matters, namely:—
(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is the subject matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the po
Section 9 of the Arbitration and Conciliation Act, 1996, provides the framework for courts to grant interim measures to protect the rights of parties involved in arbitration. This section is crucial for ensuring that the arbitration process is not rendered ineffective due to actions taken by one party that could undermine the outcome of the arbitration.
Section 9 allows a party to apply to a court for interim measures before or during arbitral proceedings, or even after an award has been made but before it is enforced. The court can issue orders to protect the subject matter of the arbitration, secure the amount in dispute, or ensure that the arbitration process is not frustrated.
While Section 9 does not explicitly outline punishments, courts have the authority to enforce compliance with their orders. Non-compliance can lead to contempt of court proceedings.
This commentary highlights the significance of Section 9 in the Arbitration and Conciliation Act, 1996, emphasizing its role in safeguarding the interests of parties during arbitration proceedings.
(1) The parties are free to determine the number of arbitrators, provided that such number shall not be an even number.
(2) Failing the determination referred to in sub-section (1), the arbitral tribunal shall consist of a sole arbitrator.
(1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.
(2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators.
(3) Failing any agreement referred to in sub-section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator.
(4) If the appointment procedure in sub-section (3) applies and—
(b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, the appointment shall be made, upon request of a party, by 1[the Sup
Section 11 of the Arbitration and Conciliation Act, 1996, provides the framework for the appointment of arbitrators in arbitration proceedings. This section is crucial as it outlines the procedure for appointing arbitrators when parties fail to do so, ensuring that disputes can be resolved efficiently through arbitration.
Section 11 empowers the Chief Justice of India or a designated authority to appoint arbitrators when there is a failure to appoint as per the arbitration agreement. It emphasizes the need for a prompt resolution of disputes through arbitration.
There are no specific punitive measures outlined in Section 11 itself; however, failure to comply with arbitration agreements may lead to legal consequences in subsequent proceedings.
This commentary highlights the critical aspects of Section 11 of the Arbitration and Conciliation Act, 1996, emphasizing its role in facilitating arbitration and ensuring that disputes are resolved efficiently and fairly.
(1) If the Central Government is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, amend the Fourth Schedule and thereupon the Fourth Schedule shall be deemed to have been amended accordingly.
(2) A copy of every notification proposed to be issued under sub-section (1), shall be laid in draft before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in disapproving the issue of the notification or both Houses agree in making any modification in the notification, the notification shall not be issued or, as the case may be, shall be issued only in such modified form as may be agreed upon by the both Houses of Parliament.]
---------------
1[(1) When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances,—
(b) which are likely to affect his ability to devote sufficient time to the arbitration and in particular his ability to complete the entire arbitration within a period of twelve months.
Explanation1.—The grounds stated in the Fifth Schedule shall guide in determining whether circumstances exist which give rise to justifiable doubts as to the independence or impartiality of an arbitrator.
Explan
Section 12 of the Arbitration and Conciliation Act, 1996, outlines the grounds for challenging the appointment of an arbitrator. This section is crucial for ensuring the impartiality and independence of arbitrators, thereby upholding the integrity of the arbitration process.
Section 12 mandates that:1. An arbitrator must disclose any circumstances that may lead to justifiable doubts regarding their independence or impartiality.2. An arbitrator can be challenged based on specific grounds, including lack of independence or failure to meet agreed qualifications.
The scope of Section 12 extends to all arbitration proceedings governed by the Act, ensuring that the appointment of arbitrators is transparent and fair. It applies to both domestic and international arbitration conducted under Indian law.
While Section 12 itself does not prescribe specific punishments, failure to comply with its provisions can lead to the annulment of arbitral awards and challenges to the validity of the arbitration process.
Disclosure - Arbitrators must disclose any circumstances that may raise doubts about their impartiality. Failure to do so can lead to challenges against their appointment. - [ "G. VIJNYANAGHAVAN VS M. D. CENTRAL WAREHOUSING CORPORALK"]
Impartiality - The mere fact that an arbitrator is on a panel does not automatically imply bias; however, any undisclosed relationships must be scrutinized. - [ "G. VIJNYANAGHAVAN VS M. D. CENTRAL WAREHOUSING CORPORALK"]
Grounds for Challenge - An arbitrator can only be challenged if there are circumstances that give rise to justifiable doubts about their independence or impartiality. - [ "State of Jharkhand VS RITES LTD"]
Waiver of Rights - Waiver of the right to challenge an arbitrator must be explicit and cannot be implied. - [ "SRC Company VS Rites Ltd. "]
Eligibility of Arbitrators - Employees of one of the parties are generally ineligible to act as arbitrators, as per Section 12(5). - [ "Bridge Building Construction Co Pvt Ltd VS Bharat Heavy Electricals Ltd. "]
Retired Employees - Retired employees may serve as arbitrators unless their previous employment creates a conflict of interest. - [ "Bishambar Dayal Sinsinwar VS General Manager, North Central Railway"]
Unilateral Appointments - Unilateral appointments of arbitrators can render awards unenforceable if they violate the provisions of Section 12. - [ "Hedge Finance Private Limited VS Bijish Joseph, S/o K. M. Joseph"]
Judicial Intervention - Courts have the authority to intervene and appoint arbitrators if the original appointment violates Section 12. - [ "Shiv Shakti Enterprises VS Union Of India"]
Challenge Procedure - The procedure for challenging an arbitrator must be followed strictly as outlined in the Act. - [ "Ramender Oil Carrier VS Hindustan Petroleum Corporation Ltd. "]
Arbitrator's Conduct - An arbitrator acting as counsel for one of the parties in another case without disclosure is disqualified. - [ "Vinod Bhaiyalal Jain VS Wadhwani Parmeshwari Cold Storage Pvt. Ltd. Through its Director"]
Scope of Judicial Review - The scope of judicial review regarding arbitrator appointments is limited, focusing primarily on compliance with statutory requirements. - [ "Indore Development Authority VS Arbitral Tribunal, through Hon'ble Shri Justice Ramesh Garg (Retd. )"]
Amendment Impact - The 2015 amendment to the Act emphasizes the need for neutrality and impartiality in arbitrator appointments. - [ "General Manager, Northern Railways VS M/s. J & K Projects Construction Corporation Ltd. "]
Arbitration Agreement - The terms of the arbitration agreement must be adhered to, including the appointment process for arbitrators. - [ "ICON Controls Pvt. Ltd. through its Managing Director Namely S. K. Pasupathy VS MECON Limited"]
Court's Discretion - Courts have discretion in appointing arbitrators when the parties fail to do so within the stipulated time. - [ "Shiv Shakti Enterprises VS Union Of India"]
Fees of Arbitrators - The fees for arbitrators are governed by the Fourth Schedule of the Act, ensuring transparency in remuneration. - [ "City Sweep Services LLP vs South Delhi Municipal Corporation"]
Termination of Mandate - The court can terminate an arbitrator's mandate if they are found ineligible under Section 12. - [ "DEPARTMENT OF TRANSPORT GOVERNMENT OF NCT OF DELHI VS STAR BUS SERVICES PRIVATE LIMITED"]
Independence Assurance - The Act ensures that arbitrators maintain independence throughout the arbitration process. - [ "Huawei Telecommunications (India) Co. Pvt. Ltd. VS Wipro Limited"]
Legal Precedents - Various judgments have reinforced the principles of independence and impartiality as critical to the arbitration process. - [ "OIL INDUSTRY DEVELOPMENT BOARD VS GODREJ AND BOYCE MFG CO LTD"]
Challenging Awards - Awards can be challenged under Section 34 if the arbitrator's appointment contravenes Section 12. - [ "Bridge Building Construction Co Pvt Ltd VS Bharat Heavy Electricals Ltd. "]
Compliance Requirement - Arbitrators must ensure compliance with Section 12 before commencing arbitration proceedings. - [ "Montecarlo Limited vs Regal Emporia Infratech Pvt. Ltd."]
Judicial Authority - The judiciary plays a crucial role in upholding the provisions of Section 12 to maintain the integrity of arbitration. - [ "Channel VAS Services India Pvt. Ltd. VS Bharat Sanchar Nigam Limited"]
(1) Subject to sub-section (4), the parties are free to agree on a procedure for challenging an arbitrator.
(2) Failing any agreement referred to in sub-section (1), a party who intends to challenge an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in sub-section (3) of section 12, send a written statement of the reasons for the challenge to the arbitral tribunal.
(3) Unless the arbitrator challenged under sub-section (2) withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.
(4) If a challenge under any procedure agreed upon by the parties or under the procedure under subsection (2) is not successful, the arbitral tribunal shall continue the arbitral proceedings and make an arbitral award.
(5) Where a
(1) 1[The mandate of an arbitrator shall terminate and he shall be substituted by another arbitrator, if]—
(b) he withdraws from his office or the parties agree to the termination of his mandate.
(2) If a controversy remains concerning any of the grounds referred to in clause (a) of sub-section (1), a party may, unless otherwise agreed by the parties, apply to the Court to decide on the termination of the mandate.
(3) If, under this section or sub-section (3) of section 13, an arbitrator withdraws from his office or a party agrees to the termination of the mandate of an arbitrator, it shall not imply acceptance of the validity of any ground referred to in this section or sub-section(3) of section 12.
---------------
(1) In addition to the circumstances referred to in section 13 or section 14,the mandate of an arbitrator shall terminate—
(b) by or pursuant to agreement of the parties.
(2) Where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced.
(3) Unless otherwise agreed by the parties, where an arbitrator is replaced under sub-section (2), any hearings previously held maybe repeated at the discretion of the arbitral tribunal.
(4) Unless otherwise agreed by the parties, an order or ruling of the arbitral tribunal made prior to the replacement of an arbitrator under this section shall not be invalid solely because there has been a change in the composition of the arbitral tribunal.
(1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose,—
(b) 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; however, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of, an arbitrator.
(3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the m
1(1) A party may, during the arbitral proceedings 2***, apply to the arbitral tribunal—
(ii) for an interim measure of protection in respect of any of the following matters, namely:—
(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken, or any observation to be
Section 17 of the Arbitration and Conciliation Act, 1996, empowers arbitral tribunals to pass interim measures of protection during the course of arbitration proceedings. It aligns the powers of the tribunal with those traditionally exercised by courts, facilitating swift and effective interim relief to preserve the subject matter of dispute or protect the rights of parties pending final adjudication.
Section 17 authorizes an arbitral tribunal to:- Pass interim orders during arbitration proceedings.- Such orders are deemed to be orders of the court and are enforceable as if they are court orders (Section 17(2)).- The scope includes measures such as securing assets, preserving property, appointing receivers, or any other interim relief necessary to protect the subject matter or rights of parties.
Section 17 of the Arbitration and Conciliation Act, 1996, provides a robust mechanism for arbitral tribunals to pass interim measures necessary for the preservation of rights and property during arbitration proceedings. Its alignment with judicial powers facilitates swift enforcement, ensuring that arbitration remains effective and credible. However, such orders are limited to interim relief and are subject to judicial review for jurisdictional or procedural irregularities, maintaining the balance between arbitration autonomy and judicial oversight.
Note: The references are based on the provided sources, and the summary aims to encapsulate the key legal principles, scope, and judicial perspectives on Section 17.
The parties shall be treated with equality and each party shall be given a full opportunity to present this case.
(1) The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872).
(2) Subject to this Part, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings.
(3) Failing any agreement referred to in sub-section (2), the arbitral tribunal may, subject to this Part, conduct the proceedings in the manner it considers appropriate.
(4) The power of the arbitral tribunal under sub-section (3) includes the power to determine the admissibility, relevance, materiality and weight of any evidence.
Section 19 of the Arbitration and Conciliation Act, 1996, is a fundamental provision that grants arbitral tribunals significant autonomy in determining the procedure for arbitration proceedings. It emphasizes the parties' freedom to agree on rules of procedure, while also outlining the tribunal's authority to decide issues such as admissibility, relevance, and materiality of evidence, thereby ensuring procedural flexibility and independence from the Civil Procedure Code and Evidence Act.
Section 19 of the Arbitration and Conciliation Act, 1996, strikes a balance between party autonomy and judicial oversight by empowering tribunals to determine their own procedural rules, including evidence admissibility, while limiting courts' interference to violations of natural justice. Its design fosters flexible, efficient arbitration proceedings while safeguarding fairness and substantive justice.
Note: The references are based on the provided sources, primarily emphasizing the core provisions and judicial interpretations related to Section 19.
(1) The parties are free to agree on the place of arbitration.
(2) Failing any agreement referred to in sub-section (1), 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.
