ADR - 6TH MAY - V K GUPTA - 2ND LECTURE

1. Alternate Dispute ResolutionAlternate Dispute Resolution
(Commercial Conciliation & Arbitration)(Commercial Conciliation & Arbitration)
Company of Master MarinersCompany of Master Mariners
55thth
& 6& 6thth
May 2018May 2018
Company of Master MarinersCompany of Master Mariners
55thth
& 6& 6thth
May 2018May 2018

2. 2
Drafting Arbitration ClausesDrafting Arbitration Clauses
WrittenWritten agreement - a pre-requisite:agreement - a pre-requisite:
• Usually thru a clause in original contract – (Usually thru a clause in original contract – (but considered anbut considered an
independent contract);independent contract);
• Arbitration agreement can be made even after disputes arise.Arbitration agreement can be made even after disputes arise.
• As party-autonomy the basic principle, parties can chooseAs party-autonomy the basic principle, parties can choose
applicable law; Whether conciliation a pre-requisite; numberapplicable law; Whether conciliation a pre-requisite; number
& qualifications of arbitrators; Place and Seat of Arbitration;& qualifications of arbitrators; Place and Seat of Arbitration;
Extent of Discovery and also agree on how the arbitralExtent of Discovery and also agree on how the arbitral
process will be regulatedprocess will be regulated
• Arbitration agreements not binding on third parties;Arbitration agreements not binding on third parties;
• For low value claims – No oral hearing and evidence;For low value claims – No oral hearing and evidence;

3. 3
Desirable features in Arbitration ClausesDesirable features in Arbitration Clauses::
• Simplicity, clarity and unambiguous language;Simplicity, clarity and unambiguous language;
• Aim to keep expenses low;Aim to keep expenses low;
• Institutional Rules to be incorporated????Institutional Rules to be incorporated????
• Arbitrator – Number of arbitrators, qualifications and selectionArbitrator – Number of arbitrators, qualifications and selection
procedures (Avoid retired judges, non-commercial lawyers and lawprocedures (Avoid retired judges, non-commercial lawyers and law
professors -- Especially in the Indian context)professors -- Especially in the Indian context)
• Give due importance to domain knowledge and experience;Give due importance to domain knowledge and experience;
• Commercial men??? – meaning of???Commercial men??? – meaning of???
• Appearance of Lawyers??Appearance of Lawyers??
• Applicable Law – Substantive and Procedural;Applicable Law – Substantive and Procedural;
• Venue and Seat of Arbitration,Venue and Seat of Arbitration,
• Language;Language;

4. 4
INVOKING ARBITRATIONINVOKING ARBITRATION
1.1. Written notice a must – (S.21)Written notice a must – (S.21)
2.2. Purposes: 1. Save Limitation; 2. Put the RespondentPurposes: 1. Save Limitation; 2. Put the Respondent
on notice that you mean business;on notice that you mean business;
3.3. Precautions: (i) Ensure that any pre-requisites arePrecautions: (i) Ensure that any pre-requisites are
complied with; (ii) Keep the notice short – no needcomplied with; (ii) Keep the notice short – no need
to give the history of the dispute or the amount ofto give the history of the dispute or the amount of
Claim; (iii) The nominated arbitrator meets theClaim; (iii) The nominated arbitrator meets the
qualifications mentioned in the arbitrationqualifications mentioned in the arbitration
agreement; (iv) The notice is sent in such manneragreement; (iv) The notice is sent in such manner
that service can be proved beyond doubt.that service can be proved beyond doubt.

5. 5
NNominating the “RIGHT” Arbitrator-Iominating the “RIGHT” Arbitrator-I
“A“Arbitration is only as good as the Arbitrators”rbitration is only as good as the Arbitrators”
1.1. Impartiality, neutrality and independence;Impartiality, neutrality and independence;
2.2. Subject matter experience and knowledge;Subject matter experience and knowledge;
3.3. Arbitral experience and reputation;Arbitral experience and reputation;
4.4. Knowledge of laws governing disputes and procedures;Knowledge of laws governing disputes and procedures;
5.5. Language skills;Language skills;
6.6. Good “listening” attitude and mental alertness;Good “listening” attitude and mental alertness;
7.7. Availability for conducting arbitration;Availability for conducting arbitration;
8.8. DiligenceDiligence
9.9. Are previous Awards well written?Are previous Awards well written?
10.10. Does he / she work well with other arbitrators?Does he / she work well with other arbitrators?
11.11. Does he “balance” the opponent’s arbitrator?Does he “balance” the opponent’s arbitrator?
12.12. Age and HealthAge and Health
Make own enquiries – Do not appoint arbitrators on theMake own enquiries – Do not appoint arbitrators on the
basis of reports from ill informed sources or friendsbasis of reports from ill informed sources or friends

