1

SCHOOL OF LAW

SUBJECT: ALTERNATE DISPUTE RESOLUTION (LF 23.522)

NAME OF THE TOPIC: WAIVER OF THE RIGHT TO OBJECT - UNDER

THE ARBITRATION AND CONCILIATION ACT 1996

SESSION: 2023-2024

SUBMITTED TO – SUBMITTED BY –
Dr. Pooja Jain Fagun Mathur
(Assistant professor, 190239
School of Law) BALLB, 5th year
 2

TABLE OF CONTENTS

S. No. Title Page no.

1. Introduction 4

2. History of arbitration in India 5

4. Waiver of the right to object 6

5. Conditions precedent to waiver of the right to 8

object
6. Landmark judgments of waiver of the right to 9
object
7. Conclusion 13

8. Plagiarism Report 13
 3

TABLE OF CASES
1. Adani Enterprises Ltd. v. Antikeros Shipping Corp
2. Banning v. Wright
3. Bharat Sanchar Nigam Ltd.& Anr vs. Motorola India Pvt. Ltd
4. Jain Automobiles H.P.C. Dealer v. Hindustan Petroleum Corporation Limited
5. Karnataka State Road Transport Corporation vs. M. Keshava Raju
6. Narayan Prasad Lohia v. Nikunj Kumar Lohia & Ors.
7. Prasun Roy v. Calcutta M.D. Authority
8. Quippo Construction Equipment Limited v. Janardan Nirman Pvt. Ltd
9. Satish Kumar vs. Union of India and Ors.
10. S.N. Malhotra & Sons v. Airport Authority of India
 4

WAIVER OF THE RIGHT TO OBJECT - UNDER THE ARBITRATION

AND CONCILIATION ACT 1996
 INTRODUCTION –
The UNCITRAL Model Law has a major influence on the 1996 Arbitration and Conciliation
Act. It is applicable to arbitrations of all types, not only business conflicts. The Act does not,
however, apply to certain disputes that may not be arbitral under Indian law. These include
matters pertaining to guardianship, insolvency and winding-up proceedings, criminal offences,
matrimonial disputes related to divorce, matters pertaining to a grant of probate, letters of
administration, succession certificates, matters pertaining to the eviction of tenants where the
tenant is entitled to statutory protection against eviction, disputes involving intellectual property
and antitrust, and certain statutory arbitrations.

Arbitration is defined as "any arbitration, whether or whether it is run by a permanent arbitration

body, under Section 2 (1) (a) of the Act 1. Arbitration, as defined by the Oxford Dictionary, is
"the process of resolving a dispute by referring it to a third party in order to obtain an impartial
decision." It is described as "an effective way of obtaining a final and binding decision on a
dispute, or series of disputes, without reference to a court of law" in common law jurisdictions.

One of the fundamental characteristics of arbitration is its contractual aspect, which grants the
parties’ liberty since the contract is an expression of their shared will. Because arbitration is
contractual in nature, the main determinant of the outcome is the parties' intentions.
The other certainty is the judicial character, which binds the parties in dispute. Because it
contradicts the fundamental principles of arbitration, the judicial aspect renders the ruling final
and binding. As such, it should be minimized2. Arbitration's binding character and contractual
independence are compromised when the judiciary becomes involved.

The arbitration agreement's terms must be followed by the parties during the arbitration process.
Nevertheless, there are numerous situations in which parties fail to abide by the same, and in
such cases, the other party must object in the arbitration process against the non-complying party
1
The Arbitration and Conciliation Act, 1996.
2
O P Malhotra and Indu Malhotra, The Law and Practice of Arbitration and Conciliation, Butterworths, 2006.
 5

as soon as possible, within the allotted time frame. Conversely, a party is said to have "waived
off his right to object" if they have not objected to the procedure and are aware of continuing
with it.

 HISTORY OF ARBITRATION IN INDIA –

YEAR DEVELOPMENT
1809 The Indian Arbitration Act of 1899 was the first arbitration statute and was only
applicable to Presidency cities, based on the English Arbitration Act of 1899,
1908 The Code of Civil Procedure, 1908, Schedule

1937 Act of 1937 on Arbitration (Protocol and Convention). It addressed the Geneva
Convention's acceptance and enforcement of foreign awards.
1940 The laws pertaining to domestic arbitration were unified by the Arbitration Act of
1940.
1961 The Act of 1961 on the Recognition and Enforcement of Foreign Awards. It addressed
the New York Convention's recognition and enforcement of foreign awards.

