2. Arbitration And Conciliation Act, 1996
• Arbitration And Conciliation Act, 1996 & ADR Contents:
• Part I – Arbitration (16thAug 1996)
• Chapter I-General Provisions (Sec 1-6)
• Chapter II-Arbitration Agreement (Sec 7-9)
• Chapter III- Composition of Arbitral Tribunal (Sec 10-15)
• Chapter IV- Jurisdiction of Arbitral Tribunals (Sec 16-17)
• Chapter V- Conduct of Arbitral Proceedings (Sec 18-27)
• Chapter VI- Making of Arbitral Award and termination of proceedings
• Chapter VII- Recourse Against Arbitral Award (Sec 34)
• Chapter VIII- Finality and Enforcement of Award (Sec 35-36)
• Chapter IX- Appeals (Sec 37)Chapter X- Miscellaneous (Sec 38-43)
3. • Contents: Part II – Enforcement of Foreign Awards:
• Chapter I – New York Convention Awards (Sec 44-52)
• Chapter II – Geneva Convention Awards (Sec 53-60)
• Contents: Part III – Conciliation: (Sec 61- 81)
• Contents: Part IV- Supplementary Provisions: (Sec 82-86)
4. • Contents: Part II – Enforcement of Foreign Awards:
• Chapter I – New York Convention Awards (Sec 44-52)
• Chapter II – Geneva Convention Awards (Sec 53-60)
• Contents:
• Part III – Conciliation: (Sec 61- 81)
• Contents: Part IV- Supplementary Provisions: (Sec 82-86
5. • Arbitration And Conciliation Act, 1996 & ADR Chapter I –
• Sec 1:The Arbitration and Conciliation Act, 1996 (Act No. 26 of1996)
was enacted in India on 16thAugust ,1996 and came into force on
22ndAugust 1996. This Act was on the lines of UNICITRAL (United
Nations Commission on International Trade Law)Model Law adopted
by the United Nations in1985.It extends to whole of India Parts I, II, III
and IV shall extend to State of Jammu and Kashmir in so far as they
relate to International Commercial Arbitration. The word ‘Arbitration’
shall be substituted by the word ‘conciliation’.
6. • Arbitration And Conciliation Act, 1996 & ADR
• Chapter I - Sec 2 – Definitions::“Arbitration "means any arbitration whether
or not administered by permanent arbitral institution
• “Arbitration Agreement” means an agreement by the parties to submit to
arbitration all or certain disputes which have arisen or which may arise
• “Arbitral Award "includes an interim award
• “Arbitral Tribunal "means a sole arbitrator or panel of Arbitrators “Court”
means the Principal Civil Court of original jurisdiction in a district, but does
not include any civil Court of a grade inferior to such Principal Civil Court,
or any Court of small causes
7. • Chapter I - Sec 2 – Definitions: “International commercial Arbitration
"means an arbitration relating to disputes arising out of legal
relationships, whether contractual or not, considered as commercial
under the law in force in India, and at least one of the parties is not a
national of India.
• “Legal representative "means a person who in law represents the
estate of a deceased person or acts in representative character
8. Arbitral tribunals
Composition of tribunals
• It is the creation of an agreement which conforms with the law.
Section 10 of the Act enables the parties to determine freely the
number of arbitrators to settle their dispute. The only restriction is
that the number of such arbitrators must not be even. If the parties
are not able to decide then there will be only 1 arbitrator. But if there
are even number of arbitrators then the agreement cannot be held
invalid merely on this ground. (Narayan Prasad Lohia v. Nikunj Kumar
Lohia, 2002)
9. Procedure
• Further, Section 11 of the Act provides the procedure for the
appointment of arbitrators. The valid requirements for any such
appointment are:
• Party must give proper notice of appointment to the other party. If it
does not do so, the appointment is held invalid.
• A person appointed as an arbitrator must be duly informed and his
consent must be taken.
• The consent must be obtained before finalizing his appointment.
10. • It also says that if the parties fail to appoint an arbitrator within 30
days of the request or if two arbitrators are appointed and not the
third one, then the appointment will be made by Chief Justice or any
person on his behalf designated by him but with the prior request of
the parties.