(3) Notwithstanding sub-section (1) or sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at anyplace it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property.
Section 20 of the Arbitration and Conciliation Act, 1996, is a fundamental provision that governs the determination of the "seat" or "place" of arbitration. It emphasizes the principle of party autonomy in choosing the arbitration seat and delineates the legal framework for the tribunal to determine or parties to agree upon the arbitration location. The section plays a crucial role in establishing the jurisdiction of courts and the procedural conduct of arbitration proceedings within India.
Section 20 of the Arbitration and Conciliation Act, 1996, is pivotal in defining the legal framework for the seat of arbitration, emphasizing party autonomy, procedural flexibility, and jurisdictional clarity. Proper understanding and application of this section are essential for the smooth conduct of arbitration proceedings within India, ensuring enforceability and legal certainty.
**- [Section 20(1), (2), (3)]- [Case law: Bharat Aluminium Co. v. Kaiser Aluminium]- [Case law: Union of India v. Singh Engineering]- [Indus Mobile v. Datawind]- [UNCITRAL Model Law]- [Legal commentaries and case law summaries]
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.
Section 21 of the Arbitration and Conciliation Act, 1996, delineates the commencement of arbitral proceedings in India. It establishes the procedural milestone that triggers the arbitration process, which is crucial for determining jurisdiction, limitation, and the timeline for dispute resolution. Understanding the scope and essential ingredients of this section is vital for parties and courts to ensure proper initiation and validity of arbitration proceedings.
Section 21 states that, unless otherwise agreed by the parties, arbitral proceedings in respect of a particular dispute commence on the date a request for that dispute to be referred to arbitration is received by the respondent. It emphasizes that the initiation of arbitration is dependent upon the receipt of a notice or request by the respondent, marking the start of the arbitral process.
Section 21 itself does not prescribe penalties or punishments for failure to invoke arbitration properly. However, failure to properly invoke arbitration (e.g., not sending notice to the correct address or not initiating proceedings within limitation) can lead to:- Invalidity of proceedings: The arbitral process may be deemed not to have started, leading to delays or dismissals.- Challenges to awards: Awards may be set aside if arbitration was not properly commenced.- Limitation bar: Claims may become time-barred if arbitration is not initiated timely, affecting enforceability.
In summary, Section 21 plays a pivotal role in the arbitration process by marking the commencement of proceedings upon receipt of a request. Proper adherence to its provisions ensures the validity, enforceability, and timely resolution of disputes under Indian arbitration law.
References used in the commentary are based on judicial interpretations, legal commentaries, and case law summarized from the provided sources.
(1) The parties are free to agree upon the language or languages to be used in the arbitral proceedings.
(2) Failing any agreement referred to in sub-section (1), the arbitral tribunal shall determine the language or languages to be used in the arbitral proceedings.
(3) The agreement or determination, unless otherwise specified, shall apply to any written statement by a party, any hearing and any arbitral award, decision or other communication by the arbitral tribunal.
(4) The arbitral tribunal may order that any documentary evidence shall be accompanied by a translation into the language or languages agreed upon by the parties or determined by the arbitral tribunal.
(1) Within the period of time agreed upon by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting his claim, the points at issue and the relief or remedy sought, and the respondent shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of those statements.
(2) The parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence they will submit.
1[(2A) The respondent, in support of his case, may also submit a counterclaim or plead a set-off, which shall be adjudicated upon by the arbitral tribunal, if such counterclaim or set-off falls within the scope of the arbitration agreement.]
(3) Unless otherwise agreed by the parties, either party may amend or supplement his claim or defence during the course o
Section 23 of the Arbitration and Conciliation Act, 1996, prescribes the procedural framework for pleadings in arbitration proceedings, primarily focusing on the statement of claim and defence, including amendments, counterclaims, and set-offs. It aims to streamline arbitration procedures, ensure fairness, and facilitate expeditious resolution of disputes.
Section 23 mandates that within the period agreed upon by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting his claim, the points at issue, and the relief sought. The respondent shall then state his defence, including any counterclaim or set-off, within the same period or as otherwise agreed. It also provides for amendments and supplementary pleadings, subject to the tribunal's discretion, and sets timelines for these processes.
While Section 23 does not explicitly prescribe penalties, non-compliance with timelines or procedural lapses may lead to:- Dismissal or rejection of pleadings.- Possible adverse inference or findings against the defaulting party.- Delays or complications in arbitration proceedings.- Potential costs or penalties as determined by the arbitral tribunal or courts under general law.
This concise yet comprehensive analysis of Section 23 highlights its pivotal role in ensuring procedural discipline, fairness, and efficiency in arbitration proceedings under the Arbitration and Conciliation Act, 1996.
(1) Unless otherwise agreed by the parties, the arbitral tribunal shall decide whether to hold oral hearings for the presentation of evidence or for oral argument, or whether the proceedings shall be conducted on the basis of documents and other materials:
Provided that the arbitral tribunal shall hold oral hearings, at an appropriate stage of the proceedings, on a request by a party, unless the parties have agreed that no oral hearing shall be held:
1[Provided further that the arbitral tribunal shall, as far as possible, hold oral hearings for the presentation of evidence or for oral argument on day-to-day basis, and not grant any adjournments unless sufficient cause is made out, and may impose costs including exemplary costs on the party seeking adjournment without any sufficient cause.]
(2) The parties shall be given sufficient advance notice of any hearing and of any meeting of the arbit
Unless otherwise agreed by the parties, where, without showing sufficient cause,—
(b) the respondent fails to communicate his statement of defence in accordance with sub-section (1) of section 23, the arbitral tribunal shall continue the proceedings without treating that failure in itself as an admission of the allegations by the claimant 1[and shall have the discretion to treat the right of the respondent to file such statement of defence as having been forfeited].
(c) a party fails to appear at an oral hearing or to produce documentary evidence, the arbitral tribunal may continue the proceedings and make the arbitral award on the evidence before it.
----------------------------------------------
(1) Unless otherwise agreed by the parties, the arbitral tribunal may—
(b) require a party to give the expert any relevant information or to produce, or to provide access to, any relevant documents, goods or other property for his inspection.
(2) Unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal considers it necessary, the expert shall, after delivery of his written or oral report, participate in an oral hearing where the parties have the opportunity to put questions to him and to present expert witnesses in order to testify on the points at issue.
(3) Unless otherwise agreed by the parties, the expert shall, on the request of a party, make available to that party for examination all documents, goods or other property
Section 26 of the Arbitration and Conciliation Act, 1996, empowers arbitral tribunals to appoint experts for technical or specialized issues during arbitration proceedings. It facilitates informed decision-making by allowing the tribunal to seek specialized knowledge, thereby ensuring a fair and efficient arbitration process. This section plays a crucial role in complex disputes where factual or technical issues require expert opinion.
Section 26 authorizes arbitral tribunals to:- Appoint one or more experts to report on specific issues (Sub-section 1).- Require parties to produce relevant documents, goods, or other evidence for examination by the expert (Sub-section 3).- Allow experts to participate in hearings and be questioned by parties.- Make available the expert's report to parties for their examination.- Participate in hearings and contribute to the arbitration process as deemed necessary.
The section aims to assist the tribunal in arriving at a well-informed and just decision on technical matters.
Section 26 itself does not prescribe specific punishments for violations. However:- Failure to Follow Principles of Natural Justice: If the tribunal or parties violate principles of fairness—such as denying access to evidence or not giving parties a chance to cross-examine—the award can be challenged under Section 34.- Misuse or Arbitrary Appointment: Appointing experts without proper grounds or in violation of procedural fairness can be grounds for setting aside an award.- Legal Recourse: Courts may set aside awards where appointment of experts is shown to be arbitrary, biased, or in violation of natural justice.
In conclusion, Section 26 is a vital procedural provision that enhances the arbitral tribunal’s ability to seek specialized knowledge, ensuring that complex disputes are adjudicated on a well-informed factual basis. Its proper application requires adherence to principles of natural justice, fairness, and transparency, with courts having limited scope to interfere unless procedural violations are evident.
(1) The arbitral tribunal, or a party with the approval of the arbitral tribunal, may apply to the Court for assistance in taking evidence.
(2) The application shall specify—
(b) the general nature of the claim and the relief sought;
(c) the evidence to be obtained, in particular,—
(i) the name and address of any person to be heard as witness or expert witness and a statement of the subject-matter of the testimony required;
(ii) the description of any document to be produced or property to be inspected.
(3) The Court may, within its competence and according to its rules on taking evidence, execute the request by ordering that the evidence be provided directly to the arbitral tribunal.
(4) The Court may, while making an or
(1) Where the place of arbitration is situate in India,—
(b) in international commercial arbitration,—
(i) the arbitral tribunal shall decide the dispute in accordance with the rules of law designated by the parties as applicable to the substance of the dispute;
(ii) any designation by the parties of the law or legal system of a given country shall be construed, unless otherwise expressed, as directly referring to the substantive law of that country and not to its conflict of laws rules;
(iii) failing any designation of the law under clause (a) by the parties, the arbitral tribunal shall apply the rules of law it considers to be appropr
(1) Unless otherwise agreed by the parties, in arbitral proceedings with more than one arbitrator, any decision of the arbitral tribunal shall be made by a majority of all its members.
(2) Notwithstanding sub-section (1), if authorised by the parties or all the members of the arbitral tribunal, questions of procedure may be decided by the presiding arbitrator.
1,2[(1)The award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23:
Provided that the award in the matter of international commercial arbitration may be made as expeditiously as possible and endeavor may be made to dispose of the matter within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23.]
(2) If the award is made within a period of six months from the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree.
(3) The parties may, by consent, extend the period specified in sub-section (1) for making award for a further period not exceeding six months.
Section 29(a) of the Arbitration and Conciliation Act, 1996, establishes the time frame within which an arbitral tribunal must pass an award, emphasizing the importance of timely dispute resolution. It aims to prevent prolonged arbitration proceedings and promote efficiency in arbitration processes, aligning with the broader objectives of the Act to facilitate speedy justice.
Section 29(a) mandates that, unless otherwise agreed by the parties, the arbitral tribunal shall make the award within twelve months from the date the arbitral tribunal is deemed to have entered upon the reference, i.e., after the completion of pleadings. It also provides for extensions of this period, subject to specific conditions and mutual consent, with a maximum extension of six months. Failure to adhere to these timelines can lead to termination of the tribunal's mandate unless extended by the court.
Section 29(a) applies to all arbitration proceedings under Part I of the Act, excluding international commercial arbitration unless expressly included. It covers disputes where the parties have agreed to arbitration under the Act, emphasizing the importance of adhering to prescribed timelines to ensure the efficacy of arbitration as a dispute resolution mechanism. The section also interacts with provisions related to extension of time, substitution of arbitrators, and the jurisdiction of courts.
While Section 29(a) does not prescribe a direct punishment, non-compliance results in the termination of the arbitral tribunal’s mandate, effectively ending the proceedings unless the court grants an extension. This acts as a deterrent against unnecessary delays and underscores the obligation of tribunals and parties to adhere to timelines, fostering discipline in arbitration.
In conclusion, Section 29(a) of the Arbitration and Conciliation Act, 1996, is a vital provision that enforces timely passing of arbitral awards, with built-in flexibility for extensions under specific conditions. It aims to uphold the integrity, efficiency, and credibility of arbitration as a dispute resolution mechanism, while balancing judicial oversight and party autonomy.
Note: All references are based on the provided sources and relevant legal principles.
(1) Notwithstanding anything contained in this Act, the parties to an arbitration agreement, may, at any stage either before or at the time of appointment of the arbitral tribunal, agree in writing to have their dispute resolved by fast track procedure specified in sub-section (3).
(2) The parties to the arbitration agreement, while agreeing for resolution of dispute by fast track procedure, may agree that the arbitral tribunal shall consist of a sole arbitrator who shall be chosen by the parties.
(3) The arbitral tribunal shall follow the following procedure while conducting arbitration proceedings under sub-section (1):—
(b) The arbitral tribunal shall have power to call for any further information or clarification fro
(1) It is not incompatible with an arbitration agreement for an arbitral tribunal to encourage settlement of the dispute and, with the agreement of the parties, the arbitral tribunal may use mediation, conciliation or other procedures at any time during the arbitral proceedings to encourage settlement.
(2) 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.
(3) An arbitral award on agreed terms shall be made in accordance with section 31 and shall state that it is an arbitral award.
(4) An arbitral award on agreed terms shall have the same status and effect as any other arbitral award on the substance of the dispute.
(1) An arbitral award shall be made in writing and shall be signed by the members of the arbitral tribunal.
