The document outlines the concepts, types, and procedures of arbitration, conciliation, and alternative dispute resolution (ADR) systems, detailing their applications in commercial disputes. It contrasts the Arbitration Acts of 1940 and 1996, explaining judicial interventions, arbitration agreements, and the powers and jurisdiction of arbitral tribunals. Additionally, it covers enforcement of arbitral awards, distinctions between mediation and arbitration, and the confidentiality of arbitration proceedings.

1. UNIT – 3
Arbitration, Conciliation and
ADR(Alternative Dispute Resolution)
system

2. Arbitration – Meaning, Scope and
types
 Arbitration means determination of
settlement all the dispute by the decision of
one or more person called arbitrators or
arbitral tribunal.
 Arbitration is a procedure in which a
dispute is submitted, by agreement of the
parties, to one or more arbitrators who
make a binding decision on the dispute.
 Arbitration is often used for the resolution
of commercial disputes, particularly in the
context of international commercial
transactions.

3. Arbitration – Meaning, Scope and
types Cont…
Arbitration Scope
 Arbitrator is called upon to find the facts,
apply the law, Grand relief to the disputed
parties.
 In any agreement in force between India
and any other country these parts shall
applied to all arbitration to all proceedings
relating thereto.
 Arbitration and conciliation is a civilized
way of resolving issues which avoid court
proceedings.

4. Arbitration Types
 There are 6 types of Arbitration.
1.Domestic Arbitration: Domestic
arbitration is that type of arbitration, which
happens in India, wherein both parties must
be Indians.
 The conflict has to be decided in
accordance with the substantive law of
India.
2. International Arbitration: When
arbitration happens within India or outside
India containing elements which are foreign
in origin in relation to the parties or the
subject of the dispute, it is called as
International Arbitration.

5. Arbitration Types Cont…
3. International Commercial Arbitration
International Arbitration is considered to
becommercial if it related to disputes arising
out of a legal relationships irrespective of
their contractual nature.
4. Institutional arbitration
When an arbitral Institution conducts
arbitration, it is called Institutional Arbitration.

6. Arbitration Types Cont…
5. Ad-hoc arbitration: If the parties agree
among themselves and arrange for
arbitration, it is called Ad hoc Arbitration
without having an institutional proceeding.
 It can either be domestic, international or
foreign arbitration.
6. Fast track arbitration: Fast track
arbitration is a method, which is time
dependent in the provision of the arbitration
and conciliation act.

7. Distinction between laws of 1940 & 1996
1. Arbitration Act of 1940 was based upon
the English Arbitration Act of 1934 which
prevailed in the British.
The Arbitration Act of 1996 is based
upon the UNCITRAL.
2. The Act 1940 was enacted in India to
consolidate and amend the law relating
to arbitration and is made effective from
1 July 1940.
The Arbitration Act, 1996 is an Act to
consolidate and amend the law relating
to domestic arbitration, international
commercial arbitration

8. Distinction between laws of 1940 & 1996
3. Under the 1940 Act, an Arbitrator was not a
conciliator. He was only to adjudicate the
disputes referred to him by the parties.
However, the 1996 Act has recognized the
Arbitrator as a Conciliator as well.
4. Under the 1940 Act, an aggrieved party to get
an Arbitrator appointed has to approach the
jurisdictional Civil + Court either under sec 8
or sec 20 of the 1940 Act.
Under the 1996 Act, the Chief Justice of the
HC has been named under schedule II for
the purpose of appointment of Arbitrator.

9. UNCITRAL Model Law – Arbitration &
Expert determination
Arbitration :
Arbitration, a form of alternative dispute
resolution, is a way to resolve disputes
outside the judiciary courts.
Expert determination:
Expert determination is a procedure in
which a dispute between the parties is
submitted, by agreement of the parties, to
one or more experts who make a
determination on the matter referred to
them.