11. Termination of arbitrator
• The grounds for termination are given under Section 14 and Section
15 of the Act. These are:
• If he is not able to perform his functions without undue delay
(whether de jure or de facto),
• If he withdraws or is terminated by the parties,
• He shall be terminated where he withdraws himself or by agreement
of the parties.
• On his termination, a substitute arbitrator will be appointed as per
Section 15.
12. Jurisdiction
• Section 16
of the Act provides that the tribunal will act in its jurisdiction. If the
arbitral tribunal has no jurisdiction then a plea will be raised but not
later than when the statement of defense is submitted. It also provides
that in case a party is not satisfied with the arbitral award, it can make
an application to set it aside according to Section 34 of the Act.
The Supreme Court in the case of Centro trade Minerals and Metals v.
Hindustan Copper Ltd. (2006), held that any issue related to the
jurisdiction can be raised by people in the proceedings or anyone from
outside. But if it is made by the party then it must be done during the
proceedings or at the initial stage.
13. Arbitral award
• It is a final determination of a claim or a part of it or a counter-claim
awarded by the arbitral tribunal. It must be written and duly signed
by the members of the arbitral tribunal as given under Section 31 of
the Act. The Section further gives the power to the tribunal to make
interim awards for any matter. In case of payment of money, it can
award the interest which seems reasonable, just and fair to the
tribunal.
14. • Section 32 of the Act empowers the arbitral tribunal to terminate the
proceedings by making a final arbitral award. The procedure for any
correction in the award or its interpretation is given under Section 33
of the Act. It also gives the power to the tribunal or the arbitrator to
amend, correct or remove any errors of any kind within 30 days but is
silent on judicial review. The tribunals cannot exercise their
jurisdiction beyond whatever has been mentioned in this section.
15. Types of arbitral awards
• Interim award – It is the determination of any issue arising out of the main
dispute. It is a temporary arrangement to satisfy a party and is subject to the final
award.
• Additional award – According to Section 33 of the Act, if the parties find that
certain claims have been missed out by the arbitral tribunal and they were
present in the proceedings then it can after notifying other parties, make a
request to the arbitral tribunal to make an additional award and cover the claims
which have been left.
• Settlement awards – It is made if the parties agree on certain terms of the
settlement. As per Section 30 of the Act, the arbitral tribunal may use any
method of dispute resolution like mediation, conciliation or negotiation to bring a
settlement between the parties.
• Final award – It is an award which finally determines all the issues in a dispute. It
is conclusive unless set aside by courts and binding on the parties.
16. Recourse against arbitral awards
• Under Section 34 of the Act, a party if not satisfied can make an application to set aside
the award granted by an arbitral tribunal. The time limit to make such an application is
not more than 3 months from the date the arbitral award was made. The grounds are:
• Incapacity of parties.
• Non-existence of the agreement of arbitration.
• Did not follow the due process.
• Error on the part of the arbitral tribunal to exercise its jurisdiction.
• Improper composition of the arbitral tribunal.
• The subject matter is not capable of being referred to arbitration.
• It is against public policy.
• Fraud or corruption.
17. • Section 37 of the Act provides that if a person is not satisfied with the
order passed by the tribunal, he/she can appeal to the court.
However, there are no provisions for a second appeal once an appeal
has been made. In the case of Pandey and Co. Builders Pvt. Ltd. v.
State of Bihar (2007), it was held that the appellate authority in any
case which is referred to arbitration must be decided from the
definition of court given under Section 2 of the Act.
18. The UNCITRAL Model
• The UNCITRAL Model law on Arbitration is an international legal
framework that provides the set of provisions on international
commercial arbitration conduct & management. It came into being on
21st June, 1985. It is one of the three pillars of arbitration created by
the UN to assist countries with different legal system in harmonizing
their arbitration laws. As the model law is not a treaty, government
are free to copy or modify it. Over 70 jurisdictions have already
accepted it.
19. • The model law consists of 45 Articles classified in 9 chapters covering
all the stages of arbitration from limitation of court intervention to
the recognition and imposition of the award by balancing b/w the
parties freedom to choose their own procedure & the need to
provide default rules to fill potential gaps.
20. Relevance of UNCITRAL Model law
• The UNCITRAL is the vital legal part of the UN in the field of
international trade law. Every nation has very contrasting laws in
general. However, arbitration has an international connotation to it
with often being international in nature. Thus, it needs uniformity of
states & in that regard domestic laws of arbitration that has been
included b/w different countries needs to be in uniformity. If not so,
would result in creating hurdles to the smooth flow of trade.