(2) For the purposes of sub-section (1), in arbitral proceedings with more than one arbitrator, the signatures of the majority of all the members of the arbitral tribunal shall be sufficient so long as the reason for any omitted signature is stated.
(3) The arbitral award shall state the reasons upon which it is based, unless—
(b) the award is an arbitral award on agreed terms under section 30.
(4) The arbitral award shall state its date and the place of arbitration as determined in accordance with section 20 and the award shall be deemed to have been made at that place.
(5) After the arbitral award is made, a signed copy shall be delivered to each party.
1(1) In relation to any arbitration proceeding or a proceeding under any of the provisions of this Act pertaining to the arbitration, the Court or arbitral tribunal, notwithstanding anything contained in the Code of Civil Procedure,1908 (5 of 1908), shall have the discretion to determine—
(b) the amount of such costs; and
(c) when such costs are to be paid.
Explanation.—For the purpose of this sub-section, “costs” means reasonable costs relating to—
(ii) legal fees and expenses;
(iii) any administration fees of the institution supervising the arbitration; and
(iv) any other expenses incurred in connection with the arbitral or Court proceedings and t
(1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub-section (2).
(2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where—
(b) the parties agree on the termination of the proceedings, or
(c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.
(3) Subject to section 33 and sub-section (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings.
(1) Within thirty days from the receipt of the arbitral award, unless another period of time has been agreed upon by the parties—
(b) if so agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to give an interpretation of a specific point or part of the award.
(2) If the arbitral tribunal considers the request made under sub-section (1) to be justified, it shall make the correction or give the interpretation within thirty days from the receipt of the request and the interpretation shall form part of the arbitral award.
(3) The arbitral tribunal may correct any error of the type referred to in clause (a) of sub-secti
Section 33 of the Arbitration and Conciliation Act, 1996 deals with the correction and interpretation of arbitral awards and the power to make additional awards. This provision serves as a limited post-award remedy allowing parties to seek rectification of computational, clerical, or typographical errors, interpretation of specific points (if agreed), and the rendering of additional awards on omitted claims. The section is critical in maintaining the finality of arbitral awards while providing a narrow window for technical corrections.
Section 33 of the Act provides:
Any other errors of a similar nature
Interpretation of award: If agreed by the parties, a party may request interpretation of a specific point or part of the award
Additional award: A party may request an additional award on claims presented in arbitral proceedings but omitted from the award
Time limits: The tribunal must decide on correction/interpretation requests within 30 days, and additional award requests within 60 days
Extension of limitation: The time for challenging the award under Section 34 runs from the date of disposal of a Section 33 application
The scope of Section 33 is deliberately narrow and limited to:- Correcting clerical, computational, or typographical errors- Providing interpretation of specific points (by agreement)- Rendering additional awards on omitted claims
It does not permit:- Review of the award on merits- Reconsideration of findings- Modification of substantive decisions- Re-examination of conclusions
Section 33 does not prescribe any punishment. However, non-compliance or abuse may lead to:- Dismissal of applications filed beyond the prescribed period- Loss of jurisdiction by the tribunal after 30 days- Dismissal of objections under Section 34 if the Section 33 application was not maintainable- Costs imposed for frivolous or delaying applications
Limited scope of correction - Section 33 permits correction only of computational errors, clerical/typographical errors, or errors of a similar nature. Any modification beyond this scope is impermissible. [V. S. Reddy VS M. Jayakumar - 2000 0 Supreme(Kar) 836, Abhiram Infra Projects Private Limited VS Commissioner - 2022 0 Supreme(Kar) 860]
30-day strict limitation - The 30-day period under Section 33(1) is rigid and cannot be evaded. Applications filed beyond this period are not entertainable, and this limitation cannot be condoned unless mutually agreed by parties. [Abhiram Infra Projects Private Limited VS Commissioner - 2022 0 Supreme(Kar) 860, Tantia Construction Limited vs Ircon International Ltd. - Delhi (2021)]
Deemed disposal after 30 days - If a correction application is not decided within 30 days, the tribunal loses jurisdiction to make the correction. No mandamus can be issued contrary to this statutory provision. [Kali Charan Pandey VS Union of India - 2014 0 Supreme(All) 1534]
Limitation for Section 34 objections - The limitation period for filing objections under Section 34 commences from the date when the request under Section 33 is disposed of by the Arbitral Tribunal, regardless of the outcome. [Geojit Financial Services Ltd. VS Sandeep Gurav - 2025 0 Supreme(SC) 1245, PRAKASH ATLANTA JV VS NATIONAL HIGHWAYS AUTHORITY OF INDIA - 2016 0 Supreme(Del) 694, SAR PARIVAHAN PVT. LTD. VS HINDUSTAN COPPER LTD. - 2021 0 Supreme(MP) 786]
No fresh cause of action - A reply from the arbitrator rejecting a Section 33 application does not give a fresh cause of action for filing objections under Section 34(3). [State of Arunachal Pradesh VS Damani Construction - 2007 5 Supreme 259]
Application must be maintainable - For a party to claim the benefit of extended limitation under Section 34(3), the Section 33 application must be maintainable under the provision. An application that is not maintainable does not extend limitation. [T. Younis S/o Hajit Amirsab VS National Highway Authority of India - 2024 0 Supreme(Kar) 44]
No review power - Section 33 does not confer power on the tribunal to review its award on merits. Any application designed as a review is wholly misconceived. [State of Arunachal Pradesh VS Damani Construction - 2007 5 Supreme 259, Prahaladas Goyal Since Deceased VS Anand - 2020 0 Supreme(Kar) 1516]
No modification or recall - Arbitral tribunals cannot modify or recall their awards once rendered, as per the principle of functus officio. Section 33 only allows correction and interpretation, not modification. [National Highways Authority Of India VS Musafir - 2024 0 Supreme(All) 710]
Natural justice requirement - The principles of natural justice must be adhered to when deciding Section 33 applications. The arbitrator cannot act unilaterally without notice to the opposite side and without hearing them. [H. P. HOUSING VS KAPIL CONSTRUCTIONS - 2009 0 Supreme(HP) 1270, Tantia Construction Limited vs Ircon International Ltd. - Delhi (2021)]
Clerical errors must be corrected - Where an award contains a clerical error, such as incorrectly reflecting a party's name, the court can direct correction even under Article 227, as denying correction would violate natural justice. [S.S Total Construction India Pvt. Ltd. vs All India Institute of Medical Sciences - Delhi (2022)]
Additional award vs. corrected award - Any change made to an arbitral award post-making falls into three categories: correction, interpretation, and addition. A corrected version should not be referred to as an "Additional Arbitral Award." [3i Infotech Limited, Represented by Mr. Dinesh R Miranda VS Romila Bajaj - 2019 0 Supreme(Mad) 482]
Deemed disposal makes award executable - An application under Section 33(1)(a) is deemed disposed of after the expiry of 30 days, making the award final and executable. [Ex. Engineer H. S. A. M. Board VS Dharam Pal - 2000 0 Supreme(P&H) 1458]
Counter-claims under Section 33(4) - When a counter-claim is filed before the arbitrator, it is the duty of the arbitrator to decide it. Under Section 33(4), the party can bring omissions to the tribunal's notice. [Vitthalrao Shinde Sahakari Sakhar Karkhana Ltd. VS Gangapur Sahakari Sakhar Karkhana Ltd. - 2017 0 Supreme(Bom) 495]
Consent not required for Section 33(4) - The consent of the other party who may be benefited by the omission is not necessary for an application under Section 33(4). Such interpretation would render the provision otiose. [Vitthalrao Shinde Sahakari Sakhar Karkhana Ltd. VS Gangapur Sahakari Sakhar Karkhana Ltd. - 2017 0 Supreme(Bom) 495]
Review application beyond Section 33 - If an application under Section 33 is beyond its scope and is in fact a review application, the period spent pending the application will not extend the limitation period for filing objections under Section 34. [Shayam Sunder VS Kotak Securities Ltd. - 2017 0 Supreme(Del) 3433]
Disposal includes dismissal - The expression "disposed of" in Section 34(3) is broad and includes dismissals. Limitation runs from the date of disposal irrespective of whether the application was allowed or dismissed. [Geojit Financial Services Ltd. VS Sandeep Gurav - 2025 0 Supreme(SC) 1245]
Separate invocation of clauses - When contract clauses are worded differently, invocation of one clause can be done independently without awaiting completion of another clause's procedure. [S. Kumar Construction Co. VS Municipal Corporation of Greater Bombay - 2017 0 Supreme(Bom) 163]
Error apparent on record - If the arbitrator fails to correct an error apparent on record (e.g., failing to grant refund despite finding invocation of bank guarantee unjustified), the court may modify the award under Section 34. [Tal Manufacturing Solutions VS Union of India - 2013 0 Supreme(Del) 154]
Condonation of delay - The delay of more than 30 days in filing objections under Section 34 cannot be condoned under Section 34(3), even if a Section 33 application was filed but dismissed as not maintainable. [Blue Prime Aluminum Limited VS L & T Finance Limited - 2016 0 Supreme(Bom) 392]
Costs for delaying tactics - Courts may impose costs (e.g., Rs. 25,000 per petition) for cavalier attitude and burdening the registry with additional work in re-filing petitions under Section 34 after Section 33 applications. [INDIA TOURISM DEVELOPMENT CORPORATION VS CP ASSOCIATES PVT LTD - 2019 0 Supreme(Del) 752]
(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if—
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the
Section 34 of the Arbitration and Conciliation Act, 1996 provides the framework for challenging arbitral awards in India. It delineates the grounds upon which a party may seek to set aside an arbitral award, emphasizing the limited scope of judicial review and the principle of finality in arbitration.
Section 34 allows a party to apply to a court to set aside an arbitral award under specific circumstances, primarily if the award is contrary to public policy, violates the principles of natural justice, or if the tribunal exceeded its jurisdiction.
The scope of Section 34 is narrow, focusing on procedural and jurisdictional issues rather than the merits of the case. Courts are not to re-evaluate the evidence or the merits of the award but to ensure that the arbitration process adhered to legal standards.
There are no criminal penalties associated with Section 34; however, failure to comply with the procedural requirements may result in the dismissal of the application to set aside the award.
This commentary provides a comprehensive overview of Section 34 of the Arbitration and Conciliation Act, 1996, highlighting its significance in the arbitration framework in India.
Subject to this Part an arbitral award shall be final and binding on the parties and persons claiming under them respectively.
1(1) Where the time for making an application to set aside the arbitral award under section 34 has expired, then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were a decree of the court.
(2) Where an application to set aside the arbitral award has been filed in the Court under section 34, the filing of such an application shall not by itself render that award unenforceable, unless the Court grants an order of stay of the operation of the said arbitral award in accordance with the provisions of sub-section (3), on a separate application made for that purpose.
(3) Upon filing of an application under sub-section (2) for stay of the operation of the arbitral award, the Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for reason
Section 36 of the Arbitration and Conciliation Act, 1996, is a crucial provision that governs the enforcement of arbitral awards, equating their enforceability to that of a court decree. It facilitates the swift and effective execution of awards, ensuring arbitration awards are given the same force and finality as decrees of courts, thereby promoting the efficacy of arbitration as an alternative dispute resolution mechanism.
Section 36 provides that once the period for filing an application to set aside the arbitral award under Section 34 has expired, the arbitral award can be enforced in the same manner as a decree of a civil court. It establishes a legal fiction that awards are to be treated as decrees, subject to certain conditions, and prescribes the procedures for execution, including the possibility of stay orders under specified circumstances.
Section 36 of the Arbitration and Conciliation Act, 1996, provides a robust framework for the enforcement of arbitral awards, aligning their execution with that of court decrees. Its provisions ensure that arbitral awards attain finality and are executed swiftly, with judicial oversight limited to procedural compliance and exceptional circumstances such as fraud or collusion. Judicial trends favor enforcing awards as decrees, thereby strengthening arbitration as an effective dispute resolution mechanism, while maintaining safeguards against abuse through procedural checks and balances.
Note: The references are based on the provided sources and are formatted as per the specified instructions.
(1) 1[Notwithstanding anything contained in any other law for the time being in force, an appeal] shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:—
(b) granting or refusing to grant any measure under section 9;
(c) setting aside or refusing to set aside an arbitral award under section 34.]
(2) Appeal shall also lie to a court from an order of the arbitral tribunal—
(b) granting or refusing to grant an interim measure under section 17.
(3) No second appeal shall lie from an order passed in appeal under thi
Section 37 of the Arbitration and Conciliation Act, 1996 provides the legal framework for filing appeals against certain orders passed under the Act. It delineates the scope, grounds, and procedure for appellate review, aiming to balance judicial oversight with the finality of arbitral awards.