1996 All domestic and international arbitration laws were combined into one act in 1996
under the name Arbitration and Conciliation Act.
2001 The 1996 Act was urged to be amended in the 176th Law Commission Report.

2003 In line with the 176th Law The Arbitration and Conciliation (Amendment) Bill, 2003,
Commission Report, was released.
2004 The 176th Report of the Law Commission's recommendations was the reason behind
the formation of the Justice Saraf Committee on Arbitration.
2005 The Department Related Standing Committee on Personnel, Public Grievances, Law
and Justice was tasked with reviewing the 2003 Bill in further detail. The Bill was
dropped because the Department determined it was insufficient.
2014-15 The Law Commission suggested amending the 1996 Act in its 246th and
Supplementary Reports.
2015 The 1996 Act was modified with effect from October 23, 2015, by the Arbitration and
Conciliation (Amendment) Act, 2015.
2017 A commission headed by Justice Srikrishna, a senior Supreme Court judge, was
 6

established with the recommendation to amend the Act further and encourage
institutional arbitration.
2018 Based on the Sririshna J. Report, the Arbitration and Conciliation (Amendment) Bill,
2018 suggested additional changes to the Act.

2019 The Arbitration and Conciliation (Amendment) Act, 2019 made amendments to the
Act. The 2019 Act, which became operative on August 30, 2019, aims to demonstrate
India's growing pro-arbitration stance and further streamline Indian arbitration
legislation in light of international arbitration standards[4] ("2019 Amendment Act").
2021 With effect from November 4, 2020, the 2021 Amendment Act broadened the scope of
Section 36 of the Act by granting an unconditional stay of the arbitral award in the case
where it is prima facie shown that fraud or corruption had been employed to induce or
effect the arbitration agreement or contract between the parties, or the arbitral award
itself. Additionally, by eliminating the 8th Schedule of the Act and replacing it with
Section 43J, the Act gives ACI the authority to enact regulations regarding the
requirements for the training, background, and standards for arbitrator recognition.

 WAIVER OF THE RIGHT TO OBJECT –

The goal of implementing Article 8 of the UNCITRAL Model Law on International Commercial
Arbitration which is founded on the doctrine of estoppel was to guarantee the effectiveness of the
arbitration procedure. However, it was brought out in the talks that preceded this article's
publication that stringent implementation may result in a party being treated unfairly. This issue
is still significant, especially in nations like India where ad hoc arbitration is common. Similar to
Article 8 of the Model Law, Section 4 of the Indian Arbitration and Conciliation Act, 1996
addresses the presumed surrender of a party's right to object under specific conditions. If a party
remains silent despite being aware of the non-compliance, it is deemed that they have waived
their right to object. As a result, they are unable to object to the non-compliance in any
subsequent domestic court proceedings3. However, the party is not considered to have forfeited
his right to object if circumstances such as a postal strike or similar obstacles prevented him from
communicating his complaint. The United Nations Commission on International Trade Law's
3
The institute of company secretaries of India, group – 2, Elective paper 7.1, Lesson 3.
 7

Fifth Session of the Working Group on International Contract Practices was when the concept of
a general principle of waiver was first explored. The majority of parties thought that a general
waiver rule was required, even if it should be less strict and only apply in situations where there
had been flagrant violations of procedural rules.

The act of voluntarily giving up a valid claim is conveyed by the definition of "waiver."
According to the ruling in Banning v. Wright4, waiver is defined as giving up a right in a way
that enables the other party the right to claim it has been waived by means of confession and
avoidance if the right is later asserted. It implies the deliberate and voluntary renunciation of a
recognized right through behaviour or silence.

According to Section 4 of the Act 5, a party must have been aware of the derogation or violation
for the provision to be applicable. For the principle of waiver to be generally applicable, it has
always been necessary to have awareness of the party. Although the Act doesn't define "waiver,"
Indian courts have interpreted it as the deliberate and voluntarily giving up of a right or benefit.
Nonetheless, depending on purpose, courts have distinguished between "waiver" and "estoppel."
There is no mention of "knows or ought to know" in Section 4 of the Arbitration & Conciliation
Act; instead, the word "know that" has been construed to indicate "actual knowledge." In
addition, a party's actions during the arbitration are strongly linked to their level of knowledge.
For example, one may look at how they participated in the proceedings without raising an
objection in a timely manner even if they had been aware of the shortcomings.