21. • The aim & objective of modern law was to majorly eliminate the
concern for inadequacy of national laws & disparity b/w the states
concerned.
• Lately, UNCITRAL Expedited Arbitration Rules have come into
existence as were being adopted on 21st July, 2021 & entered into
effect on 19 th September, 2021. These rules function as discretionary
preference of parties.
22. Uncetral Law & Uncitral Rules
• UNCITRAL Rules are the exhaustive bunch of rules requiring the party to
give consent for the conduct of arbitral proceedings b/w the participating
parties. It pursue to provide competency in the procedures by laying out
requirement of the reasonableness of cost & review mechanism.
• On the contrary, Model laws dispense bunch of patterns legislation of
different nations can alter by being a part of their domiciliary legislation on
arbitration.
• Both plays an indispensable role in international commercial arbitration in
order to harmonize the global trade
23. Principles of Model law on International
Commercial Arbitration
• It empowers the parties to freely choose their rules applicable on the
arising conflicts. Majorly, the principles are agreeable and adaptable.
24. Following are the binding principles:
Party Autonomy:
• It lays down the parties with fair platform to have substantial control
over the process for the removal of disputes. Parties are also provided
with the option to alter the needs & requirements.
Separability:
• The arbitration clause in the contract is liberated and stays stand even
if the substantial contract get invalid or becomes void. As per the
Arbitration & Conciliation Act, 1996, an arbitration maybe in the form
of as a clause in a contract or a separate agreement.
25. • Competence: competence: Competency of an arbitral tribunal is of utmost
importance to rule in its own jurisdiction. This principle is given recognition
by numerous convention on international arbitration.
• Territorial Principle: As the name suggests, it facilitates the tribunal to
regulate people & events within its jurisdiction, with barring the tribunal to
regulate the people & events outside its boarders.
• Enforceability: It takes care & mandates that the decision resolving the
dispute the executed in all the nation concerning the mention dispute in
hand. Also, to accommodate the winning party to credit the assets of losing
party based in & around the world.
26. UNCITRAL Model law in India
• Arbitration was never been alien to India & has its existence since the
ancient times. History being from 1889 arbitration legislation to
provisions under CPC, 1908, India has tremendously developed
arbitration by ratifying Geneva protocol,1923 & Geneva
Convention,1927 under Arbitration Act, 1937. 1940's Arbitration Act
was an attempt to consolidate & amend the law pertaining to
domiciliary conflicts.
27. • To reduce the already overworked judicial system in India, the legislation
introduced Arbitration & Conciliation Act, 1996 for speedy, thrifty, &
flexible disposal of disputes. The foundation principle of the act is
UNCITRAL Model laws, 1985 covering both international & domestic
commercial arbitration.
• The demarcation of the act is in such a way that it consists of two parts,
first being when both domestic and international arbitration are in India
itself. Second part provides for foreign awards along with their execution
under the New York Convention and the Geneva Convention. It sets the
standard clause for arbitration agreement & also provides the interposition
of the courts when the tribunals are not functioning adequately.
28. • Further, it talks about the composition & jurisdiction of tribunals.
Additionally, it also states the provision for arbitral award, its
execution, mannerism of proceedings. Whatsoever is there in the said
act, keeps the consensus with the model law.
• Keeping in view, the lately given pronouncements by the judicial
authorities shows the intent of the government to support the
developments in the said field & in making India a hub of institutional
arbitration.
29. • The Law Commission in its 246th Report recognised the key source of
India’s A&C Act, 1996’s text being the UNCITRAL Model Law on
International Commercial Arbitration. The Law Commission’s 246th
Report notes, “The 1996 Act is based on the UNCITRAL Model Law on
International Commercial Arbitration, 1985 and the UNCITRAL
Conciliation Rules, 1980
30. • .”[6] As the UNCITRAL Model Law on International Commercial
Arbitration and the UNCITRAL Arbitration Rules have a functional
overlap, the A&C Act, 1996 also has deep linkages with the UNCITRAL
Arbitration Rules.
At adoption of A&C Act, 1996, its provisions were rooted in the
UNCITRAL Model Law on International Commercial Arbitration.