Section 37 enumerates the specific orders against which appeals are maintainable, including orders refusing to refer disputes to arbitration, granting or refusing interim measures, and setting aside arbitral awards. It emphasizes that only certain types of orders are appealable and restricts the scope of appellate interference, making it a narrower review mechanism compared to ordinary civil appeals.
This concise commentary highlights the core principles, scope, and limitations of Section 37, reflecting judicial interpretations and statutory provisions to aid legal understanding and practice.
(1) The arbitral tribunal may fix the amount of the deposit or supplementary deposit, as the case may be, as an advance for the costs referred to in sub-section (8) of section 31, which it expects will be incurred in respect of the claim submitted to it:
Provided that where, apart from the claim, a counter-claim has been submitted to the arbitral tribunal, it may fix separate amount of deposit for the claim and counter-claim.
(2) The deposit referred to in sub-section (1) shall be payable in equal shares by the parties:
Provided that where one party fails to pay his share of the deposit, the other party may pay that share:
Provided further that where the other party also does not pay the aforesaid share in respect of the claim or the counter-claim, the arbitral tribunal may suspend or terminate the arbitral proceedings in respect of such claim or counter-claim, as the case may be.
Section 38 of the Arbitration and Conciliation Act, 1996, deals with the fixation and regulation of deposits to be made by parties in arbitration proceedings. It ensures that the arbitral tribunal has the necessary funds to conduct the arbitration efficiently and provides mechanisms for the enforcement and adjustment of such deposits. This section plays a crucial role in maintaining the financial discipline of arbitration proceedings and in safeguarding the interests of the parties and the tribunal.
Section 38 empowers the arbitral tribunal to fix the amount of deposit or supplementary deposit as an advance for the costs of arbitration, including fees and expenses of the arbitrators. It also provides that the tribunal may specify the manner and time of deposit, and if a party fails to deposit the amount, the tribunal may suspend or terminate the proceedings. The section further allows the tribunal to direct the refund of unexpended deposits and to adjust deposits against the costs incurred.
Section 38 applies to both domestic and international arbitrations and is designed to ensure that arbitration proceedings are adequately funded. It provides a framework for the tribunal to manage costs and deposits, thereby preventing delays caused by financial disputes. The section also interacts with other provisions like Sections 31(8) and 31A, which deal with costs and fees, creating a comprehensive regime for arbitration expenses.
While Section 38 itself does not prescribe a specific punishment for failure to deposit, it authorizes the arbitral tribunal to suspend or terminate proceedings if a party defaults. This acts as a deterrent against non-compliance and ensures that parties adhere to their financial obligations to facilitate smooth arbitration.
Section 38 of the Arbitration and Conciliation Act, 1996, is a vital provision that ensures the financial stability and efficiency of arbitration proceedings. It grants the arbitral tribunal the authority to fix and regulate deposits, thereby safeguarding the process from delays and disputes over costs. Proper adherence to its provisions promotes transparency, fairness, and expeditious resolution of disputes, reinforcing arbitration as an effective alternative dispute resolution mechanism.
Note: The references in square brackets correspond to the provided sources, primarily "" which encapsulates the general legal principles and case law summaries related to Section 38.
(1) Subject to the provisions of sub-section (2) and to any provision to the contrary in the arbitration agreement, the arbitral tribunal shall have a lien on the arbitral award for any unpaid costs of the arbitration.
(2) If in any case an arbitral tribunal refuses to deliver its award except on payment of the costs demanded by it, the Court may, on an application in this behalf, order that the arbitral tribunal shall deliver the arbitral award to the applicant on payment into Court by the applicant of the costs demanded, and shall, after such inquiry, if any, as it thinks fit, further order that out of the money so paid into Court there shall be paid to the arbitral tribunal by way of costs such sum as the Court may consider reasonable and that the balance of the money, if any, shall be refunded to the applicant.
(3) An application under sub-section (2) may be made by any party unless the fees demanded have been fixed by
(1) An arbitration agreement shall not be discharged by the death of any party thereto either as respects the deceased or as respects any other party, but shall in such event been forceable by or against the legal representative of the deceased.
(2) The mandate of an arbitrator shall not be terminated by the death of any party by whom he was appointed.
(3) Nothing in this section shall affect the operation of any law by virtue of which any right of action is extinguished by the death of a person.
(1) Where it is provided by a term in a contract to which an insolvent is a party that any dispute arising there out or in connection therewith shall be submitted to arbitration, the said term shall, if the receiver adopts the contract, be enforceable by or against him so far as it relates to any such dispute.
(2) Where a person who has been adjudged an insolvent had, before the commencement of the insolvency proceedings, become a party to an arbitration agreement, and any matter to which the agreement applies is required to be determined in connection with, or for the purposes of, the insolvency proceedings, then, if the case is one to which sub-section (1) does not apply, any other party or the receiver may apply to the judicial authority having jurisdiction in the insolvency proceedings for an order directing that the matter in question shall be submitted to arbitration in accordance with the arbitration agreement, and the judicial authority
Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court.
Legal Comments- "Section 42" - Exclusive jurisdiction rule - The court where an application under Part I is first filed remains the only court for subsequent arbitral applications; outsized scope for other courts is barred - [01100106632]
"Section 42" - Supreme Court guidance on seat vs venue - Distinction between seat (exclusive jurisdiction) and venue; seat fixes jurisdiction, while hearings can occur elsewhere - [Municipal Corporation for the City of Kalyan & Dombivli VS Rudranee Infrastructure Ltd. - 2017 0 Supreme(Bom) 845]
"Section 42" - Ouster by exclusive clause - If parties designate an exclusive court, that court handles challenges to arbitral awards; other courts lose jurisdiction - [Aditya Birla Finance Ltd. VS MVR Gas Through its Proprietor - 2023 0 Supreme(Bom) 1419]
"Section 42" - Interaction with Section 11/6-A (Amendment 2015) - Post-amendment, Section 11(6-A) confines court inquiry to existence of arbitration agreement; Section 42 still governs subsequent proceedings where first petition filed - [Hasmukh Prajapati VS Jai Prakash Associates Ltd. Through Its Managing Director - 2022 0 Supreme(All) 119]
"Section 42" - When an application is filed in a Court, that Court’s jurisdiction is triggered - All subsequent proceedings arising under the same arbitration agreement must proceed there - [Dredging & Desiltation Co. Pvt. Ltd. VS Board of Trustees of Paradip Port Trust - 2014 0 Supreme(Ori) 377]
"Section 42" - Debt recovery statutes interaction - Special statutes (e.g., RDTA/Banking Acts) can override general Act; Memorandum of Association alone may not create arbitrable agreement under the Act - [Surya News Print and Papers Private Ltd. VS Branch Manager, State Bank of India - 2009 0 Supreme(Ori) 280]
"Section 42" - Application to execution of awards - Section 42 governs where petitions under Part I were made; execution may proceed in the court with supervisory jurisdiction - [Savitri Devi VS Union Of India - 2024 0 Supreme(All) 1021]
"Section 42" - Effect on interim measures - Interim relief under Section 9 remains anchored to the court that first entertained the dispute under Part I; subsequent challenges follow Section 42 flow - [Jag Parvesh Sura vs Uppal Engineering Co. Pvt. Ltd. - Delhi (2022)]
"Section 42" - Distinction of 'Court' concept - Under the 1996 Act, 'Court' means Principal Civil Court of original jurisdiction (District Court) or High Court in original jurisdiction; this shapes which forum can hear related petitions - [S. M. Suparies VS Karnataka Bank Ltd. - 2010 0 Supreme(Kar) 1224]
"Section 42" - Implication for seat vs venue analysis - Courts emphasize that mere conduct of arbitration at a place does not fix the seat; seat designates exclusive jurisdiction, not all sittings - [Municipal Corporation for the City of Kalyan & Dombivli VS Rudranee Infrastructure Ltd. - 2017 0 Supreme(Bom) 845]
"Section 42" - Practical consolidation aim - Section 42 promotes consolidation of all arbitration-related applications in a single court to avoid multifarious litigation - [PUNJ LLOYD LTD. VS GVK POWER (GOINDWAL SAHIB) LIMITED - 2017 0 Supreme(Del) 802]
"Section 42" - Competing statutes principle - Where a special Act (e.g., MSMED Act) provides its own arbitration pathway, it may override general Arbitration Act provisions; Section 24 of MSMED Act gives overriding effect to 15-23 - [Lokopriya Gopinath Bordoloi Regional Institute of Mental Health, Tezpur, an Autonomous Society under the Ministry of Health and Family Welfare, Govt. of India, Represented by its Director vs Green Alliance Engineering Services Pvt. Ltd., [Through its Managing Director/Authorized Representative - 2025 0 Supreme(Gau) 1898], [Anoop Nambiar S/o T.V. Sethumadhavan Nair vs Union of India, Represented by its Secretary, New Delhi - 2026 0 Supreme(Ker) 242]
"Section 42" - Distinguishing applications under Section 8 - An application under Section 8 (reference to arbitration) is not a subsequent Part I application, but Section 42 contemplates subsequent Part I applications; need to harmonize with 2015 amendments - [Govil Automobiles VS Hindustan Petroleum Corporation Limited - 2009 0 Supreme(Del) 452], [Steel (Singapore) Trading Pvt. Ltd. VS Bhushan Power & Steel Ltd. - 2011 0 Supreme(Cal) 91]
"Section 42" - Precedent on exclusive jurisdiction clauses - Indus Mobile and State of West Bengal v Associated Contractors establish that exclusive jurisdiction clauses oust other courts - [Municipal Corporation for the City of Kalyan & Dombivli VS Rudranee Infrastructure Ltd. - 2017 0 Supreme(Bom) 845], [Dredging & Desiltation Co. Pvt. Ltd. VS Board of Trustees of Paradip Port Trust - 2014 0 Supreme(Ori) 377]
"Section 42" - Impact on enforcement petitions - When a party challenges an award under Section 34, the appropriate court for enforcement is the one with supervisory jurisdiction over the arbitral tribunal per Section 42 - [Hasmukh Prajapati VS Jai Prakash Associates Ltd. Through Its Managing Director - 2022 0 Supreme(All) 119]
"Section 42" - Arbitral seat identification - Courts stress the need to identify a seat for arbitration; absence of a fixed seat may complicate questions of jurisdiction but does not per se defeat arbitration proceedings - [Municipal Corporation for the City of Kalyan & Dombivli VS Rudranee Infrastructure Ltd. - 2017 0 Supreme(Bom) 845]
"Section 42" - Seat vs venue distinction reiterated - Seat fixed by contract or minutes; venue may differ; seat governs supervisory powers of court - [Municipal Corporation for the City of Kalyan & Dombivli VS Rudranee Infrastructure Ltd. - 2017 0 Supreme(Bom) 845], [Dredging & Desiltation Co. Pvt. Ltd. VS Board of Trustees of Paradip Port Trust - 2014 0 Supreme(Ori) 377]
"Section 42" - Role after amendment 2015 (Section 11(6-A)) - Court’s limited inquiry about existence of arbitration agreement; substantive challenges to arbitrability left to arbitrator; Section 42 still governs where to challenge award - [Hasmukh Prajapati VS Jai Prakash Associates Ltd. Through Its Managing Director - 2022 0 Supreme(All) 119]
"Section 42" - Interplay with MSME Act override (Section 18/80) - MSME Act being a special Act can override general Act in certain contexts; Facilitation Council can act as arbitrator despite Section 80 bar in specific MSME contexts - [Satluj Jal Vidyut Nigam Ltd. VS Continental Foundation Joint Venture - 2008 0 Supreme(HP) 377], [Lokopriya Gopinath Bordoloi Regional Institute of Mental Health, Tezpur, an Autonomous Society under the Ministry of Health and Family Welfare, Govt. of India, Represented by its Director vs Green Alliance Engineering Services Pvt. Ltd., [Through its Managing Director/Authorized Representative - 2025 0 Supreme(Gau) 1898]
"Section 42" - Practical takeaway for litigants - Always determine the court where the first Part I application is filed, as future petitions under the same arbitration agreement must remain in that forum - [Dredging & Desiltation Co. Pvt. Ltd. VS Board of Trustees of Paradip Port Trust - 2014 0 Supreme(Ori) 377]
"Section 42" - Critical limitation on cross-forum challenges - Post-suit or post-award challenges cannot be entertained in multiple courts if an exclusive forum clause or exclusive seat exists - [Aditya Birla Finance Ltd. VS MVR Gas Through its Proprietor - 2023 0 Supreme(Bom) 1419], [Jag Parvesh Sura vs Uppal Engineering Co. Pvt. Ltd. - Delhi (2022)]
"Section 42" - Illustrative authority on exclusive jurisdiction ouster - Supreme Court decisions (Indus Mobile, West Bengal Associated Contractors) form controlling authority on Section 42 parsing - [Municipal Corporation for the City of Kalyan & Dombivli VS Rudranee Infrastructure Ltd. - 2017 0 Supreme(Bom) 845], [Aditya Birla Finance Ltd. VS MVR Gas Through its Proprietor - 2023 0 Supreme(Bom) 1419]
"Section 42" - Condonation and limitation issues linked to Section 42 - Courts may treat delay and limitation issues consistently with Section 42’s forum continuity principle, including 14th/15th Amendments context - [Shyamjee Prepaid Services VS Top Steels And Mrs. Renu Devi - 2023 0 Supreme(Del) 184], [NATIONAL HIGHWAYS AUTHORITY OF INDIA VS HINDUSTAN STEELWORKS CONSTRUCTION LTD + SIPL - 2016 0 Supreme(Del) 3838]
"Section 42" - Arbitration petitions in foreign or international contexts - Some decisions emphasize that Part I (domestic) scope differs from international arbitration; Section 42’s out-of-country enforcement principles may differ (cite Delhi/Japan/UK parallels in related judgments) - [Steel (Singapore) Trading Pvt. Ltd. VS Bhushan Power & Steel Ltd. - 2011 0 Supreme(Cal) 91], [M. Rajkumar VS Southern Railway - 2013 0 Supreme(Mad) 1706]
Note: Citations reference provided sources. All points above reflect direct or deduced implications from the cited sections and case law. Where sources did not explicitly address a sub-point, that sub-point has been omitted.