The Honourable Bombay High Court ruled in Adani Enterprises Ltd. v. Antikeros Shipping
Corp6 that a party could not be presumed to have waived its right of recourse under Section 11
of the Arbitration and Conciliation Act because it grants the High Court and the Supreme Court
authority.

The objective of this section is to prevent any party that chooses to intervene during the
arbitration procedure from objecting at any point. If the party fails to raise an objection within an
appropriate period of time, they must explain and provide a valid cause. If an objection is made
after a reasonable amount of time, it must be taken into consideration given the specifics of the

4
(1972) 2 All ER 987.
5
The Arbitration and Conciliation Act, 1996.
6
AIRONLINE 2020 BOM 136.
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case, such as the nature of the condition with which the arbitration panel failed to comply. If a
time limit is specified, it must be looked at first because it surpasses the broad definition of
"undue delay," regardless of whether it is included in the arbitration agreement or the applicable
arbitration statute.

A party cannot subsequently raise the same objection during the arbitral proceedings if it is
determined that it has renounced its right to object under this principle. Additionally, it forfeits
its ability to bring up this non-compliance in any further enforcement or setting-aside actions in
domestic courts. However, in reviewing the arbitral processes, the court may reach a different
decision if an arbitral panel finds that a party was presumed to have forfeited his right to object.
It is not possible to waive objections to the infringement of required elements of the relevant
arbitration statute. Given the gravity of the regulation, which is reflected in its required nature,
such legal consequences would be excessively stringent. The conduct of the party must be
considered when determining whether the party has waived a right. It has been decided that, in
the context of interim orders, any action taken to end an order does not signify a waiver.

● CONDITIONS PRECEDENT TO WAIVER OF THE RIGHT TO OBJECT –

The structure of section 4 of the Act suggests that no change is allowed, even if it does not
explicitly mention those parts of Part I. The terms of Part I of the Act have occasionally been
interpreted by the courts in relation to the relinquish of the right to object. If the following
criteria are met, a party is assumed to have waived his right to object:

1. Voluntary relinquishment of right to object –

The party intending to invoke section 4 of the Act against another party must have known that
the other party was not complying with any condition under the arbitration agreement or a non-
mandatory provision under part I of the Act. Additionally, such party must have purposefully
abstained from expressing legitimate concerns about the previously listed matters. The party is
considered to have relinquished his right to object if all of these conditions are met. The facts of
the case may also be used to derive knowledge of non-compliance 7. Since the fundamental
component of waiver is the voluntarily and intentional renunciation of a recognized right, that is,

7
S.C. TRIPATHI, ALTERNATIVE DISPUTE RESOLUTION (ADR) 71 (Central Law Publications 2018).
 9

the renouncing of a right at the appropriate opportunity knowledge of the party surrendering his
right to object is required under Section 4.

2. Objection not raised within established time –

To use Section 4 against a party, it is necessary to prove that the party, aware of the violation
mentioned therein, did not submit its objection to it within a reasonable time frame or within the
allotted time frame. Waiver of the right to object under the Act results from a lack of objection or
even from a delayed objection. However, if a person is prevented from sending any
communication at all for an extended period of time due to circumstances beyond his control, he
will not be considered to have renounced his right to object8.

3. Party proceeds with the arbitral proceedings without any objection –

In the case of Prasun Roy v. Calcutta M.D. Authority9, he right to object can be considered to
have been forfeited only if the party proceeds with the arbitration without objecting and acts of
such proceedings would include attending hearings and corresponding with the opposing party or
the arbitral tribunal. When parties consent to arbitral proceedings even though they are aware of
the mandatory or complimentary terms under the arbitration agreement that have not been
followed and they do not object within the allotted time frame, it is equivalent to that party
waiving their right to object.10

