ARBITRATION LAW IN INDIA

Objectand

Reasons for the Enactment

• Harmonisation

• UNCITRAL Model Law

• Investment Climate

Salient Features of Arbitration & Salient Features of Arbitration & Conciliation Act 1996Conciliation Act 1996

Salient Features of Arbitration & Salient Features of Arbitration & Conciliation Act 1996Conciliation Act 1996

Arbitration and Conciliation Act,1996

• Arbitration and Conciliation Act 1996 was enacted based on UNCITRAL Model Rules

• This Act repealed the Arbitration Act 1940, Foreign Awards (recognition and Enforcement) Act, 1961 and Arbitration (Protocol and convention ) Act, 1937

Part I – Arbitration

10 Chapters

Sections 1-43

Part II – Enforcement of Certain Foreign Awards

2 Chapters

Sections 44-60

Part III – Conciliation

Sections 61-81

Part IV – Supplementary Provisions

Sections 82-86

Parts

Schedules

FIRST SCHEDULE

Convention on the recognition and enforcement of foreign arbitral awards

SECOND SCHEDULE

Protocol on Arbitration clauses

THIRD SCHEDULE

Convention on the execution of Foreign Arbitral Awards

Departures from Arbitration Act, 1940

• Award – Unique

• Court Intervention - Minimal

Important Provisions of the new Arbitration & Conciliation Act,

1996 • Arbitration Agreement (Sec.7) • Interim Measures by Court

(Sec.9) • Appointment of Arbitrator

(Sec.11) • Arbitrators jurisdiction

(Sec.16) • Interim measures by

Arb.Tribunal (Sec.17) • Rules of procedure (Sec.19)

• Filing of pleadings (Sec.23)

• Default of a party (Sec.25)

• Settlement (Sec.30) • Challenge of Award

(Sec.34) • Enforcement (Sec.36) • Jurisdiction (Sec.42) • Limitation (Sec.43)

SECTION 7Arbitration agreement

• 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 clause in a contract

• a separate agreement

• in writing and signed by the partiesexchange of letters, telex, telegrams or other telecommunication

• 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.

• The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.

SECTION 9Interim measures by Court

• Before, or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced

• appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings; or

• interim measure or protection:

(a) the preservation, interim custody or sale of any goods

(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

(d) interim injunction or the appointment of a receiver

Section 11Appointment of Arbitrators

• A person of any nationality• Parties are free to agree on a procedure • 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.

Default ProvisionSole Arbitrator & Presiding Arbitrator

SECTION 16Competence of arbitral tribunal to rule on

its jurisdiction

• The arbitral tribunal may rule on its own jurisdiction

• Plea – before filing defence statement

• Rejection of plea – Proceedings continue

• A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with section 34.

SECTION 17

Interim measures ordered by arbitral tribunal

Interim measure of protection and may require a party to

provide appropriate security in connection with a measure

SECTION 19Determination of rules of

procedure

• Not bound by the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872.

• Parties are free to agree on the procedure

• The power of the arbitral tribunal includes the power to determine the admissibility , relevance, materiality and weight of any evidence

SECTION 23Statements of claim and defence

• Statement of Claim and defence with documents

• Parties may amend or supplement their claim or defence

Section 25Default of a Party

• Claimant fails to communicate his statement of claim, the arbitral tribunal shall terminate the proceedings;

• Respondent fails to communicate his statement of defence, the arbitral tribunal shall continue the proceedings without treating that failure in itself as an admission of the allegations by the claimant.

• 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.

SECTION 30Settlement

• Encourage settlement of the dispute and use mediation, conciliation or other procedures

• Record the settlement in the form of an arbitral award on agreed terms in accordance with section 31

SECTION 34 Application for setting aside arbitral award

Arbitral award may be set aside by the Court only if the party making the application furnishes proof that-

• a party was under some incapacity, or

• the arbitration agreement is not valid under the law; or

• 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

Contd…

• 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 matter beyond the scope of the

submission to arbitration; or• the composition of the arbitral tribunal or the arbitral

procedure was not in accordance with the agreement of the parties; or

• (b) the Court finds that---

• - the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or

• the arbitral award is in conflict with the public policy of India.

• Setting aside application – within three months

SECTION 36Enforcement

• Code of Civil Procedure, 1908 (5 of 1908) similar to a decree of the Court.

SECTION 42Jurisdiction

Any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications

Section 43Limitation

• Limitation Act, 1963 (36 of 1963), shall, apply to arbitrations as it applies to proceedings in court.

• An arbitration shall be deemed to have commenced on the date referred in section 21.

• Where the Court orders that an arbitral award be set aside, the period between the commencement of the arbitration and the date of the order of the Court shall be excluded in computing the time prescribed by the Limitation Act, 1963 (36 of 1963), for the commencement of the proceedings (including arbitration) with respect to the dispute so submitted.