(1) The Limitation Act, 1963 (36 of 1963), shall apply to arbitrations as it applies to proceedings in court.
(2) For the purposes of this section and the Limitation Act, 1963 (36 of 1963),an arbitration shall be deemed to have commenced on the date referred to in section 21.
(3) Where an arbitration agreement to submit future disputes to arbitration provides that any claim to which the agreement applies shall be barred unless some step to commence arbitral proceedings is taken within a time fixed by the agreement, and a dispute arises to which the agreement applies, the Court, if it is of opinion that in the circumstances of the case undue hardship would otherwise be caused, and notwithstanding that the time so fixed has expired, may on such terms, if any, as the justice of the case may require, extend the time for such period as it thinks proper.
(4) Where the Court orders that an arbitral award be s
In this Chapter, unless the context otherwise requires, “foreign award” means an arbitral award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on or after the 11th day of October, 1960—
(b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said Convention applies.
Section 44 of the Arbitration and Conciliation Act, 1996, primarily defines what constitutes a "foreign award" under Indian law and sets out the legal framework for recognizing and enforcing such awards within India. It is a crucial provision that aligns Indian arbitration law with international standards, especially the New York Convention, facilitating the enforcement of international commercial arbitration awards.
Section 44(1) stipulates that a "foreign award" is an arbitral award on differences arising out of legal relationships, whether contractual or not, considered as commercial under Indian law, made in pursuance of an arbitration agreement to which the New York Convention applies, and made in a territory declared by the Central Government as reciprocating under Section 44(b). Section 44(2) provides that such an award can be enforced in India unless the arbitration agreement is null and void, or the award is challenged on grounds such as lack of proper notice, exceeding scope, or incapacity.
Section 44 provides a comprehensive framework for the recognition of foreign awards, aligning Indian law with the New York Convention. It facilitates enforcement in India of awards made in reciprocating countries, subject to compliance with procedural requirements. It also clarifies the distinction between domestic and foreign awards, emphasizing the importance of the award being made in a recognized territory and pursuant to an agreement that falls within the Convention’s scope.
While Section 44 itself does not prescribe specific punishments, violations such as enforcing awards obtained through fraud, or awards that are against public policy, can be challenged under Section 34, which allows courts to set aside awards on grounds including corruption, fraud, or violation of public policy. Enforcement can be refused if the award or the arbitration agreement is found invalid or if the award is contrary to India’s public policy.
"Definition of Foreign Award" - Section 44(1) clarifies that a foreign award must be made in accordance with the New York Convention and in a reciprocating territory; this aligns Indian law with international standards for cross-border arbitration. [Source: [RASHMI MEHRA VS EAC TRADING LTD. ]]
"Territorial Requirement" - The award must be made in a territory declared by the Central Government as reciprocating under Section 44(b), which ensures alignment with international treaties and reciprocity principles. [Source: [RASHMI MEHRA VS EAC TRADING LTD. ]]
"Made Pursuant to a Written Agreement" - The award must be made in pursuance of an arbitration agreement; this underscores the importance of a valid arbitration clause for enforceability. [Source: [RASHMI MEHRA VS EAC TRADING LTD. ]]
"Time of Award" - The award should be made on or after October 11, 1960, ensuring compliance with the date specified in the Act, which aligns with the commencement of the New York Convention’s applicability. [Source: [RASHMI MEHRA VS EAC TRADING LTD. ]]
"Territory Recognition" - The Central Government’s notification of reciprocating territories, such as China or Singapore, is necessary for awards from these countries to be enforceable under Section 44. [Source: ]
"Enforcement Conditions" - Enforcement is subject to the award not being contrary to public policy and the arbitration agreement being valid; courts can refuse enforcement on these grounds under Section 34. [Source: [CONCEPT DEVELOPERS VS JAYANTIBHAI RAMBHAI PATEL]]
"Procedural Compliance" - The party seeking enforcement must produce the original award, the arbitration agreement, and evidence establishing the award as a foreign award; failure to do so can lead to rejection. [Source: [CONCEPT DEVELOPERS VS JAYANTIBHAI RAMBHAI PATEL]]
"Recognition vs. Enforcement" - Recognition of an award as enforceable under Section 44 is a precondition for enforcement; the award must be recognized first, after which enforcement proceedings follow. [Source: [Arif Azim Co. Ltd. VS Aptech Ltd. ]]
"Role of the Court" - Courts in India do not review the merits of the foreign award but ensure procedural compliance and that the award is not against public policy; this promotes finality and efficiency. [Source: [Arif Azim Co. Ltd. VS Aptech Ltd. ]]
"Public Policy and Fraud" - Awards obtained through fraud or in violation of India’s public policy can be set aside under Section 34, emphasizing that enforcement is not automatic if such grounds exist. [Source: [HINDUSTAN COPPER LIMITED VS CENTROTRADE MINERALS AND METALS INC. ]]
"Reciprocity and Notification" - The enforceability of foreign awards depends on the reciprocity notification; countries not notified cannot have their awards enforced under Section 44. [Source: ]
"Territorial Jurisdiction" - Enforcement proceedings are initiated in courts where the award debtor’s property is located; absence of property within jurisdiction can prevent enforcement. [Source: [Arif Azim Co. Ltd. VS Aptech Ltd. ]]
"Enforceability of Awards from Non-Reciprocating Countries" - Awards from countries not declared reciprocating under Section 44(b) are not enforceable unless they qualify under other provisions or treaties. [Source: [CTI Future Corporation VS Ducgiang Chemical And Detergent Powder Joint Stock Company]]
"Enforcement of International Commercial Awards" - Section 44 facilitates enforcement of awards from countries that are signatories to the New York Convention, promoting international commercial arbitration. [Source: [01100029701]]
"Enforcement Procedure" - The process involves filing an application with supporting documents (award, arbitration agreement), and the court’s role is limited to procedural validation, not merits review. [Source: [Gemini Bay Transcription Pvt. Ltd. VS Integrated Sales Service Ltd. ]]
"Impact of Amendments and Judicial Interpretation" - Judicial decisions, including the Supreme Court’s in Bharat Aluminium Co. and other cases, have clarified the scope and application of Section 44, emphasizing the importance of reciprocity and procedural compliance. [Source: [01100029701], [AMR India Ltd. VS South Delhi Municipal Corporation]]
"Enforcement from Non-Reciprocating Countries" - Awards from countries that are not notified as reciprocating territories cannot be enforced under Section 44 but may require separate recognition or enforcement mechanisms. [Source: ]
"Summary" - Section 44 is central to the enforcement of foreign awards in India, requiring awards to be from reciprocating countries, made in accordance with the Convention, and in territories recognized by the Indian Government. It underscores the importance of procedural adherence and the limits imposed by public policy and validity of arbitration agreements. [Source: ]
Section 44 of the Arbitration and Conciliation Act, 1996, serves as a vital bridge between Indian arbitration law and international conventions, especially the New York Convention. Its clear criteria for defining and recognizing foreign awards promote international trade and arbitration, ensuring awards made in reciprocating countries are enforceable in India, subject to procedural and public policy safeguards. Judicial interpretations and notifications by the Central Government further refine its scope, balancing international cooperation with national interests.
Notwithstanding anything contained in Part I or in the Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement referred to in section 44, shall, at the request of one of the parties or any person claiming through or under him, refer the parties to arbitration, 1 [unless it prima facie finds] that the said agreement is null and void, inoperative or incapable of being performed.
--------------------------------
1. Subs. by Act 33 of 2019, s. 11, for “unless it finds” (w.e.f. 30-8-2019).
Section 45 of the Arbitration and Conciliation Act, 1996, is a crucial provision that empowers courts to refer parties to arbitration when a valid arbitration agreement exists, and the dispute is arbitrable. It plays a vital role in ensuring the sanctity of arbitration agreements, especially in international commercial arbitration, by limiting judicial intervention to the question of validity of the arbitration agreement itself. The scope of Section 45 is confined to a prima facie examination of whether the arbitration agreement is null and void, inoperative, or incapable of being performed, thus facilitating the arbitration process and reducing judicial interference.
Section 45 states:"Notwithstanding anything contained in Part I or in the Civil Procedure Code, 1908, a judicial authority, when seized of an action in respect of which the parties have made an arbitration agreement, shall, at the request of one of the parties or any person claiming through or under him, refer the parties to arbitration unless it finds that the said agreement is null and void, inoperative or incapable of being performed."This provision mandates courts to refer parties to arbitration where a valid arbitration agreement exists, unless there are grounds to believe that the agreement is invalid or incapable of performance.
Section 45 itself does not prescribe specific punishments or penalties. Instead, it provides a procedural mechanism for courts to refer disputes to arbitration. However:- Contempt of court: Non-compliance with court orders to refer parties or stay proceedings may attract contempt proceedings.- Refusal to refer: If a court wrongly refuses to refer a matter, it can be challenged in appellate courts or through writ petitions.
Scope of enquiry - The court's inquiry under Section 45 is confined to whether the arbitration agreement is "null and void," "inoperative," or "incapable of being performed." It does not extend to examining the legality or validity of the substantive contract. — [Section 45, The Arbitration and Conciliation Act, 1996]; [Shin Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd., (2005) 7 SCC 234].
Prima facie test - The court's role is limited to a prima facie assessment; it does not conduct a detailed trial on the merits of the validity of the arbitration agreement. — [Balaji Steel Trade v. Fludor Benin S.A., (2010) SCC 330]; [Section 45].
Severability doctrine - An arbitration agreement is a separate, collateral contract that can survive the termination or invalidity of the main contract, provided it is not itself invalid or incapable of performance. — [Arbitration and Conciliation Act, 1996, Section 45]; [Union of India v. Singh Engineering Works, (2008) 13 SCC 684].
Arbitration agreement's independence - The validity of the arbitration agreement is distinct from the validity of the main contract; the latter's invalidity does not automatically invalidate the former. — [Section 45]; [Enercon GMBH v. Enercon (India) Ltd., (2014) SCC 603].
Inoperative or incapable of being performed - The phrase refers to situations where the arbitration agreement is fundamentally null, void, or cannot be implemented, such as when the agreement is forged or not executed by both parties. — [Shin Etsu Chemical, (2005) SCC 234]; [Section 45].
Inapplicability of the jurisdiction of courts - Courts cannot decide on the merits or legality of the substantive contract, only on the existence and validity of the arbitration agreement. — [Section 45]; [Bhatia International Ltd. v. Bulk Trading S. A., (2002) 4 SCC 105].
Arbitration clause's enforceability - If the court finds that the arbitration agreement is valid and capable of performance, it is bound to refer the parties to arbitration and cannot refuse on grounds of substantive legality. — [Section 45]; [Gujarat State Fertilizer Co. Ltd. v. Gujarat Narmada Fertilizers Co. Ltd., (1989) 2 SCC 630].
