COMMERCIAL ARBITRATION

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Regulatory Framework

 The Arbitration and Conciliation Act, 1996

 The Arbitration and Conciliation Act, 1996 is 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.
Arbitrator
The term “arbitrator” is not defined in the Arbitration and Conciliation
Act. But “arbitrator” is a person who is appointed to determine
differences and disputes between two or more parties by their mutual
consent.
It is not enough that the parties appoint an arbitrator.
The person who is so appointed must also give his consent to act as an
arbitrator. His appointment is not complete till he has accepted the
reference.
Arbitral Award – Features
 Written and stamped

 Signed

 Reasoned

 Dated

 Mention of Place

 Clarity of Value and Interest

 Cost of Arbitration
 Delivery of copies
Arbitration Agreement
 Arbitration agreement” means an agreement referred to in Section 7 [Section 2(1)(b)].

 Under Section 7, the Arbitration agreement has been defined to mean 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.

 An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a
separate agreement.
 An arbitration agreement shall be in writing.
 An arbitration agreement is in writing if it is contained in,

a) a document signed by the parties;

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

through electronic means which provide a record of the agreement; or

c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one
party and not denied by the other
 Interim Measures by Court

Section 9(1) states that a party may, before, or during arbitral proceedings or at any time after making of the
arbitral award but before it is enforced in accordance with section 36, apply to a court,
i) for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral
proceedings; or
ii) for an interim measure of protection in respect of any of the following matters, namely
 the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration
agreement;
 securing the amount in dispute in the arbitration;
 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 part) or authorising any samples to be
taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the
purpose of obtaining full information or evidence;
 interim injunction or the appointment of a receiver;
 such other interim measure of protection as may appear to the Court to be just and convenient, and the Court
shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings
before it.
Number of Arbitrators

 As per Section 10(1) of the Act, the parties are free to determine the
number of arbitrators, provided that such number shall not be an
even number.
 Failing the determination referred to in Section 10(1) above,the
arbitraltribunal shall consist of a sole arbitrator.
Grounds for Challenge
Section 12(1) provides that when a person is approached in connection with his
possible appointment as an arbitrator, he shall disclose in writing any circumstances,

(a) such as the existence either direct or indirect, of any past or present relationship
with or interest in any of the parties or in relation to the subject matter in dispute,
whether financial, business, professional or other kind, which is likely to give rise to
justifiable doubts as to his independence or impartiality; and

(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.
Place of Arbitration
As per Section 20
(1) the parties are free to agree on the place of arbitration and sub-section
(2) states that if they fail to reach an agreement, the place of arbitration is determined
by the arbitral tribunal, having regard to the circumstances of the case, including the
convenience of the parties. Section 20
(3) introduces an option by providing that the arbitrator/tribunal may, unless
otherwise agreed by the parties, may meet at any place it considers appropriate for
consultation among its members, for hearing witnesses, experts or the parties, or for
inspection of documents, goods or other property.
Time Limit for Arbitral Award

Time Limit for Arbitral Award

As per section 29A As per section 29 B

The parties to an arbitration agreement, may, at any stage

The award shall be made within a either before or atthe time of appointment of the arbitral
tribunal, agree in writing to have their disputes resolved by
period of twelve months from the fast track procedure. The award under fast track procedure
date of completion of pleadings. shall be made within a period of six months from the date of
arbitral tribunal enters upon.
Fast Track Procedure

 Section 29B(1) provides that 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).
 Section 29B (2) states that 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.
Fast Track Procedure (Continued)
 Section 29B (3) says that the arbitral tribunal shall follow the following procedure while
conducting arbitration proceedings under sub-section (1):

Written pleadings without (a) The arbitral tribunal shall decide the dispute on the
oral hearing basis of written pleadings, documents and submissions
filed by the parties without any oral hearing;
Further clarification (b) The arbitral tribunal shall have power to call for any
further information or clarification from the partiesin
addition to the pleadings and documents filed by them
Oral hearing on request (c) An oral hearing may be held only, if, allthe parties
make a request or ifthe arbitral tribunal considers it
necessary to have oral hearing for clarifying certain
issues
Procedural Discretion (d) The arbitral tribunal may dispense with any technical
formalities, if an oral hearing is held, and adoptsuch
procedure as deemed appropriate for expeditious
disposal of the case.
Form and Contents of Arbitral Award

 As per section 31(1) an arbitral award shall be made in writing and

shall be signed by the members of the arbitral tribunal.
 Under Section 31 (3) the arbitral award shall state the reasons upon
which it is based, unless

a. the parties have agreed that no reasons are to be given, or

b. the award is an arbitral award on agreed terms under section 30.

Application for Setting Aside Arbitral Award

 Section 34 (2) states that an arbitral award may be set aside by the Court only if,
a) the party making the application establishes on the basis of the record of the arbitral tribunal that-,
1. a party was under some incapacity, or
2. 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
3. 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
4. the arbitral award deals with a dispute not contemplated by or not falling within the terms of the
submission to arbitration, or it contains decisions on matters beyond the scope of the submission to
arbitration: Provided that, if the decisions on matters submitted to arbitration can be separated from
those not so submitted, only that part of the arbitral award which contains decisions on matters not
submitted to arbitration may be set aside; or
5. the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the
agreement of the parties, unless such agreement was in conflict with a provision of this Part from
which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
Application for Setting Aside Arbitral Award (Continued)

b) the Court finds that,

1) the subject-matter of the dispute is not capable of settlement by arbitration under
the law for the time being in force, or
2) the arbitral award is in conflict with the public policy of India.
Finality of Arbitral Awards and Enforcement

Section 35 provides that an arbitral award made under the Act is final
and binding on the parties and persons claiming under them
respectively.
Enforcement

Section 36(1) provides that where the time for making an application
to set aside the arbitral award under section 34 has expired, then,
subject to the provisions of sub-section (2), such award shall be
enforced in accordance with the provisions of the Code of Civil
Procedure, 1908, in the same manner as if it were a decree of the court.
Appealable Orders
 Section 37(1) provides that 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, refusing to refer the
parties to arbitration under section 8;

(a) granting or refusing to grant any measure under section 9;

(b) setting aside or refusing to set aside an arbitral award under section 34.

 Further Section 37(2) provides that appeal shall also lie to a court from an order of the arbitral tribunal

a. accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or

b. granting or refusing to grant an interim measure under section 17.

 Section 37(3) states that 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.
ENFORCEMENT OF CERTAIN FOREIGN ARBITRAL AWARDS

 Awards Made under New York Convention or Geneva Convention

 When Foreign Award Binding
 Conditions for Enforcement of Foreign Awards

The award has been made in pursuance of a submission to arbitration which is valid under the law
applicable thereto;

The subject-matter of the award is capable of settlement by arbitration under the law of India;

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
arbitral procedure;

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;

The enforcement of the award is not contrary to the public policy or the law of India.
THANK YOU