10. Extent of Judicial intervention
Three ways in which judicial intervention in
arbitration takes place:-
 Before proceedings- Section 5 of the 1996 act
 During proceedings- Section 9 of the 1996 Act
 After proceedings- with regard to arbitral
awards
1) Before Proceeding : The extent of judicial
intervention statutorily permitted is laid
under Section 5 of the Arbitration and
Conciliation Act, 1996.
 The construction of Section 5 of the Act
makes it pretty clear that the legislature
wanted to limit the role of Court in
arbitration.

11. Extent of Judicial intervention Cont...
2. During proceedings-
 There are various sections involved where
the judiciary steps in during proceedings as
well.
 Section 9 of the Act lays down interim
measures that can be granted by the Court.
 Section 17 of the Act on the other hand
empowers arbitral tribunals to make orders
as per the section.

12. Extent of Judicial intervention Cont...
3. After proceedings-
 One of the most significant provisions of
the Act is Section 34.
 This Section lays down the permissible
grounds upon which an arbitral award can
challenge.
 The Court doesn’t entertain appeal over
arbitral awards.

13. Arbitration agreements – Essential &
kinds
Arbitration agreements
 Arbitration agreement is 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.
 It’s typically a clause in a broader contract
in which you agree to settle out of court,
through arbitration cases, any dispute that
arises with your counterpart.

14. Essential features of Arbitration
agreements
 An arbitration agreement may be in the
form of an arbitration clause in a contract or
in the form of a separate agreement.
 The arbitration agreement shall be in
writing.
 An agreement is in writing if it is contained
in a document signed by the parties or in an
exchange of letters, telegrams or other
means of telecommunication which provide
a record of the agreement.

15. Kinds of Arbitration agreements
 There are two kinds of Arbitration
agreement.
1) Arbitration clause
 Agreements which provide that, if a
dispute should arise, it will be resolved by
arbitration.
 These will generally be normal contracts,
but they contain an arbitration clause.
2) Submission Agreement
 Agreements which are signed after a
dispute has arisen, agreeing that the dispute
should be resolved by arbitration.

16. Reference Interim measures by court
 Under the Arbitration Act, 1940, party could
commence proceedings in a Court by
moving an application under Section 20 for
appointment of an arbitrator and
simultaneously it could move an application
for interim relief under the Second Schedule
read with Section 41(b) of the old Act.
Under the New Act 1996, Section 9
empowers the court to order a party to take
interim measure or protection when an
application is made. Besides this Section 17
gives power to the Arbitral Tribunal to order
interim measures unless the agreement
prohibits such power.

17. Arbitration Tribunal
 Arbitral tribunals refer to panels of one or
more arbitrators responsible for adjudicating
disputes between parties.
 The tribunal may consist of a sole
arbitrator, or there may be two or more
arbitrators, which might include
a chairperson.
 Members selected to serve on a arbitration
panel are typically professionals with
expertise in both law and in friendly dispute
resolution.

18. Arbitration Tribunal - Appointment
There are several practical considerations
that parties should reflect upon when
selecting an arbitrator. The following factors
are generally among the most important:
Knowledge of the relevant law(s)
Absence of conflict of interest
Experience as an arbitrator
Language proficiency
Availability of arbitrator/manageability of
current caseload
Timeliness
Cohesiveness of the Tribunal
Other areas of expertise

19. Arbitration Tribunal - Challenge
The procedure concerning the challenge of
arbitrators differs in some respects
depending on whether the arbitration is
subject to the 1976 Rules or 2010 and 2013
Rules.
1) UNCITRAL Arbitration Rules (1976)
The UNCITRAL Arbitration Rules of 1976
provide for a proceeding of challenge of
arbitrators taking into account the principles
of impartiality and independence.

20. 2) UNCITRAL Arbitration Rules (as
revised in 2010 and 2013)
 The UNCITRAL Arbitration Rules of 2010
and 2013 provide for a challenge procedure
that is rather similar to the one provided by
the 1976 Rules with some exceptions.
 The rules first require, as provided by
Article 11, that a prospective arbitrator
discloses to those who approach the
arbitrator in connection with a possible
appointment any circumstances likely to give
rise to justifiable doubts as to the arbitrator’s
impartiality or independence.