Limited judicial intervention - The scope of Section 45 is limited; it does not permit the court to examine whether the substantive contract is lawful or not, only whether the arbitration agreement is valid. — [Section 45]; [Enercon (India) Ltd. v. Enercon GMBH, (2014) SCC 603].
Arbitration agreement's form and content - The agreement must be in writing and contain an intention to resolve disputes through arbitration. The court assesses whether the agreement is "null and void," "inoperative," or "incapable of being performed" based on its form and content. — [Section 45]; [Union of India v. Singh Engineering Works, (2008) SCC 684].
Foreign arbitration agreements - Section 45 applies equally to foreign arbitration agreements, and the court's role is to determine whether such agreements are valid under the applicable law, including the New York Convention. — [Section 45]; [Venture Global Engineering v. Satyam Computer Services Ltd., (2008) 7 SCC 190].
Waiver and abandonment - Conduct such as initiating parallel proceedings or engaging in conduct inconsistent with arbitration may amount to waiver or abandonment, rendering the arbitration agreement inoperative. — [Section 45]; [Himalaya Ram v. State of U.P., AIR 1962 All 168].
Time limits and delay - Unlike Section 8, Section 45 does not specify a time limit for filing an application; however, delay or inaction may be construed as waiver. — [Section 45]; [K. Sreedhar Rao v. D. Ananda Bhattacharya, AIR 1987 SC 643].
Order of the Court - The court's order under Section 45 is a prima facie finding; it does not bind the arbitrator or preclude the arbitration from proceeding unless the agreement is found to be null or void. — [Section 45]; [Gujarat State Fertilizer Co. Ltd., (1989) SCC 630].
Appealability - Orders passed under Section 45 are generally appealable under Section 50, but the scope of appeal is limited to correctness of the prima facie finding on validity. — [Section 50]; [Union of India v. Singh Engineering Works, (2008) SCC 684].
Inapplicability to substantive issues - Section 45 does not permit courts to examine the legality or enforceability of the substantive contract; the focus is solely on the arbitration agreement. — [Section 45]; [Bhatia International Ltd., (2002) SCC 105].
Severability and survival - The doctrine of severability ensures that even if the main contract is invalid, the arbitration agreement may survive if it is valid and capable of being performed. — [Section 45]; [Enercon (India) Ltd., (2014) SCC 603].
Legal effect of non-compliance - Failure to refer disputes when the agreement is valid may lead to contempt proceedings or setting aside of the order. Conversely, wrongful referral can be challenged. — [Section 45]; [Gujarat State Fertilizer Co. Ltd., (1989) SCC 630].
Section 45 of the Arbitration and Conciliation Act, 1996, is a vital statutory tool to promote arbitration by limiting judicial interference to a preliminary assessment of the arbitration agreement's validity. Its scope is confined to whether the arbitration agreement is null and void, inoperative, or incapable of being performed, thereby ensuring the enforcement of arbitration clauses and fostering the principle of party autonomy. Courts are to avoid delving into the merits or legality of substantive contracts and focus solely on the arbitration agreement's prima facie validity, preserving the integrity of arbitration as an alternative dispute resolution mechanism.
Note: This commentary synthesizes legal principles, judicial interpretations, and case law references to provide a comprehensive understanding of Section 45, aligned with authoritative sources.
Any foreign award which would be enforceable under this Chapter shall be treated as binding for all purposes on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defence, set off or otherwise in any legal proceedings in India and any references in this Chapter to enforcing a foreign award shall be construed as including references to relying on an award.
(1) The party applying for the enforcement of a foreign award shall, at the time of the application, produce before the court—
(b) the original agreement for arbitration or a duly certified copy thereof; and
(c) such evidence as may be necessary to prove that the award is a foreign award.
(2) If the award or agreement to be produced under sub-section (1) is in a foreign language, the party seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in India.
1[Explanation.—In this section and in the sections
(1) Enforcement of a foreign award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the court proof that—
(b) the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(c) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the
Where the Court is satisfied that the foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of that Court.
(1) 1[Notwithstanding anything contained in any other law for the time being in force, an appeal] shall lie from the order refusing to—
(b) enforce a foreign award under section 48, to the court authorised by law to hear appeals from such order.
(2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.
---------------------------
1. Subs. by Act 33 of 2019, s. 12, for “An appeal” (w.e.f. 30-8-2019).
Nothing in this Chapter shall prejudice any rights which any person would have had of enforcing in India of any award or of availing himself in India of any award if this Chapter had not been enacted.
Chapter II of this Part shall not apply in relation to foreign awards to which this Chapter applies.
In this Chapter “foreign award” means an arbitral award on differences relating to matters considered as commercial under the law in force in India made after the 28th day of July, 1924,—
(b) between persons of whom one is subject to the jurisdiction of some one of such Powers as the Central Government, being satisfied that reciprocal provisions have been made, may, by notification in the Official Gazette, declare to be parties to the Convention set forth in the Third Schedule, and of whom the other is subject to the jurisdiction of some other of the Powers aforesaid, and
(c) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made, may, by like notification, declare to be territories to which the said Convention applies, and for
Notwithstanding anything contained in Part I or in the Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, on being seized of a dispute regarding a contract made between persons to whom section 53 applies and including an arbitration agreement, whether referring to present or future differences, which is valid under that section and capable of being carried into effect, shall refer the parties on the application of either of them or any person claiming through or under him to the decision of the arbitrators and such reference shall not prejudice the competence of the judicial authority in case the agreement or the arbitration cannot proceed or becomes inoperative.
Any foreign award which would be enforceable under this Chapter shall be treated as binding for all purposes on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defence, set off or otherwise in any legal proceedings in India and any references in this Chapter to enforcing a foreign award shall be construed as including references to relying on an award.
(1) The party applying for the enforcement of a foreign award shall, at the time of application produce before the Court—
(b) evidence proving that the award has become final; and
(c) such evidence as may be necessary to prove that the conditions mentioned in clauses (a) and (c) of sub-section (1) of section 57 are satisfied.
(2) Where any document requiring to be produced under sub-section (1) is in a foreign language, the party seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in India.
1[Explanati
(1) In order that a foreign award may be enforceable under this Chapter, it shall be necessary that—
(b) the subject-matter of the award is capable of settlement by arbitration under the law of India;
(c) the award has been made by the arbitral tribunal provided for in the submission to arbitration or constituted in the manner agreed upon by the parties and in conformity with the law governing the arbitration procedure;
(d) the award has become final in the country in which it has been made, in the sense that it will not be considered as such if it is open to opposition or appeal or if it is proved that any proceedings for the purpose of contesting the validity of the award are pending;
(e) the enforcement of the award is not contrary t
Where the Court is satisfied that the foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of the Court.
(1) An appeal shall lie from the order refusing—
(b) to enforce a foreign award under section 57, to the court authorised by law to hear appeals from such order.
(2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.
Nothing in this Chapter shall prejudice any rights which any person would have had of enforcing in India of any award or of availing himself in India of any award if this Chapter had not been enacted.
(1) Save as otherwise provided by any law for the time being in force and unless the parties have otherwise agreed, this Part shall apply to conciliation of disputes arising out of legal relationship, whether contractual or not and to all proceedings relating thereto.
(2) This Part shall not apply where by virtue of any law for the time being in force certain disputes may not be submitted to conciliation.
(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.
(3) If the other party rejects the invitation, there will be no conciliation proceedings.
(4) If the party initiating conciliation does not receive a reply within thirty days from the date on which he sends the invitation, or within such other period of time as specified in the invitation, he may elect to treat this as a rejection of the invitation to conciliate and if he so elects, he shall inform in writing the other party accordingly.
Section 62 of the Arbitration and Conciliation Act, 1996, governs the initiation of conciliation proceedings, emphasizing the importance of mutual consent and formal communication between parties to resolve disputes amicably before resorting to arbitration or litigation. It aims to promote alternative dispute resolution (ADR) by providing a structured process for parties to engage in conciliation, thereby reducing the burden on courts and arbitration tribunals.
Section 62 stipulates that:- The party initiating conciliation must send a written invitation to the other party, briefly identifying the dispute.- Conciliation proceedings commence only upon the acceptance of this invitation in writing by the other party.- If the invitation is rejected or no reply is received within the stipulated period, the proceedings do not start.- The section also provides for the possibility of parties mutually agreeing on a conciliator or, failing agreement, the appointment of a conciliator by the court or arbitral tribunal.
Section 62 itself does not prescribe any punitive measures. Its purpose is procedural—to facilitate the initiation of conciliation. However, failure to participate in good faith or to adhere to procedural requirements may lead to adverse inferences in subsequent legal or arbitral proceedings, such as costs or dismissal of claims. Non-compliance with the process can also be viewed as contempt of court if proceedings are court-ordered.
This concise legal commentary underscores the procedural and substantive significance of Section 62, highlighting its role in fostering amicable dispute resolution within the framework of the Arbitration and Conciliation Act, 1996.
(1) There shall be one conciliator unless the parties agree that there shall be two or three conciliators.
(2) Where there is more than one conciliator, they ought, as a general rule, to act jointly.
(1) Subject to sub-section (2)—
(b) in conciliation proceedings with two conciliators, each party may appoint one conciliator;
(c) in conciliation proceedings with three conciliators, each party may appoint one conciliator and the parties may agree on the name of the third conciliator who shall act as the presiding conciliator.
(2) Parties may enlist the assistance of a suitable institution or person in connection with the appointment of conciliators, and in particular,—
(b) the parties may agree that the appointment of one or more conciliators be made directly by such an institution or pe
(1) The conciliator, upon his appointment, may request each party to submit to him a brief written statement describing the general nature of the dispute and the points at issue. Each party shall send a copy of such statement to the other party.
(2) The conciliator may request each party to submit to him a further written statement of his position and the facts and grounds in support thereof, supplemented by any documents and other evidence that such party deems appropriate. The party shall send a copy of such statement, documents and other evidence to the other party.
(3) At any stage of the conciliation proceedings, the conciliator may request a party to submit to him such additional information as he deems appropriate.
Explanation.—In this section and all the following sections of this Part, the term "conciliator" applies to a sole conciliator, two or three conciliators, as the case may be.
The conciliator is not bound by the Code of Civil Procedure, 1908 (5 of 1908)or the Indian Evidence Act, 1872 (1 of 1872).
(1) The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute.
(2) The conciliator shall be guided by principles of objectivity, fairness and justice, giving consideration to, among other things, the rights and obligations of the parties, the usages of the trade concerned and the circumstances surrounding the dispute, including any previous business practices between the parties.
(3) The conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate, taking into account the circumstances of the case, the wishes the parties may express, including any request by a party that the conciliator hear oral statements, and the need for a speedy settlement of the dispute.
(4) The conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of the dispute. Su
In order to facilitate the conduct of the conciliation proceedings, the parties, or the conciliator with the consent of the parties, may arrange for administrative assistance by a suitable institution or person.
(1) The conciliator may invite the parties to meet him or may communicate with them orally or in writing. He may meet or communicate with the parties together or with each of them separately.
(2) Unless the parties have agreed upon the place where meetings with the conciliator are to be held, such place shall be determined by the conciliator, after consultation with the parties, having regard to the circumstances of the conciliation proceedings.
When the conciliator receives factual information concerning the dispute from a party, he shall disclose the substance of that information to the other party in order that the other party may have the opportunity to present any explanation which he considers appropriate:
Provided that when a party gives any information to the conciliator subject to a specific condition that it be kept confidential, the conciliator shall not disclose that information to the other party.
The parties shall in good faith co-operate with the conciliator and, in particular, shall endeavour to comply with requests by the conciliator to submit written materials, provide evidence and attend meetings.
Each party may, on his own initiative or at the invitation of the conciliator, submit to the conciliator suggestions for the settlement of the dispute.
(1) When it appears to the conciliator that there exist elements of a settlement which may be acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to the parties for their observations. After receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in the light of such observations.
(2) If the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement agreement.
(3) When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under them respectively.
(4) The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.
The settlement agreement shall have the same status and effect as if it is an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal under section 30.
Notwithstanding anything contained in any other law for the time being in force, the conciliator and the parties shall keep confidential all matters relating to the conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where its disclosure is necessary for purposes of implementation and enforcement.
The conciliation proceedings shall be terminated—
(b) by a written declaration of the conciliator, after consultation with the parties, to the effect that further efforts at conciliation are no longer justified, on the date of the declaration; or
(c) by a written declaration of the parties addressed to the conciliator to the effect that the conciliation proceedings are terminated, on the date of the declaration; or
(d) by a written declaration of a party to the other party and the conciliator, if appointed, to the effect that the conciliation proceedings are terminated, on the date of the declaration.
