We are living in times where our Courts are
over-burdened & over-stretched with pending cases; and ordinarily, the
cases filed in the Court of law may take years to be finally adjudicated. In this
scenario, the resolution of legal disputes by the means of Arbitration may play
a significant role.
Arbitration is
an adjudicatory process wherein the parties agree to present their dispute to a
neutral third party for a decision, instead of litigating in the court of law;
and Orders passed by the Arbitrator are enforceable like a decree of the Court.
However, for certain reliefs, during the course of
Arbitration proceedings, the Claimant may be required to move the competent
Court of law, like for example, so as to obtain any Interim relief of
injunction etc. against the Respondent, or, for the appointment of Arbitrators,
etc.
All Arbitration
proceedings are governed and regulated by Arbitration & Conciliation Act,
1996. However, at the same time, Section 2(4) of the said Act gives sanctity to
any other enactment / laws which provides for compulsory Arbitration, and
prescribe rules for such Arbitration proceedings.
Arbitration Agreement: A valid
Arbitration proceeding must be precede by a written Arbitration Agreement. In
today’s time, almost every commercial contract, Sale, Purchase, Service
transactions contain Arbitration Clause in their contracts, Invoices. The
Clause such as “The dispute, if any
arises in respect of this transaction shall be resolved through the medium of
Arbitration only; and shall be referred to (Full Name and address of the
Arbitrator / Arbitral Institution); and Parties would be bound by the decision
of the said Arbitrator / Arbitral Institution” in the Contracts / Invoices
may be sufficient to bind parties to Arbitration proceedings. Communication through electronic means is also regarded as “Arbitration
agreement in writing”.
The Arbitration Clause may extensively provide for number of Arbitrators,
determination of rules of procedure, place of arbitration, Language, Rules for
filing Statements of claim and defence, Rules for Hearings and written
proceedings, etc.
Every civil or
commercial dispute, either contractual or non-contractual, which can be decided
by a court, is in principle capable of being adjudicated and resolved by the
means of Arbitration. The disputes
which cannot be decided by means of Arbitration are: (i) criminal offences;
(ii) matrimonial disputes relating to divorce, etc.; (iii) guardianship
matters; (iv) insolvency and winding up matters; (v) Immovable property
disputes in which title to the property is in dispute; (vi) disputes as
succession to property (vii) eviction or tenancy matters governed by special
statutes.
Accrual of “cause of action” to invoke Arbitration
Proceedings: The
cause of action arises on the date on which the aggrieved has a right to move
the court of law or to adopt any other legal proceeding, for redressal of his
grievance, although the aggrieved person may choose not to move the court of
law or to adopt any legal proceeding, immediately, and he may prefer to redress
his grievance by resorting to any other legal means.
Limitation period: The Arbitration
must be invoked within the period prescribed under the Arbitration Agreement,
or if it is not provided, then within such time as applicable article contained
in Schedule appended to Limitation Act, 1963. In contractual disputes, the
limitation is generally three years from the date of accrual of cause of
action. If we examine Section 2(4) of the Act, we will find that whereas
Section 43 of the Act expressly provides that Limitation Act is applicable with
reference to adopting of Arbitration proceedings, nevertheless S.43 is subject
to the provisions of Section 2(4), wherein Section 2(4) recognizes the sanctity
of the provisions of any other enactment and restricts the application of
Section 43 to that enactment.
Commencement
of Arbitration proceedings: Arbitration
proceeding commence when a Notice is given by the aggrieved party (u/s 21 of
the Act), to the other party (Respondent), informing that whereas “disputes”
have arisen, Arbitration Clause is invoked.
Parties to the Arbitration: The
Parties to the Arbitration Agreement would be the parties to the Arbitration
proceedings. The Parties would also include those parties who are assignee of
main contract (under which Arbitration agreement was entered into).
Settlement of dispute by way of Mediation
Conciliation:
Arbitrator / Arbitral Tribunal, during the course of Arbitration proceedings
are empowered to persuade and encourage parties before it, to settle their
dispute by way of Mediation / Conciliation etc. [Section.30]
Powers of Arbitral Tribunal to grant Interim
Reliefs:
Section 17 of the Arbitration Act empowers the Arbitrators to grant Interim reliefs;
and the Interim Orders passed by the
Arbitrators are regarded as Orders of the Court and are enforceable in the same
manner as if it were an Order of the Court.