6. 6
NNominating the “RIGHT” Arbitrator-IIominating the “RIGHT” Arbitrator-II
Retired Judge or Commercial – Technical Person?Retired Judge or Commercial – Technical Person?
Retired JudgesRetired Judges::
1.1. More likely to be neutral but lack subject matter knowledgeMore likely to be neutral but lack subject matter knowledge
2.2. Tend to be hyper-technical on procedures and evidenceTend to be hyper-technical on procedures and evidence
3.3. Generally fail to appreciate circumstances and tenor of commercial correspondenceGenerally fail to appreciate circumstances and tenor of commercial correspondence
4.4. Sometimes very old – probability of not surviving the arbitrationSometimes very old – probability of not surviving the arbitration
5.5. Often too busy to give frequent datesOften too busy to give frequent dates
6.6. Indulgent to lawyers in granting time on flimsy excusesIndulgent to lawyers in granting time on flimsy excuses
7.7. Do not make effort to read matters in advanceDo not make effort to read matters in advance
8.8. Not committed to quick and expeditious disposalNot committed to quick and expeditious disposal
Commercial Arbitrators:Commercial Arbitrators:
1.1. Lack language skills and analytical thinking to impartially assess evidence;Lack language skills and analytical thinking to impartially assess evidence;
2.2. Tend to get swayed by lawyers’ histrionics.Tend to get swayed by lawyers’ histrionics.
3.3. Tend to lose sight of the fact that their job is to make a broad commercial judgment.Tend to lose sight of the fact that their job is to make a broad commercial judgment.
4.4. Tend to worry about being challenged in courts.Tend to worry about being challenged in courts.
5.5. Occasionally, when working with judges or senior lawyers, tend to get over- awed –Occasionally, when working with judges or senior lawyers, tend to get over- awed –
particularly with use of legal jargon;particularly with use of legal jargon;
6.6. Often unable distinguish between rOften unable distinguish between ratio decidendiatio decidendi and obiter dictaand obiter dicta

7. 7
Controlling costs and theControlling costs and the
Arbitration ProcessArbitration Process
1.1. Know your contractual obligations and rightsKnow your contractual obligations and rights
2.2. Know ALL the FACTS, PROS AND CONSKnow ALL the FACTS, PROS AND CONS (NO WISHFUL THINKING AND ASSUMPTIONS!)(NO WISHFUL THINKING AND ASSUMPTIONS!)
3.3. Make only realistically realizable claims;Make only realistically realizable claims;
4.4. Maintain an attitude towards “commercial” resolution of the dispute – notMaintain an attitude towards “commercial” resolution of the dispute – not
at asserting legal rights and scoring points;at asserting legal rights and scoring points;
5.5. Assess the probability of enforcing your AwardAssess the probability of enforcing your Award
6.6. Foresee disputes developing and draft all correspondence conciselyForesee disputes developing and draft all correspondence concisely
(avoid verbosity)– “without prejudice” when necessary (but not always);(avoid verbosity)– “without prejudice” when necessary (but not always);
7.7. Preserve ALL evidence – especially from the “field”;Preserve ALL evidence – especially from the “field”;
8.8. Make a pre-arbitration assessment – preferably by a neutral expert;Make a pre-arbitration assessment – preferably by a neutral expert;
9.9. Make only merit based claims – Avoid frivolous / exaggerated claims;Make only merit based claims – Avoid frivolous / exaggerated claims;
10.10. Limit Witness Affidavits / Statements to relevant & essential facts;Limit Witness Affidavits / Statements to relevant & essential facts;
11.11. If lawyers draft pleadings – check the FACTS are correctly stated;If lawyers draft pleadings – check the FACTS are correctly stated;
12.12. May discuss probable cross examination – but do not “coach” witnessesMay discuss probable cross examination – but do not “coach” witnesses

8. 8
How NOT to cross examine witnessesHow NOT to cross examine witnesses
(A pick of some questions asked by lawyers)(A pick of some questions asked by lawyers)
1.1. Now, tNow, the two ships that collided, how far apart would you say they werehe two ships that collided, how far apart would you say they were
at the time of the collision?at the time of the collision?
2.2. Is it not true that you were on the navigation bridge until the time you leftIs it not true that you were on the navigation bridge until the time you left
it?it?
3.3. Were you present in court this morning when you were sworn in?Were you present in court this morning when you were sworn in?
4.4. Were you alone or by yourself?Were you alone or by yourself?
5.5. LawyerLawyer: Ms. Desai, is your appearance this morning pursuant to the notice which: Ms. Desai, is your appearance this morning pursuant to the notice which
was dispatched to you by my office?was dispatched to you by my office?
Ms. DesaiMs. Desai : No. This is how I always dress when I go to work.: No. This is how I always dress when I go to work.

9. 9
The Client’s Oath!The Client’s Oath!

10. 10
THANK YOU!THANK YOU!
QUESTIONS???QUESTIONS???