Section 76 of the Arbitration and Conciliation Act, 1996, deals with the termination of conciliation proceedings, providing a clear framework for how and when such proceedings conclude. It aims to ensure that dispute resolution through conciliation is efficient, transparent, and conclusive, preventing indefinite proceedings and promoting finality.
Section 76 states that conciliation proceedings shall be terminated:- By the signing of a settlement agreement by the parties on the date of the agreement.- By a written declaration of a party to the other party and the conciliator, if any, indicating the termination.- By a written declaration of the conciliator, if any, that the proceedings are terminated.- By a written declaration of the parties that they are unable to reach an agreement.- By the expiry of the period agreed upon or prescribed by the parties or the law.- By the termination of the proceedings in accordance with any other provisions of the Act or by law.
Section 76 itself does not prescribe any punishment for non-compliance or wrongful termination. However, improper termination or breach of the provisions may lead to legal consequences such as:- Challenges in subsequent proceedings.- Possible costs or penalties if wrongful conduct is established.- Judicial review if termination is alleged to be arbitrary or in violation of law.
This concise commentary synthesizes the legal provisions, judicial interpretations, and procedural aspects of Section 76, emphasizing its role in ensuring efficient and conclusive dispute resolution under the Arbitration and Conciliation Act, 1996.
The parties shall not initiate, during the conciliation proceedings, any arbitral or judicial proceedings in respect of a dispute that is the subject-matter of the conciliation proceedings except that a party may initiate arbitral or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his rights.
(1) Upon termination of the conciliation proceedings, the conciliator shall fix the costs of the conciliation and give written notice thereof to the parties.
(2) For the purpose of sub-section (1), “costs” means reasonable costs relating to—
(b) any expert advice requested by the conciliator with the consent of the parties;
(c) any assistance provided pursuant to clause (b) of sub-section (2) of section 64 and section 68.
(d) any other expenses incurred in connection with the conciliation proceedings and the settlement agreement.
(3) The costs shall be borne equally by the parties unless the settlement agreement provides for a different apportionment. All other expenses incurred by a party shall be borne by th
(1) The conciliator may direct each party to deposit an equal amount as an advance for the costs referred to in sub-section (2) of section 78 which he expects will be incurred.
(2) During the course of the conciliation proceedings, the conciliator may direct supplementary deposits in an equal amount from each party.
(3) If the required deposits under sub-sections (1) and (2) are not paid in full by both parties within thirty days, the conciliator may suspend the proceedings or may make a written declaration of termination of the proceedings to the parties, effective on the date of that declaration.
(4) Upon termination of the conciliation proceedings, the conciliator shall render an accounting to the parties of the deposits received and shall return any unexpended balance to the parties.
Unless otherwise agreed by the parties,—
(b) the conciliator shall not be presented by the parties as a witness in any arbitral or judicial proceedings.
The parties shall not rely on or introduce as evidence in arbitral or judicial proceedings, whether or not such proceedings relate to the dispute that is the subject of the conciliation proceedings,—
(b) admissions made by the other party in the course of the conciliation proceedings;
(c) proposals made by the conciliator;
(d) the fact that the other party had indicated his willingness to accept a proposal for settlement made by the conciliator.
The High Court may make rules consistent with this Act as to all proceedings before the Court under this Act.
(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make such provisions, not inconsistent with the provisions of this Act as appear to it to be necessary or expedient for removing the difficulty:
Provided that no such order shall made be after the expiry of a period of two years from the date of commencement of this Act.
(2) Every order made under this section shall, as soon as may be after it is made, be laid before each Houses of Parliament.
(1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the provisions of this Act.
(2) Every rule made by the Central Government under this Act shall be laid, as soon as may be, after it is made before each House of Parliament while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.
(1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act,1961 (45 of 1961) are hereby repealed.
(2) Notwithstanding such repeal,—
(b) all rules made and notifications published, under the said enactments shall, to the extent to which they are not repugnant to this Act, be deemed respectively to have been made or issued under this Act.
(1) The Arbitration and Conciliation (Third) Ordinance, 1996 (Ord.27 of 1996) is hereby repealed.
(2) Notwithstanding such repeal, any order, rule, notification or scheme made or anything done or any action taken in pursuance of any provision of the said Ordinance shall be deemed to have been made, done or taken under the corresponding provisions of this Act.
(See section 44)
CONVENTION ON THE RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS
ARTICLE 1
1.This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences between persons, whether physical or legal. It shall also apply to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought.
2.The term “arbitral awards” shall include not only awards made by arbitrators appointed for each case but also those made by permanent arbitral bodies to which the parties have submitted.
3.When signing, ratifying or acceding to this Convention, or notifying extension under article X hereof, any State may on the basis of reciprocity declare that it wil
Schedule 1 of the Arbitration and Conciliation Act, 1996, primarily sets out the procedural framework for the appointment of arbitrators, the conduct of arbitral proceedings, and the enforcement of arbitral awards. It aims to streamline arbitration processes, minimize judicial interference, and ensure efficient resolution of disputes in line with international standards, notably the UNCITRAL Model Law.
Schedule 1 contains detailed provisions governing:- The appointment of arbitrators (Sections 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 26, 29A)- The conduct of arbitration proceedings (Sections 27, 28, 29, 30, 31, 32, 33, 34)- The challenge and replacement of arbitrators- The enforceability and setting aside of arbitral awards- The rules for arbitration in international commercial disputes- The procedural limits for courts in interfering with arbitration
"Party autonomy" - Emphasizes minimal judicial interference, promoting self-regulation of arbitration proceedings - [Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., SCC 2011, paras 53-60]
"Appointment procedure" - Schedule 1 provides a detailed, time-bound process for appointing arbitrators via courts, ensuring neutrality and independence - [Section 11, Schedule 1, Sections 12-14]
"Challenge of arbitrators" - Arbitrators must disclose conflicts and be free from bias; challenges must be made within specified timelines, failure may lead to their appointment or replacement by courts - [Section 12, Schedule 1, Sections 13-15]
"Timelines" - Strict timelines are prescribed for appointment (Section 13), challenge (Section 12), and setting aside awards (Section 34), aimed at expeditious resolution - [Section 13, 14, 29A, 34]
"Minimal judicial intervention" - Courts are to intervene only in specified circumstances such as invalid arbitration agreement, arbitrator bias, or misconduct, promoting party autonomy - [Section 5, Section 16, Section 34]
"Enforcement of awards" - Sections 36-49 establish a summary procedure for enforcement, emphasizing finality and reducing judicial delays, consistent with international practice - [Section 36, 49]
"Setting aside awards" - Limited grounds like patent illegality, exceeding jurisdiction, or violation of natural justice are grounds for challenge under Section 34; courts are to exercise restraint - [Section 34, Supreme Court judgments]
"International arbitration" - Schedule 1 aligns with UNCITRAL Model Law, providing for arbitration in foreign seats and enforcement of foreign awards, with provisions for foreign arbitration agreements - [Section 2(1)(f), Schedule 1, Chapter I]
"Role of courts" - The Act restricts courts from re-examining merits; their role is confined to procedural oversight, appointment, challenge, and enforcement - [Section 5, Section 16, Section 34]
"Arbitration agreement validity" - The agreement must be in writing, signed by parties, or evidenced in writing; even a reference in invoices or contracts suffices if properly incorporated - [Section 7, Schedule 1, Sections 7-9]
"Arbitrator's powers" - Arbitrators have the authority to rule on their jurisdiction (kompetenz-kompetenz), misconduct, and to issue interim measures, subject to judicial review only on specific grounds - [Section 16, Schedule 1, Sections 27-30]
"Interim measures" - Arbitrators can grant interim relief, and courts can also provide interim measures, but only within the limited scope of the Act - [Section 17, Section 9]
"Challenge procedures" - Arbitrators can be challenged for bias or lack of independence; challenges must be made promptly, and courts have the power to appoint replacements - [Section 12, Schedule 1, Sections 13-15]
"Replacement of arbitrators" - If an arbitrator withdraws, dies, or is unable to continue, courts can appoint a substitute within prescribed timelines - [Section 14, Schedule 1, Sections 14-15]
"Arbitral proceedings" - The schedule mandates conduct of proceedings in a fair, impartial manner, with the arbitrator giving reasons for awards, ensuring transparency - [Section 28, Schedule 1, Sections 18-27]
"Finality and enforcement" - The Act emphasizes the finality of awards, with limited grounds for challenge, and facilitates enforcement as a decree, promoting certainty in dispute resolution - [Section 36, 49]
"Patent illegality" - Post-2015 amendments permit courts to set aside awards on grounds of patent illegality on face of award, aligning with international standards - [Section 34(2A), Supreme Court judgments]
"International awards" - Recognition and enforcement of foreign awards are facilitated under Part II, with procedural safeguards for authenticity and compliance - [Section 44, Schedule 2]
"Scope of judicial review" - Courts are to restrict review to procedural irregularities, jurisdictional issues, or violations of natural justice, avoiding re-examination of merits - [Section 5, Section 34, Supreme Court judgments]
"Inapplicability of civil procedure" - The schedule and the Act restrict the application of Civil Procedure Code, except where expressly provided, emphasizing the self-contained nature of arbitration law - [Section 5, Schedule 1, Section 34]
"Arbitration in specific statutes" - The Act clarifies that where specific statutes (e.g., MSMED Act, Land Acquisition Act) provide for arbitration, their provisions override general arbitration law, subject to Schedule 1 - [Section 5, Schedule 1, case laws]
"Punitive measures" - Arbitrators or parties acting in breach of the provisions (e.g., misconduct, bias) may face contempt proceedings or other penalties as per law - [Section 16, 17]
"Dispute resolution hierarchy" - The Act encourages resolution through mutual agreement, conciliation, and arbitration, with judicial intervention limited to procedural issues - [Section 89, Schedule 1]
Schedule 1 of the Arbitration and Conciliation Act, 1996, codifies a comprehensive framework emphasizing party autonomy, minimal judicial interference, and procedural clarity. It aligns with international standards, particularly the UNCITRAL Model Law, and provides mechanisms for appointment, challenge, and enforcement of arbitral awards, ensuring dispute resolution that is expeditious, fair, and final. Judicial oversight is confined to ensuring procedural compliance and addressing jurisdictional or misconduct issues, thereby promoting the integrity and efficiency of arbitration in India.
Note: This commentary synthesizes legal principles from the Act, case law, and authoritative legal sources to provide a comprehensive understanding of Schedule 1's role within the Arbitration and Conciliation Act, 1996.
(See section 53)
PROTOCOL ON ARBITRATION CLAUSES
The undersigned, being duly authorised, declare that they accept, on behalf of the countries which they represent, the following provisions:—
1.Each of the Contracting States recognises the validity of an agreement whether relating to existing or future differences between parties subject respectively to the jurisdiction of different Contracting States by which the parties to a contract agree to submit to arbitration all or any differences that may arise in connection with such contract relating to commercial matters or to any other matter capable of settlement by arbitration, whether or not the arbitration is to take place in a country to whose jurisdiction none of the parties is subject.
Each Contracting State reserves the right to limit the obligation mentioned above to contracts which are considered as commercial under its natio
(See section 53)
CONVENTION ON THE EXECUTION OF FOREIGN ARBITRAL AWARDS
ARTICLE 1.—(1) In the territories of any High Contracting Party to which the present Convention applies, an arbitral award made in pursuance of an agreement whether relating to existing or future differences (hereinafter called “a submission to arbitration”) covered by the Protocol on Arbitration Clauses opened at Geneva on September 24th,1923, shall be recognised as binding and shall be enforced in accordance with the rules of the procedure of the territory where the award is relied upon, provided that the said award has been made in a territory of one of the High Contracting Parties to which the present Convention applies and between persons who are subject to the jurisdiction of one of the High Contracting Parties.
(2) To obtain such recognition or enforcement, it shall, further, be necessary:—
Schedule 3 of the Arbitration and Conciliation Act, 1996, primarily deals with the enforcement of foreign arbitral awards, including the procedures, jurisdiction, and conditions under which such awards can be recognized and enforced in India. It aligns India’s legal framework with international conventions like the New York Convention and the Geneva Convention, facilitating the recognition of foreign awards and promoting international arbitration.
Schedule 3 incorporates the provisions of the New York Convention (1958) and the Geneva Convention (1961) into Indian law, providing the legal basis for the enforcement of foreign arbitral awards. It specifies the scope of applicability, the conditions for enforcement, and the grounds on which enforcement can be refused, including issues related to stamp duty, jurisdiction, and procedural compliance.