21. Jurisdiction of arbitral tribunal
 The arbitral tribunal takes its jurisdiction to
decide a particular dispute from the
agreement between the parties.
 An arbitral tribunal does not get its
jurisdiction from any legislation.
 The scope of the tribunal’s jurisdiction will
be determined by the scope of the arbitration
agreement, subject only to any mandatory
legislative enactments governing the
arbitration agreement.

22. Arbitral tribunal Powers
Power of the arbitral tribunal are :-
1. At any time in the proceedings, the
Arbitral Tribunal may attempt to settle the
dispute between the parties.
2. The Arbitral Tribunal may issue all urgent
and provisional measures of protection.
3. Where multiple proceedings are pending
before the Arbitral Tribunal, the Tribunal
may order their consolidation, if it deems
them to be connected.
4. Where the same proceedings concern
several disputes, the Arbitral Tribunal
may order their separation.

23. Arbitral tribunal- Grounds of Challenge
Grounds of challenge of an arbitrator :-
1. An arbitrator may be challenged only if
circumstances exist that, from the
perspective of a reasonable third person
having knowledge of the relevant facts,
give rise to justifiable doubts as to his
impartiality or independence.
2. A party may challenge an arbitrator
appointed by him, or in whose
appointment he has participated, only for
reasons of which he becomes aware
after the appointment has been made.

24. Procedure & Court assistance
 An arbitral proceeding of a dispute
commences on the date on which a request
for that dispute to be referred to arbitration is
received by the respondent.
Court Assistance
 There may be situations when parties do
not cooperate with the tribunal during the
evidence stage.
For example, they may not produce a
document, or a witness may not appear
before the Tribunal despite being summoned
multiple times.

25. Court assistance Cont..
 The arbitral tribunal has the power to issue
orders to parties to call a witness or produce a
document, but where something is not directly in
control of the parties, the tribunal cannot compel
its production or attendance of a witness.
 Hence, in such situations, for an arbitral
tribunal, assistance of the court may be
necessary to obtain evidence.
 Section 27 of the A & C Act states the
procedure that one has to follow for asking the
Court for assistance in taking evidence in an
arbitration proceeding.
Either the Arbitral Tribunal or any party after
taking approval of the Tribunal may apply to the
court for assistance in taking evidence.

26. Award including Form & Content
 An arbitral award or arbitration award
means decision made by an arbitration
tribunal in an arbitration proceeding.
 An arbitral award shall be made in writing
and shall be signed by the members of the
arbitral tribunal.
 After the arbitral award is made, a signed
copy shall be delivered to each party.
 The arbitral award shall state its date and
the place of arbitration as determined in
accordance with section 20 and the award
shall be deemed to have been made at that
place.

27. Grounds for setting aside an award
 Acc to Sec. 34 of the Arbitration and
Conciliation Act 1996 deals with the setting aside
of the arbitral award.
 In order to set aside an arbitral award,
individual needs to file an application in the
court.
 Such an application by the party may be
acknowledged or discarded by the court.
The following grounds are:
1. Incapacity of a party
In case any of the parties is of unsound
mind or is minor, then such persons are not
bound to act in harmony with any agreement
or contract. Therefore, the agreement itself
becomes null and void and passing any
award in such case can be set aside by the
court.

28. Grounds for setting aside an award Cont..
2. Unlawful agreement
 If the contract is unlawful, then the
arbitration agreement will also be held to be
invalid.
3. No notice to the other party
 A prior notice must be sent to the other
party regarding the commencement of the
proceedings or of invocation of the arbitral
clause of the agreement.
4. Subject matter extent to the scope of
the arbitration agreement.
 While formulating an agreement, the
parties describe as to what all can be
enclosed in the subject matter.