● LANDMARK JUDGMENTS OF WAIVER OF RIGHT TO OBJECT –

A. Karnataka State Road Transport Corporation vs. M. Keshava Raju (2003)11-

The Karnataka High Court produced the statement that follows in Karnataka State Road
Transport Corporation v. M. Keshava Raju: "Section 4 narrates the circumstances in which the
party, who knowingly fails to object the non-compliance of any non-mandatory provisions of
Part-I or any requirement under the arbitration agreement by the other party, is deemed to have
waived his right to object." The court was addressing the scope and ambit of Section 4 of the Act
of 1996 regarding waiver of the right to object. General precepts like "estoppel" and "venire

8
Ibid.
9
AIR 1988 SC 205.
10
S.C. TRIPATHI, ALTERNATIVE DISPUTE RESOLUTION (ADR) 71 (Central Law Publications 2018).
11
MANU/KA/0732/2003: AIR 2004 Kant 109.
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contra factum proprium" serve as the foundation for this section. Its objective is to support the
effective and fair operation of the arbitral process. The aforementioned clause is entirely
applicable to the case's facts. Therefore, in this instance, the applicant would be subject to the
waiver concept as stated in Section 4 of the Act of 1996. Under all the circumstances, the
applicant would be considered to have forfeited its right to object to the arbitrator resolving the
parties' dispute and to the continuation of the arbitral procedures. Consequently, an arbitrator's
authority cannot be revoked just because the arbitral award was not made in the allotted ten
months.

B. Bharat Sanchar Nigam Ltd.& Anr vs. Motorola India Pvt. Ltd(2008)12-

The appellants maintained the burden of proven injuries and refused to back down. The
respondent filed a discretionary application for the allocation of authority under Section 11 of the
Arbitration and Conciliation Act, 1996 with respect to the sold portions that the appealing party
surveyed under the steady gaze of the Kerala high court in Ernakulam. It is evident from the
provider Motorola's counter sworn statement recorded in the processes that it restricts lawful
procedures as defined by Section 28 of the Act13. Thus, the agreement having this effect has to be
declared void. A party who recognizes that a requirement under the mediation understanding has
not been implemented and proceeds with the High Court has appointed a mediator due to the
documented appeal, in line with Section 4 of the Arbitration and Conciliation Act, 1996. By
delaying the resolution without raising a grievance right away, the mediator delays their right to
object.

C. Narayan Prasad Lohia v. Nikunj Kumar Lohia & Ors. (2002)14 –

The Supreme Court of India held that a party can challenge the composition of the Arbitral
Tribunal under section 16(2), but the challenge must be made not later than the submission of the
statement of defence. Section 16(2) makes it clear that such a challenge can be made even
though the party may have participated in the appointment of the Arbitrator and/or may have
himself appointed the Arbitrator. A party would be free, if he so chooses, not to raise such a
challenge. Thus, a conjoint reading of sections 10 and 16 shows that an objection to the
12
AIR 2009 SC 357.
13
Indian Contract Act, 1882.
14
AIR 2002 SC 1139.
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composition of the Arbitral Tribunal is a matter which is derogable. It is derogable because a

party is free not to object within the time prescribed in section 16(2). If a party chooses not to so
object there will be a deemed waiver under section 4.The Supreme Court of India held that
Respondents No. 1 and 2 not having raised any objection to the composition of the arbitral
tribunal, as provided in section 16, they must be deemed to have waived their right to object. The
Judgments of the Single Judge and the Division Bench, on the question of composition of
Arbitral Tribunal, were set aside.15

D. Quippo Construction Equipment Limited v. Janardan Nirman Pvt. Ltd16 –

In this case, the Apex Court ruled on April 29, 2020, that a party that did not object to the
proceedings being conducted in a certain way could not later contest the jurisdiction of the
Tribunal or challenge the arbitration's venue. It will be assumed that all of these objections have
been waived. The Arbitration & Conciliation Act, 1996 was examined in detail by the court in its
ruling, which ruled that although a party has the right to object, that right is presumed to have
been waived if it is not used. An arbitral tribunal is a product of a contract. This is an effort
towards limiting the amount of time the court becomes involved in arbitral procedures. With this
ruling, the Apex Court has made it abundantly evident that disputes relating to jurisdiction, the
arbitration agreement's legality, the seat and venue, or any other aspect should be brought up
before the Tribunal when it is most suitable. A party would have forfeited its ability to raise such
concerns in the future if it didn't do so. The Court also emphasized that, in contrast to
international commercial arbitrations, where seat is a major factor, domestic arbitrations do not
place as much emphasis on seat.
E. Jain Automobiles H.P.C. Dealer v. Hindustan Petroleum Corporation Limited17 –
It was decided that an arbitration party may only bring up the issue of waiver during the
proceedings. The Court stated that the matter of waiver could not be examined at that time since
an application under Sections 9 and 11 of the Act had already been filed before the arbitration
procedures began, even if it acknowledged the facts and circumstances of the current case.
Although the Court did point out that the issue of waiver may have been taken up by the Court if