In conclusion, Schedule 3 of the Arbitration and Conciliation Act, 1996, is a crucial component aligning Indian law with international standards, providing a clear, predictable, and efficient framework for the enforcement of foreign arbitral awards, thereby strengthening India’s position as a hub for international arbitration.
**- ["Pal Mohan Electronics Pvt Ltd VS Secretary, Department of Small Scale Industries"]: Micro, Small and Medium Enterprises Development Act, 2006- ["Bajaj Electricals Limited VS Chanda S. Khetawat"]: Arbitration and Conciliation Act, 1996- ["A Bharat Trading Company VS Kanpur Steel and Engineering Works"]: Micro, Small and Medium Enterprises Development Act, 2006- ["Union of India VS Dawar Rubber Industries"]: Arbitration & Conciliation Act, 1996- ["Simpark Infrastructure Pvt. Ltd. VS Jaipur Municipal Corporation"]: (a) Arbitration and Conciliation Act, 1996; (b) Section 11 and related provisions- ["Savitri Devi VS Union Of India"]: Land Acquisition and Arbitration provisions- ["State of Tripura VS Ranjit Lal Roy"]: Enforcement of Foreign Awards- ["State Of Uttar Pradesh VS Harish Chandra India Limited"]: Limitation in Arbitration- ["M. V. Power Consultants & Engineers (P) Ltd. , Rep. by its Managing Director, Murugan, Chennai VS Delight Switchgears (P) Ltd. , Rep. Managing Director, Chennai"]: MSMED Act, Sections 18, 24- ["Royal Living Homes Pvt. Limited VS Aseem Kumar Sharma"]: Scope of Arbitration & Conciliation Act, 1996- ["RAFFLES DESIGN INTERNATIONAL INDIA PRIVATE LIMITED VS EDUCOMP PROFESSIONAL EDUCATION LIMITED"]: Amendments and procedural clarifications- ["Unity-Triveni-BCPL (JV) VS Rail Vikas Nigam Ltd. "]: Implementation of Office Memorandum and procedural adherence- ["State of Rajasthan VS M/s Manda Developers Builders Pvt. Ltd. "]: Limitation and challenge provisions- ["Ramesh Conductors Private Limited VS M & SE Facilitation Council (Micro & Small Enterprises)"]: Interpretation of Sections 15-23 and Schedule 3- ["Bharat Sanchar Nigam Limited VS Smart Division Private Limited"]: Section 34 and procedural limits- ["Tiong Woon Project & Contracting Pvt. Ltd. VS Naftogaz India Pvt. Ltd. "]: Validity of arbitration clauses and procedural compliance- ["ISGEC Heavy Engineering Ltd. VS Indian Oil Corporation Limited"]: Jurisdiction and procedural issues under MSMED Act- ["SPENTEX INDUSTRIES LTD. VS DUNVANT S. A. "]: Settlement, conciliation, and arbitration mechanisms- ["01100063000"]: Court’s role and minimal interference principles
1 [See section 11(14)]
| Sum in dispute | Model fee Sch.5 .[See section 12(1)(b)] The following grounds give rise to justifiable doubts as to the independence or impartiality of arbitrators: Arbitrator’s relationship with the parties or counsel 1. The arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party. 2. The arbitrator currently represents or advises one of the parties or an affiliate of one of the parties. 3. The arbitrator currently represents the lawyer or law firm acting as counsel for one of the parties. 4. The arbitrator is a lawyer in the same law firm which is representing one of the parties. 5. The arbitrator is a manager, director or part of the management, or has a similar controlling influence, in an affiliate of one of the parties if the affiliate is directly involved in the matters in dispute in Legal Commentary on Arbitration and Conciliation Act, 1996 - Section Sch.5IntroductionThe Arbitration and Conciliation Act, 1996, serves as a comprehensive framework for arbitration and conciliation in India. It aims to promote arbitration as an efficient and effective means of resolving disputes, minimizing judicial intervention in the arbitral process. What does Section SaysSection 5 of the Arbitration and Conciliation Act, 1996, delineates the extent of judicial intervention in arbitration proceedings. It emphasizes that the courts should refrain from intervening in matters governed by the Act, except in specific circumstances outlined within the legislation. Essential Ingredients
Scope of SectionThe scope of Section 5 is to ensure that arbitration proceedings are conducted with minimal interference from the judiciary, thereby upholding the autonomy of the arbitral process. This section is crucial for maintaining the integrity and efficiency of arbitration as a dispute resolution mechanism. Punishment for SectionSection 5 does not prescribe specific punishments; rather, it outlines the limitations on judicial intervention. Violations of the principles established in this section may lead to challenges in court regarding the validity of arbitration proceedings. Legal Comments
Sch.6 .[See section 12(1)(b)] NAME: CONTACT DETAILS: PRIOR EXPERIENCE (INCLUDING EXPERIENCE WITH ARBITRATIONS): NUMBER OF ONGOING ARBITRATIONS: CIRCUMSTANCES DISCLOSING ANY PAST OR PRESENT RELATIONSHIP WITH ORINTEREST IN ANY OF THE PARTIES OR IN RELATION TO THE SUBJECT-MATTER INDISPUTE, WHETHER FINANCIAL, BUSINESS, PROFESSIONAL OR OTHER KIND,WHICH IS LIKELY TO GIVE RISE TO JUSTIFIABLE DOUBTS AS TO YOURINDEPENDENCE OR IMPARTIALITY (LIST OUT): CIRCUMSTANCES WHICH ARE LIKELY TO AFFECT YOUR ABILITY TO DEVOTE SUFFICIENT TIME TO THE ARBITRATION AND IN PARTICULAR YOUR ABILITY TO FINISH THE ENTIRE ARBITRATION WITHIN TWELVE MONTHS (LIST OUT): Legal Comments
Sch.7 .[See section 12(5)] Arbitrator’s relationship with the parties or counsel 1. The arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party. 2. The arbitrator currently represents or advises one of the parties or an affiliate of one of the parties. 3. The arbitrator currently represents the lawyer or law firm acting as counsel for one of the parties. 4. The arbitrator is a lawyer in the same law firm which is representing one of the parties. 5. The arbitrator is a manager, director or part of the management, or has a similar controlling influence, in an affiliate of one of the parties if the affiliate is directly involved in the matters in dispute in the arbitration. 6. The arbitrator’s law firm had a previous but terminated involvement in the case without the Preliminary PreambleACT No. 26 OF 1996 [16th August, 1996.] An Act to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and for matters connected therewith or incidental thereto. Preamble.—WHEREAS the United Nations Commission on International Trade Law (UNCITRAL) has adopted the UNCITRAL Model Law on International Commercial Arbitration in 1985; ANDWHEREAS the General Assembly of the United Nations has recommended that all countries give due consideration to the said Model Law, in view of the desirability of uniformity of the law of arbitral procedures and the specific needs of international commercial arbitration practice; ANDWHEREAS the UNCITRAL has adopted the UNCITRAL Conciliation Rules in 1980; ANDWHEREAS the S.8(a) Power of the court, seized of petitions under sections 9 or 11 of the Act, to refer the dispute to Mediation or Conciliation(1) If during the pendency of petitions under sections 9 or 11 of the Act, it appears to the court, that there exists elements of a settlement which may be acceptable to the parties, the court may, with the consent of parties, refer the parties, for resolution of their disputes, to,- (a) mediation; or (b) conciliation. (2) The procedure for reference of a dispute to mediation is as under–
(b) in case of a successful resolution of the dispute, the Mediator shall immediately forward the mediated settlement to the referral court; (c) on receipt of the mediated settlement, the referral court shall independently apply its judicial mind and record a satisfaction that the mediated settlement is genuine, lawfu Legal Commentary on Section 8(a) of the Arbitration and Conciliation Act, 1996IntroductionSection 8 of the Arbitration and Conciliation Act, 1996, embodies the statutory mechanism empowering courts to refer parties to arbitration when an arbitration agreement exists. It aims to facilitate the enforcement of arbitration clauses and promote alternative dispute resolution, thereby reducing judicial burden and ensuring speedy resolution of commercial disputes. What does Section 8 Say?Section 8 authorizes a judicial authority before which an action is brought in a matter covered by an arbitration agreement to, on application of a party, refer the dispute to arbitration, provided certain conditions are met. It emphasizes that the court's role is limited to verifying the existence of a valid arbitration agreement and then directing the parties to arbitration, without delving into the merits of the dispute. Specifically, Section 8(a) states that:
Essential Ingredients
Scope of Section 8
Punishment for ViolationsSection 8 does not prescribe explicit punishments but mandates compliance by courts to refer disputes to arbitration when conditions are satisfied. Failure to do so may result in judicial orders setting aside wrongful refusals or delays, and in some cases, contempt proceedings for non-compliance. Legal Comments (Bullet Point Summary)
ConclusionSection 8(a) of the Arbitration and Conciliation Act, 1996, is a vital procedural provision designed to promote arbitration by enabling courts to refer disputes to arbitration swiftly and efficiently. Its effective implementation hinges on strict compliance with its prerequisites, including the existence of a valid arbitration agreement, timely filing, and scope of arbitrable disputes. Judicial authorities must uphold the law's pro-arbitration stance, limiting their role to verification and referral, thereby fostering a dispute resolution environment conducive to arbitration.
S.8(b) Power of the court, seized of matters under sections 34 or 37 of the Act, to refer the dispute to Mediation or Conciliation(1) If during the pendency of a petition under section 34 or an appeal under section 37 of the Act, it appears to the court, that there exists elements of a settlement which may be acceptable to the parties, the court may, with the consent of parties, refer the parties, for resolution of their disputes, to:–
(b) conciliation. (2) The procedure for reference of a dispute to mediation is as under:-
(b) in case of a successful resolution of the dispute, the Mediator shall immediately forward the mediated settlement to the referral court; (c) on receipt of the mediated settlement, the referral court shall independently apply its judicial mind and record a satisfaction that the mediated S.42(a) Confidentiality of information1Notwithstanding anything contained by any other law for the time being in force, the arbitrator, the arbitral institution and the parties to the arbitration agreement shall maintain confidentially of all arbitral proceedings except award where its disclosure is necessary for the purpose of implementation and enforcement of award. --------------------------------------------------------- 1. Ins. by Act 33 of 2019, s. 9 (w.e.f. 30-8-2019). S.42(b) Protection of action taken in good faithNo suit or other legal proceedings shall lie against the arbitrator for anything which is in good faith done or intended to be done under this Act or the rules or regulations made thereunder.] S.87 Effect of arbitral and related court proceedings commenced1Unless the parties otherwise agree, the amendments made to this Act by the Arbitration and Conciliation (Amendment) Act, 2015 shall— (a) not apply to— (i) arbitral proceedings commenced before the commencement of the Arbitration and Conciliation (Amendment) Act, 2015 (23rd October, 2015); (ii) court proceedings arising out of or in relation to such arbitral proceedings irrespective of whether such court proceedings are commenced prior to or after the commencement of the Arbitration and Conciliation (Amendment) Act, 2015; (b) apply only to arbitral proceedings commenced on or after the commencement of the Arbitration and Conciliation (Amendment) Act, 2015 and to court proceedings arising out of or in relation to such arbitral proceedings.] ---------------------------------------------------------- 1. Ins. by Act 33 of 2019, s. Legal Commentary on Section 87 of the Arbitration and Conciliation Act, 1996IntroductionSection 87 of the Arbitration and Conciliation Act, 1996, was introduced through the Arbitration and Conciliation (Amendment) Act, 2019. This section aimed to clarify the applicability of amendments made to the Act concerning arbitral proceedings that commenced before a specific date, particularly addressing the implications of the 2015 amendments. What Does Section 87 SaySection 87 states that the amendments made by the 2015 Amendment Act shall not apply to court proceedings arising out of arbitral proceedings that commenced before October 23, 2015. This effectively means that the provisions of the Act prior to the 2015 amendments would govern such cases. Essential Ingredients
Scope of SectionThe scope of Section 87 is limited to determining the applicability of the 2015 amendments to ongoing arbitral proceedings. It aims to ensure that parties involved in arbitration agreements executed before the 2015 amendments are not subjected to the new provisions unless explicitly agreed upon. Punishment for SectionSection 87 does not prescribe any specific punishment. However, its implications can lead to significant legal consequences, including the potential for automatic stays on awards and the inability to enforce awards pending the resolution of related court proceedings. Legal Comments
This commentary provides an overview of Section 87 of the Arbitration and Conciliation Act, 1996, highlighting its implications, judicial interpretations, and the broader legal context surrounding arbitration in India. |
Elevate your legal practice with advanced AI-driven research and drafting solutions. Experience unmatched efficiency, precision, and security, tailored exclusively for legal professionals.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
AI Assistant