29. Grounds for setting aside an award Cont..
5. Formation of Tribunal not as per the
agreement
 In case the Arbitrator is not appointed or by the
parties which has not been followed or any other
bureaucratic aspect that was decided earlier in
the agreement by the parties has not been
followed all the way through, then such affected
party may challenge the award in the court to set
aside the award.
6. Subject matter not under the arbitration
law
There are certain types of matters that are not
arbitral in nature like criminal, insolvency or any
other public matters.
7. Award in conflict with the public policy of
India

30. Enforcement, appeal and revision
Enforcement of awards under section 36
 Section 36 of the Act, 2015 deals with the
enforcement of domestic awards.
 It provides that an award shall be enforced
once the time for making an application to
set aside the award under Section 34 of the
Act has expired.
 The award could only be enforced once
the time for making an application to set
aside the arbitral award under Section 34
had expired, or such application having been
made, it had been refused.

31. Enforcement, appeal and revision
Appeal of awards :-
 An appeal may lie under Section 37 of the
Arbitration Act from an order setting aside or
refusing to set aside an arbitral award under
Section 34.
 Significantly, no second appeal lies from
an order passed in appeal under Section 37.
 However, nothing prevents a party from
approaching the Supreme Court by way of a
Special Leave Petition under Article 136 of
the Constitution of India.

32. Enforcement of Foreign awards
Foreign Arbitral Awards can be enforced
under the New York Convention or under the
Geneva Convention.
Enforcement under the New York
Convention
 The New York Convention defines “foreign
award” as an arbitral award on differences
between persons arising out of legal
relationships, whether contractual or not,
considered as commercial under the law in
force in India, made on or after the 11th day
of October, 1960.

33. Enforcement under the New York
Convention Cont…
 There are two pre-requisites for
enforcement of foreign awards under the
New York Convention. These are:
i) The country must be a signatory to the
New York Convention.
ii) The award shall be made in the territory of
another contracting state which is a
reciprocating territory and notified as such
by the Central Government.
 Once an application for enforcement of a
foreign award is made, the other party has
the opportunity to file an objection against
enforcement on the grounds recognized
under Section 48 of the Act.

34. Enforcement under the Geneva
Convention
 As per the Geneva Convention, “foreign
award” means an arbitral award on
differences relating to matters considered as
commercial under the law in force in India
made after the 28th day of July, 1924.
 The conditions for enforcement of foreign
awards under the Geneva Convention are
provided under Section 57 of the Arbitration
and Conciliation (Amendment) Act, 2015.
These are as follows:
i) The award has been made in pursuance
of a submission to arbitration which is valid
under the law applicable thereto.

35. Enforcement under the Geneva
Convention Cont…
ii) The subject-matter of the award is
capable of settlement by arbitration under
the law of India.
iii) 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.
iv) The enforcement of the award is not
contrary to the public policy or the law of
India.

36. Distinction between conciliation,
negotiation
Conciliation Negotiation
Conciliation is a alternate
dispute resolution
method in which an
expert is appointed to
settle the dispute by
persuading parties to
reach agreement.
Negotiation is a process
where two parties in a
conflict or disagreement
try to reach a resolution
together.
Both the disputed party
appoint conciliator to
resolve their dispute and
conciliator try to settle
the dispute.
During a negotiation, the
parties or their
representatives (lawyers)
discuss the issues to
come to a resolution.

37. Distinction between mediation and
arbitration
Mediation Arbitration
Mediation is a
negotiation process and
not an adjudicatory
process. Parties
participate directly in the
resolution of their dispute
and decide the terms of
settlement.
Arbitration is a quasi-
judicial adjudicatory
process where the
arbitrator(s) appointed by
the Court or by the
parties decide the
dispute between the
parties.
Procedure and
settlement are not
controlled & governed by
statutory provisions
thereby allowing freedom
and flexibility.
Procedure and decision
are governed, restricted
and controlled by the
provisions of the
Arbitration & Conciliation,
1996.

38. Distinction between mediation and
arbitration
Mediation Arbitration
Personal appearance
and active participation
of the parties are
required.
Personal appearance or
active participation of
parties is not always
required.
Optimal opportunity for
parties to communicate
directly with each other
in the presence of the
mediator.
No opportunity for parties
to communicate directly
with each other.
In case of settlement, in
a court annexed
mediation the court fee
already paid is
refundable as per the
Rules.
Does not involve
payment of court fees.