Application to Appoint Arbitrators: Where the
Parties to the Arbitration Agreement fails to reach any consensus as to the
appointment of the Sole Arbitrator or more than one Arbitrators, any one of the
Party may approach the concerned High Court by making Application u/s 11 of the
Act, for the appointment of Arbitrator.
Statement of Claim and Defense by rival parties
(S.23): The
Parties to the Proceedings are obliged to file their Statement of Claim and
Defense, within such time as directed by the Arbitrator. The claimant shall
state the facts supporting his claim, the points at issue and the relief or
remedy sought, and the respondent shall state his defense in respect of these
particulars. The parties are also required to submit all documents they consider
to be relevant or may add a reference to the documents.
Hearing and Written Proceedings (S.24): Depending upon
the Arbitration Agreement between the parties providing Rules for hearing of
the Arbitration proceedings , or the Arbitral Tribunal Rules, the Arbitrator
would conduct the hearing. Experts may be appointed by Arbitrators / Arbitral
Tribunal during Arbitration proceedings (S.26). The Arbitrators may take the assistance of the Court in taking
evidence of the witnesses and parties before it (S.27). The Arbitrators should secure equal treatment of parties before
it. (S.18). Section 24 of the Act provides
for expeditious hearing; and Section 25 provides for discretion of the
Arbitrator to disallow the defense of the Respondent if the defense is not
filed in time provided for.
Challenge to the Award / decision (S.34). The decision of
the Arbitrator may be challenged in the Court of law. After the Amendments in
the law in the year 2015, now unless the Court by its Order stays the operation
of Award, the Award can be executed like a decree of the Court. The main
grounds to challenge the Award are – (a) the arbitration agreement is not valid
under the law; (b) 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; (c) the arbitral award deals with a
dispute not provided under the Arbitration Agreement; (d) the composition of
the Arbitral Tribunal was not in accordance with the agreement of the parties, or was not in accordance with Part I
of the Act; (e) the arbitral procedure was not in accordance with the agreement
of the parties, or was not in accordance with Part I of the Act; (f) the Award is
in contravention of the provisions of the Act or any other substantive law
governing the parties or is against the terms of the contract; (g) the Award is
against the public policy of India, that is to say, if it is contrary to: (i)
fundamental policy of Indian law; or (ii) the interest of India; or (iii)
justice or morality; or (iv) if it is patently illegal. An Award would be said to be in conflict with the public policy of
India, only if, (i) the making of the award was induced or affected by fraud or
corruption; or (ii) it is in contravention with the fundamental policy of
Indian law; or (iii) it is in conflict with the most basic notions of morality
or justice.
Arbitration
may be commenced in Suit proceedings: By the mandate of Section 89 of CPC, 1908, in the first hearing
of the Suit, if it appears to the Court that there exist elements of settlement
which may be acceptable to the parties, the Court should formulate the terms of
settlement and give them to the parties for their observations. After receiving
the observations of the parties, the Court may, if necessary, reformulate the
terms of a possible settlement and having regard to the nature of dispute between
the parties, shall refer the same for (a) arbitration; (b) conciliation; (c)
judicial settlement including settlement through Lok Adalat; or (d) mediation. In Suits
involving family disputes, the O.32 R.3 of CPC, 1908, casts an express
responsibility upon the Court to see that parties come for amicable settlement
of their dispute.
One of the main advantages of resorting to
Arbitration, is to have speedy and inexpensive judicial redressal of dispute
between the parties. The procedure prescribed may be simple unlike the Code of
Civil procedure, 1908. The provisions of Evidence Act are not applicable
although the principles employed therein may be invoked in desired
circumstances.
Sandeep Jalan
Advocate
Legal issues !!
If you are facing any of these issues like (a) Recovery of Moneys (b) Immovable property disputes (c) grievances against Municipalities & Govts., including challenge to legitimacy of laws etc. (d) grievances against illegalities and highhandedness of Police like illegal arrests, refusal to register FIR, deliberately flawed investigations, etc (e) False FIRs (f) False Claims (g) False evidences (h) Grievances against Judges (i) Illegal or perverse Orders of the Courts / Tribunals, among others.
or
If you are looking for draft of any legal proceeding; or if you want to know the nature and attribute of any legal proceeding; or if you want to know the procedure followed in any legal proceeding; or if you want to know the grounds on which any order of the court / tribunal is challenged; or if you are facing any frivolous litigation.
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Referencer: https://www.litigationplatform.com/
Thank you.
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