15
K.V. Satyanarayan, Arbitration & Conciliation in India, 1st edition, Asian Law House.
16
SLP (C) NO.11011 of 2019.
17
AIRONLINE 2020 ALL 2449.
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the arbitration processes had already begun and the application under Sections 9 and 11 of the
Act had been made during those arbitral proceedings.
F. Satish Kumar vs. Union of India and Ors.18 –
In this case the Delhi High Court held. A perusal of the counter statement of facts on behalf of
the Respondent/ Union of India filed before the learned Arbitrator shows that it was nowhere
pleaded by the Respondent that claim No. 1 was in the category of "excepted matters". The plea
of the learned Counsel for the Respondent that Claim No. 1 fell in the category of "excepted
matters" cannot, therefore, be entertained at this stage. Such a plea is also not sustainable in view
of the judgments of the Hon'ble Supreme Court in J.G. Engineers (P) Ltd. v. Calcutta
Improvement Trust19 and Narayan Prasad Lohia v. Nikunj Kumar Lohia 20, wherein applying the
principal of waiver, it was held by the Hon'ble Supreme Court that the Respondent not having
taken the objection with regard to the non-arbitrability of the claim before the Arbitrator or any
objection that the said claims were "excepted matters" and having contested the claims on merits,
is estopped from raising such an objection after having suffered the award."
G. S.N. Malhotra & Sons v. Airport Authority of India21 -
The Delhi High Court held: "Applying the test laid down in the aforesaid case and the statutory
provisions referred to hereinabove, and also keeping in mind the fact that the Respondent at no
stage of the arbitral proceedings chose to raise a challenge to the assumption of jurisdiction by
the arbitral tribunal on a matter falling in the category of "excepted matters" under Clause 25 of
the agreement between the parties, we are of the considered view that the Respondent is now
debarred from raising such a plea for the first time under Section 34 of the Act. A conjoint
reading of Section 16(2) and Section 4 shows that an objection to the Arbitrator having exceeded
his jurisdiction falls in the category of case covered by Clause (b) of Section 4. The Respondent
knew that in respect of the non-compliance of any requirement under the arbitration agreement,
it was free to raise challenge. It chose not to do so. As laid down in Narayan Prasad Lohia
(supra), if a party chooses not to so object there will be deemed waiver under Section 4. Lohia's
case pertained to a statutory prohibition. In the present case, it is the requirement of a clause in
an agreement which has not been adhered to. The Respondent was all along aware of this non-

18
152 (2008) DLT 475.
19
AIR 2002 SC 766.
20
AIR 2002 SC 1139.
21
149 (2008) DLT 757 (DB).
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compliance and participated in the proceedings without demur 22. The award in respect of the
same is not to its liking. The challenge now sought to be raised by the Respondent flies in the
face of its tacit approval of the matter being dealt with by the Arbitrator. Allowing the
Respondent to resign from his position at this stage without its laying any foundation for the
challenge when it was free to raise the same, would be inequitable to say the least."
 CONCLUSION –
In conclusion, an important and important feature of Indian arbitration law is the surrender of the
right to object under the Arbitration and Conciliation Act of 1996. It is clear from examining
different clauses and court interpretations that the Act's goal is to maximise party autonomy and
reduce procedural delays in order to advance arbitration as a successful alternative dispute
settlement tool.

Essentially, one of the most important instruments for expediting arbitration procedures and
fostering party autonomy is the Arbitration and Conciliation Act of 1996's renunciation of the
right to object. Although implementing it requires caution and sound judgement, its core
objective of encouraging effective and equitable conflict settlement is still very important. In
order to make a significant contribution to the advancement and practical application of
arbitration law, it is essential that we critically interact with this element of the field as aspiring
lawyers.
 Plagiarism Report -

22
K.V. Satyanarayan, Arbitration & Conciliation in India, 1st edition, Asian Law House.
14