39. Distinction between arbitration,
conciliation & mediation
Arbitration Conciliation Mediation
Meaning Arbitration is a
dispute
settlement
process in
which an
impartial third
party is
appointed to
study the
dispute and
hear both the
parties.
Conciliation is a
method of
resolving
dispute wherein
an independent
person helps
the parties to
arrive at the
negotiated
settlement.
Mediation is
a process of
resolving
issues
between
parties
wherein a
third party
assist them
in arriving at
an
agreement.
Regulat-
ed by
The
Arbitration and
Conciliation Act,
1996
The
Arbitration and
Conciliation Act,
1996
Code of Civil
Procedure,
1908

40. Distinction between arbitration,
conciliation & mediation
Arbitration Conciliation Mediation
Enforc-
ement
An arbitrator
has the power
to enforce his
decision.
A conciliator
does not have
the power to
enforce his
decision.
The decision
made by the
mediator is not
enforceable like
an arbitral
award.
Prior
Agree-
ment
Required Not Required Not Required
Available
for
Existing and
future
disputes.
Existing
disputes.
Existing
disputes.

41. Confidentiality
 Confidentiality, as a principle, has been a
part of the Arbitration Act since its inception
in terms of Section 75 of the Arbitration Act.
 However, Section 75 of the Arbitration Act
only related to conciliation proceedings and
not arbitration proceedings.
 Section 75 of the Arbitration Act provides
that the conciliator and the parties shall keep
confidential all matters relating to the
conciliation proceedings and such
confidentiality shall extend to the settlement
agreement except where its disclosure is
necessary for purposes of implementation
and enforcement.

42. Resort to judicial proceedings – Section 77
 Section 77 of the Act bars the “initiation” of
judicial proceedings in respect of a dispute
that is the subject matter of conciliation
proceedings, except for the purpose of
“preserving” their rights.
 When the arbitral or judicial proceedings
are on, the parties are even encouraged to
initiate conciliation proceedings but when the
conciliation proceedings are on, they are
barred from initiating arbitral or judicial
proceedings.

43. Resort to judicial proceedings Section –
77 Cont..
 The parties shall not initiate, during the
conciliation proceedings, any arbitral or
judicial proceedings in respect of a dispute
that is the subject- matter of the conciliation
proceedings except that a party may initiate
arbitral or judicial proceedings where, in his
opinion, such proceedings are necessary for
preserving his rights.

44. Costs
 The costs of arbitration include
- arbitrator's fee, administrative and
secretarial expense.
- expenses on travel of arbitrator and
others concerned,
- stenographic, translation and
interpretation charges
- stamp duty on award, expenses of
witnesses,
- cost of legal or technical advice and other
incidental expenses arising out of or in
connection with the arbitration
proceeding or award.

45. Dispute Resolution Board
 Dispute resolution board is a forum for
dispute resolution, typically comprising three
independent and impartial persons selected
by the contracting parties.
 The idea behind a standing Dispute
Resolution Board is that it may be called
upon early in the evolution of any dispute
which cannot be resolved by the parties and
be asked to publish decisions or
recommendations on how the matters in
issue should be settled.

46. Dispute Resolution Board Cont…
 A Dispute Review Board is a creature of
contract; the parties establish and empower
a Dispute Review Board with jurisdiction to
hear and advise on the resolution of
disputes.
 Dispute Resolution Boards sometimes
referred to as Dispute Review Boards
and Dispute Adjudication Boards.

47. Lok Adalats
 The term ‘Lok Adalat’ means ‘People’s
Court’ and is based on Gandhian principles.
 Lok Adalat is an alternative dispute
resolution mechanism used in India.
 It is a forum where cases pending on
panchayat, or at a pre-litigation stage in a
court of law, are settled.
 It is one of the components of
the Alternative Dispute Resolution (ADR)
system and delivers informal, cheap and
expeditious justice to the common people.

48. Lok Adalats Cont…
 Every Lok Adalat organised for an area
shall consist of such number of serving or
retired judicial officers and other persons of
the area as may be specified by the agency
organising.
 A Lok Adalat consists of a judicial officer as
the chairman and a lawyer (advocate) and a
social worker as members.

49. THANK YOU